Exhibit 10.48
LICENSE AND SUPPLY AGREEMENT
between
BUMIMEDIC (MALAYSIA) SDN. BHD.
and
AMARILLO BIOSCIENCES, INC.
January 18th, 2006
CONFIDENTIAL
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with the Commission.
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TABLE OF CONTENTS
ARTICLE I:
DEFINITIONS.......................................................5
ARTICLE II: RESEARCH AND
DEVELOPMENT........................................11
Section
2.01. ABI
Obligations........................................11
Section
2.03. Availability of
Resources; Cooperation.................13
Section
2.04. Reporting
Obligations of BME...........................13
ARTICLE III:
LICENSE........................................................13
Section
3.01. License and
Supply Grant...............................13
Section
3.02.
Restrictions...........................................14
Section
3.03. Retained
Rights........................................14
Section
3.04. First Right of
Refusal.................................14
ARTICLE IV: PAYMENTS AND
ROYALTIES..........................................14
Section
4.01. Initial
Fee............................................14
Section
4.02. Royalty
Payments.......................................15
Section
4.03. Milestone
Payments.....................................15
Section
4.04. Minimum
Payment........................................15
Section
4.05.
Reports................................................15
Section
4.06. Records and
Audits.....................................15
Section
4.07. Exchange Rate;
Manner and Place of Payment.............16
Section
4.08. Late
Payments..........................................16
Section
4.09.
Taxes..................................................16
ARTICLE V: TERM AND
TERMINATION.............................................17
Section
5.01.
Term...................................................17
Section
5.02. Termination By
BME.....................................17
Section
5.03. Termination by
ABI.....................................17
Section
5.04. Termination Upon
Certain Events........................18
Section
5.05.
Remedies...............................................18
Section
5.06. Effect of
Termination..................................18
Section
5.07.
Bankruptcy.............................................19
Section
5.08. Continuing
Obligations.................................19
Section
5.09. Return of
Confidential Information.....................19
ARTICLE VI: SUPPLY, MANUFACTURE AND PURCHASE OF
PRODUCT.....................19
Section
6.01. Supply of
Product......................................19
Section
6.02. Supply and
Manufacturing Rights........................20
Section
6.03. Quality
Assurance......................................20
Section
6.04. ABI's
Duties...........................................20
Section
6.05. BME's Duties if
Manufacturing..........................21
Section
6.06. Failure to
Supply......................................22
Section
6.07.
Allocation.............................................22
Section
6.08. Records and
Audits.....................................22
ARTICLE VII: PURCHASE AND
SALE..............................................23
Section
7.01. Purchase Price
and Payment.............................23
Section
7.02. Labeling and
Artwork...................................23
Section
7.03. Purchase
Forms.........................................23
Section
7.04.
Confirmation...........................................23
Section
7.05.
Delivery...............................................24
Section
7.06. Forecasts and
Orders...................................24
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ARTICLE VIII: WARRANTY, REJECTION AND
INSPECTIONS...........................25
Section
8.01. ABI
Warranty...........................................25
Section
8.03. BME
Inspections........................................26
ARTICLE IX: REGULATORY
COMPLIANCE...........................................26
Section
9.01. Maintenance of
Marketing Authorizations................26
Section
9.02. Adverse Drug
Event Reporting and Phase IV Surveillance.26
Section
9.03. Commercial Sale
Testing and Reporting..................27
Section
9.04.
Assistance.............................................27
Section
9.05.
Compliance.............................................28
ARTICLE X: REPRESENTATIONS, WARRANTIES AND
COVENANTS........................28
Section
10.01. Corporate
Power........................................28
Section
10.02. Due
Authorization......................................28
Section
10.03. Binding
Obligation.....................................28
Section
10.04. Ownership of ABI
Rights................................28
Section
10.05. Material
Agreements....................................29
Section
10.06. Adverse
Properties.....................................29
Section
10.07. Preservation of Name and
Reputation....................29
Section
10.08.
Debarment..............................................29
Section
10.09. Limitation on
Warranties...............................30
Section
10.10. Limitation of
Liability................................30
ARTICLE XI: PATENTS AND
TRADEMARK...........................................30
Section
11.01. Filing,
Maintenance and Protection of Patents.........30
Section
11.02.
Cooperation...........................................30
Section
11.03. ABI to
Prosecute Infringement.........................30
Section
11.04. Infringement
Claimed by Third Parties.................31
Section
11.05.
Trademark.............................................31
ARTICLE XII: COVENANTS OF BME AND
ABI.......................................31
Section
12.01. Access to Books and
Records............................31
Section
12.02. Further
Actions........................................31
Section
12.03. Equitable
Relief.......................................32
ARTICLE XIII:
INDEMNIFICATION...............................................32
Section
13.01. BME Indemnified by
ABI.................................32
Section
13.02. ABI Indemnified by
BME.................................33
Section
13.03. Prompt Notice
Required.................................33
Section 13.04.
Indemnitor May Settle..................................33
ARTICLE XIV: DISPUTE
RESOLUTION.............................................34
Section
14.01.
Disputes...............................................34
Section
14.02. Trial Without
Jury.....................................34
Section
14.03. Performance to
Continue................................34
Section
14.04. Provisional
Remedies...................................34
Section
14.05. Determination of Patents and Other Intellectual
Property.34
ARTICLE XV:
CONFIDENTIALITY.................................................35
Section
15.01.
Confidentiality........................................35
Section
15.02. Publicity
Review.......................................35
ARTICLE XVI:
MISCELLANEOUS..................................................36
Section
16.01. Commercially Reasonable
Efforts........................36
Section
16.02.
Notices................................................36
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Section
16.03.
Severability...........................................37
Section
16.04. Entire
Agreement/Merger................................37
Section
16.05.
Amendment..............................................37
Section
16.06.
Counterparts...........................................37
Section 16.07.
No Waiver of Rights....................................37
Section
16.08. Force
Majeure..........................................38
Section
16.09. Further
Assurances.....................................38
Section
16.10. Assignment and
Sublicense..............................38
Section
16.11.
Expenses...............................................38
Section
16.12. Binding
Effect.........................................38
Section
16.13. Governing
Law..........................................38
Section
16.14. Survival of Representations and
Warranties.............39
Section
16.15. No Strict
Construction.................................39
Section
16.16. Independent
Contractors................................39
Exhibit A
- Specifications............................................A-1
Exhibit B
- Certificate of Compliance.................................B-1
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LICENSE AND SUPPLY AGREEMENT
This
License and Supply Agreement ("Agreement") is made as of January
18th
2006 (the "Effective Date"), by and between Bumimedic (Malaysia)
SDN. BHD, a
Malaysian corporation ("BME"), with its principal place of business
located at
No. 3 Jalan 19/1, Seksyen 19, 46300 Petaling Jaya, Selangor Darul
Ehsan,
MALAYSIA, and Amarillo Biosciences, Inc., a Texas corporation
("ABI"), with its
principal place of business located at 4134 Business Park Drive,
Amarillo, Texas
79110, USA. ABI and BME are sometimes referred to collectively
herein as the
"Parties" and individually as a "Party."
WHEREAS, ABI and
its contract supplier, Hayashibara Biochemical
Laboratories, Inc. ("HBL") have substantial expertise in the
production and oral
use of human interferon alpha ("IFN") and have proprietary rights
and Know-How
in the field of production, purification and formulation of
IFN;
WHEREAS,
ABI is willing to disclose to BME the ABI Know-How consisting
of
human clinical data and all other data, including safety,
bioavailability, and
clinical trial data necessary for BME to obtain regulatory approval
for a
product for the treatment of human diseases in the Territory;
and
WHEREAS,
ABI has an exclusive worldwide license (except Japan) to market
and distribute the oral formulation of HBL IFN, and desires to
provide HBL IFN
to BME on the terms and conditions herein set forth, and BME
desires to obtain
the right to perform clinical trials on, distribute and market HBL
IFN on the
terms and conditions herein set forth;
WHEREAS,
ABI owns certain proprietary information, intellectual
property,
Patents and ABI Know-How, and other rights relating to the use of
low dose IFN
for the treatment or prevention of human diseases;
WHEREAS,
subject to the terms of this Agreement, ABI desires to grant to
BME, and BME wishes to obtain from ABI, an exclusive supply
agreement license,
subject to existing rights, to such Know-How and related
intellectual property
rights in the Territory in connection with the Product; and
WHEREAS,
ABI is willing to grant such rights and licenses to BME under
the
terms and conditions hereinafter set forth.
NOW,
THEREFORE, in consideration of the mutual promises, covenants
and
agreements hereinafter set forth, the Parties mutually agree as
follows:
ARTICLE I:
DEFINITIONS
(a) The
following terms as used in the Agreement shall, unless the
context
clearly
indicates to the contrary, have the meaning set forth below:
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"ABI
Know-How" means all Know-How under the Control of ABI as of the
Effective Date and at any time during the Term related to (but not
claimed
under) the ABI Patent Rights and which is necessary or useful to
develop,
Manufacture and/or commercialize the Product, including all
information,
reports, results, inventions, materials, and any other technical
and scientific
data, specifications and formulae directly related to the
development,
regulatory approval, Manufacture, testing, use, marketing and/or
sale of
Product, including non-patentable Improvements, and any nonpublic
information
relevant to the ABI Patent Rights, including preclinical and
clinical data from
ABI's past, current or future studies, relating to safety or
bioavailability, or
preclinical or clinical data relating to the use of HBL IFN and/or
IFN for the
treatment or prevention of human diseases.
"ABI
Patent Rights" means all Patent Rights that are under the Control
of
ABI as of the Effective Date and at any time during the Term that
are necessary
or useful to the use, development, Manufacture, marketing,
promotion,
distribution, sale and/or commercialization of the Product for use
in the
treatment of the Licensed Indication, and Improvements thereto
developed by or
on behalf of ABI during the Term.
"ABI
Technology" means the ABI Patent Rights and the ABI Know-How.
"Affiliate" means any entity, which directly or indirectly
controls, is
controlled by or is under common control with either BME or ABI.
The term
"control" as used in the preceding sentence means the power to
direct or control
the affairs of such entity, and control shall be presumed where BME
or ABI or
their Affiliates (as the case may be) own ten percent (10%) or more
of the
voting stock or other equity interests of such entity.
"Applicable Laws" means all applicable laws, rules, regulations
and
guidelines within or without the Territory that may apply to the
marketing or
sale of the Product in the Territory or the performance of either
Party's
obligations under this Agreement including laws, regulations and
guidelines
governing the marketing, distribution and sale of the Product in
the Territory,
to the extent applicable and relevant, and including all cGMP or
current Good
Clinical Practices standards or guidelines promulgated by the FDA
or the
Governmental Authorities and including trade association
guidelines.
"Bulk IFN"
means concentrated liquid HBL IFN which can be used to
Manufacture Product.
"Certificate of Compliance" means the certificate of compliance in
the
form attached hereto as Exhibit B.
"CFR"
means the United States Code of Federal Regulations.
"cGMP"
means current good manufacturing practices as defined in 21 CFR
ss.
110 et seq. and established under the Act and applicable
Regulations.
"Confidential Information" means any confidential information
(including
Know-How) of a Party relating to any human interferon use, process,
method,
compound, research project, work in process, future development,
scientific,
engineering, Manufacturing, marketing, business plan, financial or
personnel
matter relating to the disclosing Party, its present or future
product, sales,
suppliers, customers, employees, investors or business, whether in
oral,
written, graphic or electronic form. Confidential Information shall
not include
any information, which the receiving Party can prove by competent
evidence:
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(a) is now, or
hereafter becomes, through no act or failure to act on the part
of the
receiving Party, generally known or available;
(b) is known by
the receiving Party at the time of receiving such information,
as
evidenced by its written records maintained in the ordinary course
of
business;
(c) is hereafter
furnished to the receiving Party by a Third Party, as a
matter of
right and without restriction on disclosure;
(d) is
independently developed by the receiving Party, as evidenced by
its
written
records, without knowledge of, and without the aid, application
or
use of,
the disclosing Party's Confidential Information; or
(e) is the
subject of a written permission to disclose provided by the
disclosing
Party.
"Control"
means the possession of the ability to grant a license or
sublicense as provided for herein without violating the terms of
any agreement
or other arrangement with any Third Party.
"Existing
Licensees" means, as applicable, Pharma Pacific Management Pty,
Ltd. (PPM), HBL and Interferon Sciences, Inc. (ISI), their
successors,
transferees and licensees.
"Existing
Licenses" means, as applicable, the HBL Agreement, the PPM
Agreement and the ISI Agreement.
"FDA"
means the United States Food and Drug Administration.
"First Commercial
Sale" means the first sale for use, consumption or
resale of a Product by BME, its Affiliates or its sublicensees in
the Territory
(excluding any sales for clinical trials). A sale to an Affiliate
shall not
constitute a First Commercial Sale unless the Affiliate is the end
user of the
Product.
"GAAP"
means United States generally accepted accounting principles,
consistently applied in accordance with past practice.
"Good
Clinical Practices"
means good clinical
practices as defined
in
21 CFR ss. 50 et. seq. and ss. 312 et. seq.
"Governmental Approval" means all permits, licenses and
authorizations,
including Marketing Authorizations, required by the FDA or any
other
Governmental Authority as a prerequisite to the Manufacturing,
packaging,
marketing and selling of the Product.
"Governmental Authority" means any federal, state, local or
other
government, administrative or regulatory agency, authority, body,
commission,
court, tribunal or similar entity, including the FDA and other
entities in each
country in the Territory responsible for the regulation of
medicinal products
intended for human use.
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"HBL"
means Hayashibara Biochemical Laboratories, Inc. of Okayama,
Japan.
"HBL
Agreement" means the Joint Development and Manufacturing/Supply
Agreement by and between HBL and ABI dated as of March 13, 1992, as
amended by
the First Amendment to Joint Development and Manufacturing/Supply
Agreement
dated as of January 17, 1996 and the Addendum to
Manufacturing/Supply Agreements
dated as of May 10, 1996 and September 7, 2001.
"HBL IFN"
means the cell culture derived human lymphoblastoid IFN
produced
by HBL.
"Improvements" means any and all developments, inventions or
discoveries
in the Licensed Indication relating to the ABI Patent Rights
developed, or
acquired by ABI at any time during the Term and shall include
developments
intended to enhance the safety and/or efficacy of the Product.
"IFN"
means human interferon alpha.
"ISI
Agreement" means the License Agreement dated October 20, 1989 by
and
between Interferon Sciences, Inc. and ABI, as successor-in-interest
to Amarillo
Cell Culture Company, Incorporated.
"Know-How"
means all know-how, trade secrets, inventions, data, processes,
techniques, procedures, compositions, devices, methods, formulas,
protocols and
information, whether or not patentable, which are not generally
publicly known,
including, without limitation, all chemical, biochemical,
toxicological, and
scientific research information, whether in written, graphic or
video form or
any other form or format, related to human interferon alpha.
"Licensed
Indications" means influenza and one other human indication
treated or treatable by the oral administration of IFN.
"Manufacture" or "Manufacturing Process" means the storage,
handling,
production, processing and packaging of the Product, in accordance
with this
Agreement and Applicable Laws.
"Marketing
Authorization" means all necessary and appropriate regulatory
approvals, including Pricing and Reimbursement Approvals, where
applicable, to
put the Product on the market in the Territory.
"Material
Agreements" means the Existing Licenses, and the TAMU License
Agreement.
"NDA"
means a new drug application, biological license application or
establishment license application, as applicable, and all
amendments and
supplements thereto, filed or to be filed, with the FDA seeking
authorization
and approval to Manufacture, package, ship and sell the Product as
more fully
described in the Regulations.
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"Net
Sales" means the invoice amounts actually received for sales of
the
Product by BME, its Affiliates or sub-licensees in a bona fide
arm's length
transaction, less the following items, provided that they are bona
fide
transactions designed to optimize the sales of Product (a) cash
discounts and
trade allowances actually granted, (b) rebates and charge backs
required by
Applicable Laws or made pursuant to agreements with customers, (c)
credits or
allowances actually granted upon claims, damaged goods, outdated
goods,
rejections or returns of such Product, including recalls, (d)
taxes, tariffs and
similar obligations, duties or other governmental charges (other
than income
taxes) levied on, absorbed or otherwise imposed on sales of such
Product in the
Territory and shown separately on the invoice, (e) shipping charges
and (f)
insurance costs related to shipping.
Components
of Net Sales shall be determined in the ordinary course of
business in accordance with historical practice and using the
accrual method of
accounting in accordance with GAAP, but shall not include any sales
of the
Product for pre-clinical or clinical testing or for other than
commercial
purposes.
In the
event BME transfers the Product to a Third Party in a bona fide
arm's length transaction, for consideration, in whole or in part,
other than
cash or to a Third Party in other than a bona fide arm's length
transaction, the
Net Sales price for such Product shall be deemed to be the standard
invoice
price then being invoiced by BME in an arms length transaction with
similar
customers for similar amounts less the items set forth in (a)
through (f) above.
"Patent
Rights" means all rights related to human interferon alpha
under
patents and patent applications, and any and all patents issuing
there from
(including utility, model and design patents and certificates of
invention),
together with any and all substitutions, extensions (including
supplemental
protection certificates), registrations, confirmations, reissues,
divisional,
continuations, continuations-in-part, re-examinations, renewals and
foreign
counterparts of the foregoing and all improvements, supplements,
modifications
or additions.
"Phase III
Study" means a well-controlled study of sufficient size and
appropriate design to demonstrate the safety and efficacy of the
Product for its
intended use.
"Phase IV"
means, as applicable, a study or program designed to obtain
additional safety or efficacy data, detect new uses for a drug, or
to determine
effectiveness for labeled indications under conditions of
widespread usage,
which is commenced after Government Approval of the Product in the
applicable
country in the Territory or any such study or program required by
the FDA or
other applicable Governmental Authority.
"PPM
Agreement" means the PPM/ACC Sublicense Agreement dated April
27,
1995 by and between Pharma Pacific Management Pty, Ltd. and
ABI.
"Pricing
and Reimbursement Approvals" means any pricing and
reimbursement
approval that must be obtained before placing the Product on the
market in the
Territory in which such approval is required.
"Prime
Rate of Interest" means the prime rate of interest published
from
time to time in The Wall Street Journal as the prime rate;
provided, however
that if The Wall Street Journal does not publish the prime rate of
interest,
then the term "Prime Rate of Interest" shall mean the rate of
interest publicly
announced by Bank of America, N.A., as its prime rate, base rate,
reference rate
or the equivalent of such rate, whether or not such bank makes
loans to
customers at, above, or below said rate.
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"Product"
means a formulation or composition containing IFN and
designated, detailed, or labeled for oral use in the treatment of
the Licensed
Indications.
"Regulations" means regulations, statutes, rules, guidelines
and
procedures promulgated by the FDA or other governmental agency
pursuant to the
Act or other law, including without limitation, those regulations
currently
contained in Title 21 of the CFR.
"Shipment"
or "Shipped" means each individual group of Product received by
BME from ABI or its agent.
"Specifications" means the specifications for the Product as may
be
amended from time to time by BME on notice to ABI or in compliance
with
Applicable Laws. The initial Specifications are attached hereto as
Exhibit A.
"TAMU
License Agreement" means the License Agreement between The Texas
A&M
University System and ABI dated March 22, 1988, as amended by
Amendment No. 1
dated September 17, 1998.
"Territory" means the country of Malaysia.
"Third
Party" means any entity other than ABI or BME or an Affiliate
of
ABI or BME.
"Unit"
means a single finished dosage form of Product in the form
designated by BME, which initially, for clinical supplies, shall
consist of a
200 mg by weight, with 150 international units by activity, tablet
or lozenge.
Clinical testing may result in a change in the optimal dose and
require a new
definition of "Unit."
(b) Each of the following terms is defined in the Section or under
the defined
term set forth opposite such term below:
ABI.............................................................Preamble
ADE.........................................................Section
9.02
Agreement.......................................................Preamble
Clinical
Records.........................................Section 2.01(c)
Disputed
Amount..........................................Section 5.03(a)
DMF......................................................Section
2.02(b)
Effective
Date..................................................Preamble
Force
Majeure..............................................Section
16.08
BME.............................................................Preamble
Indemnitee.................................................Section
13.03
Indemnitor.................................................Section
13.03
Interferon......................................................Recitals
Loss.......................................................Section
13.01
Parties.........................................................Preamble
Party...........................................................Preamble
Patent
Rights .............................................Section
10.01
Purchase
Price..............................................Section 7.01
Representatives............................................Section
15.01
Royalty
Payment Date........................................Section
4.02
Milestone
Payments..........................................Section 4.03
SEC........................................................Section
15.02
SOP.........................................................Section
9.02
Term........................................................Section
5.01
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(c) Interpretation. The section headings contained in this
Agreement are for
reference purposes only and shall not affect the meaning or
interpretation of
this Agreement. Except where the context clearly requires to the
contrary: (i)
each reference in this Agreement to a designated "Section" or
"Exhibit" is to
the corresponding Section or Exhibit of or to this Agreement; (ii)
instances of
gender or entity-specific usage (e.g., "his" "her" "its" "person"
or
"individual") shall not be interpreted to preclude the application
of any
provision of this Agreement to any individual or entity; (iii) the
word "or"
shall not be applied in its exclusive sense; (iv) "including" shall
mean
"including, without limitation"; (v) references to laws,
regulations and other
governmental rules, as well as to contracts, agreements and other
instruments,
shall mean such rules and instruments as in effect at the time of
determination
(taking into account any amendments thereto effective at such time
without
regard to whether such amendments were enacted or adopted after the
effective
date of this Agreement) and shall include all successor rules and
instruments
thereto; (vi) references to "$" or "dollars" shall mean the lawful
currency of
the United States; (vii) references to "Federal" or "federal" shall
be to laws,
agencies or other attributes of the United States (and not to any
State or
locality thereof); (viii) the meaning of the terms "domestic" and
"foreign"
shall be determined by reference to the United States; (ix)
references to "days"
shall mean calendar days; (x) references to months or years shall
be to the
actual calendar months or years at issue (taking into account the
actual number
of days in any such month or year); (xi) days, business days and
times of day
shall be determined by reference to local time in Amarillo, Texas;
and (xii) the
English language version of this Agreement shall govern all
questions of
interpretation relating to this Agreement, notwithstanding that
this Agreement
may have been translated into, and executed in, other
languages.
ARTICLE II:
RESEARCH AND DEVELOPMENT
Section 2.01. ABI
Obligations.
(a) As soon as reasonably practicable after the Effective Date, ABI
will make
available all ABI Know-How to BME for BME's inspection and at BME's
request will
provide BME with a copy of all ABI Know-How in tangible form and a
written
summary of all ABI Know-How not in tangible form. In the event BME
requests that
more than 1,000 pages be copied in connection with the foregoing,
BME shall
reimburse ABI for ABI's actual out-of-pocket costs for making
copies in excess
of 1,000 pages. BME shall pay ABI such amounts within 30 days
following BME's
receipt of an invoice therefor accompanied by documentation
reasonably
supporting such invoice.
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(b) ABI hereby grants to BME reference rights to ABI's, and agrees
to cause HBL
to grant to BME rights of reference to HBL's, as the case may be,
FDA Drug
Master File ("DMF"), when filed, and FDA Investigational New Drug
Application,
when filed, for HBL IFN and agrees to execute or cause HBL to
execute any
necessary authorization letters in this regard.
(c) ABI agrees to maintain, or cause HBL to maintain, the DMF for
HBL IFN
up-to-date at all times during the Term. ABI shall cooperate fully
with BME in
order to obtain all the Marketing Authorizations which now are or
later become
necessary to develop, Manufacture, use, market or sell any Product.
Such
cooperation shall include, but not be limited to, ABI providing BME
with the ABI
Know-How and ABI appearing at and participating in meetings with
regulatory
agencies at the reasonable request of BME to assist BME in
obtaining such
Marketing Authorizations as are now required, or may in the future
be required
to Manufacture, use, market or sell any Product. ABI shall execute,
or cause
third parties to execute, upon request by BME, any and all
documents reasonably
necessary to obtain such Marketing Authorizations. BME shall
reimburse ABI for
any reasonable out-of-pocket costs, including reasonable attorney's
fees and
travel expenses incurred by ABI in connection with such
cooperation.
(d) ABI shall provide to BME or any sub-licensee of BME, at BME's
request and,
unless otherwise set forth in this Agreement, sole expense, with
ABI Technology
reasonably necessary to enable BME or such sub-licensee to exercise
fully its
rights and fulfill its obligations under this Agreement
Section 2.02. BME
Obligations.
(a) BME will use commercially reasonable efforts to timely complete
at the sole
cost and expense of BME (i) clinical trials and development of
Product for the
treatment of the Licensed Indications, (ii) animal toxicology and
other
pre-clinical studies required for commercial launch of the Product,
(iii) Phase
III Studies, and (iv) other tasks supporting commercialization of
the final
formulation of the Product.
(b) BME shall use commercially reasonable efforts to timely secure
any and all
Governmental Approvals in the Territory and shall own and maintain
all
Governmental Approvals and related information as provided herein.
The Parties
agree and acknowledge that Governmental Approval for the Product
will be sought
in Malaysia.
(c) BME shall maintain records in sufficient detail and in good
scientific
manner appropriate for patent and regulatory purposes and shall
properly reflect
all work done and results achieved in the performance of its duties
hereunder
(including all data in the form required to be maintained under any
Applicable
Laws), and any subsequent pre-clinical or clinical studies (the
"Clinical
Records"). The Clinical Records shall be jointly owned by BME and
ABI, shall be
considered Confidential Information of both BME and ABI, and shall
include
books, records, reports, research notes, charts, graphs, comments,
computations,
analyses, compilations, recordings, photographs, computer programs
and
documentation thereof, computer information storage means, samples
of materials
and other graphic or written data generated in connection with
BME's research
and development activities with respect to the Product.
CONFIDENTIAL
**** Indicates that a portion of the text has been omitted and
filed separately
with the Commission.
<PAGE>
(d) ABI has the right, upon five business days prior written notice
to BME, to
inspect the Clinical Records upon request and during normal
business hours, and
BME shall, subject to Applicable Laws, provide ABI upon request
with a copy of
all requested Clinical Records, to the extent reasonably required
for the
exercise of ABI's rights under this Agreement. ABI may use the
Clinical Records
and the summaries thereof for commercial purposes. If ABI wants to
provide a
Third Party with the Clinical Records or a summary thereof or use
information
contained in such records for a commercial purpose, ABI may do
so.
Section 2.03.
Availability of Resources; Cooperation.
Each Party
shall maintain laboratories, offices and/or other facilities
reasonably necessary to carry out the activities to be performed by
such Party
hereunder. Upon reasonable advance notice, each Party agrees to
make its
employees and non-employee consultants reasonably available at
their respective
work locations to consult with the other Party on issues arising
during the
collaboration and in connection with any request from any
Governmental
Authority, including regulatory, scientific, technical and clinical
testing
issues.
Section 2.04.
Reporting Obligations of BME.
On or
prior to December 31st of each year during the Term of this
Agreement BME shall provide ABI with a report of ongoing
development efforts,
including a report of efforts by BME with respect to clinical
testing,
regulatory approval efforts, marketing/sales strategy, and any
other areas into
which BME's reasonable business efforts in accordance with this
paragraph may
reasonably be categorized. Such report shall be provided in English
and shall be
accompanied by samples of labeling, instructions, promotional and
other support
materials, if any, developed for BME's sales force, patients,
physicians, or
other outside parties.
ARTICLE III:
LICENSE
Section 3.01. License
and Supply Grant.
Subject to
the terms of this Agreement and the Existing Licenses, ABI
hereby grants to BME:
(a) an exclusive sublicense, with rights to sublicense, under the
ABI Technology
to use the ABI Technology to market, advertise, promote,
Manufacture, offer for
sale, sell, and distribute the Product in the Territory; and
(b) an exclusive sublicense, with rights to sublicense, under all
rights granted
to ABI pursuant to the HBL Agreement to market, advertise, promote,
Manufacture,
offer for sale, sell, and distribute the Product in the
Territory.
In
addition to the transfer fees and Royalty, ABI shall receive
fifty
percent (50%) of any license fee, option fee, or other payment,
which BME may
receive for the sublicense of rights under this Agreement to the
sale and/or use
of Product.
CONFIDENTIAL
**** Indicates that a portion of the text has been omitted and
filed separately
with the Commission.
<PAGE>
Section 3.02.
Restrictions.
BME shall
have the right to use and sell Product only in the Territory
and
only for use in the treatment of the Licensed Indications. BME
shall not seek
customers, establish any branch or maintain any distribution depot
for Product
in any country outside the Territory. BME shall not sell Product to
any customer
in any country outside the Territory or to any customer in the
Territory if, to
the knowledge of BME, such customer intends to resell such Product
in any
country outside the Territory.
Section 3.03. Retained
Rights.
ABI
retains all rights other than as set forth in this Agreement to
HBL
IFN and IFN, including without limitation, the right to test,
develop, license,
sublicense, market, distribute or otherwise use IFN and HBL IFN for
treatment of
the Licensed Indications outside the Territory.
Section 3.04. First
Right of Refusal.
BME shall
have a first right of refusal to add to this Agreement as
Licensed Indications, in the Territory, other clinical indications
treated or
treatable by the oral administration of IFN, as such may become
available from
ABI from time to time in the future, within the term of this
Agreement. In the
event ABI should determine to license such an indication or
indications in the
Territory, ABI shall provide written notice of such intention to
BME. If ABI
proposes to license such indication or indications to any person or
entity other
than BME, ABI shall provide to BME, along with such written notice,
a complete
outline of the substantive terms of such proposed license; BME
shall thereupon
have a period of thirty (30) days to notify ABI, in writing, that
it elects to
enter into the license, on the terms and conditions set forth in
such notice
from ABI to BME. If BME does not so notify ABI of its election to
license, then
ABI shall be free to license such indication or indications to the
party or
parties identified in such notice, or to any other party or
parties, during a
period of ninety (90) days after the expiration of the aforesaid
thirty (30)
days, and if ABI does not so license the indication or indications
within said
ninety (90) day period, BME's first right of refusal shall be
reinstituted, with
respect to any future license by ABI of such indication or
indications, in the
Territory. The first right of refusal contained in this Section
3.04 shall not
constitute an obligation on the part of ABI to license any further
indication or
indications in the Territory and ABI may elect not to develop
treatments for any
further indications, or if it does develop such, ABI may elect not
to license
them in the Territory.
ARTICLE IV:
PAYMENTS AND ROYALTIES
Section 4.01. Initial
Fee.
On the
Effective Date as an initial license fee BME shall pay to ABI a
fee
equal to **** US Dollars ($****) which fee shall be applied by ABI
toward patent
filings, prosecution and maintenance outside Malaysia.
CONFIDENTIAL
**** Indicates that a portion of the text has been omitted and
filed separately
with the Commission.
<PAGE>
Section 4.02. Royalty
Payments.
During the
Term, BME will pay ABI a royalty on Product equal to **** of
the aggregate Net Sales of Product in each calendar year; Royalties
shall be due
and payable thirty (30) days after the end of each calendar quarter
(each a
"Royalty Payment Date"). BME may prepay, in whole or in part, any
royalties
prior to the applicable Royalty Payment Date.
Section 4.03.
Milestone Payments.
BME shall
pay to ABI, as licensing fees, the following milestone payments
within 30 calendar days after the occurrence of the specified
milestone event
with respect to the Product:
(a) **** US
Dollars ($****) upon BME's receipt of the Governmental Approval
to market Product for human use from the applicable
Governmental
Authority in Malaysia and upon BME's completion of all required
Product
registration procedures.
(b) **** US
Dollars ($****) upon BME's first commercial sale of the Product
in Malaysia.
Section 4.04. Minimum
Payment.
BME shall
pay to ABI a Minimum Payment which shall be the greater of ****
dollars ($****) per calendar year, or **** dollars ($****) per
fifteen (15)
lozenges, of Product sales by BME, its affiliates or sub-licensees
in bonafide
arm's length, transactions per calendar year, starting from the
date of
completion of product registration procedures. Failure to make this
minimum
payment shall be a reason for Termination pursuant to Section
5.03(e). Minimum
Payments made under this Section 4.04 shall be applied toward the
royalty
payable under Section 4.02, above.
Section 4.05.
Reports.
BME shall
furnish to ABI a quarterly written report (in sufficient detail
to determine the relevant amounts and dates specified in this
Section 4.05),
which report shall contain at a minimum (a) the Minimum Payment
provided in
Section 4.04, including the number of lozenges sold; (b) the
calculation of Net
Sales; (c) royalties payable in U.S. dollars, if any, which shall
have accrued
hereunder based upon Net Sales; (d) withholding taxes, if any,
required by law
to be deducted with respect to such sales; (e) the dates of the
First Commercial
Sale of any Product; and (f) the exchange rates, if any, used to
determine the
amount of United States dollars (collectively, the "Royalty
Statement"). Reports
shall be due on the 30th day following the close of each
quarter.
Section 4.06. Records
and Audits.
During the
Term and for a period of two years thereafter or upon written
notice to BME received prior to the expiration of such two year
period as
otherwise required in order for ABI to comply with Applicable Law,
BME shall
keep complete and accurate records in sufficient detail to permit
ABI to confirm
the completeness and accuracy of the information presented in each
Royalty
Statement and all payments due hereunder. BME shall permit an
independent,
certified public accountant reasonably acceptable to BME to audit
and/or inspect
those records of BME (including financial records) that relate to
number of
lozenges sold and Net Sales for the sole purpose of verifying the
completeness
and accuracy of the Royalty Statements and the calculation of
Minimum Payments,
Net Sales and confirming royalty payments for the Product, during
the preceding
calendar year. Such inspection shall be conducted during BME's
normal business
hours, no more than once in any 12-month period and upon at least
ten days'
prior written notice by ABI to BME. If such accounting firm
concludes that such
payments were underpaid during the periods reviewed by such
accountants, BME
shall pay ABI the amount of any such underpayments, plus interest
at a rate
equal to the Prime Rate of Interest, within 30 days of the date ABI
delivers to
BME such accounting firm's report so concluding that such payments
were
underpaid. If such accounting firm concludes that such payments
were overpaid
during such period, ABI shall pay to BME the amount of any such
overpayments,
without interest, within 30 days of the date ABI delivers to BME
such accounting
firm's report so concluding that such payments were overpaid. ABI
shall bear the
full cost of such audit unless such audit discloses an underpayment
by more than
5% of the amount due during such period. In such case, BME shall
bear the full
cost of such audit.
CONFIDENTIAL
**** Indicates that a portion of the text has been omitted and
filed separately
with the Commission.
<PAGE>
Section 4.07. Exchange
Rate; Manner and Place of Payment.
All
payments hereunder shall be payable in United States dollars.
With
respect to each calendar quarter, whenever conversion of payments
from any
foreign currency shall be required, such conversion shall be made
at the rate of
exchange reported in The Wall Street Journal on the last business
day of the
applicable calendar quarter. All payments owed under this Agreement
shall be
made by wire transfer to a bank account designated in writing by
ABI, unless
otherwise specified in writing by ABI.
Section 4.08. Late
Payments.
Unless
otherwise provided in this Agreement, upon the failure of BME
to
pay any amount due under this Agreement within five days after
receipt of notice
by ABI that such amount has become due and payable and has not been
paid, BME
shall pay interest to ABI on such amount from the date such amount
is due under
this Agreement at the rate of 8% per annum calculated on the number
of days such
payment is delinquent, unless such payment is being disputed by BME
in good
faith pursuant to Section 5.03(a). Nothing in this Section 4.06
shall relieve
BME of BME's obligation to make payments, risk Termination pursuant
to Section
5.03(a), or provide a Royalty Statement pursuant to Section
5.03(b).
Section 4.09.
Taxes.
All taxes
levied on account of the payments accruing to ABI under this
Agreement shall be paid by ABI for its own account, including taxes
levied
thereon as income to ABI. If provision is made in law or regulation
for
withholding, such tax shall be deducted from the payment made by
BME, paid to
the proper taxing authority and a receipt of payment of the tax
secured and
promptly delivered to ABI.
CONFIDENTIAL
**** Indicates that a portion of the text has been omitted and
filed separately
with the Commission.
<PAGE>
ARTICLE V:
TERM AND TERMINATION
Section 5.01.
Term.
This
Agreement will take effect on the Effective Date and will remain
in
force through December 31, 2015 (the "Term") after which it shall
automatically
be renewed for successive periods of one year each, unless
terminated earlier
under provisions of this Article V or if notice of termination is
given by
either Party at least one hundred twenty (120) days prior to the
December 31st
anniversary each year after 2015.
Section 5.02.
Termination By BME.
BME may
terminate this Agreement by notice to ABI as follows:
(a) at any time with or without cause upon three months' prior
written notice to
ABI;
(b) immediately, if the HBL Agreement is terminated; or
(c) immediately, if BME reasonably determines based upon the
clinical trials and
after consultation with ABI that receipt of Governmental Approval
for a Product
is unlikely.
Section 5.03.
Termination by ABI.
ABI may
terminate this Agreement by notice to BME, upon any of the
following conditions:
(a) if BME shall fail to make any payments to ABI on the date on
which such
payments are due hereunder and such failure continues for more than
30 days
after BME's receipt of notice of such failure to pay; provided,
however, that
this subsection (a) shall not apply to any payment, or portion
thereof, under
this Agreement, which is the subject of a good faith dispute (a
"Disputed
Amount") between BME and ABI. Any Disputed Amount shall be resolved
by the
Parties within 30 days from the date BME notifies ABI o
