Technology License And Option Agreement

DATED 5 AUGUST 1999

(1) NATINCO N.V.

(2) ALPHARMA INC.

(3) BISA HOLDINGS B.V.

(4) BIOTECHNOLOGY INVESTMENTS LIMITED


TECHNOLOGY LICENCE
AND OPTION AGREEMENT


STEPHENSON HARWOOD
One St Paul's Churchyard
London EC4M 8SH
Tel: 0171 329 4422
Fax: 0171 606 0822
Ref: 772/816

CONTENTS

Page

1. DEFINITIONS AND INTERPRETATION *

2. GRANT OF LICENCE *

3. WARRANTIES *

4. KNOW-HOW AND IMPROVEMENTS *

5. LICENCE FEES *

6. ROYALTIES AND RECORDS *

7. PAYMENT *

8. PRODUCT LICENCES *

9. MANUFACTURE OF LICENSED PRODUCTS *

10. MARKETING AND SALE OF LICENSED PRODUCTS *

11. LICENSOR'S UNDERTAKING *

12. TRADE MARK LICENCE *

13. CONFIDENTIALITY *

14. MAINTENANCE AND ENFORCEMENT OF PATENTS *

15. OPTION TO PURCHASE INTELLECTUAL PROPERTY *

16. FORCE MAJEURE *

17. TERMINATION *

18. CONDITIONS PRECEDENT TO ALPHARMA'S OBLIGATIONS *

19. CONDITIONS PRECEDENT TO THE LICENSOR'S OBLIGATIONS *

20. DELIVERIES AT THE CLOSING *

21. SUCCESSORS AND ASSIGNS *

22. AGENCY AND SUBCONTRACTING *

23. GENERAL *

24. PUBLIC ANNOUNCEMENTS *

25. GOVERNING LAW AND JURISDICTION *

26. ARBITRATION *

SCHEDULE A - PATENTS

SCHEDULE B - THIRD PARTY LICENCES

SCHEDULE C - REGISTRATION PROGRAMME

SCHEDULE D - OPTION PRICE

SCHEDULE E - PATENT LICENCE

TECHNOLOGY LICENCE AND OPTION AGREEMENT

DATED 1999

BETWEEN

NATINCO N.V. a company incorporated in the Netherlands Antilles whose registered office is at Plaza Jojo, Correa, 1-5 Willemstad, Curacao, Netherlands Antilles (" Licensor ");

ALPHARMA INC. a company incorporated under the laws of the State of Delaware whose registered office is at One Executive Drive, Fort Lee, New Jersey 0702.4, United States of America (" Alpharma ");

BISA HOLDINGS BV , a company incorporated under the laws of the Netherlands whose registered office is at Hofplein 19, 3032 AC Rotterdam, Netherlands (" Bisa "); and

BIOTECHNOLOGY INVESTMENTS LIMITED , a company incorporated under the laws of England and Wales whose registered office is at PO Box 242, 8t Peter's Port House, Sausmarez Street, St Peter's Port, Guernsey, Channel Islands (" BIL "). .

RECITALS

Licensor is the sole beneficial owner of the Licensed Patents, the Trade Mark and the Know-How and a licensee of the Third Party Patents and the Third Party Know-How under the Third Party Licences.

Licensor is willing to grant, and Alpharma is willing to take, a licence on the terms and conditions set out in this Agreement to use the Know-How, the Trade Mark and the Licensed Patents and a sub-licence under the Third Party licences in order to apply for Product Licences worldwide and to manufacture, use, sell or otherwise commercially deal in the Licensed Products in the Licensed Territories on the terms and conditions set out in this Agreement.

Licensor is further willing to grant Alpharma an exclusive option (i) to purchase the Licensed Patents, the Trade Mark and the Know-How and (ii) to take an assignment of the Third Party Licences on the terms and conditions set out in this Agreement.

IT IS AGREED AS FOLLOWS:

1. DEFINITIONS AND INTERPRETATION

1.1 In this Agreement, unless the context otherwise expressly requires, the following terms shall have the following meanings:


"Affiliate"

shall mean any entity in whatever country organised, which directly or indirectly owns, is owned by or is under common ownership with a Party to this Agreement or any entity actually controlled by, controlling or under common control of a Party to this Agreement. For the purpose of this definition, "ownership" or "control" shall mean where such entity owns or controls fifty per cent (50%) or more of the equity conferring voting rights and/or otherwise has the ability or power to control and direct the business affairs of another entity;

"Alpharma Mark"

shall mean any mark used by Alpharma for the Licensed Product, subject to Clause 12.6;

"Asset Purchase Agreement"

shall mean the asset purchase agreement between Alpharma and SCB;

"AUD"

shall mean Australian dollars;

"best endeavours"

shall mean taking all actions which, having regard to the cost and degree of difficulty, are commercially practicable;

"Bunge Agreement"

shall mean the letter of offer dated 12 October 1993 from the South African Breweries Beer Division to Bunge (Australia) Pty Ltd;

"Closing"

shall mean the consummation of this transaction which, subject to Clauses 18, 19 and 20 hereof, shall take place at the office of Alpharma in Fort Lee, New Jersey, USA at 10:00 am (local time) on [Aug 6, 1999] or on such other date and time agreed upon by the Licensor and Alpharma ;

"Confidential Information"

shall mean all information (including, but not limited to, Registration Dossiers and Know-How) which any Participant discloses to any other Participant either prior to and in contemplation of, or during the course of, this Agreement, whether commercial, financial or otherwise, whether in electronic, documentary or any other form and howsoever disclosed, whether marked or otherwise designated confidential or proprietary, and all matters arising during or in connection with the performance of the Agreement including, but not limited to, details of customers and employees and all materials and information in respect of which any Participant owes obligations of confidence;

"CSL Agreement"

shall mean the sub-lease and agreement dated 22 July 1988 between Bunge (Australia) Pty Ltd and the Commonwealth Serum Laboratories Commission relating to the premises situated in the West Wing of Block 5 at 45 Poplar Road, Parkville, Victoria., as varied by a deed of renewal and variation of lease made on 18 March 1993 between CSL Limited and Bunge (Australia) Pty Ltd, a deed of assignment and variation made on 18 March 1993 between Bunge (Australia) Pty Ltd, Fidelity Food Technologies Pty Ltd and CSL Limited and a sublease dated 13 July 1994 between Fidelity Food Technologies Pty Ltd, the Seller and Bunge (Australia) Pty Ltd;

"Effective Date"

shall mean the date of Closing;

"FDA"

shall mean the Center for Veterinary Medicine of the Food and Drug Administration of the US Department of Health and Human Services;

"Force Majeure Event"

shall mean any event preventing or restricting a Party From performing any or all of its obligations under this Agreement which arises from or is attributable to any circumstance, acts, omissions or causes beyond the reasonable control of the Party so prevented including without limitation:

(a) act of God, flood, fire, storm, explosion or other destruction of property by natural causes;

(b) war, invasion, revolution, riot, civil commotion or other acts of armed force;

(c) strike, lock-out or other industrial dispute involving the workforce of the Party so prevented;

(d) blockade, embargo or other economic sanction having general effect; or

(e) law, government order, regulation, rule or other official directive, policy demand or request having the force of law, including any directive, restriction or other condition of a legal nature imposed in the Licensed Territory or Intended Licensed Territory by a relevant Regulatory Authority, which is of general application to animal health companies and in particular to products having the general characteristics of the Licensed Product;

"Improvement"

shall mean any improvement, enhancement, material alteration or modification to or of the Licensed Product;

"Intellectual Property"

shall mean the Know-How, the Licensed Patents and the Trade Mark;

"Intellectual Property Transfer Date"

shall mean 31 December 2003 (unless extended pursuant to the provisions of Schedule C) or such earlier date on which the Intellectual Property may be transferred and the Third Party Licences assigned to Alpharma under the provisions of this Agreement;

"Intended Licensed Territory"

shall mean those countries listed in Schedule C as to which from time to time Licensee does not possess a Product Licence;

"Know-How"

shall mean and include all present and future techniques, inventions, practices, knowledge, know-how, skill, experience, test data, engineered cell lines, samples, analytical data, field trial protocols, field trial data, reports, information in any application to any Regulatory Authority including without limitation Registration Dossiers, marketing and sales data, toxicological and safety data, INAD's, NADA's or equivalent protocols and all supplements thereto, descriptions and the like (whether in electronic, documentary, eye readable or any other form and howsoever stored and communicated) with regard to the Licensed Product, owned by the Licensor at the Effective Date or at any time in the course of this Agreement and which might reasonably be necessary, required or useful to Alpharma in applying to any Regulatory Authority and in the development, manufacture, use or sale of the Licensed Products;

"Licence Fee"

shall mean, the amount payable on the Effective Date under Clause 5.1 and, in respect of each country listed in Schedule C, the sum of money set out in that Schedule as being due on the granting of a Product Licence in that country, or the equivalent sum in any other currency specified in writing by the Licensor within ten (10) business days of the date that the relevant Product Licence is granted (based on the average buying rate for the latter currency at Chase Manhattan Bank, New York, for the period between the date that the relevant Product Licence is granted and five (5) business days prior to the date of payment provided under Clause 5.2), and, in respect of any country not listed in Schedule C, such sum as the Parties may agree in accordance with Clause 5.4;

"Licence Period"

shall mean, subject to Clause 15.4, the period from the Effective Date until the Intellectual Property Transfer Date;

"Licensed Patents"

shall mean:

(a) all patents, including all pending applications whether filed with a complete specification or an incomplete specification, short particulars of which are set out in Schedule A;

(b) all patent applications that may hereafter be filed by or on behalf of the Licensor which are either based on or claim priority from any of the foregoing patents and applications (including any division, continuation, or continuation-in-part of any such application);

(c) all patents which may be granted pursuant to any of the foregoing applications;

(d) any patent which is a re-issue or extension of, or patent of addition or any application maturing into a patent, any patent or patent application defined in (a), (b) or (c) above; and

(e) any patent or patent application corresponding to any patent or patent application defined in (a), (b), (c) or (d) above which is hereafter filed or issued by or on behalf of the Licensor anywhere in the world in respect of the Licensed Products;

"Licensed Product"

shall mean and include:

(a) recombinant porcine somatotrophin;

(b) any product which is within the scope of, or whose manufacture, use or sale falls within, one or more valid claims of the Licensed Patents in any country of the world to the extent that such Licensed Patents cover the product in the actual country of such manufacture, use or sale; and

(c) any product (including products used in connection with other species) which utilizes any of the Know-How or the Third Party Know-How;

"Licensed Territory"

shall mean Australia, Malaysia and Indonesia and shall be expanded from time to time to include any other country in respect of which Alpharma has paid the appropriate Licence Fee pursuant to Clause 5;

"Net Invoiced Price"

shall mean the total sale price as invoiced by or on behalf of Alpharma or any sub-licensee for Licensed Products without any deductions except for the following to the extent to which any of the same are allowed for or included in the invoice:

(a) transport charges (including carriage and insurance) and delivery expenses;

(b) costs to reflect special packaging costs required by a customer;

(c) credits on Licensed Products returned;

(d) usual trade discounts and discounts for prompt payment; and

(e) sales, value added tax, customs duties or other taxes based on the sales price and borne by Alpharma;

Provided that, in the event that any Licensed Products are used by Alpharma or any sub-licensee for its own commercial purposes or are sold or transferred otherwise than on an arms length basis or are sold or transferred to any of Alpharma's Affiliates, the Net Invoiced Price of such Licensed Products shall be deemed to be equivalent to the Net Invoiced Price which would have been applicable hereunder had such Licensed Products been sold or transferred to an independent arms length customer at the date of first use, or, in the case of such a sale or transfer to an Affiliate, the price charged upon first sale or transfer to such customer by such Affiliate;

"Option Price"

Shall mean, depending on the Intellectual Property Transfer Date, the price for the Intellectual Property set out in Schedule D;

"Participants"

shall mean the Licensor, Alpharma, Bisa and BIL and " Participant " means any of them;

"Personnel"

shall mean Richard Levitt, David Hughes, and Ian Walker;

"Pig Dose"

shall mean that amount of recombinant porcine somatotrophin required to give one pig one course of treatment (150 mg of recombinant porcine somatotrophin per pig, or such other quantity as may be agreed by the Parties from time to time or as shall be mandated by a Regulatory Agency);

"Product Licence"

shall mean the licence, certificate or other written approval issued by the Regulatory Authority as provided for by the law of the relevant country, which enables the legal marketing and sale of the Licensed Product in that country;

"Registration Dossier"

shall mean all data and information (including, but not limited to, composition, method of manufacture, analytical procedures, cell lines and other genetic material, and field trial reports) required for an application for a Product Licence by the applicable Regulatory Authority;

"Registration Programme"

Shall mean the programme for filing applications to register Product Licences set out in Schedule C;

"Regulatory Authority"

shall mean the duly constituted authority in a relevant country charged with approving veterinary products for manufacture and/or sale, and regulating and controlling the use of such products;

"SCB"

shall mean Southern Cross Biotech Pty Ltd, a company registered in Australia, whose registered office is at Level 10, Trak Centre, 443-449 Toorak Road, Toorak, Victoria;

"Serious Breach"

shall mean (a) a failure of Alpharma to make a payment of monies validly due hereunder or (b) a failure by Alpharma to secure the grant of at least five (5) new Product Licences under the Registration Programme by 31 December 2002 under circumstances which would entitle the Licensor to liquidated damages under Clause 8.8 for four (4) or more Product Licences;

"Sold"

shall mean invoiced, (irrespective of delivery or payment terms, on Alpharma's terms and conditions of sale) to a purchaser or user and "sell" and "sale" and cognate expressions shall be construed accordingly, and shall extend to all sales made by any sub-licensee, sub-licensed Affiliate of Alpharma or any other person on behalf of Alpharma;

"Target Grant Date"

shall mean, with respect to any Product Licence, the last day of the calendar quarter in which that Product Licence would be expected to have been granted, as set out in the Registration Programme;

"Target Submission Date"

shall mean, with respect to the application for any Product Licence, the last day of the calendar quarter in which it is required to be filed., as set out in the Registration Programme;

"Third Party Know How"

shall mean and include all present and future techniques, inventions, practices, knowledge, know-how, skill, experience, test data, engineered cell lines, samples, analytical data, field trial protocols, field trial data, reports, information in any application to any Regulatory Authority including without limitation Registration Dossiers, marketing and sales data, descriptions and the like (whether in electronic, documentary, eye readable or any other form and howsoever stored and communicated) which the Licensor has obtained from the Third Party Licensors pursuant to the Third Party Licences and has in its possession at the Effective Date;

"Third party Licences"

shall mean the licences listed in Schedule B;

"Third Party Licensors"

shall mean those parties listed in Schedule B ;

"Third Party Patents"

shall mean the patents referred to in the Third Party Licences;

"Trade Mark"

shall mean REPORCIN;

"Trade Mark Licence"

shall mean the licence to use the Trade Mark described in Clause 12;

"Warrantors"

shall mean Bisa and BIL;

1.2 references to Clauses and Schedules are to the clauses and schedules of this Agreement;

1.3 words importing gender include each gender;

1.4 references to persons and entities include, without limitation, bodies corporate, firms or unincorporated associations;

1.5 the singular includes the plural and vice versa;

1.6 Clause headings are included for convenience only and shall not affect the interpretation of this Agreement; and

1.7 references to any statute or any clause of any statute include any statutory amendment, modification or re-enactment in force from time to time and references to any statute include any statutory instrument or regulations made under it.

2. GRANT OF LICENCE

2.1 In consideration of the payment of $1 AUD, receipt of which is hereby acknowledged, the Licensor hereby grants to Alpharma:

2.1.1 an exclusive non-transferable licence to use the Know-How, and

2.1.2 an exclusive non-transferable licence under the Licensed Patents

solely in either case for the purposes of applying for Product Licences worldwide.

2.2 The Licensor further hereby grants to Alpharma:

2.2.1 an exclusive licence under the Licensed Patents, and

2.2.2 an exclusive licence to use the Know-How in the Licensed Territory and in the USA or such other country as the Parties may hereafter agree prior to as well as after the grant of a Product Licence for that country,

solely for the purposes in either case of developing and manufacturing the Licensed Products.

2.3 The Licensor further hereby grants to Alpharma an exclusive licence to use, market, have marketed, sell or otherwise commercially deal in Licensed Products manufactured under the licence set out in Clause 2.2 anywhere in the Licensed Territory (as that term is expanded from time to time concurrent with the issuance of new Product Licences).

2.4 Subject to the terms of the sub-licences granted to Alpharma under the Third Party Licences, Alpharma shall be entitled to sub-license on a country by country basis any third party (including any Affiliate of Alpharma) under the rights granted under Clauses 2.2 and 2.3 but subject to the following conditions:

2.4.1 Alpharma shall have requested and obtained the Licensor's prior written consent to sub-license to the proposed sub-licensee (which consent may not be unreasonably withheld or delayed), provided, however, that such consent shall not be required in order for Alpharma to sub-license the rights granted to it under Clause 2.2 to either (i) the Alpharma Affiliate to whom Alpharma assigns the right to purchase the Operating Assets (as that term is defined in the Asset Purchase Agreement) pursuant to clause 13.1 of the Asset Purchase Agreement, or (ii) the Alpharma Affiliate which performs Alpharma's obligations under Clause 9.1;

2.4.2 the terms of the sub-licence shall have been previously approved by the Licensor and shall not thereafter be amended without the prior written consent in either case of the Licensor (which consent shall not be unreasonably withheld or delayed) and shall include in any event obligations on the sub-licensee which are equivalent to the obligations on Alpharma under this Agreement;

2.4.3 the sub-licence shall prohibit the sub-licensee from granting further sublicences or from sub-contracting or assigning any of its rights and obligations under the sub-licence;

2.4.4 the sub-licence shall, subject to the Licensor exercising its rights under Clause 17.2.3(b), terminate automatically on the termination of this Agreement for any reason or, if the sub-licensee is an Affiliate of Alpharma, on the sub-licensee ceasing to be such an Affiliate if the Licensor reasonably withholds its consent to the sub-licence continuing under Clause 2.7; and

2.4.5 within 30 days of the execution of any sub-licence (or any amendment thereto) Alpharma providing to the Licensor a true copy of it.

2.5 Alpharma undertakes to cause any sub-licensee to comply fully and promptly with its obligations under any sub-licence (or any amendment thereto) and to procure that each sub-licensee shall comply with the terms of this Agreement mutatis mutandis.

2.6 Alpharma shall indemnify the Licensor against any loss, damages, liabilities, costs, claims or expenses which the Licensor may suffer or incur as a result of any failure by Alpharma to comply with Clause 2.5 or any failure by any sub-licensee to comply with its obligations under the relevant sub-licence and the terms of this Agreement.

2.7 If a sub-licensee is an Affiliate of Alpharma, then, in the event that such sublicensee ceases to be such an Affiliate, Alpharma shall notify the Licensor forthwith and the Licensor shall, within 30 days of such notification, inform Alpharma whether it consents to such sub-licence continuing, such consent not to be unreasonably withheld If the Licensor refuses its consent, Alpharma shall cause such sub-licence to terminate immediately.

2.8 For the purposes of this Clause 2, any distributor or sales agent appointed by Alpharma on an arms length basis solely for the sale of the Licensed Products shall not be deemed to be a sub-licensee, provided that such person is given no rights by Alpharma to use any of the Know-How, the Third Party Know-How, the Licensed Patents or the Third Party Patents other than for the purposes of distribution and sale of the Licensed Products.

2.9 The Parties agree to execute a formal licence agreement substantially as set out in Schedule E for the purposes of registering any patent licence granted pursuant to Clause 2.2.

2.10 Without limiting either Alpharma or the Licensor's right to reject any terms or conditions not acceptable to it, the Parties further agree to co-operate and take such steps before Closing as may be reasonable to procure on or before Closing the execution of appropriate sub-licences under the Third Party Licences and consents from the Third Party Licensors. Said sub-licences and consents shall, in form and substance satisfactory to each of Alpharma and the Licensor, contain terms and conditions appropriate to carry out the intent of this Agreement including (a) to effect, on the Effective Date, a valid and enforceable sub-licence of the rights of the Licensor under the Third Party Licences, and (b) to effect, subject only to the occurrence of the Intellectual Property Transfer Date, the valid and enforceable transfer to Alpharma of the rights of the Licensor under the Third Party Licences; all in a form granting Alpharma rights equivalent to those of the "licensee" under the Third Party Licences, and

the territory to which the sub-licences extend shall be coextensive with the Licensed Territory under this Agreement as the Licensed Territory is defined from time to time during the course of this Agreement;

the sub-licences shall be exclusive for so long as the licences granted under Clauses 2.2 and 2.3 remain exclusive so that, if for any reason any such licences become non-exclusive in any country, the sub-licences shall become non-exclusive in the same manner; and

payments by Alpharma (to the Licensor prior to the Intellectual Property Transfer Date and to the Third Party Licensors thereafter) shall be limited to the payment of royalties, such royalties to be no greater than the royalties payable by the Licensor to the Third Party Licensors under the terms of the Third Party Licences as in existence at the date of this Agreement.

3. WARRANTIES

3.1 Alpharma, the Licensor and each of the Warrantors warrants that it is a company duly incorporated under the laws of the country or state referred to above, and that it has the corporate power and authority to accept the terms of this Agreement and to perform its obligations under it.

3.2 The Licensor warrants and represents that, at the Effective Date, (a) the Licensor is the sole beneficial owner of the Licensed Patents and the Know-How and a licensee of the Third Party Patents and the Third Party Know-How under the Third Party Licences and the Licensor has full right and power to grant licences set out in Clauses 2.1, 2.2 and 2.3, and (b) so far as it is aware, no other party has any rights or claims in respect of the Licensed Patents and the Know-How, and (c) there are no outstanding agreements, assignments or encumbrances in existence inconsistent with the provisions of the Agreement with respect to or relating to the Licensed Patents or Know-How, except for the obligations to pay royalties under the CSL Agreement and Bunge Agreement, and (d) the Third Party Licences are in full force and effect and the Licensor is not in default with respect to any of the Third Party Licences, and (e) so far as it is aware, no other party (except the Third Party Licensors) has any rights or claims in respect to the Third Party Patents or Third Party Know-How and there are no outstanding agreements inconsistent with the provisions of this Agreement created or allowed to exist by or on behalf of any Third Party Licensor, and (f) the Licensor has full power and right to grant the sub-licences under the Third Party Licences and, upon the Intellectual Property Transfer Date, the transfer of the Third Party Licences, and (g) the Licensor has not created or, with its knowledge, allowed to exist any outstanding agreement, assignment, or encumbrance with respect to the Third Party Licences inconsistent with the provisions of this Agreement. As the phrase "agreement, assignment or encumbrance" is used in the Clause it includes without limitation, any obligations to governmental agencies, private foundations, companies, corporations, individuals or the like resulting from acceptance of research grant or other monies, or otherwise.

3.3 The Licensor warrants that, at the Effective Date, Schedule A contains a full list of the Licensor's patents and pending patent applications worldwide, and that the Licensor has acquired all of the Intellectual Property owned by SCB prior to the transfer of the Intellectual Property to the Licensor and all of SCB's rights under Third Party Licenses.

3.4 The Licensor warrants that, at the Effective Date, so far as it is aware:

3.4.1 no person is infringing (nor is there any claim that any person is infringing) any of the Licensed Patents or Third Party Patents in any part of the Licensed Territory or the Intended Licensed Territory;

3.4.2 the manufacture, use, sale or other dealing or disposition of the Licensed Products does not infringe (nor is there any claim of infringement of) the intellectual property rights of any other person in any part of the Licensed Territory or the Intended Licensed Territory; and

3.4.3 the granted patents within the Licensed Patents and the Third Party Patents are valid and enforceable and no facts or information exist which render any of Know-How or Third Party Know-How invalid, unusable or unenforc ...