Document:

Exhibit 4.2(d)

 

“CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS
DOCUMENT HAVE BEEN OMITTED AND HAVE BEEN SEPARATELY FILED WITH THE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.”

 

	
  DATE

  	
   

  	
  April 28 1999

  

 

 

AUTOGEN Pty Ltd

 

 

and

 

 

LIPHA S.A.

 

 

 

RESEARCH AND LICENCE AGREEMENT

(Field of Obesity)

 

 

1

 

	
  THIS AGREEMENT is made on

  	
   

  	
  April 28 1999

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BETWEEN

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Autogen Pty Ltd ACN 074 636 847

  	
   

  	
   

  
	
  of
  210 Kings Way, South Melbourne, Victoria, Australia

  	
   

  	
   

  
	
   

  	
   

  	
  (“Autogen”)

  
	
   

  	
   

  	
   

  
	
  AND

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Lipha S.A.

  	
   

  	
   

  
	
  of
  37 rue Saint Romain, 69379 Lyon, CEDEX 08, France

  	
   

  	
   

  
	
   

  	
   

  	
  (“Lipha”)

  

 

 

RECITALS:

 

A.            Lipha has for many years, been strongly
involved in the research, development, manufacturing and commercialisation of
pharmaceuticals addressing metabolic diseases and has invented, developed,
manufactured and marketed pharmaceutical products containing metformin, one of the leading oral anti-diabetic
products throughout the world.

 

B.            Lipha has agreed to provide research support to
the Autogen/Deakin/International Diabetes Institute (IDI) research program for
the discovery of novel genes involved in obesity and diabetes, the product of
these genes being able to be used as therapeutic agents or as a target for drug
discovery as well as providing in house facilities including combinatorial
chemistry to advance subsequent drug development in that field.

 

C.            Lipha and Autogen have entered into “Heads of
Agreement” dated December 15th, 1997 under which Autogen has agreed to carry
out Research with an option for Lipha to continue such research program.

 

D.            Lipha and Autogen
have agreed in accordance with provisions of Heads of Agreement to enter into
this research and licence agreement related to research into diabetes and novel
genes involved in obesity.  Lipha and
Autogen have simultaneously entered into a substantially similar agreement in
respect of diabetes.

 

2

 

OPERATIVE
PROVISIONS:

 

1.            INTERPRETATION

 

1.1          Definitions

 

In this agreement the following expressions have the following meanings:

 

“Affiliate” means with respect to a Party,
any person which directly or indirectly Controls, or is Controlled by, or is
under common Control with, such Party.

 

“Autogen Know-How” means Know-How owned by
or licensed to Autogen in relation to the Autogen Patents, or of relevance or
use in relation to the Licensed Field or the conduct of Stage 1 Research or
Stage 2 Research but excludes Stage 1 Know-How.

 

“Autogen Patents” means the patents and
patent applications owned by or licensed to Autogen related to the Licensed
Field including but not limited to those referred to in Schedule 1 and including:

 

(i)            any re-issue, renewal or extension of such a
patent or patent application (whether in whole or in part) and any patent of
addition thereto; and

 

(ii)           any supplementary
protection certificate or other form of extension based on or arising from such
patents or patent applications.

 

“Base Rate” means PIBOR rate published as such by the French Association of Banks
(Association Francaise de Banque (AFB)) or EURIBOR rate applicable on 1 January
1999 or at any later date, should such date be postponed for any reason and
published as such by the European Federation of Banks (Federation Européenne de
Banque (FEB)) plus in either case the amount of one 1.5% per annum.

 

“Business Day” means a day on which the
trading banks are open for general banking business in both Melbourne,
Australia and Lyon, France.

 

“Commencement Date” means the date of
execution of this agreement by the Party last signing it.

 

“Commercialisation Licence” means a licence
in respect of Patents and Know-How in the form of the agreement contained in Schedule 3.

 

“Complementary Agreement” means a detailed
agreement, if any, entered into towards the end of Stage 2 Research, including
all the terms of the Commercialisation Licence, unless the Parties agree to
amend the same, and otherwise taking account of the terms of any Joint Venture
Agreement.

 

“Control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management of
policies of a person.

 

3

 

“Diabetes Agreement” means the agreement
dated around the same date as this agreement and on substantially similar
terms, save that it relates to obesity rather than diabetes.

 

“Dollars” or “$” means Australian dollars.

 

“Europe” means those countries specified in Schedule 2.

 

“EUR” means the new European currency called
EURO.

 

“FFR” means French Francs.

 

“Force Majeure” means any cause which is not
within the reasonable control of the party affected by it including, but not
limited to, acts of God, industrial disputes of any kind, war declared or
undeclared, civil disturbance, acts or omissions of Government or other
competent authority, fire, lightning, explosion or flood.

 

“Further Development” means the program of
further research and development in relation to a Product or potential Product
undertaken after completion of Stage 2 Research.

 

“IDI” means International Diabetes
Institute, a company established in Victoria, Australia.

 

“Insolvency Event” means any event of
insolvency, bankruptcy or liquidation of the relevant party, including any
voluntary or involuntary judicial liquidation or re-organisation proceedings.

 

“Joint Venture Agreement” means a joint
venture in respect of certain specified Patents and Know-How, containing the
definitions and provisions contained in this agreement as specified in Schedule 4, and dealing with such other
matters as are specified in that schedule.

 

“Know-How” means technical, commercial and
other information, data, know-how, drawings, specifications and/or designs,
animal or other models, methodologies and biological materials embodied in some
Material Form, and without prejudice to the generality of the foregoing
includes:

 

(i)            all experimental,
manufacturing, process, analytical, packaging, product, warehousing, quality
control and quality assurance and marketing specifications, standards,
procedures, processes, methods, instructions and techniques, samples,
prototypes, formulae, writings of any kind, opinions or otherwise unwritten
data or in the form of computer software or computer programs or any part
thereof in any code; and

 

4

 

(ii)           all other information
and other material supplied to or received by a party or its Representatives
from another party or Representatives on a confidential basis pursuant to this
agreement.

 

“Licence” means the right and licence
granted by Autogen to Lipha pursuant to this agreement.

 

“Licensed Field” means the field of human
therapeutic applications for the treatment or prevention of diabetes and its
complications.  For clarity it is noted
that this does not include diagnostics or veterinary applications.

 

“Lipha Fields” means the Licensed Field and
the “Licenced Field) as described in the Diabetes Agreement, so long as that
agreement remains in full force and effect.

 

“Loss” means any loss, damage, cost,
interest, expense, fee, penalty, fine, forfeiture, assessment, demand, action,
suit, claim, proceeding, cause of action, liability or damages incurred by a
person, and includes:

 

(i)            the cost of any action taken by the person to
protect itself against any loss or to preserve any right it has under this
agreement; and

 

(ii)           where applicable
reasonable legal costs.

 

“Material Form” in relation to Information
includes any form (whether visible or not) of storage from which Information can
be reproduced, and any form in
which Information is embodied or encoded.

 

“Month” means calendar month.

 

“Novel Gene Product” means any new gene,
novel protein or novel antigen, and any product arising from the transcription
of these genes.

 

“Option Period” means the Research Term and
the 24 month period following the Research Term within which Lipha has the
option to decide whether it wishes to progress some part of Stage 1 Research to
Stage 2 Research.

 

“Party” means Autogen or Lipha and their
respective successors and permitted assigns and “Parties” means both of them.

 

“Patent” means any patent or patent
application as defined in the Patents Act
1952 (C’th) and any similar international, national or regional
patent or patent application and includes any and all extensions, renewals,
continuations, patent-of-addition and/or supplementary protection certificates
to any of the foregoing and includes any corresponding patent or patent
application taken out or applied for in any country in the Territory which is
fairly based upon or derived from any of the aforesaid patents.

 

“Pre-Stage 2 Results” means the Autogen
Patents, Autogen Know-How, Stage 1 Patents and Stage 1 Know-How.

 

“Products” means any products produced or
arising out of use of the results of Stage 1 Research or Stage 2 Research or
arising out of all and any further development by Lipha pursuant to Stage 1
Research or Stage 2 Research or both.

 

5

 

“Project Patents” means the Autogen Patents,
the Stage 1 Patents and/or the Stage 2 Patents.

 

“Project Research” means the research in the
area of obesity and diabetes of novel genes involved in obesity and diabetes
and the research arising therefrom, consisting of the Stage 1 Research and the
Stage 2 Research.

 

“Representatives” of a party means that
party’s directors, officers, employees or agents.

 

“Required Insurance” means:

 

(i)            public liability insurance in respect of Losses
up to a limit of $5,000,000 covering property damage and personal injury as may
be relevant to the performance of each party’s obligations under this agreement
to the other, including (without limitation) liability, loss or damage due to
negligent or malicious damage, data corruption or loss, fire, theft, electrical
and water damage; and

 

(ii)           if the relevant party
sells a Product, product liability insurance in respect of Losses up to a limit
of $20,000,000 covering any
liability associated with use or misuse of the Product including, personal
injury and consequential loss.

 

“Research Agreement” means the Research
Agreement dated 28 February 1997 between Autogen, IDI and Deakin University to
carry out research in the field of, amongst other things, obesity.

 

“Research Term” means the period which
commences on December 15, 1997 corresponding to the signature of Heads of
Agreement and which shall end on December 14, 1999, unless otherwise extended
pursuant to clause 3.4.

 

“Scientific Board” means the board established under clause 5.1.

 

“Stage 1 Know-How” means the Know-How relating to or arising out of Stage 1 Research.

 

“Stage 1 Patents” means Patents relating to
or arising out of Stage 1 Research.

 

“Stage 1 Research” means discovery of Novel Gene Products,
characterisation and studies of such Novel Gene Products in animal models and
human gene expression studies as resulting from such Stage 1 Research performed
according to this agreement as described in Schedule
5.

 

“Stage 1 Results” means the Stage 1 Know-How and the Stage 1
Patents.

 

“Stage 2 Know-How” means in the context of a Stage 2 Research
Program, the Know-How relating to or arising out of that Stage 2 Research
Program.

 

“Stage 2 Patents” means in the context of a Stage 2 Research Program,
Patents relating to or arising out of that Stage 2 Research Program.

 

“Stage 2 Research” means generally antibody productions, large
scale protein production, structural analysis, screening of compounds affecting
such Novel Gene Product, combinatorial chemistry, toxicological studies and
first clinical

 

6

 

studies in obese patients and completion of
dose efficiency relationship studies in obese patients (clinical Phase 2),
performed on products or technologies generated by Stage 1 Research according
to this agreement as described in Schedule 5.

 

“Stage 2 Research Program” means a program
of Stage 2 Research in respect of
a Novel Gene Product.

 

“Stage 2 Results” means in the context of a
Stage 2 Research Program, the Stage
2 Know-How and the Stage 2 Patents for that Stage 2 Research Program.

 

“Target Compound” means a compound or small molecule, or group
of the same, identified in the course of Project Research, being a compound
which it is expected will be Covered By a Project Patent.

 

“Term” means the period this agreement is in force pursuant to clause  13.

 

1.2          Construction

 

In this agreement unless the context otherwise requires:

 

(a)           Business Day. If any day appointed or specified by this agreement
for the payment of any money or the doing of any act or thing falls on a day
that is not a Business Day, the day so appointed or specified is deemed to be
the next day which is a Business Day.

 

(b)           Collective references. Reference to any thing (including, without
limitation, any amount) is a reference to the whole or any part of it and a
reference to a group of things or persons is a reference to any one or more of
them.

 

(c)           Defined expressions. If a word or phrase is defined, cognate words
and phrases have corresponding definitions.

 

(d)           Gender. Words importing any gender include the other
genders.

 

(e)           Headings. Headings must be ignored in construing this
document.

 

7

 

(f)           Joint liability. An obligation of two or more Parties binds
them jointly and severally.

 

(g)           Joint obligations. An obligation incurred in favour of two or
more Parties is enforceable by them jointly and severally.

 

(h)           Month. Means a calendar month.

 

(i)            Numbers. Words importing the singular include the plural and
vice versa.

 

(j)            Parts of agreement. References to this agreement include its
recitals, schedules and annexures.

 

(k)           Persons. References to persons include corporations and
bodies politic.

 

(l)            Reconstituted bodies. References to a body which has ceased to
exist or has been reconstituted, amalgamated, reconstructed or merged, or the
functions of which have become exercisable by any other person or body in its
place, is taken to refer to the person or body established or constituted in
its place or the person or body by which its functions have become exercisable.

 

(m)          Representatives and assigns. References to a person include the legal
personal representatives, successors and permitted assigns of that person.

 

(n)           Statutory amendments. A reference to a statute, ordinance, code or
other law includes regulations and other statutory instruments under it and
consolidations, amendments, re-enactments or replacements of any of them
(whether of the same or any other legislative authority having jurisdiction).

 

(o)           Variation. References to this or any other document include the
document as varied or replaced, and notwithstanding any change in the identity
of the Parties.

 

(p)           Writing. References to writing include any mode of
representing or reproducing words in tangible and permanently visible form, and
include telex and facsimile transmissions.

 

1.3          Diabetes Agreement Crossover

 

Whilst and so long as the Diabetes Agreement remains in full force and
effect, the parties agree, that for the purposes of the following defined terms
as included in the Diabetes Agreement those terms will have in that agreement
an extended meaning which includes the corresponding defined term as defined in
this agreement and vice versa:

 

(a)           Novel Gene Product;

 

(b)           Stage 1 Know-How;

 

(c)           Stage 1 Patents;

 

8

 

(d)           Stage 2 Know-How; and

 

(e)           Stage 2 Patents

 

2.             CONDITION AND INITIAL PAYMENTS

 

2.1          Approval
by parent

 

This agreement is conditional on the written approval of the Pharma
Management Board of Merck KGaA, the parent company of Lipha, of both this
agreement and the Diabetes Agreement.  If
such approval is not obtained by Lipha within 60 days of execution of this
agreement by Autogen, then this agreement will lapse and be of no further force
and effect.  Lipha must use all
reasonable endeavours to procure satisfaction with this condition.  If as a result of the non-satisfaction of
this condition, this agreement lapses, then the following will apply:

 

(a)           Autogen will not be liable to repay any
up-front payment made to it;

 

(b)           Lipha will have no entitlement to any Stage 1
Results;

 

(c)           Lipha will have no rights to any Stage 1
Results;

 

(d)           Lipha must immediately return to Autogen any
and all Autogen Know-How and Stage 1 Know-How; and

 

(e)           the provisions of clauses 9, 18, 20 and 21 will continue to apply.

 

2.2          Up-front
payment

 

Lipha has paid as an up-front payment to Autogen [*] FFR in
consideration of Autogen entering into this agreement, and granting to Lipha a
licence of the Autogen Patents and Autogen Know-How.

 

3.             STAGE 1 RESEARCH

 

3.1          Undertaking of Stage 1 Research

 

Autogen has been carrying out and must continue to carry out through
arrangement with Deakin University and IDI under the Research Agreement Stage 1
Research for the period of the Research Term. The currently agreed program for
Stage 1 Research is as set out in Schedule 5.
The general objective of Stage 1 Research is to identify Novel Gene Products
that may be of utility in the Licensed Field.

 

9

 

3.2          Initial contribution

 

Lipha has paid the sum of [*] FFR in respect of the first year of the
Research Term and a further [*] FFR in respect of the second year of the
Research Term as a part contribution to the cost of the research being funded
by Autogen under the Research Agreement in the Licenced Field.

 

3.3          Lipha contribution

 

At Autogen’s request, but at Lipha’s cost, Lipha agrees to perform
biotechnological studies for production and yield optimisation of protein and
limited animal pharmacological studies as part of Stage 1 Research up to a
limit of [*] FFR

 

3.4          Extension of Stage 1 Research

 

(a)           If Stage 1 Research is not completed during the
Research Term Lipha shall have the right to require Autogen to continue Stage 1
Research, and at the same time extend the Research Term, for successive periods
of one year, by giving written notice to Autogen not less than 3 months prior
to the expiry of the current Research Term, or in the case of the first
extension of the Research Term, not less than one month prior to expiry of the
Research Term.

 

(b)           Where Lipha does extend the Research Term then:

 

(i)            Lipha shall pay to Autogen for each renewal
period the amount [*] FFR as part contribution to the research being funded by
Autogen under the Research Agreement in the Licensed Field; and

 

(ii)           Autogen will then
continue to carry out through arrangement with Deakin University and IDI the
Stage 1 Research for the extended period of the Research Term.

 

(c)           Following the giving by Lipha of notice under
clause 3.4(a), the Parties will
liaise in relation to the content of the Stage 1 Research for the following
year, which will, unless otherwise agreed, be conducted under the Research
Agreement. Initially this liaison will take place through the Scientific Board,
who will prepare a draft research plan which is to be finally agreed between
the Parties.

 

(d)           The research being undertaken under the
Research Agreement may include more than just Stage 1 Research, and Autogen is
solely responsible for funding this as well as the balance of the funding
required to conduct the Stage 1 Research.

 

(e)           If Lipha elects not to extend the Research
Term, then without in any way limiting Lipha’s discretion in relation to such
decision, Lipha will give Autogen written reasons why it has elected not to do
so.

 

10

 

3.5          Transition to Stage 2 Research

 

Lipha is entitled at any time during the Option Period to exercise its
right by notice in writing to Autogen to proceed to Stage 2 Research.  Lipha in exercising its option will identify
the Novel Gene Product in respect of which Stage 2 Research is to commence.

 

3.6          Action on option

 

Upon receipt by Autogen of such notice of exercise by Lipha of its
option, under clause 3.5:

 

(a)           Lipha must, in the case of the first transition
of a Novel Gene Product to Stage 2 Research only, pay to Autogen the sum of [*]
FFR such amount to be paid within 30 Business Days of exercise by Lipha of its
option, it being acknowledged that Lipha will not have to pay such sums for
transition of further Novel Gene Products to Stage 2 Research following such
first transition; and

 

(b)          the Parties will execute a Commercialisation
Licence in respect of such Novel Gene Product.

 

This option may be separately exercised by Lipha in respect of separate
Novel Gene Products, and each exercise will lead to additional
Commercialisation Licences and Stage 2 Research Programs.

 

3.7          Autogen and Stage 1 Research Rights

 

Subject to the terms of this agreement and any other licence granted by
Autogen in favour of Lipha, Autogen will own and have an unfettered right to
use and exploit all Stage 1 Patents and Stage 1 Know-How in any and all fields.

 

3.8          Lipha Research Licence

 

Whilst Lipha is continuing Stage 1 Research, Stage 2 Research, Further
Development or paying royalties to Autogen under any Commercialisation Licence,
Lipha has a non-exclusive royalty free right to use the Pre-Stage 2 Results for
the purposes of its own internal research for human therapeutic purposes. This
research licence extends to Affiliates of Lipha.

 

3.9          Option lapsing

 

If Lipha does not exercise its option under clause 3.5 during the Option
Period then Lipha and its Affiliates must not thereafter in any way exploit,
benefit or use directly or indirectly Pre-Stage 2 Results save and except for
the purpose of their own internal research, but, for the sake of clarity not
for any research into Novel Gene Products discovered in the course of Stage 1
Research.

 

3.10        Stage 1 Patents

 

(a)           Where either party in the course of Stage 1
Research makes or discovers any patentable invention then it must forthwith
advise the other party in writing together with full details. Lipha will have
the first option to patent such invention at its own cost, and if it elects not
to do so then Autogen may do so at its cost. Any

 

11

 

such patent application in respect of Stage 1
Research will be in the name of Autogen.

 

(b)          If Autogen has patented an invention under clause 3.10(a) and paid the costs of
such patenting, and Lipha elects to participate in Stage 2 Research in respect
of the Stage 1 Research to which the invention relates, Lipha will then
reimburse to Autogen the reasonable external costs incurred by Autogen in
respect of each patent.

 

(c)           If Lipha does not exercise its option in
respect of the Novel Gene Product within the Option Period then Autogen will be
free to offer the Novel Gene Product to third parties on such terms as it
considers appropriate.  In doing so
Autogen may grant to such third parties a licence in respect of the Autogen
patents and the Stage 1 Patents to the extent that such a licence  is necessary to exploit the Novel Gene
Product and such licence will not be a breach of any licence granted by Autogen
in the Lipha Fields to Lipha, the scope of any licence in favour of Lipha being
commensurately reduced, such reduction being limited to a reduction in respect
of such Novel Gene Product.

 

(d)          In the case where Lipha patents an invention
pursuant to clause 3.10(a) where
the invention also has application in areas outside the Licensed Fields,
Autogen may:

 

(i)            require Lipha to patent the invention in such a
manner as to include the application of the invention in those areas outside
the Licensed Fields (and if this involves any additional external cost to
Lipha, Autogen will reimburse to Lipha the reasonable additional external
costs); or

 

(ii)           patent the invention
itself in so far as the invention has application outside the Licensed Fields
and, in this case, Autogen can require Lipha to amend or limit the patent
lodged by Lipha so that the patent only covers the Licensed Fields.

 

3.11        Continuing Research Agreement

 

Where Lipha has ceased to provide support for research being conducted
under the Research Agreement as contemplated by clause 2.4, Lipha acknowledges it will have no
rights in respect of any new or further Know-How or Patents arising under such
Research Agreement.

 

4.             STAGE 2 RESEARCH

 

4.1          Multiple Stage 2 Research Programs

 

The Parties acknowledge that there may be multiple Stage 2 Research
Programs, each of which will be based on or around different Novel Gene
Products, and will generate their own Know-How and Patents.

 

4.2          Undertaking Stage 2 Research

 

(a)           Where Lipha has exercised its rights as
provided in clause 3.5 or 3.10 in respect of a Novel Gene Product,
Lipha will have sole carriage of all research and development in respect of
that Novel Gene Product until completion of the Stage 2

 

12

 

Research Program in respect of that Novel Gene
Product. Each Stage 2 Research Program will be conducted and funded by Lipha
until completion of that Stage 2 Research Program. Each Stage 2 Research
Program must be directed at developing Novel Gene Products within the Licensed
Field and discovering Target Compounds for use within the Licensed Field.  Autogen may itself or through others seek to
develop and exploit Novel Gene Products outside of the Licenced Field.

 

(b)          Where Autogen desires to develop and exploit
Novel Gene Products outside of the Licensed Field through a third party, then
Autogen will at first instance engage in discussions with Lipha with a view to
looking at opportunities for the Parties to work together on such development
and exploitation.

 

4.3          Licence to Lipha

 

Where Lipha is solely undertaking a Stage 2 Research Program then:

 

(a)           all Stage 2 Know-How or Stage 2 Patents in
respect of that Stage 2 Research Program will belong solely to Lipha, subject
to the remainder of this clause and clauses
4.6, 4.8 and 4.9, and Lipha will be solely responsible for
the cost of obtaining and maintaining any patent or other protection, provided
that:

 

(i)            Lipha may not assign any Stage 2 Results to a
third party without the prior written consent of Autogen which consent will not
be unreasonably withheld provided the assignee agrees to similar conditions in
respect of such Stage 2 Results as are applicable under this agreement and the
relevant Commercialisation Licence and in a manner which makes those conditions
enforceable against the assignee by Autogen; and

 

(ii)           if Lipha seeks to
patent an invention from the Stage 2 Research which has application
exclusively outside the Licensed Field, then Lipha must notify Autogen of such
invention prior to lodgment of the application for the patent and Autogen can
require Lipha to extend the patent in respect of claims or other matters
outside of the Licensed Field;

 

(b)          Autogen grants to Lipha a licence in respect of
the Pre-Stage 2 Results within the Licensed Field to the extent necessary to
undertake the Stage 2 Research Program, but not to undertake commercialisation
(which must be subject to the Commercialisation Licence or a Complementary
Agreement), such licence to be exclusive in the Licensed field, royalty free
and extending to Affiliates of Lipha.

 

4.4          Autogen Stage 2 Research assistance

 

Autogen agrees upon Lipha’s request to cooperate with Lipha for Stage 2
Research and both Parties may agree on specific studies to be included in a
Stage 2 Research Program which are to be performed by Autogen or through
Autogen and paid by Lipha, provided Lipha has previously given Lipha’s written
approval on the costs of such studies. Lipha agrees that it will not in respect
of any Stage 2 Research contract directly with Deakin University or IDI without
the prior written consent of Autogen, it being the expectation that any
research conducted by those Parties will be contracted through Autogen.

 

13

 

4.5          Obligations of Lipha

 

Lipha will use its best endeavours to progress each Stage 2 Research
Program in a timely and diligent fashion and with a substantial dedication of
resources. Where activities forming part of a Stage 2 Research Program could
properly and effectively be undertaken at IDI or Deakin University, then Lipha
will consider the possible performance of those activities at those
institutions, subject to clause 4.4,
and will not conduct such activities through other third Parties without first
offering them to IDI or Deakin University as appropriate.

 

4.6          Rights of Autogen

 

(a)           Lipha grants to Autogen and its Affiliates,
with a right to sublicencee to IDI and Deakin University, a non-exclusive
royalty free right to use for the purposes of their own internal research the
Stage 2 Results of all Stage 2 Research Programs.

 

(b)           If such internal research leads to an invention
which can be commercialised within the Licensed Fields, then Lipha will have
the first option to commercialise such invention within the Licensed Fields,
and the Parties will negotiate in good faith in this regard. If agreement cannot
be reached within 90 days of the making of a formal offer by Autogen, then
Autogen will be free to offer the commercialisation opportunity to third
Parties, but on no better terms than those offered to Lipha, unless it first
offers such better terms to Lipha, which will have 14 days to either accept or
reject such terms.

 

(c)           If the internal research conducted under clause 4.6(a) leads to the
commercialisation of the results of such internal research outside the Licensed
Fields by Autogen, either on its own account, or acting as licensee on behalf
of IDI or Deakin University then the Parties agree to negotiate in good faith
for the grant by Lipha of a royalty bearing licence in respect of the ongoing
use of the Stage 2 Results in such commercialisation. The Parties acknowledge
that the natural outcome of such discussions may be that Lipha takes on the
role of commercialisation of the results of such internal research.

 

4.7          Discontinuation of Stage 2 Research

 

Lipha has the right at its own option and without any liability to
Autogen to stop a Stage 2 Research Program if further development is not
justifiable due to Lipha’s reasonable determination that for efficacy, safety
or medical reasons, the validity of the Patents covering such Novel Gene
Product, a substantial change of economic factors or otherwise, such
development should be terminated. If Lipha does cease such development it must
promptly advise Autogen and provide written reasons as to why Lipha has ceased
such development, but Lipha’s determination will prevail. Lipha must endeavour
to consult with the Scientific Board prior to ceasing development.

 

4.8          Unwanted rights Stage 2 Results

 

Where in accordance with clauses 4.7 or 7.2 Lipha ceases a Stage 2 Research
Program, Lipha retains the exclusive ownership of the relevant Stage 2 Results
generated up to the

 

14

 

date of the cessation of that Stage 2 Research Program, provided that
Autogen may request a commercial and research licence of such Stage 2 Results,
in which case the Parties will negotiate in good faith the terms of a licence
(which may be exclusive or non-exclusive) for development and commercialisation
of such Stage 2 Results, and unless the negotiated licence otherwise provides,
Autogen must not assign the rights licensed from Lipha to a third party without
the prior written consent of Lipha, which consent must not be unreasonably
withheld.

 

4.9          Commercialisation Licences required

 

In the event Lipha wishes to in any way use, commercialise, licence, or
assign Stage 2 Results, then, unless it does so pursuant to a Complementary
Agreement, it must enter into a Commercialisation Licence in respect of those
Stage 2 Results, to the intent and with the effect that amongst other things
Autogen will receive “royalties” in respect of such use, commercialisation,
licensing or assignment.

 

5.             RESEARCH GENERALLY

 

5.1          Scientific Board

 

The Parties agree to establish a scientific board comprised of both
Parties’ representatives to discuss between the parties the carrying out of
Stage 1 Research.  The Scientific Board
will consist of 2 representatives of Autogen, initially Prof. Gregory Collier
of Deakin University and Prof. Paul Zimmet of IDI and 2 representatives of Lipha.

 

5.2          Meetings of the Scientific Board

 

Scientific Board meetings will be held every three (3) months, or as
otherwise agreed by the Parties and each party may have any of its employees
participate in said meeting if the party considers it necessary. Such meeting
shall take place alternating at each party’s place of business or at any other
place subject to prior agreement by the Parties, and be chaired by a
representative of the party who hosts the meeting. The chairman of the meeting
must circulate the agenda for the meeting at least 2 weeks prior to each
meeting and will issue the formal minutes of the meeting.

 

The Parties agree that Scientific Board meetings are only a place to
report and discuss:

 

(a)           the progress of each party’s research and
development work related to Stage 1 Research; and

 

(b)           the progress of Lipha’s research and
development work related to each Stage 2 Research Program,

 

but the Scientific Board does not have capacity to make decisions on
important matters to bind either party, unless otherwise agreed.

 

5.3          Reports

 

(a)           Autogen agrees that it will prepare and submit
reports to Lipha every 3 months during Stage 1 Research and it shall promptly
give to Lipha at the end of Stage 1 Research a final and detailed report on
such Stage 1 Research.

 

15

 

(b)           If Lipha performs part of Stage 1 Research, as
contemplated by clause 3.3, it
will prepare and submit reports to Autogen every 3 months on such studies
related to Stage 1 Research and it shall promptly give to Autogen at the end of
Stage 1 Research a final and detailed report on such studies.

 

(c)           Lipha agrees that it will prepare and submit
reports to Autogen every 3 months during each Stage 2 Research Program and it
shall promptly give to Autogen at the end of each Stage 2 Research Program a
final and detailed report on such completion of Stage 2 Research.

 

(d)           The reports provided above must in each case
set out in reasonable and informative detail the activities undertaken in the
period to which the report relates, and the activities planned for the next
reporting period, if any.

 

6.             OPTION FOR FURTHER AGREEMENT

 

6.1          Multiple Complementary Agreements

 

If, and each time, Lipha exercises its option under clause 3.5 or 3.9
then the Parties agree, if it is necessary, to enter into a Complementary
Agreement which will take effect no later than 6 months prior to completion by
Lipha of relevant Stage 2 Research Program. A Complementary Agreement may not
be required if Lipha does not elect to proceed with a Joint Venture Agreement.

 

6.2          Licence milestones

 

Within 30 days after the commencement of Phase III clinical trials in
respect of a Product the subject of a Stage 2 Research Program Lipha must pay
to Autogen a milestone payment of:

 

(a)           if Lipha elects to proceed with a Joint Venture
Agreement, [*] FFR (less any amount paid in respect of the first transition of
a Novel Gene Product to Stage 2 Research under clause 3.6(a), which is non refundable and will not be
credited against future royalty payments, if any, payable to Autogen; or

 

(b)          in any other case [*] FFR for (less any amount
paid in respect of the first transition of a Novel Gene Product to Stage 2
Research under clause 3.6(a))
provided that [*] FFR of such milestone payment will be treated as an advance
royalty and be credited against future royalty payments, if any, payable to
Autogen.

 

7.             COMMERCIALISATION LICENCE

 

7.1          Requirement for such a licence

 

Upon exercise by Lipha of its option to commence each relevant Stage 2
Research Program, the Commercialisation Licence for the Stage 2 Research
Program will be deemed to be in force, and Lipha and Autogen must promptly
execute a Commercialisation Licence.

 

16

 

7.2          Failure to sign Commercialisation Licence

 

In the event that the Commercialisation Licence in respect of a Stage 2
Research Program is not executed in accordance with clause 7.1, then:

 

(a)           the relevant Stage 2 Research Program must
cease; and

 

(b)          the provisions of clause 4.8 will apply.

 

7.3          Commercialisation

 

The obligations of each of the Parties in respect of commercialisation
will be as contained in the relevant Commercialisation Licence or Complementary
Agreement (if any).

 

8.             INDUSTRIAL AND INTELLECTUAL PROPERTY RIGHTS

 

8.1          Autogen Patents, Autogen Know-How and Stage 1 Results

 

The Autogen Patents, Autogen Know-How and Stage 1 Results (as per clause 3.7) are owned by Autogen, or
exclusively licensed by it from IDI or Deakin University and are freely
exploitable by it, subject to:

 

(a)           a research licence in favour of Lipha and its
Affiliates within the Licensed Field (as per clause
3.8);

 

(b)          an exclusive licence in favour of Lipha within
the Licensed Field for commercialisation in terms of the relevant
Commercialisation Licence (if any); and

 

(c)           if appropriate, the rights granted under the
Joint Venture Agreement.

 

8.2          Scope of any exclusive licence

 

Any grant of an exclusive licence in a given limited field in respect of
Patents or Know-How, does not preclude the licensing of the same Patents or
Know-How for use or exploitation in some other field.

 

8.3          Stage 2 Results

 

As provided in clause 43(a)
Stage 2 Results in respect of each Stage 2 Research Program are owned by Lipha
and are freely exploitable by it, subject to:

 

(a)           a research licence in favour of Autogen and its
Affiliates and IDI and Deakin University for the purpose of their own internal
research, as provided in clause 4.6;

 

(b)          a right for Autogen to seek a licence in
certain circumstances as provided in clause
4.8;

 

(c)           the use of, including the licensing of such
Stage 2 Results, being subject to the same restrictions as are applicable to
Pre-Stage 2 Results, under a

 

17

 

Commercialisation Licence, save for the
Licensed Field restriction, but including, amongst other things:

 

(i)            the obligation to pay “royalties” to Autogen
for the use or exploitation of the Stage 2 Results; and

 

(ii)           the requirements in
relation to the grant of licences of the Stage 2 Results,

 

to the intent that Stage 2 Results will be accorded the same treatment
and generate for Autogen the same benefits and entitlements as Pre-Stage 2
Results, even though their legal ownership is different.

 

8.4          Use outside of Licensed Field

 

While Stage 2 Results are freely exploitable by Lipha outside of the
Licensed Field (subject to clause 7.3),
this does not imply any licence to use Pre-Stage 2 Results outside of the
Licensed Field, and Lipha will need to seek a licence from Autogen in relation
to the same, if such exploitation uses Pre-Stage 2 Results, or would amount to
an infringement of Stage 1 Patents or Autogen Patents.

 

9.             CONFIDENTIAL INFORMATION

 

9.1          Obligations to Autogen

 

Subject to clauses 9.3 and 9.6, Lipha covenants with Autogen as
follows:

 

(a)           to keep all Know-How belonging to Autogen or supplied
to it by Autogen, including the existence of such Know-How, strictly secret and
confidential (including from all its employees, servants and agents),
exercising at least the same degree of care as it uses to maintain its own
Know-How;

 

(b)           to provide proper and secure storage for such
Know-How within its possession or control;

 

(c)           to use such Know-How only for the purposes of
this agreement and not for any other activity or purpose whatsoever without the
prior written approval of Autogen; and

 

(d)           to not copy or reduce to writing or any other
medium any part of such Know-How except as may be reasonably necessary for the
purposes of this agreement.

 

9.2          Obligations to Lipha

 

Subject to clauses 9.3 and 9.6,
Autogen covenants with Lipha as follows:

 

(a)           to keep all Know-How belonging to Lipha or
supplied to it by Lipha, including the existence of such Know-How, strictly
secret and confidential (including from all its employees, servants and
agents), exercising at least the same degree of care as it uses to maintain its
own Know-How;

 

(b)           to provide proper and secure storage for such
Know-How within its possession or control;

 

18

 

(c)           to use such Know-How only for the purposes of
this agreement and not for any other activity or purpose whatsoever without the
prior written approval of Lipha; and

 

(d)           to not copy or reduce to writing or any other
medium any part of such Know-How except as may be reasonably necessary for the
purposes of this agreement.

 

9.3          Exceptions to obligations

 

The obligations of confidence set out in clauses 9.1 and
9.2 do not extend to Know-How which:

 

(a)           at the time of disclosure to a party is in the
public domain;

 

(b)           after disclosure to a party becomes part of the
public domain otherwise than as a result of the wrongful act of that party or
one of that party’s disclosees;

 

(c)           a party can show was in its possession at the
time of disclosure and was not acquired directly or indirectly from the other
party; or

 

(d)           is received from a third party provided that it
was not acquired directly or indirectly by that third party from a party to
this agreement or under an obligation of confidence;

 

(e)           is required by compulsion of law to be
disclosed,

 

provided that:

 

(f)            the onus is on the party alleging the same to
prove that one of the above exceptions has application; and

 

(g)           in any case of
uncertainty as to whether the obligations in clauses 9.1 or 9.2 have
application to any information, such information must be treated as subject to
the obligations until advised otherwise by the party to whom the obligations
are owed.

 

9.4          Rights in Know-How

 

Each party acknowledges and agrees that each other party has made a
substantial investment in that party’s Know-How and has a legitimate right to
protect itself against wrongful disclosure or use of such Know-How.

 

9.5          Term of obligation

 

The obligations in this clause 9
survive the expiry or termination of this agreement for whatever reason and
continue for a period of 10 years, subject always to the exceptions included in
clause 9.3.

 

9.6          Permitted disclosures

 

Each party (“the first party”) is permitted to disclose Know-How
belonging to another party or supplied to it by another party (“the other party”)
to such of the first party’s Representatives as require access to such
information for the purposes of this agreement, provided that:

 

19

 

(a)           only such Know-How as needs to be disclosed to
a person for the purposes of this agreement will be disclosed to that person;
and

 

(b)           the first party must:

 

(i)            have obtained from each such person
undertakings in favour of the other party substantially in the form of the
relevant obligations and undertakings in this clause 9 (but not this clause 9.6);

 

(ii)           be responsible for
the performance of its Representatives’ undertakings referred to in clause 9.6(b)(i); and

 

(ii)           take whatever steps
are reasonably necessary, including the institution of legal proceedings, to
ensure that each of its Representatives is bound by and observes the terms of
the undertakings referred to in clause
9.6(b)(i).

 

9.7          Delivery-up of Know-How

 

All of a party’s Know-How and all materials containing or embodying such
Know-How and all copies of or extracts from or notes on the same in the possession,
power or control of another party or any of its employees, servants or agents
together with all forms and other materials relating to practices and
procedures in relation to the Know-How to the extent possible must:

 

(a)           in the event of the expiration or sooner
termination of this agreement, be delivered up by the other party to the first
party at the expense of the other party; and

 

(b)          in the event of any demand made by the first
party be delivered up by the other party to the first party at the expense of
the first party.

 

9.8          Terms of this Agreement

 

Lipha and Autogen shall not disclose any terms or conditions of this
agreement to any third party without the prior consent of the other party,
except as required by applicable law or local regulations or to a third party
with whom Autogen or Lipha has entered into or proposes to enter into a
business relationship, provided that such third party shall enter into a
confidentiality agreement with, or otherwise owe a duty or confidentiality to
Lipha or Autogen, as applicable.

 

9.9          Public Announcement

 

Except as required by law, order or regulation of a governmental agency
or a court of competent jurisdiction, no other announcement, public release or
notice of any kind may be issued without the express written consent of both
Parties, which consent shall not be unreasonably withheld, provided, however,
the Parties shall prepare a joint press release announcing the transaction set
forth in this agreement to be issued promptly upon execution of this agreement.

 

20

 

9.10        Continuous disclosure obligations

 

Autogen is a subsidiary of Australia Wide Industries Limited (“AWI”) ACN
000 248 304 which is listed on the Australian Stock Exchange (“ASX”). As such
Autogen is subject to the continuous disclosure requirements of the ASX. The
obligations of Autogen under this agreement will not restrict it or AWI from
making whatever disclosures are necessary for the purposes of fulfilling the
requirements applicable to AWI as a company listed on the ASX, and neither
Autogen or AWI is under any obligation to delay the public release of any
required announcement pending the provision of any consent or approval from
Lipha. The above provision will also apply with such adaptations as are
necessary to disclosure obligations imposed upon Lipha as a subsidiary of its
listed parent Merck KGaA.

 

10.          LIABILITY

 

10.1        Responsibility for Products

 

Lipha must ensure at all times that Stage 2 Research is conducted and
Products are developed, manufactured, tested and used strictly in accordance
with all relevant applicable requirements and standards of relevant
jurisdictions and Lipha will be responsible for conducting its own independent
examination and verification of the accuracy and suitability of Pre-Stage 2
Results and for ensuring the same are suitable for the purposes for which the
same are used.

 

10.2        Autogen not liable

 

Except as provided in clauses 11.2
and 17.2, Autogen is not liable
(in contract or tort or otherwise) to compensate Lipha for any loss howsoever
arising suffered by Lipha arising directly or indirectly from the use by Lipha
of Pre-Stage 2 Results or the sale of Products.

 

11.          INDEMNITIES

 

11.1        Indemnity by Lipha

 

Lipha agrees to indemnify Autogen against and hold Autogen harmless from
any and all Losses arising from or in connection with:

 

(a)           a breach by Lipha of any of its warranties or
obligations under this agreement;

 

(b)           the conduct of Stage 1 Research by Lipha under clause 3.3; and

 

(c)           the conduct of Stage 2 Research,

 

provided that Lipha is not required to indemnify Autogen for any Losses
to the extent they result from Autogen’s or its Representatives negligence or
breach of any of Autogen’s warranties or obligations under this agreement.

 

11.2        Indemnity by Autogen

 

Autogen agrees to indemnify Lipha and hold Lipha harmless from any and
all Losses, arising from or in connection with:

 

21

 

(a)           a breach by Autogen of any of its warranties or
obligations under this agreement;

 

(b)           the negligent performance by Autogen, IDI or
Deakin University of the Stage 1 Research; and

 

(c)           the termination of the Research Agreement as a
result of the failure of Autogen to provide research funding under this
agreement (other than as a result of any act or omission of Lipha or its
Representatives),

 

provided that Autogen is not required to indemnify Lipha for any Losses
to the extent they result from Lipha’s or its Representatives’ negligence or
breach of any of Lipha’s warranties or obligations under this agreement.

 

11.3        Notification regarding indemnity

 

Each party must promptly notify the other of any claims or suits for
which the first party may assert indemnification from the other party and the
first party will permit the other party and its insurer at the other party’s
expense to assume or participate in the defence of any such claims or suits and
the first party will co-operate with the other party or its insurers in such
defence when reasonably requested to do so.

 

12.          INSURANCE

 

Each party must have and must maintain for the Term the relevant
Required Insurance.  The Required
Insurance must be with a reputable insurer and name the other party as an
additional insured.  Each party will at
the others request provide to that party a certificate from a reputable
insurance broker confirming that the insurance required by this clause in
currently in effect.

 

13.          TERM AND TERMINATION

 

13.1        Term

 

Subject to making of the payment contemplated by clause 3.4(a), or earlier termination pursuant to
the further provisions of this clause 13,
the initial term of this agreement will expire on 14 December 1999, subject to
extension pursuant to clause 3.4.
In the event that Lipha exercises its option in relation to undertaking Stage 2
Research, then this agreement will be extended and continue to apply whilst and
so long as any Stage 2 Research Program continues, it being acknowledged that
in such circumstances Lipha is not obliged to extend the Research Term (and
comply with clause 3.4(b)) unless
it wishes to extend Stage 1 Research in respect of some other Novel Gene
Product.

 

13.2        Termination for breach

 

If one party breaches any term, provision or obligation of this
agreement (the “Defaulting Party”) and the Defaulting Party fails to:

 

(a)           remedy such breach within 60 days after receipt
of notice from the other party requiring remedy of the breach; or

 

22

 

(b)           if the breach cannot be remedied within the
said 60 day period, commence action within the said 60 day period to remedy the
breach and undertake in writing to the other party to complete remedy of the
breach as soon as practicable thereafter,

 

the other party has the right to terminate this agreement immediately
upon the expiration of the said period of 60 days by written notice to the
Defaulting Party.

 

13.3        Termination in default of payment

 

This agreement may be forthwith terminated by a party by giving notice
to the other party if that other party defaults in the payment of any money due
by that other party to the first party under this agreement and such default
continues for a period of 30 days after notice has been given to the other
party demanding the payment of such money.

 

13.4        Grounds for immediate Termination

 

Subject to clause 12.5, this agreement may be terminated by a
party giving notice to the other party upon the happening of any of the
following events in respect of that other party:

 

(a)           an Insolvency Event; or

 

(b)           if the other party is in breach of an
undertaking given pursuant to clause 13.2(b).

 

13.5        Reconstruction exception

 

A winding up or liquidation for the purposes of reconstruction or
amalgamation by the other party is not an event permitting or giving rise to
termination if after that reconstruction or amalgamation the resulting
corporation becomes bound by the terms of this agreement by way of assignment
or novation.

 

13.6        Termination by Autogen

 

Autogen may terminate this agreement upon notice to Lipha if:

 

(a)           there is a change of greater than 50% in the
control of the issued voting capital of Lipha or a holding company (if any) of
Lipha other than for the purpose of internal re-construction;

 

(b)           a person or persons not previously in Control
of Lipha obtain Control of Lipha or a holding company (if any) of Lipha; or

 

(c)           if Lipha or any of its affiliates challenges or
seeks or causes to be challenged the validity of the Project Patents.

 

13.7        Termination by Lipha

 

Lipha may terminate this agreement upon notice to Autogen if there is a
change of greater than 50% in the control of the issued voting capital of
Autogen or a holding company (if any) of Autogen other than for the purpose of
internal re-construction.

 

23

 

13.8        Termination to be without prejudice

 

Any termination of this agreement is without prejudice to the rights
which a party has against the other in respect of anything done or omitted to
be done hereunder prior to such termination or in respect of any sums or other
claims outstanding at the time of termination.

 

13.9        Survival of provisions

 

The provisions of clauses 1, 3.8, 3.9,
4.3, 4.6, 4.8, 4.9, 8.3, 8.4,  9, 11, 12,
13.8, 13.9, 15.1, 19, 20 and 21
will survive termination of this agreement.

 

14.          OBLIGATIONS AND RIGHTS ON TERMINATION

 

Immediately upon termination or expiration of this agreement, each party
must return or destroy all copies of Know-How owned or supplied by the other
party, except for the retention of a copy as necessary for that party to be
able to exploit any continuing licenses.

 

15.          WARRANTIES

 

15.1        General warranties

 

Each party represents and warrants to the other that:

 

(a)           it has all necessary powers and authorisations
necessary to enter into this agreement and observe its obligations hereunder
and allow this agreement to be enforced against it; and

 

(b)          all necessary consents, approvals and
authorisations of all governmental authorities required to be obtained by that
party in connection with this agreement have been obtained; and

 

(c)           the execution and delivery of this agreement
does not contravene any law, regulation or official directive or any
obligations or undertakings, contractual or otherwise, by which it or any of
its assets are bound or cause a limitation on its powers to be exceeded; and

 

(d)          the performance of the party’s obligations under
this agreement:

 

(i)            do not and will not conflict with or violate
any requirement of applicable laws or regulations; and

 

(ii)           do not and will not
conflict with, or constitute a default under any contractual obligation of that
party; and

 

(e)           there does not presently exist any event which
would either now or with the effluxion of time entitle the other party to
terminate this agreement pursuant to clause
13; and

 

(f)           it is not a party to any pending or threatened
action or proceeding affecting it or any of its assets before a court,
governmental agency, commission or arbitrator

 

24

 

where an adverse outcome could reasonably be
expected to adversely impact upon the performance of its obligations under this
agreement; and

 

(g)          it has no immunity
from the jurisdiction of a court or from legal process (whether through service
of notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise).

 

15.2        Specific warranty for Autogen Patents

 

Autogen warrants to Lipha that:

 

(a)           as at the date of this agreement it has
disclosed to Lipha details of all prior art sighted by Autogen by way of
international search in relation to the Autogen Patents, but does not warrant
that it has undertaken a thorough or exhaustive search of prior art; and

 

(b)          at the date of this agreement it is unaware of
any other Patent which has not been disclosed to Lipha and which may be
infringed by Lipha using the Autogen Patents in accordance with the terms of
this agreement.

 

15.3        Warranties by Lipha

 

Lipha warrants to Autogen that:

 

(a)           it will obtain or has obtained from its
Representatives who have access to the Autogen Know-How and Stage 1 Know-How
written obligations to treat such information as confidential strictly in
accordance with this agreement.

 

(b)          that it has made its own enquiries into the
validity and enforceability of the Autogen Patents and satisfied itself that
the usage by Lipha, its Affiliates or sub-licensees of the Autogen Patents and
the Confidential Information do not and will not infringe the intellectual
property rights of any third party.

 

16.          PROTECTION OF PATENTS

 

16.1        Maintenance of Patents

 

Autogen is responsible for the cost of preparing filing prosecuting and
maintaining the Autogen Patents but nothing expressed or implied herein
necessarily obligates Autogen to institute legal proceedings to protect
same.  The party  responsible for the cost of preparing, filing,
prosecuting and maintaining the Stage 1 Patents will initially be determined in
accordance with clause 3.10,
provided that as from the date that a Commercialisation Licence in respect of
Stage 1 Patents is entered into between the Parties, Lipha will assume full
responsibility for the full cost of preparing, filing, prosecuting and
maintaining such Stage 1 Patents.  Lipha is responsible for the cost
of preparing, filing, prosecuting and maintaining the Stage 2 Patents.  Nothing expressed or implied herein
necessarily obligates Lipha to institute legal proceedings to protect Stage 1
Patents or Stage 2 Patents.

 

25

 

16.2        Reporting infringements

 

A party must promptly report to the other in writing particulars of any
action or activity of which the first party becomes aware which might
reasonably amount to infringement of or challenge to any of the Pre-Stage 2
Results or Stage 2 Results.

 

16.3        Conduct of proceedings regarding Pre-Stage 2 Results

 

Lipha has the first right to take control of and conduct any
infringement proceedings in respect of the Pre-Stage 2 Results where such
infringement is within the Licensed Field. 
Should Lipha undertake such proceedings Autogen must fully co-operate
with Lipha in relation to such action including the lending of Autogen’s name
to the action and assistance by personnel of Autogen. The costs and expenses of
any such action will be borne by Lipha, and the proceeds of such action after
payment of Lipha’s reasonable external costs will be divided between Autogen
and Lipha on the basis that Autogen gets 50% and Lipha the balance. In the
event Lipha does not wish to undertake the conduct of such proceedings on its
own, Autogen and Lipha must discuss whether they will undertake joint
proceedings and if so on what basis. If no such agreement can be reached Autogen
is entitled to bring an action in its own name, and Lipha must provide Autogen
with all reasonable assistance including lending Lipha’s  name to such action.  Autogen must bear all the costs of such an
action, and the proceeds of any such action belong to Autogen absolutely.

 

17.          INFRINGEMENT OF OTHERS RIGHTS

 

17.1        Notification of action

 

In the event that legal action is threatened or commenced against Lipha
arising out of Lipha’s use of Autogen Patents or Autogen Know-How, Lipha must
not make any admissions or enter into any substantive steps in connection
therewith but must promptly notify Autogen.

 

17.2        Autogen action

 

If such legal action against Lipha arises out of the use of the Autogen
Patents or Autogen Know-How in accordance with the terms and conditions of this
agreement in relation to Products, then Autogen must defend and/or assist in
the defence of such litigation, and must bear the reasonable costs and expenses
of such defence. If as a result of such proceedings any damages or awards are
assessed against Lipha, then provided that Lipha has at all times followed the
instructions of, or otherwise obtained the consent of, Autogen in respect of
the defence of such claims, then such damages or awards, as well as any and all
reasonable costs incurred by Lipha, must be satisfied and paid by Autogen.

 

17.3        Lipha action

 

If such legal action against Lipha related to the use by Lipha, Lipha
Affiliates or sub-licensees of the Autogen Patents or Autogen Know-How or use
of Stage 1 Patents, Stage 1 Know-How or Stage 2 Patents or Stage 2 Know-How
other than in accordance with the terms and conditions of this agreement Lipha
must promptly notify Autogen of the commencement of legal action. Autogen must
(at the expense of Lipha) assist Lipha’s efforts to settle and/or defend such
claims. Lipha must bear all its own costs and expenses

 

26

 

and must be responsible for awards against it and Autogen, as well as
any and all reasonable costs incurred by Autogen, to the extent that
indemnification, warranties and other claims may not be available against
Autogen.

 

If any amounts are recovered by or awarded or paid to Lipha from or by a
third party as a result of any such action or litigation, Lipha must from such
amounts reimburse Autogen for all costs and amounts paid by Autogen in
connection with such action or litigation and must, after deducting the legal
costs incurred by it in taking such legal or other action, pay to Autogen from
any compensation recovered thereby, Autogen’s part thereof determined in
accordance with the respective interests of the Parties in such compensation.

 

18.          FORCE MAJEURE

 

18.1        Party not liable

 

Where a party is required under this agreement to perform an obligation
or do any act or thing by a designated time or date (other than an obligation
to make payment) (“Obligation”), the party is not to be liable for any delay in
performing or for failure to perform an Obligation where the delay or failure
arises from Force Majeure and that party has complied with this clause.

 

18.2        Notice of Force Majeure

 

A party who claims Force Majeure must:

 

(a)           give the other party prompt notice of the Force
Majeure with reasonably full particulars and an estimate of the extent and
duration of its delay in performance, or inability to perform; and

 

(b)          use all possible diligence to remove the Force
Majeure as quickly as possible provided that this will not oblige the party to
settle on terms unsatisfactory to that party any strike, lockout or other
labour difficulty, or any investigation or proceeding by any governmental
authority or any litigation by any third party.

 

18.3        Termination in case of Force Majeure

 

If the delay continues beyond 30 Business Days, after the notice given
under clause 18.2, the Parties must
meet to discuss in good faith a mutually satisfactory resolution of the problem
and, if unable to achieve such a resolution within a further 30 Business Days,
either party may elect to terminate this agreement by 5 Business Days prior
written notice to the other.

 

19.          ARBITRATION

 

In case of any disputes arising between the Parties or arising out of
the performance or non-performance of the obligations of either party
hereunder, or the termination of this agreement, the Parties will endeavour to
settle such disputes amicably between themselves.  If the Parties fail to resolve such disputes,
then such disputes shall be finally resolved by arbitration in accordance with
the Rules of Conciliation and Arbitration of the

 

27

 

International Chamber of Commerce (ICC) by one or more arbitrators
appointed in accordance with the said rules.

 

Any such arbitration will be held in English language and take place in
Paris - FRANCE.

 

20.          NOTICES

 

20.1        Form of Notice

 

Any notice, approval, consent or other communication (“notice”) from one
party to another (“Recipient”) must be in writing and be signed by a person
duly authorised by the person giving the notice.

 

20.2        Manner of Service

 

A notice must be served by:

 

(a)           leaving it at the Recipient’s address;

 

(b)          sending it by ordinary pre-paid post (airmail
if being sent from or to a place outside of Australia) to the Recipient’s
address; or

 

(c)           sending it by facsimile to the facsimile number
of the Recipient.

 

20.3        Address for Service

 

Until other details are specified by a Party as its address or facsimile
number for service the following apply:

 

Autogen

 

	
  Address
  :

  	
   

  	
  210
  Kings Way, South Melbourne, Victoria, Australia

  
	
   

  	
   

  	
   

  
	
  Facsimile
  :

  	
   

  	
  61
  3 9234 1190

  
	
   

  	
   

  	
   

  
	
  Attention
  :

  	
   

  	
  Company
  Secretary

  
	
   

  	
   

  	
   

  
	
  Lipha

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address
  :

  	
   

  	
  37
  rue Saint Romain, 69379 Lyon, CEDEX 08, France

  
	
   

  	
   

  	
   

  
	
  Facsimile :

  	
   

  	
  33-4-78-75-39-05

  
	
   

  	
   

  	
   

  
	
  Attention :

  	
   

  	
  Head of Legal
  Department

  

 

20.4        Time of Service

 

A letter or facsimile will be taken to be served:

 

(a)           in the case of a delivered letter, on the day
of delivery, unless delivery is made on a non Business Day or after 4:30 p.m.
(local time in the place of receipt) on a Business Day, in which case it will
be taken to be served on the next Business Day;

 

28

 

(b)          in the case of a posted letter, on the third
(or seventh in the case of airmail) Business Day after posting; and

 

(c)           in the case of a facsimile, on receipt by the
party giving the notice of a transmission confirmation report, unless within
one Business Day of receipt the Recipient has informed the party giving the
notice that the transmission was incomplete or garbled, provided that in any
case if transmission is completed after 4:30 p.m. (local time in the place of
receipt) or is received on a non Business Day, the notice will be taken to be
served on the next Business Day.

 

21.          MISCELLANEOUS

 

21.1        Severance

 

If any provision is held invalid or unenforceable, in whole or in part
in any jurisdiction, then such invalidity or unenforceability will only affect
such provision or part thereof in such jurisdiction, and will not in any manner
affect the provision in this agreement in any other jurisdiction.  To the extent legally permissible an
arrangement which reflects the original intent of the Parties must be
substituted for such invalid or unenforceable provision.

 

21.2        Waiver

 

The failure, delay, relaxation or indulgence by any party in exercising
any power or right given to that party under this agreement will not operate as
a waiver of that power or right, nor will any single exercise of a power or
right preclude any other or further exercise of it or the exercise of any other
power or right under this agreement.  A
power or right may only be waived in writing, signed by the party to be bound
by the waiver.

 

21.3        Relationship of Parties

 

Nothing contained in this agreement is to be construed so as to place
any Party in the relationship of principal, employee, agent, partner, joint
venturer or legal representative of any other Party. The Parties expressly
agree and acknowledge that each of the Parties is an independent contracting
Party and does not, unless expressly provided, have the authority or power for
or on behalf of any other Party to enter into any contract, to incur debts, to
accept money, to assume any obligations or to make any warranties or
representations.

 

21.4        Injunctive relief

 

If there is any conduct or threatened conduct which is or may be a
breach of this agreement, both Parties acknowledge that damages may be
inadequate compensation for such a breach and that the other Party is entitled
to apply to any court of competent jurisdiction for interim or permanent
injunctive relief or both restraining the other Party from committing any
breach or threatened breach of this agreement without showing or proving any
actual damage sustained by it. Such rights and remedies will be cumulative and
in addition to any other rights or remedies which that party may be entitled to
at law or in equity.

 

29

 

21.5        Proper law

 

This agreement must be construed in accordance with and governed by the
laws of the United Kingdom and its form, execution, validity, construction and
effect is to be determined in accordance with the laws of the United Kingdom.

 

21.6        Rule of construction

 

No rule of construction applies to this agreement to the disadvantage of
a Party because that Party was responsible for the preparation of this
agreement or any part of it.

 

21.7        Variation

 

Any modification, alteration, change or variation of any term or
condition of this agreement must be in writing, executed by all Parties.

 

21.8        Assignment

 

This agreement is personal to the respective Parties and neither is
entitled to assign in whole or in part without the prior written consent of the
other Party.

 

21.9        Further documents

 

Each Party agrees that it will forthwith upon the request of the other
Party execute and deliver all such instruments and agreements and will take all
such other actions as the other Party may reasonably request from time to time
in order to give effect to the provisions and purposes of this agreement.

 

21.10     Affiliates’ actions

 

Each Party will ensure that none of its Affiliates takes any action
which is inconsistent with that Party’s obligations under this agreement, or
which if it was done or not done under this agreement by that Party would
amount to a breach of this agreement by that Party.

 

21.11     Costs and Taxes

 

Each party must pay its own costs and expenses in relation to the negotiation,
preparation, execution, delivery, stamping and registration, completion,
variation and discharge of this agreement and Lipha must pay any Tax in respect
of the execution, delivery, performance, release, discharge, amendment,
enforcement or attempted enforcement or otherwise of any of the following:

 

(a)           this agreement;

 

(b)          any agreement or document entered into or
signed under this agreement;

 

(c)           any transaction contemplated under this
agreement; and

 

(d)          any payment made or received in respect of this
agreement,

 

except in any case to the extent to which such Tax is payable in
Australia or on or in respect of the income of Autogen.

 

30

 

21.12     Interest on overdue amounts

 

If any amount due under this agreement is not paid when due, then the
Party obliged to make payment must pay to the other Party interest at the Base
Rate on the amount due and payable, accruing from day to day and to be computed
from the date for payment of the amount until payment of the amount in full.

 

21.13     Counterparts

 

This agreement may be executed in counterparts, and by the Parties on
separate or the same counterparts, each of which is deemed an original, but all
of which constitute one and the same instrument.

 

21.14     Registration of agreement

 

If this agreement or any associated transaction is required by the law
of any country, other than Australia, to be either approved or registered in
any country or with any governmental agency, Lipha is responsible for obtaining
such approval or registration including without limiting the generality of the
foregoing, causing this agreement to be stamped, recorded and registered at its
cost in such country. Autogen agrees to co-operate in any such application or
registration procedure. Lipha must furnish proof of compliance with the
foregoing to Autogen when and if Autogen so requires.

 

21.15     Not obliged to act contrary to law

 

No Party is obliged to carry out or perform any of the terms of this
agreement where doing so would constitute a violation of any treaty, law, code
or regulation of any governmental authority whether local, national or
supranational. In any event the other terms of this agreement nevertheless
continue and the Parties must use all reasonable endeavours to re-negotiate and
amend this agreement so that the performance of this agreement as so amended
will not involve any such violation.

 

21.16     Statutory rights not limited

 

The powers, remedies and rights conferred upon the Parties by or under
any statute are (except to the extent inconsistent with the terms and
provisions expressed in this agreement) be in addition to the powers, remedies
and rights conferred by this agreement.

 

21.17     Consents

 

Unless this agreement provides otherwise and to the extent permitted by
law, a Party may, in its absolute discretion, conditionally or unconditionally
give or withhold any approval or consent permitted or required to be given by
it pursuant to this agreement.

 

21.18     Entire agreement

 

This agreement constitutes the entire agreement between the Parties in
relation to the subject matter of this agreement. Any prior arrangements,
agreements, representations or undertakings are superseded and, except as
expressly provided, each party acknowledges that it has not relied on any
arrangement, agreement, representation or understanding which is not expressly
set out in this agreement.

 

31

 

SCHEDULE 1

 

Autogen Patents

 

(Referred to in clause 1.1, definition of “Autogen Patents”)

 

International
Patent Application No. PCT/AU 98/00902 based on Australian Provisional Patent
Application Nos PP0117/97 and PP0323/97 “A novel gene and uses therefore”,
filed on 31 October, 1997 and 11 November, 1997 respectively, in the names of
International Diabetes Institute and Deakin University.

 

Both
application have a Priority Date of 31 October 1997.

 

32

 

SCHEDULE 2

 

Europe

 

	
  Albania

  	
   

  	
  Macedonia

  
	
  Austria

  	
   

  	
  Malta

  
	
  Belgium

  	
   

  	
  Moldavia

  
	
  Belarus

  	
   

  	
  Netherlands

  
	
  Bosnia-Herzegovina

  	
   

  	
  Norway

  
	
  Bulgaria

  	
   

  	
  Poland

  
	
  Croatia

  	
   

  	
  Portugal

  
	
  Cyprus

  	
   

  	
  Romania

  
	
  Czech
  Republic

  	
   

  	
  Russia

  
	
  Denmark

  	
   

  	
  San
  Marino

  
	
  Estonia

  	
   

  	
  Slovak
  Republic

  
	
  Finland

  	
   

  	
  Slovenia

  
	
  France

  	
   

  	
  Spain

  
	
  Germany

  	
   

  	
  Sweden

  
	
  Greece

  	
   

  	
  Switzerland

  
	
  Hungary

  	
   

  	
  Turkey

  
	
  Iceland

  	
   

  	
  Ukraine

  
	
  Ireland

  	
   

  	
  United
  Kingdom

  
	
  Italy

  	
   

  	
  Yugoslav
  Federal Republic (Serbia-Montenegro)

  
	
  Latvia

  	
   

  	
   

  
	
  Liechtenstein

  	
   

  	
   

  
	
  Lithunia

  	
   

  	
   

  
	
  Luxembourg

  	
   

  	
   

  

 

33

 

SCHEDULE 3

 

Proforma Commercialisation Licence

 

34

 

SCHEDULE 4

 

Joint Venture Agreement

 

1.             Suggested Equity of Autogen [*]%, Lipha [*]%

 

2.             Joint Venture would be conducted through a
jointly owned company (“JVCO”) to be located in an agreed country.

 

3.             JVCO would hold, either directly, or by way of
exclusive “free” licence all relevant intellectual property rights, including
Pre-Stage 2 Results and Stage 2 Results. 
the licence would be restricted to the Licensed Field and only apply to
countries outside Europe.

 

4.             An exclusive research and development and
commercialization agreement (“Joint Venture”) on the Research relating to all
countries outside Europe provided that each Party equally shares all costs and
revenues of such research and development costs. Any sales made outside Europe
by this joint venture shall not be subject to royalty payments.

 

5.             In case any study is necessary for development
both in Europe and outside Europe, both Parties shall agree on which of Lipha
or JVCO will conduct such study, and the cost of such study shall be shared by
Lipha and JVCO according to the part of the world in which such study may be
used, considering of the world for Europe, for North and Latin America and for
Japan, the other parts of the world not being considered in such sharing.

 

6.             Both Parties are to contribute all relevant
patents and technology (including core registration data and other material
relevant to registration and approval) necessary or useful to commercialise
products or processes in the relevant Licensed Field, which they already have,
or subsequently separately create or generate at or prior to the date of
commencement of JVCO at the end of Stage 2, such contribution to be without
cost or royalty entitlements, unless the same are due to non-Affiliates.

 

7.             This free
contribution does not extend to manufactured product which, subject to the
price being cost competitive with third Parties on a contract or toll
manufacturing basis, will be supplied exclusively by Lipha at a price to be
agreed.

 

35

 

SCHEDULE 5

 

Stage 1 Research

 

The
Discovery of Novel Genes Involved in the Development of Obesity

 

Deakin
University/Autogen/Lipha

 

Stage 1
Research Plan 1999-2000

 

Introduction

 

This is research program is aimed at
discovering novel genes involved in the development of obesity, determining
their functions, and eventually, developing new approaches to treatment of
obesity. Already a number of key genes have been identified and are at various
stages through the program.  It is
necessary for the entire program to continue to allow for new gene discovery to
strengthen the program.

 

The project capitalizes on the availability
of a unique animal model for the study of obesity, Psammomys obesus, and the availability of the latest
molecular biology technologies. We have one of only two active research
colonies of Psammomys  obesus in the world. This animal develops
metabolic defects in a manner very similar to humans, with a broad spectrum of
glucose intolerance, insulin resistance, and obesity, providing an ideal model
system to uncover now genes and pathways involved in obesity development. No
other animal model has this pattern of diabetes development, as most available
models are either single gene mutation models, or chemically created by damage
to the pancreas CNS.

 

The observation that one breeding pair of Psammomys obesus can have a litter with
some animals remaining obesity and diabetes-free, while other develop all the
characteristics common in obesity, despite living in exactly the same environmental
conditions, makes the model perfect to explore underlying genetic causes.

 

In this research plan, key tissues involved
in the development of diabetes, including brain, pancreas, liver, muscle and
adipose tissue, are removed and RNA extracted. Using molecular techniques
routine in our laboratories, including differential gene expression, we
determine which genes are up- or down-regulated in obese and lean animals. This
powerful technique highlights novel genes linked with obesity and diabetes
development and further functional studies provide lead compounds for
therapeutic development, The major expected outcomes are identification of
novel gene sequences linked with obesity, new proteins involved in obesity
development, and the patenting of potential new lead compounds for treatment.

 

36

 

Research Plan

 

This research project covers a large range of
research and development areas from basic discovery using gene technologies,
gene expression, protein production and testing of protein function in cell
systems and animal models.

 

The research and development plan can be
easily subdivided into a number of sections.

 

1.             Gene Discovery

 

In this section RNA is isolated from Psammomys  obesus
with and without obesity and under a variety of conditions with
disturbed energy balance, including fasting, energy restriction, over-feeding
and nicotine treatment.  RNA samples
collected from brain, liver, muscle, and pancreas are examined to determine
which genes are over- or under-expressed in the disease states, using
differential gene expression. This technique has the advantage of not requiring
prior knowledge of the disease process and it allows identification of novel
genes not previously linked with the disease process.

 

2.             Gene Sequencing

 

Following identification of a novel gene
sequence linked with obesity, the entire gene sequence is determined and its
novel characteristics confirmed with available bioinformatic software.  A number of sequencing techniques are employed to identify the entire gene sequence.

 

3.             Gene Expression

 

Following identification of the entire novel
gene sequence, gene expression is determined in a number of tissues including
brain, liver, pancreas, and muscle. In addition, gene expression under a
variety of metabolic disturbances including obesity, fasting, aver-feeding and
sever diabetes is determined. The pattern o£ gene expression is then examined
to identify leads for future experiments aimed at identifying the function of
the novel gene. A major advance in technology
in the area of gene expression is
‘real-time PCR’ which is now routinely available in our laboratory and allows
accurate and rapid determination of gene expression. Following detailed animal
experiments in Psammomys  obesus and to confirm the importance of
the identified gene in human metabolism, human RNA blots are used to examine
gene expression in a variety of human tissues.

 

4.             Protein Production

 

The next stage of research and development
involves the introduction of the newly identified gene sequence into
appropriate bacterial vectors for protein production. Once the appropriate
bacterial vector has been identified, protein production and purification
provides the protein product of the novel gene discovered for functional analysis.

 

5.             Functional Studies

 

To determine the function of novel proteins,
both in vivo and in vitro models are utilized. In both cases the research
involves two major approaches; firstly, administration of purified protein at
varying doses and times of treatment, secondly, administration of an antisense
oligonucleotide directed at the novel gene sequence to block expression of the
protein product. Subsequently, a variety of metabolic parameters are measured
and gene expression of key enzyme pathways determined. The availability of
real-time PCR technology in our laboratories allows us to quickly and
confidently quantitate changes in expression in tissue samples following
protein treatment.

 

Each phase of the research program is
currently underway and running simultaneously; different genes identified are
at various stages of development throughout the program.

 

At the end of the research and development
program, we will have identified a number of new genes involved in obesity
development; we will have produced their protein products and further developed

 

37

 

this research by determining the basic
function of the novel protein in tissue culture systems and in whale animal
studies. The result will be key lead compounds for further development by Lipha
in Stage

 

We currently have identified eight novel
genes and these genes will proceed through various stages of the above research
plan during 1999/2000.

 

The development and progress achieved with
each of these previously identified novel genes and new genes uncovered will be
reported to the Autogen Scientific Advisory Board under the following
Milestones-,

 

1.
      Identification of gene sequences up- or down-regulated in diabetic,
non-diabetic, lean and obese animals.

 

2.       Identification of full-gene sequence and
confirmation of novel character.

 

3
       Production of protein product by bacterial expression of novel genes.

 

4.       Confirmation of tissue differential gene
expression and regulation of expression of the novel gene in various metabolic
conditions.

 

5.       Effects of gene product on carbohydrate and
fat metabolism,

 

38

 

EXECUTED as an agreement

 

 

	
  The common seal of Autogen Pty Ltd is

  	
   

  	
  )

  
	
  affixed in accordance with its articles of

  	
   

  	
  )

  
	
  association in the presence of:

  	
   

  	
  )

  
	
   

  	
   

  	
  )

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Joseph Isaac Gutnick

  
	
  Director

  	
   

  	
  (name printed)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Peter James Lee

  
	
  Director/Secretary

  	
   

  	
  (name printed)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The common seal of Lipha S.A. is affixed

  	
   

  	
  )

  
	
  in accordance with its articles of
  association

  	
   

  	
  )

  
	
  in the presence of:

  	
   

  	
  )

  
	
   

  	
   

  	
  )

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Jean-Noël
  TREILLES

  
	
  CHAIRMAN OF THE BOARD

  	
   

  	
  (name printed)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Yves BONHOMME

  
	
  MANAGING DIRECTOR

  	
   

  	
  (name printed)

  

 

39Exhibit 4.2(e)

 

“CONFIDENTIAL
TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED
AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.”

 

	
  DATE

  	
   

  	
  February
  11 2002

  

 

 

AUTOGEN
Research Pty Ltd

 

 

and

 

 

LIPHA S.A.

 

 

 

RESEARCH AND LICENCE
AGREEMENT

(Strategic Alliance in Human
Gene)

 

 

1

 

TABLE OF
CONTENTS

 

	
  1.

  	
   

  	
  INTERPRETATION

  	
   

  
	
   

  	
  1.1

  	
  Definitions

  	
   

  
	
   

  	
  1.2

  	
  Construction

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  STAGE 1 RESEARCH

  	
   

  
	
   

  	
  2.1

  	
  Undertaking of
  Stage 1 Research

  	
   

  
	
   

  	
  2.2

  	
  Initial contribution

  	
   

  
	
   

  	
  2.3

  	
  Payment for Stage 1
  Research

  	
   

  
	
   

  	
  2.4

  	
  Extension of Stage 1
  Research

  	
   

  
	
   

  	
  2.5

  	
  Transition to Stage
  2 Research

  	
   

  
	
   

  	
  2.6

  	
  Direct Programs

  	
   

  
	
   

  	
  2.9

  	
  Autogen and
  Stage 1 Research Rights

  	
   

  
	
   

  	
  2.10

  	
  Lipha Research Licence

  	
   

  
	
   

  	
  2.11

  	
  Stage
  1 Patents

  	
   

  
	
   

  	
  2.12

  	
  Continuing Research
  Agreement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  stage 2 research

  	
   

  
	
   

  	
  3.1

  	
  Multiple Stage 2
  Research Programs

  	
   

  
	
   

  	
  3.2

  	
  Undertaking Stage 2
  Research

  	
   

  
	
   

  	
  3.3

  	
  Licence to Lipha

  	
   

  
	
   

  	
  3.4

  	
  Autogen Stage 2
  Research assistance

  	
   

  
	
   

  	
  3.5

  	
  Obligations of Lipha

  	
   

  
	
   

  	
  3.6

  	
  Rights of Autogen

  	
   

  
	
   

  	
  3.7

  	
  Rights of Parties

  	
   

  
	
   

  	
  3.8

  	
  Discontinuation
  of Stage 2 Research

  	
   

  
	
   

  	
  3.9

  	
  Unwanted rights
  Stage 2 Results

  	
   

  
	
   

  	
  3.10

  	
  Commercialisation
  Licences required

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Research generally

  	
   

  
	
   

  	
  4.1

  	
  Scientific Board

  	
   

  
	
   

  	
  4.2

  	
  Meetings of the
  Scientific Board

  	
   

  
	
   

  	
  4.3

  	
  Reports

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Option for further
  agreement

  	
   

  
	
   

  	
  5.1

  	
  Multiple Complementary
  Agreements

  	
   

  
	
   

  	
  5.2

  	
  Licence milestones

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Commercialisation licence

  	
   

  
	
   

  	
  6.1

  	
  Requirement for such
  a licence

  	
   

  
	
   

  	
  6.2

  	
  Failure
  to sign Commercialisation Licence

  	
   

  
	
   

  	
  6.3

  	
  Commercialisation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  industrial
  and Intellectual property rights

  	
   

  
	
   

  	
  7.1

  	
  Autogen
  Patents, Autogen Know-How and Stage 1 Results

  	
   

  
	
   

  	
  7.2

  	
  Scope of any
  exclusive licence

  	
   

  
	
   

  	
  7.3

  	
  Stage 2 Results

  	
   

  
	
   

  	
  7.4

  	
  Use outside of
  Licensed Field

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  CONFIDENTIAL INFORMATION

  	
   

  
	
   

  	
  8.1

  	
  Obligations to Autogen

  	
   

  
	
   

  	
  8.2

  	
  Obligations to Lipha

  	
   

  
	
   

  	
  8.3

  	
  Exceptions to obligations

  	
   

  
	
   

  	
  8.4

  	
  Rights in Know-How

  	
   

  
					

 

2

 

	
   

  	
  8.5

  	
  Term of obligation

  	
   

  
	
   

  	
  8.6

  	
  Permitted disclosures

  	
   

  
	
   

  	
  8.7

  	
  Delivery-up of Know-How

  	
   

  
	
   

  	
  8.8

  	
  Terms of this Agreement

  	
   

  
	
   

  	
  8.9

  	
  Public Announcement

  	
   

  
	
   

  	
  8.10

  	
  Continuous
  disclosure obligations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  LIABILITY

  	
   

  
	
   

  	
  9.1

  	
  Responsibility for
  Products

  	
   

  
	
   

  	
  9.2

  	
  Autogen not liable

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  INDEMNITIES

  	
   

  
	
   

  	
  10.1

  	
  Indemnity by Lipha

  	
   

  
	
   

  	
  10.2

  	
  Indemnity by Autogen

  	
   

  
	
   

  	
  10.3

  	
  Notification
  regarding indemnity

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  INSURANCE

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  TERM and TERMINATION

  	
   

  
	
   

  	
  12.1

  	
  Term

  	
   

  
	
   

  	
  12.2

  	
  Termination for breach

  	
   

  
	
   

  	
  12.3

  	
  Termination in
  default of payment

  	
   

  
	
   

  	
  12.4

  	
  Grounds for
  immediate Termination

  	
   

  
	
   

  	
  12.5

  	
  Reconstruction exception

  	
   

  
	
   

  	
  12.6

  	
  Termination by Autogen

  	
   

  
	
   

  	
  12.7

  	
  Termination by Lipha

  	
   

  
	
   

  	
  12.8

  	
  Termination to
  be without prejudice

  	
   

  
	
   

  	
  12.9

  	
  Survival of provisions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  OBLIGATIONS
  AND RIGHTS ON TERMINATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  WARRANTIES

  	
   

  
	
   

  	
  14.1

  	
  General warranties

  	
   

  
	
   

  	
  14.2

  	
  Specific
  warranty for Autogen Patents

  	
   

  
	
   

  	
  14.3

  	
  Warranties by Lipha

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  PROTECTION OF PATENTS

  	
   

  
	
   

  	
  15.1

  	
  Maintenance of Patents

  	
   

  
	
   

  	
  15.2

  	
  Reporting infringements

  	
   

  
	
   

  	
  15.3

  	
  Conduct
  of proceedings regarding Pre-Stage 2 Results

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  INFRINGEMENT OF
  OTHERS RIGHTS

  	
   

  
	
   

  	
  16.1

  	
  Notification of action

  	
   

  
	
   

  	
  16.2

  	
  Autogen action

  	
   

  
	
   

  	
  16.3

  	
  Lipha action

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  FORCE MAJEURE

  	
   

  
	
   

  	
  17.1

  	
  Party not liable

  	
   

  
	
   

  	
  17.2

  	
  Notice of Force Majeure

  	
   

  
	
   

  	
  17.3

  	
  Termination
  in case of Force Majeure

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  arbitration

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  NOTICES

  	
   

  
	
   

  	
  19.1

  	
  Form of Notice

  	
   

  
	
   

  	
  19.2

  	
  Manner of Service

  	
   

  
					

 

3

 

	
   

  	
  19.3

  	
  Address for Service

  	
   

  
	
   

  	
  19.4

  	
  Time of Service

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
  20.1

  	
  Severance

  	
   

  
	
   

  	
  20.2

  	
  Waiver

  	
   

  
	
   

  	
  20.3

  	
  Relationship of Parties

  	
   

  
	
   

  	
  20.4

  	
  Injunctive relief

  	
   

  
	
   

  	
  20.5

  	
  Proper law

  	
   

  
	
   

  	
  20.6

  	
  Rule of construction

  	
   

  
	
   

  	
  20.7

  	
  Variation

  	
   

  
	
   

  	
  20.8

  	
  Assignment

  	
   

  
	
   

  	
  20.9

  	
  Further documents

  	
   

  
	
   

  	
  20.10

  	
  Affiliates’ actions

  	
   

  
	
   

  	
  20.11

  	
  Costs and Taxes

  	
   

  
	
   

  	
  20.12

  	
  Interest on overdue
  amounts

  	
   

  
	
   

  	
  20.13

  	
  Counterparts

  	
   

  
	
   

  	
  20.14

  	
  Registration of agreement

  	
   

  
	
   

  	
  20.15

  	
  Not obliged to
  act contrary to law

  	
   

  
	
   

  	
  20.16

  	
  Statutory rights not
  limited

  	
   

  
	
   

  	
  20.17

  	
  Consents

  	
   

  
	
   

  	
  20.18

  	
  Entire agreement

  	
   

  
					

 

	
  Schedule
  1

  	
   

  	
  Autogen
  Patents

  
	
  Schedule
  2

  	
   

  	
  Europe

  
	
  Schedule
  3

  	
   

  	
  Proforma
  Commercialisation Licence

  
	
  Schedule
  4

  	
   

  	
  Joint
  Venture Agreement

  
	
  Schedule
  5

  	
   

  	
  Stage
  1 Research

  
	
  Schedule
  6

  	
   

  	
  Schema

  

 

434343

 

4

 

	
  THIS
  AGREEMENT is made on

  	
   

  	
  February 11 2002

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BETWEEN

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Autogen Research Pty Ltd

  	
   

  	
   

  
	
  of 210 Kings Way, South
  Melbourne, Victoria, Australia

  	
   

  	
   

  
	
   

  	
   

  	
  (“Autogen”)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AND

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Lipha
  S.A.

  	
   

  	
   

  
	
  of 37 rue Saint Romain,
  69379 Lyon, CEDEX 08, France

  	
   

  	
   

  
	
   

  	
   

  	
  (“Lipha”)

  

 

RECITALS:

 

A.                                  Lipha has for many
years, been strongly involved in the research, development, manufacturing and
commercialisation of pharmaceuticals addressing metabolic diseases and has
invented, developed, manufactured and marketed pharmaceutical products
containing metformin, one of the
leading oral anti-diabetic products throughout the world.

 

B.                                    Lipha has agreed to
provide research support to the International Diabetes Institute (IDI) research
program for the discovery of novel genes involved in obesity and diabetes, the
product of these genes being able to be used as therapeutic agents or as a
target for drug discovery as well as providing in house facilities including
combinatorial chemistry to advance subsequent drug development in that field.

 

C.                                    Lipha and Autogen
have entered into a “Letter of
Understanding” dated November 9th, 1999, under which Autogen has agreed to
carry out research above mentioned.

 

D.                                   Lipha and Autogen
have agreed to enter into this research and license agreement related to human
genome project.

 

5

 

OPERATIVE
PROVISIONS:

 

1.                                     INTERPRETATION

 

1.1                              Definitions

 

In
this agreement the following expressions have the following meanings:

 

“Affiliate” means with
respect to a Party, any person which directly or indirectly Controls, or is
Controlled by, or is under common Control with, such Party.

 

“Autogen Know-How” means
Know-How owned by or licensed to Autogen in relation to the Autogen Patents, or
of relevance or use in relation to the Licensed Field or the conduct of Stage 1
Research or Stage 2 Research but excludes Stage 1 Know-How.

 

“Autogen Patents” means the
patents and patent applications owned by or licensed to Autogen related to the
Licensed Field including but not limited to those referred to in Schedule 1 and including:

 

(i)                                     any
re-issue, renewal or extension of such a patent or patent application (whether
in whole or in part) and any patent of addition thereto; and

 

(ii)                                  any
supplementary protection certificate or other form of extension based on or
arising from such patents or patent applications.

 

“Base Rate” means EURIBOR
rate applicable on January first (1st), 2000 and published as such by the
European Federation of Banks (Federation Européenne de Banque (FEB)) plus in
either case the amount of one point five per cent (1.5%) per annum.

 

“Business Day” means a day
on which the trading banks are open for general banking business in both
Melbourne, Australia and Lyon, France.

 

“Commencement Date” means
the date of execution of this agreement by the Party last signing it.

 

“Commercialisation Licence”
means a licence in respect of Patents and Know-How in the form of the agreement
contained in Schedule 3.

 

“Complementary Agreement”
means a detailed agreement, if any, entered into towards the end of Stage 2
Research, including all the terms of the Commercialisation Licence, unless the
Parties agree to amend the same, and otherwise taking account of the terms of
any Joint Venture Agreement.

 

“Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management of policies of a person.

 

6

 

“Direct Program” means a
Stage 2 Research Program based on a Novel Gene Product to investigate its
direct use as a drug or for other gene therapies.

 

“Dollars” or “USD” means US dollars.

 

“Europe” means those
countries specified in Schedule 2.

 

“EUR” means the new
European currency called EURO officially replacing FRF from December 31st 2001.

 

“FFR” means French Francs.

 

“Force Majeure” means any
cause which is not within the reasonable control of the party affected by it
including, but not limited to, acts of God, industrial disputes of any kind,
war declared or undeclared, civil disturbance, acts or omissions of Government
or other competent authority, fire, lightning, explosion or flood.

 

“Further Development” means
the program of further research and development in relation to a Product or
potential Product undertaken after completion of Stage 2 Research.

 

“IDI” means International
Diabetes Institute, a company established in Victoria, Australia.

 

“Indirect Program” means a
Stage 2 Research Program which uses the Novel Gene Product as the basis for the
discovery of other chemicals or biological compounds or other gene therapies or
otherwise in ways not contemplated by Direct Programs.

 

“Insolvency Event” means
any event of insolvency, bankruptcy or liquidation of the relevant party,
including any voluntary or involuntary judicial liquidation or re-organisation
proceedings.

 

“Joint Venture Agreement”
means a joint venture in respect of certain specified Patents and Know-How,
containing the definitions and provisions contained in this agreement as
specified in Schedule 4, and
dealing with such other matters as are specified in that schedule.

 

“Know-How” means technical,
commercial and other information, data, know-how, drawings, specifications
and/or designs, animal or other models, methodologies and biological materials
embodied in some Material Form, and without prejudice to the generality of the
foregoing includes:

 

(i)                                     all
experimental, manufacturing, process, analytical, packaging, product,
warehousing, quality control and quality assurance and marketing
specifications, standards, procedures, processes, methods, instructions and
techniques, samples, prototypes, formulae, writings of any kind, opinions or
otherwise unwritten data or in the form of computer software or computer
programs or any part thereof in any code; and

 

7

 

(ii)                                 all other
information and other material supplied to or received by a party or its
Representatives from another party or Representatives on a confidential basis
pursuant to this agreement.

 

“Licence” means the right
and licence granted by Autogen to Lipha pursuant to this agreement.

 

“Licensed Field” means the
field of human therapeutic applications for the treatment or prevention of:

 

(i)            obesity;

 

(ii)           diabetes and its complications; and

 

(iii)          insulin resistance syndrome (excluding
hypertension).

 

For clarity it is noted that this does not include diagnostics or
veterinary applications.

 

“Lipha Research License”
means the Research License granted to Lipha pursuant to Clause 2.9.

 

“Loss” means any loss,
damage, cost, interest, expense, fee, penalty, fine, forfeiture, assessment,
demand, action, suit, claim, proceeding, cause of action, liability or damages
incurred by a person, and includes:

 

(i)                                     the cost
of any action taken by the person to protect itself against any loss or to
preserve any right it has under this agreement; and

 

(ii)                                  where
applicable reasonable legal costs.

 

“Material Form” in relation
to Information includes any form (whether visible or not) of storage from which
Information can be reproduced, and any form in which Information is embodied or
encoded.

 

“Month” means calendar
month.

 

“Novel Gene Product” means
any new gene, novel protein or novel antigen, and any product arising from the
transcription of these genes.

 

“Option Period” means the
Research Term and the 24 month period following the Research Term within which
Lipha has the option to decide whether it wishes to progress some part of Stage
1 Research to Stage 2 Research.

 

“Party” means Autogen or
Lipha and their respective successors and permitted assigns and “Parties” means
both of them.

 

“Patent” means any patent
or patent application as defined in the Patents
Act 1952 (C’th) and any similar international, national or regional
patent or patent application and includes any and all extensions, renewals,
continuations, patent-of-addition and/or supplementary protection certificates
to any of the foregoing and includes any corresponding patent or patent
application taken out or applied for in any country in the Territory which is
fairly based upon or derived from any of the aforesaid patents.

 

8

 

“Pre-Stage 2 Results” means
the Autogen Patents, Autogen Know-How, Stage 1 Patents and Stage 1 Know-How.

 

“Products” means any
products produced or arising out of use of the results of Stage 1 Research or
Stage 2 Research or arising out of all and any further development by Lipha
pursuant to Stage 1 Research or Stage 2 Research or both.

 

“Project Patents” means the
Autogen Patents, the Stage 1 Patents and/or the Stage 2 Patents.

 

“Project Research” means
the research in the area of obesity and diabetes of novel genes involved in
obesity and diabetes and the research arising therefrom, consisting of the
Stage 1 Research and the Stage 2 Research.

 

“Representatives” of a
party means that party’s directors, officers, employees or agents.

 

“Required Insurance” means:

 

(i)                                     public
liability insurance in respect of Losses up to a limit of USD 5,000,000 covering property damage and
personal injury as may be relevant to the performance of each party’s obligations
under this agreement to the other, including (without limitation) liability,
loss or damage due to negligent or malicious damage, data corruption or loss,
fire, theft, electrical and water damage; and

 

(ii)                                  if the
relevant party sells a Product, product liability insurance in respect of
Losses up to a limit of USD
20,000,000 covering any liability associated with use or misuse of the Product
including, personal injury and consequential loss.

 

“Research Agreement” means
the Research Agreement dated 14 January 1998 between Autogen and IDI to carry
out research in the field of, amongst other things, the License Field.

 

“Research Term” means the
period which commences on 1 January 2000 and expires on 31 December 2005,
unless otherwise extended pursuant to clause 2.4.

 

“Scientific Board” means
the board established under clause 4.1.

 

“Stage 1 Know-How” means
the Know-How relating to or arising out of Stage 1 Research.

 

“Stage 1 Patents” means
Patents relating to or arising out of Stage 1 Research.

 

“Stage 1 Research” means
discovery of Novel Gene Products, characterisation and studies of such Novel
Gene Products in animal models and human gene expression studies as resulting
from such Stage 1 Research performed according to this agreement as described
in Schedule 5.

 

“Stage 1 Results” means the
Stage 1 Know-How and the Stage 1 Patents.

 

“Stage 2 Know-How” means in
the context of a Stage 2 Research Program, the Know-How relating to or arising
out of that Stage 2 Research Program.

 

9

 

“Stage 2 Patents” means in
the context of a Stage 2 Research Program, Patents relating to or arising out
of that Stage 2 Research Program.

 

“Stage 2 Research” means a
program of research and development directed at developing relevant Novel Gene
Products within the Licensed Field and discovering Target Compounds for use
within the Licensed Field and includes antibody production, large scale protein
production, structural analysis, screening of compounds affecting such Novel
Gene Product, combinatorial chemistry, toxiological studies and first clinical
studies in target patient groups and completion of dose efficiency relationship
studies in those patients (clinical Phase 2), the undertaking of relevant human
clinical trials on Target Compounds, but does not include the generation of
relevant scientific and clinical data which is uniquely required by the
regulatory authorities of Europe or the United States.

 

“Stage 2 Research Program”
means a program of Stage 2 Research in respect of a Novel Gene Product.

 

“Stage 2 Results” means in
the context of a Stage 2 Research Program, the Stage 2 Know-How and the Stage 2
Patents for that Stage 2 Research Program.

 

“Target Compound” means a
compound or small molecule, or group of the same, identified in the course of
Project Research, being a compound which it is expected will be Covered By a
Project Patent.

 

“Term” means the period
this agreement is in force pursuant to clause 12.

 

1.2                              Construction

 

In
this agreement unless the context otherwise requires:

 

(a)                                  Business Day. If any day appointed or specified by this agreement
for the payment of any money or the doing of any act or thing falls on a day
that is not a Business Day, the day so appointed or specified is deemed to be
the next day which is a Business Day.

 

(b)                                  Collective references. Reference to any thing (including, without
limitation, any amount) is a reference to the whole or any part of it and a
reference to a group of things or persons is a reference to any one or more of
them.

 

(c)                                  Defined expressions. If a word or phrase is defined, cognate words
and phrases have corresponding definitions.

 

(d)                                  Gender. Words importing any gender include the other
genders.

 

(e)                                 Headings. Headings must be ignored in construing this
document.

 

10

 

(f)                                   Joint liability. An obligation of two or more Parties binds
them jointly and severally.

 

(g)                                 Joint obligations. An obligation incurred in favour of two or
more Parties is enforceable by them jointly and severally.

 

(h)                                 Month. Means a calendar month.

 

(i)                                    Numbers. Words importing the singular include the plural and
vice versa.

 

(j)                                    Parts of agreement. References to this agreement include its
recitals, schedules and annexures.

 

(k)                                Persons. References to persons include corporations and
bodies politic.

 

(l)                                    Reconstituted bodies. References to a body which has ceased to
exist or has been reconstituted, amalgamated, reconstructed or merged, or the
functions of which have become exercisable by any other person or body in its
place, is taken to refer to the person or body established or constituted in
its place or the person or body by which its functions have become exercisable.

 

(m)                              Representatives and assigns. References to a person include the legal
personal representatives, successors and permitted assigns of that person.

 

(n)                                 Statutory amendments. A reference to a statute, ordinance, code or
other law includes regulations and other statutory instruments under it and
consolidations, amendments, re-enactments or replacements of any of them
(whether of the same or any other legislative authority having jurisdiction).

 

(o)                                  Variation. References to this or any other document include the
document as varied or replaced, and notwithstanding any change in the identity
of the Parties.

 

(p)                                 Writing. References to writing include any mode of
representing or reproducing words in tangible and permanently visible form, and
include telex and facsimile transmissions.

 

2.                                     STAGE 1 RESEARCH

 

2.1                              Undertaking of Stage 1 Research

 

Autogen
has been carrying out and must continue to carry out through arrangement with
IDI under the Research Agreement Stage 1 Research for the period of the
Research Term. The currently agreed program for Stage 1 Research is as set out
in Schedule 5. The general objective
of Stage 1 Research is to identify Novel Gene Products that may be of utility
in the Licensed Field.

 

11

 

2.2                              Initial contribution

 

Lipha
has already paid the sum of [*] US dollars (USD [*]) in respect of years 2000
and 2001 of the Research Term as referred herebelow.

 

2.3                              Payment for Stage 1 Research

 

Taking
into account initial contribution above mentioned Lipha will pay to Autogen in
respect of Stage 1 Research for each year during the Research Term the sum of [*]
US dollars (USD [*]) per annum, such amount to be paid in equal quarterly
instalments in advance, the first such payment being due on January 1st, 2000.

 

2.4                              Extension of Stage 1 Research

 

(a)                                  If Stage 1
Research is not completed during the Research Term Lipha shall have the right
to require Autogen to continue Stage 1 Research, and at the same time extend
the Research Term, for successive periods of one (1) year, by giving written
notice to Autogen not less than three (3) months prior to the expiry of the
current Research Term.

 

(b)                                 Where
Lipha does extend the Research Term then:

 

(i)                                     Lipha
shall pay to Autogen for each renewal period the amount of [*] US dollars (USD [*])
in equal quarterly instalments as contribution to the research being funded by
Autogen under the Research Agreement in the Licensed Field; and

 

(ii)                                  Autogen
will then continue to carry out through arrangement with IDI the Stage 1
Research for the extended period of the Research Term.

 

(c)                                  Following
the giving by Lipha of notice under clause 2.4(a),
the Parties will liaise in relation to the content of the Stage 1 Research for
the following year, which will, unless otherwise agreed, be conducted under the
Research Agreement. Initially this liaison will take place through the Scientific
Board, who will prepare a draft research plan which is to be finally agreed
between the Parties.

 

(d)                                 The
research being undertaken under the Research Agreement may include more than
just Stage 1 Research, and Autogen is solely responsible for funding this.

 

(e)                                  If Lipha
elects not to extend the Research Term, then without in any way limiting Lipha’s
discretion in relation to such decision, Lipha will give Autogen written
reasons why it has elected not to do so.

 

12

 

2.5                              Transition to Stage 2 Research

 

From
time to time throughout the Stage 1 Research including Option Period it is
expected that Novel Gene Products may be found. When this occurs there may be a
Direct Program and one or more Indirect Programs. The Parties will first
determine whether to pursue a Direct Program in accordance with the provisions
of clause 2.6 herebelow. The
Parties will then investigate whether the Novel Gene Product could be used for
the discovery of chemical or biological compounds or in other gene therapies
(Indirect Program). This process will be covered by the provisions of clause 2.7 herebelow.

 

Lipha
will make every endeavours to exercise and to conduct the Stage 2 Research.

 

2.6                              Direct Programs

 

In
respect of each Novel Gene Product and in accordance with elements given in
schema as described in Schedule 6 (including the respective funding obligations
of the parties) if:

 

(a)                                   The Parties both
agrees to pursue a Direct Program, then the provisions of clause 2.8 will apply,

 

(b)                                neither Party wishes to pursue a
Direct Program, then there will be no Direct Program in respect of the Novel
Gene Product unless the Parties otherwise later agree,

 

(c)                                 Autogen wishes to pursue a Direct
Program but Lipha does not, then the Direct Program may commence subject that:

 

(i)                                     Autogen will be wholly responsible
for the initial funding of the Direct Program,

(ii)                                  Lipha will have a period of six
(6) months to determine if it wishes to participate,

(iii)                               If it determines that it does, then
it must reimburse Autogen for one third (1/3) of the costs incurred by Autogen
up to that date and thereafter the provisions of clause 2.8 will apply,

(iv)                              If Lipha determines that it does
not wish to participate, or makes no election within that period of six (6)
months, then Lipha will have no further
rights in the Direct Program, and Autogen must fully fund it. Further Autogen
will be free to offer the Direct Program in respect of the Novel Gene Product
to third parties on such terms as it considers appropriate. In doing so Autogen
may grant to third parties a licence in respect of the Autogen Patents and the
Stage 1 Patents to the extent that such a licence is necessary to conduct the
Direct Program and exploit the Novel Gene Product and such licence will not be
a breach of any licence granted by Autogen in the Licensed Field to Lipha, the
scope of any licence in favour of Lipha being commensurately reduced, such
reduction being limited to reduction in respect of such Novel Gene Product and
its use as a Direct Program.

 

13

 

d)            Lipha wishes to pursue a Direct
Program but Autogen does not, then the Direct Program may commence and the
provisions of clause 2.8 will
apply subject that:

 

(i)                                           Lipha will be wholly responsible
for the initial funding of the Direct Program,

(ii)                                        Autogen will have a period of six
(6) months to determine if it wishes to participate,

(iii)                                     If it determines that it does,
then it must reimburse Lipha for two third (2/3) of the costs incurred by Lipha
up to that date,

(iv)                                    If Autogen determines that it does
not wish to participate, or makes no election within that period of six (6)
months, then Autogen will have no further rights in the Direct Program and
Lipha must fully fund it. Further Lipha will be free to offer the Direct
Program in respect of the Novel Gene Product to third parties on such terms as
it considers appropriate

 

2.7                               Indirect Programs

 

There may be multiple
Indirect Programs based upon Novel Gene Products and there could be Indirect
Programs where there may or may not exist a Direct Program. In respect of each
Novel Gene Product and in accordance with elements given in schema as described
in Schedule 6 the Parties will
seek to identify Indirect Programs which they would wish to undertake in
respect of that Novel Gene Product. These Indirect Programs may be generated
jointly or independently. In respect of each of these it is agreed as follows:

 

(a)          if Lipha wishes to pursue an Indirect
Program, then the provisions of clause 2.8
will apply,

(b)         if neither Party wishes to pursue an Indirect
Program, then the proposed Indirect Program will not proceed,

(c)          if only Autogen wishes to pursue an Indirect
Program but Lipha does not, then the Indirect Program may not commence. In such
a case Lipha will have a period during which it can preclude the commencement
of the proposed Indirect Program and preserve its potential position in respect
of that program. That period will be:

(i)                                     in the event Lipha is funding and
continuing to fund another Indirect Program based on Novel Gene Products, until
the end of the Option Period as
referred to in Article 1.1,

(ii)                                  in any other case two (2) years
from the date of identification of the Novel Gene Product or the cessation of
funding of another Indirect Program based on the same Novel Gene Product,
whichever is the later.

 

If Lipha does not by the end
of the relevant period, agree to proceed under clause 2.7, then Lipha will have no further rights
in the Indirect Program and Autogen may fully fund it.  In doing so Autogen may grant to third parties
a licence in respect of the Autogen Patents and the Stage 1 Patents to the
extent that such a licence is necessary to conduct the Indirect Program and
exploit the Novel Gene Product and such licence will not be a breach of any
licence granted by Autogen in the Licensed Field to Lipha, the scope of any
Licence in favour of Lipha being commensurately reduced and such reduction
being limited to reduction in respect of such Novel Gene Product and its use as
contemplated in the Indirect Program.

 

14

 

2.8                               Stage 2 Research
Payment

 

Referring to the first
commencement of a Direct Program or Indirect Program in respect of a Novel Gene
Product:

 

(a)   Lipha must only pay to Autogen
the sum of [*] french francs (FRF [*]) such
amount to be paid within thirty (30) Business Days of the commencement of the
first Direct Program or Indirect Program, it being acknowledged that Lipha will
not have to pay such sums for transition of further Novel Gene Products to
Stage 2 Research following such first transition; and

(b)   the Parties will execute a
Commercialisation Licence in respect of such Novel Gene Product which will
reflect the respective funding contributions of the parties to the relevant
Stage 2 Research.  This right for Lipha may be separately exercised by
Lipha in respect of separate Novel Gene Products, and each decision to enter
into Stage 2 Research will lead to additional Commercialisation Licences and
Stage 2 Research Programs.

 

2.9                              Autogen and Stage 1 Research Rights

 

Subject
to the terms of this agreement and any other licence granted by Autogen in
favour of Lipha, Autogen will own and have an unfettered right to use and
exploit all Stage 1 Patents and Stage 1 Know-How in any and all fields.

 

2.10                       Lipha Research Licence

 

Whilst
Lipha is continuing Stage 1 Research, Stage 2 Research, Further Development or
paying royalties to Autogen under any Commercialisation Licence, Lipha has a
non-exclusive royalty free right to use the Pre-Stage 2 Results for the
purposes of its own internal research for human therapeutic purposes. This
research licence extends to Affiliates of Lipha.

 

2.11                       Stage 1 Patents

 

(a)                                 Where
either party in the course of Stage 1 Research makes or discovers any patentable
invention then it must forthwith advise the other party in writing together
with full details. Lipha will have the first option to patent such invention at
its own cost, and if it elects not to do so then Autogen may do so at its cost.
Any such patent application in respect of Stage 1 Research will be in the name
of Autogen.

 

(b)                                If Autogen
has patented an invention under clause 2.11(a)
and paid the costs of such patenting, and Lipha elects to participate in Stage
2 Research in respect of the Stage 1 Research to which the invention
relates, Lipha will then reimburse to Autogen the reasonable external costs
incurred by Autogen in respect of each patent.

 

15

 

(c)                                  In the
case where Lipha patents an invention pursuant to clause 2.11(a) where the invention also has
application in areas outside the Licensed Fields, Autogen may:

 

(i)                                     require
Lipha to patent the invention in such a manner as to include the application of
the invention in those areas outside the Licensed Fields (and if this involves
any additional external cost to Lipha, Autogen will reimburse to Lipha the
reasonable additional external costs); or

 

(ii)                                  patent the
invention itself in so far as the invention has application outside the
Licensed Fields and, in this case, Autogen can require Lipha to amend or limit
the patent lodged by Lipha so that the patent only covers the Licensed Fields.

 

2.12                       Continuing Research Agreement

 

Where
Lipha has ceased to provide support for research being conducted under the
Research Agreement as contemplated by clause
2.4, Lipha acknowledges it will have no rights in respect of any new
or further Know-How or Patents arising under such Research Agreement.

 

3.                                     STAGE 2 RESEARCH

 

3.1                              Multiple Stage 2 Research Programs

 

The
Parties acknowledge that there may be multiple Stage 2 Research Programs with
varying obligations and rights in respect of funding, control and ownership of
results as determined in relevant commercialisation licence, each of which will
be based on or around different Novel Gene Products, and will generate their
own Know-How and Patents.

 

3.2                              Undertaking Stage 2 Research

 

(a)                                 Where
Lipha has exercised its rights regarding Indirect Programs as provided in
clause 2.7 and Schedule 6 in respect of a Novel Gene
Product, Lipha will have sole carriage of all research and development in
respect of that Novel Gene Product until completion of the Stage 2 Research
Program in respect of that Novel Gene Product. Each Stage 2 Research Program
will be conducted and funded by Lipha until completion of that Stage 2 Research
Program. Each Stage 2 Research Program must be directed at developing Novel
Gene Products within the Licensed Field and discovering Target Compounds for
use within the Licensed Field.

 

(b)                                Where
Autogen is solely funding regarding Indirect Programs as provided in clause 2.7 and Schedule
6 in respect of a Novel Gene Product, Autogen will have sole
carriage of all research and development in respect of that Novel Gene Product
until completion of the Stage 2 Research Program in respect of that Novel Gene
Product. Each Stage 2 Research Program will be conducted and solely funded by
Autogen until completion of that Stage 2 Research Program. Each Stage 2
Research Program must be directed at developing Novel Gene Products within the
Licensed Field and discovering Target Compounds for use within the Licensed
Field.

 

16

 

(c)                                 Where Lipha and Autogen desires to
share in a Direct Program as provided in clause 2.6 and Schedule 6
in respect of a Novel Gene Product, Lipha and Autogen will share pursuant to
provisions of clause 2.6 all
research and development in respect of that Novel Gene Product until completion
of the Stage 2 Research in respect of that Novel Gene Product.

 

(d)                                Where
Autogen desires to develop and exploit Novel Gene Products outside of the
Licensed Field through a third party, then Autogen will at first instance
engage in discussions with Lipha with a view to looking at opportunities for
the Parties to work together on such development and exploitation.

 

3.3                              Licence to Lipha

 

Where
Lipha is solely undertaking a Stage 2 Research Program (“Lipha Program”) then:

 

(a)                                  all Stage
2 Know-How or Stage 2 Patents in respect of that Stage 2 Research Program will
belong solely to Lipha, subject to the remainder of this clause and clauses 3.6, 3.8 and 3.9, and Lipha
will be solely responsible for the cost of obtaining and maintaining any patent
or other protection, provided that:

 

(i)                                     Lipha may
not assign any Stage 2 Results to a third party without the prior written
consent of Autogen which consent will not be unreasonably withheld provided the
assignee agrees to similar conditions in respect of such Stage 2 Results as are
applicable under this agreement and the relevant Commercialisation Licence and
in a manner which makes those conditions enforceable against the assignee by
Autogen; and

 

(ii)                                  if Lipha
seeks to patent an invention from the Stage 2 Research which has
application exclusively outside the Licensed Field, then Lipha must notify
Autogen of such invention prior to lodgment of the application for the patent
and Autogen can require Lipha to extend the patent in respect of claims or
other matters outside of the Licensed Field;

 

(b)                                Autogen
grants to Lipha a licence in respect of the Pre-Stage 2 Results within the
Licensed Field to the extent necessary to undertake the Stage 2 Research
Program, but not to undertake commercialisation (which must be subject to the
Commercialisation Licence or a Complementary Agreement), such licence to be
exclusive in the Licensed field, royalty free and extending to Affiliates of
Lipha.

 

3.4                              Autogen Stage 2 Research assistance

 

Autogen
agrees upon Lipha’s request to cooperate with Lipha for Stage 2 Research and
both Parties may agree on specific studies to be included in a Stage 2 Research
Program which are to be performed by Autogen or through Autogen and paid by
Lipha, provided Lipha has previously given Lipha’s written approval on the
costs of such studies. Lipha agrees that it will not in respect of any Stage 2
Research contract directly with IDI without the prior written consent of
Autogen, it being the expectation that any research conducted by those Parties
will be contracted through Autogen.

 

17

 

3.5                              Obligations of Lipha

 

Lipha
will use its best endeavours to progress each Stage 2 Research Program in a
timely and diligent fashion and with a substantial dedication of resources.
Where activities forming part of a Stage 2 Research Program could properly and
effectively be undertaken at Autogen, then Lipha will consider the possible
performance of those activities at those institutions, subject to clause 3.4, and will not conduct such activities
through other third Parties without first offering them to Autogen as
appropriate.

 

3.6                              Rights of Autogen

 

Where
Lipha is undertaking a Lipha Program the following applies:

 

(a)                                  Lipha
grants to Autogen and its Affiliates, with a right to sublicencee to IDI, a
non-exclusive royalty free right to use for the purposes of their own internal
research the Stage 2 Results of all Stage 2 Research Programs.

 

(b)                                 If such
internal research leads to an invention which can be commercialised within the
Licensed Fields, then Lipha will have the first option to commercialise such
invention within the Licensed Fields, and the Parties will negotiate in good
faith in this regard. If agreement cannot be reached within 90 days of the
making of a formal offer by Autogen, then Autogen will be free to offer the
commercialisation opportunity to third Parties, but on no better terms than
those offered to Lipha, unless it first offers such better terms to Lipha,
which will have 14 days to either accept or reject such terms.

 

(c)           If the internal research conducted under clause 3.6(a) leads to the commercialisation of
the results of such internal research outside the Licensed Fields by Autogen,
either on its own account, or acting as licensee on behalf of IDI then the
Parties agree to negotiate in good faith for the grant by Lipha of a royalty
bearing licence in respect of the ongoing use of the Stage 2 Results in such
commercialisation. The Parties acknowledge that the natural outcome of such
discussions may be that Lipha takes on the role of commercialisation of the
results of such internal research.

 

3.7                              Rights of Parties

 

(a)                                  Notwithstanding any other
provision of this agreement, each of the Parties shall have control of a Stage
2 Research Program and associated matters where it is providing a majority of
the funding in relation to that program.

 

(b)                                 Notwithstanding any other
provision to this agreement ownership of any intellectual property, know how or
like right or interest resulting from a Stage 2 Research Program shall vest in
or reside with the Parties in proportion to their funding contributions to that
program.

 

18

 

3.8                              Discontinuation of Stage 2 Research

 

In
the case of a Lipha Program Lipha has the right at its own option and without
any liability to Autogen to stop a Stage 2 Research Program if further
development is not justifiable due to Lipha’s reasonable determination that for
efficacy, safety or medical reasons, the validity of the Patents covering such
Novel Gene Product, a substantial change of economic factors or otherwise, such
development should be terminated. If Lipha does cease such development it must
promptly advise Autogen and provide written reasons as to why Lipha has ceased
such development, but Lipha’s determination will prevail. Lipha must endeavour
to consult with the Scientific Board prior to ceasing development.

 

3.9                              Unwanted rights Stage 2 Results

 

Where
in accordance with clauses 3.7 or 6.2 Lipha ceases a Stage 2 Research
Program, Lipha retains the exclusive ownership of the relevant Stage 2 Results
generated up to the date of the cessation of that Stage 2 Research Program,
provided that Autogen may request a commercial and research licence of such
Stage 2 Results, in which case the Parties will negotiate in good faith the
terms of a licence (which may be exclusive or non-exclusive) for development
and commercialisation of such Stage 2 Results, and unless the negotiated
licence otherwise provides, Autogen must not assign the rights licensed from
Lipha to a third party without the prior written consent of Lipha, which
consent must not be unreasonably withheld.

 

3.10                       Commercialisation Licences required

 

In
the event Lipha wishes to in any way use, commercialise, licence, or assign
Stage 2 Results, then, unless it does so pursuant to a Complementary Agreement,
it must enter into a Commercialisation Licence in respect of those Stage 2
Results, to the intent and with the effect that amongst other things Autogen
will receive “royalties” in respect of such use, commercialisation, licensing
or assignment.

 

4.                                     RESEARCH GENERALLY

 

4.1                              Scientific Board

 

The
Parties agree to establish a scientific board comprised of both Parties’
representatives. The Scientific Board may consist of two (2) representatives of
Autogen and two (2) representatives of Lipha.

 

4.2                              Meetings of the Scientific Board

 

Scientific
Board meetings will be held every three (3) months, or as otherwise agreed by
the Parties and each party may have any of its employees participate in said
meeting if the party considers it necessary. Such meeting shall take place
alternating at each party’s place of business or at any other place subject to
prior agreement by the Parties, and be chaired by a representative of the party
who hosts the meeting. The chairman of the meeting must circulate the agenda
for the meeting at least two (2) weeks prior to each meeting and will issue the
formal minutes of the meeting.

 

19

 

The
Parties agree that Scientific Board meetings are only a place to report and
discuss:

 

(a)                                  the progress
of each party’s research and development work related to Stage 1 Research; and

 

(b)                                 the
progress of research and development work related to each Stage 2 Research
Program,

 

but
the Scientific Board does not have capacity to make decisions on important
matters to bind either party, unless otherwise agreed.

 

4.3                              Reports

 

(a)                                  Autogen
agrees that it will prepare and submit reports to Lipha every three (3) months
during Stage 1 Research and any stage research in progress and it shall
promptly give to Lipha at the end of Stage 1 Research and such stage research
in progress a final and detailed report.

 

(b)                                 Lipha
agrees that it will prepare and submit reports to Autogen every three (3)
months during each Stage 2 Research Program and it shall promptly give to Autogen
at the end of each Stage 2 Research Program a final and detailed report on such
completion of Stage 2 Research.

 

(c)                                  The
reports provided above must in each case set out in reasonable and informative
detail the activities undertaken in the period to which the report relates, and
the activities planned for the next reporting period, if any.

 

5.                                     OPTION FOR FURTHER AGREEMENT

 

5.1                              Multiple Complementary Agreements

 

If,
and each time, Lipha participates in Direct Programs or Indirect Programs under
clause 2.6 or 2.7 then the Parties agree, if it is
necessary, to enter into a Complementary Agreement which will take effect no
later than six (6) months prior to completion by Lipha of relevant Stage 2
Research Program. A Complementary Agreement may not be required if Lipha does
not elect to proceed with a Joint Venture Agreement.

 

5.2                              Licence milestones

 

Within
30 days after the commencement of Phase III clinical trials in respect of a
Product the subject of a Stage 2 Research Program Lipha must pay to Autogen a
milestone payment of:

 

(a)                                 in case
the protein could be directly useable as a drug or other gene therapies (Direct
Program) if Lipha elects to proceed with a Joint Venture Agreement, FRF [*] for
Lipha’s exclusive European rights (less any amount already paid under clause 2.8) which is non refundable and will not
be credited against future royalty payments, if any, payable to Autogen,

 

20

 

Lipha
will have exclusive further development and marketing rights throughout Europe
Autogen having the rights to develop and market such Autogen invention in the
rest of the world; or

 

(b)                                in case
gene and/or protein could be used for discovery of chemical or biological
compounds or other gene therapies (Indirect Program), FRF [*] for Lipha’s
worldwild exclusive rights (less any amount paid in respect of the first
transition of a Novel Gene Product to Stage 2 Research under clause 2.8) provided that FRF [*] of such
milestone payment will be treated as an advance royalty and be credited against
future royalty payments, if any, payable to Autogen.

 

Lipha
will fund the whole further development.

 

(c)                                 In case gene and/or
protein could be used for discovery of chemical or biological compounds
(Indirect Program), FRF [*] for Lipha’s exclusive European rights (less any
amount paid in respect of the first transition of a Novel Gene Product to Stage
2 Research under clause 2.8).

 

Lipha
will fund a third (1/3) of the further common development expenses, the J.V.
funding the other two third (2/3).

 

6.                                     COMMERCIALISATION LICENCE

 

6.1                              Requirement for such a licence

 

Upon
the first commencement of a Direct Program or Indirect Program, the
Commercialisation Licence for the Stage 2 Research Program (in the case of
Lipha Programs or a Stage 2 Research Program funded by both Autogen and Lipha)
will be deemed to be in force, and Lipha and Autogen must promptly execute a
Commercialisation Licence.

 

6.2                              Failure to sign Commercialisation Licence

 

In
the event that the Commercialisation Licence in respect of a Stage 2 Research
Program is not executed in accordance with clause 6.1, then:

 

(a)                                  the
relevant Stage 2 Research Program must cease; and

 

(b)                                 the
provisions of clause 3.8 will
apply.

 

6.3                              Commercialisation

 

The
obligations of each of the Parties in respect of commercialisation will be as
contained in the relevant Commercialisation Licence or Complementary Agreement
(if any).

 

21

 

7.            INDUSTRIAL AND INTELLECTUAL PROPERTY RIGHTS

 

7.1          Autogen Patents, Autogen Know-How and Stage 1 Results

 

The
Autogen Patents, Autogen Know-How and Stage 1 Results (as per clause 2.9) are owned by Autogen, or exclusively
licensed by it from IDI and are freely exploitable by it, subject to:

 

(a)           a research
licence in favour of Lipha and its Affiliates within the Licensed Field (as per
clause 2.10);

 

(b)           an exclusive licence
in favour of Lipha within the Licensed Field for commercialisation in terms of
the relevant Commercialisation Licence (if any); and

 

(c)           if appropriate, the
rights granted under the Joint Venture Agreement.

 

7.2          Scope of any exclusive licence

 

Any
grant of an exclusive licence in a given limited field in respect of Patents or
Know-How, does not preclude the licensing of the same Patents or Know-How for
use or exploitation in some other field.

 

7.3          Stage 2 Results

 

As
provided in clause 3.3(a) Stage 2
Results in respect of each Lipha Program are owned by Lipha and are freely
exploitable by it, subject to:

 

(a)           a research licence in
favour of Autogen and its Affiliates and IDI for the purpose of their own
internal research, as provided in clause 3.6;

 

(b)           a right for Autogen
to seek a licence in certain circumstances as provided in clause 3.8;

 

(c)           the use of, including
the licensing of such Stage 2 Results, being subject to the same restrictions
as are applicable to Pre-Stage 2 Results, under a Commercialisation Licence,
save for the Licensed Field restriction, but including, amongst other things:

 

(i)            the obligation to pay
“royalties” to Autogen for the use or exploitation of the Stage 2 Results; and

 

(ii)           the requirements in
relation to the grant of licences of the Stage 2 Results,

 

to
the intent that Stage 2 Results will be accorded the same treatment and
generate for Autogen the same benefits and entitlements as Pre-Stage 2 Results,
even though their legal ownership is different.

 

22

 

7.4          Use outside of Licensed Field

 

While
Stage 2 Results from a Lipha Program are freely exploitable by Lipha outside of
the Licensed Field (subject to clause 7.3),
this does not imply any licence to use Pre-Stage 2 Results outside of the
Licensed Field, and Lipha will need to seek a licence from Autogen in relation
to the same, if such exploitation uses Pre-Stage 2 Results, or would amount to
an infringement of Stage 1 Patents or Autogen Patents.

 

8.            CONFIDENTIAL INFORMATION

 

8.1          Obligations to Autogen

 

Subject
to clauses 8.3 and 8.6, Lipha covenants with Autogen as
follows:

 

(a)           to keep all Know-How
belonging to Autogen or supplied to it by Autogen, including the existence of
such Know-How, strictly secret and confidential (including from all its
employees, servants and agents), exercising at least the same degree of care as
it uses to maintain its own Know-How;

 

(b)           to provide proper and
secure storage for such Know-How within its possession or control;

 

(c)           to use such Know-How
only for the purposes of this agreement and not for any other activity or
purpose whatsoever without the prior written approval of Autogen; and

 

(d)           to not copy or reduce
to writing or any other medium any part of such Know-How except as may be
reasonably necessary for the purposes of this agreement.

 

8.2          Obligations to Lipha

 

Subject
to clauses 8.3 and 8.6, Autogen covenants with Lipha as
follows:

 

(a)           to keep all Know-How
belonging to Lipha or supplied to it by Lipha, including the existence of such
Know-How, strictly secret and confidential (including from all its employees,
servants and agents), exercising at least the same degree of care as it uses to
maintain its own Know-How;

 

(b)           to provide proper and
secure storage for such Know-How within its possession or control;

 

(c)           to use such Know-How
only for the purposes of this agreement and not for any other activity or
purpose whatsoever without the prior written approval of Lipha; and

 

(d)           to not copy or reduce
to writing or any other medium any part of such Know-How except as may be
reasonably necessary for the purposes of this agreement.

 

8.3          Exceptions to obligations

 

The
obligations of confidence set out in clauses
8.1 and 8.2 do not
extend to Know-How which:

 

23

 

(a)           at the time of
disclosure to a party is in the public domain;

 

(b)           after disclosure to a
party becomes part of the public domain otherwise than as a result of the
wrongful act of that party or one of that party’s disclosees;

 

(c)           a party can show was
in its possession at the time of disclosure and was not acquired directly or
indirectly from the other party; or

 

(d)           is received from a
third party provided that it was not acquired directly or indirectly by that
third party from a party to this agreement or under an obligation of
confidence;

 

(e)           is required by
compulsion of law to be disclosed,

 

provided
that:

 

(f)            the onus is on the
party alleging the same to prove that one of the above exceptions has
application; and

 

(g)           in any
case of uncertainty as to whether the obligations in clauses 8.1 or 8.2
have application to any information, such information must be treated as
subject to the obligations until advised otherwise by the party to whom the
obligations are owed.

 

8.4          Rights in Know-How

 

Each
party acknowledges and agrees that each other party has made a substantial investment
in that party’s Know-How and has a legitimate right to protect itself against
wrongful disclosure or use of such Know-How.

 

8.5          Term of obligation

 

The
obligations in this clause 8
survive the expiry or termination of this agreement for whatever reason and
continue for a period of 10 years, subject always to the exceptions included in
clause 8.3.

 

8.6          Permitted disclosures

 

Each
party (“the first party”) is permitted to disclose Know-How belonging to
another party or supplied to it by another party (“the other party”) to such of
the first party’s Representatives as require access to such information for the
purposes of this agreement, provided that:

 

(a)           only such Know-How as
needs to be disclosed to a person for the purposes of this agreement will be
disclosed to that person; and

 

(b)           the first party must:

 

(i)            have obtained from
each such person undertakings in favour of the other party substantially in the
form of the relevant obligations and undertakings in this clause 8 (but not this clause 8.6);

 

(ii)           be responsible for
the performance of its Representatives’ undertakings referred to in clause 8.6(b)(i); and

 

24

 

(ii)           take whatever steps
are reasonably necessary, including the institution of legal proceedings, to
ensure that each of its Representatives is bound by and observes the terms of
the undertakings referred to in clause
8.6(b)(i).

 

8.7          Delivery-up of Know-How

 

All
of a party’s Know-How and all materials containing or embodying such Know-How and
all copies of or extracts from or notes on the same in the possession, power or
control of another party or any of its employees, servants or agents together
with all forms and other materials relating to practices and procedures in
relation to the Know-How to the extent possible must:

 

(a)           in the event of the
expiration or sooner termination of this agreement, be delivered up by the
other party to the first party at the expense of the other party; and

 

(b)           in the event of any
demand made by the first party be delivered up by the other party to the first
party at the expense of the first party.

 

8.8          Terms of this Agreement

 

Lipha
and Autogen shall not disclose any terms or conditions of this agreement to any
third party without the prior consent of the other party, except as required by
applicable law or local regulations or to a third party with whom Autogen or
Lipha has entered into or proposes to enter into a business relationship,
provided that such third party shall enter into a confidentiality agreement
with, or otherwise owe a duty or confidentiality to Lipha or Autogen, as
applicable.

 

8.9          Public Announcement

 

Except
as required by law, order or regulation of a governmental agency or a court of
competent jurisdiction, no other announcement, public release or notice of any
kind may be issued without the express written consent of both Parties, which
consent shall not be unreasonably withheld, provided, however, the Parties
shall prepare a joint press release announcing the transaction set forth in this
agreement to be issued promptly upon execution of this agreement.

 

8.10        Continuous disclosure obligations

 

Autogen
is a subsidiary of Autogen Limited which is listed on the Australian Stock
Exchange (“ASX”). As such Autogen is subject to the continuous disclosure
requirements of the ASX. The obligations of Autogen under this agreement will
not restrict it or AWI from making whatever disclosures are necessary for the
purposes of fulfilling the requirements applicable to AWI as a company listed
on the ASX, and neither Autogen or AWI is under any obligation to delay the
public release of any required announcement pending the provision of any
consent or approval from Lipha. The above provision will also apply with such
adaptations as are necessary to disclosure obligations imposed upon Lipha as a
subsidiary of its listed parent Merck KGaA.

 

25

 

9.            LIABILITY

 

9.1          Responsibility for Products

 

Lipha
must ensure at all times that Stage 2 Research is conducted and Products are
developed, manufactured, tested and used strictly in accordance with all
relevant applicable requirements and standards of relevant jurisdictions and
Lipha will be responsible for conducting its own independent examination and
verification of the accuracy and suitability of Pre-Stage 2 Results and for
ensuring the same are suitable for the purposes for which the same are used.

 

9.2          Autogen not liable

 

Except
as provided in clauses 10.2 and 16.2, Autogen is not liable (in contract or
tort or otherwise) to compensate Lipha for any loss howsoever arising suffered
by Lipha arising directly or indirectly from the use by Lipha of Pre-Stage 2
Results or the sale of Products.

 

10.          INDEMNITIES

 

10.1        Indemnity by Lipha

 

Lipha
agrees to indemnify Autogen against and hold Autogen harmless from any and all
Losses arising from or in connection with:

 

(a)           a breach by Lipha of
any of its warranties or obligations under this agreement;

 

(b)           the conduct of a
Lipha Program,

 

provided
that Lipha is not required to indemnify Autogen for any Losses to the extent
they result from Autogen’s or its Representatives negligence or breach of any
of Autogen’s warranties or obligations under this agreement.

 

10.2        Indemnity by Autogen

 

Autogen
agrees to indemnify Lipha and hold Lipha harmless from any and all Losses,
arising from or in connection with:

 

(a)           a breach by Autogen
of any of its warranties or obligations under this agreement;

 

(b)           the negligent
performance by Autogen or IDI of the Stage 1 Research; and

 

(c)           the termination of
the Research Agreement as a result of the failure of Autogen to provide
research funding under this agreement (other than as a result of any act or
omission of Lipha or its Representatives),

 

provided
that Autogen is not required to indemnify Lipha for any Losses to the extent
they result from Lipha’s or its Representatives’ negligence or breach of any of
Lipha’s warranties or obligations under this agreement.

 

26

 

10.3        Notification regarding indemnity

 

Each
party must promptly notify the other of any claims or suits for which the first
party may assert indemnification from the other party and the first party will
permit the other party and its insurer at the other party’s expense to assume
or participate in the defence of any such claims or suits and the first party
will co-operate with the other party or its insurers in such defence when
reasonably requested to do so.

 

11.          INSURANCE

 

Each
party must have and must maintain for the Term the relevant Required
Insurance.  The Required Insurance must
be with a reputable insurer and name the other party as an additional
insured.  Each party will at the others
request provide to that party a certificate from a reputable insurance broker
confirming that the insurance required by this clause in currently in effect.

 

12.          TERM AND TERMINATION

 

12.1        Term

 

Subject
to making of the payment contemplated by clause 2.4(b), or earlier termination pursuant to the further
provisions of this clause 12, the
initial term of this agreement will expire on 31st December 2005, subject to
extension pursuant to clause 2.4.
In the event that Lipha exercises its option in relation to undertaking Stage 2
Research, then this agreement will be extended and continue to apply whilst and
so long as any Stage 2 Research Program continues, it being acknowledged that
in such circumstances Lipha is not obliged to extend the Research Term (and
comply with clause 2.4(b)) unless
it wishes to extend Stage 1 Research in respect of some other Novel Gene Product.

 

12.2        Termination for breach

 

If
one party breaches any term, provision or obligation of this agreement (the “Defaulting
Party”) and the Defaulting Party fails to:

 

(a)           remedy such breach
within 60 days after receipt of notice from the other party requiring remedy of
the breach; or

 

(b)           if the breach cannot
be remedied within the said 60 day period, commence action within the said 60
day period to remedy the breach and undertake in writing to the other party to
complete remedy of the breach as soon as practicable thereafter,

 

the
other party has the right to terminate this agreement immediately upon the
expiration of the said period of 60 days by written notice to the Defaulting
Party.

 

12.3        Termination in default of payment

 

This
agreement may be forthwith terminated by a party by giving notice to the other
party if that other party defaults in the payment of any money due by that
other party to the first party under this agreement and such default continues
for a period of 30 days after notice has been given to the other party
demanding the payment of such money.

 

27

 

12.4        Grounds for immediate Termination

 

Subject
to clause 12.5, this agreement may be terminated by a
party giving notice to the other party upon the happening of any of the
following events in respect of that other party:

 

(a)           an Insolvency Event;
or

 

(b)           if the other party is
in breach of an undertaking given pursuant to clause 12.2(b).

 

12.5        Reconstruction exception

 

A
winding up or liquidation for the purposes of reconstruction or amalgamation by
the other party is not an event permitting or giving rise to termination if
after that reconstruction or amalgamation the resulting corporation becomes
bound by the terms of this agreement by way of assignment or novation.

 

12.6        Termination by Autogen

 

Autogen
may terminate this agreement upon notice to Lipha if:

 

(a)           there is a change of
greater than 50% in the control of the issued voting capital of Lipha or a
holding company (if any) of Lipha other than for the purpose of internal
re-construction;

 

(b)           a person or persons
not previously in Control of Lipha obtain Control of Lipha or a holding company
(if any) of Lipha; or

 

(c)           if Lipha or any of
its affiliates challenges or seeks or causes to be challenged the validity of
the Project Patents.

 

12.7        Termination by Lipha

 

Lipha
may terminate this agreement upon notice to Autogen if there is a change of
greater than 50% in the control of the issued voting capital of Autogen or a
holding company (if any) of Autogen other than for the purpose of internal
re-construction.

 

12.8        Termination to be without prejudice

 

Any
termination of this agreement is without prejudice to the rights which a party
has against the other in respect of anything done or omitted to be done
hereunder prior to such termination or in respect of any sums or other claims
outstanding at the time of termination.

 

12.9        Survival of provisions

 

The
provisions of clauses 1, 2.9, 2.10, 3.3, 3.6,
3.8, 3.9, 3.10, 7.3, 7.4, 8, 9, 10, 11, 12.8, 12.9, 14.1, 16, 18, 19, 20
will survive termination of this agreement.

 

28

 

13.          OBLIGATIONS AND RIGHTS ON TERMINATION

 

Immediately
upon termination or expiration of this agreement, each party must return or
destroy all copies of Know-How owned or supplied by the other party, except for
the retention of a copy as necessary for that party to be able to exploit any
continuing licenses.

 

14.          WARRANTIES

 

14.1        General warranties

 

Each
party represents and warrants to the other that:

 

(a)           it has all necessary
powers and authorisations necessary to enter into this agreement and observe
its obligations hereunder and allow this agreement to be enforced against it;
and

 

(b)           all necessary
consents, approvals and authorisations of all governmental authorities required
to be obtained by that party in connection with this agreement have been
obtained; and

 

(c)           the execution and
delivery of this agreement does not contravene any law, regulation or official
directive or any obligations or undertakings, contractual or otherwise, by
which it or any of its assets are bound or cause a limitation on its powers to
be exceeded; and

 

(d)           the performance of
the party’s obligations under this agreement:

 

(i)            do not and will not
conflict with or violate any requirement of applicable laws or regulations; and

 

(ii)           do not and will not
conflict with, or constitute a default under any contractual obligation of that
party; and

 

(e)           there does not
presently exist any event which would either now or with the effluxion of time
entitle the other party to terminate this agreement pursuant to clause 12; and

 

(f)            it is not a party to
any pending or threatened action or proceeding affecting it or any of its
assets before a court, governmental agency, commission or arbitrator where an
adverse outcome could reasonably be expected to adversely impact upon the
performance of its obligations under this agreement; and

 

(g)           it has no
immunity from the jurisdiction of a court or from legal process (whether through
service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise).

 

29

 

14.2        Specific warranty for Autogen Patents

 

Autogen
warrants to Lipha that:

 

(a)           as at the date of
this agreement it has disclosed to Lipha details of all prior art sighted by
Autogen by way of international search in relation to the Autogen Patents, but
does not warrant that it has undertaken a thorough or exhaustive search of
prior art; and

 

(b)           at the date of this
agreement it is unaware of any other Patent which has not been disclosed to
Lipha and which may be infringed by Lipha using the Autogen Patents in
accordance with the terms of this agreement.

 

14.3        Warranties by Lipha

 

Lipha
warrants to Autogen that:

 

(a)           it will obtain or has
obtained from its Representatives who have access to the Autogen Know-How and
Stage 1 Know-How written obligations to treat such information as confidential
strictly in accordance with this agreement.

 

(b)           that it has made its
own enquiries into the validity and enforceability of the Autogen Patents and
satisfied itself that the usage by Lipha, its Affiliates or sub-licensees of
the Autogen Patents and the Confidential Information do not and will not
infringe the intellectual property rights of any third party.

 

15.          PROTECTION OF PATENTS

 

15.1        Maintenance of Patents

 

Autogen
is responsible for the cost of preparing filing prosecuting and maintaining the
Autogen Patents but nothing expressed or implied herein necessarily obligates
Autogen to institute legal proceedings to protect same.  The party 
responsible for the cost of preparing, filing, prosecuting and
maintaining the Stage 1 Patents will initially be determined in accordance with
clause 2.11, provided that as from
the date that a Commercialisation Licence in respect of Stage 1 Patents is
entered into between the Parties, Lipha will assume full responsibility for the
full cost of preparing, filing, prosecuting and maintaining such Stage 1
Patents. 
Lipha is responsible for the cost of preparing, filing,
prosecuting and maintaining the Stage 2 Patents.  Nothing expressed or implied herein
necessarily obligates Lipha to institute legal proceedings to protect Stage 1
Patents or Stage 2 Patents.

 

15.2        Reporting infringements

 

Other
than in the case of a Direct Program or Indirect Program solely funded by
Autogen, a party must promptly report to the other in writing particulars of
any action or activity of which the first party becomes aware which might
reasonably amount to infringement of or challenge to any of the Pre-Stage 2
Results or Stage 2 Results.

 

30

 

15.3        Conduct of proceedings regarding Pre-Stage 2 Results

 

Lipha
has the first right to take control of and conduct any infringement proceedings
in respect of the Pre-Stage 2 Results from a Lipha Program where such
infringement is within the Licensed Field. 
Should Lipha undertake such proceedings Autogen must fully co-operate with
Lipha in relation to such action including the lending of Autogen’s name to the
action and assistance by personnel of Autogen. The costs and expenses of any
such action will be borne by Lipha, and the proceeds of such action after
payment of Lipha’s reasonable external costs will be divided between Autogen
and Lipha on the basis that Autogen gets 50% and Lipha the balance. In the
event Lipha does not wish to undertake the conduct of such proceedings on its
own, Autogen and Lipha must discuss whether they will undertake joint
proceedings and if so on what basis. If no such agreement can be reached
Autogen is entitled to bring an action in its own name, and Lipha must provide
Autogen with all reasonable assistance including lending Lipha’s  name to such action.  Autogen must bear all the costs of such an
action, and the proceeds of any such action belong to Autogen absolutely.

 

16.          INFRINGEMENT OF OTHERS RIGHTS

 

16.1        Notification of action

 

In
the event that legal action is threatened or commenced against Lipha arising
out of Lipha’s use of Autogen Patents or Autogen Know-How, Lipha must not make
any admissions or enter into any substantive steps in connection therewith but
must promptly notify Autogen.

 

16.2        Autogen action

 

If
such legal action against Lipha arises out of the use of the Autogen Patents or
Autogen Know-How in accordance with the terms and conditions of this agreement
in relation to Products, then Autogen must defend and/or assist in the defence
of such litigation, and must bear the reasonable costs and expenses of such
defence. If as a result of such proceedings any damages or awards are assessed
against Lipha, then provided that Lipha has at all times followed the
instructions of, or otherwise obtained the consent of, Autogen in respect of
the defence of such claims, then such damages or awards, as well as any and all
reasonable costs incurred by Lipha, must be satisfied and paid by Autogen.

 

16.3        Lipha action

 

If
such legal action against Lipha related to the use by Lipha, Lipha Affiliates
or sub-licensees of the Autogen Patents or Autogen Know-How or use of Stage 1
Patents, Stage 1 Know-How or Stage 2 Patents or Stage 2 Know-How other than in
accordance with the terms and conditions of this agreement Lipha must promptly
notify Autogen of the commencement of legal action. Autogen must (at the
expense of Lipha) assist Lipha’s efforts to settle and/or defend such claims.
Lipha must bear all its own costs and expenses and must be responsible for
awards against it and Autogen, as well as any and all reasonable costs incurred
by Autogen, to the extent that indemnification, warranties and other claims may
not be available against Autogen.

 

31

 

If
any amounts are recovered by or awarded or paid to Lipha from or by a third
party as a result of any such action or litigation, Lipha must from such
amounts reimburse Autogen for all costs and amounts paid by Autogen in
connection with such action or litigation and must, after deducting the legal
costs incurred by it in taking such legal or other action, pay to Autogen from
any compensation recovered thereby, Autogen’s part thereof determined in
accordance with the respective interests of the Parties in such compensation.

 

17.          FORCE
MAJEURE

 

17.1        Party not liable

 

Where
a party is required under this agreement to perform an obligation or do any act
or thing by a designated time or date (other than an obligation to make
payment) (“Obligation”), the party is not to be liable for any delay in
performing or for failure to perform an Obligation where the delay or failure
arises from Force Majeure and that party has complied with this clause.

 

17.2        Notice of Force Majeure

 

A
party who claims Force Majeure must:

 

(a)           give the other party
prompt notice of the Force Majeure with reasonably full particulars and an
estimate of the extent and duration of its delay in performance, or inability
to perform; and

 

(b)           use all possible
diligence to remove the Force Majeure as quickly as possible provided that this
will not oblige the party to settle on terms unsatisfactory to that party any
strike, lockout or other labour difficulty, or any investigation or proceeding
by any governmental authority or any litigation by any third party.

 

17.3        Termination in case of Force Majeure

 

If
the delay continues beyond 30 Business Days, after the notice given under
clause 17.2, the Parties must meet
to discuss in good faith a mutually satisfactory resolution of the problem and,
if unable to achieve such a resolution within a further 30 Business Days,
either party may elect to terminate this agreement by five (5) Business Days
prior written notice to the other.

 

18.          ARBITRATION

 

In
case of any disputes arising between the Parties or arising out of the
performance or non-performance of the obligations of either party hereunder, or
the termination of this agreement, the Parties will endeavour to settle such
disputes amicably between themselves.  If
the Parties fail to resolve such disputes, then such disputes shall be finally
resolved by arbitration in accordance with the Rules of Conciliation and
Arbitration of the International Chamber of Commerce (ICC) by one or more
arbitrators appointed in accordance with the said rules.

 

Any
such arbitration will be held in English language and take place in Paris -
FRANCE.

 

32

 

19.          NOTICES

 

19.1        Form of Notice

 

Any
notice, approval, consent or other communication (“notice”) from one party to
another (“Recipient”) must be in writing and be signed by a person duly
authorised by the person giving the notice.

 

19.2        Manner of Service

 

A
notice must be served by:

 

(a)           leaving it at the
Recipient’s address;

 

(b)           sending it by
ordinary pre-paid post (airmail if being sent from or to a place outside of
Australia) to the Recipient’s address; or

 

(c)           sending it by facsimile
to the facsimile number of the Recipient.

 

19.3        Address for Service

 

Until
other details are specified by a Party as its address or facsimile number for
service the following apply:

 

	
  Autogen

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address :

  	
  210 Kings Way, South
  Melbourne, Victoria, Australia

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile :

  	
  61 3 9234 1190

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention :

  	
  Company Secretary

  	
   

  
	
   

  	
   

  	
   

  
	
  Lipha

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address :

  	
  37 rue Saint Romain, 69379
  Lyon, CEDEX 08, France

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile :

  	
  33-4-78-75-39-05

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention :

  	
  Head of Legal Department

  	
   

  

 

19.4        Time of Service

 

A
letter or facsimile will be taken to be served:

 

(a)           in the case of a
delivered letter, on the day of delivery, unless delivery is made on a non
Business Day or after 4:30 p.m. (local time in the place of receipt) on a
Business Day, in which case it will be taken to be served on the next Business
Day;

 

(b)           in the case of a
posted letter, on the third (or seventh in the case of airmail) Business Day
after posting; and

 

33

 

(c)           in the case of a
facsimile, on receipt by the party giving the notice of a transmission
confirmation report, unless within one Business Day of receipt the Recipient
has informed the party giving the notice that the transmission was incomplete
or garbled, provided that in any case if transmission is completed after 4:30
p.m. (local time in the place of receipt) or is received on a non Business Day,
the notice will be taken to be served on the next Business Day.

 

20.          MISCELLANEOUS

 

20.1        Severance

 

If
any provision is held invalid or unenforceable, in whole or in part in any
jurisdiction, then such invalidity or unenforceability will only affect such
provision or part thereof in such jurisdiction, and will not in any manner
affect the provision in this agreement in any other jurisdiction.  To the extent legally permissible an
arrangement which reflects the original intent of the Parties must be
substituted for such invalid or unenforceable provision.

 

20.2        Waiver

 

The
failure, delay, relaxation or indulgence by any party in exercising any power
or right given to that party under this agreement will not operate as a waiver
of that power or right, nor will any single exercise of a power or right
preclude any other or further exercise of it or the exercise of any other power
or right under this agreement.  A power
or right may only be waived in writing, signed by the party to be bound by the
waiver.

 

20.3        Relationship of Parties

 

Nothing
contained in this agreement is to be construed so as to place any Party in the
relationship of principal, employee, agent, partner, joint venturer or legal
representative of any other Party. The Parties expressly agree and acknowledge
that each of the Parties is an independent contracting Party and does not,
unless expressly provided, have the authority or power for or on behalf of any
other Party to enter into any contract, to incur debts, to accept money, to
assume any obligations or to make any warranties or representations.

 

20.4        Injunctive relief

 

If
there is any conduct or threatened conduct which is or may be a breach of this
agreement, both Parties acknowledge that damages may be inadequate compensation
for such a breach and that the other Party is entitled to apply to any court of
competent jurisdiction for interim or permanent injunctive relief or both
restraining the other Party from committing any breach or threatened breach of
this agreement without showing or proving any actual damage sustained by it.
Such rights and remedies will be cumulative and in addition to any other rights
or remedies which that party may be entitled to at law or in equity.

 

34

 

20.5        Proper law

 

This
agreement must be construed in accordance with and governed by the laws of the
United Kingdom and its form, execution, validity, construction and effect is to
be determined in accordance with the laws of the United Kingdom.

 

20.6        Rule of construction

 

No
rule of construction applies to this agreement to the disadvantage of a Party
because that Party was responsible for the preparation of this agreement or any
part of it.

 

20.7        Variation

 

Any
modification, alteration, change or variation of any term or condition of this
agreement must be in writing, executed by all Parties.

 

20.8        Assignment

 

This
agreement is personal to the respective Parties and neither is entitled to
assign in whole or in part without the prior written consent of the other
Party.

 

20.9        Further documents

 

Each
Party agrees that it will forthwith upon the request of the other Party execute
and deliver all such instruments and agreements and will take all such other
actions as the other Party may reasonably request from time to time in order to
give effect to the provisions and purposes of this agreement.

 

20.10     Affiliates’ actions

 

Each
Party will ensure that none of its Affiliates takes any action which is
inconsistent with that Party’s obligations under this agreement, or which if it
was done or not done under this agreement by that Party would amount to a
breach of this agreement by that Party.

 

20.11     Costs and Taxes

 

Each
party must pay its own costs and expenses in relation to the negotiation,
preparation, execution, delivery, stamping and registration, completion,
variation and discharge of this agreement and Lipha must pay any Tax in respect
of the execution, delivery, performance, release, discharge, amendment,
enforcement or attempted enforcement or otherwise of any of the following:

 

(a)           this agreement;

 

(b)           any agreement or
document entered into or signed under this agreement;

 

(c)           any transaction
contemplated under this agreement; and

 

(d)           any payment made or
received in respect of this agreement,

 

except
in any case to the extent to which such Tax is payable in Australia or on or in
respect of the income of Autogen.

 

35

 

20.12     Interest on overdue amounts

 

If
any amount due under this agreement is not paid when due, then the Party
obliged to make payment must pay to the other Party interest at the Base Rate
on the amount due and payable, accruing from day to day and to be computed from
the date for payment of the amount until payment of the amount in full.

 

20.13     Counterparts

 

This
agreement may be executed in counterparts, and by the Parties on separate or
the same counterparts, each of which is deemed an original, but all of which
constitute one and the same instrument.

 

20.14     Registration of agreement

 

If
this agreement or any associated transaction is required by the law of any
country, other than Australia, to be either approved or registered in any
country or with any governmental agency, Lipha is responsible for obtaining
such approval or registration including without limiting the generality of the
foregoing, causing this agreement to be stamped, recorded and registered at its
cost in such country. Autogen agrees to co-operate in any such application or
registration procedure. Lipha must furnish proof of compliance with the
foregoing to Autogen when and if Autogen so requires.

 

20.15     Not obliged to act contrary to law

 

No
Party is obliged to carry out or perform any of the terms of this agreement
where doing so would constitute a violation of any treaty, law, code or
regulation of any governmental authority whether local, national or
supranational. In any event the other terms of this agreement nevertheless continue
and the Parties must use all reasonable endeavours to re-negotiate and amend
this agreement so that the performance of this agreement as so amended will not
involve any such violation.

 

20.16     Statutory rights not limited

 

The
powers, remedies and rights conferred upon the Parties by or under any statute
are (except to the extent inconsistent with the terms and provisions expressed
in this agreement) be in addition to the powers, remedies and rights conferred
by this agreement.

 

20.17     Consents

 

Unless
this agreement provides otherwise and to the extent permitted by law, a Party
may, in its absolute discretion, conditionally or unconditionally give or
withhold any approval or consent permitted or required to be given by it
pursuant to this agreement.

 

20.18     Entire agreement

 

This
agreement constitutes the entire agreement between the Parties in relation to
the subject matter of this agreement. Any prior arrangements, agreements,
representations or undertakings are superseded and, except as expressly
provided, each party acknowledges that it has not relied on any arrangement,
agreement, representation or understanding which is not expressly set out in
this agreement.

 

36

 

SCHEDULE 1

 

Autogen Patents

 

(Referred to in clause 1.1, definition of “Autogen Patents”)

 

37

 

SCHEDULE 2

 

Europe

 

	
  Albania

  	
   

  	
  Macedonia

  
	
  Austria

  	
   

  	
  Malta

  
	
  Belgium

  	
   

  	
  Moldavia

  
	
  Belarus

  	
   

  	
  Netherlands

  
	
  Bosnia-Herzegovina

  	
   

  	
  Norway

  
	
  Bulgaria

  	
   

  	
  Poland

  
	
  Croatia

  	
   

  	
  Portugal

  
	
  Cyprus

  	
   

  	
  Romania

  
	
  Czech Republic

  	
   

  	
  Russia

  
	
  Denmark

  	
   

  	
  San Marino

  
	
  Estonia

  	
   

  	
  Slovak Republic

  
	
  Finland

  	
   

  	
  Slovenia

  
	
  France

  	
   

  	
  Spain

  
	
  Germany

  	
   

  	
  Sweden

  
	
  Greece

  	
   

  	
  Switzerland

  
	
  Hungary

  	
   

  	
  Turkey

  
	
  Iceland

  	
   

  	
  Ukraine

  
	
  Ireland

  	
   

  	
  United Kingdom

  
	
  Italy

  	
   

  	
  Yugoslav Federal Republic
  (Serbia-Montenegro)

  
	
  Latvia

  	
   

  	
   

  
	
  Liechtenstein

  	
   

  	
   

  
	
  Lithunia

  	
   

  	
   

  
	
  Luxembourg

  	
   

  	
   

  

 

38

 

SCHEDULE 3

 

Proforma Commercialisation
Licence

 

39

 

SCHEDULE 4

 

Joint Venture Agreement

 

1.             Suggested
Equity of Autogen [*]%, Lipha [*]%

 

2.             Joint
Venture would be conducted through a jointly owned company (“JVCO”) to be
located in an agreed country.

 

3.             JVCO would
hold, either directly, or by way of exclusive “free” licence all relevant
intellectual property rights, including Pre-Stage 2 Results and Stage 2
Results.  the licence would be restricted
to the Licensed Field and only apply to countries outside Europe.

 

4.             An
exclusive research and development and commercialization agreement (“Joint
Venture”) on the Research relating to all countries outside Europe provided
that each Party equally shares all costs and revenues of such research and
development costs. Any sales made outside Europe by this joint venture shall
not be subject to royalty payments.

 

5.             In case
any study is necessary for development both in Europe and outside Europe, both
Parties shall agree on which of Lipha or JVCO will conduct such study, and the
cost of such study shall be shared by Lipha and JVCO according to the part of
the world in which such study may be used, considering of the world for Europe,
for North and Latin America and for Japan, the other parts of the world not
being considered in such sharing.

 

6.             Both
Parties are to contribute all relevant patents and technology (including core
registration data and other material relevant to registration and approval)
necessary or useful to commercialise products or processes in the relevant
Licensed Field, which they already have, or subsequently separately create or
generate at or prior to the date of commencement of JVCO at the end of Stage 2,
such contribution to be without cost or royalty entitlements, unless the same
are due to non-Affiliates.

 

7.             This free
contribution does not extend to manufactured product which, subject to the
price being cost competitive with third Parties on a contract or toll
manufacturing basis, will be supplied exclusively by Lipha at a price to be
agreed.

 

40

 

SCHEDULE 5

 

Stage 1 Research

 

41

 

SCHEDULE 6

 

STAGE 1

 

 

•      Please
note references to “[*]” and “[*]” mean the funding proportions to be borne by
the parties.

 

42

 

EXECUTED as an
agreement

 

 

	
  The
  common seal of Autogen
  Research

  	
   

  	
  )

  
	
  Pty Ltd is
  affixed in accordance with its

  	
   

  	
  )

  
	
  articles of association in
  the presence of:

  	
   

  	
  )

  
	
   

  	
   

  	
  )

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
  (name
  printed)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Director/Secretary

  	
   

  	
  (name
  printed)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The
  common seal of Lipha S.A.
  is affixed

  	
   

  	
  )

  
	
  in accordance with its
  articles of association

  	
   

  	
  )

  
	
  in the presence of:

  	
   

  	
  )

  
	
   

  	
   

  	
  )

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Jean-Noël
  TREILLES

  
	
  CHAIRMAN OF THE BOARD

  	
   

  	
  (name
  printed)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Yves
  BONHOMME

  
	
  MANAGING DIRECTOR

  	
   

  	
  (name
  printed)

  

 

43

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