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.




 





























 




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.




 




12





























 




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




 




13





























 




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.




 




14





























 




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.




 




15





























 




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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