Option Deed
 
between

Worldwide PE Patent Holdco Pty Limited

(ACN 117 157 427)

and

AMI Australia Holdings Pty Limited
 
(ACN 095 238 645)
and

AMI Group Limited
 
and

Zascha Knochell, Drew Shardlow, Richard Mare and David McDonald
 

 
 

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Contents
 

Clause
   
number
Heading
Page
     
1.
Definitions and interpretation
2
1.1
Definitions
2
1.2
Interpretation
6
     
2.
Grant of Call Option and Information Memorandum
7
2.1
Call Option
7
2.2
Information Memorandum
8
     
3.
Exercise of Call Option
8
3.1
Exercise of the call option
8
3.2
Extension of Exercise Period
9
3.3
Usage of name AMI etc
9
     
4.
Completion
9
4.1
Completion details
9
4.2
Completion process
9
4.3
Conditions of Completion
9
     
5.
Warranties
10
5.1
Warranties by Worldwide
10
5.2
No reliance on other matters
10
5.3
Time limit for claims
10
5.4
Maximum limit on Claims
10
5.5
Limitation for future events
10
5.6
Warranty and other claims connected to the Deed
11
     
6.
Undertakings not to compete
11
6.1
General covenants
11
6.2
Restraints fair and reasonable
12
6.3
Exceptions
12
6.4
Severability
12
6.5
Injunction
12
     
7.
Intellectual Property
13
7.1
AMI Australia and Worldwide property
13
     
8.
GST or VAT
13
     
9.
Confidentiality
13
9.1
Provisions to remain confidential
13
9.2
Exclusions
13
     
10.
Notices
14

 
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10.1
Requirements
14
10.2
Receipt
14
     
11.
General provisions
15
11.1
Entire agreement
15
11.2
Further assurances
15
11.3
Costs
15
11.4
Assignment
15
11.5
Invalid or unenforceable provisions
15
11.6
No merger
16
11.7
Waiver and exercise of rights
16
11.8
Amendment
16
11.9
Counterparts
16
11.10
Governing law
16
11.11
Jurisdiction
16
     
12.
Guarantee and indemnity
17
12.1
Consideration
17
12.2
Guarantee
17
12.3
Non-compliance
17
12.4
Indemnity
17
12.5
Separate obligation
17
12.6
Principal liability
17
12.7
Waiver of rights
17
12.8
Continuing indemnity
17
12.9
Absolute obligation
18
     
 
Annexure 1
1
 
Warranties
1
     
1.
Corporate
1
1.1
Authority
1
1.2
Insolvency events
1
     
2.
General
2
2.1
Benefit
2
     
 
Annexure 2
3
     
 
Annexure 3
6

 
ii

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Option Deed
 

This Deed is dated  
April 2007

Between
Worldwide PE Patent Holdco Pty Limited (ACN 117 157 427) of Level 1, 204-218
Botany Road, Alexandria NSW 2015 (Worldwide);
 
And

AMI Australia Holdings Pty Limited (ACN 095 238 645) of Level 1, 204-218 Botany
Road, Alexandria NSW 2015 (AMI Australia);
 
And

AMI Group Limited of c/- 143a woodland St Balgowlah, Sydney NSW 2093 (AMI UK);
 
And

Zascha Knochell, Drew Shardlow, Richard Mare and David McDonald of c/- 143a
woodland St Balgowlah, Sydney NSW 2093 (AMI UK Principals);
 
Recitals
 
A.
AMI operates Australia's largest chain of specialist sexual dysfunction clinics.

B.
Worldwide owns the international formulation rights and other rights associated
with the AMI business.

C.
AMI UK has requested that Worldwide grant AMI UK an option to exclusively
licence all of Worldwide’s intellectual property and systems in relation to
erectile dysfunction and premature ejaculation, being all of the intellectual
property and systems used in AMI Australia’s business, (Technology) for the
United Kingdom (Territory) for a term of 5 years with 2 options to extend for 5
years each with the exception that this will only extend to IMT’s intellectual
property where such intellectual property is sold to the public in Australia and
where IMT continues to be part of the AMI Australia group on the basis set out
in the Licence Agreement.

D.
The AMI UK Principals are the current directors and shareholders of AMI UK.

E.
Worldwide has agreed to grant AMI UK an option to exclusively licence its
Technology in the Territory for a term of 5 years with 2 options to extend for 5
years each in accordance with the Licence Agreement on the basis set out in this
Deed.

 
-1-

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F.
In consideration for AMI UK agreeing to enter into this Deed and pay the Initial
Call Option Fee to Worldwide, AMI Australia has agreed to guarantee Worldwide’s
obligations under this Deed.

G.
In consideration for Worldwide and AMI Australia agreeing to enter into this
Deed, the AMI UK Principals have agreed to give certain covenants relating to
confidentiality, restraints of trade and content of and indemnity in relation to
any information memorandum issued by AMI UK pursuant to this Deed

Operative provisions

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1.
Definitions and interpretation

 
1.1
Definitions

 
In this Deed, unless the context requires another meaning:
 
ASIC means the Australian Securities & Investments Commission;

Business Day means a day on which banks are open for business in Sydney, New
South Wales, Australia, excluding a Saturday or a Sunday or a public holiday;
 
Call Option means the option granted in clause 2.1 to exclusively licence
Worldwide’s Technology in the Territory for a term of 5 years with 2 options to
extend for 5 years each in accordance with the Licence Agreement;
 
Call Option Fees means the Initial Call Option Fee and the Further Call Option
Fee;
 
Call Option Notice means a notice substantially in the form set out in Annexure
2;
 
Claim means any claim, cost, damages, debt, expense, Tax, Liability, loss,
allegation, suit, action, demand, cause of action or proceeding of any kind made
under or in connection with a matter irrespective of:
 
(a)
how or when it arises;

 
(b)
whether it is actual or contingent;

 
(c)
whether or not it is in respect of legal or other costs, damages, expenses, fees
or losses;

 
(d)
whether or not it is in respect of a breach of trust or of a fiduciary or other
duty or obligation; and

 
(e)
whether or not it arises at law or in any other way;

 
Completion means completion of the grant of the Licence Agreement in accordance
with clause 4;
 

 
-2-

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Completion Date means 5 Business Days after the date AMI UK serves the Call
Option Notice and the Upfront Licence Fee on Worldwide;
 
Confidential Information means information which relates to the business and
affairs (financial and otherwise) of the Disclosing Party (including information
which is in oral, visual or written form or is recorded in any other medium),
and includes:

(a)
business plans and forecasts;

(b)
financial and marketing information of the Disclosing Party;

(c)
know-how, trade secrets, ideas, concepts, technical and operational information,
arising or used by the Disclosing Party in relation to its business;

(d)
the terms upon which the Disclosing Party contracts with or proposes to contract
with employees, contractors, clients and suppliers;

(e)
information concerning the affairs or property of the Disclosing Party's
business or any current or proposed business, property or transaction in which
the Disclosing Party may be or may have been concerned or interested;

(f)
the names and addresses and other personal details of current and proposed
employees, contractors, clients and suppliers of the Disclosing Party;

(g)
information which by its nature or by the circumstances of its disclosure, is or
could reasonably be expected to be regarded as confidential to the Disclosing
Party or any third party with whose consent or approval the Disclosing Party
uses that information;

(h)
any discussions or negotiations relating to this Deed; and

(i)
any documents, reports or analyses created in relation to this Deed;

 
but does not include:

 
(i)
any information which is or becomes part of the public domain other than by
reason of a breach of this Deed; or

 
(ii)
information the disclosure of which is compelled by any court, tribunal,
commission or other competent judicial or administrative body; or

 
(iii)
information which the Receiving Party can establish was known by it before it
was disclosed to it by the other party;

Controller has the meaning given to "controller" in section 9 of the
Corporations Law Act 2001;
 
Disclosing Party means the party disclosing Confidential Information to the
other party or parties;

Dollar and $ means the lawful currency of Australia;
 

 
-3-

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Exercise Period means, subject to clause 3.2, the period commencing on the date
of this Deed and ending on the date which is 4 months after the date of this
Deed;
 
Further Call Option Fee means a further US$50,000;
 
Government Agency means:
 
(a)
a government, whether foreign, federal, state, territorial or local;

 
(b)
a department, office or minister of a government acting in that capacity; or

 
(c)
a commission, delegate, instrumentality, agency, board, or other government,
semi-government, judicial, administrative, monetary or fiscal authority, whether
statutory or not;

 
IMT means Intelligent Medical Technologies Pty Limited (ACN 107 047 496);
 
Initial Call Option Fee means US$50,000;
 
Insolvency Event means for a party, the happening of one or more of the
following events:
 
(a)
except for the purpose of a solvent reconstruction or amalgamation which has the
prior written consent of the other party:

 

 
(i)
process is filed in a court seeking an order that it be wound up or that a
Controller be appointed to it or any of its assets, unless the application is
withdrawn, struck out, stayed or dismissed within 28 days of it being filed; or

 

 
(ii)
an order is made that it be wound up or that a Controller be appointed to it or
any of its assets; or

 

 
(iii)
a resolution that it be wound up is passed;

 
(b)
a liquidator, provisional liquidator, Controller or any similar official is
appointed to, or takes possession or control of, all or any of its assets or
undertaking;

 
(c)
an administrator is appointed to it or a resolution that an administrator be
appointed to it is passed;

 
(d)
it enters into, or resolves to enter into, an arrangement, compromise or
composition with any of, or any class of, its creditors or shareholders, or an
assignment for the benefit of any of, or any class of, its creditors, or process
is filed in a court seeking approval of any such arrangement, compromise or
composition;

 
(e)
a reorganisation, moratorium, deed of company arrangement or other
administration involving one or more of its creditors is effected;

 
(f)
any action is taken by the ASIC with a view to cancelling its registration or to
dissolving it;

 

 
-4-

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(g)
it is insolvent within the meaning of Section 95A of the Corporations Act 2001,
as disclosed in its Accounts or otherwise, states that it is unable to pay its
debts or it is presumed to be insolvent under any applicable law;

 
(h)
as a result of the operation of section 459F(1) of the Corporations Act 2001, it
is taken to have failed to comply with a statutory demand;

 
(i)
it stops or suspends or threatens to stop or suspend:

 

 
(i)
the payment of all or a class of its debts; or

 

 
(ii)
the conduct of all or a substantial part of its business or threatens to do so;

 
(j)
it is bankrupt or becomes subject to any form of trusteeship or external
administration; or

 
(k)
anything having a substantially similar effect to any of the events specified in
the preceding paragraphs happens to it under the law of any jurisdiction.

 
Intellectual Property Rights means all rights (including without limitation
moral rights) in or to any patent, copyright, database rights, registered design
or other design right, utility model, trade mark (whether registered or not and
including any rights in get up or trade dress), brand name, service mark, trade
name, eligible layout right, chip topography right and any other rights of a
proprietary nature in or to the results of intellectual activity in the
industrial, commercial, scientific, literary or artistic fields, whether
registrable or not and wherever existing in the world, including all rights in
or to renewals, extensions and revivals of, and all rights to apply for, any of
the foregoing rights;
 
Liability means any liability, whether actual or contingent, present or future,
quantified or unquantified;

Licence Agreement means a licence agreement in the form attached as Annexure 3;
 
Receiving Party means the party receiving the other party's Confidential
Information;

Related Bodies Corporate has the meaning ascribed to it in the Corporations Act
2001;
 
Security Interest means any mortgage, charge, bill of sale, pledge, deposit,
lien, encumbrance, hypothecation, arrangement for the retention of title, and
any other right, interest, power or arrangement of any nature having the purpose
or effect of providing security for, or otherwise protecting against default in
respect of, the obligations of any person;
 
Tax means a tax (including GST), levy, charge, impost, deduction, withholding or
duty of any nature (including stamp and transaction duty) at any time:
 
(a)
imposed or levied by any Government Agency; or

 
(b)
required to be remitted to, or collected, withheld or assessed by, any
Government Agency; and any related interest, expense, fine, penalty or other
charge on those amounts;

 

 
-5-

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Technology has the meaning ascribed to it in recital C;
 
Territory has the meaning ascribed to it in recital C;
 
Third Party Interest means any Security Interest, lease, option, voting
arrangement, easement, covenant, notation, restriction, interest under any
agreement, interest under any trust, or other right, equity, entitlement or
other interest of any nature held by a third party;

Upfront Licence Fee means an amount of US$1 million less any Call Option Fees
paid to Worldwide in accordance with this Deed (ie if the Further Option Fee has
been paid this will be US$900,000 and if it has not been paid it will be
US$950,000); and
 
Warranties means the warranties and representations set out in Annexure 1 and
Warranty means any one of them.

1.2
Interpretation

 
In this Deed:
 
(a)
unless the context requires another meaning, a reference:

 
(i)
to the singular includes the plural and vice versa;

 

 
(ii)
to a gender includes all genders;

 

 
(iii)
to a document (including this Deed) is a reference to that document (including
any Schedules and Annexures) as amended, consolidated, supplemented, novated or
replaced;

 

 
(iv)
to an agreement includes any undertaking, representation, deed, agreement or
legally enforceable arrangement or understanding whether written or not;

 

 
(v)
to a party means a party to this Deed;

 

 
(vi)
to an item, Recital, clause, Schedule or Annexure is to an item, Recital,
clause, Schedule or Annexure of or to this Deed;

 

 
(vii)
to a notice means a notice, approval, demand, request, nomination or other
communication given by one party to another under or in connection with this
Deed; 

 

 
(viii)
to a person (including a party) includes:

 

 
(A)
an individual, company, other body corporate, association, partnership, firm,
joint venture, trust or Government Agency; and

 

 
(B)
the person's successors, permitted assigns, substitutes, executors and
administrators; and

 

 
-6-

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(ix)
to a law:

 

 
(A)
includes a reference to any legislation, treaty, judgment, rule of common law or
equity or rule of any applicable stock exchange; and

 

 
(B)
is a reference to that law as amended, consolidated, supplemented or replaced;
and

 

 
(C)
includes a reference to any regulation, rule, statutory instrument, by-law or
other subordinate legislation made under that law;

 

(x)
to proceedings includes litigation, arbitration and investigation;

 

(xi)
to a judgement includes an order, injunction, decree, determination or award of
any court or tribunal;

 

(xii)
to time is to Sydney time;

 

(xiii)
the word including or includes means including, but not limited to, or includes,
without limitation.

 
(b)
Where a word or phrase is defined, its other grammatical forms have a
corresponding meaning.

 
(c)
Headings are for convenience only and do not affect interpretation.

 
(d)
If a payment or other act must (but for this clause) be made or done on a day
that is not a Business Day in the country in which the payment is to be made or
the act done, then it must be made or done on the next Business Day.

 
(e)
If a period occurs from, after or before a day or the day of an act or event, it
excludes that day.

 
(f)
This Deed may not be construed adversely to a party only because that party was
responsible for preparing it. 

 
(g)
A representation, covenant or warranty given by or on behalf of 2 or more
persons, binds those parties jointly and severally.

 
(h)
A representation, covenant or warranty given for the benefit of 2 or more
parties, is for the benefit of those parties jointly and severally.

 

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2.
Grant of Call Option and Information Memorandum

 
2.1
Call Option

 
In consideration of AMI UK paying the Initial Call Option Fee to Worldwide,
Worldwide grants to AMI UK the option to be granted the Licence Agreement on the
terms set out in this Deed free from any Security Interest or Third Party
Interest. AMI UK acknowledges and agrees that the Initial Call Option Fee is
non-refundable and will become the absolute property of Worldwide upon payment
by AMI UK.

 
-7-

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2.2
Information Memorandum

 
Worldwide and AMI Australia acknowledge that AMI UK and the AMI UK Principals
intend to prepare and issue an information memorandum to raise funds to exercise
the Call Option and establish the AMI UK business. Worldwide and AMI Australia
agree that AMI UK and the AMI UK Principals may include a summary of this Deed
and the Licence Agreement in their information memorandum subject to the
following conditions:

(a)
the information memorandum may only be issued to professional investors and may
not be issued to retail investors;

 
(b)
AMI UK and the AMI UK Principals must obtain the prior written consent of
Worldwide and AMI Australia to the final form of the information memorandum,
which must include standard disclaimers in a form reasonably satisfactory to
Worldwide and AMI Australia and which must clearly state that neither Worldwide
nor AMI Australia have prepared or are responsible for the contents of the
information memorandum;

 
(c)
AMI UK and the AMI UK Principals must indemnify Worldwide and AMI Australia for
any Liability or Claim which Worldwide or AMI Australia may suffer or incur in
connection with the issue of the information memorandum including without
limitation any legal expenses on a solicitor and own client basis;

 
(d)
if Worldwide or AMI Australia subsequently become aware of an inaccuracy in the
contents of the information memorandum, AMI UK and the AMI UK Principals agree
that they will make any changes reasonably required by Worldwide or AMI
Australia to correct such inaccuracy; and

 
(e)
AMI UK and the AMI UK Principals agree that they will require any party they
wish to issue a copy of the information memorandum to sign a confidentiality
deed in favour of Worldwide and AMI Australia in a form reasonably required by
Worldwide and AMI Australia.

 

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3.
Exercise of Call Option

 
3.1
Exercise of the call option

 
AMI UK may exercise the Call Option at any time during the Exercise Period (in
respect of which time will be of the essence) by sending to Worldwide a duly
completed Call Option Notice signed by AMI UK together with a bank cheque for
the Upfront Licence Fee. If the Call Option is not exercised within the Exercise
Period then this Deed will be terminated and neither party will have any further
liability to the other with the exception that AMI UK and the AMI UK Principals
will be bound by the confidentiality, intellectual property and restraint
clauses of this Deed.
 

 
-8-

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3.2
Extension of Exercise Period

 
AMI UK may extend the Exercise Period on one occasion by a further 2 months by
sending a written notice to Worldwide together with the Further Call Option Fee
prior to the expiry of the Exercise Period (in respect of which time will be of
the essence). AMI UK acknowledges and agrees that the Initial Call Option Fee is
non-refundable and is the absolute property of Worldwide.
 
3.3
Usage of name AMI etc

 
AMI UK and the AMI UK Principals acknowledge that AMI UK is presently using the
mark “AMI” as a bare licensee of Worldwide which licence may be terminated by
Worldwide with immediate effect and without payment of any compensation by
giving AMI UK written notice at any time. AMI UK and the AMI UK Principals agree
that AMI UK will cease to use the mark “AMI” if any such notice is given and
they further agree that in the event the Call Option is not exercised AMI
Australia will have ownership of and the right to use all material developed by
AMI UK in relation to the UK market some of which they acknowledge and agree has
been sourced from Worldwide.
 

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4.
Completion

 
4.1
Completion details

 
Completion will occur on the Completion Date at 2 pm at AMI Australia’s head
office.

4.2
Completion process

 
At Completion:

(a)
Worldwide must deliver to AMI UK a Licence Agreement duly signed by it and by
AMI Australia; and

 
(b)
AMI UK must deliver to Worldwide a Licence Agreement duly signed by it and by
the AMI UK Principals.

 
4.3
Conditions of Completion

 
Completion is conditional on compliance by Worldwide and AMI UK with all of
their respective obligations under this clause 4. For the avoidance of doubt,
this means that if a party is not ready, willing and able to comply with all of
its obligations under this clause 4 on the Completion Date, the other party is
under no obligation to deliver any documents or other items referred to in
clause 4.2 and may at its option:

(a)
defer Completion for up to 14 days after the Completion Date (in which case the
provisions of this clause 4.3 will apply to the deferred Completion);

 
(b)
proceed to Completion so far as is practical without affecting its rights under
this Deed; or

 

 
-9-

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(c)
terminate this Deed by notice to the non-complying party.

 

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5.
Warranties

 
5.1
Warranties by Worldwide

 
Worldwide and AMI Australia represent and warrant to AMI UK that to the best of
their knowledge and belief each statement contained in Annexure 1 is true,
accurate and not misleading as at the date of this Deed.

5.2
No reliance on other matters

 
AMI UK and the AMI UK Principals acknowledge that, except for the Warranties,
they have not relied on any information, representations or warranties (written
or oral) supplied or given by or on behalf of Worldwide or AMI Australia or any
of their directors, officers, employees or agents.

5.3
Time limit for claims

 
AMI UK and the AMI UK Principals acknowledge and agree that any Liability of
Worldwide or AMI Australia under the Warranties will cease 1 year after the date
of this Deed, except for matters which have been the subject of a bona fide
written claim made by AMI UK to Worldwide and AMI Australia before that date and
about which legal proceedings are commenced with a Court of competent
jurisdiction within 6 months after the end of that 1 year.

5.4
Maximum limit on Claims

 
AMI UK and the AMI UK Principals acknowledge and agree that Worldwide’s and AMI
Australia’s maximum Liability to AMI UK and the AMI UK Principals for all
breaches of this Deed (including, without limitation, liability in relation to a
Warranty) is the Upfront Licence Fee.

5.5
Limitation for future events

 
AMI UK and the AMI UK Principals acknowledge and agree that neither Worldwide
nor AMI Australia are liable to AMI UK or the AMI UK Principals for any Claim
which would not have arisen but for any loss attributable to:

(a)
anything done or not done after the date of this Deed by AMI UK or the AMI UK
Principals or a Related Body Corporate of AMI UK or the AMI UK Principals or any
person acting, or purporting to act, on behalf of AMI UK or the AMI UK
Principals or a Related Body Corporate of AMI UK or the AMI UK Principals; or

 
(b)
the enactment or amendment of any legislation after the date of this Deed.

 

 
-10-

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5.6
Warranty and other claims connected to the Deed

 
AMI UK and the AMI UK Principals acknowledge and agree that neither Worldwide
nor AMI Australia will be liable to AMI UK or the AMI UK Principals for a Claim
if the Claim would not have arisen but for a change after the date of this Deed:

(a)
in the rate of Tax or a change in the interpretation of Tax laws;

 
(b)
in the method of applying or calculating the rate of Tax;

 
(c)
in any extra statutory concession or practice adopted by the Australian Taxation
Office or other relevant Tax authority as at the date of this Deed (whether or
not that change is effective retrospectively in whole or in part); or

 
(d)
in legislation.

 

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6.
Undertakings not to compete

 
6.1 General covenants
 
In consideration of Worldwide and AMI Australia agreeing to enter into this Deed
and to disclose their Confidential Information to AMI UK and the AMI UK
Principals, AMI UK and the AMI UK Principals agree that, subject to clause 6.3,
they will not, directly or indirectly, whether solely or jointly with any other
person and whether as principal, agent, director, executive officer, employee,
member, partner, joint venturer, adviser, consultant or otherwise without the
prior written consent of the other parties within 3 years of the date of this
Deed (Restraint Period):
 
(a)
within Australia, New Zealand, Japan, China, Indonesia, the UK or any other
place in which AMI Australia, Worldwide or a Related Body Corporate of either of
them carries on business, be engaged in, acquire or hold an interest in any
company or business which is similar to or competes with AMI Australia’s
business (other than pursuant to the Licence Agreement in the case of the UK and
any other territories licensed under that agreement);

 
(b)
canvass, solicit, or entice away from AMI Australia, Worldwide or a Related Body
Corporate of either of them or accept the custom of any person who as at the
relevant time during the Restraint Period or at any time during the period of 12
months before that date was a client, customer, identified prospective customer,
representative or agent or correspondent of AMI Australia, Worldwide or a
Related Body Corporate of either of them or was in the habit of dealing with AMI
Australia, Worldwide or a Related Body Corporate of either of them ;

 
(c)
employ, solicit, entice away from AMI Australia, Worldwide or a Related Body
Corporate of either of them any person who as at the relevant time during the
Restraint Period or at any time during the period of 12 months before that date
was an officer, manager, consultant or employee of AMI Australia, Worldwide or a
Related Body Corporate of either of them whether or not that person would commit
a breach of contract by reason of leaving AMI Australia, Worldwide or a Related
Body Corporate of either of them;

 

 
-11-

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(d)
use or register at any future time a name or trade mark which includes all or
part of any trade mark owned or used by AMI Australia or any confusingly similar
word or words in such a way as to be capable of or likely to be confused with
any trade mark owned or used by AMI Australia or any other name or trade mark of
AMI Australia (other than in accordance with the Licence Agreement); or

 
(e)
attempt, counsel, procure or otherwise assist any person to do any of the acts
referred to in this clause.

 
6.2 Restraints fair and reasonable
 
Each of AMI UK and the AMI UK Principals acknowledges that:
 
(a)
the covenants given in clause 6.1 are material to AMI Australia’s and
Worldwide’s decision to enter into this Deed; and

 
(b)
the restraints contained in clause 6.1 are:

 

 
(i)
fair and reasonable regarding the subject matter, area and duration; and

 

 
(ii)
reasonably required by each of the parties to protect the business, financial
and proprietary interests of the AMI Australia and Worldwide.

 
6.3 Exceptions
 
Nothing in this clause 6 will prevent AMI UK and the AMI UK Principals from
holding for investment purposes only marketable securities quoted at the time of
acquisition on a recognised stock exchange in Australia or elsewhere being in
total not more than 5% of the issued share capital of the listed company.

6.4 Severability
 
Each of the agreements, obligations and restrictions set out in clause 6 is
severable and independent so that if clause 6 or any part or provision of it is
held or found to be wholly or partly unenforceable, then that clause or that
provision or part will be deemed eliminated or modified to the minimum extent
necessary to make this Deed or that clause or provision or part enforceable.
 
6.5 Injunction
 
AMI UK and the AMI UK Principals acknowledges that monetary damages alone would
not be adequate compensation to AMI Australia and Worldwide for a breach of
clause 6.1 and that AMI Australia and Worldwide are entitled to seek an
injunction from a court of competent jurisdiction if:
 
(a)
AMI UK or the AMI UK Principals fails to comply or threatens to fail to comply
with clause 6.1; or

 
(b)
AMI Australia or Worldwide has reason to believe AMI UK or the AMI UK Principals
is not complying or will not comply with clause 6.1. 

 

 
-12-

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--------------------------------------------------------------------------------

7.
Intellectual Property

 
7.1 AMI Australia and Worldwide property
 
All Intellectual Property Rights owned by AMI Australia and Worldwide are and
will remain the property of AMI Australia and Worldwide and must not be used by
any of the other parties unless otherwise agreed in writing by AMI Australia and
Worldwide.

--------------------------------------------------------------------------------

8.
GST or VAT

(a)
If any GST, VAT, withholding or similar tax is payable on any taxable supply
made under this Deed to the recipient, the recipient must pay to the supplier
the amount of the GST, subject to receipt of a valid tax invoice (or other
things required for the supplier to obtain an input tax credit or other like
offset) for the supply.

 
(b)
Each party must comply with its obligations under Part VB of the Trade Practices
Act 1974, any similar State or Territory or UK legislation and any guidelines
released by the Australian Competition and Consumer Commission or similar body,
and provide to the other party reasonable evidence of compliance on request.

 
(c)
Nothing in this clause 8 requires the recipient to pay any penalties, fines,
interest or other amounts payable by the supplier on account of a tax default of
the supplier. If the recipient is required to reimburse the supplier for any
cost or other amount, despite any other provision of this Deed, the recipient
does not have to pay the supplier any sum included in that amount for which the
supplier (or representative member, if this is not the supplier) can claim an
input tax credit, partial input tax credit or other like offset.

 

--------------------------------------------------------------------------------

 
9.
Confidentiality

 
9.1 Provisions to remain confidential
 
Subject to clause 9.2 each party must not and must ensure that its officers,
employees and agents do not without the prior written consent of the other
parties disclose or use any Confidential Information of the other parties. For
the avoidance of doubt, if the Call Option is exercised, AMI UK will be entitled
to use Worldwide’s Technology in accordance with the Licence Agreement.
 
9.2 Exclusions
 
(a)
A party may make disclosures:

 

 
(i)
to those of its employees, officers, professional or financial advisers and
bankers as the party reasonably thinks necessary to give effect to this Deed but
only on a strictly confidential basis;

 

 
(ii)
if required by law or the rules of a stock exchange; and

 

 
-13-

--------------------------------------------------------------------------------

 

 

 
(iii)
in the case of AMI UK, in the information memorandum it proposes to issue
subject to clause 2.2 being complied with.

 
(b)
The obligations of this clause do not apply to any information which the
recipient can reasonably demonstrate:

 

 
(i)
is in the public domain through no fault of its own;

 

 
(ii)
is already known to the recipient (as evidenced by its written records) at the
date of disclosure and was not acquired directly or indirectly from the
disclosing party; or

 

 
(iii)
is required to be disclosed by law under a court order, or by any recognised
stock exchange or other regulatory body.

 

--------------------------------------------------------------------------------

10.
Notices

 
10.1 Requirements 
 
All notices must be:
 
(a)
in legible writing and in English;

 
(b)
addressed to the recipient at the address or facsimile number set out below or
to such other address or facsimile number as a party may notify to the other:

 
to:
Worldwide or AMI Australia
Address:
Level 1, 204-218 Botany Road, Alexandria NSW 2015
Attention:
Richard Doyle
Facsimile no:
(02) 9640 5186
   
to:
AMI UK and the AMI UK Principals
Address:
Level 2, Hudson House, 131 Macquarie Street, Sydney NSW 2000
Attention:
Richard Mare
Facsimile no:
(02) 9258 9999

(c)
signed by the party, or where the sender is a company, by a director of that
company or under the common seal of the sender; and

 
(d)
sent to the recipient by hand, prepaid post (airmail if to or from a place
outside Australia) or facsimile.

 
10.2
Receipt

 
Without limiting any other means by which a party may be able to prove that a
notice has been received by another party, a notice will be deemed to be duly
received:
 
(a)
if sent by hand, when left at the address of the recipient;

 

 
-14-

--------------------------------------------------------------------------------

 

 
(b)
if sent by pre-paid post, 3 days (if posted within Australia to an address in
Australia) or 10 days (if posted from one country to another) after the date of
posting; or

 
(c)
if sent by facsimile, upon receipt by the sender of an acknowledgment or
transmission report generated by the machine from which the facsimile was sent
indicating that the whole facsimile was sent to the recipient's facsimile
number;

 
but if a notice is served by hand, or is received by the recipient's facsimile
on a day which is not a Business Day in the country where it is received, or
after 5:00 pm (at place of receipt) on a Business Day in the country where it is
received, the notice is deemed to be duly received by the recipient at 9.00 am
(at place of receipt) on the first Business Day after that day in the country
where it is received.
 

--------------------------------------------------------------------------------

11.
General provisions

 
11.1
Entire agreement

 
This Deed and any documents referred to in this Deed or executed in connection
with this Deed is the entire agreement of the parties about its subject matter
and supersedes all other representations, negotiations, arrangements,
understandings or agreements and all other communications. 

11.2
Further assurances

 
Each party must, at its own expense, whenever requested by the other party,
promptly do or arrange for others to do, everything reasonably necessary to give
full effect to this Deed and the transactions contemplated by this Deed.
 
11.3
Costs

 
Each party must pay its own costs in respect of this Deed and the documents and
transactions contemplated by this Deed except that AMI UK must pay all stamp
duty chargeable on this Deed.
 
11.4
Assignment

 
Neither party may assign, create an interest in or deal in any other way with
any of its rights under this Deed without the prior written consent of the other
party.
 
11.5
Invalid or unenforceable provisions

 
If a provision of this Deed is invalid or unenforceable in a jurisdiction:
 
(a)
it is to be read down or severed in that jurisdiction to the extent of the
invalidity or unenforceability; and

 
(b)
that fact does not affect the validity or enforceability of:

 

 
(i)
that provision in another jurisdiction; or

 

 
-15-

--------------------------------------------------------------------------------

 

 

 
(ii)
the remaining provisions.

 
11.6
No merger

 
The warranties, other representations and promises by the parties are continuing
and will not merge or be extinguished on Completion.
 
11.7
Waiver and exercise of rights

 
(a)
A waiver of a provision of or of a right under this Deed is binding on the party
granting the waiver only if it is given in writing and is signed by the party or
an authorised officer of the party granting the waiver.

 
(b)
A waiver is effective only in the specific instance and for the specific purpose
for which it is given.

 
(c)
A single or partial exercise of a right by a party does not preclude another
exercise of that right or the exercise of another right.

 
(d)
Failure by a party to exercise or delay in exercising a right does not prevent
its exercise or operate as a waiver.

 
11.8
Amendment

 
This Deed may be amended only by a document signed by all parties.
 
11.9
Counterparts

 
This Deed may be signed in counterparts and all counterparts taken together
constitute one document.
 
11.10
Governing law

 
This Deed is governed by the laws of New South Wales.
 
11.11
Jurisdiction

 
Each party irrevocably and unconditionally:
 
(a)
submits to the non-exclusive jurisdiction of the courts of New South Wales; and

 
(b)
waives, without limitation, any Claim or objection based on absence of
jurisdiction or inconvenient forum.

 

 
-16-

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--------------------------------------------------------------------------------

12.
Guarantee and indemnity

 
12.1
Consideration

 
AMI Australia agrees that it has entered into this Deed for valuable
consideration including, but not limited to, AMI UK entering into this Deed and
paying the Initial Call Option Fee to Worldwide.

12.2
Guarantee

 
AMI Australia unconditionally and irrevocably guarantees to AMI UK the due and
punctual performance and observance by Worldwide of Worldwide’s obligations
under or in connection with this Deed including all obligations to pay money
("Guaranteed Obligations").

12.3
Non-compliance

 
If Worldwide does not comply with the Guaranteed Obligations on time and in
accordance with this Deed, then AMI Australia agrees to comply with the
Guaranteed Obligations when AMI UK requests AMI Australia to do so.

12.4
Indemnity

 
As a separate undertaking, AMI Australia unconditionally and irrevocably
indemnifies AMI UK from and against all claims arising from or incurred in
connection with Worldwide’s breach or failure to comply with any of the
Guaranteed Obligations. It is not necessary for AMI UK to incur expense or make
payment before enforcing this right of indemnity.

12.5
Separate obligation

 
AMI Australia agrees that the indemnity contained in clause 12.4 is a separate
and distinct obligation and will not be restrictively interpreted by the
guarantee set out in clause 12.2.

12.6
Principal liability

 
AMI Australia agrees that its liability under this clause 12 is that of
principal debtor.

12.7
Waiver of rights

 
AMI Australia waives any right it may have of first requiring AMI UK to commence
proceedings or enforce any other right against Worldwide or any other person
before claiming under this clause 12.

12.8
Continuing indemnity

 
The guarantee and indemnity in this clause 12 is a continuing guarantee and
indemnity, is not discharged by any one payment and will remain in full force
and effect until the whole of the Guaranteed Obligations have been satisfied in
full.

 
-17-

--------------------------------------------------------------------------------

 

12.9
Absolute obligation

 
AMI Australia’ obligations as guarantor and indemnifier under this Deed are
absolute and unconditional in any and all circumstances and are not prejudiced,
released, discharged or otherwise affected by any act, omission, matter or thing
which except for this provision might operate to release it from its obligations
under this clause.

 

 
-18-

--------------------------------------------------------------------------------

 

Executed by the parties as a Deed:

Signed, Sealed and Delivered by
)
 
Worldwide PE Patent Holdco Pty Limited
)
)
 
by its sole director and secretary:
)
                       
Signature of sole director/secretary
                     
Name of sole director/secretary (please print)

Signed, Sealed and Delivered by
)
 
AMI Australia Holdings Pty Limited
)
 
by its sole director and secretary:
)
                       
Signature of sole director/secretary
                     
Name of sole director/secretary (please print)

Signed, Sealed and Delivered by
)
 
AMI Group Limited
)
 
by a director and secretary/director:
)
                   
Signature of secretary/director
 
Signature of director
                 
Name of secretary/director (please print)
 
Name of director (please print)

 
-19-

--------------------------------------------------------------------------------

 

Signed, Sealed and Delivered by
)
 
Zascha Knochell
)
 
in the presence of:
)
                   
Signature of witness
 
Signature of Zascha Knochell
                 
Name of witness (please print)
   

Signed, Sealed and Delivered by
)
 
Drew Shardlow
)
 
in the presence of:
)
                   
Signature of witness
 
Signature of Drew Shardlow
                 
Name of witness (please print)
   

Signed, Sealed and Delivered by
)
 
Richard Mare
)
 
in the presence of:
)
                   
Signature of witness
 
Signature of Richard Mare
                 
Name of witness (please print)
   

 
-20-

--------------------------------------------------------------------------------

 

Signed, Sealed and Delivered by
)
 
David McDonald
)
 
in the presence of:
)
                   
Signature of witness
 
Signature of David McDonald
                 
Name of witness (please print)
   

 
-21-

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Annexure 1
 
Warranties
 

--------------------------------------------------------------------------------

1.
Corporate

 
1.1
Authority

 
Worldwide and AMI Australia have:
 
(a)
full power and authority to enter into and perform this Deed; and

 
(b)
obtained all necessary shareholder and/or board approvals.

 
1.2
Insolvency events

 
(a)
Liquidation/winding up/appointment of administrator or receiver etc

 
Neither Worldwide nor AMI has had:
 

 
(i)
a liquidator or provisional liquidator appointed;

 

 
(ii)
a receiver, receiver and manager, trustee, controller, official manager,
bankruptcy trustee or administrator or similar officer appointed;

 

 
(iii)
an administrator appointed, whether under Part 5.3A of the Corporations Law or
otherwise;

 

 
(iv)
an application made for the appointment of an administrator, liquidator or
provisional liquidator; or

 

 
(v)
any foreign equivalent to any of the above;

 
over all or part of its business and no resolutions have been passed for any
such appointment; or
 

 
(vi)
an application made for the winding up of the company.

 
(b)
Execution

 
No execution, distress or similar process has been levied upon or against
Worldwide or AMI Australia.
 
(c)
Schemes of arrangement

 
Neither Worldwide nor AMI Australia has:
 

 
(i)
entered into or resolved to enter into any scheme of arrangement, composition,
assignment for the benefit of, or other arrangement with its creditors or any
class of creditors; or

 

 
-1-

--------------------------------------------------------------------------------

 

 

 
(ii)
proposed or had proposed on its behalf a reorganisation, moratorium, deed of
company arrangement or other administration involving one or more of its
creditors, or its winding up or dissolution.

 
(d)
Striking off

 
Neither Worldwide nor AMI Australia has:
 

 
(i)
received a notice under sections 601AA or 601AB of the Corporations Act 2001 or
any foreign equivalent; or

 

 
(ii)
been struck off the register of companies or dissolved and there is no action
proposed by the ASIC, or any foreign equivalent, to do so.

 

--------------------------------------------------------------------------------

2.
General

 
2.1
Benefit

 
(a)
Each or Worldwide and AMI Australia benefit by entering into this Deed.

 
(b)
There are no reasonable grounds to suspect that Worldwide or AMI Australia is
unable to pay its debts as and when they become due and payable.

 
(c)
Neither Worldwide nor AMI Australia enters into this Deed as a trustee.

 
(d)
No person has contravened or will contravene section 208 or section 209 of the
Corporations Act 2001 or any foreign equivalent by entering into this Deed or
participating in any transaction in connection with this Deed.

 
(e)
Neither Worldwide nor AMI Australia has immunity from the jurisdiction of a
court or from legal process.

 
(f)
All of the statements relating to Worldwide and AMI Australia set out in this
Deed and the Licence Agreement are true and correct.

 

 
-2-

--------------------------------------------------------------------------------

 

Annexure 2
 
Call Option Notice

To:
Worldwide PE Patent Holdco Pty Limited (ACN 117 157 427) (Worldwide) and AMI
Australia Holdings Pty Limited (ACN 095 238 645) (AMI Australia)

 
From:
AMI Group Limited (AMI UK) and Zascha Knochell, Drew Shardlow, Richard Mare and
David McDonald (AMI UK Principals)

 

 
Option Deed
 
We refer to the Option Deed dated on or about 13 April 2007 (the "Deed") between
Worldwide, AMI Australia, AMI UK and the AMI UK Principals.
 
Terms defined in the Deed have the same meaning in this Notice.
 
Pursuant to clause 3.1 of the Deed, AMI UK requires Worldwide to grant the
Licence Agreement to AMI UK with effect from the Completion Date.
 
AMI UK and the AMI UK Principals confirm that they are bound by the Licence
Agreement.
 

 

Signed, Sealed and Delivered by
)
 
AMI Group Limited
)
 
by a director and secretary/director:
)
                   
Signature of secretary/director
 
Signature of director
                 
Name of secretary/director (please print)
 
Name of director (please print)

 
-3-

--------------------------------------------------------------------------------

 

Signed, Sealed and Delivered by
)
 
Zascha Knochell
)
 
in the presence of:
)
                   
Signature of witness
 
Signature of Zascha Knochell
                 
Name of witness (please print)
   

Signed, Sealed and Delivered by
)
 
Drew Shardlow
)
 
in the presence of:
)
                    
Signature of witness
 
Signature of Drew Shardlow
                 
Name of witness (please print)
   

Signed, Sealed and Delivered by
)
 
Richard Mare
)
 
in the presence of:
)
                   
Signature of witness
 
Signature of Richard Mare
                 
Name of witness (please print)
   

 
-4-

--------------------------------------------------------------------------------

 

Signed, Sealed and Delivered by
)
 
David McDonald
)
 
in the presence of:
)
                   
Signature of witness
 
Signature of David McDonald
                 
Name of witness (please print)
   

 
-5-

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Annexure 3
 
Licence Agreement

 
-6-

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Licence Deed
 
between

Worldwide PE Patent Holdco Pty Limited

(ACN 117 157 427)

and

AMI Australia Holdings Pty Limited
 
(ACN 095 238 645)
and

AMI Group Limited
 
and

Zascha Knochell, Drew Shardlow, Richard Mare and David McDonald
 

 
 

--------------------------------------------------------------------------------

 

Contents
 

Clause
   
number
Heading
Page
     
1.
Definitions and interpretation
2
     
2.
Grant of rights and maintenance of quality
7
     
3.
Support and assistance
8
     
4.
Upfront Licence Fee, Royalties and expenses
9
     
5.
Method of payment
10
     
6.
Confidentiality
10
     
7.
Warranties and indemnities
12
     
8.
Infringement
12
     
9.
Restraints
12
     
10.
Termination
14
     
11.
Guarantee and indemnity by Licensor's Guarantor
16
     
12.
Notices
16
     
13.
General provisions
17
     
14.
Assignment
18
     
15.
Option for additional Territories and right of first refusal
19
     
16.
Option to renew
20

 
-i-

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Licence Deed
 

This deed is made on the     of     , 2007.

Between
Worldwide PE Patent Holdco Pty Limited (ACN 117 157 427) of Level 1, 204-218
Botany Road, Alexandria NSW 2015 (Licensor);
 
And

AMI Australia Holdings Pty Limited (ACN 095 238 645) of Level 1, 204-218 Botany
Road, Alexandria NSW 2015 (Licensor’s Guarantor);
 
And

AMI Group Limited of c/- 143a woodland St Balgowlah, Sydney NSW 2093 (Licensee);
 
And

Zascha Knochell, Drew Shardlow, Richard Mare and David McDonald of c/- Level 2,
131 Macquarie Street, Sydney NSW 2000 (Licensee’s Principals);
 

Recitals
A.
The Licensor owns the international formulation rights and other rights
associated with the AMI business and the Licensor’s Guarantor operates
Australia’s largest chain of specialist sexual dysfunction medical clinics.

 
B.
The Licensee Principals are the current directors and shareholders of the
Licensee.

C.
The Licensor has agreed to grant to the Licensee the exclusive right and licence
to use the Technology in the Territory, on the terms and conditions of this
Deed.

C.
In consideration for the Licensee agreeing to enter into this Deed and pay the
Upfront Licence Fee to the Licensor, the Licensor’s Guarantor has agreed to
guarantee the Licensor’s obligations under this Deed.

D.
In consideration for the Licensor and the Licensor’s Guarantor agreeing to enter
into this Deed, the Licensee Principals have agreed to give certain covenants
relating to confidentiality and restraint of trade pursuant to this Deed

 
-1-

--------------------------------------------------------------------------------

 

Operative provisions

--------------------------------------------------------------------------------

1.
Definitions and interpretation

 
1.1
Definitions

 
In this Deed, unless the context requires another meaning:
 
"Business Day" means a day that is not a Saturday, Sunday or a public holiday or
bank holiday in Sydney;
 
"Commencement Date" means the date of this Deed;
 
“Confidential Information” means information which relates to the business and
affairs (financial and otherwise) of the Disclosing Party (including information
which is in oral, visual or written form or is recorded in any other medium),
and includes:
 
(a)
business plans and forecasts;

(b)
financial and marketing information of the Disclosing Party;

(c)
know-how, trade secrets, ideas, concepts, technical and operational information,
arising or used by the Disclosing Party in relation to its business;

(d) the terms upon which the Disclosing Party contracts with or proposes to
contract with employees, contractors, clients and suppliers;

(e)
information concerning the affairs or property of the Disclosing Party's
business or any current or proposed business, property or transaction in which
the Disclosing Party may be or may have been concerned or interested;

(f)
the names and addresses and other personal details of current and proposed
employees, contractors, clients and suppliers of the Disclosing Party;

(g)
information which by its nature or by the circumstances of its disclosure, is or
could reasonably be expected to be regarded as confidential to the Disclosing
Party or any third party with whose consent or approval the Disclosing Party
uses that information;

(h)
any discussions or negotiations relating to this Deed; and

(i)
any documents, reports or analyses created in relation to this Deed;

but does not include:

 
(i)
any information which is or becomes part of the public domain other than by
reason of a breach of this Deed; or

 
-2-

--------------------------------------------------------------------------------

 

 
(ii)
information the disclosure of which is compelled by any court, tribunal,
commission or other competent judicial or administrative body; or

 
(iii)
information which the Receiving Party can establish was known by it before it
was disclosed to it by the other party;

“Disclosing Party” means the party disclosing Confidential Information to the
other party or parties;

"Exploit" includes to develop further, use, make, hire, sell or otherwise
dispose of or commercialise, advertise and promote and to offer to do any of
those things;

"Field of Use" means the treatment of sexual dysfunction including without
limitation impotence and premature ejaculation;

"GST" has the meaning set out in clause 5.2;

"Improvements" means Licensee Improvements, Licensor Improvements and Joint
Improvements;

"IMT" means Intelligent Medical Technologies Pty Limited (ACN 107 047 496);
 
"Insolvency Event" means for a party, the happening of one or more of the
following events:

(a)
except for the purpose of a solvent reconstruction or amalgamation:

 
(i)
a process is filed in a court seeking an order that it be wound up or that a
controller be appointed to it or any of its assets, unless the application is
withdrawn, struck out, dismissed or stayed within 21 days of it being filed; or

 

 
(ii)
an order is made that it be wound up or that a controller be appointed to it or
any of its assets; or

 

 
(iii)
a resolution that it be wound up is passed;

 
(b)
a liquidator, provisional liquidator, controller or any similar official is
appointed to, or takes possession or control of, all or any of its assets or
undertaking;

(c)
an administrator is appointed to it, a resolution that an administrator be
appointed to it is passed;

(d)
it enters into, or resolves to enter into, an arrangement, compromise or
composition with any of, or any class of, its creditors, or an assignment for
the benefit of any of, or any class of, its creditors, or process is filed in a
court seeking approval of any such arrangement, compromise or composition;

(e)
a reorganisation, moratorium, deed of company arrangement or other
administration involving one or more of its creditors is effected;

 
-3-

--------------------------------------------------------------------------------

 

(f)
any action is taken by the Australian Securities & Investments Commission to
cancel its registration or to dissolving it;

(g)
it is insolvent within the meaning of section 95A of the Corporations Act 2001
(Cth), as disclosed in its accounts or otherwise, states that it is unable to
pay its debts or it is presumed to be insolvent under any applicable law;

(h)
as a result of the operation of section 459F(1) of the Corporations Act 2001
(Cth), it is taken to have failed to comply with a statutory demand;

(i)
it stops or suspends or threatens to stop or suspend:

 
(i)
the payment of all of its debts; or

 

 
(ii)
the conduct of all or a substantial part of its business; or

(j)
anything having a substantially similar effect to any of the events specified in
the preceding paragraphs happens to it under the law of any jurisdiction;

"Intellectual Property Rights" means all rights (including without limitation
moral rights) in or to any patent, copyright, database rights, registered design
or other design right, utility model, trade mark (whether registered or not and
including any rights in get up or trade dress), brand name, service mark, trade
name, eligible layout right, chip topography right and any other rights of a
proprietary nature in or to the results of intellectual activity in the
industrial, commercial, scientific, literary or artistic fields, whether
registrable or not and wherever existing in the world, including all rights in
or to renewals, extensions and revivals of, and all rights to apply for, any of
the foregoing rights;
 
"Inventions" means the Technology, including any Improvements;
 
"Joint Improvements" means any developments with respect to the Inventions
(including any patentable inventions or know-how) which are developed jointly by
or on behalf of the Licensor and the Licensee or are acquired jointly by the
Licensor and the Licensee;

"Know-how" means any information, whether or not in writing and whether or not
patentable, developed or acquired by or on behalf of the Licensor concerning the
methods used for and in the design, development, manufacture, testing, delivery
and use of the Inventions and the processes for utilising the Inventions;

"Licensee Business" means the business to be developed by the Licensee to
Exploit the rights in clause 2.1 in the Territory only;
 
"Licensee Improvements" means any developments with respect to the Inventions
(including any patentable inventions or know-how) which are developed by or on
behalf of the Licensee or are acquired by the Licensee;

"Licensor Improvements" means any developments with respect to the Inventions
(including any patentable inventions or know-how) which are developed by or on
behalf of the Licensor or are acquired by the Licensor;

"Personnel" of a party means the officers, employees, contractors and agents of
that party;
 

 
-4-

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“Receiving Party” means the party receiving the other party's Confidential
Information;

"Related Bodies Corporate" has the meaning ascribed to it in the Corporations
Act;
 
"Royalties" means, for each period during the term of this Deed, an amount equal
to the greater of:

(a)
5% of the gross revenue of the Licensee during the relevant period; and

(b)
subject to clause 15, the amount specified in Schedule 1 in relation to the
relevant period;

"Security Interest" means an interest in an asset which provides security for,
or protects against default by, a person for the payment or satisfaction of a
debt, obligation or liability including a mortgage, charge, bill of sale,
pledge, deposit, lien, encumbrance, hypothecation, or arrangement for the
retention of title or any other arrangement under which money or claims to, or
the benefit of, a bank or other account may be applied, set-off or made subject
to a combination of accounts;
 
"Tax" means a tax, levy, charge, impost, deduction, withholding or duty of any
nature (including stamp and transaction duty) at any time:

(a)
imposed or levied by any government agency;

(b)
required to be remitted to, or collected, withheld or assessed by, any
government agency; and

(c)
any related interest, expense, fine, penalty or other charge on those amounts;

"Technology" means all methods, systems, hardware, software, technology,
Know-how, Confidential Information and Intellectual Property Rights developed or
utilised now or in the future by the Licensor in relation to the Field of Use
only, with the exception that this will only extend to IMT’s intellectual
property where such intellectual property is sold to the public in Australia and
where IMT continues to be a Related Body Corporate of the Licensor’s Guarantor;
 
"Term" means, subject to clause 16, the period of 5 years from the Commencement
Date unless terminated earlier;
 
"Territory" means, subject to clause 15, the United Kingdom (including England,
Scotland, Ireland and Wales);
 
"Third Party Interest" means any Security Interest, lease, license, option,
voting arrangement, easement, covenant, notation, restriction, interest under
any agreement, interest under any trust, or other right, equity, entitlement or
other interest of any nature held by a third party; and
 
Upfront Licence Fee means, subject to clause 15, an amount of US$1 million.
 

 
-5-

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1.2
Interpretation

 
In this Deed, unless the context requires another meaning:
 
(a)
a reference:

 

 
(i)
to the singular includes the plural and vice versa;

 

 
(ii)
to a gender includes all genders;

 

 
(iii)
to a document (including this Deed) is a reference to that document (including
any schedules and annexures) as amended, consolidated, supplemented, novated or
replaced;

 

 
(iv)
to an agreement includes any undertaking, representation, deed, agreement or
legally enforceable arrangement or understanding whether written or not;

 

 
(v)
to a party means a party to this Deed;

 

 
(vi)
to an item, recital, clause or schedule is to an item, recital, clause or
schedule of this Deed;

 

 
(vii)
to a notice means a notice, approval, demand, request, nomination or other
communication given by one party to another under or in connection with this
Deed; 

 

 
(viii)
to a person (including a party) includes:

 

 
(A)
an individual, company, other body corporate, association, partnership, firm,
joint venture, trust or government agency; and

 

 
(B)
the person's successors, permitted assigns, substitutes, executors and
administrators;

 

 
(ix)
to a law:

 

 
(A)
includes a reference to any legislation, treaty, judgment, rule of common law or
equity or rule of any applicable stock exchange; and

 

 
(B)
is a reference to that law as amended, consolidated, supplemented or replaced;
and

 

 
(C)
includes a reference to any regulation, rule, statutory instrument, by-law or
other subordinate legislation made under that law;

 

 
(x)
to proceedings includes litigation, arbitration and investigation;

 

 
(xi)
to a judgement includes an order, injunction, decree, determination or award of
any court or tribunal;

 

 
-6-

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(xii)
to time is to Sydney time; and

 

 
(xiii)
the word including or includes means including, but not limited to, or includes,
without limitation.

 
(b)
Where a word or phrase is defined, its other grammatical forms have a
corresponding meaning.

 
(c)
Headings are for convenience only and do not affect interpretation.

 
(d)
If a payment or other act must (but for this clause) be made or done on a day
that is not a business day, then it must be made or done on the next business
day.

 
(e)
If a period occurs from, after or before a day or the day of an act or event, it
excludes that day.

 
(f)
This Deed may not be construed adversely to a party only because that party was
responsible for preparing it.

 
(g)
Where a covenant is given by or on behalf of 2 or more parties, such covenant is
given jointly and severally.

 

--------------------------------------------------------------------------------

2.
Grant of rights and maintenance of quality

 
2.1
The Licensor grants to the Licensee from the Commencement Date the exclusive
right and licence to Exploit the Inventions in the Field of Use in the Territory
during the Term.

 
2.2
The Licensor will not Exploit, and will not grant to any party other than the
Licensee the right to Exploit, the Inventions in the Field of Use in the
Territory during the Term. For the avoidance of doubt, this restriction will
only extend to IMT’s intellectual property where such intellectual property is
sold to the public in Australia and where IMT continues to be a Related Body
Corporate of the Licensor’s Guarantor.

 
2.3
The Licensee acknowledges that other than as set out in this clause 2 it
acquires no proprietary rights in the Inventions provided to the Licensee by the
Licensor pursuant to this Deed, and that at all times, ownership thereof remains
with the Licensor, notwithstanding the payment of any costs relating to those
rights. Without limiting the foregoing, the Licensee and the Licensee’s
Principals agree that they are not permitted to and will not Exploit the
Inventions outside the Territory.

 
2.4
The Licensee acknowledges and agrees that all rights and interests in the
Inventions are, and will remain, owned by the Licensor.

 

 
-7-

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2.5
The Licensee agrees to inform the Licensor, promptly, in writing, of any
Improvement of which it becomes aware. If, during the term of this Deed, the
Licensee, discovers or invents an Improvement, the Licensee will promptly
disclose to the Licensor and furnish to the Licensor all information held by it
pertaining to such Improvement.

 
2.6
The Licensor agrees to inform the Licensee, promptly, in writing, of any
Improvement of which it becomes aware. If, during the term of this Deed, the
Licensor, discovers or invents an Improvement, the Licensor will promptly
disclose to the Licensee and furnish to the Licensee all information held by it
pertaining to such Improvement to the extent reasonably required for the
Licensee to exercise its rights under this Deed.

 
2.7
The Licensee acknowledges that the licence involves the right to use significant
Intellectual Property Rights of the Licensor within the Territory and that the
quality of goods and services provided by the Licensee to customers as well as
the general use of those rights by the Licensee have the potential to impact the
reputation of the Licensor and the value of its Intellectual Property Rights.
The Licensee agrees and acknowledges that it will ensure that all of its
operations are conducted in accordance with all relevant legal requirements and
that it will also ensure that the quality of goods and services provided by it
within the Territory are commensurate with the quality of goods and services
provided by the Licensor outside the Territory. Without limiting the foregoing
the Licensee agrees that it will ensure that all medical services performed in
accordance with its business are performed by registered doctors who have been
appropriately trained by it, that any pharmaceuticals provided by it are
provided by a licensed compounding pharmacy in accordance with all relevant
regulatory requirements and that its advertising and operations are fully
compliant with all other relevant regulatory requirements.

 
2.8
The Licensee agrees that the Licensor will be entitled to inspect the Licensee’s
premises and books and records at any time on reasonable notice to the Licensee
to review compliance with this clause.

 

--------------------------------------------------------------------------------

3.
Support and assistance

 
3.1
During the Term, the Licensor will promptly give the Licensee reasonable access
to such of the Inventions not already disclosed to the Licensee as is reasonably
required by the Licensee to enable the efficient exercise of its rights and
licences under this Deed.

 
3.2
During the Term, the Licensor will use best endeavours to assist the Licensee to
exercise its rights under clause 2.1 and develop the Licensee’s Business
including using bast endeavours to procure that any third parties involved in
the operation of the Licensor's business (for example pharmaceutical suppliers)
will also supply goods and services to the Licensee on the same terms as the
goods and services are supplied to the Licensor.

 
3.3
The Licensor must ensure that suitable members of its Personnel are available to
answer all reasonable queries the Licensee may have regarding the Inventions
during the Term.

 

 
-8-

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3.4
The Licensor will also ensure that its senior personnel will, on reasonable
notice, travel to the Territory to assist the Licensee to Exploit the Inventions
and develop the Licensee’s Business in the Territory during the Term if
requested by the Licensee.

 

--------------------------------------------------------------------------------

4.
Upfront Licence Fee, Royalties and expenses

 
4.1
In consideration of the rights granted by the Licensor, the Licensee will pay
the Upfront Licence Fee to the Licensor on the date of this Deed and the
Licensee will pay the Royalties to the Licensor on a quarterly basis in
accordance with this Deed.

 
4.2
The minimum Royalties (being the amount specified in subparagraph (b) of the
definition of Royalties) will be payable by the Licensee to the Licensor
quarterly in advance without set-off or demand, which amounts are payable
regardless of the level of turnover in the Licensee’s Business. Within 30 days
after each calendar quarter the Licensee will prepare a calculation of the
actual gross revenue in the quarter and will pay its calculation of any excess
of the actual Royalty for that quarter over the minimum Royalty to the Licensor
without set-off or demand.

 
4.3
The Licensor may audit the Licensee’s books and records to ensure compliance
with the Licensee’s obligations to pay Royalties at any time. If an audit report
prepared by or on behalf of the Licensor indicates any understatement in the
Licensee’s Royalty calculations and payments, the Licensee must immediately pay
the Licensor the amount of the shortfall without set-off or demand and, if the
amount of the shortfall in any period is more than 3%, the Licensee must
reimburse the Licensor for all costs incurred by the Licensor in respect of the
audit.

 
4.4
The Licensee is also to be responsible for all reasonable patent and trademark
fees incurred by the Licensor during the Term relating to the Territory
(including without limitation grant fees, renewal fees and reasonable fees
payable to lawyers and patent attorneys in relation to same) and the Licensee
must reimburse the Licensor for all such costs on receipt of a request from the
Licensor.

 
4.5
In addition, where Australian based assistance from the Licensor to the Licensee
under clause 3 involves extensive staff time or third party costs, the Licensee
must reimburse the Licensor for any such staff costs or third party costs (as
applicable). The Licensor will consult with the Licensee prior to undertaking a
task which involves extensive staff time so that the Licensee is able to confirm
that it wishes the relevant service to be provided before incurring the cost. If
the Licensee requests that the Licensor’s staff travel to the Territory to
provide assistance, the Licensee is to be responsible for all travel and
accommodation costs (including business class airfares) and is to pay a fee of
A$1,500 per day for each staff member during the initial Term (which fee will
rise to A$2,500 per day for each staff member during the first option term and
A$3,500 per day during the second option term). For the avoidance of doubt, the
Licensee will not be responsible for food and drink costs.

 
4.6
All invoices issued by the Licensor under this clause are to be paid by the
Licensee within 28 days after receipt.

 

 
-9-

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4.7
Where the Licensee wishes to purchase products from the Licensor, the parties
agree that the cost mechanism will be cost plus a 10% margin exclusive of
freight, with the Licensee being responsible for freight costs.

 
4.8
For the avoidance of doubt, this clause 4 will not require the Licensee to make
a payment to the Licensor in respect of staff costs in relation to minor ad-hoc
queries made by the Licensee of the Licensor and will only require payment where
extensive time is involved. The Licensor will consult with the Licensee prior to
undertaking a task which involves extensive staff time so that the Licensee is
able to confirm that it wishes the relevant service to be provided before
incurring the cost.

 

--------------------------------------------------------------------------------

5.
Method of payment

 
5.1
Subject to clauses 5.2 and 5.4, each party will bear any and all Taxes, bank
fees and charges it incurs as a direct or indirect result of the entry into this
Deed or the rights and obligations under this Deed. 

 
5.2
If a goods and services tax, value added tax or any similar tax ("GST") has
application to any supply made under this Deed, the party making the supply
("the Supplier") may, in addition to any amount or consideration expressed as
payable elsewhere in this Deed, subject to issuing a valid tax invoice or other
documents or things required for the party receiving the supply ("the
Recipient") to obtain an input tax credit to the Recipient, recover from the
Recipient an additional amount on account of GST, such amount to be calculated
by multiplying the amount or consideration payable by the Recipient for the
supply by the prevailing GST rate. This clause does not require the Recipient to
pay any amount on account of a fine, penalty, interest or other amount payable
as a consequence of a default by the Supplier or any person associated with the
Supplier. The Supplier shall issue to the Recipient a valid tax invoice. For the
avoidance of doubt, this includes any such taxes payable on the Upfront Licence
Fee or any Royalties payable by the Licensee to the Licensor under this Deed.

 
5.3
Any GST amounts due pursuant to this Deed will be payable within 14 days after
issue of tax invoice in respect of the supply.

 
5.4
In addition, if any withholding or similar tax is chargeable on any payments
payable by the Licensee to the Licensor under this Deed, the Licensee will be
responsible for any such taxes and will reimburse the Licensor for any taxes
payable by it in relation to same.

 

--------------------------------------------------------------------------------

6.
Confidentiality

 
6.1
Except as expressly permitted or required by this Deed, the Licensee and the
Licensee's Guarantor must not use any of the Confidential Information.

 
6.2
Except as expressly permitted or required by this Deed, the Licensee and the
Licensee's Guarantor must not disclose to any other person any of the
Confidential Information.

 

 
-10-

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6.3
The Licensee may disclose the Confidential Information:

 
(a)
when required to do so by law or any regulatory authority, to the extent so
required;

 
(b)
to its Personnel whose duties reasonably require such disclosure, on condition
that the party making such disclosure: 

 

 
(i)
ensures that each such person to whom such disclosure is made is informed of the
confidentiality of the information and the obligations of confidentiality under
this Deed; and

 

 
(ii)
use its best endeavours to ensure that each such person to whom such disclosure
is made complies with those obligations as if they were bound by them;

 
6.4
From time to time, the Licensor may, in writing, request the Licensee to notify
it in writing of all persons to whom the Confidential Information has been
disclosed under clause 6.3. If the Licensee receives such a request, it must
comply with that request promptly.

 
6.5
If the Licensee becomes aware of a breach of this clause 5.4 6.4, including a
breach of duty of its Personnel with respect to the Confidential Information, it
must:

 
(a)
notify the Licensor as soon as it becomes aware of the breach;

 
(b)
promptly provide the Licensor with any information or assistance which it may
reasonably request in order to minimise the loss or damage it may suffer as a
result of the breach; and

 
(c)
cooperate with the Licensor in any investigation or litigation conducted by it
to protect its rights in the Confidential Information.

 
6.6
A copy of all public announcements and press releases which the Licensee intends
to release or make with respect to the subject matter of this Deed shall be
provided to the Licensor in writing prior to being released or made. The
Licensor shall respond to a request for approval within three (3) working days
of receipt of the copy of the public announcement or press release and shall not
unreasonably withhold or condition its approval. The Licensee acknowledges that
the Licensor is part of a listed group and will be required to announce the
entry into this Deed and will also be required to report its earnings under this
Deed on a quarterly basis and any major developments relating to this Deed as
and when they occur in accordance with applicable securities laws or stock
exchange requirements. The Licensee consents to all such announcements.

 

 
-11-

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7.
Warranties and indemnities

 
7.1
The Licensor warrants that, as far as the Licensor is aware (other than as has
come to the knowledge of the Licensee during the discussions regarding these
arrangements):

 
(a)
The Licensor owns or has the rights to use all Intellectual Property Rights in
the Inventions;

 
(b)
The Licensor has the unencumbered right to grant to the Licensee the licence set
out in clause 2.1; and

 
(c)
acts done by the Licensee in exercise of the rights granted in clause 2.1 will
not infringe the Intellectual Property Rights of any third party.

 
7.2
The Licensor agrees unconditionally to indemnify and hold harmless the Licensee
(including all of its officers, agents, employees, and affiliates) from and
against any and all loss, damage, liability and expense (including all
reasonable legal fees) suffered or incurred by reason of any claims, proceedings
or suits based on or arising out of any breach by the Licensor of this Deed or
arising as a result of any written representation or warranty made by the
Licensor in this Deed being untrue or misleading.

 
7.3
The Licensee agrees unconditionally to indemnify and hold harmless the Licensor
from and against any and all loss, damage liability and expense (including all
reasonable legal fees) suffered or incurred by reason of any claims, proceedings
or suits based on or arising out of any breach by the Licensee of this Deed.

 

--------------------------------------------------------------------------------

8.
Infringement

 
8.1
Each Party must notify the other party in writing as soon as practicable after
it detects any actual or threatened infringement or misuse of, or any challenge
or other action detrimental to any of the Technology and of any actual or
threatened passing-off in each case on a scale that would substantially
adversely affect the Technology.

 
8.2
The Licensor may, at its expense, take all steps that it thinks fit to prevent
or end any infringement or misuse or to defend any challenge or other action
concerning the Technology, including by commencing proceedings.

 

--------------------------------------------------------------------------------

9.
Restraints

 
9.1
Subject to clause 9.3, the Licensee and the Licensee’s Principals must not
directly or indirectly, whether solely or jointly with any other person, and
whether as principal, agent, director, executive officer, employee, shareholder,
partner, joint venturer, advisor, consultant or otherwise:

 

 
-12-

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(a)
subject to clause 9.5, for the period commencing on the Commencement Date and
ending on the date which is 3 years after the end of the Term, carry on or be
engaged or involved in any trade, business or undertaking which relates to the
treatment of impotence, sexual dysfunction or premature ejaculation in men or
women and the treatment of female sexual arousal disorders, globally, in
Australia and in each other country around the world (other than the Territory);

 
(b)
subject to clause 9.5, for the period commencing on termination of this Deed and
ending on the date which is 3 years after that date, carry on or be engaged or
involved in any trade, business or undertaking which relates to the treatment of
impotence, sexual dysfunction or premature ejaculation in the Territory;

 
(c)
subject to clause 9.5, for the period commencing on the Commencement Date and
ending on the date which is 3 years after the end of the Term canvass, solicit,
or entice away from the Licensor or its Related Bodies Corporate, in Australia
and in each other country around the world (other than the Territory), the
custom of any person who during that period was a client or customer of the
Licensor or its Related Bodies Corporate;

 
(d)
subject to clause 9.5, for the period commencing on the termination of this Deed
and ending on the date which is 3 years after that date canvass, solicit, or
entice away from the Licensor or its Related Bodies Corporate, in the Territory,
the custom of any person who as at the termination date or at any time during
the period of 12 months prior to the termination date was a client or customer
of the Licensor or its Related Bodies Corporate or of the Licensee;

 
(e)
subject to clause 9.5, for the period commencing on the Commencement Date and
ending on the date which is 3 years after the end of the Term, employ, solicit,
entice away from the Licensor or its Related Bodies Corporate any person who
during that period was an officer, manager, consultant or employee of the
Licensor or its Related Bodies Corporate whether or not that person would commit
a breach of contract by reason of leaving the Licensor or its Related Bodies
Corporate;

 
(f)
use or disclose, or permit any other person to use or disclose any Confidential
Information (not being information which is or becomes available to the public
other than by reason of a breach of this clause) of the Licensor or its Related
Bodies Corporate other than in relation to the Licensee Business and then only
in accordance with this Deed;

 
(g)
use or register a name or trade mark which includes all or part of any business
name, trade mark or the name of the Licensor or its Related Bodies Corporate or
any confusingly similar word or words in such a way as to be capable of or
likely to be confused with any business name, trade mark or the name of the
Licensor or its Related Bodies Corporate other than in relation to the Licensee
Business and then only in accordance with this Deed;

 

 
-13-

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(h)
in the course of carrying on any trade or business, claim, represent or
otherwise indicate any present association with the Licensor or its Related
Bodies Corporate or, for the purpose of obtaining or retaining any business or
custom, claim, represent or otherwise indicate any past association with the
Licensor or its Related Bodies Corporate other than in accordance with this
Deed; or

 
(i)
attempt, counsel, procure or otherwise assist any person to do any of the acts
referred to in this clause.

 
9.2
The Licensee and the Licensee’s Principals acknowledge that:

 
(a)
the covenants given in clause 9.1 are material to the Licensor's decision to
enter into this Deed; and

 
(b)
the restraints contained in clause 9.1 are:

 

 
(i)
fair and reasonable regarding the subject matter, area and duration; and

 

 
(ii)
reasonably required by the Licensor to protect the business, financial and
proprietary interests of the Licensor and its Related Bodies Corporate.

 
9.3
Nothing in this clause 9 prevents the Licensee and the Licensee’s Principals
from holding for investment purposes only marketable securities quoted at the
time of acquisition on a recognised stock exchange in Australia or elsewhere
providing the aggregate direct and indirect interest of the Licensee and the
Licensee’s Principals in aggregate in any such entity does not exceed 5% of its
total issued capital if such entity’s activities are in competition or conflict
with the Licensor or its Related Bodies Corporate.

 
9.4
Each of the obligations set out in clause 9.1 is severable and independent so
that if clause 9.1 or any part or provision of it is unenforceable then that
clause or that part will be deemed eliminated or modified to the minimum extent
necessary to make this Deed or that clause or part enforceable.

 
9.5
The obligations in clauses 9.1 (a), (b), (c), (d) and (e) will cease on
termination of this Deed if this Deed is terminated by the Licensee in
accordance with clause 10 due to breach of this Deed by the Licensor.

 

--------------------------------------------------------------------------------

10.
Termination

 
10.1
Either party may terminate this Deed immediately (or with effect from any later
date that it may nominate) by written notice to the other party if one or more
Insolvency Events occurs in relation to that other party.

 
10.2
In addition, the Licensor may terminate this Deed if the Licensee fails for more
than 35 days to make a Royalty payment which is due under this Deed without any
demand needing to be made by the Licensor or if the Licensee materially breaches
clause 9 of this Deed.

 

 
-14-

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10.3
Without prejudice to each party’s rights under the other provisions of this
clause, either party may terminate this Deed upon at least 15 Business Days’
written notice to the other party if the other party commits a material breach
of any of its other obligations under this Deed and fails to remedy that breach
within twenty-one days of prior written notice of such breach. For the avoidance
of doubt, a breach of clause 2, 3, 6 or 9 will be considered material.

 
10.4
Notwithstanding clause 10.3, if there is a dispute between the parties regarding
an invoice issued pursuant to clause 4 of the Deed, and this dispute is not
resolved within 7 days, the parties must immediately refer the dispute to the
President or his nominee of the Institute of Chartered Accountants of Australia
in New South Wales ("Expert") whose decision shall be final and binding on the
parties and who will act as an expert and not an arbitrator. The parties will
instruct the Expert to:

 
(a)
resolve the dispute within the shortest practicable time after receiving
submissions from the parties, which the parties must provide within 5 Business
Days of the appointment of the Expert;

 
(b)
resolve the matter as informally and inexpensively as possible, including, if
the Expert deems it to be appropriate, by convening a meeting of the parties;
and

 
(c)
deliver a written report to the parties stating the decision of the Expert with
respect to the dispute.

 
10.5
The unsuccessful party will bear all costs in respect of the Expert's
determination (including without limitation the other party's costs).

 
10.6
If the Expert decides that the invoice issued pursuant to clause 4 of the Deed
is payable, any continuing failure to pay the invoice within 7 days after that
decision is notified to the parties will constitute a material breach of the
Deed.

 
10.7
Upon termination of this Deed all obligations, including all payments,
outstanding at the date of the termination will remain outstanding
notwithstanding such termination. Without limiting the foregoing, on termination
the Licensee must transfer to the Licensor all company name, business name,
trademark and domain name registrations containing the Licensor’s Intellectual
Property Rights to the Licensor and the Licensee hereby appoints the Licensor as
the Licensee’s attorney to sign any transfers of such rights to the Licensor or
its nominee. The Licensee must also deliver to the Licensor a copy of all
documents held by it containing the Licensor’s Intellectual Property Rights as
well as all other information and documentation relating to the Licensee’s
Business. On such date, the Licensor will also acquire from the Licensee all
supplies held by the Licensee relating to the Licensee’s Business which are able
to be utilised by the Licensor and are fit for sale at a price equal to the
lesser of cost and market value.

 
10.8
All provisions of this Deed that expressly or by their nature, survive its
termination will continue after its termination, including, without limitation,
clauses 2.3, 2.4,2.7, 5.4, 7, 9, 11, 12 and 13.

 

 
-15-

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11.
Guarantee and indemnity by Licensor's Guarantor

 
11.1
Guarantee

 
In consideration of the Licensee entering into this Deed, the Licensor's
Guarantor guarantees to the Licensee the due and punctual performance of all the
obligations of the Licensor under this Deed.

11.2
Separate and principal obligations

 
The guarantee and indemnity contained in this clause 11 is a principal
obligation and is not ancillary or collateral to any other right or obligation.
The Licensee need not take any steps against the Licensor or any other person
(other than by serving a demand on the Licensor's Guarantor) before it enforces
this guarantee and indemnity.

11.3
Obligations of guarantor unaffected

 
The obligations of the Licensor's Guarantor under this guarantee and indemnity
will not be affected in any way by any act, omission, matter or thing, which
except for this provision might operate to release it from its obligations under
this clause.

11.4
Indemnity

 
As a separate and alternative obligation, any amount not paid by the Licensor's
Guarantor under this clause on the basis of a guarantee is recoverable from the
Licensor's Guarantor on the basis of an indemnity payable on demand.

--------------------------------------------------------------------------------

12.
Notices

 
12.1
Requirements

 
All notices must be:
 
(a)
in legible writing and in English;

 
(b)
addressed to the recipient at the address or facsimile number set out below or
to any other address or facsimile number that a party may notify to the other:

 
To the Licensor and the Licensor's Guarantor:

Address:
214-218 Botany Road, Alexandria, NSW, 2015
Attention:
Jack Vaisman/Richard Doyle
   
Facsimile no:
(02) 9640 5186

 
-16-

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To the Licensee and the Licensee's Principals:

Address:
Level 2, Hudson House, 131 Macquarie Street, Sydney NSW 2000
   
Attention:
Richard Mare
   
Facsimile no:
(02) 9258 9999

(c)
signed by the party or, where the sender is a company, by an authorised officer
or under the common seal of the sender; and

 
(d)
sent to the recipient by hand, prepaid post (airmail if to or from a place
outside Australia) or facsimile.

 
12.2
Receipt

 
Without limiting any other means by which a party may be able to prove that a
notice has been received by the other party, a notice will be considered to have
been received:
 
(a)
if sent by hand, when left at the address of the recipient;

 
(b)
if sent by pre-paid post, 3 days (if posted within Australia to an address in
Australia) or 10 days (if posted from one country to another) after the date of
posting; or

 
(c)
if sent by facsimile, on receipt by the sender of an acknowledgment or
transmission report generated by the sender's machine indicating that the whole
facsimile was sent to the recipient's facsimile number;

 
but if a notice is served by hand, or is received by the recipient's facsimile,
on a day that is not a Business Day, or after 5:00pm (recipient's local time) on
a Business Day, the notice will be considered to have been received by the
recipient at 9.00 am on the next Business Day.

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13.
General provisions

 
13.1
The Parties must do all acts and execute and deliver all other documents
required to give full effect to this Deed.

 
13.2
This Deed may be amended only by a further agreement executed by all parties.

 
13.3
This Deed and any documents referred to in this Deed or executed in connection
with this Deed are the entire agreement of the parties about the subject matter
of this Deed and supersede all other representations, negotiations,
arrangements, understandings or agreements and all other communications. No
party has entered into this Deed relying on any representations made by or on
behalf of the other, other than those expressly made in this Deed.

 

 
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13.4
Each party must, at its own expense, whenever reasonably requested by the
other party, promptly do or arrange for others to do, everything reasonably
necessary or desirable, including without limitation executing any other
documentation or agreement, to give full effect to this Deed and the
transactions contemplated by this Deed.

 
13.5
If a provision of this Deed is invalid or unenforceable in a jurisdiction:

 

(a)
it is to be read down or severed in that jurisdiction to the extent of the
invalidity or unenforceability; and

 

(b)
that fact does not affect the validity or enforceability of:

 

 
(i)
that provision in another jurisdiction; or

 

 
(ii)
the remaining provisions.

 
13.6
This Deed may be signed in counterparts and all counterparts taken together
constitute one document.

 
13.7
This Deed is governed by the laws of New South Wales.

 
13.8
Each party irrevocably and unconditionally:

 
(a)
submits to the non-exclusive jurisdiction of the courts of New South Wales; and

 
(b)
waives, without limitation, any claim or objection based on absence of
jurisdiction or inconvenient forum.

 
13.9
A waiver of a provision of or of a right under this Deed is binding on the party
granting the waiver only if it is given in writing and is signed by the party or
an authorised officer of the party granting the waiver.

 
13.10
A waiver is effective only in the specific instance and for the specific purpose
for which it is given.

 
13.11
A single or partial exercise of a right by a party does not preclude another
exercise or attempted exercise of that right or the exercise of another right.

 
13.12
Failure by a party to exercise or delay in exercising a right does not prevent
its exercise or operate as a waiver.

 

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 14.
Assignment

 
14.1
Subject to clause 14.3, this licence is personal to the Licensee and may not be
assigned by it without the prior written consent of the Licensor (which may be
withheld in the Licensor's absolute discretion). A change in the control of the
Licensee which involves a change in the board or shareholding of 50% or more in
aggregate will be deemed an assignment for the purposes of this Deed.

 
14.2
The Licensor may assign its rights under this Deed (but not its obligations) by
written notice to the Licensee.

 

 
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14.3
The Licensee may assign its rights under this Deed (but not its obligations) to
a party which, in the reasonable opinion of the Licensor, has the financial
capacity, expertise and experience to carry on the Licensee’s Business subject
to the following conditions:

 

 
(a)
the Licensee must not be in breach of this Deed at the date it requests such
assignment (and must not subsequently breach this Deed before the date such
assignment is proposed to take effect);

 

 
(b)
the Licensee and its proposed assignee must enter into an assignment deed in a
form reasonably required by the Licensor to give effect to such assignment
pursuant to which the assignee must agree to be responsible for all obligations
of the Licensee under this Deed, which Deed will be prepared at the reasonable
cost of the Licensee;

 

 
(c)
the proposed assignee must not be a party which competes with the Licensor in
relation to its business and must not be associated with Mr Graham Meehan, Mr
Young Song or Mr Mark Ryan;

 

 
(d)
the Licensee must pay the Licensor a transfer fee equal to 10% of the Upfront
Licence Fee (ie currently US$100,000) as a pre-condition to such assignment; and

 

 
(e)
the Licensee must provide the Licensor with all information which it has
available to it in relation to the proposed assignee which must include
information regarding the financial capacity, expertise and experience of the
proposed assignee.

 

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15.
Option for additional Territories and right of first refusal

 
15.1
The Licensee has the right to extend the Territory to the following countries
within the first year of the initial Term of this licence (in respect of which
time will be of the essence) by paying the following upfront fees to the
Licensor:

 

 
(a)
France and Monaco - 1,000,000 pound sterling;

 

 
(b)
Germany - 1,000,000 pound sterling;

 

 
(c)
The Netherlands, Belgium and Luxembourg - 1,000,000 pound sterling;

 

 
(d)
Spain, Andorra and Gibralter - 1,000,000 pound sterling; and

 

 
(e)
Italy - 1,000,000 pound sterling.

 
15.2
The Licensee may exercise its option under clause 15.1 in respect of any or all
of the territories referred to in that clause. To exercise its option the
Licensee must send written notice executed by it and each of the Licensee
Principals together with a bank cheque in favour of the Licensor for the
relevant upfront licence fee.

 

 
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15.3
If the Licensee exercises an option under clause 15.1 the minimum Royalty for
each of the relevant territories referred to in that clause will be the minimum
Royalty for the UK for the corresponding time set out in Schedule 1 and schedule
1 will be deemed to have been amended accordingly. In addition, each of the
provisions in this Deed which relate to a territorial area will be deemed to
have been amended to incorporate that territory.

 
15.4
In addition to its rights under clause 15.1, the Licensee will have a right of
first refusal during the Term to extend its licence to other countries in
Western Europe. To give effect to this right, if the Licensor proposes to
licence another area in Western Europe to a third party the Licensor agrees that
it will provide the Licensee with the core commercial terms on which it is
prepared to grant such a licence. This notice will constitute an offer from the
Licensor to the Licensee which offer will remain open for 45 days from receipt
by the Licensee and which offer may be accepted by the Licensee and the
Licensee’s Principals giving written notice to the Licensor and paying the
upfront licence fee referred to in the commercial terms to the Licensor. If
exercised, any such right will be on an exclusive basis. For the avoidance of
doubt, nothing in this clause restricts or prohibits the Licensor or a
subsidiary of the Licensor from opening operations in Western Europe (excluding
the Territory) without complying with this clause prior to the Licensee
exercising a right under this clause in relation to the relevant part of Western
Europe (in which case the right in relation to that part of Western Europe will
lapse) and nothing in this clause requires the Licensor to make any such offer
in relation to a geographical area outside Western Europe. For the avoidance of
doubt, if the Licensee exercises their right in relation to part of Western
Europe, their right will be exclusive. If they do not, the Licensor may operate
without restriction in that part of Western Europe. For the purposes of this
Deed Western Europe means Portugal, Spain, Andorra, France, Italy, the
Netherlands, Belgium, Luxembourg, Germany, Switzerland, Lichtenstein, Italy,
Austria, Monaco and Gibralter.

 
15.5
For the avoidance of doubt, clause 5 applies to any payment made under this
clause 15.

 

--------------------------------------------------------------------------------

 16.
Option to renew

 
16.1
The Licensee has the right to renew this Licence for 2 further periods of 5
years each which options may be exercised in each case by giving the Licensor
written notice executed by the Licensee and each of the Licensee’s Principals
together with a bank cheque in favour of the Licensor for the Upfront Licence
Fee (ie if no option has been exercised under clause 15.1, this fee will be US$1
million and if options have been exercised the fee will be US$1 million plus the
aggregate of the upfront licence fees for the territories in clause 15.1 for
which options have been exercised).

 
16.2
The options referred to in clause 16.1 may only be exercised by a date which is
not less than 6 months prior to the expiry of the then current term in respect
of which time will be of the essence.

 

 
-20-

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16.3
If the option is exercised, the terms of the licence will be identical to the
current terms with the exception that the option in clause 15.1 will be deleted
and that on exercise of the first option the number of options under clause 16.1
will be reduced to 1 and on exercise of the second option this clause 16 will be
deleted in its entirety.

 
16.4
For the avoidance of doubt, clause 5 applies to any payment made under this
clause 16 and the Licensor will be bound to proceed with a renewal if it is
exercised in accordance with this clause.

 
Executed as a deed
 

 

 

Signed, Sealed and Delivered by
)
 
Worldwide PE Patent Holdco Pty Limited
)
)
 
by its sole director and secretary:
)
                 
 
   
Signature of sole director/secretary
               
 
   
Name of sole director/secretary (please print)

Signed, Sealed and Delivered by
)
 
AMI Australia Holdings Pty Limited
)
 
by its sole director and secretary:
)
                 
 
   
Signature of sole director/secretary
               
 
   
Name of sole director/secretary (please print)

 
-21-

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Signed, Sealed and Delivered by
)
 
AMI Group Limited
)
 
by a director and secretary/director:
)
                 
 
Signature of secretary/director
 
Signature of director
               
 
Name of secretary/director (please print)
 
Name of director (please print)

Signed, Sealed and Delivered by
)
 
Zascha Knochell
)
 
in the presence of:
)
                 
 
Signature of witness
 
Signature of Zascha Knochell
                 
Name of witness (please print)
   

Signed, Sealed and Delivered by
)
 
Drew Shardlow
)
 
in the presence of:
)
                 
 
Signature of witness
 
Signature of Drew Shardlow
                 
Name of witness (please print)
   

 
-22-

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Signed, Sealed and Delivered by
)
 
Richard Mare
)
 
in the presence of:
)
                 
 
Signature of witness
 
Signature of Richard Mare
                 
Name of witness (please print)
   

Signed, Sealed and Delivered by
)
 
David McDonald
)
 
in the presence of:
)
                 
 
Signature of witness
 
Signature of David McDonald
                 
Name of witness (please print)
   

 
-23-

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Schedule 1

Minimum Royalties

Initial Term:

Year 1 - nil
Year 2 - 100,000 pounds
Year 3 - 150,000 pounds
Year 4 - 200,000 pounds
Year 5 - 250,000 pounds

First Option Period:

250,000 pounds per annum

Second Option Period:

350,000 pounds per annum

These minimum amounts apply to the UK and are to be amended in accordance with
clause 15 in the event an option to extend the Territory is exercised under that
clause.

 
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