Exhibit 10.3

 

INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT

 

BETWEEN

 

DAVID HENRY SMALL, Ph.D. of 35 Munro Avenue, Ashburton, Victoria, 3147,
Australia (“David”)

 

MARIE-ISABEL AGUILAR, Ph.D of Lot 21, Glynns Road, Warrandyte, Victoria, 3113
Australia (“Marie-Isabel”)

 

SUPUNDI SUBASINGHE, of 32 Grant Avenue, Endeavour Hills, Victoria, 3802,
Australia (“Supundi”)

 

(collectively “the Assignors”)

 

AND

 

AXONYX INC. of 825 Third Avenue, 40th Floor, New York, NY, 10022, USA (“the
Assignee”)

 

RECITALS:

 

A.                                   The Assignors are the applicants named in
patent application numbers PCT/AU PS3064 and 60/392,761 (U.S. Provisional
Application), both entitled “Assay Method”.  The Assignors have agreed to assign
the patent applications to the Assignee in return for the possibility of payment
of royalties arising from commercial exploitation of products resulting from the
patent applications.

 

B.                                     The parties wish to record the terms and
conditions of their agreement in this Agreement.

 

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The parties hereby agree as follows.

 

1.     DEFINITIONS

 

“Assignee” means Axonyx Inc., a United States Corporation with offices at 825
Third Avenue, 40th Floor, New York N.Y. 10022 USA.

 

“Confidential Information” means all business, scientific, technical, financial
and other information belonging to a party which is disclosed to or accessed by
one party or its respective personnel hereunder, which is by its nature
confidential or otherwise designated as confidential by the disclosing party. 
Confidential Information shall include but not be limited to inventions, trade
secrets, know-how, data, specifications, protocols, diagrams, sales and sales
forecasts, marketing and marketing forecasts, pricing, cost information,
supplier information, production data and schedules, technical processes,
formulae, methodologies, plans and reports, information relating to the
Intellectual Property, the research and development plans, experiments, results,
the existence, structure of function of compounds, therapeutic leads, candidates
and products, clinical and preclinical data, regulatory, personnel, customer
information and lists, and other financial, technical and business information
and plans, whether in oral, written, graphic or electronic form and whether in
existence as of the Effective Date or developed or acquired in the future.

 

“Effective Date” of this Agreement is September 1, 2002.

 

“First Commercial Sale” shall mean, with respect to a Product, the first sale by
Assignee, its affiliates, or its sublicensees for end use or consumption of such
Product in a country after all required approvals, including without limitation
Health Registrations, have been granted by the governing regulatory authority of
such country.

 

“Health Registrations” shall mean the technical, medical and scientific
licenses; registration, authorizations and/or approvals of a Product (including
any prerequisite manufacturing approvals or authorizations related thereto) that
are required or deemed necessary by any national, supra-national (e.g., the
European Commission or the Council of the European Union), regional, state or
local regulatory agency, department, bureau or other governmental entity, and
any pricing, third party reimbursement approvals and labeling approvals required
or deemed necessary by such agencies, departments, bureaus or entities for the
manufacture, distribution, use or sale of such Product.

 

“Intellectual Property” means industrial and Intellectual Property whether
protected at common law or under statute and includes (without limitation) all
inventions (both patentable and unpatentable), patents, designs, copyrights,
circuit layouts, plant variety rights, trade marks, trade secrets, know-how and
all other Confidential Information.

 

“Inventors Patents” means the patent applications identified by the numbers
PCT/AU PS3064 and 60/392,761 (U.S. Provisional Application), both entitled
“Assay Method” which are attached hereto as Appendix A and all continuations,
continuations-in-part, divisions, reissues, reexaminations, extensions or other
government actions which extend the subject matter of such patent or
application, reissues, reexaminations, extensions or

 

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other government actions, and any corresponding foreign patent applications, and
any patents, patents of addition, or other equivalent foreign patent rights
issuing, granted or registered based on or resulting from the patents and patent
applications.

 

“Net Sales” shall mean the amounts received by Assignee, an affiliate of the
Assignee, or its sublicensees for all Sales of Product to unaffiliated third
parties, less the reasonable and customary deductions from such gross amounts
including:

 

(A)                                  TRADE, CASH AND QUANTITY DISCOUNTS,
REBATES, REIMBURSEMENTS, ALLOWANCES AND CREDITS;

 

(B)                                 CREDITS OR ALLOWANCES ACTUALLY GRANTED FOR
DAMAGED GOODS, RETURNS OR REJECTIONS OF A PRODUCT;

 

(C)                                  SALES TAXES LEVIED ON THE SALE OR USE OF A
PRODUCT;

 

(D)                                 FREIGHT, POSTAGE, SHIPPING, CUSTOMS DUTIES
AND INSURANCE CHARGES DIRECTLY RELATED TO THE SALE OF A PRODUCT;

 

(E)                                  COSTS AND EXPENSES INCURRED BY ASSIGNEE IN
PROVIDING PRODUCT-RELATED SERVICES TO THIRD PARTIES; AND

 

(F)                                    COMMISSIONS PAID TO THIRD PARTIES OTHER
THAN SALES PERSONNEL AND SALE REPRESENTATIVES OR SALES AGENTS.

 

For purposes of calculating Net Sales under this Agreement, all sales of any
Product hereunder, whether made for cash or otherwise, shall be deemed to be
made for cash, at the applicable fair market value of such Product. Net Sales
shall also mean the transfer or assignment by the Assignee of the right, title
and interest in and to all industrial and Intellectual Property rights related
to the Inventors’ Patents (other than as excluded by the definition of “Sale,
Sell or Sold”, below).

 

“Product” means any good or product (or any part of a good or product) which is
covered by a Valid Claim in the Inventors Patents.

 

“Sale, Sell or Sold” means, provided that Assignee receives consideration
specifically for Product, or for the transfer or assignment of the Inventors
Patents: selling, licensing, hiring out, assigning or otherwise supplying or
disposing of or allowing the use by third parties of or any use by Assignee on
behalf of third parties who hired Assignee, or providing to third parties any
Products or right, title and interest in and to all industrial and Intellectual
Property rights relating to Inventors Patents for consideration. For the
purposes of clarity, the following shall not be a “Sale” pursuant to this
Agreement (regardless of whether Assignee receives consideration), and no
royalty obligation shall arise as a result of such transactions:  (i) any
assignment of this Agreement by Assignee pursuant to Section 10.4; (ii) any
transfer of Intellectual Property by Assignee in connection with a merger, sale,
or other change in corporate structure of Assignee, its successor or assigns;
(iii) financings or investments in Assignee, its successors or assigns;

 

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or (iv) any other consideration received by Assignee which is not solely related
to Product.

 

“Valid Claim” means a claim of an issued and unexpired patent or patent
application included within the scope of protection afforded by the Inventors
Patents that has not lapsed, been revoked or abandoned or held unenforceable or
invalid by a court or other appropriate body of competent jurisdiction, and that
has not been disclaimed, denied or admitted to be invalid or unenforceable
through reissue, re-examination, disclaimer or otherwise.

 

2.     ASSIGNMENT

 

2.1                                 ASSIGNMENT.  THE ASSIGNORS HEREBY ASSIGN,
TRANSFER AND CONVEY TO ASSIGNEE, AND ASSIGNEE ACCEPTS, ALL OF ASSIGNORS’ RIGHT,
TITLE AND INTEREST THROUGHOUT THE WORLD IN AND TO ALL INDUSTRIAL AND
INTELLECTUAL PROPERTY RIGHTS RELATING TO THE INVENTORS PATENT; INCLUDING,
WITHOUT LIMITATION, ALL CAUSES OF ACTION, CLAIMS, DEMANDS PRESENTLY OR HEREAFTER
ACCRUING WITH RESPECT TO THE SAME, INCLUDING THE RIGHT TO SUE OR BRING OTHER
ACTIONS FOR PAST, PRESENT AND FUTURE INFRINGEMENT THEREOF ANYWHERE IN THE
WORLD.  ASSIGNOR FURTHER ASSIGNS ALL RIGHTS, AND EMPOWERS ASSIGNEE, ITS
SUCCESSORS, ASSIGNS AND NOMINEES, TO MAKE APPLICATIONS FOR PATENT, TRADEMARK,
COPYRIGHT OR OTHER INTELLECTUAL PROPERTY REGISTRATION OR PROTECTION ANYWHERE IN
THE WORLD, TO CLAIM AND RECEIVE THE BENEFIT OF ANY APPLICABLE RIGHTS OF PRIORITY
IN CONNECTION WITH SUCH APPLICATIONS, TO PROSECUTE SUCH APPLICATIONS TO ISSUE,
AND TO HAVE ANY AND ALL REGISTRATIONS ISSUED IN THE NAME OF ASSIGNEE.

 

2.2                                 FURTHER ASSURANCES.  ASSIGNORS FURTHER AGREE
THAT ASSIGNORS WILL: (I) COOPERATE WITH ASSIGNEE IN THE FILING AND PROSECUTION
OF ANY AND ALL PATENT, TRADEMARK, COPYRIGHT OR OTHER INTELLECTUAL PROPERTY
REGISTRATIONS OR APPLICATIONS; (II) EXECUTE, VERIFY, ACKNOWLEDGE AND DELIVER ALL
SUCH FURTHER PAPERS, INCLUDING APPLICATIONS AND INSTRUMENTS OF TRANSFER; AND
(III) PERFORM SUCH OTHER ACTS AS ASSIGNEE LAWFULLY MAY REQUEST, TO FACILITATE
ASSIGNEE’S RIGHT TO OBTAIN, PROTECT, MAINTAIN, DEFEND OR ENFORCE ANY OF THE
RIGHTS GRANTED HEREUNDER.  IN THE EVENT THAT ASSIGNEE IS UNABLE FOR ANY REASON
WHATSOEVER TO SECURE ANY OF THE ASSIGNORS’ SIGNATURE TO ANY DOCUMENT WHEN SO
REQUIRED TO EFFECTUATE FULLY THIS ASSIGNMENT, ASSIGNORS HEREBY IRREVOCABLY
DESIGNATE AND APPOINT ASSIGNEE AND ASSIGNEE’S DULY AUTHORIZED OFFICERS AND
AGENTS, AS ASSIGNORS’ AGENTS AND ATTORNEYS-IN-FACT TO ACT FOR AND ON ITS BEHALF
AND INSTEAD OF IT, TO EXECUTE AND FILE ANY SUCH DOCUMENT AND TO DO ALL OTHER
LAWFULLY PERMITTED ACTS TO FURTHER THE PURPOSES OF THE FOREGOING, WITH THE SAME
LEGAL FORCE AND EFFECT AS IF EXECUTED BY ASSIGNORS.

 

3.     OBLIGATIONS WITH RESPECT TO ASSIGNORS.

 

3.1                                 EACH OF MARIE-ISABEL AND SUPUNDI AGREE THAT,
AS AND WHEN DESIRED BY AXONYX, DAVID SHALL ACT AS THEIR AGENT IN ALL ASPECTS
WITH RESPECT TO THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO WITH RESPECT TO THE
REVENUE SHARE AND INVENTORS PATENTS.  TO THAT END, EACH OF MARIE-ISABEL AND
SUPUNDI HAVE EXECUTED A POWER OF ATTORNEY APPOINTING DAVID TO RECEIVE ALL
COMMUNICATIONS ON HER BEHALF, TO EXECUTE ALL DOCUMENTS ON HER BEHALF, TO

 

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RECEIVE HER SHARE OF THE ROYALTY OR OTHER FEES PAYABLE, TO DO ALL OTHER THINGS
REASONABLY REQUIRED TO FULFILL HER OBLIGATIONS AND TO GENERALLY ACT AS HER AGENT
IN DEALING WITH ASSIGNEE UNDER THIS AGREEMENT.  THOSE POWERS OF ATTORNEY ARE
ANNEXED HERETO AS APPENDIX B.

 

3.2                                 ALL NOTICES, PAYMENTS AND OTHER INTERACTIONS
BETWEEN ASSIGNEE, ON ONE HAND, AND THE ASSIGNORS, ON THE OTHER HAND, SHALL BE
MADE THROUGH DAVID ON BEHALF OF ALL ASSIGNORS. EACH OF MARIE-ISABEL AND SUPUNDI
HEREBY IRREVOCABLY APPOINT DAVID AS THEIR AGENT FOR SUCH AFFAIRS.  EACH OF
MARIE-ISABEL AND SUPUNDI HEREBY AGREE THAT ASSIGNEE SHALL HAVE NO OBLIGATIONS OR
LIABILITY WHATSOEVER TO MARIE-ISABEL AND SUPUNDI FOR ROYALTIES ON NET SALES, THE
GIVING OF NOTICES UNDER THIS AGREEMENT OR ANY OTHER RESPONSIBILITY ON THE PART
OF ASSIGNEE HEREUNDER.  NOTWITHSTANDING ANYTHING TO THE CONTRARY ELSEWHERE IN
THIS AGREEMENT, ASSIGNEE SHALL IN ALL EVENTS HAVE THE RIGHT TO ACT ON
INSTRUCTIONS OR OTHER COMMUNICATIONS FROM DAVID, WITHOUT ANY OBLIGATION TO
QUESTION, CHALLENGE, INVESTIGATE OR CONFIRM THAT SUCH INSTRUCTIONS OR OTHER
COMMUNICATIONS ACCURATELY REFLECT THE INTENTIONS OF MARIE-ISABEL OR SUPUNDI.

 

3.3                                 MARIE-ISABEL AND SUPUNDI ACKNOWLEDGE THAT
THE POWERS OF ATTORNEY ARE INTENDED TO BE IRREVOCABLE, AND HEREBY AGREE NOT TO
REVOKE SUCH POWER OF ATTORNEY. MARIE-ISABEL AND SUPUNDI FURTHER AGREE THAT, IN
THE EVENT OF A REVOCATION OF ANY OR ALL OF SUCH POWERS OF ATTORNEY IN
CONTRAVENTION OF THIS SECTION, SUCH REVOCATION SHALL NOT TERMINATE OR IMPAIR
ASSIGNEE’S RIGHT TO PROVIDE ALL ASSIGNEE COMMUNICATIONS AND PAYMENTS UNDER THIS
AGREEMENT EXCLUSIVELY TO, AND RECEIVE AND ACT UPON ASSIGNOR INSTRUCTIONS AND
OTHER COMMUNICATIONS EXCLUSIVELY FROM, DAVID. 

 

3.4                                 IN THE EVENT ANY SUCH POWER OF ATTORNEY IS
DEEMED INVALID OR UNENFORCEABLE, THE PARTIES AGREE THAT, NOTWITHSTANDING SUCH
INVALIDITY OR UNENFORCEABILITY OF THE POWER OF ATTORNEY, EACH OF MARIE-ISABEL
AND SUPUNDI HEREBY IRREVOCABLY APPOINT DAVID AS HER AGENT TO RECEIVE ALL
COMMUNICATIONS ON HER BEHALF, TO EXECUTE ALL DOCUMENTS ON HER BEHALF, TO RECEIVE
HER SHARE OF THE ROYALTY OR OTHER FEES PAYABLE, TO DO ALL OTHER THINGS
REASONABLY REQUIRED TO FULFILL HER OBLIGATIONS AND TO GENERALLY ACT AS HER AGENT
IN DEALING WITH ASSIGNEE UNDER THIS AGREEMENT.

 

3.5                                 DAVID HEREBY REPRESENTS, WARRANTS AND AGREES
THAT, AS ATTORNEY-IN-FACT AND AGENT FOR MARIE-ISABEL AND SUPUNDI HEREUNDER, HE
SHALL (I) ACT PROMPTLY AND IN GOOD FAITH IN ORDER TO DISCHARGE ALL OF THE
ASSIGNORS’ OBLIGATIONS HEREUNDER; (II) PROMPTLY FORWARD TO MARIE-ISABEL AND
SUPUNDI ALL COMMUNICATIONS RECEIVED ON HER BEHALF, (III) PROMPTLY EXECUTE ALL
NECESSARY DOCUMENTS ON HER BEHALF, (IV) RECEIVE AND FORWARD TO HER HER SHARE OF
THE ROYALTY OR OTHER FEES PAYABLE; AND (V) DO ALL OTHER THINGS NECESSARY IN
ORDER TO FULFILL ALL OF THE ASSIGNORS’ OBLIGATIONS HEREUNDER.

 

3.6                                 EACH OF THE ASSIGNORS SHALL NOTIFY ASSIGNEE
AND EACH OTHER PROMPTLY UPON A CHANGE OF ADDRESS, AND MARIE-ISABEL AND SUPUNDI
SHALL NOTIFY DAVID, ASSIGNOR AND EACH OTHER PROMPTLY UPON A CHANGE OF ADDRESS.

 

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4.     REVENUE SHARE.  SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT,
AND AFTER REPAYMENT OF THE RECOUPMENT (AS DEFINED IN SECTION 4.10, BELOW),
ASSIGNEE SHALL PAY, OR CAUSE TO BE PAID, TO DAVID (ON BEHALF OF ALL OF THE
ASSIGNORS) A QUARTER-ANNUAL ROYALTY ON A SHARE OF ITS REVENUES FROM NET SALES OF
PRODUCTS IN AN AMOUNT EQUAL TO THE FOLLOWING:

 

4.1                                 WITH RESPECT TO YEARLY NET SALES OF ALL
PRODUCTS COVERED BY A VALID CLAIM AT OR BELOW TWO MILLION FIVE HUNDRED THOUSAND
U.S. DOLLARS (U.S. $2,500,000.00), THREE PERCENT (3%) OF SUCH NET SALES; AND

 

4.2                                 WITH RESPECT TO YEARLY NET SALES OF ALL
PRODUCTS COVERED BY A VALID CLAIM BETWEEN TWO MILLION FIVE HUNDRED THOUSAND U.S.
DOLLARS (U.S. $2,500,000.00) AND SIX MILLION TWO HUNDRED FIFTY THOUSAND U.S.
DOLLARS (U.S. $6,250,000.00), TWO PERCENT (2%) OF SUCH NET SALES; AND,

 

4.3                                 WITH RESPECT TO YEARLY NET SALES OF ALL
PRODUCTS COVERED BY A VALID CLAIM ABOVE SIX MILLION TWO HUNDRED FIFTY THOUSAND
U.S. DOLLARS (U.S. $6,250,000.00) ONE PERCENT (1%) OF SUCH NET SALES.

 

For calculation of the percentage of revenue share due in any Royalty Quarter,
(as defined below) (e.g., 3%, 2%, or 1%), the Net Sales for such Royalty Quarter
shall be deemed to be the aggregate Net Sales for such Royalty Quarter plus all
preceding Royalty Quarters in such Year; however, the royalty due shall be
calculated solely on the Net Sales actually accrued in such Royalty Quarter. 

 

4.4                                 NO DOUBLE PAYMENT.  ROYALTIES SHALL BE
PAYABLE ONLY ONCE ON ANY SALE OF PRODUCT UNDER THIS AGREEMENT.  THE PARTIES
ACKNOWLEDGE THAT DAVID AND ASSIGNEE HAVE AS OF THE EFFECTIVE DATE ENTERED INTO A
RESEARCH AGREEMENT WHICH ALSO PROVIDES FOR NET SALES TO BE PAID BY ASSIGNEE TO
DAVID IN THE EVENT OF SALES OF PRODUCT (AS “PRODUCT” IS DEFINED IN THE RESEARCH
AGREEMENT).  THE PARTIES FURTHER ACKNOWLEDGE THAT A PRODUCT WHICH IS SOLD BY
ASSIGNEE MAY BE CONSTRUED TO BE A “PRODUCT” AS DEFINED IN THIS AGREEMENT AND
ALSO A “PRODUCT” AS DEFINED IN THE RESEARCH AGREEMENT, AND HEREBY AGREE THAT
ASSIGNEE SHALL BE OBLIGATED TO PAY TO DAVID ONLY ONE ROYALTY ON NET SALES OF
SUCH PRODUCT, WHICH PAYMENT SHALL BE MADE UNDER THE THIS AGREEMENT. 
ACCORDINGLY, THE PARTIES HEREBY AGREE THAT IN THE EVENT OF A CONFLICT OR OVERLAP
BETWEEN THE NET SALES OR ROYALTY PROVISIONS UNDER THIS AGREEMENT AND UNDER THE
RESEARCH AGREEMENT, THE TERMS OF THIS AGREEMENT SHALL CONTROL, AND ASSIGNEE
SHALL BE OBLIGATED TO PAY ROYALTIES ON A PRODUCT ONLY ONCE UNDER THIS AGREEMENT
AND NOT PURSUANT TO THE RESEARCH AGREEMENT.

 

4.5                                 NEGOTIATION IN THE EVENT OF COMPETING
PRODUCTS.  IN THE EVENT THAT A PRODUCT WITH A MECHANISM OF ACTION SUBSTANTIALLY
EQUIVALENT TO THAT OF ANY PRODUCT, WHICH HAS AN APPROVED HEALTH REGISTRATION IN
A GIVEN COUNTRY FOR AN INDICATION FOR WHICH SUCH PRODUCT ALSO HAS AN APPROVED
HEALTH REGISTRATION IN SUCH COUNTRY AND WHICH HAS A MARKET SHARE OF 25% OR MORE
IN SUCH COUNTRY AS MEASURED BY SALES OR OTHER SIMILAR INFORMATION FOR SUCH
COUNTRY, THE ASSIGNORS AGREE TO DISCUSS IN GOOD FAITH WITH THE ASSIGNEE THE
RE-NEGOTIATION OF THE REVENUE SHARE PROVIDED IN THIS SECTION 4.

 

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4.6                                 REVENUE SHARE PAYMENTS.  PAYMENTS PURSUANT
TO THIS SECTION 4 SHALL BE RECEIVED BY DAVID ON BEHALF OF ALL OF THE ASSIGNORS
AND SHALL BE PAID IN UNITED STATES DOLLARS IN NEW YORK, NEW YORK OR AT SUCH
OTHER PLACE AS DAVID MAY REASONABLY DESIGNATE CONSISTENT WITH THE LAWS AND
REGULATIONS CONTROLLING IN ANY FOREIGN COUNTRY.  ANY WITHHOLDING TAXES WHICH
ASSIGNEE, ITS AFFILIATE OR ANY SUBLICENSEE SHALL BE REQUIRED BY LAW TO WITHHOLD
ON REMITTANCE OF THE REVENUE SHARE PAYMENTS PURSUANT TO SECTION 4 HEREOF SHALL
BE DEDUCTED FROM SUCH REVENUE SHARE PAYMENT TO THE ASSIGNORS.  IF ANY CURRENCY
CONVERSION SHALL BE REQUIRED IN CONNECTION WITH THE PAYMENT OF ROYALTIES
HEREUNDER, SUCH CONVERSION SHALL BE MADE BY USING THE EXCHANGE RATE PREVAILING
AT CITIBANK, N.A. (OR SUCH APPLICABLE SUCCESSOR ENTITY) IN NEW YORK, NEW YORK ON
THE LAST BUSINESS DAY OF THE CALENDAR QUARTER TO WHICH SUCH REVENUE SHARE
PAYMENTS RELATE.

 

4.7                                 TIMING OF PAYMENTS. PAYMENTS PAYABLE TO
ASSIGNORS PURSUANT TO THIS SECTION 4 SHALL COMMENCE AFTER THE RECOUPMENT
(DEFINED BELOW IN SECTION 4.10) IS REPAID AND SHALL BE PAID QUARTER-ANNUALLY
(EACH, A “ROYALTY QUARTER”) IN ARREARS WITHOUT DEDUCTION, DEMAND, SET-OFF
COUNTERCLAIM AND ANY BANK OR GOVERNMENT CHARGES OR DUTIES OTHER THAN THE
WITHHOLDING TAX, COMMENCING ON THE THREE MONTH ANNIVERSARY OF THE DATE ON WHICH
ASSIGNEE FIRST RECEIVES INCOME FROM THE SALE OF PRODUCT. EACH FOR ROYALTY
QUARTERS SHALL BE DESIGNATED A “YEAR” FOR THE PURPOSES OF THIS SECTION 4. SUCH
PAYMENT WILL BE MADE BY CHEQUE OR SUCH OTHER MEANS AS NOTIFIED BY THE DAVID TO
THE ASSIGNEE FROM TIME TO TIME. 

 

4.8                                 TERM OF THE REVENUE SHARE OBLIGATION. 
ASSIGNEE’S OBLIGATION TO MAKE PAYMENTS UNDER SECTION 4 OF THIS AGREEMENT WITH
RESPECT TO ANY COUNTRY SHALL EXTEND FROM THE DATE OF THE FIRST COMMERCIAL SALE
OF A PRODUCT IN SUCH COUNTRY TO THE DATE OF EXPIRATION OR INVALIDATION OF ALL OF
THE VALID CLAIMS OF THE PATENT(S) UNDER WHICH SUCH PRODUCT IS COVERED.

 

4.9                                 ANY PAYMENTS WHICH ARE NOT MADE WITHIN SIXTY
(60) DAYS’ OF THEIR BEING DUE SHALL BE SUBJECT TO A 1% PENALTY ON THE AMOUNT
DUE, OR, IF LOWER, THE MAXIMUM INTEREST RATE ALLOWED BY LAW.

 

4.10                           RECOUPMENT.  ASSIGNORS ACKNOWLEDGE THAT AXONYX
HAS PAID CERTAIN LEGAL FEES OF THE LAW FIRM OF GRIFFITH HACK ON BEHALF OF
ASSIGNORS.  IN CONSIDERATION FOR AXONYX’S PAYMENT OF SUCH LEGAL FEES, THE
PARTIES HEREBY AGREE THAT AXONYX SHALL BE ENTITLED TO RECOUP AN AMOUNT EQUAL TO
SUCH LEGAL FEES OUT OF THE ROYALTIES WHICH WOULD OTHERWISE BE PAYABLE TO
ASSIGNORS HEREUNDER (THE “RECOUPMENT”).  NO ROYALTIES SHALL BE PAYABLE UNTIL THE
RECOUPMENT HAS BEEN REPAID.

 

4.11                           THE ASSIGNEE MUST KEEP TRUE AND ACCURATE RECORDS
OF ALL MATTERS CONNECTED WITH THE SALES OF THE PRODUCTS AND MUST ALSO KEEP
PROPER BOOKS OF ACCOUNT RELATING TO THE CALCULATION OF PAYMENTS TO THE ASSIGNORS
UNDER THIS AGREEMENT.  ON THE ASSIGNORS’ REASONABLE WRITTEN REQUEST (WHICH SHALL
BE NOT MORE THAN ONCE PER YEAR AND UPON AT LEAST THIRTY (30) DAYS’ WRITTEN
NOTICE), THE ASSIGNEE MUST PRODUCE THESE RECORDS AND BOOKS OF ACCOUNT, AND MUST
PERMIT THOSE RECORDS AND BOOKS TO BE EXAMINED BY A CERTIFIED PUBLIC ACCOUNTANT
ON BEHALF OF THE ASSIGNORS.  THE

 

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ASSIGNORS MAY CONDUCT SUCH AN AUDIT AT THEIR OWN COST, UNLESS THE EXAMINATION
IDENTIFIES AN UNDERPAYMENT TO ASSIGNORS EQUAL TO OR GREATER THAN 10% IN THE
AMOUNTS IDENTIFIED AS PAYABLE TO THE ASSIGNORS, IN WHICH CASE THE COSTS ARE TO
BE PAID BY THE ASSIGNEE.

 

4.12                           THE ASSIGNEE SHALL USE REASONABLE COMMERCIAL
EFFORTS TO EXPLOIT THE INVENTORS PATENT.  THE ASSIGNEE SHALL PROVIDE TO THE
ASSIGNORS SUCH INFORMATION AS THE ASSIGNORS MAY REASONABLY REQUEST CONCERNING
THE ASSIGNEE’S PLANS FOR AND EFFORTS IN EXPLOITING THE INVENTORS PATENT AND
SELLING THE PRODUCTS.  THE ASSIGNEE MUST NOT ENGAGE IN ANY ACTIVITY THAT
CONFLICTS WITH ITS OBLIGATION UNDER THIS CLAUSE.

 

4.13                           THE ASSIGNEE HEREBY GRANTS TO THE ASSIGNORS A NON
EXCLUSIVE, PERSONAL, NONSUBLICENSABLE, NONTRANSFERABLE, ROYALTY FREE, WORLDWIDE,
PERPETUAL AND IRREVOCABLE LICENSE TO USE FOR THEIR OWN RESEARCH AND EDUCATIONAL
PURPOSES THE INVENTORS PATENT FOR THE DURATION THAT A VALID CLAIM SUBSISTS IN
THE INVENTORS PATENT.

 

5.     CONFIDENTIAL INFORMATION

 

5.1                                 EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
HEREIN, THE PARTIES AGREE THAT A PARTY RECEIVING CONFIDENTIAL INFORMATION (“THE
RECEIVING PARTY”) FROM ANOTHER PARTY (THE “DISCLOSING PARTY”) SHALL NOT AND
SHALL ENSURE THAT ITS EMPLOYEES, STUDENTS, AGENTS, LICENSEES, SUB-LICENSEES,
CONTRACTORS AND SUB-CONTRACTORS SHALL NOT, EXCEPT AS EXPRESSLY PROVIDED IN THIS
SECTION 5, DISCLOSE TO ANY THIRD PARTY OR USE FOR ANY PURPOSE ANY CONFIDENTIAL
INFORMATION FURNISHED TO IT BY THE DISCLOSING PARTY, EXCEPT TO THE EXTENT THAT
IT CAN BE ESTABLISHED BY THE RECEIVING PARTY BY WRITTEN RECORDS THAT SUCH
INFORMATION:

 

(A)                                  WAS ALREADY KNOWN TO THE RECEIVING PARTY,
OTHER THAN UNDER AN OBLIGATION OF CONFIDENTIALITY, AT THE TIME OF DISCLOSURE;

 

(B)                                 WAS GENERALLY AVAILABLE TO THE PUBLIC OR
OTHERWISE PART OF THE PUBLIC DOMAIN AT THE TIME OF ITS DISCLOSURE TO THE
RECEIVING PARTY;

 

(C)                                  BECAME GENERALLY AVAILABLE TO THE PUBLIC OR
OTHERWISE PART OF THE PUBLIC DOMAIN AFTER ITS DISCLOSURE AND OTHER THAN THROUGH
ANY ACT OR OMISSION OF THE RECEIVING PARTY IN BREACH OF THIS AGREEMENT;

 

(D)                                 WAS LAWFULLY DISCLOSED TO THE RECEIVING
PARTY BY A THIRD PARTY WHO HAD NO OBLIGATION TO KEEP SUCH INFORMATION
CONFIDENTIAL IN FAVOR OF THE DISCLOSING PARTY;

 

(E)                                  WAS INDEPENDENTLY DEVELOPED BY EMPLOYEES OF
THE RECEIVING PARTY HAVING NO KNOWLEDGE OF SUCH CONFIDENTIAL INFORMATION; OR

 

(F)                                    IS REQUIRED TO BE DISCLOSED PURSUANT TO
APPLICABLE LAW, GOVERNMENTAL RULE OR REGULATION OR RULE OR REGULATION OF ANY
SECURITIES EXCHANGE, PROVIDED THE RECEIVING PARTY USES REASONABLE EFFORTS TO
LIMIT DISCLOSURE AND TO OBTAIN CONFIDENTIAL

 

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TREATMENT OR A PROTECTIVE ORDER AND HAS ALLOWED THE DISCLOSING PARTY TO
PARTICIPATE IN SUCH PROCEEDINGS.

 

5.2                                 ANY USE OR DISCLOSURE OF CONFIDENTIAL
INFORMATION BY ANY EMPLOYEES, AGENTS, LICENSEES, SUB-LICENSEES, CONTRACTORS AND
SUB-CONTRACTORS OF THE RECEIVING PARTY IS DEEMED USE OR DISCLOSURE BY THE
RECEIVING PARTY.

 

6.     PATENTS AND INFRINGEMENT

 

6.1                                 GENERAL.  IN CARRYING OUT ITS OBLIGATIONS
UNDER THIS SECTION 6, ASSIGNEE SHALL (I) CONSULT WITH ASSIGNORS OR ASSIGNORS’
NOMINEE WITH RESPECT TO ALL MATERIAL DECISIONS; AND (II) USE GOOD FAITH AND
REASONABLE DISCRETION IN EXERCISING ITS DUTIES HEREUNDER.  NOTWITHSTANDING THE
FOREGOING, ALL DECISIONS WITH RESPECT TO PATENTS AND INFRINGEMENT SHALL BE MADE
BY ASSIGNEE, IN ASSIGNEE’S SOLE DISCRETION.

 

6.2                                 PATENT SUPPORT AND PROTECTION.  ASSIGNEE
MUST PROVIDE FUNDS FOR ALL APPROPRIATE PATENT PROTECTION (IN ASSIGNEE’S SOLE BUT
REASONABLE DISCRETION) AND SUPPORT RELATED EXPENSES, INCLUDING THE COST OF
RETAINING PATENT COUNSEL WITH RESPECT TO THE INVENTORS PATENTS AND THE COST OF
MAKING ALL NECESSARY PATENT FILINGS, SO LONG AS THIS AGREEMENT IS IN EFFECT. 
ASSIGNEE SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO SELECT PRIMARY PATENT
COUNSEL FOR THE INVENTORS PATENTS.

 

6.3                                 FILING, PROSECUTING AND MAINTAINING
PATENTS.  ASSIGNEE SHALL HAVE SOLE RESPONSIBILITY FOR FILING, PROSECUTING AND
MAINTAINING ALL U.S. AND FOREIGN PATENT APPLICATIONS AND PATENTS ISSUING THEREON
FOR ANY INVENTORS PATENTS.  ASSIGNEE MAY PROVIDE ASSIGNORS WITH ALL RELEVANT
DOCUMENTATION (INCLUDING ANY DRAFT APPLICATIONS, OFFICIAL PAPERS FROM ANY PATENT
OFFICE REQUIRING A RESPONSE, AND ANY PROPOSED RESPONSE THERETO) FOR ANY PATENT
APPLICATION OR PATENT CLAIMING INVENTORS PATENTS, AND ASSIGNORS SHALL COOPERATE
AND PROVIDE SUCH ASSISTANCE AS ASSIGNEE REASONABLY REQUESTS IN RELATION TO
FILING, PROSECUTING AND MAINTAINING SUCH PATENT APPLICATIONS AND PATENTS.

 

6.4                                 INFRINGEMENT.  EACH OF ASSIGNEE AND
ASSIGNORS SHALL PROMPTLY PROVIDE WRITTEN NOTICE TO THE OTHER PARTY OF ANY
ALLEGED INFRINGEMENT BY A THIRD PARTY OF THE INVENTORS PATENTS AND PROVIDE SUCH
OTHER PARTY WITH ANY AVAILABLE EVIDENCE OF SUCH INFRINGEMENT.

 

6.5                                 DEFENSE. ASSIGNEE SHALL HAVE THE RIGHT, BUT
NOT THE OBLIGATION, TO PROSECUTE AND/OR DEFEND, AT ITS OWN EXPENSE AND UTILIZING
COUNSEL OF ITS CHOICE, ANY INFRINGEMENT OF, AND/OR CHALLENGE TO, THE INVENTORS
PATENTS.  IN FURTHERANCE OF SUCH RIGHT, ASSIGNORS HEREBY AGREE THAT ASSIGNEE MAY
JOIN ASSIGNORS AS A PARTY IN ANY SUCH SUIT, WITHOUT EXPENSE TO ASSIGNORS.  NO
SETTLEMENT, CONSENT JUDGMENT OR OTHER VOLUNTARY FINAL DISPOSITION OF ANY SUCH
SUIT WHICH WOULD ADVERSELY AFFECT THE RIGHTS OF ASSIGNORS MAY BE ENTERED INTO
WITHOUT THE CONSENT OF ASSIGNORS, WHICH CONSENT SHALL NOT BE UNREASONABLY
WITHHELD. 

 

6.6                                 ALLOCATION OF RECOVERY.  ANY RECOVERY OF
DAMAGES BY ASSIGNEE, IN ANY SUCH SUIT, SHALL BE APPLIED FIRST IN SATISFACTION OF
ANY UNREIMBURSED EXPENSES AND LEGAL FEES

 

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OF ASSIGNEE RELATING TO THE SUIT AND THEN TO ASSIGNORS FOR ANY REVENUE SHARE
CREDITED IN ACCORDANCE WITH SECTION 6.8, BELOW.  THE BALANCE REMAINING FROM ANY
SUCH RECOVERY SHALL BE TREATED AS NET SALES RECEIVED BY ASSIGNEE.

 

6.7                                 DEFENSE.  IN THE EVENT THAT A CLAIM OR SUIT
IS ASSERTED OR BROUGHT AGAINST ASSIGNEE ALLEGING THAT THE MANUFACTURE OR SALE OF
ANY PRODUCT BY ASSIGNEE, AN AFFILIATE OF ASSIGNEE, OR ANY SUBLICENSEE, OR THE
USE OF SUCH LICENSED PRODUCT, INFRINGES THE PROPRIETARY RIGHTS OF A THIRD PARTY,
ASSIGNEE SHALL GIVE WRITTEN NOTICE THEREOF TO ASSIGNORS.  ASSIGNEE MAY, IN ITS
SOLE DISCRETION, MODIFY SUCH LICENSED PRODUCT TO AVOID SUCH INFRINGEMENT AND/OR
MAY SETTLE ON TERMS THAT IT DEEMS ADVISABLE IN ITS SOLE DISCRETION AFTER
CONSULTATION WITH THE ASSIGNORS.  IN ANY CASE, ASSIGNEE SHALL HAVE THE RIGHT,
BUT NOT THE OBLIGATION, TO DEFEND ANY SUCH CLAIM OR SUIT.

 

6.8                                 CREDITS.  ASSIGNEE MAY CREDIT ANY LITIGATION
COSTS INCURRED BY ASSIGNEE IN ANY COUNTRY PURSUANT TO THIS ARTICLE 6 AND ANY
AMOUNTS PAID IN JUDGMENT OR SETTLEMENT OF LITIGATION WITHIN THIS ARTICLE 6
AGAINST REVENUE SHARE PAYMENTS THEREAFTER PAYABLE TO ASSIGNORS PURSUANT TO
SECTION 4 ABOVE FOR SUCH COUNTRY.  IF SUCH AGGREGATE AMOUNTS IN SUCH COUNTRY
EXCEED 50% OF REVENUE SHARE PAYABLE TO ASSIGNORS PURSUANT TO SECTION 4 ABOVE IN
ANY YEAR IN WHICH SUCH COSTS ARE INCURRED, THEN THE AMOUNT OF SUCH COSTS,
EXPENSES AND AMOUNTS PAID IN JUDGMENT OR SETTLEMENT IN EXCESS OF SUCH 50% OF
SUCH REVENUE SHARE PAYABLE SHALL BE CARRIED OVER AND CREDITED AGAINST REVENUE
SHARE PAYMENTS PURSUANT TO SECTION 4 HEREOF IN FUTURE YEARS FOR SUCH COUNTRY.

 

6.9                                 COOPERATION.  IN ANY SUIT TO ENFORCE AND/OR
DEFEND THE INVENTORS PATENTS PURSUANT TO THIS AGREEMENT, ASSIGNORS SHALL, AT THE
REQUEST AND EXPENSE OF ASSIGNEE, COOPERATE IN ALL RESPECTS AND, TO THE EXTENT
POSSIBLE, HAVE ITS EMPLOYEES TESTIFY WHEN REQUESTED AND MAKE AVAILABLE RELEVANT
RECORDS, PAPERS, INFORMATION, SAMPLES, SPECIMENS, AND THE LIKE.

 

7.             COMPLIANCE WITH REQUIREMENTS OF EMPLOYER ACADEMIC INSTITUTIONS

 

7.1                                 THE PARTIES ACKNOWLEDGE THAT DAVID IS AN
EMPLOYEE OF THE UNIVERSITY OF MELBOURNE AND, AS SUCH, IS BOUND BY CERTAIN
OBLIGATIONS TO INCORPORATE CERTAIN PROVISIONS INTO THIS AGREEMENT, AS SET FORTH
IN THIS SECTION 7 AND SECTION 9, BELOW.

 

7.2                                 THE ASSIGNORS REPRESENT AND WARRANT TO
ASSIGNEE THAT (I) THEY HAVE DISCLOSED TO ASSIGNEE ALL OF THEIR OBLIGATIONS TO
THEIR RESPECTIVE EMPLOYERS, AND THE TERMS OF THIS AGREEMENT COMPLY WITH THE
RULES AND REGULATIONS OF THEIR RESPECTIVE EMPLOYERS; AND (II) THEY SHALL COMPLY
WITH ALL OF THE OBLIGATIONS ON THEM SET FORTH IN THE STATUTES GOVERNING THEIR
EMPLOYERS.

 

7.3                                 ASSIGNEE AND THE ASSIGNORS AGREE NOT TO USE
THE  NAME OF AN ASSIGNOR’S EMPLOYER WITHOUT FIRST OBTAINING THE WRITTEN CONSENT
OF THAT EMPLOYER, WHICH CONSENT MAY BE WITHHELD OR GIVEN AT THE EMPLOYER’S
ABSOLUTE DISCRETION WITHOUT BEING REQUIRED TO ASSIGN ANY REASON THEREFOR.

 

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7.4                                 THE PARTIES HEREBY ACKNOWLEDGE THAT THE
UNIVERSITY OF MELBOURNE IS NOT OBLIGED TO PROMOTE, SUPPORT OR DEFEND ANY LEGAL
ACTION IN RELATION TO OR ARISING FROM THE EXERCISE OF ANY RIGHTS HEREUNDER.
NEITHER THE ASSIGNORS NOR ASSIGNEE SHALL INSTITUTE PROCEEDINGS AGAINST THE
UNIVERSITY OF MELBOURNE OR JOIN THE UNIVERSITY OF MELBOURNE IN ANY PROCEEDINGS
BROUGHT BY ANOTHER PERSON WITH RESPECT TO INTELLECTUAL PROPERTY WHICH IS THE
SUBJECT OF THIS AGREEMENT.

 

7.5                                 ASSIGNEE HEREBY AGREES TO CARRY INSURANCE
APPROPRIATE IN SCOPE TO COVER THE COMMERCIAL EXPLOITATION OF INTELLECTUAL
PROPERTY HEREUNDER, WHICH SHALL NAME THE UNIVERSITY OF MELBOURNE AS NAMED
INSURED.

 

7.6                                 ASSIGNEE ACKNOWLEDGES THE RIGHTS OF THE
UNIVERSITY OF MELBOURNE WHICH ARE SET FORTH IN STATUTE 14.1.5 OF THE RULES OF
THE UNIVERSITY OF MELBOURNE.

 

7.7                                 ASSIGNEE HEREBY ACKNOWLEDGES THE PROVISIONS
OF SECTION 14.1 OF THE STATUTE OF THE UNIVERSITY OF MELBOURNE.

 

8.     REPRESENTATIONS AND WARRANTIES        

 

8.1                                 GENERAL.  EACH PARTY REPRESENTS AND WARRANTS
TO THE OTHER PARTY THAT AS OF THE EFFECTIVE DATE:

 

(A)                                  IT HAS THE LEGAL RIGHT AND AUTHORITY TO
EXTEND THE RIGHTS GRANTED IN THIS AGREEMENT;

 

(B)                                 IT HAS THE LEGAL RIGHT AND AUTHORITY TO
ENTER INTO THIS AGREEMENT AND TO PERFORM ALL OF ITS OBLIGATIONS HEREUNDER;

 

(C)                                  ALL CONSENTS, APPROVALS AND AUTHORIZATIONS
OF ALL GOVERNMENTAL AUTHORITIES AND OTHER PERSONS REQUIRED TO BE OBTAINED BY
SUCH PARTY IN CONNECTION WITH THIS AGREEMENT AND ITS RESPONSIBILITIES AND
ACTIVITIES HEREUNDER HAVE BEEN OBTAINED;

 

(D)                                 ITS EXECUTION, DELIVERY AND PERFORMANCE OF
THIS AGREEMENT DOES NOT AND WILL NOT CONFLICT WITH, OR CONSTITUTE A BREACH OR
DEFAULT UNDER, OR REQUIRE THE CONSENT OF ANY THIRD PARTY UNDER, ITS CHARTER
DOCUMENTS OR ANY MATERIAL LICENSE, LOAN OR OTHER AGREEMENT, CONTRACT, COMMITMENT
OR INSTRUMENT TO WHICH IT IS A PARTY OR ANY OF ITS ASSETS ARE BOUND OR VIOLATE
ANY PROVISION OF LAW, STATUTE, RULE OR REGULATION OR ANY RULING, WRIT,
INJUNCTION, ORDER, JUDGMENT OR DECREE OF ANY COURT, ADMINISTRATIVE AGENCY OR
OTHER GOVERNMENTAL BODY;

 

(E)                                  WHEN EXECUTED BY BOTH PARTIES, THIS
AGREEMENT WILL CONSTITUTE THE VALID AND LEGALLY BINDING OBLIGATION OF SUCH PARTY
AND SHALL BE ENFORCEABLE AGAINST SUCH PARTY IN ACCORDANCE WITH ITS TERMS;

 

(F)                                    THERE ARE NO EXISTING OR THREATENED
ACTIONS, SUITS OR CLAIMS PENDING OR, TO THE BEST OF ITS KNOWLEDGE THREATENED
AGAINST IT THAT MAY AFFECT THE PERFORMANCE OF ITS OBLIGATIONS UNDER THE
AGREEMENT.

 

8.2                                 BY THE ASSIGNORS.  THE ASSIGNORS HEREBY
REPRESENT AND WARRANT TO ASSIGNEE THAT

 

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(A)                                  THE ASSIGNORS HAVE OBTAINED THE RIGHTS OF
ALL OF THE INVENTORS AND PRIOR OWNERS OF THE INVENTORS PATENT AND HAVE THE RIGHT
TO VALIDLY ASSIGN THE INTELLECTUAL PROPERTY RIGHTS ASSIGNED UNDER SECTION 2
ABOVE TO ASSIGNEE, AND NO THIRD PARTY (INCLUDING THE UNIVERSITY OF MELBOURNE)
HAS A RIGHT TO LAY CLAIM TO ANY PART OF THE INVENTORS PATENT;

 

(B)                                 TO THE BEST OF THE ASSIGNORS’ KNOWLEDGE,
INFORMATION, AND BELIEF, THE INVENTORS PATENT DOES NOT INFRINGE ANY THIRD
PARTY’S INTELLECTUAL PROPERTY RIGHTS.

 

(C)                                  THE PROVISIONS OF THIS AGREEMENT (INCLUDING
BUT NOT LIMITED TO THE REVENUE SHARING PROVISIONS SET FORTH IN SECTION 4, ABOVE)
DO NOT VIOLATE ANY APPLICABLE LAWS, REGULATIONS OR RULES TO WHICH THE ASSIGNORS
ARE SUBJECT, INCLUDING, WITHOUT LIMITATION, THOSE OF THE UNIVERSITY OF
MELBOURNE.

 

8.3                                 THE ASSIGNEE ACKNOWLEDGES AND AGREES THAT:

 

(A)                                  NO PROTOTYPE PRODUCT HAS BEEN DEVELOPED OR
TESTED BY THE ASSIGNORS TO DEMONSTRATE THE VALIDITY OR EFFICACY OF THE INVENTORS
PATENT;

 

(B)                                 ASSIGNEE ASSUMES THE SOLE RISK OF
INTERPRETING, APPLYING AND EXPLOITING THE INVENTORS PATENT AND RELEASES AND
INDEMNIFIES THE ASSIGNORS AND THEIR EMPLOYEES, STUDENTS, AGENTS, CONSULTANTS,
CONTRACTORS AND SUB-CONTRACTORS FROM AND AGAINST ALL LIABILITY OF ANY KIND
ARISING FROM THE USE OR EXPLOITATION OF THE INVENTORS PATENT OR THE INTELLECTUAL
PROPERTY BY OR THROUGH ASSIGNEE, UNLESS THE LIABILITY ARISES AS A RESULT OF THE
NEGLIGENT OR DELIBERATE ACTS OR OMISSIONS OF THE ASSIGNORS, THEIR EMPLOYEES OR
CONTRACTORS;

 

(C)                                  NOTHING IN THIS AGREEMENT IS TO BE
CONSTRUED AS A REPRESENTATION OR WARRANTY BY THE ASSIGNORS THAT THE INVENTORS
PATENT, OR INTELLECTUAL PROPERTY ARE SAFE, USEFUL, EFFECTIVE OR SUITABLE FOR ANY
PURPOSE WHATSOEVER OR THE USE OR APPLICATION OF THE INVENTORS PATENT AND/OR
INTELLECTUAL PROPERTY WILL ACHIEVE OR GIVE RISE TO A PARTICULAR RESULT OR
OUTCOME.

 

9.     INDEMNITY

 

9.1                                 GENERAL.  EACH PARTY HERETO (ASSIGNEE, ON
ONE HAND AND ALL OF THE ASSIGNORS, JOINTLY AND SEVERALLY, ON THE OTHER HAND,
THROUGH DAVID AS AGENT) AGREES TO INDEMNIFY, DEFEND AND HOLD THE OTHER PARTIES
AND THEIR AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS HARMLESS FROM
AND AGAINST ANY LOSSES, COSTS, CLAIMS, DAMAGES, LIABILITIES OR EXPENSE
(INCLUDING WITHOUT LIMITATION, FEES AND DISBURSEMENTS OF COUNSEL INCURRED BY THE
SUCH INDEMNIFIED PARTIES (COLLECTIVELY, “LIABILITIES”) ARISING OUT OF OR IN
CONNECTION WITH THIRD PARTY CLAIMS RELATING TO A BREACH OF THE FIRST MENTIONED
PARTY’S REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT.

 

9.2                                 BY ASSIGNEE.  ASSIGNEE AND AGREES TO
INDEMNIFY, DEFEND AND HOLD THE UNIVERSITY OF MELBOURNE HARMLESS FROM AND AGAINST
ANY LIABILITIES ARISING AS A RESULT OF THE COMMERCIAL EXPLOITATION OF PRODUCTS
HEREUNDER.

 

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9.3                                 PROCEDURE.  A PARTY (THE “INDEMNITEE”) THAT
INTENDS TO CLAIM INDEMNIFICATION UNDER THIS AGREEMENT SHALL PROMPTLY NOTIFY THE
OTHER PARTY (THE “INDEMNITOR”) OF ANY CLAIM, DEMAND, ACTION OR OTHER PROCEEDING
FOR WHICH THE INDEMNITEE INTENDS TO CLAIM SUCH INDEMNIFICATION, AND THE
INDEMNITOR SHALL HAVE THE RIGHT TO PARTICIPATE IN, AND, TO THE EXTENT THE
INDEMNITOR SO DESIRES, TO ASSUME SOLE CONTROL OF THE DEFENSE THEREOF WITH
COUNSEL SELECTED BY THE INDEMNITOR; PROVIDED, HOWEVER, THAT THE INDEMNITEE SHALL
HAVE THE ABSOLUTE RIGHT TO RETAIN ITS OWN COUNSEL, WITH THE FEES AND EXPENSES TO
BE PAID BY THE INDEMNITEE.  THE INDEMNITY OBLIGATIONS UNDER THIS AGREEMENT SHALL
NOT APPLY TO AMOUNTS PAID IN SETTLEMENT OF ANY LOSS, CLAIM, DAMAGE, LIABILITY OR
ACTION IF SUCH SETTLEMENT IS EFFECTED WITHOUT THE CONSENT OF THE INDEMNITOR,
WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED.  THE FAILURE TO
DELIVER NOTICE TO THE INDEMNITOR WITHIN A REASONABLE TIME AFTER THE COMMENCEMENT
OF ANY SUCH ACTION, IF PREJUDICIAL TO INDEMNITOR’S ABILITY TO DEFEND SUCH
ACTION, SHALL RELIEVE THE INDEMNITOR OF ANY LIABILITY TO THE INDEMNITEE UNDER
THIS AGREEMENT, BUT THE OMISSION TO DELIVER SUCH NOTICE TO THE INDEMNITOR SHALL
NOT RELIEVE IT OF ANY LIABILITY THAT IT MAY HAVE TO THE INDEMNITEE OTHERWISE
THAN UNDER THIS AGREEMENT.  THE INDEMNITEE, ITS EMPLOYEES AND AGENTS, SHALL
COOPERATE FULLY WITH THE INDEMNITOR AND ITS LEGAL REPRESENTATIVES IN THE
INVESTIGATION OF ANY ACTION, CLAIM OR LIABILITY COVERED BY AN INDEMNIFICATION
FROM THE INDEMNITOR.  NO INDEMNITOR SHALL, WITHOUT THE PRIOR WRITTEN CONSENT OF
THE INDEMNITEE, EFFECT ANY SETTLEMENT OF ANY PENDING OR THREATENED ACTION, SUIT
OR PROCEEDING IN RESPECT OF WHICH ANY INDEMNITEE IS OR COULD HAVE BEEN A PARTY
AND INDEMNITY COULD HAVE BEEN SOUGHT HEREUNDER BY SUCH INDEMNITEE, UNLESS SUCH
SETTLEMENT INCLUDES AN UNCONDITIONAL RELEASE OF SUCH INDEMNITEE FROM ALL
LIABILITY ON CLAIMS THAT ARE THE SUBJECT MATTER OF SUCH ACTION, SUIT OR
PROCEEDING.

 

10.  MISCELLANEOUS

 

10.1                           GOVERNING LAW AND JURISDICTION.  THIS AGREEMENT
IS GOVERNED BY THE LAWS OF THE STATE OF VICTORIA, COMMONWEALTH OF AUSTRALIA,
WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS.  EACH PARTY HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF QUEENSLAND
WITH RESPECT TO ALL MATTERS CONCERNING THIS AGREEMENT.

 

10.2                           WAIVER.  IT IS AGREED THAT NO WAIVER BY EITHER
PARTY HERETO OF ANY BREACH OR DEFAULT OF ANY OF THE COVENANTS OR AGREEMENTS
HEREIN SET FORTH SHALL BE DEEMED A WAIVER AS TO ANY SUBSEQUENT AND/OR SIMILAR
BREACH OR DEFAULT.

 

10.3                           INDEPENDENT CONTRACTORS.  THE PARTIES EXPRESSLY
AGREE THAT THE RELATIONSHIP BETWEEN THEM IS THAT OF INDEPENDENT CONTRACTORS. 
THE PARTIES HERETO SHALL NOT BE DEEMED TO BE AGENTS, PARTNERS OR JOINT VENTURERS
OF THE OTHER FOR ANY PURPOSE AS A RESULT OF THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

10.4                           ASSIGNMENT. THIS AGREEMENT MAY BE ASSIGNED BY
ASSIGNEE, BUT SHALL NOT BE ASSIGNABLE BY ASSIGNORS TO ANY THIRD PARTY WITHOUT
THE PRIOR WRITTEN CONSENT OF ASSIGNEE.  THIS AGREEMENT SHALL BE BINDING UPON AND
ACCRUE TO THE BENEFIT OF ANY PERMITTED ASSIGNEE, AND ANY SUCH ASSIGNEE SHALL
AGREE TO PERFORM THE OBLIGATIONS

 

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of the Assignee. Any assignment of this Agreement by Assignee pursuant to this
Section 10.4 shall not be deemed to be a “Sale” under this Agreement, and no
royalty obligation shall arise as a result of such transaction.

 

10.5                           COMPLIANCE WITH APPLICABLE LAWS.  IN CONNECTION
WITH THEIR RESPECTIVE ACTIVITIES UNDER THIS AGREEMENT, THE PARTIES AND THEIR
AFFILIATES SHALL FULLY COMPLY IN ALL MATERIAL RESPECTS WITH THE REQUIREMENTS OF
ANY AND ALL APPLICABLE LAWS, REGULATIONS, RULES AND ORDERS OF ANY GOVERNMENTAL
BODY HAVING JURISDICTION OVER THE EXERCISE OF RIGHTS UNDER THIS AGREEMENT
INCLUDING, WITHOUT LIMITATION, THOSE APPLICABLE TO THE RESEARCH, DISCOVERY,
DEVELOPMENT, PATENT PROSECUTION, MANUFACTURE, DISTRIBUTION, IMPORT AND EXPORT
AND SALE OF ANY PRODUCTS PURSUANT TO THIS AGREEMENT.

 

10.6                           NOTICES.  ALL NOTICES, REPORTS, CONSENTS,
REQUESTS AND OTHER COMMUNICATIONS HEREUNDER SHALL BE IN WRITING AND SHALL BE
PERSONALLY DELIVERED, SENT BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, OR
BY FACSIMILE (WITH PROOF OF RECEIPT AND A CONFIRMATION COPY SENT BY REGISTERED
OR CERTIFIED MAIL, POSTAGE PREPAID) OR SENT BY OVERNIGHT DELIVERY SERVICE, IN
EACH CASE TO THE RESPECTIVE ADDRESS SPECIFIED BELOW, OR SUCH OTHER ADDRESS AS
MAY BE SPECIFIED IN WRITING TO THE OTHER PARTY HERETO AND SHALL BE DEEMED TO
HAVE BEEN GIVEN UPON RECEIPT:

 

 

If to Assignee:

Axonyx Inc.

 

 

825 Third Avenue, 40th Floor

 

 

New York, NY 10022

 

 

Attention: Dr. Marvin S. Hausman, M.D.

 

 

Fax:  (212) 688-4843

 

 

 

 

If to the Assignors c/o:

David Henry Small, Ph.D.

 

 

35 Munro Avenue

 

 

Ashburton, Victoria

 

 

3147, Australia

 

10.7                           SEVERABILITY.  IN THE EVENT THAT ANY PROVISION OF
THIS AGREEMENT BECOMES OR IS DECLARED BY A COURT OF COMPETENT JURISDICTION TO BE
ILLEGAL, UNENFORCEABLE OR VOID, THIS AGREEMENT SHALL CONTINUE IN FULL FORCE AND
EFFECT WITHOUT SAID PROVISION, AND THE PARTIES SHALL AMEND THIS AGREEMENT TO THE
EXTENT FEASIBLE TO LAWFULLY INCLUDE THE SUBSTANCE OF THE EXCLUDED TERM TO AS
FULLY AS POSSIBLE REALIZE THE INTENT OF THE PARTIES AND THEIR COMMERCIAL
BARGAIN.

 

10.8                           SPECIAL, INCIDENTAL AND CONSEQUENTIAL DAMAGES. 
NEITHER PARTY WILL BE LIABLE UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR
OTHER THEORY FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES WITH RESPECT
TO ANY SUBJECT MATTER OF THIS AGREEMENT.

 

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10.9                           LIMITATION OF LIABILITY.  OTHER THAN WITH RESPECT
TO A CLAIM PURSUANT TO SECTION 9.1,ASSIGNEE SHALL NOT BE LIABLE UNDER THIS
AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR
EQUITABLE THEORY FOR ANY AMOUNTS, IN THE AGGREGATE, IN EXCESS OF $50,000 AUD.
EACH OF MARIE-ISABEL AND SUPUNDI HEREBY AGREE THAT ASSIGNEE SHALL HAVE NO
OBLIGATIONS OR LIABILITY WHATSOEVER TO MARIE-ISABEL AND SUPUNDI FOR ROYALTIES ON
NET SALES, THE GIVING OF NOTICES UNDER THIS AGREEMENT OR ANY OTHER
RESPONSIBILITY ON THE PART OF ASSIGNEE HEREUNDER.

 

10.10                     FORCE MAJEURE.  NEITHER PARTY SHALL LOSE ANY RIGHTS
HEREUNDER OR BE LIABLE TO THE OTHER PARTY FOR DAMAGES OR LOSSES OR BE DEEMED TO
HAVE DEFAULTED UNDER OR BREACHED THIS AGREEMENT ON ACCOUNT OF FAILURE OF
PERFORMANCE BY THE DEFAULTING PARTY IF THE FAILURE IS OCCASIONED BY WAR, ACTS OF
WAR (WHETHER DECLARED OR NOT), STRIKE, INSURRECTIONS, RIOTS, CIVIL COMMOTIONS,
FIRE, ACT OF GOD, EARTHQUAKE, FLOOD, LOCKOUT OR OTHER LABOR DISTURBANCES,
EMBARGO, GOVERNMENTAL ACTS OR ORDERS OR RESTRICTIONS, OR ANY OTHER REASON WHERE
FAILURE TO PERFORM IS BEYOND THE REASONABLE CONTROL AND NOT CAUSED BY THE
NEGLIGENCE, INTENTIONAL CONDUCT OR MISCONDUCT OF THE NON-PERFORMING PARTY AND
SUCH PARTY HAS EXERTED ALL COMMERCIALLY REASONABLE EFFORTS TO AVOID AND REMEDY
SUCH FORCE MAJEURE; PROVIDED, HOWEVER, THAT THE NON-PERFORMING PARTY SHALL
NOTIFY THE OTHER PARTY IN WRITING THAT SUCH CONDITION EXISTS WITHIN FIVE (5)
DAYS OF THE START OF LEARNING THAT SUCH CONDITIONS EXISTS. SHOULD SUCH FORCE
MAJEURE CONDITION CONTINUE FOR A PERIOD OF THIRTY (30) DAYS BEYOND THE DATE OF
NOTICE THAT SUCH CONDITION EXISTS, THE PARTIES SHALL MEET AND USE THEIR BEST
EFFORTS TO ASSIST THE PERFORMING PARTY TO SEEK PERFORMANCE FROM A THIRD PARTY
(IF APPROPRIATE).

 

10.11                     ENTIRE AGREEMENT.  THIS AGREEMENT AND THE EXHIBITS
ATTACHED HERETO HEREUNDER CONSTITUTE THE ENTIRE AGREEMENT, BOTH WRITTEN AND
ORAL, BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF, AND ALL
PRIOR AGREEMENTS  RESPECTING THE SUBJECT MATTER HEREOF, EITHER WRITTEN OR ORAL,
EXPRESSED OR IMPLIED, SHALL BE ABROGATED, CANCELED, AND ARE NULL AND VOID AND OF
NO EFFECT.  THE PARTIES HEREBY AGREE THAT THE CONFIDENTIAL DISCLOSURE AGREEMENT
BETWEEN THE PARTIES DATED MAY 21, 1998, AS AMENDED, SHALL TERMINATE AS OF THE
EFFECTIVE DATE, BUT SHALL CONTINUE IN FULL FORCE AND EFFECT UNDER ITS TERMS AND
FOR THE TERM INDICATED THEREIN WITH RESPECT TO ANY PROPRIETARY INFORMATION, AS
DEFINED IN THAT AGREEMENT, DISCLOSED BY EITHER PARTY PRIOR TO THE EFFECTIVE
DATE.  NO AMENDMENT OR CHANGE HEREOF OR ADDITION HERETO SHALL BE EFFECTIVE OR
BINDING ON EITHER OF THE PARTIES HERETO UNLESS REDUCED TO WRITING AND EXECUTED
BY THE RESPECTIVE DULY AUTHORIZED REPRESENTATIVES OF THE PARTIES.

 

10.12                     HEADINGS.  THE CAPTIONS TO THE SEVERAL ARTICLES AND
SECTIONS HEREOF ARE NOT A PART OF THIS AGREEMENT, BUT ARE INCLUDED MERELY FOR
CONVENIENCE OF REFERENCE AND LOCATION ONLY AND SHALL NOT AFFECT ITS MEANING OR
INTERPRETATION.

 

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10.13                     COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN TWO
OR MORE COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED TO BE AN ORIGINAL AND ALL OF
WHICH TOGETHER SHALL BE DEEMED TO BE ONE AND THE SAME INSTRUMENT.

 

10.14                     RESOLUTION OF DISPUTES.  IF A DISPUTE ARISES BETWEEN
THE PARTIES (“THE DISPUTE”), THE PARTIES AGREE TO NEGOTIATE IN GOOD FAITH TO
RESOLVE THE DISPUTE.  IF THE DISPUTE HAS NOT BEEN RESOLVED BY NEGOTIATION WITHIN
A REASONABLE TIME THEN EITHER PARTY MAY REFER THE DISPUTE TO MEDIATION AND WILL
DO SO BEFORE INITIATING PROCEEDINGS IN A COURT TO RESOLVE THE DISPUTE.  A
DISPUTE WHICH IS REFERRED TO MEDIATION WILL BE REFERRED TO THE AUSTRALIAN
COMMERCIAL DISPUTE CENTRE LTD (“ACDC”) AND WILL BE CONDUCTED IN ACCORDANCE WITH
THE CONCILIATION RULES OF ACDC AND WILL BE HEARD BY ONE CONCILIATOR APPOINTED
UNDER THE RELEVANT RULES IN VICTORIA.  IF THE DISPUTE HAS NOT BEEN RESOLVED
WITHIN 60 DAYS OF REFERRAL TO ACDC EITHER PARTY IS FREE TO INITIATE PROCEEDINGS
IN A COURT.  NOTHING IN THIS CLAUSE WILL PREVENT A PARTY FROM SEEKING
INTERLOCUTORY RELIEF THROUGH COURTS OF APPROPRIATE JURISDICTION.

 

 

AXONYX INC.

DAVID HENRY SMALL

By

/s/ Marvin S. Hausman, M.D.

 

By:

/s/ David Henry Small, Ph.D.

 

 

Marvin S. Hausman, M.D.

 

David Henry Small, Ph.D.

 

 

 

MARIE-ISABEL AGUILAR

 

 

 

By:

/s/ Marie –Isabel Aguilar, Ph.D.

 

 

 

Marie-Isabel Aguilar, Ph.D

 

 

 

SUPUNDI SUBASINGHE

 

 

 

By:

/s/ Supundi Subasinghe

 

 

 

Supundi Subasinghe

 

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