EXHIBIT 10(z)
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DEVELOPMENT, SUPPLY AND
DISTRIBUTION AGREEMENT
DEVELOPMENT,
SUPPLY AND DISTRIBUTION AGREEMENT ("Agreement") dated November
10, 2000, by and between CEL-SCI
Corporation, a Colorado corporation, located at
8229 Boone Boulevard, Suite 802, Vienna, Virginia 22182, USA ("CEL-SCI"),
and
Orient Europharma Co., Ltd., a corporation
organized and existing under the laws
of Taiwan, R.O.C., located at 7F., No.368,
Sec. 1, Fu Hsing S.
Road, Taipei,
Taiwan, Republic of China ("Orient
Europharma").
WHEREAS,
CEL-SCI and Orient
Europharma are engaged
in the development and
distribution, respectively, of
pharmaceutical products; and
WHEREAS, Orient
Europharma has broad marketing and distribution capabilities
and regulatory expertise in the Territory
(as defined) with respect to
pharmaceutical products; and
WHEREAS, Orient
Europharma wishes to obtain from CEL-SCI exclusive marketing
and distribution rights in the Territory
with respect to CEL-SCI's
pharmaceutical Product (as defined)
manufactured and developed by CEL-SCI, and
wishes to have CEL-SCI supply it with such
Product; and
WHEREAS, Orient
Europharma wishes to fund the clinical trials necessary to
obtain Product registrations in the
Territory; and
WHEREAS, CEL-SCI
wishes to grant Orient Europharma exclusive marketing and
distribution rights for cancer indications
and to supply Orient Europharma with
such Product for clinical trial use and
resale in the Territory;
NOW, THEREFORE, in
consideration for the mutual promises contained herein,
the parties agree as follows:
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1. Definitions
As used in this
Agreement, the following definitions shall apply:
a. "Commencement Date"
shall mean, with respect to the Product, the
date of the first commercial sale of such Product in Taiwan. If
the
Product is not approved for sale in Taiwan, then "Commencement
Date"
will be
the date of first commercial sale in any country of the
Territory, as acknowledged in writing by Orient Europharma and
CEL-SCI.
b. "Contract Year"
shall mean a calendar year, according to the USA
calendar.
c. "FOB" shall have
the meaning ascribed in the Uniform Commercial Code
in effect in Maryland, USA. "FOB point of origin" shall mean FOB
at
the CEL-SCI manufacturing or packaging site or at its
contractor's
site
where such activities are performed, for the Product in the
USA.
d. "THA" shall mean
the Taiwanese Health Authorities, or its
successors.
e. "IND" shall mean an
Investigational New Drug application filed with
the U.S. or Canadian health authorities or any other national
health
authority recognized by the THA in the Territory covering
manufacture of the Product dosage form(s) being evaluated in
clinical trials under such IND.
f. "Labeling" shall
mean all package inserts, vial labels and carton
imprints and all other markings on packaging for, or other
similar
materials related to, the Product for commercial sale that are
defined as labeling under any applicable law or regulation.
"Labeling" shall also mean such labeling applicable to the use
of
clinical supplies (e.g., Investigational Drug Brochure).
g. "Manufacturing
Cost" shall mean CEL-SCI's fully-burdened direct and
indirect manufacturing costs and expenses associated in
producing
the Product, including, but not limited to, cost of materials,
supplies, utilities, rent, labor (including taxes, benefits,
overheads), third party contract expenses, administration,
depreciation for plant and equipment and any other direct
expenses.
h. "Gross Selling
Price" is (1) the national reimbursement price
approved by THA or the equivalent regulatory agency in the
other
countries of the Territory, or (2) in the event that THA or the
equivalent regulatory agencies in the other countries do not
grant
the approval to reimburse the payments, Gross Selling Price is
the
contract price between Orient Europharma and the major hospitals
in
Taiwan or other countries in the Territory.
i. "Specifications"
shall mean, with respect to the Product, the
specifications set
forth in the IND for such Product approved by the
health authorities in the Territory.
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j. "Product" shall
mean CEL-SCI's Leukocyte Interleukin Injection
(Multikine(TM)), plus any improvements thereto, which shall
comply
with the Specifications, approved by health authorities in the
Territory.
k. "Purchase Price" is
(1) the transfer price of Product for commercial
sale from CEL-SCI to Orient Europharma as specified in Section
9(b)
; or (2) the transfer price of Product for clinical use according
to
Section 9(c).
l. "Term" shall have
the meaning ascribed to it in Section 3(a) hereof.
m. "Territory" shall
mean Taiwan, Singapore, Malaysia and Hong Kong.
CEL-SCI grants to Orient Europharma the right of first
negotiation
with respect to Thailand, China and the Philippines.
2. Authorization and
Acceptance of Distribution
a. Subject to the
terms and conditions herein contained, CEL-SCI hereby
appoints Orient Europharma, following regulatory approval for
sale,
as its exclusive distributor to market, distribute and sell the
Product for human cancer indications in the Territory.
b. Orient Europharma
will be entitled to appoint sub-distributors for
the Territory with respect to marketing, distributing and
selling
the Product and to perform any of the obligations undertaken by
it
under this Agreement through any corporation or entity
controlling
or under common control with Orient Europharma. These
appointments
will be subject to CEL-SCI approval which approval will not be
unreasonably
withheld.
3. Term
a. The term of this
Agreement shall commence on the date hereof and
shall terminate on the fifteenth anniversary date of the
Commencement Date for the Product. The 15-year term may
hereinafter
be referred to as the "Term."
b. After the 15-year
period has expired, the exclusive Term for the
Product shall automatically be extended for successive two-year
periods unless at least six months before the expiration of the
then
current period for such Product, either party gives written
notice
to the other that it does not wish to extend the exclusive
Term.
c. Following the
expiration of the 15-year Term, with or without its
2-year extension, all rights of Orient Europharma to the Product,
as
well as any discoveries, inventions, or improvements to the
Product
will expire and revert to CEL-SCI. In addition, Orient
Europharma
will sign
over to CEL-SCI any rights that Orient Europharma may
retain in the Product (e.g. product registration in the countries
of
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the Territory). Orient Europharma will also return all data
and/or
documents that relate to the Product. Notwithstanding anything
herein to the contrary, Orient Europharma shall have the right
to
sell Product obtained from CEL-SCI hereunder in its possession
after
termination of this Agreement.
4. Regulatory Approvals
a. Orient Europharma
shall file substantially complete and correct
applications in all countries of the Territory where clinical
trials
will be conducted.
b. Orient Europharma
represents and warrants that it has, and will
maintain during the Term, all approvals necessary to conduct
clinical trials and to market, sell and distribute the Product
in
the Territory, and that it may lawfully purchase such Product
from
CEL-SCI, for human cancer indications.
c. After receiving
from CEL-SCI all pertinent documentation required by
various regulatory authorities, Orient Europharma, at its own
expense and as promptly as possible, shall file substantially
complete and correct applications for all approvals necessary to
,
market, sell and distribute the Product in the Territory. In
support
of such filings, CEL-SCI agrees to provide pertinent information
and
technical assistance to Orient Europharma in seeking these
approvals. CEL-SCI shall provide to a third party chosen by
CEL-SCI,
all pertinent process technology information necessary for
registration of the Product to the extent that is permitted by
the
applicable laws and regulations in the Territory. The third
party
will forward such information to the health authorities for the
purpose of completing the Orient Europharma application(s).
d. In addition to the
provisions of Sections 4(b) and (c), Orient
Europharma shall, at its own expense and as promptly as
possible,
use all due diligence to obtain all additional governmental and
other approvals which may subsequently become necessary for
Orient
Europharma to import and market, sell and distribute such
Product
for human cancer indications throughout the Territory.
e. Orient Europharma
shall promptly provide to CEL-SCI copies, along
with English translations, of all of its product registrations
and
other approvals for the marketing, distribution and sale of the
Product in the Territory. Orient Europharma shall comply with
all
applicable laws in the Territory in conducting clinical studies
and
in marketing, distributing and selling the Product.
f. Orient Europharma
shall conduct all clinical studies required for
the registrations with the health departments in the Territory
defined in Section 1(m) of Product required in connection with
the
approvals and registrations for such Product to be obtained in
accordance with Section 4(c). Orient Europharma shall bear all
the
costs and expenses in conducting such studies in the Territory,
including the cost of clinical supplies of the Product from
CEL-SCI,
the cost of the Clinical Research Organization (CRO), plus
CEL-SCI's
expenses associated with regulatory applications. In
particular,
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Orient Europharma will assist CEL-SCI to conduct clinical
trial(s)
of the Product in Taiwan and/or other sites within the
Territory,
and shall bear all costs and expenses relating to such
trial(s).
Orient Europharma will also reimburse CEL-SCI for reasonable
travel
and hotel expenses of two trips per year to Taiwan for a team
of
CEL-SCI representatives, business class airfare. Orient
Europharma
agrees to pay for additional trips, if deemed necessary.
g. CEL-SCI will design
and direct the clinical trials in the Territory
through an internationally recognized CRO, at Orient
Europharma's
expense.
h. All preclinical and
clinical data generated in the Territory shall
belong to CEL-SCI for CEL-SCI's use in Product registrations
outside
the Territory.
k. Orient Europharma
shall be subject to meeting certain milestones in
any country in the Territory:
(1) Start
clinical trial(s)* 2001
(2) Start Phase
III trials** 2002
(3) Start Phase
III trials*** 2003
* of squamous cell carcinoma of the oral cavity (SCC) and
adenocarcinoma of the nasal pharynx (ANP).
** of SCC
*** of ANP, if supported by data.
If Orient Europharma fails to meet any milestone, through no
fault
of CEL-SCI, CEL-SCI will have the right to re-negotiate or
terminate
this Agreement.
5. Manufacturing and Packaging of
Product
a. CEL-SCI will
manufacture the Product and deliver as finished Product
suitable for use in clinical trials and subsequently for sale or
in
bulk where the country allows.
b. Orient Europharma
will provide label copy to be used on vials and
patient packs in all cases where English is not acceptable.
c. Orient Europharma
shall be responsible for ensuring the accuracy of
the information and the form of the Labeling for the Product
and
their compliance with applicable laws within the Territory.
d. Orient Europharma
may market, sell and/or distribute the Product
under the trademark owned or used by CEL-SCI (e.g.,
Multikine(TM)).
Upon Orient Europharma's request, CEL-SCI shall license Orient
Europharma to use its trademark in the Territory. Orient
Europharma
may market, sell and/or distribute the Product in the Territory
under any trademark owned or used by it as it may from time to
time
choose. Such trademarks shall become the sole property of
CEL-SCI.
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6.
Shipments
of Product for Clinical Trials
a.
CEL-SCI will ship, for use in all clinical trials in the
Territory,
clinical supplies (investigational drug) necessary to support
clinical trials.
b. CEL-SCI will
invoice Orient Europharma for all clinical supplies, at
CEL-SCI cost according to Section 9(c), as well as all shipping
costs including customs, storage, and insurance. Payment will be
due
in 30 days from date of invoice.
7. Supply of the Product for
Commercial Sale
a. No later than six
months prior to the first day of each Contract
Year of the Term, Orient Europharma will provide to CEL-SCI a
non-binding forecast of Orient Europharma's annual requirements
of
the Product for the succeeding Contract Year. CEL-SCI shall
advise
Orient Europharma within thirty (30) days of its receipt of
such
forecast of CEL-SCI's anticipated ability to supply the
forecasted
amount for the applicable period (such confirmed amount, the
"Forecasted Amount").
b. If at any time during the Term,
CEL-SCI is or expects that it will
be unable to satisfy the Forecasted Amount of Product for any
period
of a Contract Year, in full or in part, CEL-SCI shall so notify
Orient Europharma promptly, detailing the extent to which it
will
not meet such Forecasted Amount.
c. It shall be the
responsibility of CEL-SCI to maintain reasonably
adequate manufacturing capabilities of the Product, using its
reasonable commercial best efforts to supply the Forecasted
Amounts.
d. CEL-SCI will be the
exclusive and sole supplier of Product to Orient
Europharma during the Term of this Agreement.
8. Shipment of Product for Commercial
Sale
a. Orient Europharma
shall place all orders for Product by delivering
to CEL-SCI a written purchase order specifying the Product,
quantity
and delivery date (which delivery date shall not be less than
180
days after
the date such purchase order is delivered to CEL-SCI).
b. After accepting any
written purchase order, CEL-SCI shall use
reasonable commercial efforts to fill each order by the
specified
delivery date and shall notify Orient Europharma of anticipated
delays in filling any order.
c. With each shipment
of Product to Orient Europharma hereunder,
CEL-SCI shall invoice Orient Europharma for the Product included
in
such shipment at the Purchase Price as set forth in Section
9(b).
Payment shall be made in U.S. dollars, by Confirmed Irrevocable
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Letter of Credit from an internationally recognized bank to
CEL-SCI's US bank.
d. Product shall be shipped FOB point
of origin. Orient Europharma
shall arrange for the carrier or shipping agent to transport
each
shipment of Product from CEL-SCI's loading dock at the point of
origin to desired destination. Orient Europharma will ensure
that
adequately monitored freezer (-20(Degree)C 3(Degree)C) space is
maintained for Product storage prior to its distribution.
Orient
Europharma shall arrange for carrier / shipment of Product to
maintain frozen condition.
9. Purchase Price
a. Both parties agree
that the selling pri
