Exhibit 4(a)(1)





 


“CONFIDENTIAL TREATMENT
REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED AND HAVE
BEEN SEPARATELY FILED WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS, WHICH ARE IDENTIFIED BY ***.”


 


ASA Termination Agreement


Progen Industries Limited


ACN 010 975 612


Progen


Medigen Biotechnology Corporation


MBC


 


 


 


 


 


 


The Clayton Utz contact for this document is


Tim Reid on +61
7 3292  7000


 


Clayton Utz


Lawyers


Level 28, Riparian Plaza  71 Eagle Street  Brisbane 
QLD  4000  Australia


GPO Box 55 
Brisbane  QLD  4001


T +61 7 3292 7000  F +61 7 3221 9669


 


www.claytonutz.com


 


Our reference  15314/80049052


 

















 


Table of contents


	
  1.

  	
  Definitions and interpretations

  	
  1

  
	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Definitions

  	
  1

  
	
   

  	
  1.2

  	
  Interpretation

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Termination of ASA

  	
  3

  
	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Termination

  	
  3

  
	
   

  	
  2.2

  	
  Continuation
  of provisions

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Release

  	
  4

  
	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Mutual
  release

  	
  4

  
	
   

  	
  3.2

  	
  Preservation
  of rights

  	
  4

  
	
   

  	
  3.3

  	
  Independent
  obligations

  	
  4

  
	
   

  	
  3.4

  	
  Specific
  release from trial costs

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Provision of data

  	
  4

  
	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Final
  HCC PR88204 Stage I Data

  	
  4

  
	
   

  	
  4.2

  	
  HCC
  PR88204 Stage I Study Report

  	
  4

  
	
   

  	
  4.3

  	
  Access
  to PPC

  	
  5

  
	
   

  	
  4.4

  	
  Access
  to MBC

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Payments by Progen

  	
  5

  
	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Payments
  on delivery of data

  	
  5

  
	
   

  	
  5.2

  	
  Form
  of payments

  	
  5

  
	
   

  	
  5.3

  	
  Issue
  of shares

  	
  5

  
	
   

  	
  5.4

  	
  Trial
  costs payment

  	
  6

  
	
   

  	
  5.5

  	
  Transaction
  Event payment

  	
  6

  
	
   

  	
  5.6

  	
  Phase
  III Trial payment

  	
  6

  
	
   

  	
  5.7

  	
  Return
  of Medigen Shares

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Options

  	
  7

  
	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Issuance
  of options

  	
  7

  
	
   

  	
  6.2

  	
  Certificate

  	
  7

  
	
   

  	
  6.3

  	
  Options
  not to be listed

  	
  7

  
	
   

  	
  6.4

  	
  Grant
  of Options conditional

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Resignations

  	
  7

  
	
   

  	
   

  	
   

  
	
   

  	
  7.

  	
  Resignations

  	
  7

  
	
   

  	
  7.1

  	
  Resignation
  from Progen

  	
  7

  
	
   

  	
  7.2

  	
  Cessation
  of alternate director

  	
  7

  
	
   

  	
  7.3

  	
  Resignation
  from MBC

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Representations, warranties and undertakings

  	
  7

  
	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  General

  	
  7

  
	
   

  	
  8.2

  	
  Warranties
  by MBC regarding data

  	
  8

  
	
   

  	
  8.3

  	
  Warranties
  by MBC regarding equity

  	
  8

  
	
   

  	
  8.4

  	
  Warranties
  by Progen

  	
  8

  
	
   

  	
  8.5

  	
  Survival
  of warranties

  	
  8

  
	
   

  	
  8.6

  	
  Undertaking
  as to share sales

  	
  9

  
	
   

  	
  8.7

  	
  Undertaking
  as to a Transaction Event

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Confidentiality and public announcements

  	
  9

  
	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Confidentiality

  	
  9

  
	
   

  	
  9.2

  	
  MBC
  confidentiality obligations

  	
  9

  
	
   

  	
  9.3

  	
  ASA
  obligations

  	
  10

  



 


 


i

















 


	
   

  	
  9.4

  	
  Exceptions

  	
  10

  
	
   

  	
  9.5

  	
  Public
  announcements

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  Termination

  	
  10

  
	
   

  	
   

  	
   

  
	
   

  	
  10.1

  	
  Termination
  for Default

  	
  10

  
	
   

  	
  10.2

  	
  Event
  of Insolvency

  	
  11

  
	
   

  	
  10.3

  	
  Consequences
  of termination - obligations

  	
  11

  
	
   

  	
  10.4

  	
  Consequences
  of termination - information

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  Arbitration

  	
  11

  
	
   

  	
   

  	
  12

  
	
   

  	
  11.1

  	
  Reference
  to arbitration

  	
  12

  
	
   

  	
  11.2

  	
  General
  principles

  	
  12

  
	
   

  	
  11.3

  	
  Award
  final and binding

  	
  12

  
	
   

  	
  11.4

  	
  Governing
  law of arbitration agreement

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  Notices

  	
  12

  
	
   

  	
   

  	
   

  
	
  13.

  	
  General

  	
  13

  
	
   

  	
   

  	
   

  
	
   

  	
  13.1

  	
  Amendments

  	
  13

  
	
   

  	
  13.2

  	
  Assignment

  	
  13

  
	
   

  	
  13.3

  	
  Counterparts

  	
  13

  
	
   

  	
  13.4

  	
  Entire
  agreement

  	
  14

  
	
   

  	
  13.5

  	
  Expenses

  	
  14

  
	
   

  	
  13.6

  	
  Further
  acts and documents

  	
  14

  
	
   

  	
  13.7

  	
  Governing
  law

  	
  14

  
	
   

  	
  13.8

  	
  No
  representation or reliance

  	
  14

  
	
   

  	
  13.9

  	
  Severance

  	
  14

  
	
   

  	
  13.10

  	
  Waiver

  	
  14

  
	
   

  	
  13.11

  	
  Text
  of agreement

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  Annexure A - Option terms (clause 6.1)

  	
  17

  



 


 


ii

















 


 


ASA Termination Agreement made at
                                on


Parties                                                                                         Progen Industries Limited ACN 010 975 612 of 16
Benson Street Toowong Qld 4066


(“Progen”)


Medigen Biotechnology
Corporation, a company incorporated in Taiwan, of
Building F, Room A, 14F., No.3, Yuancyu St., Nangang District, Taipei City 115,
Taiwan


(“MBC”)


Background


A.                                                   Progen
and MBC entered into an Agreement for Strategic Alliance in 2000.


B.                                                     The parties have agreed to
terminate that agreement on the terms and conditions in this Agreement.


Operative provisions


1.                                                      Definitions and
interpretations


1.1                                               Definitions


“ASA”
means the Agreement for Strategic Alliance entered into in or about May 2000
between Progen and MBC as amended by the Supplementary Letter.


“ASX”
means Australian Securities Exchange Limited ACN 008 624 691.


“Business
Day” means a day that is not a Saturday, Sunday or
public holiday and on which banks are open for business generally in Brisbane
and in Taipei.


“Business
Hours” means between 9.00 am and 5.00 pm on a Business
Day.


“Claim”
means any claim, demand or cause of action whether
arising in contract or tort, under statute or otherwise in relation to any
provision of the ASA.


“Commercialise”
means the sale or other exploitation of a product developed from intellectual
property owned by or licensed to Progen in respect of PI-88 related to:


(a)                                                   the potential treatment of solid
tumours through inhibition of metastasis and new blood vessel growth; or


(b)                                                  the potential treatment for prevention
of thrombosis.


“Execution Date”
means the date that this Agreement is fully executed by each party.


“Final HCC PR88204 Stage I
Data” means final Validated Data from the results of the
HCC PR88204 Trial stage I undertaken by or on behalf of MBC in accordance with
the protocols agreed under the ASA.


“HCC PR88204 Stage I Study
Report” means the final study report prepared on the basis
of the Final HCC PR88204 Stage I Data.


 


1

















 


“ICH GCP”
means the guidelines of good clinical practice as approved by the International
Conference on Harmonisation of Technical Requirements of Pharmaceuticals for
Human Use.


“Issue Price”
means *** per ordinary share, being the volume weighted closing trading price
of Progen ordinary shares on ASX for the 30 Business Days up to and including ***.


“Listing Rules”
means the listing rules of ASX as they apply to Progen from time to time.


“Medigen Shares”
means 15,176,525 shares and 34,823,475 preferred shares held by Progen in MBC,
which represent Progen’s entire shareholding in MBC.


“Options”
means the options to be issued under clause 6.1 or clause 6.2.


“Patient Records” has
the meaning given to it in clause 4.1.


“Phase II PR88205 Study”
means the phase II study of PI-88 with Darcabazine in patients with metastatic
Melanoma as referred to in the Supplementary Letter.


“Phase III Trial”
means a trial involving testing of a drug in several hundred to several
thousand patients designed to provide statistically significant data on the
drug’s effectiveness, benefits and the range of possible adverse reactions.


“PI-88” means
an oligosaccharide based compound which inhibits heparanase, extravasation and
thrombosis.


“Preliminary HCC PR88204
Stage I Data” means preliminary Validated Data from the
results of the HCC PR88204 Trial stage I undertaken by or on behalf of MBC in
accordance with the protocols agreed under the ASA.


“PPC”
means Protech Pharmaservices Corporation, a company incorporated in Taiwan,
which is the independent party appointed to hold and verify the data created
under the trials contemplated by the ASA in general and the PR88204 trial in
particular.


“Supplementary Letter”
means the letter from Progen to MBC dated 18 April 2005 agreeing amendments to
the ASA.


“Taiwan DOH” means
the Taiwan Department of Health, Republic of China.


“Transaction Event” means in
relation to Progen:


	
  (a)

  	
  a
  person acquires voting power (within the meaning in section 610 of the
  Corporations Act 2001) in more than 50% of the ordinary shares in the Company
  as a result of a takeover bid which is unconditional; or

  
	
   

  	
   

  
	
  (b)

  	
  a
  person acquires voting power (within the meaning in section 610 of the
  Corporations Act 2001) in more than 50% of the ordinary shares in the Company
  through a scheme of arrangement; or

  
	
   

  	
   

  
	
  (c)

  	
  Progen
  enters into an agreement with a third party that is not a related body
  corporate of Progen, which agreement is or has become unconditional, which
  provides for one or more of the following:

  
	
   

  	
   

  
	
   

  	
  (i)

  	
  the grant of a licence to the third party
  to Commercialise PI-88;

  
	
   

  	
   

  
	
   

  	
  (ii)

  	
  a joint venture, partnership or similar
  arrangement under which Progen and the third party agree to carry on a
  business of Commercialising PI-

  



 


2





















 


	
   

  	
  88 and the third party is obliged to make material financial contributions
  to that activity,

  
	
   

  	
   

  
	
   

  	
  whether or not such agreement includes an agreement to further
  develop PI-88.

  
			



 


“Validated
Data” means patient data that has been validated and
verified to ICH GCP requirements by PPC or another contract research organisation
approved by Progen.


1.2                                               Interpretation


In this Agreement:


	
  (a)

  	
  headings are for convenience
  only and do not affect interpretation;

  
	
   

  	
   

  
	
  and unless the context indicates a contrary
  intention:

  
	
   

  	
   

  
	
  (b)

  	
  “person” includes an individual, the estate
  of an individual, a corporation, an authority, an association or a joint
  venture (whether incorporated or unincorporated), a partnership and a trust;

  
	
   

  	
   

  
	
  (c)

  	
  a reference to a party
  includes that party’s executors, administrators, successors and permitted
  assigns, including persons taking by way of novation;

  
	
   

  	
   

  
	
  (d)

  	
  a reference to a document
  (including this Agreement) is to that
  document as varied, novated, ratified or replaced from time to time;

  
	
   

  	
   

  
	
  (e)

  	
  a reference to a statute
  includes its delegated legislation and a reference to a statute or delegated
  legislation or a provision of either includes consolidations, amendments, re-enactments
  and replacements;

  
	
   

  	
   

  
	
  (f)

  	
  a word importing the singular
  includes the plural (and vice versa), and a word indicating a gender includes
  every other gender;

  
	
   

  	
   

  
	
  (g)

  	
  a reference to a party,
  clause, schedule, exhibit, attachment or annexure is a reference to a party,
  clause, schedule, exhibit, attachment or annexure to or of this Agreement, and a reference to this Agreement includes all schedules, exhibits,
  attachments and annexures to it;

  
	
   

  	
   

  
	
  (h)

  	
  if a word or phrase is given a
  defined meaning, any other part of speech or grammatical form of that word or
  phrase has a corresponding meaning;

  
	
   

  	
   

  
	
  (i)

  	
  “includes” in any form is not a word of limitation;
  and

  
	
   

  	
   

  
	
  (j)

  	
  a reference to “$” or “dollar”
  is to Australian currency.

  



 


2.                                                      Termination of ASA


2.1                                               Termination


In consideration of the
mutual promises in this Agreement and subject to this Agreement (in particular
clause 2.2), the parties agree that the ASA will terminate, and be of no
further force and effect, on and from the Execution Date.


2.2                                               Continuation of
provisions


Notwithstanding clause 2.1,
each of the parties agrees to continue to be bound by the rights and
obligations in clause 13 of the ASA as if it was incorporated in full in this
Agreement.


 


3

















 


3.                                                      Release


3.1                                               Mutual release


Subject
to clause 3.2, on and from the Execution Date, each party (“releasor”) irrevocably, fully and finally discharges and
releases the other party and each of its past or present directors, officers
and employees (“releasees”) from any claim or
action of whatsoever nature for any loss, damage or other liability that the
releasor had or may have against the releasees including the performance of any
further obligations which either of them may have pursuant to the ASA, but for
this Agreement.


3.2                                               Preservation of rights


The release in clause 3.1
does not operate to:


	
  (a)

  	
  release a party from a breach
  of the ASA occurring before the Execution Date; or

  
	
   

  	
   

  
	
  (b)

  	
  release MBC or Progen from any
  obligations under clauses 10, 11 or 13 of the ASA; or

  
	
   

  	
   

  
	
  (c)

  	
  derogate from or otherwise
  affect the intention of clause 13 of the ASA as to the ownership of the
  intellectual property referred to in that clause.

  



 


Other than the rights
specifically preserved in this clause 3.2, no other rights or obligations in
the ASA are preserved following termination of the ASA under this Agreement.


3.3                                               Independent
obligations


The obligations of the parties
under this Agreement are separate and independent obligations of the parties
and are not affected by the termination of the ASA under clause 2 or the
release in clause 3.1.


3.4                                               Specific release from
trial costs


Without limiting clause 3.1
but subject to this Agreement, Progen
irrevocably, fully and finally discharges and releases MBC from any further
obligation under the ASA to co-fund the Phase II PR88205 Study.


4.                                                      Provision of data


4.1                                               Final HCC PR88204
Stage I Data


As soon as the Final HCC
PR88204 Stage I Data is available, and in any event, no later than 14 February
2007, MBC must deliver to Progen the Final HCC PR88204 Stage I Data together
with, if available at that time, all patient case record forms including scanned forms relating to the Final HCC
PR88204 Stage I Data (“Patient Records”).
In any event, MBC must deliver to Progen the Patient Records by 14 March 2007.


4.2                                               HCC PR88204 Stage I
Study Report


As soon as the HCC PR88204
Stage I Study Report is available, and in any event, no later than 5 June 2007,
MBC must deliver to Progen the HCC PR88204 Stage I Study Report.


 


4

















 


4.3                                               Access to PPC


Progen may, and MBC will
give all necessary directions to permit Progen to, directly contact PPC or such
other independent party appointed to hold and verify the data created under the
trials contemplated by the ASA in general and the PR88204 trial in particular,
to resolve any questions that Progen has in respect of Validated Data which has
been provided to Progen by PPC or that other independent party provided that such access is at Progen’s own
expense and is granted only in a manner so as not
to interfere with the normal business operations of PPC.


4.4                                               Access to MBC


If
Progen wishes to contact MBC employees involved in
the conduct of the PR88204 trial to resolve any questions that Progen has in
respect of the data provided by MBC, Progen must first give notice to MBC and MBC must arrange for such
access at no cost to Progen, provided that such access is during normal business hours and undertaken
in a manner so as not to interfere with the normal business operations of MBC.
MBC will provide access to its employees under this clause and those employees
will assist Progen resolve any questions on a timely basis.


5.                                                      Payments by Progen


5.1                                               Payments on delivery
of data


In consideration for MBC
executing this Agreement, Progen must issue the following ordinary shares in
Progen and make the following payments at the times indicated:


	
  (a)

  	
  issue 500,000 ordinary shares
  in Progen within 10 Business Days after the Execution Date;

  
	
   

  	
   

  
	
  (b)

  	
  pay $2,000,000 within 10
  Business Days of the delivery of both the Final HCC PR88204 Stage I Data and
  the Patient Records under clause 4.1; and

  
	
   

  	
   

  
	
  (c)

  	
  pay $2,000,000 within 10
  Business Days of the delivery of the HCC PR88204 Stage I Study Report under
  clause 4.2.

  



 


5.2                                               Form of payments


Progen may, in its absolute
discretion, make the payments under clause 5.1(b) and (c) in either of the
following forms:


	
  (a)

  	
  cash in which case payment
  will be made by electronic transfer in Australian dollars to an account
  nominated by MBC for that purpose, or failing nomination of an account, by
  bank cheque drawn on an Australian bank; or

  
	
   

  	
   

  
	
  (b)

  	
  by the issue of ordinary
  shares in Progen at the Issue Price,

  



 


provided that at least $2,000,000 of the total payments
under clause 5.1(b) and (c) are paid by way of the issue of shares.


5.3                                               Issue of shares


If Progen issues ordinary
shares to MBC under clause 5.2:


	
  (a)

  	
  Progen must deliver to MBC on
  the date for payment a holding statement reflecting the shares issued or such
  other evidence of the issue of the shares reasonably satisfactory to MBC;

  



 


 


5





















 


	
  (b)

  	
  Progen will apply for the
  shares to be listed for quotation on ASX in accordance with the Listing
  Rules; and

  
	
   

  	
   

  
	
  (c)

  	
  MBC undertakes not to sell, or
  otherwise dispose of, the shares issued to it under clause 5.1(a) until such
  time as it has delivered to Progen both the Final HCC PR88204 Stage I Data
  and the Patient Records.

  



 


5.4                                               Trial costs payment


In
addition to the payments payable under clause 5.1, within 15 Business
Days after the Execution Date, Progen must pay to MBC $300,000 in consideration
of MBC’s contribution to the costs of the Phase II PR88205 Study, in the manner
described in clause 5.2(a).


5.5                                               Transaction Event
payment


In addition to the payments payable under
clause 5.1, within 20 Business Days after the consummation of the first
Transaction Event to occur after signing this Agreement, Progen must pay to MBC
as a once only payment, $2,000,000 in the manner described in clause 5.2(a).


 


5.6                                               Phase III Trial
payment


In
addition to the payments payable under clause 5.1, within 20 Business
Days after the commencement of the first Phase III Trial on PI-88, Progen must
pay to MBC $2,000,000 in the manner described in clause 5.2(a).


5.7                                               Return of Medigen
Shares


The parties agree that they
will take steps to cause the Medigen Shares to be returned by Progen to MBC for MBC to process the cancellation of the Medigen
Shares. Progen
and MBC must do all things necessary under Taiwanese law
to give effect to the intention of the parties under this clause including the following:


	
  (a)

  	
  within 5 Business Days of the Execution Date, Progen,
  at MBC’s cost, will appoint Ernst & Young Taiwan in Taiwan to apply to
  the Investment Commission of the Ministry of Economic Affairs on behalf of
  Progen for cancellation of Progen’s investment in MBC;

  
	
   

  	
   

  
	
  (b)

  	
  within 10 Business Days of the Execution Date, MBC
  must procure, at MBC’s cost, Ernst & Young Taiwan to prepare and provide
  to Progen for its execution, a statement by which Progen acknowledges its
  intention to abandon its equity investment in MBC;

  
	
   

  	
   

  
	
  (c)

  	
  within 10 Business Days of receiving the
  statement from MBC (or such longer period as may be required having regard to
  the need to have the statement notarized and legalized by the Taipei Economic
  and Cultural Office in Australia), Progen will execute the statement and
  arrange for it to be notarized and legalized by the Taipei Economic and
  Cultural Office in Australia at Progen’s cost up to a limit of $1,000;

  
	
   

  	
   

  
	
  (d)

  	
  MBC must cause Ernst & Young Taiwan to
  diligently pursue the application and advise Progen when it has been
  determined;

  
	
   

  	
   

  
	
  (e)

  	
  MBC must, or must instruct Ernst & Young
  Taiwan to, provide Progen with copies of all documents that Progen may
  require to properly account for and report the cancellation of its equity
  investment and such other documents relating to the cancellation of the
  equity investment as Progen reasonably requires.

  



 


 


6





















 


6.                                                      Options


6.1                                               Issuance of options


Within 10 Business Days after of the delivery of the HCC
PR88204 Stage I Study Report under clause 4.2, Progen must issue to MBC one
million options to subscribe for ordinary shares in Progen on the terms set out
in Annexure A.


6.2                                               Certificate


On the date of issue of
Options, Progen must deliver to MBC a certificate for the Options issued on
that date or such other evidence of issue of the Options as MBC reasonably requires.


6.3                                               Options not to be
listed


MBC acknowledges that Progen
is not obliged to apply for or cause the Options to be listed for quotation on
ASX or any other stock exchange.


6.4                                               Grant of Options
conditional


The grant by Progen of the
Options under clause 6.2 is conditional on MBC performing in full its
obligations under this Agreement which are due to be performed by the date for
issue of the Options under clause 6.2, including delivery of the HCC PR88204
Stage I Study Report under clause 4.2.


7.                                                      Resignations


7.1                                               Resignation from
Progen


On the Execution Date, MBC must
procure that Dr Stanley Chang resigns as a director of Progen and, subject to
payment by Progen of all director’s fees owing to Dr Chang up to the date of
resignation, releases Progen from any claims for director’s fees, remuneration
or any other matter absolutely.


7.2                                               Cessation of alternate
director


On the Execution Date, MBC must
procure that Dr Stanley Chang revokes the appointment of Mr Eugene Cheng as his
alternate director of Progen and procure that Mr Cheng provides an
acknowledgement to Progen that he has no claims against Progen for director’s
fees, remuneration or in respect of any other matter absolutely.


7.3                                               Resignation from MBC


On the Execution Date, Progen must give notice to MBC of its resignation from the
board of directors’ of MBC and release MBC from any claims for director’s fees,
remuneration, loss of office or any other matter absolutely.  Progen must also procure that the two
representatives appointed by Progen to the MBC board of directors’ are
discharged or resign as directors of MBC and release MBC from any claims for
directors’ fees, remuneration, loss of office or any other matter absolutely.


8.                                                      Representations,
warranties and undertakings


8.1                                               General


Each party
represents and warrants to the other party that:


 


7
















 


	
  (a)

  	
  this
  Agreement constitutes its valid and legally binding obligation in accordance
  with its terms;

  
	
   

  	
   

  
	
  (b)

  	
  the
  execution, delivery and performance of this Agreement by it does not violate
  any statute or law, or any document or agreement to which it is a party and
  which is binding on it or any of its assets; and

  
	
   

  	
   

  
	
  (c)

  	
  all
  consents, licences, approvals and authorisations required to be obtained by
  it in connection with the execution, delivery and performance of this
  Agreement have been obtained and are valid and subsisting.

  



 


8.2                                               Warranties by MBC
regarding data


MBC represents and warrants
for the benefit of Progen that each of the Preliminary HCC PR88204 Stage I
Data, the Final HCC PR88204 Stage I Data and the HCC PR88204 Stage I Study
Report will:


	
  (a)

  	
  be materially accurate and complete; and

  
	
   

  	
   

  
	
  (b)

  	
  to the best of MBC’s knowledge
  and belief, not be subject to any material misstatement.

  



 


8.3                                               Warranties by MBC
regarding equity


MBC represents and warrants
for the benefit of Progen that:


	
  (a)

  	
  it is aware
  that any ordinary shares issued under this Agreement will be issued with a
  view that offers for sale of those securities can be made subject to section
  708A of the Corporations Act;

  
	
   

  	
   

  
	
  (b)

  	
  it is aware
  that section 708A may not apply in the event that the Company does not
  satisfy the requirements under section 708A (including if a notice given to
  ASX under subsection 708A(5)(e) does not comply with subsection 708A(6));

  
	
   

  	
   

  
	
  (c)

  	
  it will not
  offer to sell those securities to any person that is a person to whom a
  disclosure document needs to be given under Chapter 6D of the Corporations
  Act until the day after a notice is lodged by the Company with ASX that
  complies with subsections 708A(5)(e) and 708A(6); and

  
	
   

  	
   

  
	
  (d)

  	
  its
  acceptance of securities is in compliance with all relevant laws and
  regulations (including, without limitation, the requirements of the
  Australian Foreign Acquisitions and Takeovers Act 1975) in any applicable
  jurisdiction.

  



 


8.4                                               Warranties by Progen


Progen
warrants that there has been no withheld information to MBC pertaining to any
written offer received pertaining to a possible Transaction Event as of the
Execution Date.


8.5                                               Survival of warranties


Each representation and warranty in this Agreement:


	
  (a)

  	
  is severable; and

  
	
   

  	
   

  
	
  (b)

  	
  will survive the termination
  of this Agreement.

  



 


 


8





















 


8.6                                               Undertaking as to
share sales


As long as MBC continues to hold
more than 3.5% of all issued and outstanding shares of Progen, MBC undertakes to notify Progen of any
intended on-market sale of shares in Progen by MBC at least 5 Business Days
before the intended date for sale. Progen agrees
to keep such information
confidential. MBC must give
reasonable consideration to any proposal by a purchaser (which is not an associate
of Progen) for the shares introduced by Progen or any other person before the
intended date for sale, with the intention that if the proposal is comparable
to, or better than, the market prices for the shares at that time, after
considering transaction costs, then MBC will prefer the proposal to selling the
shares in any other way.  Nothing in this
clause gives Progen or any other person power to control the exercise of a
power to dispose of the shares.


8.7                                               Undertaking as to a
Transaction Event


To
the extent permitted by law, Progen will notify MBC of a Transaction Event on execution of any binding
memorandum or agreement or at least 15 Business Days before the intended date
of the Transaction Event, whichever is earlier. In respect of a Transaction Event
of the type described in paragraphs (a) and (b) of the definition in clause
1.1, Progen agrees that:


	
  (a)

  	
  MBC
  is not restricted under this Agreement from selling or disposing of all of
  its shares in Progen or on a pro-rata basis with other sellers; and

  
	
   

  	
   

  
	
  (b)

  	
  this
  Agreement and the rights granted under this Agreement shall continue to bind
  Progen or its successor.

  



 


9.                                                      Confidentiality and
public announcements


9.1                                               Confidentiality


Subject to clauses 9.4
and 9.5, each party must keep the terms of this Agreement confidential.


9.2                                               MBC confidentiality
obligations


MBC must keep confidential:


	
  (a)

  	
  the Preliminary HCC PR88024
  Stage I Data;

  
	
   

  	
   

  
	
  (b)

  	
  the Final HCC PR88024 Stage I
  Data;

  
	
   

  	
   

  
	
  (c)

  	
  the HCC PR88024 Stage I Study
  Report;

  
	
   

  	
   

  
	
  (d)

  	
  all data and the study report
  arising from the follow-on study of the HCC PR88204 Trial stage I being
  conducted by MBC;

  
	
   

  	
   

  
	
  (e)

  	
  all data relating to the Phase
  II PR88205 Study; and

  
	
   

  	
   

  
	
  (f)

  	
  any other information of
  whatsoever nature which:

  
	
   

  	
   

  
	
   

  	
  (i)

  	
  was the subject of obligations of confidentiality under the ASA; or

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  is produced as a result of this Agreement being entered into and
  which relates to PI-88.

  



 


 


9





















 


9.3                                               ASA obligations


Notwithstanding clause 2.1,
each of the parties agree to continue to be bound by the confidentiality
obligations in clauses 10 and 11 of the ASA as if they were incorporated in
full in this Agreement.


9.4                                               Exceptions


A party may make any
disclosure in relation to this Agreement:


	
  (a)

  	
  to a professional adviser,
  financial adviser, banker, financier or auditor if that person is obliged to
  keep the information disclosed confidential;

  
	
   

  	
   

  
	
  (b)

  	
  to comply with the law, or a
  requirement of a regulatory body (including any relevant stock exchange);

  
	
   

  	
   

  
	
  (c)

  	
  to any of its employees to
  whom it is necessary to disclose the information;

  
	
   

  	
   

  
	
  (d)

  	
  to obtain the consent of a
  third party to a term of, or to an act under, this Agreement;

  
	
   

  	
   

  
	
  (e)

  	
  to enforce its rights or to
  defend a claim or action under this Agreement;

  
	
   

  	
   

  
	
  (f)

  	
  to a Agreement, on receipt of its undertaking to keep the information
  disclosed confidential; or

  
	
   

  	
   

  
	
  (g)

  	
  if the information disclosed
  has come into the public domain through no fault of the party making the
  disclosure.

  



 


9.5                                               Public announcements


	
  (a)

  	
  Except as required by law or a
  regulatory body (including a relevant stock exchange), all press releases and
  other public announcements in connection with this Agreement must be in terms agreed by the parties.

  
	
   

  	
   

  
	
  (b)

  	
  Unless compelled by law, MBC
  must not make any public statement about PI-88 or Progen which is negative or
  may have an adverse effect on Progen or its business.

  
	
   

  	
   

  
	
  (c)

  	
  If MBC becomes legally
  compelled to disclose any information which is the subject of the
  confidentiality obligations in this Agreement or which is negative or adverse
  to PI-88 or Progen, then MBC will immediately notify Progen so that Progen
  has the opportunity to apply for a protective order or other appropriate
  remedy.

  
	
   

  	
   

  
	
  (d)

  	
  Unless compelled by law, Progen must not make any public statement
  which is negative or may have an adverse effect on MBC or its business.

  
	
   

  	
   

   

  
	
  (e)

  	
  If Progen becomes legally compelled to
  disclose any information which is the subject of the confidentiality
  obligations in this Agreement or which is negative or adverse to MBC, then Progen will immediately notify MBC so that MBC has the opportunity to apply for a protective order or
  other appropriate remedy.

  



 


10.                                               Termination


10.1                                        Termination for
Default


Either party may terminate
this Agreement by notice to the other party if:


 


10

















 


	
  (a)

  	
  an event of insolvency set out
  in clause 11.2 occurs in respect of the other party; or

  
	
   

  	
   

  
	
  (b)

  	
  that other party commits any
  breach of a term of this Agreement and:

  
	
   

  	
   

  
	
   

  	
  (i)

  	
  the breach is material and not capable of being cured; or

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  the breach is capable of being cured, but is not cured within
  15 Business Days after a notice specifying the breach or default is
  given to the other party.

  



 


10.2                                        Event of Insolvency


An event of insolvency in
respect of a party means:


	
  (a)

  	
  an application has been made
  for winding up or the appointment of a liquidator or provisional liquidator
  is made and not dismissed, stayed, enjoined or withdrawn within 21 days;

  
	
   

  	
   

  
	
  (b)

  	
  any order is made or
  resolution passed for winding up (except for the purpose of reconstruction on
  terms approved by the other party);

  
	
   

  	
   

  
	
  (c)

  	
  it enters into a scheme of
  arrangement with its creditors or any class of creditors;

  
	
   

  	
   

  
	
  (d)

  	
  it has a receiver or manager
  of any of its assets appointed;

  
	
   

  	
   

  
	
  (e)

  	
  it has an administrator
  appointed under the Corporations Act 2001 (Cth), or any equivalent
  legislation;

  
	
   

  	
   

  
	
  (f)

  	
  it is taken to be insolvent
  under any relevant provision of the Corporations Act 2001 (Cth);

  
	
   

  	
   

  
	
  (g)

  	
  it stops payment of its debts
  or announces an intention to do so;

  
	
   

  	
   

  
	
  (h)

  	
  it is struck off or
  deregistered or otherwise ceases to exist or have full capacity;

  
	
   

  	
   

  
	
  (i)

  	
  execution is levied against
  any of its assets; or

  
	
   

  	
   

  
	
  (j)

  	
  it has any action taken
  against it or happen to it which is equivalent to paragraphs (a) to (i) under
  the law of any jurisdiction.

  



 


10.3                                        Consequences of
termination - obligations


Termination of this Agreement takes effect without prejudice to the
rights or remedies arising out of any antecedent breach of the Agreement.


10.4                                        Consequences of
termination - information


If this Agreement is
terminated, MBC must return to Progen within 10 Business Days of termination
all information, data or documents of any nature in relation to PI-88 which is
within its power, possession or control.


11.                                               Arbitration


11.1                                        Reference to
arbitration


	
  (a)

  	
  Any controversy, claim or
  dispute directly or indirectly based upon, arising out of, relating to or in
  connection with this Agreement
  (including but not limited to any question relating to the existence,
  validity or termination of this Agreement)
  shall

  



 


 


11





















 


	
   

  	
  be referred to and finally
  resolved by arbitration in accordance with the arbitration rules of the Singapore International Arbitration Centre.

  
	
   

  	
   

  
	
  (b)

  	
  The seat of the arbitration
  will be Singapore.

  
	
   

  	
   

  
	
  (c)

  	
  The number of arbitrators will
  be 1.

  
	
   

  	
   

  
	
  (d)

  	
  The language of the
  arbitration will be English.

  



 


11.2                                        General principles


The parties further agree to
the following general principles relating to the procedure of the arbitration:


	
  (a)

  	
  that they have chosen
  arbitration for the purposes of achieving a just, quick and cost-effective
  resolution of any dispute;

  
	
   

  	
   

  	
   

  
	
  (b)

  	
  that any arbitration conducted
  pursuant to this clause shall not necessarily mimic court proceedings and the
  practices of those courts will not regulate the conduct of the proceedings
  before the arbitral tribunal;

  
	
   

  	
   

  	
   

  
	
  (c)

  	
  that in conducting the
  arbitration, the arbitral tribunal must take into account the matters set out
  above, particularly in deciding issues such as:

  
	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
  how many written submissions will be allowed;

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  where appropriate, the length of written submissions;

  
	
   

  	
   

  	
   

  
	
   

  	
  (iii)

  	
  the extent of document discovery permitted, if any;

  
	
   

  	
   

  	
   

  
	
   

  	
  (iv)

  	
  the length of any hearing; and

  
	
   

  	
   

  	
   

  
	
   

  	
  (v)

  	
  the
  number of experts, if any, each party is allowed to appoint; and

  
	
   

  	
   

  	
   

  
	
  (d)

  	
  that
  the arbitral tribunal has the power to grant all legal, equitable and statutory remedies, except punitive
  damages.

  
				



 


11.3                                        Award final and
binding


Any
award will be final and binding upon the parties.


11.4                                        Governing law of
arbitration agreement


The
law governing this arbitration agreement is the law in Singapore.


12.                                               Notices


Each communication
(including each notice, consent, approval, request and demand) under or in
connection with this Agreement:


	
  (a)

  	
  must be in writing;

  
	
   

  	
   

  
	
  (b)

  	
  must be addressed as follows
  (or as otherwise notified by that party to each other party from time to
  time):

  



 


 


12





















 


	
  To Progen:

  
	
   

  
	
  Name:

  	
  Progen Industries Limited

  
	
  Address:

  	
  16
  Benson Street, Toowong, Qld 4066

  
	
  Fax:

  	
  61
  7 3720 9624

  
	
  For the attention of:

  	
  Company Secretary

  
	
   

  	
   

  
	
  To MBC:

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Medigen Biotechnology Corporation

  
	
  Address:

  	
  Building F, Room A, 14F., No.3, Yuancyu
  St., Nangang District, Taipei City 115, Taiwan

  
	
  Fax:

  	
  886 2 2785 5781

  
	
  For the attention of:

  	
  Chief Executive

  



 


	
  (c)

  	
  must be signed by the party
  making it or (on that party’s behalf) by the solicitor for, or any attorney,
  director, secretary or authorised agent of, that party;

  	 

	
   

  	
   

  	
   

  	 

	
  (d)

  	
  must be delivered by hand or
  posted by prepaid post to the address, or sent by fax to the number, of the
  addressee, in accordance with clause 12(b); and

  	 

	
   

  	
   

  	
   

  	 

	
  (e)

  	
  is taken to be received by the
  addressee:

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  (i)

  	
  (in the case of prepaid post sent to an address in the same country)
  on the third day after the date of posting;

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  (ii)

  	
  (in the case of prepaid post sent to an address in another country)
  on the fifth day after the date of posting by airmail;

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  (iii)

  	
  (in the case of fax) at the time in the place to which it is sent
  equivalent to the time shown on the transmission confirmation report produced
  by the fax machine from which it was sent; and

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  (iv)

  	
  (in the case of delivery by hand) on delivery,

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  but if the communication is taken to be received on a day that is not
  a working day or after 5.00 pm, it is taken to be received at
  9.00 am on the next working day (“working day” meaning a day that is not
  a Saturday, Sunday or public holiday and on which banks are open for business
  generally, in the place to which the communication is posted, sent or
  delivered).

  
					



 


13.                                               General


13.1                                        Amendments


This Agreement may only be
varied by a document signed by or on behalf of each party.


13.2                                        Assignment


A party cannot assign,
novate or otherwise transfer any of its rights or obligations under this
Agreement without the prior consent of each other party.


13.3                                        Counterparts


This Agreement may be executed in any number of counterparts and by the
parties on separate counterparts. Each counterpart constitutes an original of
this Agreement, and all together
constitute one agreement.


 


13

















 


13.4                                        Entire agreement


To the extent permitted by
law, in relation to its subject matter, this Agreement:


(a)                                                   embodies the entire understanding of
the parties, and constitutes the entire terms agreed by the parties; and


(b)                                                  supersedes any prior written or other
agreement of the parties.


13.5                                        Expenses


Except as otherwise provided
in this Agreement, each party must pay
its own costs and expenses in connection with negotiating, preparing, executing
and performing this Agreement.


13.6                                        Further acts and
documents


Each party must promptly do
all further acts and execute and deliver all further documents (in form and
content reasonably satisfactory to that party) required by law or reasonably
requested by another party to give effect to this Agreement. Any obligation to
assign or deliver up any intangible matter includes an obligation to deliver up
any media embodying that intangible matter.


13.7                                        Governing law


This Agreement is governed
by and must be construed according to the law applying in Queensland.


13.8                                        No representation or
reliance


(a)                                                   Each party acknowledges that no party
(nor any person acting on a party’s behalf) has made any representation or
other inducement to it to enter into this Agreement,
except for representations or inducements expressly set out in this Agreement.


(b)                                                  Each party acknowledges and confirms
that it does not enter into this Agreement
in reliance on any representation or other inducement by or on behalf of any
other party, except for representations or inducements expressly set out in
this Agreement.


13.9                                        Severance


If at any time a provision
of this Agreement is or becomes illegal,
invalid or unenforceable in any respect under the law of any jurisdiction, that
will not affect or impair:


(a)                                                   the legality, validity or
enforceability in that jurisdiction of any other provision of this Agreement; or


(b)                                                  the legality, validity or
enforceability under the law of any other jurisdiction of that or any other
provision of this Agreement.


13.10                                 Waiver


(a)                                                   Failure to exercise or enforce, or a
delay in exercising or enforcing, or the partial exercise or enforcement of, a
right, power or remedy provided by law or under this Agreement by a party does not preclude, or operate as a waiver of,
the exercise or enforcement, or further exercise or enforcement, of that or any
other right, power or remedy provided by law or under this Agreement.


 


14





















 


(b)                                                  A waiver or consent given by a party
under this Agreement is only effective
and binding on that party if it is given or confirmed in writing by that party.


(c)                                                   No waiver of a breach of a term of this
Agreement operates as a waiver of another
breach of that term or of a breach of any other term of this Agreement.


13.11                                 Text of agreement


This Agreement is binding in this
English text form. Any translation is for convenience only.


 


15

















 


Signed as an agreement.


 


 


	
  Executed by Progen Industries Limited  in

  accordance with section 127 of the Corporations

  Act by or in the presence of:

  
	
   

  
	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature of Secretary/other Director

  	
   

  	
  Signature of Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name of Secretary/other
  Director in full

  	
   

  	
  Name of Director

  	
   

  



 


 


 


	
  The Common Seal of Medigen

  Biotechnology Corporation was affixed in the

  presence of:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature of Director

  	
   

  	
  Signature of Secretary/other Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name of Director in full

  	
   

  	
  Name of Secretary/other
  Director in full

  	
   

  



 


 


16

















 


Annexure A -
Option terms (clause 6.1)


1.                                                       Each
Option entitles the holder to subscribe for one fully
paid ordinary share (“Share”) in accordance with these terms at an exercise
price equal to the volume weighted closing
trading price of Progen ordinary shares on ASX for the 60 Business Days up to
and including the date of delivery of the HCC PR88204 Stage I Study Report
under clause 4.2 of the ASA Termination Agreement
(“Exercise Price”).


2.                                                       The
Option expires at 5.00pm Sydney time on the second anniversary of the date of
issue (“Expiry Time”). The holder may exercise the Option at any time until the
Expiry Time.


3.                                                       Subject
to any applicable law, the holder may transfer some or all of the Options:


(a)                                                   if the Options are quoted on ASX, by a proper ASTC
transfer or any other method permitted by the Applicable Law; or


(b)                                                  by an instrument of transfer approved by the Directors
from time to time.


4.                                                       The
holder may exercise the Options
in whole or in part in accordance with this Annexure A.


5.                                                       Options
may be exercised by delivery to the Company of a notice signed by the holder
specifying the number of Options exercised together with payment to the Company
by cheque or electronic funds transfer of the Exercise Price for each Option
exercised. If the Options are not quoted on ASX, the holder must also deliver
the certificate for the Options or if the certificate for the Options has been
lost, mutilated or destroyed, a declaration to that effect.


6.                                                       On
valid exercise of Options, the Shares must be issued within 10 Business Days of
exercise. The Company must promptly apply for quotation of the Shares. The
Shares issued will, subject to the constitution of the Company, rank in all
respects equally with the existing ordinary shares at the date of issue.


7.                                                       The
holder may only participate in new issues of Shares if the holder exercises an
Option and becomes the holder of Shares on or prior to the record date for the
new issue of Shares.


8.                                                       If
the Company makes a pro rata issue, the Exercise Price of each Option will be
reduced with the new exercise price of each Option to be calculated in
accordance with the formula in Listing Rule 6.22.2. No change will be made to
the number of Shares to which the Holder is entitled.


9.                                                       If
the Company makes a bonus issue, the number of Shares issued on exercise of
each Option will be increased by the number of bonus Shares that the holder
would have received if the Option had been exercised prior to the record date
for the bonus issue.  No change will be
made to the Exercise Price.


10.                                                 If
there is a reorganisation (including consolidation, sub-division, reduction or
return) of the share capital of the Company, the rights of holders in respect
of any unexercised Options will only
be changed to the extent necessary to comply with the Listing Rules
applying to a reorganisation of capital at the time of the reorganisation.  The
remaining rights of the holders will remain unchanged.


 


17