**Exhibit 10.21**CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “***”. A COMPLETEVERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGECOMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24B-2 OF THEEXCHANGE ACT OF 1934.**CONFIDENTIAL****DOCOSANOL DATA TRANSFER & PATENT LICENSE AGREEMENT**     THIS DOCOSANOL DATA TRANSFER & PATENT LICENSE AGREEMENT is made and entered into as of July6, 2006 (“Effective Date”) between Avanir Pharmaceuticals, a California corporation(“Avanir”) and Healthcare Brands International Limited of 56 Queen Anne Street, LondonW1G 8LA (“HBI”).**BACKGROUND**     Avanir is the owner of certain data, know-how, trade secrets, confidential information,inventions, technology, and patent rights and that (i) pertain to Docosanol, (ii) relate to use ofDocosanol in the treatment of viral infections and inflammations of skin and mucous membranes inhumans, and other medicinal uses, and (iii) include certain medicinal formulations andmanufacturing methods of products containing Docosanol.     The United States Food and Drug Administration (“FDA”) has approved Avanir’s NewDrug Application in the United States of America (“USA”) and Avanir received approval ofits Marketing Authorization Application (“MAA”) from the Swedish Medical Products Agency(“MPA”) under a Mutual Recognition Process (“MRP”) relating to products incorporatingDocosanol for topical, human use for the treatment of herpes labialis.     HBI is interested in obtaining access to certain of Avanir’s proprietary data and know-how,and Avanir is willing to grant such access on the terms and conditions of this Agreement.     HBI is interested in obtaining from Avanir a license to Avanir’s patent rights relating tothe use of Docosanol and Avanir is willing to grant such license and access on the terms andconditions of this Agreement.     NOW, THEREFORE, in consideration of the monetary consideration set forth in this Agreementand of the terms, conditions and agreements contained in this Agreement, and for other good andvaluable consideration, the receipt and adequacy of which are acknowledged, Avanir and HBI agreeas follows:
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**Article I. DEFINITIONS**Words and phrases used in this Agreement which are not otherwise defined will be interpreted inaccordance with the common usage for such term in English in the USA. Technical terms unlessotherwise defined will be interpreted consistent with their common usage in the relevantscientific field. Some terms are defined in this Agreement parenthetically, and such terms willhave the meanings apparent from the context in which such terms are parenthetically defined. Whenused in this Agreement, each of the following defined terms will have the meanings set forth inthis Section.Section 1.01 “Additional Territories” means Italy, Greece, Cyprus, Turkey, Romania,Sweden, Denmark, Norway and/or Finland.Section 1.02 “Additional Rights” means Avanir’s Know-how and/or Intellectual Property inso far as it relates to any of the Additional Territories, including without limitation thoserights set out in Schedule 1.12.Section 1.03 “Affiliate(s)” means, with respect to each party, any organization,corporation, company, firm, or other entity that controls, is controlled by, or is under commoncontrol with such party. In this context “control” shall mean the ability to control themanagement of a company, whether through ownership of voting rights, contract, ability to controlor appoint the board or otherwise.Section 1.04 “Approval Date” has the meaning specified in Section 5.01.Section 1.05 “Business Day” means any day other than a Saturday, Sunday or any other daywhich is a public holiday in England.Section 1.06 “Data” means any data, results, know-how, and information which Avanir owns,controls or has a license (with a right to sublicense) and relating to Docosanol or that isnecessary or useful to the manufacture, use or sale of Products, including, without limitation,data or information incorporated either in Avanir’s approved New Drug Application in the USA orthe MAA, chemical compositions of monomers, derivatives, designs, polymers, solvents, catalysts,formulae, specifications, designs, chemical and physical data, clinical data, informationconcerning concentrations, combinations, indications, dosage strengths and sizes or packaging,preparations, synthesis, processes, formulations, administrations, applications, toxicity,operations, regulatory affairs and marketing.Section 1.07 “Docosanol” means docosanol ***and any other *** ***.Section 1.08 “European Rights” means all of Avanir’s Know-how and Intellectual Property inso far as it relates to the Territory, including without limitation those rights set out inSchedule 1.13.Section 1.09 **“**First Commercial Sale**”**means, in the Territory the first commercial sale,where sale means ***, whichever comes first, of a Product by HBI, its Affiliates or sublicenseesto any person or entity other than HBI, its Affiliates or sublicensees following TerritoryRegistration. *** Portions of this page have been omittedpursuant to a request for Confidential Treatment and filed separately with theCommission.
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Section 1.10 “Improvements” means any and all improvements, developments, alterations ormodifications to the Product made or developed by Avanir or HBI from time to time, solely to theextent that the composition, manufacture or use of any such item would be dominated by theLicensed Patents at the time when discovered or made or would require use of Know-how.Section 1.11 “Intellectual Property” means all patents and patent applications (includingthe Licensed Patents), registered and unregistered designs, design rights, copyright works orother intellectual property rights from time to time owned by Avanir in relation to the creation,manufacture, Registration, marketing, promotion, distribution and/or sale of the Products and/orDocosanol, including any Improvements.Section 1.12 “Know-how” means all of the Data, drawings, designs, specifications,processes, knowledge, correspondence, technical information and expertise from time to time ownedor controlled by Avanir in relation to the creation, manufacture, Registration, marketing,promotion, distribution and/or sale of the Products and/or Docosanol and its packaging, includingany Improvements.Section 1.13 “Licensed Patents” means all (i) patents and patent applications in theTerritory which generally or specifically claim a Product, a process for manufacturing orformulating a Product, an intermediate contained in a Product, or use of a Product and which areowned or controlled by Avanir, including without limitation those listed in Schedule 1.13and those owned by Avanir under Section 3.06; (ii) any divisionals, continuations, refilings, andextensions of any of the foregoing patents and patent applications; and (iii) all substitutions,reissues, renewals, reexaminations, patents of addition, and inventors’ certificates thereof,patent term extensions, supplementary protection certificates and exclusivity extensions of theforegoing patents.Section 1.14 “Product(s)” means any finished or semi-finished product that containsDocosanol (either as the sole ingredient or in combination with any other ingredient, substance orcompound, regardless of whether any other such ingredient, substance or compound is claimed as orconsidered to be an “active ingredient” or not) in any and all concentrations, formulations,preparations, administrations, combinations or dosage strengths and sizes thereof, together withall expansions and Improvements thereon, the manufacturing, use or sale of which would, but forthe licenses granted hereunder, infringe any Licensed Patent or employ any Know-how.Section 1.15 “Registration” means satisfaction of registration (including any duplicatemarketing authorizations) or notification requirements and receipt of approvals, licenses,registrations or authorizations of any appropriate regulatory agency, department, bureau or othergovernment entity, necessary for the commercialization of the Product, including any manufacture,use, storage, import, transport or sale of Products or the equivalent from the appropriategovernmental agency in any relevant country of the Territory or Additional Territory.Section 1.16 “Territory” means Russia, the Ukraine and the nations of the European Unionas of the Effective Date, but not any of the following countries: Italy, Greece, Cyprus, Turkey,Romania, Sweden, Denmark, Norway or Finland; provided, however, that if HBI has been granted alicense pursuant to Section 2.07 in respect of any Additional Territory, such Additional Territoryshall become part of the Territory and references to Territory shall thereafter be construedaccordingly. Other countries may be added to the Territory by the parties from time to time upon
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 the mutual execution of an amendment to this Agreement adding such countries and upon the paymentof mutually agreed consideration therefor.Section 1.17 “Third Party” or “Third Parties” means any person, organization,corporation, company, firm, or other entity that is not a party hereto or an Affiliate of eitherparty.**Article II. DATA TRANSFER & PATENT LICENSE**Section 2.01 Data Transfer. In consideration for the fee paid by HBI and in order tosupport HBI’s direct pursuit of applications for Registrations for marketing approval of Productsin the Territory, Avanir (A) hereby grants HBI the right to access and reference the Data, (B)will execute such letters of authorization or consents as reasonably requested by HBI inconnection with the foregoing, (C) will make available the Data which is the entire contents ofthe approved Swedish MAA regulatory submission for 10% docosanol cream in the treatment of herpeslabialis, and pre-clinical data relating to any Product, including, without limitation, copies ofall existing clinical data, documents, papers, protocols, results and analyses and allcorrespondence relating to the Swedish approval, and (D) will transfer, or cause to betransferred, to HBI all regulatory licenses for Products in the Territory existing as of theEffective Date. This Data represents a significant investment on the part of Avanir, and isconsidered proprietary to Avanir. HBI, therefore, agrees to retain control over this Data and notto transfer Data to Third Parties other than to regulatory authorities in the Territory or toregulatory consultants of HBI who are obligated in writing to maintain its confidentiality withoutadvance written approval of Avanir.Section 2.02 Patent License Grant. Subject to all the terms, payments and limitations ofthis Agreement, Avanir hereby grants to HBI an exclusive license under the European Rights tomake, have made, use, have used, offer to sell, sell, have sold through distributors and importProducts in the Territory, and to subcontract such rights as reasonably required to exercise therights granted hereunder and to grant sub-licenses of such rights upon approval by Avanir, not tobe unreasonably withheld or delayed, and subject to the terms set forth in Schedule 2.For clarity, as a consequence of the exclusive license granted herein, Avanir will not carry on orprocure any Third Party to carry on any activities within the scope of such license. Accordingly,Avanir shall not seek customers in the Territory and will not maintain a distribution depot in theTerritory for sales of Product to customers in the Territory. Notwithstanding the foregoing,Avanir shall be entitled to manufacture Product in the Territory for the sole purpose of exportingProduct outside the Territory provided that Avanir shall not sell or supply Product to any ThirdParty in the event Avanir believes or has reasonable cause to believe that such Third Partyintends to sell such Product into the Territory. HBI shall not seek customers outside theTerritory and will not maintain a distribution depot outside the Territory for sales of Product tocustomers outside the Territory. Notwithstanding the foregoing, HBI shall be entitled tomanufacture Product outside the Territory for the sole purpose of exporting Product into theTerritory provided that HBI shall not sell or supply Product to any Third Party in the event thatHBI believes or has reasonable cause to believe that such Third Party intends to sell such Productoutside the Territory.Section 2.03 Duty to Supplement the Data. Subject to any contractual prohibitions bywhich Avanir is bound as of the Effective Date, in the event that Avanir receives any supplementalData or other Know-how or copies of correspondence with regulatory authorities outside theTerritory from any other licensees or any other source that relates to the Products, Avanir willpromptly
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 provide such updates of Data and/or Know-how to HBI. Upon request of HBI, Avanir shall requestpermission from other licensees of Products to share any such information which Avanir receiveswith HBI, solely for use by HBI under the terms of this Agreement. Avanir will also makeavailable, upon request, content from the US NDA 20-941 to HBI for use in seeking and supportingProduct Registrations in the Territory. HBI shall be permitted to reference such US NDA and anyother regulatory filings made by Avanir or its licensees in the Additional Territories to theextent reasonably necessary to obtain Registrations in the Territory.Section 2.04 Data Transfer Fees. In consideration for the transfer of the Data as aknow-how and data transfer fee, HBI will pay to Avanir, (a) the sum of £750,000 within ten (10)business days of the execution of this Agreement and (b) the sum of £750,000 within 30 days ofreceipt of each of the first two grants in the Territory by the appropriate regulatory authoritiesof the regulatory approvals necessary to commence sales, including Registration and pricingapprovals if required, in each case with respect to approvals which are received after theEffective Date.Section 2.05 Taxes. HBI will pay and bear the expense of local, state and/or federalgovernment license, sales and use, property and *ad valorem*taxes and any custom duties, fees orcharges which may be imposed or assessed on it with respect to manufacture or sales of Products inthe Territory under this Agreement.Section 2.06 Deferred Compensation. In accordance with Schedule 2 and in furtherconsideration for the licenses granted pursuant to Section 2.02, for (a) sales orsublicenses of Product rights, (b) sales of HBI and (c) initial public offerings, Licensee willpay Avanir non-refundable amounts as calculated on Schedule 2. For clarity, no royaltiesshall be due on sales of Products hereunder.Section 2.07 **“**Additional Territories License”. Avanir grants HBI a right of first offerto obtain a license under the terms set out in Section 2.02 of the relevant Additional Rights inrespect of each of the Additional Territories. This shall mean that before making any offer toany Third Party of, or making direct use by Avanir following expiration, termination orrenegotiation of any existing license agreement relating to, any of the Additional Rights (or anyinterest in any of them), directly or indirectly, Avanir shall first notify HBI in writing of theof its offer of such Additional Rights and shall give HBI *** Business Days in which todecide whether it wishes to acquire the rights which are the subject of such written offer. IfHBI wishes to acquire such Additional Rights, HBI and Avanir shall then negotiate terms to extendthe licenses hereunder to include such rights in good faith for a period of no more than 60 daysfrom the end of the first *** Business Day period. If such terms are agreed within such period,and Avanir has as of such date obtained by reversion from an existing licensee, rights to anyRegistrations relevant to the Product in such part of the Additional Territory as has become partof the Territory pursuant to this Section 2.07, Avanir shall transfer such rights to HBI upon theexecution of the amendment adding such Additional Territory. If HBI and Avanir are not able toagree on such terms within such additional 60 day period then Avanir may thereafter offer suchAdditional Rights to any Third Party on financial terms which are substantially equivalent to theterms that were last offered to HBI. *** Portions of this page have been omittedpursuant to a request for Confidential Treatment and filed separately with theCommission.
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**Article III. INTELLECTUAL PROPERTY**Section 3.01 Patent Prosecution and Maintenance.     (a) Discretionary Duty to Prosecute and Maintain: Avanir shall, at Avanir’s expense,use all commercially reasonable efforts to prosecute or cause to be prosecuted or continue toprosecute to allowance or final rejection in the Territory the patent applications included in theLicensed Patents. Avanir shall, at Avanir’s expense use all commercially reasonable efforts tomaintain any issued patents described within the Licensed Patents. Avanir shall promptly provideHBI with copies of all correspondence with patent offices relevant to the foregoing efforts. If,subject to Avanir’s obligation to use all commercially reasonable efforts as provided herein,Avanir fails to so file, prosecute, cause to be prosecuted, or maintain the Licensed Patents, HBImay elect to do so.     (b) HBI’s Right to Consult: Avanir shall furnish HBI with copies of allcorrespondence relating to the Licensed Patents to and from patent offices in the Territory andshall provide HBI a reasonable time to offer its comments thereon, *provided*that in the event thatdelay would jeopardize any potential patent right, Avanir shall use all commercially reasonableefforts to proceed without awaiting HBI’s comments on any patent application or correspondence.HBI shall have the right to consult with Avanir regarding the content of the patent applicationsincluded in the Licensed Patents in the Territory and to comment on any prosecution thereof.Avanir shall consider all such comments offered by HBI in good faith, it being agreed, however,that all final decisions respecting conduct of the prosecution of said patent applications shallrest solely in the discretion of Avanir. Any legal fees or expenses incurred by HBI under thisSection 3.01 shall be the sole responsibility of HBI.     (c) Abandonment of Prosecution: Avanir shall notify HBI in the event Avanir decidesat any time, subject to Avanir’s obligation to use all commercially reasonable efforts as providedherein, to abandon or discontinue prosecution of any one or more of the patent applicationsincluded in the Licensed Patents in the Territory, including any decisions to discontinue pursuitof applications which have been finally rejected. Such notification will be given as early aspossible which in no event will be less than *** days prior to the date on which saidapplication(s) will become abandoned. HBI shall have the option, exercisable upon writtennotification to Avanir, to assume full responsibility, at its discretion and expense, for theprosecution of the affected patent application(s). Under no circumstances shall any such expensepaid by HBI be refundable to HBI by Avanir. Under no circumstance shall any such assumption ofresponsibility on the part of HBI affect ownership of any such patent application or any patentissuing thereon.     (d) Abandonment of Opposition Contest: Should a priority or opposition contestdevelop in any patent office or other forum within the Territory relating to a patent or patentapplication within the Licensed Patents which Avanir does not believe it would be commerciallyreasonable to defend, then HBI shall be given *** days notice in which to elect to continueprosecuting and defending such patent or patent applications at HBI’s own expense. Otherwise, HBIshall pursue and bear the cost of any such contest and shall have control of such contest. Avanirshall provide HBI with all cooperation and available documents required by HBI to prosecute anysuch priority *** Portions of this page have been omittedpursuant to a request for Confidential Treatment and filed separately with theCommission.
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or opposition contest not pursued by HBI, including cooperation of any licensor orconsultants of Avanir, at HBI’s expense. Avanir shall have the right to participate in any suchcontest, or designate its own counsel to so participate, at Avanir’s own expense, throughout eachstep of such priority or opposition contest. Under no circumstance shall any such expenses or feespaid by HBIbe refundable to HBI by Avanir. Under no circumstances shall any such election on the part of HBIaffect ownership of any such patent or patent application, including any patent issuing thereon.     (e) Patent Term Extension: In the event that applicable law in any country in theTerritory provides for the extension of the term of any patent included among Licensed Patents,Avanir shall, upon request of HBI, apply for and use all commercially reasonable efforts to obtainsuch an extension or, should the law require HBI to so apply, Avanir hereby gives permission toHBI to do so. HBI and Avanir agree to cooperate with one another in obtaining such extension.Avanir agrees to cooperate with HBI in the exercise of the authorization granted herein and willexecute such documents and take such additional action as HBI may reasonably request in connectiontherewith.Section 3.02 Enforcement of Patent Rights Against Third Parties. If either party becomesaware of any product or activity of any Third Party that involves infringement or violation of anyof Avanir’s proprietary rights licensed to HBI hereunder, then such party will promptly notify theother party in writing of such infringement or violation. Subject to Section 3.03, Avanir may inits sole discretion take or not take whatever action it believes is appropriate in connectionwith, and will have the right to initiate an infringement or other appropriate suit against, anyThird Party who is suspected of infringing or misappropriating any Licensed Patents, invention ortechnology included in any Products or the Data in the Territory. If Avanir elects to takeaction, HBI will fully cooperate therewith at Avanir’s expense. If Avanir initiates andprosecutes any such action under this section, all legal expenses (including court costs andattorneys’ fees) will be for Avanir’s account. All amounts awarded by way of judgment, settlementor compromise and any such damages, royalties, settlement fees or other consideration received byAvanir will be shared by the parties in proportion to the damages that each has suffered inrelation to such infringement. Avanir will have the sole and exclusive right to select counselfor any such suit but shall consult with HBI in that regard. If necessary, HBI may be joined as aparty to the suit and will cooperate fully with respect to such suit and will offer suchassistance to Avanir as Avanir reasonably requests in connection therewith at no charge except forreimbursement of reasonable out-of-pocket expenses (including attorneys’ fees) incurred inrendering such assistance.Section 3.03 Enforcement of Patent Rights Against Third Parties by HBI. If Avanirdeclines to (or does not agree to) enforce or initiate an infringement or other appropriate suitagainst an infringing Third Party in the Territory within *** Business Days of HBIinforming it of a claim, or, notwithstanding Section 3.02, to the extent such infringement relatesto the Territory, HBI will have the right to sue in respect of any such infringement in theTerritory and shall be entitled to all amounts awarded by way of judgment, settlement orcompromise, provided, however, that Avanir will be entitled to a *** percent (***%) share of anydamages or payments (other than for reimbursement of costs or expenses, including attorneys’ fees)received by HBI from such Third Party(s). If HBI elects to take such action, Avanir will fullycooperate therewith at HBI’s expense *** Portions of this page have been omittedpursuant to a request for Confidential Treatment and filed separately with theCommission.
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and will not itself take any conflicting action underSection 3.02 (though it may take action in respect of countries which are not within theTerritory). HBI may in any event seek injunctive relief in appropriate cases without notice to orconsent from Avanir.The parties shall keep one another informed of the status of and of their respective activitiesregarding any litigation or settlement thereof concerning Product pursuant to this Section 3.03 orSection 3.02, provided, however, that no settlement or consent judgment or other voluntary finaldisposition of any suit defended or action brought by a party pursuant to this Article 3may be entered into without the consent of the other party if such settlement would require theother party to be subject to an injunction or to make a monetary payment or would otherwiseadversely affect the other party’s rights under this Agreement or the validity, scope orenforceability of the Licensed Patents.Section 3.04 Confidential Information. Each party to this Agreement acknowledges that inorder for Avanir and HBI to carry out their respective obligations under this Agreement, it may benecessary for Avanir and HBI to disclose to each other certain non-public and valuable businessinformation (“Confidential Information”), which shall include without limitationinformation exchanged or provided under Sections 2.01, 2.03 and 4.02 hereof. Each party to thisAgreement agrees: (a) not to reveal or make available any Confidential Information of the other toany Third Party, (except (i) to agents engaged to obtain Registrations in the Territory who haveentered into confidentiality agreements in a form acceptable to Avanir or (ii) as such disclosuremay be specifically approved in writing by the party against whom such disclosure is sought andexcept as such disclosure may be required by the receiving party’s compliance with legalrequirements and in any such case such party will promptly notify the other party of any suchlegally required disclosure) and to ensure that it will treat such Confidential Information of theother party in the same manner as it treats its own Confidential Information, such treatment to beat least the degree that a reasonable person would perform under similar circumstances; (b) toensure that Affiliates, sublicensees, employees, agents, associates or other persons to whom suchdisclosure may be made or who may otherwise have access to such Confidential Information of theother have, directly or indirectly, agreed in writing to safeguard and maintain such ConfidentialInformation of the other and not to disclose or use such Confidential Information of the otherexcept as expressly provided herein; (c) to ensure that Confidential Information of the other isnot used for the receiving party’s benefit except as such benefits are expressly contemplated inthis Agreement; (d) to prohibit the Confidential Information of the other from being duplicated inany manner; except as is reasonably necessary to perform the tasks and obligations contemplatedunder this Agreement; and (e) to prohibit the Confidential Information of the other from beingpublished in any form without the express written consent from the disclosing party. Theobligations of this Section with respect to Confidential Information of the other Party willcontinue during the term of this Agreement and for 10 years thereafter. For clarity, thisSection 3.04 shall not be deemed to prevent HBI from subcontracting or sublicensing underSection 2.02 or either Party from making any permitted assignment under Section7.03.Section 3.05 Trademarks. HBI will have no right to use the Avanir trade name or any Avanirtrademark. HBI will solely own any trademark or trademarks selected by HBI for use in connectionwith the sale of the Products in the Territory, together with any registrations or pendingregistration applications or intent to use filings therefor, and HBI will be solely responsiblefor use and registration of such trademarks and all related costs and expenses.
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Section 3.06 Improvements. Each party will solely own any and all Improvements that eachsuch party invents, develops, discovers or creates, without any obligation to the other party withrespect thereto other than as expressly provided herein. Subject to mutual agreement onapplicable termsand conditions, HBI will grant to Avanir a non-exclusive license outside the Territory to anyHBI-owned Improvements.**Article IV. REGULATORY MATTERS**Section 4.01 Additional Studies. HBI will be responsible for (a) conducting anyadditional pre-clinical, clinical or non-clinical studies reasonably necessary or required to beconducted in order to obtain or to maintain in effect Registrations of the Products in theTerritory and (b) all costs and expenses associated therewith.Section 4.02 Registrations. Avanir hereby grants to HBI the right to communicate directlywith applicable government agencies. HBI will be solely responsible for, will manage, direct andcontrol the application process and will directly communicate with each applicable agency requiredin order to prepare and submit an application for Registration with health care authorities in atleast *** countries in the Territory within *** months from the Effective Date. HBIwill directly bear all costs and expenses of, and will own, all applications for Registrations.Avanir will assist HBI in the regulatory matters as appropriate, and HBI will compensate Avanirfor its personnel’s reasonable time and expenses *** man hours will be provided with Avanir’sexecutive hours and non-executive hours to be charged to HBI at $***/hour and $***/hourrespectively, plus expenses). Each party will notify the other immediately by telephone (withprompt, written follow-up) of any inquiry, contact or communication received from any governmentalregulatory agency or other official body which adversely relates to or impacts upon the Productsor any component or ingredient thereof (including, without limitation, any issuance of anyRegistration administrative decree relating to a recall of the Products or the imposition of anypost marketing surveillance period), and will promptly furnish the other party with copies of allwritten communications relating thereto sent to or received from such regulatory agency. HBI willkeep Avanir informed of the status of the Registration efforts on a current basis and will furnishAvanir, upon Avanir’s reasonable request, copies of all of the documents, data and otherinformation supplied to or received from the government in the Territory or other any approvalauthority in connection with the Registration. Avanir will have the right to be informed of, andupon HBI’s request, will participate in and attend discussions regarding any Registration in theTerritory or any administrative decree. Upon receipt of the Registrations, HBI will promptlyfurnish Avanir copies or other evidence thereof.Section 4.03 Adverse Event Data Exchange. In the event that either party or itsAffiliates or licensees (or, in HBI’s case, sub-licensees) obtains, directly or indirectly,information, data, inquiries complaints or reports on any Adverse Events (as defined in accordancewith ICH Guidelines) relevant to a Product during the development, marketing and distribution ofany of the Products, such party will disclose, as soon as reasonably practicable and, inaccordance with applicable laws, such information and data to the other party. In any event, eachparty shall inform the other party of any Adverse Event of which it becomes aware in a timelymanner commensurate with the seriousness of the Adverse Event and in compliance with ICHGuidelines. HBI will be *** Portions of this page have been omittedpursuant to a request for Confidential Treatment and filed separately with theCommission.
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responsible for reporting all Adverse Events to the appropriateregulatory authorities in the countries in the Territory in accordance with the appropriate lawsand regulations of the relevant countries and authorities and Avanir or its other licensees willbe responsible for reporting allAdverse Events to the appropriate regulatory authorities in the countries outside the Territory.HBI will ensure that its Affiliates and sublicensees comply with all such reporting obligations,and Avanir will use commercially reasonable efforts to ensure that its Affiliates and otherlicensees comply with all such reporting obligations.Section 4.04 Labeling. HBI agrees that (a) in any part of the Territory, the Product’spackaging and all Product labeling will only be in the primary languages of the country(ies) wherethe Product is being sold, and (b) in any country of the Territory where there is a LicensedPatent, the word “patented” will appear on the Product’s packaging in a place determined by HBI inits sole discretion, in each case to the extent practicable and permissible under any applicablelaw.**Article V. ALLOCATIONS OF RESPONSIBILITIES AND RISKS.**Section 5.01 Commercialization &Manufacturing of Products. HBI will use allcommercially reasonable efforts to apply its marketing and sales expertise to maximize the sale ofthe Products in the Territory as soon as is reasonably practical. Such efforts shall include thatthe First Commercial Sale will occur no later than *** months after the receipt of allregulatory approvals required to commence sales, including Registration and pricing approvals ifrequired, in each country, which approvals are received after the Effective Date (each such date,an “Approval Date”). As between Avanir and HBI, throughout the term of this Agreement,HBI will be solely responsible for and entitled to (and Avanir shall refrain from and shall notassist or procure any Affiliate or Third Party unless at the request of HBI to): (a) manufactureor have manufactured the Products for distribution and sale in the Territory and any relatedpackaging, (b) acquire or cause to be acquired all manufacturing equipment and licenses,including, without limitation, plant, equipment and facilities licenses and approvals, necessaryto enable the manufacture and testing of the Products, (c) obtaining any required importationlicenses or approvals for importation of bulk Docosanol or fully manufactured Products into theTerritory, (d) report matters regarding the manufacture of Products to relevant regulatoryauthorities and handle and respond to any appropriate governmental agency inspections with respectto manufacturing of Products, all in accordance with applicable laws and regulations.Section 5.02 WARRANTIES.     (a) Avanir represents that it owns the Know-How and the Licensed Patents and has all powerand authority necessary to grant the licenses and rights to HBI under this Agreement.     (b) Avanir further warrants and represents that there is nothing in any Third Party agreementAvanir has entered into as of the Effective Date which, in any way, will limit Avanir’s ability toperform all of the obligations undertaken by Avanir hereunder, and that it will not enter into anyAgreement after the Effective Date under which Avanir would incur any such limitations. *** Portions of this page have been omittedpursuant to a request for Confidential Treatment and filed separately with theCommission.
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(c) Nothing in this Agreement shall be construed as a warranty that Licensed Patents arevalid or enforceable as of the Effective Date, or that they will be so during the term of thisAgreement; provided, however, that Avanir hereby warrants and represents that it has no presentknowledge from which it can be inferred that Licensed Patents are invalid or that their exercisewould infringe patent rights of Third Parties, and that the Licensed Patents have been filed,prosecuted and maintained in good faith to date. Avanir further warrants and represents that ithas no present knowledge from which it can be inferred that the use of or the process ofmanufacturing Product, and all intermediates of such process, will infringe patent rights of ThirdParties in any country in the Territory.     (d) Avanir warrants and represents that, it has furnished to HBI, or will, pursuant toArticle 2 hereof, furnish to HBI, copies of all clinical information and correspondence withregulatory authorities in the Territory relevant to Products that are in the possession of Avaniras of the Effective Date.     (e) Avanir warrants and represents that the officers of Avanir have no present knowledge ofthe existence of any pre-clinical or clinical results or findings concerning the Product which ithas not provided to HBI prior to the Effective Date and which results or findings in Avanir’sreasonable opinion, evidences any issue of quality, toxicity, safety and/or efficacy that wouldmaterially impair marketing and sale of the Product.     (f) AVANIR EXPRESSLY DISCLAIMS ANY OTHER WARRANTY AND ESPECIALLY WITH RESPECT TO (A) THEQUALITY, EFFICACY OR EFFICIENCY OF THE PRODUCTS, DATA OR OTHER INFORMATION TO BE DELIVERED UNDERTHIS AGREEMENT; AND (B) MERCHANTABILITY OF ANY DATA, PRODUCTS OR KNOW-HOW, OR FITNESS FOR APARTICULAR PURPOSE WITH RESPECT TO ANY AND ALL OF THE FOREGOING.Section 5.03 Limitation of Liability. TO THE EXTENT PERMITTED BY APPLICABLE LAW, NEITHERHBI NOR AVANIR WILL BE LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANYCONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY FOR COST OF PROCUREMENT OF SUBSTITUTEGOODS, SERVICES, TECHNOLOGY OR RIGHTS OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES. NEITHERAVANIR NOR HBI WILL BE LIABLE FOR ANY AMOUNTS AGGREGATING IN EXCESS OF THE AMOUNTS PAID TO IT (FORAVANIR) OR BY IT (FOR HBI) HEREUNDER, PROVIDED THAT THIS LIMITATION SHALL NOT APPLY TO THEINDEMNITIES SET OUT IN SECTION 5.04.Section 5.04 Indemnification.     (a) Notice of Indemnified Claims. If during the term of this Agreement, either partyreceives notice of or becomes aware of any Third Party claim against such party or its Affiliatesor sublicensees, which claim is subject to indemnification by the other party under thisSection 5.04 (an “Indemnified Claim”), such party seeking indemnification willpromptly inform the other party of such claim and all relevant and applicable facts relatingthereto in writing.
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(b) Defense of Indemnified Claims. Upon receiving a notification of an IndemnifiedClaim, the indemnifying party will have sole discretion with respect to and will solely control,at the indemnifying party’s expense, the defense of any such Indemnified Claim. The indemnifyingparty will keep the indemnified party fully informed regarding the status of any negotiations orsuits relating to such Indemnified Claim. The indemnified party will cooperate fully with theindemnifying party and will offer such assistance to the indemnifying party as the indemnifyingparty requests in connection with the defense of any such Indemnified Claim at no charge to theindemnifying party, except for reimbursement of reasonable out-of-pocket expenses incurred inrendering such assistance. The indemnifying party will have the right to join the indemnifiedparty as a party to any lawsuit relating to such Indemnified Claim at the indemnifying party’sexpense and the indemnified party will have the right to be represented therein by legal counselof its own choice at the indemnified party’s expense. The indemnifying party will not settle anysuch suit if such settlement would have an affect on the rights of the indemnified party withoutobtaining the prior written consent of the indemnified party, which consent will not beunreasonably withheld. The indemnifying party’s obligation to indemnify under this Section5.04 will not apply to the extent that the party seeking indemnification (i) failed to complywith the obligations under this Section 5.04; or (ii) contributed to such loss, damage,injury, liability or claim by any act, or by an omission to perform some duty imposed by law, thisAgreement or other contract between the parties, on the indemnified party. The indemnificationrights of either party under this Section 5.04 will be the sole remedy for any claims forwhich either such party seeks indemnification under this Section 5.04.     (c) Indemnification of Avanir by HBI. HBI will defend, indemnify and hold harmlessAvanir, its successors, assigns, officers, directors, employees and agents from any and allclaims, causes of action, losses, liabilities and expenses (including, but not limited to,reasonable attorneys’ fees) to Third Parties (including Avanir’s employees and any sublicensee)arising out of any personal injury, death, environmental damage or property damage resulting fromHBI’s creation, manufacture, Registration, marketing, promotion, distribution and/or sale ofDocosanol or Products or any other of HBI’s acts or omissions in relation to (i) any defects indesign, materials or workmanship of any kind or (ii) failure to comply with any applicable laws ormisappropriation of any Third Party rights related to the manufacture, labeling, marketing,advertising, distribution, transportation, sale and use of the Docosanol or Products by HBI or itsAffiliates or sublicensees or by any Third Party acting under any contract with HBI or with HBI’sknowledge, consent or approval, or (c) claims that any HBI trademark used by it in relation to theProducts infringes any trademark rights owned by a Third Party.     (d) Indemnification of HBI by Avanir. Avanir will defend, indemnify and holdharmless HBI, its successors, assigns, officers, directors, employees and agents from any and allclaims, causes of action, losses, liabilities and expenses (including, but not limited to,reasonable attorneys’ fees) to Third Parties (including HBI’s employees and any sublicensee)arising out of any personal injury, death, environmental damage or property damage resulting fromAvanir’s failure to comply with any applicable laws, or claims that HBI’s approved use or sale ofProducts infringes any patent or similar right owned by a Third Party in the Territory. If anaction is commenced by a Third Party against HBI seeking a preliminary or permanent injunctionwith respect to the use of the Products by HBI and Avanir is unable to either obtain a writtenopinion of patent counsel that HBI is not infringing the third-party’s patent, or that such patentis invalid, or a license to such Third Party’s patent, despite use of best efforts, then HBI willcease any such infringement or misappropriation unless it will release Avanir from anyindemnification
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obligations arising out of subsequent infringement by HBI. Avanir shall furtherdefend, indemnify and hold harmless HBI, its successors, assigns, officers, directors, employeesand agents from any and all claims, causes of action, losses, liabilities and expenses (including,but not limited to, reasonable attorneys’ fees) to Third Parties (including Avanir’s employees andany sublicensee) arising out of any personal injury, death, environmental damage or propertydamage resulting from Avanir’s creation, manufacture, Registration, marketing, promotion,distribution and/or sale of Docosanol or Products outside of the Territory, including in relationto (i) any defects in design,materials or workmanship of any kind or (ii) failure to comply with any applicable laws ormisappropriation of any Third Party rights, related to the manufacture, labeling, marketing,advertising, distribution, transportation, sale and use of the Products by Avanir or itsAffiliates or sublicensees or by any Third Party acting under any contract with Avanir or withAvanir’s knowledge, consent or approval, or (c) claims that any Avanir trademark infringes anytrademark rights owned by a Third Party.Section 5.05 Insurance. To provide each indemnified party under this Agreement withadequate assurance of indemnification, for the term of this Agreement and for a period of fiveyears after the expiration of this Agreement or its earlier termination, each party will obtainand maintain, at its sole cost and expense, product liability insurance in amounts, which arereasonable and customary in the local pharmaceutical industry considering the respective size andactivities of the two parties. Such product liability insurance will insure against allliability, including liability for personal injury, physical injury and property damage. Eachparty will provide written proof of the existence of such insurance to the other party uponrequest.Section 5.06 Compliance with Export and Other Laws. Each party to this Agreement herebycovenants to comply with, and the performance of the terms of this Agreement will be subject toall applicable treaties, laws, statutes, rules and regulations of any federal, state or localgovernmental entity or instrumentality, including without limitation, the provisions of the USAExport Administration Act of 1969, as amended.**Article VI. TERM & TERMINATION**Section 6.01 Term. Unless otherwise terminated as set forth below, the term of thisAgreement will commence on the date of this Agreement and will continue until and automaticallyexpire, on a country by country basis upon the later to occur of (a) the 15th anniversary of theFirst Commercial Sale in each respective country of the Territory or (b) the date the last claimof any Licensed Patent licensed under this Agreement expires or is invalidated that covers salesof Products in each such country of the Territory. Upon expiration of the term of this Agreementin each such country of the Territory, HBI will thereafter retain a fully paid-up perpetual,irrevocable, royalty-free, exclusive license under the Intellectual Property and Know-how in suchcountry.Section 6.02 Material Breach by HBI. If HBI materially breaches, materially defaults orotherwise materially fails to perform under the terms of this Agreement, Avanir may terminate thisAgreement by giving *** days advanced written notice, unless HBI will cure such breach,default or failure of performance within such *** day period or (where it is not reasonablypossible to cure within such period) within such longer period as may be reasonable in all thecircumstances *** Portions of this page have been omittedpursuant to a request for Confidential Treatment and filed separately with theCommission.
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provided that HBI is continuing to use its reasonable endeavors to cure such breach.For the avoidance of doubt, a failure of HBI to (i) prepare and file the application forRegistration in at least *** countries of the Territory within *** months after the Effective Dateor (ii) complete the First Commercial Sale of Products in each country by the *** monthanniversary of the relevant Approval Date will each be considered a breach of this Agreement,entitling Avanir to terminate the Agreement as provided herein but, in the case of (ii), only withrespect to the relevant country. For clarity, the parties agree that in the event that HBI ingood faith disputes the existence of amaterial breach by HBI, the dispute shall be resolved pursuant to Section 7.06 prior to anytermination pursuant to this Section 6.02 becoming effective, and that during the pendency of anysuch proceedings, the parties shall remain bound by the terms and conditions of this Agreement.Section 6.03 Lack of Funding. Notwithstanding anything else in this Agreement to thecontrary, in the event that HBI fails to close a transaction providing funding to HBI in at leastthe amount of *** million within *** days of the Effective Date, Avanir will have theright to terminate this Agreement and the licenses granted herein upon *** days notice, unless HBIcloses such financing within such second ***-day period.Section 6.04 Material Breach by Avanir. If Avanir materially breaches, materiallydefaults or otherwise materially fails to perform under the terms of this Agreement, HBI mayterminate this Agreement by giving *** days advanced written notice to Avanir, unless Avanir curessuch breach, default or failure of performance within such *** day period.Section 6.05 Continuing Obligations. Termination of this Agreement by either party for anyreason under the terms and conditions of this Agreement will not affect obligations of eitherparty incurred prior to termination or the right of either party to recover damages from anybreach thereof or affect HBI’s obligations to pay Avanir any fees, milestones, or other paymentsthat have accrued as of the date of such termination. In the event Avanir terminates thisAgreement for non-payment of fees under Section 5 by HBI, all amounts then owing by HBIwill immediately become due and payable.Section 6.06 Remedies. Upon termination of this Agreement by either party for any reasonunder the terms and conditions of this Agreement, neither party will incur any liabilitywhatsoever for any damage, loss or expenses of any kind suffered or incurred by the other arisingdirectly and solely from or incident to any termination of this Agreement (or any part thereof) bysuch party (whether or not such party is aware of any such damage, loss or expenses) so long assuch party’s termination complies with the terms of the Agreement. Termination is not the soleremedy under this Agreement and, whether or not termination is effected, all other remedies willremain available.Section 6.07 Consequences of Termination. Upon termination of this Agreement by eitherparty prior to the expiration of this Agreement set forth in Section 6.01:     (a) Licenses. The licenses granted under Section 2.02 will terminate, andHBI will permanently discontinue all advertising with respect to Products, although HBI may, tothe extent permitted by applicable law, continue to sell Products which it has in inventory at thetime of *** Portions of this page have been omittedpursuant to a request for Confidential Treatment and filed separately with theCommission.
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termination; provided, however, that any such sale will (i) be made at prices and underterms generally consistent with previous sales of the Products by HBI and (ii) be conducted in amanner so as not to be harmful to Avanir or the market for the Products. Notwithstanding theabove, HBI may not sell the Products more than *** days after the effective date of termination.At Avanir’s option, remaining stocks of Products may be bought by Avanir at HBI’s standard saleprice. HBI will deliver such stocks at Avanir’s direction and expense.     (b) Confidential Information. HBI will return all copies of all of Avanir’sConfidential Information and any other Data relating to the Products.**Article VII. MISCELLANEOUS**Section 7.01 Publicity. The parties to this Agreement understand that Avanir is a publiccompany and agree that Avanir may disclose certain matters pertaining to this Agreement as toenable it to fully comply with USA or Territory securities laws or regulations, which disclosuremay be in the form of public statements, whether oral or written, including, but not limited to,shareholder reports, communications with stock market analysts, press releases or othercommunications with the media. Notwithstanding the foregoing, any press release or otherannouncement pertaining to this Agreement by either party will be provided to the other party inadvance for review and approval with such approval not to be unreasonably withheld or delayed.Section 7.02 Publications. Neither HBI nor its agents, collaborators or subcontractorswill publish the results of any clinical studies of any Products without the prior approval ofAvanir, which approval of Avanir may not be unreasonably withheld or delayed.Section 7.03 Rights to Assign. Neither party will have the right to assign or delegatethis Agreement, or any of its rights or obligations under this Agreement (except for Avanir’srights to payments pursuant to this Agreement) without the other’s express written consent, andsuch assignment or delegation without such consent will be null and void for all purposes. Avanirshall not unreasonably withhold its consent to any partial assignment of HBI’s rights hereunderfor which payment would accrue in accordance with Section 2.06. Notwithstanding anything to thecontrary in this Agreement, either Avanir or HBI may assign its entire interest in this Agreementwithout any prior consent provided that such assignment is to a wholly-owned Affiliate or part ofthe sale or transfer of substantially all of Avanir’s or HBI’s business related to the Product, orpursuant to a merger, corporate division, corporate separation or de-merger, as the case may be,and subject only to HBI’s compliance with Section 2.06.Section 7.04 Notices/Reports. Any reports, notices or other communications required orpermitted to be given by either party to this Agreement will be given in writing by personaldelivery, overnight courier service or facsimile, or by registered or certified air mail, postageprepaid, return receipt requested, addressed to each respective party at the address shown below.If to Avanir:Avanir Pharmaceuticals, Inc.