Document:

Exhibit 10.53 123106

     

    Exhibit
      10.53

     

     

    

     

     

    LICENSE
      AND SUPPLY AGREEMENT

     

     

    

     

     

    

     

     

    Between

     

     

    

     

     

    

     

     

    CYTOPHARM,
      INC.

     

     

    

     

     

    &

     

     

    

     

     

    AMARILLO
      BIOSCIENCES, INC.

     

     

    

     

     

    

     

     

    

     

     

    

     

     

    

     

     

    November
      16, 2006

     

     

    

     

     

    

     

     

    

     

    
      
        ****Indicates
          that a portion of the text has been omitted and filed separately with the
          Commission

        CONFIDENTIAL

      

      
        1

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

    

      
        	
                ARTICLE
                  I: DEFINITIONS

              	
                5

              
	
                 

              	
                 

              
	
                ARTICLE
                  II:  RESEARCH AND DEVELOPMENT

              	
                12

              
	
                           
                  Section 2.01.  ABI Obligations

              	
                12

              
	
                           
                  Section 2.02.  CYTO Obligations

              	
                13

              
	
                           
                  Section 2.03.  Availability of Resources; Corporation

              	
                14

              
	
                           
                  Section 2.04.  Reporting Obligations of CYTO

              	
                14

              
	
                 

              	
                 

              
	
                ARTICLE
                  III:  LICENSE

              	
                14

              
	
                           
                  Section 3.01.  License and Supply Grant

              	
                14

              
	
                           
                  Section 3.02.  Restrictions.

              	
                15

              
	
                           
                  Section 3.03.  Retained Rights

              	
                15

              
	
                           
                  Section 3.04.  First Right of Refusal

              	
                15

              
	
                 

              	
                 

              
	
                ARTICLE
                  IV:  PAYMENTS AND ROYALTIES

              	
                15

              
	
                           
                  Section 4.01.  Initial Fee

              	
                15

              
	
                           
                  Section 4.02.  Royalty Payments

              	
                16

              
	
                           
                  Section 4.03.  Milestone Payments

              	
                16

              
	
                           
                  Section 4.04.  Minimum Royalty

              	
                16

              
	
                           
                  Section 4.05.  Reports

              	
                16

              
	
                           
                  Section 4.06.  Records and Audits

              	
                17

              
	
                           
                  Section 4.07.  Exchange Rate; Manner and Place of Payment

              	
                17

              
	
                           
                  Section 4.08.  Late Payments

              	
                18

              
	
                           
                  Section 4.09.  Taxes

              	
                18

              
	
                 

              	
                 

              
	
                ARTICLE
                  V:  TERM AND TERMINATION

              	
                18

              
	
                           
                  Section 5.01.  Term

              	
                18

              
	
                           
                  Section 5.02.  Termination by CYTO

              	
                18

              
	
                           
                  Section 5.03.  Termination by ABI

              	
                18

              
	
                           
                  Section 5.04.  Termination Upon Certain Events

              	
                19

              
	
                           
                  Section 5.05.  Remedies

              	
                20

              
	
                           
                  Section 5.06.  Effect of Termination

              	
                20

              
	
                           
                  Section 5.07.  Bankruptcy

              	
                20

              
	
                           
                  Section 5.08.  Continuing Obligations

              	
                21

              
	
                           
                  Section 5.09.  Return of Confidential Information

              	
                21

              
	
                 

              	
                 

              
	
                ARTICLE
                  VI:  SUPPLY, MANUFACTURE AND PURCHASE OF PRODUCT

              	
                21

              
	
                           
                  Section 6.01.  Supply of Product and Bulk Interferon

              	
                21

              
	
                           
                  Section 6.02.  Supply of Manufacturing Rights

              	
                21

              
	
                           
                  Section 6.03.  Quality Assurance

              	
                22

              
	
                           
                  Section 6.04.  ABI's Duties

              	
                22

              
	
                           
                  Section 6.05.  CYTO's Duties if Manufacturing

              	
                23

              
	
                           
                  Section 6.06.  Failure to Supply

              	
                23

              

      

       

      
        
          ****Indicates
            that a portion of the text has been omitted and filed separately with
            the
            Commission

          CONFIDENTIAL

        

        
          2

        

        
          
          

        

      

      
        	
                           
                  Section 6.07.  Allocation

              	
                24

              
	
                           
                  Section 6.08.  Records and Audits

              	
                24

              
	
                 

              	
                 

              
	
                ARTICLE
                  VII:  PURCHASE AND <?xml:namespace prefix = st1 ns =
                  "urn:schemas-microsoft-com:office:smarttags" />SALE

              	
                24

              
	
                           
                  Section 7.01.  Purchase Price and Payment

              	
                24

              
	
                           
                  Section 7.02.  Labeling and Artwork

              	
                25

              
	
                           
                  Section 7.03.  Purchase Forms

              	
                25

              
	
                           
                  Section 7.04.  Confirmation

              	
                25

              
	
                           
                  Section 7.05.  Delivery

              	
                25

              
	
                           
                  Section 7.06.  Forecasts and Orders

              	
                26

              
	
                 

              	
                 

              
	
                ARTICLE
                  VIII:  WARRANTY, REJECTION AND INSPECTIONS

              	
                27

              
	
                           
                  Section 8.01.  ABI Warranty

              	
                27

              
	
                           
                  Section 8.02.  Rejection of Product for Failure to Conform to
                  Specifications

              	
                27

              
	
                           
                  Section 8.03.  CYTO Inspections

              	
                28

              
	
                 

              	
                 

              
	
                ARTICLE
                  IX:  REGULATORY COMPLIANCE

              	
                28

              
	
                           
                  Section 9.01.  Maintenance of Marketing Authorizations

              	
                28

              
	
                           
                  Section 9.02.  Adverse Drug Event Reporting and Phase IV
                  Surveillance

              	
                28

              
	
                           
                  Section 9.03.  Commercial Sale Testing and Reporting

              	
                29

              
	
                           
                  Section 9.04.  Assistance

              	
                29

              
	
                           
                  Section 9.05.  Compliance

              	
                30

              
	
                 

              	
                 

              
	
                ARTICLE
                  X:  REPRESENTATIONS, WARRANTIES AND COVENANTS

              	
                30

              
	
                           
                  Section 10.01. Corporate Power

              	
                30

              
	
                           
                  Section 10.02. Due Authorization

              	
                30

              
	
                           
                  Section 10.03.  Binding Obligation

              	
                30

              
	
                           
                  Section 10.04. Ownership of ABI Rights

              	
                30

              
	
                           
                  Section 10.05. Material Agreements

              	
                31

              
	
                           
                  Section 10.06. Adverse Properties

              	
                31

              
	
                           
                  Section 10.07. Preservation of Name and Reputation

              	
                31

              
	
                           
                  Section 10.08. Debarment

              	
                31

              
	
                           
                  Section 10.09. Limitation on Warranties

              	
                32

              
	
                           
                  Section 10.10. Limitation of Liability

              	
                32

              
	
                 

              	
                 

              
	
                ARTICLE
                  XI:  PATENTS AND TRADEMARK

              	
                32

              
	
                           
                  Section 11.01.  Filing, Maintenance and Protection of
                  Patents

              	
                32

              
	
                 

              	
                 

              
	
                ARTICLE
                  XII:  COVENANTS OF CYTO AND ABI

              	
                32

              
	
                           
                  Section 12.01. Access to Books and Records

              	
                32

              
	
                           
                  Section 12.02. Further Actions

              	
                32

              
	
                           
                  Section 12.03. Equitable Relief

              	
                33

              
	
                 

              	
                 

              

      

      
        
          ****Indicates
            that a portion of the text has been omitted and filed separately with
            the
            Commission

          CONFIDENTIAL

        

        
          3

          
            

          

        

        
          
          

        

      

      
        	
                 

              	
                 

              
	
                ARTICLE
                  XIII INDEMNIFICATION

              	
                33

              
	
                           
                  Section 13.01. CYTO Indemnified by ABI

              	
                33

              
	
                           
                  Section 13.02. ABI Indemnified by CYTO

              	
                33

              
	
                           
                  Section 13.03. Prompt Notice Required

              	
                34

              
	
                           
                  Section 13.04. Indemnitor May Settle

              	
                34

              
	
                 

              	
                 

              
	
                ARTICLE
                  XIV:  DISPUTE RESOLUTION

              	
                35

              
	
                           
                  Section 14.01.  Disputes

              	
                35

              
	
                           
                  Section 14.02. Trial Without Jury

              	
                35

              
	
                           
                  Section 14.03. Performance to Continue

              	
                35

              
	
                           
                  Section 14.04. Provisional Remedies

              	
                35

              
	
                           
                  Section 14.05. Determination of Patents and Other Intellectual
                  Property.

              	
                35

              
	
                 

              	
                 

              
	
                ARTICLE
                  XV:  CONFIDENTIALITY

              	
                36

              
	
                           
                  Section 15.01. Confidentiality

              	
                36

              
	
                           
                  Section 15.02. Publicity Review

              	
                36

              
	
                 

              	
                 

              
	
                ARTICLE
                  XVI:  MISCELLANEOUS

              	
                37

              
	
                           
                  Section 16.01. Commercially Reasonable Efforts

              	
                37

              
	
                           
                  Section 16.02. Notices

              	
                37

              
	
                           
                  Section 16.03. Severability

              	
                37

              
	
                           
                  Section 16.04. Entire Agreement/Merger

              	
                38

              
	
                           
                  Section 16.05. Amendment

              	
                38

              
	
                           
                  Section 16.06. Counterparts

              	
                38

              
	
                           
                  Section 16.07. No Waiver of Rights

              	
                38

              
	
                           
                  Section 16.08. Force Majeure

              	
                39

              
	
                           
                  Section 16.09. Further Assurances

              	
                39

              
	
                           
                  Section 16.10. Assignment and Sublicense

              	
                39

              
	
                           
                  Section 16.11. Expenses

              	
                39

              
	
                           
                  Section 16.12. Binding Effect

              	
                39

              
	
                           
                  Section 16.13. Governing Law

              	
                40

              
	
                           
                  Section 16.14. Survival of Representations and Warranties

              	
                40

              
	
                           
                  Section 16.15. No Strict Construction

              	
                40

              
	
                           
                  Section 16.16. Independent Contractors.

              	
                40

              

      

       

      Exhibit
        I
        - HBL License and Supply Agreement

       

      Exhibit
        II - PPM License Agreement

    

     

    Exhibit
      III - ISI License Agreement

     

    Exhibit
      IV - TAMU License Agreement

     

    Exhibit
      V
      - Specifications

     

    Exhibit
      VI - Certificate of Compliance

     

    
      
        ****Indicates
          that a portion of the text has been omitted and filed separately with the
          Commission

        CONFIDENTIAL

      

      
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    LICENSE
      AND SUPPLY AGREEMENT

     

     

    This
      License and Supply Agreement (“Agreement”) is made as of November 16, 2006 (the
“Effective Date”), by and between CytoPharm, Inc., (“CYTO”), a corporation,
      having a principal place of business at 6 F No. 6, Jungshing Road, Sec. 1,
      Wugu
      Shiang, Taipei County 248, Taiwan, and Amarillo Biosciences, Inc., a Texas
      corporation (“ABI”), with its principal place of business located at 4134
      Business Park Drive, Amarillo, Texas 79110, USA. ABI and CYTO are sometimes
      referred to collectively herein as the “Parties” and individually as a
“Party.”

     

     

    WHEREAS,
      ABI has substantial expertise in the oral use of human interferon alpha (“IFN”)
      and have proprietary rights and Know-How in the field of formulation of oral
      IFN;

     

     

    WHEREAS,
      ABI is willing to disclose to CYTO the ABI Know-How consisting of human clinical
      data and all other data, including but not limited to, safety, bioavailability,
      and clinical trial data necessary for CYTO to obtain regulatory approval for
      a
      product for the treatment of human diseases in the Territory; and 

     

     

    WHEREAS,
      ABI has an exclusive worldwide license (except Japan) to market and distribute
      the oral formulation of Hayashibara (known as “HBL”) IFN, and desires to provide
      HBL oral IFN to CYTO on the terms and conditions herein set forth, and CYTO
      desires to obtain the right to perform clinical trials on, distribute and
      market, HBL IFN on the terms and conditions herein set forth;

     

     

    WHEREAS,
      ABI owns certain proprietary information, intellectual property, Patents and
      ABI
      Know-How, and other rights relating to the use of low dose oral IFN for the
      treatment or prevention of human diseases; 

     

     

    WHEREAS,
      subject to the terms of this Agreement, ABI desires to grant to CYTO, and CYTO
      wishes to obtain from ABI, an exclusive supply agreement and distribution
      license, subject to existing rights, to such Know-How and related intellectual
      property rights in the Territory in connection with the Product;
      and

     

     

    WHEREAS,
      ABI is willing to grant such rights and licenses to CYTO under the terms and
      conditions hereinafter set forth.

     

     

    NOW,
      THEREFORE, in consideration of the mutual promises, covenants and agreements
      hereinafter set forth, the Parties mutually agree as follows:

     

     

    ARTICLE
      I:

     

     

    DEFINITIONS

     

     

    (a)  The
      following terms as used in the Agreement shall, unless the context clearly
      indicates to the contrary, have the meaning set forth below:

     

    
      
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          that a portion of the text has been omitted and filed separately with the
          Commission

        CONFIDENTIAL

      

      
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    “ABI
      Know-How”
means
      all Know-How under the Control of ABI as of the Effective Date and at any time
      during the TERM related to (but not claimed under) the ABI Patent Rights and
      which is necessary or useful to develop, Manufacture and/or commercialize the
      Product, including all information, reports, results, inventions, materials,
      and
      any other technical and scientific data, specifications and formulae directly
      related to the development, regulato-ry approval, Manufacture, testing, use,
      marketing and/or sale of Product, including non-patentable Improvements, and
      any
      nonpublic information relevant to the ABI Patent Rights, including preclinical
      and clinical data from ABI's past, current or future studies, relating to safety
      or bioavailability, or preclinical or clinical data relating to the use of
      HBL
      oral IFN and/or IFN for the treatment or prevention of human
      diseases.

     

     

    “ABI
      Patent Rights”
means
      all Patent Rights that are under the Control of ABI as of the Effective Date
      under US patent laws’ protection, and at any time during the TERM that are
      necessary or useful to the use, development, Manufacture, marketing, promotion,
      distribution, sale and/or commercialization of the Product for use in the
      treatment of the Licensed Indications, and Improvements thereto developed by
      or
      on behalf of ABI during the TERM. 

     

     

    “ABI
      Technology”
means
      the ABI Patent Rights and the ABI Know-How. 

     

     

    “Affiliate”
means
      any entity, which directly or indirectly controls, is controlled by or is under
      common control with either CYTO or ABI. The term “control” as used in the
      preceding sentence means the power to direct or control the affairs of such
      entity, and control shall be presumed where CYTO or ABI or their Affiliates
      (as
      the case may be) own fifty percent (50%) or more of the voting stock or other
      equity interests of such entity.

     

     

    “Applicable
      Laws”
means
      all applicable laws, rules, Regulations and guidelines within or without the
      Territory that may apply to the marketing or sale of the Product in the
      Territory or the performance of either Party's obligations under this Agreement
      including laws, Regulations and guidelines governing the marketing, distribution
      and sale of the Product in the Territory, to the extent applicable and relevant,
      and including all cGMP or current Good Clinical Practices standards or
      guidelines promulgated by the FDA or the Governmental Authorities and including
      trade association guidelines. The laws are also under the designated
      Territory.

     

     

    “Bulk
      IFN” means
      concentrated powdered, frozen, lyophilized or liquid, HBL IFN, which can be
      used
      to Manufacture Product. 

     

     

    “Certificate
      of Compliance”
      means
      the
      certificate of compliance in the form attached hereto as Exhibit B
      or
      otherwise requested by regulatory agencies in the Territory.

     

     

    “CFR”
means
      the United States Code of Federal Regulations.

     

     

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

     

     

    “cGMP”
means
      current good manufacturing practices as defined in 21 CFR § 110
      et
      seq.
      and established under the Act and applicable Regulations. 

     

    
      
        ****Indicates
          that a portion of the text has been omitted and filed separately with the
          Commission

        CONFIDENTIAL

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “Confidential
      Information”
means
      any confidential information (including Know-How) of a Party relating to any
      human interferon use, process, method, compound, research project, work in
      process, future development, scientific, engineering, Manufacturing, marketing,
      business plan, financial or personnel matter relating to the disclosing Party,
      its present or future product, sales, suppliers, customers, employees, investors
      or business, whether in oral, written, graphic or electronic form. Confidential
      Information shall not include any information, which the receiving Party can
      prove by competent evidence:

     

     

    (a)  is
      now,
      or hereafter becomes, through no act or failure to act on the part of the
      receiving Party, generally known or available or accessible through public
      domains;

     

     

    (b)  is
      known
      by the receiving Party at the time of receiving such information, as evidenced
      by its written records maintained in the ordinary course of
      business;

     

     

    (c)  is
      hereafter furnished to the receiving Party by a Third Party, as a matter of
      right and without restriction on disclosure;

     

     

    (d)  is
      independently developed by the receiving Party, as evidenced by its written
      records, without knowledge of, and without the aid, application or use of,
      the
      disclosing Party's Confidential Information; or

     

     

    (e)  is
      the
      subject of a written permission to disclose provided by the disclosing
      Party.

     

     

    Any
      Confidential Information will be marked as “Confidential & Proprietary
      Information” at the foot or head of every page throughout the
      documents.

     

     

    “Control”
means
      the possession of the ability to grant a license or sublicense as provided
      for
      herein without violating the terms of any agreement or other arrangement with
      any Third Party.

     

     

    “Existing
      Licensees”
means,
      as applicable, Pharma Pacific Management Pty, Ltd. (PPM), HBL and Interferon
      Sciences, Inc. (ISI), their successors, transferees and licensees. 

     

     

    “Existing
      Licenses”
means,
      as applicable, the HBL Agreement, the PPM Agreement, the ISI Agreement and
      the
      TAMU License Agreement. These licenses will be attached into this document
      as
      Exhibit I, Exhibit II, Exhibit III and Exhibit IV, respectively.

     

     

    “FDA”
means
      the United States Food and Drug Administration.

     

     

    “First
      Commercial Sale”
means
      after obtaining the necessary Governmental Approval, the first sale for use,
      consumption or resale of a Product by CYTO, its Affiliates or its sublicensees
      in the Territory (excluding any transactions for clinical trials). A sale to
      an
      Affiliate shall not constitute a First Commercial Sale unless the Affiliate
      is
      the end user of the Product.

     

    
      
        ****Indicates
          that a portion of the text has been omitted and filed separately with the
          Commission

        CONFIDENTIAL

      

      
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    “First
      Right of Refusal”
means
      the right of CYTO to license another clinical indication under terms and
      conditions noticed in writing by ABI to CYTO. CYTO shall have thirty (30) days
      to accept such terms, and if it does not do so, ABI shall have the right to
      license such clinical indication in the Territory to an unrelated third-party
      under the same terms and conditions theretofore noticed to CYTO, at any time
      within six (6) months of the expiration of the aforesaid thirty (30) day
      acceptance period.

     

     

    “GAAP”
means
      United States generally accepted accounting principles, consistently applied
      in
      accordance with past practice.

     

     

    “Good
      Clinical Practices”
means
      good clinical practices as defined in 21 CFR § 50 et. seq. and § 312 et.
      seq.

     

     

    “Governmental
      Approval”
means
      all permits, licenses and authorizations, including Marketing Authorizations,
      required by any Governmental Authority in the Territory as a prerequisite to
      the
      Manufacturing, packaging, marketing and selling of the Product.

     

     

    “Governmental
      Authority”
means
      any federal, state, local or other government, administrative or regulatory
      agency, authority, body, commission, court, tribunal or similar entity,
      including other entities in each country in the Territory responsible for the
      regulation of medicinal products intended for human use.

     

     

    “HBL”
means
      Hayashibara Biochemical Laboratories, Inc. of Okayama, Japan.

     

     

    “HBL
      Agreement”
means
      the Joint Development and Manufacturing/Supply Agreement by and between HBL
      and
      ABI dated as of March 13, 1992 (Exhibit Ia), as amended by the First Amendment
      to Joint Development and Manufacturing/Supply Agreement dated as of January
      17,
      1996 (Exhibit Ib) and the Addendum to Manufacturing/Supply Agreements dated
      as
      of May 10, 1996 (Exhibit Ic) and September 7, 2001 (Exhibit Id). 

     

     

    “HBL IFN”
means
      the cell culture derived human lymphoblastoid IFN produced by HBL.

     

     

    “Improvements”
means
      any and all developments, inventions or discoveries in the Licensed Indication
      relating to the ABI Patent Rights developed by ABI, or acquired by ABI at any
      time during the TERM and shall include developments intended to enhance the
      safety and/or efficacy of the Product.

     

     

    “IFN”
means
      human interferon alpha.

     

     

    “ISI
      Agreement”
means
      the License Agreement dated October 20, 1989 by and between Interferon Sciences,
      Inc. and ABI, as successor-in-interest to Amarillo Cell Culture Company,
      Incorporated (Exhibit III).

     

     

    “Know-How”
means
      all know-how, trade secrets, inventions, data, processes, techniques,
      procedures, compositions, devices, methods, formulas, protocols and information,
      whether or not patentable, which are not generally publicly known, including,
      without limitation, all chemical, 

     

    
      
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          that a portion of the text has been omitted and filed separately with the
          Commission

        CONFIDENTIAL

      

      
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    biochemical,
      toxicological, and scientific research information, whether in written, graphic
      or video form or any other form or format, used to produce human interferon
      alpha and its oral formulation.

     

     

    “Licensed
      Indications”
means
      the human clinical indications of hepatitis B and influenza and one additional
      human clinical indication to be selected by CYTO within 180 days of the
      execution, treated or treatable by the oral administration of IFN. Failure
      to
      notify ABI in writing of their selection of an additional clinical indication
      within 180 days of execution shall limit CYTO to the clinical indications of
      hepatitis B and influenza.

     

     

    “Manufacture”
or
      “Manufacturing
      Process”
means
      the storage, handling, production, processing and packaging of the Product,
      in
      accordance with this Agreement and Applicable Laws.

     

     

    “Marketing
      Authorization”
means
      all necessary and appropriate regulatory approvals, including Pricing and
      Reimbursement Approvals, where applicable, to put the Product on the market
      in
      the Territory.

     

     

    “Material
      Agreements”
means
      the Existing Licenses, and the TAMU License Agreement
      (Exhibit IV).

     

     

    “NDA”
means
      a
      new drug application, biological license application or establishment license
      application, as applicable, and all amendments and supplements thereto, filed
      or
      to be filed, with the FDA seeking authorization and approval to Manufacture,
      package, ship and sell the Product as more fully described in the
      Regulations.

     

     

    “Net
      Sales”
means
      the invoice amounts actually received for sales of the Product by CYTO, its
      Affiliates or sub-licensees in a bona fide arm's length transaction, less the
      following items, provided that they are bona fide transactions designed to
      optimize the sales of Product (a) cash discounts and trade allowances actually
      granted, (b) rebates and charge backs required by Applicable Laws or made
      pursuant to agreements with customers, (c) credits or allowances actually
      granted upon claims, damaged goods, outdated goods, rejections or returns of
      such Product, including recalls, (d) taxes, tariffs and similar obligations,
      duties or other governmental charges (other than income taxes and inventory
      taxes) levied on, absorbed or otherwise imposed on sales of such Product in
      the
      Territory and shown separately on the invoice, (e) shipping charges,
      ****.

     

     

    Components
      of Net Sales shall be determined in the ordinary course of business in
      accordance with historical practice and using the accrual method of accounting
      in accordance with GAAP, or local common practice with certified CPA approval,
      but shall not include any sales of the Product for pre-clinical or clinical
      testing or for other than commercial purposes. 

     

     

    In
      the
      event CYTO transfers the Product to a Third Party in a bona fide arm's length
      transaction, for consideration, in whole or in part, other than cash or to
      a
      Third Party in other than a bona fide arm's length transaction, the Net Sales
      price for such Product shall be deemed to 

     

    
      
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          that a portion of the text has been omitted and filed separately with the
          Commission

        CONFIDENTIAL

      

      
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    be
      the
      standard invoice price then being invoiced by CYTO in an arms length transaction
      with similar customers for similar amounts less the items set forth in (a)
      through (g) above.

     

     

    “Patent
      Rights”
means
      all rights related to human interferon alpha under patents and patent
      applications, and any and all patents issuing there from (including utility,
      model and design patents and certificates of invention), together with any
      and
      all substitutions, extensions (including supplemental protection certificates),
      registrations, confirmations, reissues, divisional, continuations,
      continuations-in-part, re-examinations, renewals and foreign counterparts of
      the
      foregoing and all Improvements, supplements, modifications or additions during
      the term.

     

     

    “Phase
      IV”
means,
      as applicable, a study or program designed to obtain additional safety or
      efficacy data, detect new uses for a drug, or to determine effectiveness for
      labeled indications under conditions of widespread usage, which is commenced
      after Government Approval of the Product in the applicable country in the
      Territory or any such study or program required by the FDA or other applicable
      Governmental Authority.

     

     

    “PPM
      Agreement”
means
      the PPM/ACC Sublicense Agreement dated April 27, 1995 by and between Pharma
      Pacific Management Pty, Ltd. and ABI (Exhibit II).

     

     

    “Pricing
      and Reimbursement Approvals”
means
      any pricing and reimbursement approval, by government agency in the Territory,
      that must be obtained before placing the Product on the market in the Territory
      in which such approval is required.

     

     

    “Prime
      Rate of Interest”
means
      the prime rate of interest published from time to time in The
      Wall Street Journal
      as the
      prime rate; provided, however that if The
      Wall Street Journal
      does not
      publish the prime rate of interest, then the term “Prime Rate of Interest” shall
      mean the rate of interest publicly announced by Bank of America, N.A., as its
      prime rate, base rate, reference rate or the equivalent of such rate, whether
      or
      not such bank makes loans to customers at, above, or below said rate.

     

     

    “Product”
means
      a
      formulation or composition containing HBL IFN and designated, detailed, or
      labeled for oral use in the treatment of the Licensed Indications.

     

     

    “Regulations”
means
      regulations, statutes, rules, guidelines and procedures promulgated by the
      FDA
      or other governmental agency pursuant to the Act or other law, including without
      limitation, those regulations currently contained in Title 21 of the
      CFR.

     

     

    “SFDA”
means
      the State Food and Drug Administration of People’s Republic of China (or
      China).

     

     

    “Shipment”
or
      “Shipped”
means
      each individual group of Product received by CYTO from ABI or its
      agent.

     

     

    “Specifications”
      means
      the specifications for the Product. The initial Specifications are attached
      hereto as Exhibit V.

     

    
      
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    “TAMU
      License Agreement”
means
      the License Agreement between The Texas A&M University System and ABI dated
      March 22, 1988 (Exhibit IVa), as amended by Amendment No. 1 dated September
      17,
      1998 (Exhibit IVb).

     

     

    “Territory”
means
      both China and Taiwan.

     

     

    “Third
      Party”
means
      any entity other than ABI or CYTO or an Affiliate of ABI or CYTO.

     

     

    “Transfer
      Fee”
      means
      purchase price billed to CYTO by ABI for Product and Bulk IFN.

     

     

    “Unit”
means
      a
      single finished dosage form of Product in the form designated by CYTO, which
      initially, for clinical supplies, shall consist of a 200 mg by weight, with
      150
      international units by activity, tablet or lozenge. Clinical testing may result
      in a change in the optimal dose and require a new definition of “Unit.”

     

     

    (b)  Each
      of
      the following terms is defined in the Section or under the defined term set
      forth opposite such term below:

     

    ABIPreamble

    ADESection
      9.02

    AgreementPreamble

    Clinical
      RecordsSection
      2.02(c)

    Disputed
      AmountSection
      5.03(a)

    DMFSection
      2.02(b)

    Effective
      DatePreamble

    Force
      MajeureSection
      16.08

    CYTOPreamble

    IndemniteeSection
      13.03

    IndemnitorSection
      13.03

    LossSection
      13.01

    PartiesPreamble

    PartyPreamble

    Purchase
      PriceSection
      7.01

    RepresentativesSection
      15.01

    Royalty
      Payment DateSection
      4.02

    MILESTONE
      PAYMENTSSection
      4.03

    SECSection
      15.02

    SOPSection
      9.02

    TERMSection
      5.01

     

    (c)  Interpretation.
      The
      section headings contained in this Agreement are for reference purposes only
      and
      shall not affect the meaning or interpretation of this Agreement. Except where
      the context clearly requires to the contrary: (i) each reference in this
      Agreement to a designated “Section” or “Exhibit” is to the corresponding Section
      or Exhibit of or to this Agreement; (ii) 

     

    
      
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    instances
      of gender or entity-specific usage (e.g., “his” “her” “its” “person” or
“individual”) shall not be interpreted to preclude the application of any
      provision of this Agreement to any individual or entity; (iii) the word “or”
shall not be applied in its exclusive sense; (iv) “including” shall mean
“including, without limitation”; (v) references to laws, Regulations and other
      governmental rules, as well as to contracts, agreements and other instruments,
      shall mean such rules and instruments as in effect at the time of determination
      (taking into account any amendments thereto effective at such time without
      regard to whether such amendments were enacted or adopted after the effective
      date of this Agreement) and shall include all successor rules and instruments
      thereto; (vi) references to “$” or “dollars” shall mean the lawful currency of
      the United States; (vii) references to “Federal” or “federal” shall be to laws,
      agencies or other attributes of the United States (and not to any State or
      locality thereof); (viii) the meaning of the terms “domestic” and “foreign”
shall be determined by reference to the United States; (ix) references to “days”
shall mean calendar days; (x) references to months or years shall be to the
      actual calendar months or years at issue (taking into account the actual number
      of days in any such month or year); (xi) days, business days and times of day
      shall be determined by reference to local time in Amarillo, Texas; and (xii)
      the
      English language version of this Agreement shall govern all questions of
      interpretation relating to this Agreement, notwithstanding that this Agreement
      may have been translated into, and executed in, other languages.

     

    ARTICLE
      II:

     

    RESEARCH
      AND DEVELOPMENT

     

     

    Section
      2.01. ABI Obligations.

     

    (a)  As
      soon
      as reasonably practicable after the Effective Date, ABI will make available
      all
      ABI Know-How to CYTO for CYTO's inspection and at CYTO's request will provide
      CYTO with a copy of all ABI Know-How in tangible form and a written summary
      of
      all ABI Know-How not in tangible form. In the event CYTO request that more
      the
      1,000 pages be copied in connection with the foregoing, CYTO shall reimburse
      ABI
      for ABI’s actual out of pocket costs for making copies in excess of 1,000 pages,
      CYTO shall pay ABI such amounts within 30 days following CYTO’s receipt of an
      invoice therefor accompanied by documentation reasonably supporting such
      invoice.

     

     

    (b)  ABI
      agrees to maintain, or ask HBL to maintain, the Drug Master File (“DMF”) for HBL
      IFN up-to-date at all times during the TERM. ABI shall cooperate fully with
      CYTO
      in order to obtain all the Marketing Authorizations, which now are or later
      become necessary to develop, Manufacture, use, market or sell any Product.
      Such
      cooperation shall include, but not be limited to, ABI providing CYTO with the
      ABI Know-How and ABI appearing at and participating in meetings with regulatory
      agencies at the reasonable request of CYTO to assist CYTO in obtaining such
      Marketing Authorizations as are now required, or may in the future be required
      to Manufacture, use, market or sell any Product. ABI shall execute, or ask
      third
      parties to execute, upon request by CYTO, any and all documents reasonably
      necessary to obtain such Marketing Authorizations. CYTO (with its written
      pre-approval) shall reimburse ABI for any reasonable out-of-pocket costs,
      including reasonable attorney's fees, employee salary and travel expenses
      incurred by ABI in connection with such cooperation. If CYTO will not approve
      the 

     

    
      
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    reimbursement,
      then ABI shall not be required to perform the task. ABI agrees to pay airfare
      only for one person for up to 3 trips to China and/or Taiwan to cooperate with
      CYTO during clinical trials and/or to participate in meetings with regulatory
      agencies. 

     

     

    (c)  ABI
      shall
      provide to CYTO or any sub-licensee of CYTO, at CYTO's request and, unless
      otherwise set forth in this Agreement, CYTO’s sole expense, with ABI Technology
      reasonably necessary to enable CYTO or such sub-licensee to exercise fully
      its
      rights and fulfill its obligations under this Agreement. 

     

     

    (d)  ABI
      and
      CYTO will review the Patent Rights related to CYTO’s activities in the
      Territory. Once the Parties agree to a strategy, CYTO will make its best efforts
      to maintain all necessary ABI Technology in the Territory (see Section
      11.01). 

     

     

    Section
      2.02. CYTO Obligations.

     

    (a)  CYTO
      will
      use commercially reasonable efforts (as defined in Section 16.01) to timely
      complete at the sole cost and expense of CYTO (i)
      clinical
      trials and development of Product for the treatment of the Licensed Indications,
      (ii)
      animal
      toxicology and other pre-clinical studies required for commercial launch of
      the
      Product, and
      (iii)
      other
      tasks supporting commercialization of the final formulation of the
      Product. 

     

     

    (b)  CYTO
      shall use commercially reasonable efforts (as defined in Section 16.01) to
      timely secure any and all Governmental Approvals in the Territory and shall
      own
      and maintain all Governmental Approvals and related information as provided
      herein. The Parties agree and acknowledge that Governmental Approval for the
      Product will be sought in The Territory.

     

     

    (c)  The
      foregoing notwithstanding, it shall be conclusively presumed that CYTO has
      not
      used “commercially reasonable efforts” as to a particular Licensed Indication,
      if (i) CYTO fails to enroll patients in human clinical trials in that Licensed
      Indication within two (2) years of the Effective Date; or (ii) CYTO fails to
      achieve commercial sales of a Licensed Indication within seven (7) years of
      the
      Effective Date.

     

     

    (d)  CYTO
      shall maintain records in sufficient detail and in good scientific manner
      appropriate for patent and regulatory purposes and shall properly reflect all
      work done and results achieved in the performance of its duties hereunder
      (including all data in the form required to be maintained under any Applicable
      Laws), and any subsequent pre-clinical or clinical studies (the “Clinical
      Records”). The Clinical Records generated in the Territory shall be owned by
      CYTO and shall be considered Confidential Information of CYTO and ABI. ABI
      may
      request the Clinical Records, and CYTO shall provide the Clinical Records to
      ABI, subject to applicable laws and regulations. These records include books,
      records, reports, research notes, charts, graphs, comments, computations,
      analyses, compilations, recordings, photographs, computer programs and
      documentation thereof, computer information storage means, samples of materials
      and other graphic or written data generated in connection with CYTO's research
      and development activities with respect to the Product. 

     

    
      
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    (e)  In
      the
      event ABI requests that more than 1,000 pages be copied in connection with
      the
      foregoing, ABI shall reimburse CYTO for CYTO’s actual out of pocket costs for
      making copies in excess of 1,000 pages, ABI shall pay CYTO such amounts within
      30 days following ABI’s receipt of an invoice therefor accompanied by
      documentation reasonably supporting such invoice.

     

     

    (f)  ABI
      has
      the right, upon fifteen business days’ prior written notice to CYTO, to review
      the Clinical Records associated with human oral IFN upon request and during
      normal business hours, and CYTO shall, subject to Applicable Laws, provide
      ABI
      upon request with a copy of all requested Clinical Records, at ABI’s cost, to
      the extent reasonably required for the exercise of ABI's rights under this
      Agreement.
      ABI may
      use the Clinical Records and the summaries thereof for commercial and regulatory
      approval purposes. If ABI wants to provide a non-governmental entity Third
      Party
      with the Clinical Records or a summary thereof or use information contained
      in
      such records for a commercial purpose, ABI may do so as long as the
      non-governmental entity Third Party agrees to the Confidentiality provisions
      of
      Section 15.01.

     

     

    Section
      2.03. Availability of Resources; Cooperation. 

     

    Each
      Party shall maintain laboratories, offices and/or other facilities reasonably
      necessary to carry out the activities to be performed by such Party hereunder.
      Upon reasonable advance notice, each Party agrees to make its employees and
      non-employee consultants reasonably available at their respective work locations
      to consult with the other Party on issues arising during the collaboration
      and
      in connection with any request from any Governmental Authority, including
      regulatory, scientific, technical and clinical testing issues. Such meeting
      may
      be arranged through the internet or site visit. The meetings should be arranged
      within 15 working days after the requests, where feasible. 

     

     

    Section
      2.04. Reporting Obligations of CYTO. 

     

    On
      or
      prior to December 31st of each year during the TERM of this Agreement CYTO
      shall
      provide ABI with a report of ongoing development efforts, including a report
      of
      efforts by CYTO with respect to clinical testing, regulatory approval efforts,
      marketing/sales strategy, and any other areas into which CYTO's reasonable
      business efforts in accordance with this paragraph may reasonably be
      categorized. Such report shall be provided in English and shall be accompanied
      by samples of labeling, instructions, promotional and other support materials,
      if any, developed for CYTO's sales force, patients, physicians, or other outside
      parties.

     

     

    ARTICLE
      III:

     

     

    LICENSE

     

     

    Section
      3.01. License and Supply Grant.

     

    Subject
      to the terms of this Agreement and the Existing Licenses, ABI hereby grants
      to
      CYTO:

     

    
      
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    (a)  an
      exclusive sublicense, with rights to sublicense (subject to Section 16.10),
      under the ABI Technology to use the ABI Technology to market, advertise,
      promote, Manufacture, offer for sale, sell, and distribute the Product in the
      Territory; and 

     

     

    (b)  an
      exclusive sublicense, with rights to sublicense (subject to Section 16.10),
      under all rights granted to ABI pursuant to the HBL Agreement to market,
      advertise, promote, Manufacture, offer for sale, sell, and distribute the
      Product in the Territory. 

     

     

    In
      addition to the transfer fees and Royalty, if CYTO licenses the right to a
      third
      unrelated party (except for those who are CYTO’s subsidiaries), ABI shall
      receive ****
      of any
      license fee, option fee, or other payment, which CYTO may receive for the
      sublicense of rights under this Agreement to the sale and/or use of Product.
      

     

     

    Section
      3.02.
      Restrictions. 

     

    CYTO
      shall have the right to use and sell Product only in the Territory and only
      for
      use in the treatment of the Licensed Indications. CYTO shall not seek customers,
      establish any branch or maintain any distribution depot for Product in any
      country outside the Territory. CYTO shall not sell Product to any customer
      in
      any country outside the Territory or to any customer in the Territory if, to
      the
      knowledge of CYTO, such customer intends to resell such Product in any country
      outside the Territory.

     

     

    Section
      3.03.
      Retained Rights. 

     

    ABI
      retains all rights other than as set forth in this Agreement to HBL IFN and
      IFN,
      including without limitation, the right to test, develop, license, sublicense,
      market, distribute or otherwise use IFN and HBL IFN for treatment of the
      Licensed Indications outside the Territory. 

     

     

    Section
      3.04. First Right of Refusal. 

     

    CYTO
      shall have a first right of refusal to add to this Agreement as Licensed
      Indications, in the Territory, other human clinical indications treated or
      treatable by the oral administration of IFN, as such may become available from
      ABI from time to time in the future, within the term of this Agreement. In
      the
      event ABI should determine to license such an indication or indications in
      the
      Territory, ABI shall provide written notice of such intention to CYTO. If ABI
      proposes to license such indication or indications to any person or entity
      other
      than CYTO, ABI shall provide to CYTO, along with such written notice, a complete
      outline of the substantive terms of such proposed license; CYTO shall thereupon
      have a period of thirty (30) days to notify ABI, in writing, that it elects
      to
      enter into the license, on the terms and conditions set forth in such notice
      from ABI to CYTO. If CYTO does not so notify ABI of its election to license,
      then ABI shall be free to license such indication or indications to the party
      or
      parties identified in such notice, or to any other party or parties, during
      a
      period of ninety (90) days after the expiration of the aforesaid thirty (30)
      days, and if ABI does not so license the indication or indications within said
      ninety 

     

    
      
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    (90)
      day
      period, CYTO’s first right of refusal shall be reinstituted, with respect to any
      future license by ABI of such indication or indications, in the Territory.
      The
      first right of refusal contained in this Section 3.04 shall not constitute
      an
      obligation on the part of ABI to license any further indication or indications
      in the Territory and ABI may elect not to develop treatments for any further
      indications, or if it does develop such, ABI may elect not to license them
      in
      the Territory.

     

     

    ARTICLE
      IV:

     

    PAYMENTS
      AND ROYALTIES

     

     

    Section
      4.01. Initial Fee. 

     

    On
      the
      Effective Date, as an initial license fee, CYTO shall pay to ABI a sum equal
      to
****.
      This
      fee will be wired into ABI’s designated bank account within 30 days of the
      Effective Date. Failure to make this initial payment shall cause the Agreement
      to be terminated and to be of no further force or effect (except for Article
      XV). Upon receipt of the initial license fee, ABI shall provide CYTO with All
      the existing regulatory documents in ABI’s possession that are needed to obtain
      government approval for trials in China and Taiwan. The documents include those
      that submitted to FDA and SFDA for clinical trials. 

     

     

    After
      ABI
      notifies CytoPharm in writing or by e-mail of supplying documents above, CYTO
      will wire into ABI’s designated bank account an additional ****
      within
      30 days. 

     

     

    Section
      4.02. Royalty
      Payments. 

     

    During
      the TERM, CYTO, its Affiliates or sub-licensees in bonafide arm’s length
      transactions, will pay ABI a royalty on aggregate Net Sales of Product in each
      calendar year equal to ****
      each
      year. Royalties shall be due and payable thirty (30) days after the end of
      each
      calendar quarter (each a “Royalty Payment Date”). CYTO may prepay, in whole or
      in part, any royalties prior to the applicable Royalty Payment
      Date.

     

     

    Section
      4.03. Milestone Payments. 

     

    CYTO
      shall pay to ABI, as licensing fees, the following milestone payments within
      30
      calendar days after the occurrence of the specified milestone event with respect
      to the Product:

     

     

    (a)  Clinical
      Trials: CytoPharm will pay ****
      for
      first patient enrollment for clinical trials in China for the first Licensed
      Indication. 

     

     

    (b)  Regulatory
      Approval: CytoPharm will pay ****
      for
      China SFDA Approval for commercialization and marketing in China for the first
      Licensed Indication. 

     

     

    (c)  Other:
      CytoPharm will pay ****
      for
      gaining approval from DOH for the first Licensed Indication.

     

    
      
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    Section
      4.04. 
      Minimum Royalty. 

     

    During
      the TERM, and for each calendar year beginning with the second calendar year
      after approval of sales of Product in the Territory, CYTO shall pay ABI a
      minimum royalty, which shall be ****
      or an
      actual amount defined in Section 4.02, above, whichever is greater.  The
      Minimum Royalty calculations and payment therefor shall be made within thirty
      (30) days after the close of each calendar year, commencing with the first
      calendar year after approval of sales of Product in the Territory.  Failure
      to make this Minimum Royalty shall be a reason for Termination pursuant to
      Section 5.03(a).

     

     

    Section
      4.05. Reports.  

     

    CYTO
      shall furnish to ABI a quarterly written report (in sufficient detail to
      determine the relevant amounts and dates specified in this Section 4.05), which
      report shall contain at a minimum (a) the number of lozenges sold; (b) the
      calculation of Net Sales; (c) royalties payable in U.S. dollars, if any, which
      shall have accrued hereunder based upon Net Sales; (d) withholding taxes, if
      any, required by law to be deducted with respect to such sales; (e) the dates
      of
      the First Commercial Sale of any Product; and (f) the exchange rates, if any,
      used to determine the amount of United States dollars (collectively, the
“Royalty Statement”). Reports shall be due on the 45th
      day
      following the close of each quarter.

     

     

    Section
      4.06.
      Records
      and Audits. 

     

    During
      the TERM and for a period of two years thereafter or upon written notice to
      CYTO
      received prior to the expiration of such two year period as otherwise required
      in order for ABI to comply with Applicable Law, CYTO shall keep complete and
      accurate records in sufficient detail to permit ABI to confirm the completeness
      and accuracy of the information presented in each Royalty Statement and all
      payments due hereunder. CYTO shall permit an independent, certified public
      accountant reasonably acceptable to CYTO to audit and/or inspect those records
      of CYTO (including financial records) that relate to number of lozenges sold
      and
      Net Sales for the sole purpose of verifying the completeness and accuracy of
      the
      Royalty Statements and, the calculation of Minimum Royalties, Net Sales and
      confirming royalty payments for the Product, during the preceding calendar
      year.
      Such inspection shall be conducted during CYTO’s normal business hours, no more
      than once in any 12-month period and upon at least thirty (30) days’ prior
      written notice by ABI to CYTO. If such accounting firm concludes that such
      payments were underpaid during the periods reviewed by such accountants, CYTO
      shall pay ABI the amount of any such underpayments, within thirty (30) days
      of
      the date ABI delivers to CYTO such accounting firm's report so concluding that
      such payments were underpaid. If CYTO fails to remit the payment within thirty
      (30) days, interest at a rate equal to the Prime Rate of Interest shall be
      imposed starting from the 31st
      day. If
      such accounting firm concludes that such payments were overpaid during such
      period, ABI shall pay to CYTO the amount of any such overpayments, without
      interest, within thirty (30) days of the date ABI delivers to CYTO such
      accounting firm's report so concluding that such payments were overpaid. If
      ABI
      fails to remit payment within 30 days, interest at a rate equal to the Prime
      Rate shall be imposed starting from the 31st
      day.
      Provisions in this Section 4.06 requiring either Party 

     

    
      
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    to
      pay
      interest shall not prevent the other Party from immediately taking all actions
      necessary to collect all amounts due, or to enforce any other remedy under
      this
      Agreement. ABI shall bear the full cost of such audit unless such audit
      discloses an underpayment by more than ****
      of the
      amount due during such period. In such case, CYTO shall bear the full cost
      of
      such audit. CYTO shall provide ABI a copy of the CYTO audited financial
      statements with sufficient detail to show the portion of revenue from oral
      interferon sales each year to be delivered to ABI within 3 months of the end
      of
      CYTO’s fiscal year.

     

     

    Section
      4.07.
      Exchange Rate; Manner and Place of Payment.  

     

    All
      payments hereunder shall be payable in United States dollars. With respect
      to
      each calendar quarter, whenever conversion of payments from any foreign currency
      shall be required, such conversion shall be made at the rate of exchange
      reported in The Wall Street Journal on the last business day of the applicable
      calendar quarter. All payments owed under this Agreement shall be made by wire
      transfer to a bank account designated in writing by ABI, unless otherwise
      specified in writing by ABI.

     

     

    Section
      4.08.
      Late
      Payments. 

     

    Unless
      otherwise provided in this Agreement, upon the failure of CYTO to pay any amount
      due under this Agreement within five days after receipt of notice by ABI that
      such amount has become due and payable and has not been paid, CYTO shall pay
      interest to ABI on such amount from the date such amount is due under this
      Agreement at the rate of ****
      per
      annum calculated on the number of days such payment is delinquent, unless such
      payment is being disputed by CYTO in good faith pursuant to Section 5.03(a).
      Nothing in this Section 4.08 shall relieve CYTO of CYTO’s obligation to make
      payments, risk Termination pursuant to Section 5.03(a), or provide a Royalty
      Statement pursuant to Section 5.03(b).

     

     

    Section
      4.09.
      Taxes. 

     

    All
      taxes
      levied on account of the payments accruing to ABI under this Agreement shall
      be
      paid by ABI for its own account, including taxes levied thereon as income to
      ABI. If provision is made in law or regulation for withholding, such tax shall
      be deducted from the payment made by CYTO, paid to the proper taxing authority
      and a receipt of payment of the tax secured and promptly delivered to ABI.
      

     

     

    ARTICLE
      V:

     

    TERM
      AND TERMINATION

     

     

    Section
      5.01.
      TERM.  

     

    This
      Agreement will take effect on the Effective Date and will remain in force
      through December 31, 2016 (the “TERM”) after which it shall automatically be
      renewed for successive periods of one year each, unless terminated earlier
      under
      provisions of this Article V or if notice of termination is given by either
      Party at least one hundred twenty (120) days prior to the December
      31st
      anniversary of any year after 2016.

     

    
      
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    Section
      5.02.
      Termination
      By CYTO. 

     

    CYTO
      may
      terminate this Agreement by notice to ABI as follows:

     

     

    (a)  immediately,
      if CYTO reasonably determines based upon the clinical trials and after
      consultation with ABI that receipt of Governmental Approval for a Product is
      unlikely,
      and/or

     

     

    (b)  immediately,
      if CYTO reasonably determines based upon the market competition and after
      consultation with ABI that the profitability of the Product is
      unlikely.

     

     

    Section
      5.03. Termination by ABI. 

     

    ABI
      may
      terminate this Agreement by notice to CYTO, upon any of the following
      conditions:

     

     

    (a)  if
      CYTO
      shall fail to make any payments to ABI on the date on which such payments are
      due hereunder and such failure continues for more than 10 days after CYTO’s
      receipt of notice of such failure to pay; provided, however, that this
      subsection (a) shall not apply to any payment, or portion thereof, under this
      Agreement, which is the subject of a good faith dispute (a “Disputed Amount”)
      between CYTO and ABI. Any Disputed Amount shall be resolved by the Parties
      within 30 days from the date CYTO notifies ABI of a good faith dispute;
      provided, however, if the Disputed Amount cannot be resolved to the mutual
      satisfaction of the Parties within such 30-day period then either Party may
      request that the dispute be submitted to the Chief Executive Officers of ABI
      and
      CYTO, respectively, or their designees, for joint resolution. If the Disputed
      Amount is not jointly resolved by the Parties' Chief Executive Officers, or
      their designees, within ten days after the submission thereto, then ABI shall
      be
      entitled to pursue any and all remedies at law available to it. In no event
      will
      the dispute resolution period for the activities set forth above exceed a
      maximum of 60 days unless otherwise agreed in writing by the Parties. Further,
      CYTO may in its discretion elect to pay any such Disputed Amount and in the
      event such amount is finally determined not to have been payable by CYTO, ABI
      shall reimburse CYTO for such amount, without interest; or

     

     

    (b)  if
      CYTO
      shall fail to deliver to ABI a Royalty Statement by the Royalty Payment Date
      and
      shall fail to cure such default within 30 days after notice from ABI with
      respect thereto; or

     

     

    (c)  if
      CYTO
      shall commit any material breach of the provisions of this Agreement other
      than
      a breach set forth in subsections (a) or (b) above, provided that ABI has first
      given CYTO notice specifying the details of the material breach, and CYTO has
      not cured such material breach, if such breach is capable of being cured within
      such time period, within 45 days of the effective date of such notice; or

     

     

    (d)  if
      CYTO
      fails to market product in the Territory within nine (9) months of the Effective
      Date, provided all such product registration, governmental approvals,
      manufacturing process, etc. have been completed and CYTO has had reasonably
      sufficient time to market the product; or

     

     

    
      
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    (e)  if
      CYTO
      fails to use commercially reasonable efforts as required in Section 2.02
      regarding any one Licensed Indication, such failure shall be cause for
      Termination of this Agreement for that particular Licensed Indication but shall
      not be cause for termination as to other Licensed Indications.

     

     

    (f)  anytime
      after 12/31/2016 with or without cause upon 3 months prior written notice to
      CYTO, or,

     

     

    (g)   immediately,
      if the HBL
      Agreement is terminated. 

     

     

    Section
      5.04.
      Termination Upon Certain Events. 

     

    This
      Agreement may be terminated by the Party specified below immediately upon
      written notice to the other Party of the occurrence of either of the following
      events:

     

     

    (a)  by
      either
      Party upon a cessation of operations in the ordinary course of the other Party
      or the institution by or against such Party as debtor of any proceeding (whether
      voluntary or involuntary) in bankruptcy or for dissolution, liquidation,
      reorganization, arrangement or the appointment of a receiver, trustee or
      judicial administrator (or the equivalent thereof in the jurisdiction in
      question) or any other proceeding under the law for the relief of debtors,
      if,
      in the case of an involuntary proceeding, the same shall not have been dismissed
      or stayed within 45 days after its institution; or 

     

     

    (b)  by
      either
      Party if the other Party makes an assignment for the benefit of, or arrangement
      with, its creditors or becomes unable to pay its debts as they become
      due.

     

     

    (c)  A
      Party's
      failure to terminate this Agreement for any of the reasons specified in this
      Section 5.04 shall not in any way be deemed a waiver of such Party's rights
      in
      respect thereof or otherwise limit its rights to enforce the obligations
      hereunder.

     

     

    Section
      5.05.
      Remedies.  

     

    All
      of
      the non-breaching Party's remedies shall be cumulative, and the exercise of
      one
      remedy hereunder by the non-defaulting Party shall not be deemed to be an
      election of remedies. These remedies shall include the non-breaching Party's
      right to sue for damages for such breach without terminating this
      Agreement.

     

     

    Section
      5.06.
      Effect
      of Termination. 

     

    In
      the
      event of termination of this Agreement:

     

     

    (a)  Neither
      Party shall be discharged from any liability or obligation to the other Party
      that became due or payable prior to the effective date of such
      termination;

     

     

    (b)  CYTO
      shall discontinue, and shall cause its Affiliates and sublicensees to
      discontinue, the sale of the Product; and

     

     

    
      
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    (c)  In
      the
      event of termination by ABI under Section 5.03, all duties of ABI (other than
      under Section 5.08) and all rights (but not duties) of CYTO (other than under
      Section 5.08) under this Agreement shall immediately terminate without the
      necessity of any action being taken either by ABI or by CYTO, and

     

     

    CYTO
      shall have a period of six months to sell off its inventory of Product existing
      on the date of termination and shall pay royalties to ABI with respect to such
      Product sales within 30 days after the expiration of such six-month
      period.

     

     

    Section
      5.07. 
      Bankruptcy.  

     

    In
      the
      event that ABI as a debtor in possession, or a trustee in bankruptcy under
      the
      U.S. Bankruptcy Code, rejects this Agreement or CYTO’s right to continue the
      licenses under this Agreement, CYTO may elect to retain its license rights
      under
      the Agreement by paying all applicable fees, and otherwise acting in accordance
      with Section 365(n) of the U.S. Bankruptcy Code. Thereafter, neither ABI as
      debtor in possession, nor a trustee in bankruptcy, shall interfere with the
      rights of CYTO to use the ABI Technology under this Agreement.

     

     

    Section
      5.08.
      Continuing Obligations. 

     

    Expiration
      or termination of this Agreement shall not relieve the Parties of any obligation
      accruing prior to such expiration or termination. Except as otherwise set forth
      in this Agreement, the obligations and rights of the Parties under
      Articles X, XIII, XIV (other than Section 14.03), and Sections 5.06-5.09,
      and 12.03, and 15.01 (for the period set forth therein) shall survive expiration
      or termination of this Agreement.

     

     

    Section
      5.09. Return
      of Confidential Information.  

     

    Except
      to
      the extent necessary for CYTO to exercise its rights to the ABI Technology
      under
      Section 5.07, within 30 days following the expiration or termination of this
      Agreement, each Party shall return to the other Party, or destroy, upon the
      written request of the other Party, any and all Confidential Information of
      the
      other Party in its possession and upon a Party's request, such destruction
      (or
      delivery) shall be confirmed in writing to such Party by a responsible officer
      of the other Party. Notwithstanding the provisions of this Section 5.09, either
      Party may retain one (1) copy of such Confidential Information for the sole
      purpose of determining its continuing confidentiality obligation to the other
      Party under this Agreement.

     

     

    ARTICLE
      VI:

     

    SUPPLY,
      MANUFACTURE AND PURCHASE OF PRODUCT

     

     

    Section
      6.01.
      Supply of Product
      and Bulk Interferon. 

     

    Subject
      to the terms of this Agreement,
      ABI
      agrees to ask HBL to Manufacture or cause to be Manufactured for, and sell
      exclusively to CYTO in the Territory, CYTO’s total requirements for the Product
      in the Territory on the terms and conditions set forth herein. ABI

     

    
      
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    shall
      provide Product or Bulk IFN from HBL as directed in a forecast by CYTO, at
      CYTO’s sole discretion. CYTO may, at CYTO’s sole expense, subcontract any part
      of the Manufacturing Process for the Product to Third Parties provided the
      Product and the facilities used to Manufacture the Product continue to meet
      the
      requirements set forth in this Agreement.
      CYTO
      will bear the cost of validation and necessary stability testing, and any
      manufacturing setup costs or up front fees.

     

     

    Section
      6.02. Supply
      and Manufacturing Rights. 

     

    (a)
      During the TERM, CYTO shall have the right to purchase Product or Bulk IFN
      from
      ABI in accordance with the terms of this Agreement. CYTO shall have the right
      to
      Manufacture Product from Bulk IFN.

     

     

    (b)
      If at
      any time during the TERM ABI shall have both (i) materially breached this
      Agreement, and (ii) filed for protection under the bankruptcy laws of the United
      States, CYTO may thereafter attempt to negotiate and enter into an agreement
      with HBL pursuant to which HBL will supply CYTO with IFN.

     

     

    Section
      6.03.
      Quality Assurance.  

     

    ABI
      shall
      ask HBL to Manufacture or cause to be Manufactured the Product in accordance
      with the Specifications and this Agreement. CYTO shall promptly notify ABI
      in
      writing of any changes required by a Governmental Authority in the
      Specifications or CYTO’s quality assurance procedures that would render ABI or
      its supplier unable to supply the Product in accordance with the terms of this
      Agreement. The Parties agree to develop and execute an appropriate action plan
      in such situation. Any additional costs or expenses shall be paid by CYTO.
      

     

     

    Section
      6.04. 
      ABI's Duties.  

     

    ABI
      agrees to ask HBL to furnish to CYTO with every Shipment a written certificate
      of analysis and Certificate of Compliance that confirms conformity of the
      Product to the Specifications and this Agreement. CYTO shall analyze each
      Shipment promptly upon receipt in accordance with Section 8.02.
      In
      addition, ABI shall as HBL to:

     

    (a)  provide
      CYTO with written sampling and testing procedures used by ABI or its
      manufacturer to assure that the Product conforms to the
      Specifications;

     

     

    (b)  retain
      a
      sample of each batch of Product for a period equal to the greater of
      (i) one year after the date of Manufacture of such batch of Product or
      (ii) such period as required by Applicable Laws. Upon the request of CYTO,
      ABI shall ask HBL to make such samples available to CYTO for inspection. The
      retained sample shall be sufficient in size to allow CYTO to perform tests
      to
      determine whether the Product meets the Specifications. ABI shall store the
      retained sample in accordance with the Specifications and Applicable
      Law,

     

    
      
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    (c)  maintain
      records to ensure CYTO’s ability to perform a complete lot history via lot
      tracing of the Product,

     

     

    (d)  keep
      on
      file all manufacturing records and analytical results pertaining to the
      Manufacture of each batch of Product for a period expiring not earlier than
      one
      year after the expiration date of the last lot of the last batch of Product
      Manufactured and Shipped
      to
      CYTO.
      ABI shall make, and shall cause any Third Party manufacturer to make, such
      records available to CYTO upon request,

     

     

    (e)  provide
      CYTO with notice within 48 hours following ABI's receipt of notification of
      any
      scheduled inspection, and as soon as possible following ABI's receipt of
      notification of any unscheduled inspection, by any Governmental Authority of
      ABI's facilities, books or records, or of the facilities, books or records
      of
      any subcontractor being utilized by ABI to perform any portion or all of the
      Manufacture or development of the Product. ABI shall inform such Governmental
      Authority that CYTO may desire to be present at such inspection; provided that
      CYTO’s right to be present is subject to approval by such Governmental Authority
      and subject to CYTO being available at the time and date established by such
      Governmental Authority and, with respect to any inspection of HBL's facilities,
      HBL's consent to the presence of CYTO at such inspection. ABI shall use
      reasonable efforts to secure a time and date for such inspection that is
      reasonably acceptable to CYTO; provided, however, that ABI alone shall have
      the
      right to make the final decision on all such matters; 

     

     

    (f)  maintain
      at its expense any and all licenses, permits and consents necessary or required
      to perform its obligations under this Agreement; and

     

     

    (g)  ensure
      that all Products delivered, have a remaining shelf life from the time of
      manufacture of not less than five years if refrigerated to at least 2-8 degrees
      Centigrade or two years, if maintained at or below 25 degrees
      centigrade.

     

     

    Section
      6.05. CYTO's Duties if Manufacturing. 

     

    CYTO
      agrees to furnish to ABI with every Shipment a written certificate of analysis
      and Certificate of Compliance that confirms conformity of the Product to the
      Specifications and this Agreement. ABI shall analyze each Shipment promptly
      upon
      receipt in accordance with Section 8.02. In addition, CYTO shall:

     

     

    (a)  provide
      ABI with written sampling and testing procedures used by CYTO or its
      manufacturer to assure that the Product conforms to the
      Specifications;

     

     

    (b)  retain
      a
      sample of each batch of Product for a period equal to the greater of
      (i) one year after the date of Manufacture of such batch of Product or
      (ii) such period as required by Applicable Laws. Upon the request of ABI,
      CYTO shall make such samples available to ABI for inspection. The retained
      sample shall be sufficient in size to allow ABI to perform tests to determine
      whether the Product meets the Specifications. CYTO shall store the retained
      sample in accordance with the Specifications and Applicable Law,

     

     

    
      
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    (c)  maintain
      records to ensure ABI’s ability to perform a complete lot history via lot
      tracing of the Product,

     

     

    (d)  keep
      on
      file all manufacturing records and analytical results pertaining to the
      Manufacture of each batch of Product for a period expiring not earlier than
      one
      year after the expiration date of the last lot of the last batch of Product
      Manufactured by CYTO. CYTO shall make, and shall cause any Third Party
      manufacturer to make, such records available to ABI upon request.

     

     

    Section
      6.06.
      Failure to Supply.

     

    ABI
      shall
      immediately notify CYTO if ABI is unable to fill any purchase order placed
      by
      CYTO pursuant to Section
      7.06, and advise CYTO of the revised delivery date. CYTO shall then have the
      option of terminating the purchase order without obligation of payment or of
      accepting the revised delivery date. If ABI is unable to cure to CYTO’s
      reasonable satisfaction the circumstances giving rise to such failure within
      15
      business days after such notice, CYTO shall not be obligated to purchase any
      further Product from ABI under the then existing forecasts.

     

     

    Notwithstanding
      the
      foregoing, ABI shall not be deemed to be unable to fill any order placed by
      CYTO
if
      ABI's
      inability to fill any order arises as a result of a 50% or greater increase
      in
      CYTO’s order over CYTO’s immediately prior forecast. For example, if CYTO’s
      forecast for the initial three-month period was for 100 Units and CYTO’s
      forecast for the second three-month period was for 200 Units, then, if after
      the
      time the second three-month forecast becomes firm pursuant to Section 7.06(a),
      CYTO increased its orders, ABI would not be deemed to be unable to supply
      Product for any amount in excess of 300 Units for such three-month
      period

     

     

    Section
      6.07.
      Allocation.  

     

    If
      ABI is
      unable to supply all of the requirements of the Product, and quantities ordered
      by CYTO in accordance with Section 7.06, then ABI shall allocate the resources
      available to it so that CYTO receives at least its proportional share of
      available supplies as determined based on reasonable forecasts (taking into
      consideration past sales and sales performance against forecast) of
      CYTO.

     

     

    Section
      6.08. Records
      and Audits. 

     

    During
      the TERM and for a period of two years thereafter or such longer period as
      is
      required in order for CYTO to comply with Applicable Law, ABI shall keep
      complete and accurate records in sufficient detail to permit CYTO to confirm
      the
      completeness and accuracy of the information presented in each invoice sent
      to
      CYTO pursuant to this Agreement and all payments made by CYTO relying on such
      invoices hereunder. ABI shall permit an independent, certified public accountant
      reasonably acceptable to ABI to audit and/or inspect those records of ABI
      (including financial records) that relate to such invoices for the sole purpose
      of verifying the completeness and accuracy of such invoices during the preceding
      calendar year. Such inspection shall be conducted during ABI's normal business
      hours, no more than once in any 12-month 

     

    
      
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    period
      and upon at least ten days prior written notice by CYTO to ABI. If such
      accounting firm concludes that such payments were overpaid during the periods
      reviewed by such accountants, ABI shall pay CYTO the amount of any such
      overpayments, plus interest at a rate equal to the Prime Rate of Interest,
      within 30 days of the date CYTO delivers to ABI such accounting firm's report
      so
      concluding that such payments were overpaid. CYTO shall bear the full cost
      of
      such audit unless such audit discloses an overpayment by more than 5% of the
      amount due during such period. In such case, ABI shall bear the full cost of
      such audit. 

     

     

    ARTICLE
      VII:

     

    PURCHASE
      AND SALE

     

    Section
      7.01.
      Purchase
      Price and Payment.  

     

    ABI
      shall
      sell, and CYTO shall purchase Bulk IFN and Product at a purchase price equal
      to,
      the actual amount (exclusive of the Royalties as defined in the HBL Agreement)
      paid to HBL under the HBL Agreement as in effect at the time of such sale and
      purchase, plus ****, and all other reasonable costs of Manufacture actually
      paid
      by ABI with respect to such Product, for all Product supplied by ABI to CYTO
      pursuant to this Agreement (the “Purchase Price”). HBL has agreed to an initial
      price per lozenge of **** for commercial lots of bulk lozenges. The price of
      lozenges for clinical testing will be negotiated in good faith but the price
      will depend on volume and packaging needed. ABI shall invoice CYTO for all
      Product manufactured by ABI for CYTO, which invoice shall be accompanied by
      reasonable documentation, i.e., invoices for amounts paid by ABI, supporting
      the
      amounts set forth in the invoice, and payment shall be made to ABI before CYTO
      takes physical possession of Product or Bulk IFN. CYTO shall pay in advance
      to
      ABI any third party setup fees or advance fees required as part of the costs
      of
      manufacture.

     

     

    Section
      7.02.
      Labeling
      and Artwork. 

     

    After
      execution of this Agreement, ABI shall review and comment on any labeling and
      proposed changes to the labeling of the Product and shall be entitled to
      participate in discussions with the Governmental Authorities concerning any
      labeling or proposed labeling change so long as CYTO is purchasing the Product
      from ABI. Notwithstanding the above, CYTO shall make the final decision with
      regard to any labeling or labeling revisions

     

     

    Both
      Parties will approve all artwork developed for inclusion in the Product
      packaging, including carton labels, package inserts, etc., which approval will
      not be unreasonably withheld, conditioned or delayed by either Party. If CYTO
      wishes to institute changes in labeling artwork, both Parties will develop
      a
      mutually acceptable implementation schedule. The actual cost of implementing
      such change will be at CYTO’s sole cost and expense, including any materials
      made obsolete by CYTO’s changes to the artwork. Neither Party shall alter,
      change or in any way modify the artwork, which has previously been approved,
      for
      any reason, without prior written authorization from the other Party, which
      approval will not be unreasonably withheld, conditioned or delayed, and provided
      that such approved artwork shall conform to all Applicable Laws.

     

    
      
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    Section
      7.03.
      Purchase Forms. 

     

    Purchase
      orders, purchase order releases, confirmations, acceptances and similar
      documents submitted by a Party in conducting the activities contemplated under
      this Agreement are for administrative purposes only and shall not add to or
      modify the terms of the Agreement. To the extent of any conflict or
      inconsistency between this Agreement and any such document, the terms of this
      Agreement shall govern.

     

     

    Section
      7.04.
      Confirmation.  

     

    ABI
      shall
      confirm each purchase order within ten business days from the date of receipt
      of
      a purchase order and shall supply the Product within a maximum of 30 days from
      the date of acceptance of a purchase order, or later if so specified in the
      purchase order. Failure of ABI to confirm any purchase order shall not relieve
      ABI of its obligation to supply Product ordered by CYTO in conformity with
      this
      Agreement.

     

     

    Section
      7.05.
      Delivery. 

     

    Delivery
      for Product shall be at ABI's or its subcontractor's facility, which is
      currently located in Okayama, Japan, or such other location designated by ABI
      as
      CYTO may agree to in writing. Product shall be delivered, not cleared for
      export, to the carrier nominated by CYTO at the designated location, and CYTO,
      or its designated carrier, shall be responsible for loading. ABI shall ship
      Product in accordance with CYTO’s purchase order form or as otherwise directed
      by CYTO in writing. Title to any Product purchased by CYTO shall pass to CYTO
      upon the earlier of (a) a common carrier accepting possession or control of such
      Product, or (b) passage of such Product from the loading dock of ABI's or its
      subcontractor's facilities to CYTO or its agent.

     

     

    Section
      7.06.
      Forecasts and Orders. 

     

    Not
      later
      than six months after submission of the NDA for a Product or other applicable
      regulatory filing on a country-by-country basis, CYTO will provide ABI with
      a
      12-month forecast of CYTO’s requirement of each Product, which forecast will
      include designation of whether such Product shall be provided in bulk or Unit
      form, for which an NDA, or other applicable regulatory filing, has been
      submitted, on a Product basis, as follows: 

     

     

    (a)  During
      the period commencing six months after submission of an NDA, or other applicable
      regulatory filing, for a Product through the end of the fourth full calendar
      quarter following the First Commercial Sale of that Product, the forecasts
      shall
      be provided quarterly, no less than 45 days prior to the beginning of each
      quarter. Said requirements will be based on standard production planning
      parameters, including sales forecasts, sales demand forecasts, promotional
      forecasts, inventory requirements, and the like. The first two quarters of
      the
      12-month forecast will be stated in monthly requirements. ABI will inform HBL
      and ask HBL to stock a minimum amount of Product equal to the second two
      quarters of the 12-month forecast. The first three months of the 12-month
      forecast will be firm orders to purchase. The second three months will be
      allowed to be flexed from the previous forecast by plus or minus 25% per month
      

     

    
      
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    until
      fixed by the subsequent forecast; provided that the aggregate adjustment from
      the quantity set forth in the previous forecast for such three-month period
      shall not exceed 50% in aggregate during that three-month period. For example,
      if CYTO’s forecast for the first three months was for 100 Units and its forecast
      for the second three months was for 200 Units, the maximum number of Units
      CYTO
      could order at the time the second three-month period becomes fixed would be
      300
      Units (i.e., 50% of 200 Units plus the 200 Units originally forecast). The
      last
      two quarters of any 12-month forecast will be an estimate and not
      binding.

     

     

    (b)  Following
      the end of the fourth full calendar quarter following the First Commercial
      Sale
      of a Product, CYTO will provide to ABI a rolling 12-month forecast for each
      Product with the first three months of the rolling 12-month forecast a firm
      order to purchase. Each forecast under this subsection (ii) shall be provided
      monthly, no less than 20 days prior to the beginning of each month. All orders
      will be for full batch quantities. 

     

     

    It
      is
      understood that ABI will not maintain Product inventory in excess of the
      applicable forecast, but will produce Product upon receipt of that portion
      of
      CYTO’s forecasts that constitute firm orders to purchase. Nothing in this
      Agreement shall obligate ABI to deliver Product if HBL is unable for any reason
      to provide Product.

     

     

    CYTO
      agrees to purchase a sufficient amount of Product to enable CYTO to carry
      sufficient inventory to allow for fluctuations in sales demand so as to allow
      ABI reasonable lead-time to meet increased demand. ABI will use commercially
      reasonable efforts to meet any increase in demand in excess of the allowed
      adjustment, but will not be obligated to do so. All forecasts will be made
      by
      CYTO to ABI in good faith based upon standard commercial parameters. From time
      to time after the Effective Date, the Parties shall consider whether, in light
      of market demand, manufacturing capacity, inventory levels and other pertinent
      factors, to revise the schedule for delivery of forecasts and, if appropriate,
      negotiate in good faith to revise such schedule. 

     

     

    ARTICLE
      VIII:

     

    WARRANTY,
      REJECTION AND INSPECTIONS

     

    Section
      8.01.
      ABI Warranty. 

     

    ABI
      represents and warrants to CYTO that the
      Product delivered pursuant to this Agreement
      (a)
      shall
      comply with the Specifications and this Agreement and conform to the certificate
      of analysis for each such Product; (b)
      are
      not
      adulterated or misbranded under Applicable Laws; and (c)
      at
      the
      time of Manufacture and Shipment to CYTO, will be and are free from any failure
      or defects. 

     

     

    EXCEPT
      AS
      OTHERWISE SET FORTH HEREIN, ABI MAKES NO OTHER WARRANTIES OF ANY OTHER KIND,
      INCLUDING BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY OR FITNESS OF
      THE
      PRODUCT FOR ANY PURPOSE, AND ABI EXPRESSLY DISCLAIMS ANY SUCH OTHER WARRANTIES
      WITH RESPECT TO THE PRODUCT, EITHER EXPRESSED OR IMPLIED.

     

    
      
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    Section
      8.02.
      Rejection of Product for Failure to Conform to
      Specifications.  

     

    CYTO
      shall have 45 days after the receipt of any Shipment to determine conformity
      of
      the Shipment to the Specifications and/or Applicable Laws, except for hidden
      defects. A “hidden defect” shall mean a defect in the Product not discovered by
      CYTO during its testing of the Product in accordance with generally accepted
      industry testing procedures and which would not be a defect normally expected
      to
      be discovered in accordance with such testing. If testing of such Shipment
      shows
      a failure of the Shipment to meet the Specifications and/or Applicable Laws,
      CYTO may return the entire Shipment, or any portion thereof, to ABI at ABI's
      expense within a reasonable time following the above described testing, provided
      that notice of non-conformity is received by ABI from CYTO within 45 days of
      CYTO’s receipt of said Shipment. CYTO shall have the right to request that ABI
      provide to CYTO, within 30 days after such notice is received by it, Product
      that meets the Specifications and Applicable Laws or to promptly provide CYTO
      with full credit for the Purchase Price paid by CYTO for the returned Product.
      In the case of a hidden defect, CYTO shall have the right to request that ABI
      provide to CYTO, within thirty (30) days after a notice concerning a hidden
      defect is received by CYTO, Product that meets the Specifications and Applicable
      Laws or to promptly provide CYTO with full credit for the Purchase Price paid
      by
      CYTO for the returned Product. In either case, the cost of freight and handling
      to return or replace Product or shall be at the expense of ABI. If CYTO does
      not
      notify ABI of the non-conformity of the Product within 45 days of receipt of
      said Shipment, the Product shall be deemed to meet the Specifications (including
      those related to packaging of the Product) and Applicable Laws, except with
      respect to hidden defects. Notwithstanding anything in this Agreement to the
      contrary, the Parties may agree to a return of the Product or an adjustment
      in
      the Purchase Price in the event of any failure or defect in the Product. Should
      there be a discrepancy between CYTO’s test results and the results of testing
      performed by ABI, such discrepancies shall be finally resolved by testing
      performed by an independent Third Party mutually agreed upon by CYTO and ABI.
      The costs of such testing shall be borne by the Party against whom the
      discrepancy is resolved. In the event Product have been previously returned
      to
      ABI and such independent Third Party determines that the Product meets the
      Specifications, CYTO shall be responsible for all costs associated with the
      return.

     

     

    Section
      8.03.
      CYTO Inspections. 

     

    ABI
      shall
      ask HBL upon reasonable (but not less than fifteen (15) days) prior written
      notice by CYTO and during normal business hours to allow CYTO to inspect and
      audit ABI's facilities and the facilities of HBL or other subcontractors of
      ABI
      used to Manufacture the Product, twice annually, to confirm that the such
      facilities and the equipment, personnel and operating and testing procedures
      used by ABI or such subcontractors in the Manufacture, testing, storage and
      distribution of the Product are in compliance with Applicable Laws and the
      Governmental Approvals; provided that such inspection does not interfere with
      ABI's or such subcontractor's normal operations or cause ABI or such
      subcontractor's to violate or be in breach of any confidentiality agreements
      with any Third Parties.

     

    
      
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    ARTICLE
      IX:

     

    REGULATORY
      COMPLIANCE 

     

     

    Section
      9.01.
      Maintenance
      of Marketing Authorizations.  

     

    CYTO
      will
      own all Marketing Authorizations. CYTO agrees, at its sole cost and expense,
      to
      maintain the Marketing Authorizations including obtaining any variations or
      renewals thereof, including all fees and licenses, including user fees, related
      to the Manufacture of the Product by CYTO. Each
      Party agrees that neither it nor its Affiliates or permitted sublicensees will
      do anything to adversely affect a Marketing Authorization.

     

     

    Section
      9.02.
      Adverse
      Drug Event Reporting and Phase IV Surveillance. 

     

    Each
      Party, including its permitted sublicensees, shall advise the other Party,
      by
      telephone or facsimile, immediately but in no event later than 24 hours after
      a
      Party, or its sublicensees, becomes aware of any potentially serious or
      unexpected adverse event (including adverse drug experiences, as defined in
      Applicable Laws) involving the Product (each, an “ADE”). Such advising Party
      shall provide the other Party with a written report delivered by confirmed
      facsimile of any adverse reaction, stating the full facts known to such Party,
      including customer name, address, telephone number, batch, lot and serial
      numbers, and other information as required by Applicable Laws. During the TERM,
      CYTO shall have full responsibility for (i) monitoring such adverse reactions;
      and (ii) data collection activities that occur between CYTO and the patient
      or
      medical professional, as appropriate, including any follow-up inquiries which
      CYTO or ABI deem necessary or appropriate.

     

     

    In
      the
      event either Party requires information, regarding adverse drug events with
      respect to reports required to be filed by it in order to comply with Applicable
      Laws, including obligations to report ADEs to the Governmental Authorities,
      each
      Party agrees to provide such information to the other on a timely
      basis.

     

     

    The
      Parties agree to follow CYTO’s standard operating procedure for reporting and
      identifying adverse drug reactions (the “SOP”) in effect from time to time, a
      copy of which CYTO will provide to ABI. In the event the SOP is modified or
      amended during the TERM, CYTO shall provide ABI with copies of any such
      modification or amendment to the SOP for ABI's prior approval, which will not
      be
      unreasonably withheld, conditioned or delayed, at least five business days
      prior
      to such amendment taking effect. CYTO shall designate a qualified person under
      Applicable Laws to be responsible for ADE reporting in each country in the
      Territory. 

     

     

    If
      the
      report of an ADE causes a Governmental Authority to request a labeling revision
      as a result of an ADE or that a Phase IV surveillance program be conducted,
      then
      the Parties shall promptly enter into discussions and shall mutually agree
      on
      all of the material terms and 

     

    
      
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    conditions
      of such labeling revision or Phase IV surveillance program; provided, however
      the costs of such labeling revision or Phase IV surveillance program shall
      be
      paid by CYTO. CYTO shall have the authority to make the final decision with
      regard to any labeling revisions provided that CYTO will consider, in making
      its
      decision, the effect any such labeling revisions will have on the marketing
      and
      sale of the Product outside the Territory. CYTO agrees that should Applicable
      Laws require that any such interim data and results from such Phase IV
      surveillance programs be prepared in written form, CYTO shall comply with such
      requirements and provide all such information in writing to ABI and the
      Governmental Authorities in accordance with Applicable Laws. CYTO further agrees
      that ABI shall have the right to incorporate, refer to and cross-reference
      such
      results and underlying data in any regulatory filing or any other filing or
      requirement ABI is required to undertake with respect to the Product, if
      any.

     

     

    Section
      9.03.
      Commercial Sale Testing and Reporting.  

     

    If,
      after
      the date of First Commercial Sale in any country in the Territory, a
      Governmental Authority requires (a) additional testing, modification or
      communication related to approved indications of the Product or (b) CYTO to
      conduct a Phase IV study as a condition to receiving a Marketing Authorization,
      then CYTO shall design and implement any such testing, modification or
      communication and the costs shall be paid by CYTO. 

     

     

    Section
      9.04.
      Assistance.  

     

    Each
      Party shall provide reasonable assistance to the other at the other's request,
      in connection with their obligations pursuant to this Article IX, subject to
      reimbursement of all of its out-of-pocket costs by the requesting
      Party.

     

     

    Section
      9.05.
      Compliance.  

     

    CYTO
      shall be responsible for compliance with Applicable Laws and the Governmental
      Approvals relating to the design, possession, promotion, marketing, sale,
      advertising and distribution of the Product and Units, including obtaining
      all
      necessary permits, licenses and any other requirements relating to the import,
      sale and distribution of the Product. ABI shall be responsible for compliance
      with Applicable Laws and Governmental Approvals relating to the Manufacture
      of
      the Product, as applicable, and with cGMP relating to the Manufacture and
      testing of the Product, as applicable. CYTO and ABI shall comply with all
      Applicable Laws within the Territory as set forth in this Agreement, including
      the provision of information by CYTO and ABI to each other necessary for ABI
      and
      CYTO to comply with any applicable reporting requirements. Each Party shall
      promptly notify the other Party of any comments, responses or notices received
      from, or inspections by, the FDA, or other Governmental Authority, which relate
      to or may impact the Product or the Manufacture of the Product or the sales
      and
      marketing of the Product, and shall promptly inform the other Party of any
      responses to such comments, responses, notices or inspections and the resolution
      of any issue raised by the FDA or
      other
      Governmental Authority.

     

    
      
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    ARTICLE
      X:

     

     

    REPRESENTATIONS,
      WARRANTIES AND COVENANTS

     

     

    Section
      10.01.
      Corporate Power. 

     

    Each
      Party hereby represents and warrants that such Party is duly organized and
      validly existing under the laws of the state of its incorporation and has full
      corporate power and authority to enter into this Agreement and to carry out
      the
      provisions hereof.

     

     

    Section
      10.02.
      Due
      Authorization. 

     

    Each
      Party hereby represents and warrants that such Party is duly authorized to
      execute and deliver this Agreement and to perform its obligations
      hereunder.

     

     

    Section
      10.03.
      Binding
      Obligation.  

     

    Each
      Party hereby represents and warrants that this Agreement is a legal and valid
      obligation binding upon it and is enforceable in accordance with its terms.
      The
      execution, delivery and performance of this Agreement by such Party does not
      conflict with any agreement, instrument or understanding, oral or written,
      to
      which it is a party or by which it may be bound, nor violate any law or
      regulation of any court, governmental body or administrative or other agency
      having authority over it.

     

     

    Section
      10.04.
      Ownership
      of ABI Rights.  

     

    As
      of the
      Effective Date, ABI represents and warrants that (a) it has all right, title
      and
      interest in and to HBL IFN and the ABI Technology necessary to grant CYTO the
      licenses hereunder, (b) except for those rights granted to Existing Licensees
      under the Existing Licenses and except with respect to CYTO, it has not granted
      any license to any Third Party under the ABI Technology (or any component
      thereof) and is under no obligation to grant any such license, (c) there are
      no
      outstanding liens, encumbrances, agreements or understanding of any kind, either
      written, oral or implied, regarding either the ABI Technology, any component
      thereof or the rights of ABI in and to HBL IFN pursuant to the HBL Agreement.
      

     

     

    Section
      10.05.
      Material
      Agreements.  

     

    ABI
      represents and warrants that:

     

     

    (a)  each
      Material Agreement is valid, binding, and enforceable in accordance with its
      terms against ABI and, to the knowledge of ABI, each other party thereto, and
      is
      in full force and effect.

     

     

    (b)  ABI
      has
      performed in all material respects all obligations imposed on it under each
      Material Agreement and neither ABI nor to the knowledge of ABI, any other party
      to a Material 

     

    
      
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    Agreement
      is in material default under any Material Agreement nor is there any event
      that
      with notice or lapse of time, or both, would constitute a material default
      by
      ABI, or, to the knowledge of ABI, any other party thereunder;

     

     

    (c)  true
      and
      complete copies of each Material Agreement, including any amendments thereto,
      have been delivered to CYTO or its counsel by ABI,

     

     

    (d)  each
      of
      the HBL Agreement and the TAMU Agreement were duly and validly executed in
      accordance with Applicable Law and no Person is materially renegotiating any
      amount paid or payable under either agreement or any material term or provision
      of the HBL Agreement or the TAMU Agreement.

     

     

    Section
      10.06. Adverse
      Properties.  

     

    ABI
      represents and warrants that it knows of no adverse effects or other properties
      that may raise objections from the FDA or other Governmental Authorities or
      may
      affect the use, effectiveness or merchantability of the Product.

     

     

    Section
      10.07. Preservation
      of Name and Reputation.  

     

    During
      the TERM, each of the Parties shall endeavor to preserve the good name and
      reputation of the other Party and shall conduct itself in a manner as to
      maintain the good name and reputation of the other Party.

     

     

    Section
      10.08.
      Debarment.  

     

    During
      the TERM, neither of the Parties shall utilize any employee, representative,
      agent, assistant or associate who has been debarred pursuant to the Act in
      connection with any of the activities to be carried out under this
      Agreement. 

     

     

    Section
      10.09. Limitation
      on Warranties. 

     

    Neither
      Party makes any warranties, express or implied, concerning the success or
      commercial utility of the Product.

     

     

    Section
      10.10. Limitation
      of Liability.  

     

    EXCEPT
      FOR WILLFUL MISCONDUCT, GROSS NEGLIGENCE, BREACHES BY A PARTY OF SECTION 15.01
      OR INFRINGEMENT OF THIRD PARTY PROPRIETARY RIGHTS, NEITHER PARTY SHALL BE
      ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL
      OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT OR ANY LICENSE GRANTED
      HEREUNDER.

     

    
      
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    ARTICLE
      XI:

     

    PATENTS
      AND TRADEMARK

     

     

    Section
      11.01. Filing, Maintenance and Protection of Patents. 

     

    CYTO
      may,
      at CYTO's expense, file, maintain and protect the ABI Technology, if any, in
      the
      Territory during the TERM. 

     

     

    ARTICLE
      XII:

     

    COVENANTS
      OF CYTO AND ABI

     

     

    Section
      12.01.
      Access to Books and Records. 

     

    CYTO
      shall permit ABI, at ABI's expense and during normal business hours, to exercise
      the inspection rights granted to ABI by CYTO under Section 4.06.

     

     

    Section
      12.02. Further
      Actions. 

     

    Upon
      the
      terms and subject to the conditions hereof, each of the Parties hereto shall
      use
      its commercially reasonable efforts to (a) take, or cause to be taken, all
      appropriate action and do, or cause to be done, all things necessary, proper
      or
      advisable under Applicable Law or otherwise to consummate and make effective
      the
      transactions contemplated by this Agreement, (b) obtain from Governmental
      Authorities any consents, licenses, permits, waivers, approvals, authorizations
      or orders required to be obtained or made by the Parties in connection with
      the
      authorization, execution and delivery of this Agreement and the consummation
      of
      the transactions contemplated by this Agreement and (c) make all necessary
      filings, and thereafter make any other required submissions, with respect to
      this transaction under (i) the Securities Exchange Act of 1934, as amended
      and
      the Securities Act of 1933, as amended, and the rules and Regulations thereunder
      and any other applicable federal or state securities laws and (ii) any other
      Applicable Law. The Parties hereto shall cooperate with each other in connection
      with the making of all such filings, including by providing copies of all such
      documents to the other Party's counsel (subject to appropriate confidentiality
      restrictions) prior to filing and, if requested, by accepting all reasonable
      additions, deletions or changes suggested in connection therewith. Without
      limiting the generality of the foregoing, each Party shall take or omit to
      take
      such action as the other Party shall reasonably request to cause the Parties
      to
      obtain any material Governmental Approvals and/or the expiration of applicable
      waiting periods, provided that the foregoing shall not obligate either Party
      to
      take or to omit to take any action (including, without limitation, the
      expenditure of funds or any holding separate and agreeing to sell or otherwise
      dispose of assets, categories of assets or businesses) as in the good faith
      opinion of such Party, would cause a material adverse effect on a
      Party.

     

    
      
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    Section
      12.03. Equitable
      Relief. 

     

    The
      Parties understand and agree that because of the difficulty of measuring
      economic losses to the non-breaching Party as a result of a breach of the
      covenants set forth in this Article XII or Section 15.01, and because of the
      immediate and irreparable damage that may be caused to the non-breaching Party
      for which monetary damages would not be a sufficient remedy, the Parties agree
      that the non-breaching Party will be entitled to seek specific performance,
      temporary and permanent injunctive relief, and such other equitable remedies
      to
      which it may then be entitled against the breaching Party. This Section 12.03
      shall not limit any other legal or equitable remedies that the non-breaching
      Party may have against the breaching Party for violation of the covenants set
      forth in this Article XII or Section 15.01. Subject to Section 16.03, the
      Parties agree that the non-breaching Party shall have the right to seek relief
      for any violation or threatened violation of this Article XII or Section 15.01
      by the breaching Party from any court of competent jurisdiction in any
      jurisdiction authorized to grant the relief necessary to prohibit the violation
      or threatened violation of this Article XII or Section 15.01. This Article
      XII
      shall apply with equal force to the breaching Party's Affiliates. 

     

     

    ARTICLE
      XIII:

     

    INDEMNIFICATION

     

     

    Section
      13.01.
      CYTO
      Indemnified by ABI. 

     

    ABI
      shall
      indemnify and hold CYTO harmless from and against any liabilities or
      obligations, damages, losses, claims, encumbrances, costs or expenses (including
      attorneys' fees) (any or all of the foregoing herein referred to as “Loss”)
      insofar as a Loss or actions in respect thereof, whether existing or occurring
      prior to, on or subsequent to the Effective Date, arises out of or is based
      upon
      (a) any misrepresentation or breach of any of the warranties, covenants or
      agreements made by ABI in this Agreement; (b) the Manufacture of any Product
      that is identifiable as having been Manufactured by or on behalf of ABI; (c)
      any
      claims that a Product (as a result of the use of the ABI Technology therein)
      or
      its Manufacture (as a result of the use of ABI Technology therein), use or
      sale
      infringes the patent, trademark or other intellectual property right of a Third
      Party.

     

     

    Section
      13.02.
      ABI
      Indemnified by CYTO. 

     

    CYTO
      shall indemnify and hold harmless ABI from and against any Loss insofar as
      such
      Loss or actions in respect thereof occurs subsequent to the Effective Date,
      whether existing or occurring prior to, on or subsequent to the date hereof,
      arises out of or is based upon (a) any misrepresentation or breach of any of
      the
      warranties, covenants or agreements made by CYTO in this Agreement or (b) CYTO’s
      material violation of any Applicable Law.

     

    
      
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    Section
      13.03.
      Prompt
      Notice Required. 

     

    No
      claim
      for indemnification hereunder shall be valid unless notice of the matter which
      may give rise to such claim is given in writing by the persons seeking
      indemnification (the “Indemnitee”) to the persons against whom indemnification
      may be sought (the “Indemnitor”) as soon as reasonably practicable after such
      Indemnitee becomes aware of such claim; provided that the failure to notify
      the
      Indemnitor shall not relieve it from any liability which it may have to the
      Indemnitee otherwise than under this Article XII. Such notice shall state that
      the Indemnitor is required to indemnify the Indemnitee for a Loss and shall
      specify the amount of Loss and relevant details thereof. The Indemnitor shall
      notify Indemnitee no later than 60 days from such notice of its intention to
      assume the defense of any such claim. In the event the Indemnitor fails to
      give
      such notice within that time, the Indemnitor shall no longer be entitled to
      assume such defense.

     

     

    Section
      13.04.
      Indemnitor May Settle. 

     

    The
      Indemnitor shall at its expense, have the right to settle and defend, through
      counsel reasonably satisfactory to the Indemnitee, any action which may be
      brought in connection with all matters for which indemnification is available.
      In such event, the Indemnitee of the Loss in question and any successor thereto
      shall permit the Indemnitor full and free access to its books and records and
      otherwise fully cooperate with the Indemnitor in connection with such action;
      provided that this Indemnitee shall have the right fully to participate in
      such
      defense at its own expense. The defense by the Indemnitor of any such actions
      shall not be deemed a waiver by the Indemnitor of its right to assert a claim
      with respect to the responsibility of the Indemnitor with respect to the Loss
      in
      question. The Indemnitor shall have the right to settle or compromise any claim
      against the Indemnitee without the consent of the Indemnitee provided that
      the
      terms thereof: (a) provide for the unconditional release of the Indemnitee;
      (b)
      require the payment of compensatory monetary damages by Indemnitor only; and
      (c)
      expressly state that neither the fact of settlement nor the settlement agreement
      shall constitute, or be construed or interpreted as, an admission by the
      Indemnitee of any issue, fact, allegation or any other aspect of the claim
      being
      settled. No Indemnitee shall pay or voluntarily permit the determination of
      any
      liability, which is subject to any such action while the Indemnitor is
      negotiating the settlement thereof or contesting the matter, except with the
      prior written consent of the Indemnitor, which consent shall not be unreasonably
      withheld or delayed. If the Indemnitor fails to give Indemnitee notice of its
      intention to defend any such action as provided herein, the Indemnitee involved
      shall have the right to assume the defense thereof with counsel of its choice,
      at the Indemnitor's expense, and defend, settle or otherwise dispose of such
      action. With respect to any such action, which the Indemnitor shall fail to
      promptly defend, the Indemnitor shall not thereafter question the liability
      of
      the Indemnitor hereunder to the Indemnitee for any Loss (including counsel
      fees
      and other expenses of defense).

     

    
      
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    ARTICLE
      XIV:

     

    DISPUTE
      RESOLUTION

     

     

    Section
      14.01.
      Disputes. 

     

    The
      Parties recognize that disputes as to certain matters may from time to time
      arise during the TERM, which relate to either Party's rights and/or obligations
      hereunder. It is the objective of the Parties to establish procedures to
      facilitate the resolution of disputes arising under this Agreement in an
      expedient manner by mutual cooperation and without resort to litigation. To
      accomplish this objective, the Parties agree to follow the procedures set forth
      in this Article XIV if and when a dispute arises under this
      Agreement.

     

     

    Unless
      otherwise specifically recited in this Agreement, disputes among the Parties
      will be resolved as recited in this Article XIV. Disputes among the Parties
      first shall be presented to the chief executive officers of ABI and CYTO, or
      their respective designees, for resolution. In the event that the chief
      executive officers of ABI and CYTO, or their respective designees, cannot
      resolve the dispute within ten days of being requested by a Party to resolve
      a
      dispute, either Party may, by written notice to the other, invoke the provisions
      of Section 14.02.

     

     

    Section
      14.02.
      Trial
      Without Jury. 

     

    If
      the
      Parties fail to resolve the dispute through negotiation in accordance with
      Section 14.01, each Party shall have the right to pursue any of the remedies
      legally available to resolve the dispute; provided, however, that the Parties
      expressly waive any right to a jury trial in any legal proceedings under this
      Section 14.02.

     

     

    Section
      14.03.
      Performance
      to Continue. 

     

    Each
      Party shall continue to perform its obligations under this Agreement pending
      final resolution of any dispute arising out of or related to this Agreement;
      provided, however, that a Party may suspend performance of its obligations
      during any period in which the other Party fails or refuses to perform its
      obligations.

     

     

    Section
      14.04.
      Provisional
      Remedies. 

     

    Although
      the procedures specified in this Article XIV are the sole and exclusive
      procedures for the resolution of disputes arising out of or related to this
      Agreement, either Party may seek a preliminary injunction or other provisional
      equitable relief, if, in its reasonable judgment, such action is necessary
      to
      avoid irreparable harm to itself or to preserve its rights under this
      Agreement.

     

    
      
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    Section
      14.05.
      Determination of Patents and Other Intellectual
      Property.

     

     Notwithstanding
      the foregoing, any dispute relating to the determination of validity of claims,
      infringement or claim interpretation relating to a Party's patents shall be
      submitted exclusively to federal court.

     

     

    ARTICLE
      XV:

     

    CONFIDENTIALITY 

     

     

    Section
      15.01.
      Confidentiality. 

     

    During
      the TERM and for a period of five years thereafter, each Party shall maintain
      all Confidential Information of the other Party as confidential and shall not
      disclose any such Confidential Information to any Third Party or use any such
      Confidential Information for any purpose, except (a) as expressly authorized
      by
      this Agreement, (b) as required by law, rule, regulation or court order
      (provided that the disclosing Party shall first notify the other Party and
      shall
      use commercially reasonable efforts to obtain confidential treatment of any
      such
      information required to be disclosed), or (c) to its Affiliates and its
      employees, agents, consultants and other representatives (“Representatives”) to
      accomplish the purposes of this Agreement, so long as such persons are under
      an
      obligation of confidentiality no less stringent than as set forth herein. Each
      Party may use such Confidential Information only to the extent required to
      accomplish the purposes of this Agreement. Each Party shall use at least the
      same standard of care as it uses to protect its own Confidential Information
      to
      ensure that it and its Affiliates and Representatives do not disclose or make
      any unauthorized use of the other Party's Confidential Information. Each Party
      shall be responsible for any breach of this Agreement by its Representatives.
      Each Party shall promptly notify the other Party upon discovery of any
      unauthorized use or disclosure of the other Party's Confidential
      Information.

     

     

    Section
      15.02.
      Publicity
      Review. 

     

    The
      Parties agree that the public announcement of the execution of this Agreement
      shall be in the form of press releases issued by each of the Parties on or
      before the Effective Date and thereafter each Party shall be entitled to make
      or
      publish any public statement consistent with the contents thereof. The Parties
      acknowledge the importance of supporting each other's efforts to publicly
      disclose results and significant developments regarding the Product. The
      principles to be observed by ABI and CYTO in such public disclosures will be:
      accuracy, compliance with FDA Regulations and other FDA guidance documents
      and
      other Applicable Laws, the advantage a competitor of ABI or CYTO may gain from
      any public statements under this Section 15.02, and the standards and customs
      in
      the biotechnology and pharmaceutical industries for such disclosures by
      companies comparable to ABI and CYTO. The terms of this Agreement may also
      be
      disclosed by a Party to: (a) government agencies where required by law,
      including filings required to be made by law with the United States Securities
      and Exchange Commission 

     

    
      
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          that a portion of the text has been omitted and filed separately with the
          Commission

        CONFIDENTIAL

      

      
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    (“SEC”),
      (b) Third Parties with the prior written consent of the other Party, which
      consent shall not be unreasonably withheld, or (c) lenders, investment bankers
      and other financial institutions solely for purposes of financing the business
      operations of such Party, so long as such disclosure in (b) and (c) above is
      made under an agreement of confidentiality at least as restrictive as the
      confidentiality provisions in Section 15.01, to the extent possible highly
      sensitive terms and conditions such as financial terms are extracted from the
      Agreement (including in any disclosure required by law or the SEC) or deleted
      upon the request of the other Party, and as the disclosing Party gives
      reasonable advance notice of the disclosure under the circumstances requiring
      the disclosure.

     

     

    ARTICLE
      XVI:

     

    MISCELLANEOUS

     

     

    Section
      16.01. Commercially
      Reasonable Efforts. 

     

    Each
      Party shall use commercially reasonable and diligent efforts to perform its
      responsibilities under this Agreement.
      As used
      herein, the term “commercially
      reasonable and diligent efforts”
means,
      unless the Parties agree otherwise, those efforts consistent with the exercise
      of prudent scientific and business judgment, as applied to other products of
      similar scientific and commercial potential within the relevant product lines
      of
      the Parties.

     

     

    Section
      16.02. Notices. 

     

    All
      notices, requests and other communications to any party hereunder shall be
      in
      writing and shall be deemed to have been given if delivered personally, mailed
      by certified mail (return receipt requested) or sent by cable, telegram or
      recognized overnight delivery service to the parties at the following addresses
      or at such other addresses as, specified by the parties by like
      notice:

     

    If
      to ABI
      : Dr.
      Joseph M. Cummins, Chairman & CEO

    Amarillo
      Biosciences, Inc.

    4134
      Business Park Drive

    Amarillo,
      TX 79110

    Facsimile:
      (806) 376-9301

    

    With
      a
      copy to: Edward
      L.
      Morris, Legal Counsel

    SandersBaker,
      PC

    320
      S.
      Polk, Ste. 700

    Amarillo,
      TX 79101

    Facsimile:
      (806) 372-3725

    
      
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          that a portion of the text has been omitted and filed separately with the
          Commission

        CONFIDENTIAL

      

      
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    If
      to
      CYTO: John
      Gu,
      Chief Executive Officer

    Cytopharm,
      Inc., 

    6th
      Fl,
      No. 6, Sec. 1, Jungshing Road

    Wugu
      Shiang, Taipei County, 248 Taiwan

    Facsimile:
      (886) 2 8976-9626 

    Telephone:
      (886) 2 8976-9628

    

     

    Notice
      so
      given shall be deemed given and received (i) if by mail on the 15th day after
      posting; (ii) by cable, telegram, telex or personal delivery on the date of
      actual transmission, with evidence of transmission acceptance, or (as the case
      may be) personal or other delivery; and (iii) if by overnight delivery courier,
      on the next business day following the day such notice is delivered to the
      courier service.

     

     

    Section
      16.03. Severability. 

     

    Whenever
      possible, each clause, subclause, provision or condition of this Agreement
      shall
      be interpreted in such manner as to be effective and valid under applicable
      law,
      but if any clause, subclause, provision or condition of this Agreement should
      be
      prohibited or invalid under applicable law, such clause, subclause, provision
      or
      condition shall be considered separate and severable from this Agreement to
      the
      extent of such prohibition or invalidity without invalidating the remaining
      clauses, subclauses, provisions and conditions of this Agreement.

     

     

    Section
      16.04. Entire
      Agreement/Merger. 

     

    This
      Agreement sets forth the entire agreement between the Parties hereto pertaining
      to the subject matter hereof and supersedes all negotiations, preliminary
      agreements, memoranda or letters of proposal or intent, discussions and
      understandings of the Parties hereto in connection with the subject matter
      hereof. All discussions between the Parties have been merged into this
      Agreement, and neither Party shall be bound by any definition, condition,
      understanding, representation, warranty, covenant or provision other than as
      expressly stated in or contemplated by this Agreement or as subsequently shall
      be set forth in writing and executed by a duly authorized representative of
      the
      Party to be bound thereby.

     

     

    Section
      16.05. Amendment. 

     

    No
      amendment, change or modification of any of the terms, provisions or conditions
      of this Agreement shall be effective unless made in writing and signed on behalf
      of the Parties hereto by their duly authorized representatives.

     

     

    Section
      16.06. Counterparts. 

     

    This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed to be an original document, but all such separate counterparts shall
      constitute only one and the same instrument. This Agreement may be signed and
      delivered to the other Party by facsimile signature; such transmission shall
      be
      deemed a valid signature.

     

    
      
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          that a portion of the text has been omitted and filed separately with the
          Commission

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    Section
      16.07. No
      Waiver of Rights. 

     

    No
      waiver
      of any term, provision, or condition of this Agreement, whether by conduct
      or
      otherwise, in any one or more instances, shall be deemed to be or construed
      as a
      further or continuing waiver of any such term, provision, or condition of this
      Agreement.

     

     

    Section
      16.08. Force
      Majeure. 

     

    Neither
      Party shall be liable hereunder to the other Party nor shall be in breach for
      failure to deliver, provided failure to deliver is no greater than the delay
      in
      time caused by circumstances beyond the control for either Party, including
      acts
      of God, fires, floods, riots, wars, civil disturbances, sabotage, accidents,
      labor disputes, shortages, government actions (including priorities,
      requisitions, allocations and price adjustment restrictions) and inability
      to
      obtain material, equipment, labor or transportation (collectively, “Force
      Majeure”).

     

     

    Section
      16.09. Further
      Assurances. 

     

    The
      Parties hereto shall each perform such acts, execute and deliver such
      instruments and documents and do all such other things as may be reasonably
      necessary to accomplish the transactions contemplated in this
      Agreement.

     

     

    Section
      16.10.
      Assignment and Sublicense. 

     

    Neither
      this Agreement nor any of the rights, interests, options or obligations
      hereunder may be assigned, sublicensed or delegated by either of the Parties
      without the prior written consent of the other Party, provided, however, that
      either CYTO or ABI may, without such consent, assign this Agreement and its
      rights and obligations hereunder in connection with the transfer or sale of
      all
      or substantially all of its business pertaining to this Agreement, or in the
      event of its merger or consolidation or change in control or similar
      transaction. Any permitted assignee shall assume all obligations of its assignor
      under this Agreement. Further, a Party may assign or sublicense any and all
      of
      its rights, interests, options, and delegate all obligations hereunder, to
      any
      Affiliate of such Party (and such Affiliate may further assign or sublicense
      this Agreement to such Party or any other Affiliate of such Party) without
      the
      consent of the other Party. In the event of an assignment or sublicense to
      an
      Affiliate, the assigning Party shall guarantee the performance of such assignee
      or sublicensee. The assignment or sublicense to an Affiliate shall not operate
      to discharge the assignor or sublicensor from any obligation under this
      Agreement. Any assignment that contravenes this Section 16.10 shall be void
      ab
      initio. 

     

    
      
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          that a portion of the text has been omitted and filed separately with the
          Commission

        CONFIDENTIAL

      

      
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    Section
      16.11. Expenses. 

     

    The
      Parties hereto shall each bear their own costs and expenses (including
      attorneys' fees) incurred in connection with the negotiation and preparation
      of
      this Agreement and consummation of the transactions contemplated
      hereby.

     

     

    Section
      16.12. Binding
      Effect. 

     

    This
      Agreement, and all of the terms, provisions and conditions hereof, shall be
      binding upon and shall inure to the benefit of the Parties hereto and their
      respective permitted successors and assigns.

     

     

    Section
      16.13. Governing
      Law. 

     

    This
      Agreement shall be construed and interpreted in accordance with the laws of
      California, USA if a lawsuit against CYTO is initiated by ABI, and any such
      suit
      shall be brought in California, USA; this Agreement shall be construed and
      interpreted in accordance with the laws of Texas, USA, if a lawsuit against
      ABI is initiated by CYTO, and any such suit shall be brought in Texas,
      USA.

     

     

    Section
      16.14. Survival
      of Representations and Warranties. 

     

    All
      statements contained herein, or in any schedule hereto, shall be considered
      a
      representation, warranty or covenant of the Party making such statement. All
      representations, warranties, covenants contained herein, or in any schedule
      hereto, shall survive the closing of this transaction.

     

     

    Section
      16.15.
      No Strict Construction. 

     

    This
      Agreement has been prepared jointly and shall not be strictly construed against
      either Party.

     

     

    Section
      16.16. Independent
      Contractors. 

     

    The
      status of the Parties under this Agreement shall be that of independent
      contractor. No Party shall have the right to enter into any agreements on behalf
      of the other Party nor shall it represent to any Person that it has such right
      or authority.

     

    
      
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          that a portion of the text has been omitted and filed separately with the
          Commission

        CONFIDENTIAL

      

      
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    IN
      WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
      executed by their respective authorized officers as of the Effective
      Date.

     

    

    AMARILLO
      BIOSCIENCES, INC.

    

    

    By:
      /s/
      Joseph M. Cummins 

    Joseph
      M.
      Cummins, 

    President
      and Chief Executive Officer

    

    

     

    CYTOPHARM,
      INC.

     

    

    

    By:
      /s/
      Ellson Y. Chen 

    Ellson
      Y.
      Chen

    Chairman
      of the Board of Directors<PAGE>

EXHIBIT 4.3

                                                         [BLUEFIRE ETHANOL LOGO]

                            REVOLVING LINE OF CREDIT
$1,500,000                                                            Irvine, CA

                                 March 16, 2007

Arnie Klann ("Lender") hereby agrees to establish for the benefit of BlueFire
Ethanol, Inc. ("Borrower") a revolving credit facility in the maximum amount of
$1,500,000 according to the terms below ("Line of Credit").

Repayment Terms/Due Date: FOR VALUE RECEIVED, the Borrower promises to pay in
full, without set off, deduction or counterclaim of any kind or nature, to
Lender, the outstanding principal balance of any amounts due under the Line of
Credit within thirty (30) days of Lender's receipt of investment financing in
the aggregate of $5,000,000 ("Due Date"). Such repayment of the Line of Credit
is to be paid in lawful United States currency.

Draw Downs: Borrower, in its sole discretion prior to the Due Date and by
written notice to Lender, may borrow, from time to time, loans from Lender up to
an aggregate maximum of $1,500,000.

Annual interest rate: 10%

Default Charge: Monies not paid within thirty (30) days after the Due Date shall
be subject to, and it is agreed that Lender shall collect from Borrower, a "late
charge" in the amount of ten percent (10%) of the entire remaining unpaid
balance at the time of delinquency under the Line of Credit.

Default and Default Interest: In the event that any payment is not made within
thirty (30) days after the Due Date, the entire remaining unpaid balance shall
become immediately due and payable at the option of Lender, without notice, time
being of the essence, and the sum shall bear interest from such time until paid
at an interest rate of 20% per annum. Failure of Lender to exercise this option
shall not constitute a waiver of the right to exercise the same in the event of
any subsequent Default.

Change of Control of Borrower: Lender, at its option, may further require that
all sums due under this Line of Credit become immediately due and payable as a
condition precedent or on the closing of transaction effecting a change of
control of Borrower. Failure to exercise this option shall not constitute a
waiver of any rights of Lender contained in this Line of Credit.

BORROWER                                       LENDER
Blue Fire Ethanol, Inc.                        Arnie Klann
31 Musick                                      37 Via Monarca
Irvine, CA 92618                               Dana Point, CA 92629

By: _________________________                  By:__________________________
Its: ________________________
Date: _______________________                  Date: _______________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}]]