exv10w19



 





Exhibit 10.19




Project No: GRA02090










R&D Start Program

Grant Agreement




Particular Conditions




	 	 	 
	Parties
	 	 
	 
	 	 
	Commonwealth of Australia acting
	 	 
	through the Industry Research and
	 	 
	Development Board
	 	 
	 
	 	 
	ABN 51 835 430 479
	 	 
	(Department of Industry, Science and
	 	 
	Resources)
	 	 
	 
	 	 
	Postal address
	 	OLD State Manager
	 
	 	Department of Industry, Tourism and Resources
	 
	 	GPO Box 9839
	 
	 	BRISBANE QLD 4001
	 
	 	 
	The Grantee
	 	 
	 
	 	 
	- ABN
	 	Peplin Operations Pty Ltd
	- ACN
	 	69093317367
	- postal address
	 	093 317 367
	 
	 	PO Box 346
	 
	 	FORTITUDE VALLEY   QLD   4006
	 
	 	 
	- business address
	 	Ground Floor, South Tower
	 
	 	527 Gregory Terrace
	 
	 	BOWEN HILLS   QLD   4006






	 	 	 	 	 
	R&D
Start Grant Agreement Particular Conditions

	 	 	1	 
	Version 6.1
— Release Date July 2001

	Author: R&D Start Program Management







 









 





Operative provisions





	1.	 	This Grant is made to the Grantee in respect of the
Project by the Industry Research and Development
Board on behalf of the Commonwealth to the Grantee
under the R&D Start Program.
	 
	2.	 	The Grant is made pursuant to the Industry Research
and Development Act 1986 and the relevant
Ministerial Directions issued under sections 19 and
20 of that Act.
	 
	3.	 	
 The Grant is made on the terms and conditions of the
Grant Agreement, which comprises the General
Conditions (version 6.1) and the Particular
Conditions (including the schedule).
	 
	4.	 	The Grantee
acknowledges that it has received and read a copy of
the General Conditions (version 6.1), and agrees
that the terms and conditions of the General
Conditions form part of the Grant Agreement.
	 
	5.	 	

Terms defined in the General Conditions
(version 6.1) have the same meaning in the
Particular Conditions.
	 
	6.	 	If there is an inconsistency between the Particular
Conditions and the General Conditions (version 6.1),
the Particular Conditions prevail to the extent of
the inconsistency.





	 	 	 	 	 
	R&D
Start Grant Agreement Particular Conditions

	 	 	2	 
	Version 6.1
— Release Date July 2001

	Author: R&D Start Program Management





 









 







	 	 	 	 	 	 	 	 	 
	Acceptance of terms

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	EXECUTED as a deed
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date of deed: 19 September 2003
	 	 	 	 	 	 	 	 
	Commonwealth of Australia

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of the

	 	 	)	 	 	 	 	 
	COMMONWEALTH OF AUSTRALIA by

	 	 	)	 	 	 	 	 
	Paul Flynn a delegate of the INDUSTRY

	 	 	)	 	 	 	 	 
	RESEARCH AND DEVELOPMENT

	 	 	)	 	 	 	 	 
	BOARD in the presence of:

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 
	/s/ Bruce Dawson

	 	 	)	 	 	 	 	 
	 


	 	 	 	 	 	 	 	 
	Signature of witness

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 
	Bruce Dawson

	 	 	)	 	 	 	 	 
	 


	 	 	 	 	 	 	 	 
	Name of witness (block letters)

	 	 	)	 	 	/s/ [ILLEGIBLE]	 	 
	 

	 	 	)	 	 	 
	 	 
	 

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Grantee


The terms and conditions pursuant to which the Grant
is made are hereby accepted by the Grantee.	 	 
	
	THE COMMON SEAL of

	 	 	)	 	 	 	 	 
	Peplin Operations Pty Ltd

	 	 	)	 	 	 	 	 
	is affixed in the presence of:

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 
	/s/
Garry Llewellyn Redlich

	 	 	)	 	 	/s/ David Legh Craig	 	 
	 


	 	 	 	 	 	 	 	 
	Signature of director

	 	 	)	 	 	Signature of secretary	 	 
	 

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 
	 GARRY LLEWELLYN REDLICH

	 	 	)	 	 	DAVID LEGH CRAIG	 	 
	 	 	 	 	 	 	 	 	 
	Name of director (block letters)

	 	 	)	 	 	Name of secretary (block letters)	 	 
	 

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	 	 	 






	 	 	 	 	 
	R&D
Start Grant Agreement Particular Conditions

	 	 	3	 
	Version 6.1
— Release Date July 2001

	Author: R&D Start Program Management







 









 






The Schedule




	 	 	 	 	 
	1

	 	Project Title
	 	New generation anti-cancer drugs.
	 
	 	 	 	 
	2

	 	Project Reference Number
	 	GRA02090
	 
	 	 	 	 
	3

	 	Project Duration	 	 
	 
	 	 	 	 
	 

	 	(a)  Commencement Date:
	 	25 May 2001
	 
	 	 	 	 
	 

	 	(b)  Completion Date:
	 	31 August 2004
	 
	 	 	 	 
	4

	 	Grant
	 	      A maximum amount of $3,247,950
	 
	 	 	 	 
	5

	 	Grant Percentage of Eligible Expenditure
	 	      50%
	 
	 	 	 	 
	6

	 	Interest Rates [5.525%] per annum
	 	 
	 
	 	 	 	 
	7	 	Project Planned
Eligible Expenditure by Financial Year






	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Head of	 	 	 	 
	Expenditure	 	Estimated Expenditure $	 	Total $
	 
	 	 	2001/02	 	 	 	2002/03	 	 	 	2003/04	 	 	 	2004/05	 	 	 	 	 
	R&D Salary
Expenditure
	 	 	348,000	 	 	 	351,100	 	 	 	354,300	 	 	NIL	 	 	 	1,053,400	 
	Contract
Expenditure
	 	 	1,945,000	 	 	 	1,745,000	 	 	 	1,745,000	 	 	NIL	 	 	 	5,435,000	 
	Plant Expenditure
	 	NIL	 	 	NIL	 	 	NIL	 	 	NIL	 	 	NIL	 
	Prototype Expenditure
	 	NIL	 	 	NIL	 	 	NIL	 	 	NIL	 	 	NIL	 
	Other Expenditure
	 	 	2,500	 	 	 	2,500	 	 	 	2,500	 	 	NIL	 	 	 	7,500	 
	Project Eligible
Expenditure
	 	 	2,295,500	 	 	 	2,098,600	 	 	 	2,101,800	 	 	NIL	 	 	 	6,495,900	 
	Annual Cap
Amount
	 	 	1,417,380	 	 	 	827,650	 	 	 	840,520	 	 	 	162,400	 	 	 	3,247,950	 






	 	 	 	 	 
	8

	 	Initial Payment
	 	$621,535






	 	 	 	 	 
	R&D
Start Grant Agreement Particular Conditions

	 	 	4	 
	Version 6.1
— Release Date July 2001

	Author: R&D Start Program Management







 









 






	9	 	Project Description and Planned Outcomes




The project will compete the development of the company’s topical drug for the treatment of
skin cancer and progress the research and development of intracavitary, intralesional and
systemic drugs for solid tumours from the company’s novel proprietary compounds.





	10	 	Performance Milestones and Planned Achievement Dates





	 	 	 	 	 
	 	 	 	 	Expected Achievement
	 	 	Major Milestone	 	Date
	1

	 	Selection of lead compound.
	 	31 October 2001
	2

	 	Successful scale up of plant production
	 	7 December 2001
	3

	 	Successful scale up of active ingredient extraction.
	 	4 January 2002
	4

	 	Acceptable formulation for clinical trials.
	 	30 September 2002
	5

	 	Completion of toxiclogy studies for
Phase 1 study.
	 	30 November 2003
	6

	 	Acceptance of IND submission for Phase 1 Clinical
Trial.
	 	31 December 2003
	7

	 	Completion of Phase 1 Clinical Trial.
	 	31 August 2004
	8

	 	Completion of phase 2 Clinical Trial.
	 	31 August 2004






	 	 	 	 	 	 	 
	11

	 	Retention Amount
	 	$	162,400	 
	 
	 	 	 	 	 	 
	12

	 	Reports	 	 	 	 






	 	 	 	 	 	 	 
	 	 	 	 	 	 	Audit
	 	 	 	 	 	 	Report
	Review Type	 	Due Date	 	Report Period	 	Y/N
	Progress

	 	26 January 2002
	 	28 November 2001 to 31 December 2001	 	 
	Progress

	 	26 April 2002
	 	1 January 2002 to 31 March 2002	 	 
	Progress

	 	28 July 2002
	 	1 April 2002 to 30 June 2002
	 	Y
	Progress

	 	28 October 2002
	 	1 July 2002 to 30 September 2002	 	 
	Progress

	 	28 January 2003
	 	1 October 2002 to 31 December 2002	 	 
	Progress

	 	28 April 2003
	 	1 January 2003 to 31 March 2003	 	 
	Progress

	 	28 July 2003
	 	1 April 2003 to 30 June 2003
	 	Y
	Progress

	 	28 October 2003
	 	1 July 2003 to 30 September 2003	 	 
	Progress

	 	28 January 2004
	 	1 October 2003 to 31 December 2003	 	 
	Progress

	 	28 April 2004
	 	1 January 2004 to 31 March 2004	 	 
	Progress

	 	28 July 2004
	 	1 April 2004 to 30 June 2004	 	 
	Final

	 	28 September 2004
	 	1 July 2004 to 31 August 2004
	 	Y






	 	 	 	 	 
	R&D
Start Grant Agreement Particular Conditions

	 	 	5	 
	Version 6.1
— Release Date July 2001

	Author: R&D Start Program Management







 









 




Reports must conform with the requirements in the Project Reporting Guide supplied to
the Grantee by the Commonwealth, as varied from time to time by the Commonwealth and notified
to the Grantee.



Unless the
Grantee is otherwise notified by the Commonwealth, commercialisation reports will
be required 1, 3 and 5 years after completion of the Project, in the format supplied by the
Commonwealth at those times.





	13	 	Notices




Notices must be addressed as follows:





	 	a)	 	if given to the Commonwealth, addressed and forwarded to the Director, AusIndustry
State Office, Department of Industry, Science and Resources for the attention of an
AusIndustry Customer Service Manager at the following address:
	 
	 	 	 	Address: GPO Box 9839, BRISBANE Qld 4001 

Facsimile No: 3227 4730

Email address: aiqld@industry




or as otherwise notified in writing by an AusIndustry Customer Service Manager;

and





	 	b)	 	if given by the Commonwealth, signed by an authorised delegate of the Industry Research
and Development Board and forwarded to the Grantee at the following address:




Peplin Operations Pty Ltd

Mr Garry Redlich

CEO and Managing Director

PO Box 346

FORTITUDE VALLEY QLD 4006




or as otherwise notified in writing by the Grantee.





	14	 	Special Conditions
	 
	 	 	None





	 	 	 	 	 
	R&D
Start Grant Agreement Particular Conditions

	 	 	6	 
	Version 6.1
— Release Date July 2001

	Author: R&D Start Program Management







 









 





NATIONAL BENEFIT INDICATORS — COMMERCIALISATION



The Industry Research and Development (IR&D) Board understands the increasing global nature of
business and the need for innovative companies to respond flexibly to market needs. For example,
while the IR&D Board is keen to support projects which involve manufacturing or production in
Australia, it accepts that there will be instances where Australian manufacture could limit the
commercialisation prospects of intellectual property developed with its grant funding. This does
not remove the necessity for the commercialisation of project outcomes to provide national
benefits.



Set out below are the indicators by which the IR&D Board will assess the level of national benefit
contribution to Australia and the Australian economy from the commercialisation of R&D Start
projects where commercialisation will not take place in Australia;





	•	 	the commercialisation plan includes Australia being maintained as the home base for future
R&D, manufacture or product development;

	 
	•	 	the ongoing development of the commercial outcomes, (product, process or service), arising
from R&D activities involves interactions with other firms and research institutions (both
domestic and international);

	 
	•	 	the commercialisation of the products, processes or services arising from R&D activities result
in an increase in the number of employees in the company’s operations based in Australia;

	 
	•	 	as a result of the commercialisation, Australian residents receive commercial compensation
through royalties, licence fees, equity, dividends or outright sale; and

	 
	•	 	production overseas could be considered reasonable as:







	 	Ø	 	local production is demonstrated to be uneconomic in terms of cost structure;
and/or
	 
	 	Ø	 	the production or commercialisation requires close physical interaction
with overseas companies, customers, suppliers and competitors.




Where a company is proposing to conduct exploitation overseas due to economic viability in terms of
cost structure, the Board will consider:





	•	 	the level of commitment to retaining or enhancing the companies R&D facilities in Australia;
	 
	•	 	the degree of globalisation of the relevant industry sector;
	 
	•	 	the relative input costs to production as identified by the company;
	 
	•	 	the relative transport costs as identified by the company;
	 
	•	 	the relative costs of skilled labour as identified by the company; and
	 
	•	 	legal barriers to entry; or
	 
	•	 	any other factors the Board considers relevant.





	 	 	 	 	 
	R&D
Start Grant Agreement Particular Conditions

	 	 	7	 
	Version 6.1
— Release Date July 2001

	Author: R&D Start Program Management







 









 




Where the company is proposing to conduct exploitation overseas due to close proximity
to customers, suppliers and competitors, the Board will consider:





	•	 	the level of commitment to retaining or enhancing the companies R&D facilities in Australia;
	 
	•	 	the mechanisms established to disseminate knowledge and market intelligence from overseas to
the companies operations based in Australia;
	 
	•	 	the industry norms in terms of proximity;
	 
	•	 	the level of competition in the industry sector and the need
to innovate quickly;
	 
	•	 	the nature of the products’ inputs which require close contact eg perishables, knowledge, etc;
and
	 
	•	 	any other factors the Board considers relevant.





	 	 	 	 	 
	R&D
Start Grant Agreement Particular Conditions

	 	 	8	 
	Version 6.1
— Release Date July 2001

	Author: R&D Start Program Management