Document:

EX-10.28

 

Exhibit 10.28

Progenics Pharmaceuticals. Inc.

Old Saw Mill River Road

Tarrytown, New York 10591

(914) 789-2800

Telefax: (914) 789-2817

As of January 1, 2001

David A. Scheinberg, M.D.

Memorial Sloan-Kettering Cancer Center

1275 York Avenue

New York, New York 10021

			
	      Re:	 	Amendment to the Consulting Agreement, dated as of
May 1, 1995, as amended on June 13,1995 and as assigned
and amended as of September 5, 1996, between Progenics
Pharmaceuticals, Inc, and David A. Scheinberg, M.D. (the
“Agreement”)

Dear David:

     As you are aware, the above captioned Agreement expires as of December 31, 2000. Therefore,
the purpose of this letter is to evidence the below referenced amendments to the Agreement.

     First, the parties agree that the effective date of this Amendment is January 1, 2001.

     Second, Section 2, Compensation, of the Agreement, shall be amended and restated as follows:

     “Consultant’s full consideration for the consulting services provided by him shall be
as set forth in this Section 2.

     (a) Cash Compensation. During the Term and any Renewal Term of this
Agreement, Progenics shall pay to the Consultant cash compensation in the amount of $28,000
per annum, based on an average of 1.5 consulting days per month, payable quarterly in
arrears, for as long as the Consultant remains Involved with Progenics. Consultant shall
be solely and individually responsible for compliance with all laws and regulations
pertaining to payments received, including, without limitation, filing of estimated income
tax returns and payment of income and FICA taxes. In addition to the foregoing amount,
Progenics shall promptly reimburse the Consultant for all reasonable expenses incurred by
the Consultant in

 

 

David A. Scheinberg, M.D., Ph.D.

January 1, 2001

Page 2

 providing consulting services under this Agreement to the extent such
expenses do not exceed the reimbursement limits applicable to senior executives of
Progenics. The Consultant shall present expense statements and supporting documentation for such expenses in accordance with Progenics internal
policies and procedures for the reimbursement of business expenses.

     As used in this Agreement the term “Involved” shall mean that the Consultant is
actively involved with Progenics in at least one of the following capacities: (i) as an
employee, or (ii) as a consultant or advisor. The determination of whether the Consultant
is Involved shall be made by the Board of Directors of Progenics in its sole and reasonable
judgment.

     (b) Stock Options. During the Term and any Renewal Term of this Agreement,
for as long as the Consultant remains Involved with Progenics, in each calendar quarter the
Consultant will be granted stock options for the purchase of 1,250 shares of Progenics
Common Stock (the “Stock Options”). The Stock Options shall (i) be granted and issued on
the first day of each calendar quarter, (ii) be fully vested upon grant and issuance, (iii)
expire ten (10) years from the date of their grant, and (iv) be exercisable at a price
equal to fifty percent (50%) of the average closing bid price for the shares of Progenics’
Common Stock for the preceding thirty (30) trading days as quoted by the Nasdaq stock
market. The remaining terms of the Stock Options shall be as set forth in the Progenics
Stock Option Plan and in the stock option agreements representing the Stock Options.”

     Third, Section 7(a), Term and Termination, of the Agreement, shall be amended and restated as
follows:

     “(a) Unless terminated earlier under paragraph 7(b), below, this Agreement shall be
for an initial term of ten (10) years, commencing as of January 1,1994 (the “Term”), and
shall continue thereafter on a year to year basis (each year being a “Renewal Term”),
unless either party hereto provides written notice to the other party, no later than
forty-five (45) days prior to the expiration of the Term or any Renewal Term, of its desire
to terminate this Agreement for cause of convenience.”

 

 

David A. Scheinberg, M.D., Ph.D.

January 1, 2001

Page 3

     Fourth, all capitalized terms used herein that are not defined in this Amendment shall have
the meanings ascribed to them in the Agreement.

     Fifth, the parties hereto agree that all other terms of the Agreement shall remain the same
and in full force and effect.

To signify the your agreement with the foregoing, please indicate so by executing a copy of this
letter in the space provided below and returning a copy to the undersigned.

	 	 	 	 	 
	 	Very truly yours,

PROGENICS PHARMACEUTICALS, INC.

 	 
	 	/s/ RONALD J. PRENTKI
 	 
	 	Ronald J. Prentki 	 
	 	President 	 

	 	 	 	 	 
	Agreed and Accepted

DAVID A. SCHEINBERG, M.D.

 	 	 
	/s/ DAVID A. SCHEINBERG, M.D.
 	 	 
	David A. Scheinberg, M.D. 	 	 
	 	 	 

 

 

Addendum to Consulting Agreement

Between David A. Scheinherg, M.D., Ph.D.

and Active Biotherapies, Inc.

Active Biotherapies, Inc. (“ABI”) acknowledges that Dr. Scheinberg’s primary employment
responsibility is to Memorial Sloan-Kettering Cancer Center and/or its affiliates, Sloan-Kettering
Institute for Cancer Research and Memorial Hospital for Cancer and Allied Diseases (“MSKCC”), and
that Dr. Scheinberg is bound by MSKCC employment and business conduct policies including those
related to consulting and extramural activities. The parties agree that Dr. Scheinberg’s services
to ABI shall not employ proprietary information of MSKCC or make substantial use of MSKCC’s time or
resources without the written agreement of MSKCC. Progenics has retained a copy of pertinent MSKCC
policies.

Additionally, the parties agree that Dr. Scheinberg’s services shall not restrict or hinder the
ability to conduct current or foreseeable research assignments, nor limit Dr. Scheinberg’s ability
to publish at MSKCC concerning research generated in the course of his employment with MSKCC, nor
infringe on obligations to MSKCC with respect to publication and academic freedom at MSKCC.

ABI further acknowledges that Dr. Scheinberg will serve as a consultant in the capacity of an
individual, and not as an agent, employee or representative of MSKCC. The name of MSKCC or its
affiliates may not be used in connection with Dr. Scheinberg’s services as a consultant without
written permission from MSKCC.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Active Biotherapies, Inc.	 	 	 	Consultant
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ PAUL J. MADDON, M.D., PH.D.
	 	 	 	By:
	 	/s/ DAVID A. SCHEINBERG, M.D., PH.D.	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Paul J. Maddon, M.D., Ph.D.

President and CEO
	 	 	 	 	 	David A. Scheinberg, M.D., Ph.D.	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Date: June 13, 1995	 	 	 	Date: May 5, 1995

 

 

Progenics Pharmaceuticals, Inc.

Old Saw Mill River Road

Tarrytown, New York 10591

(914) 789-2800

Telefax: (914) 789-2817

May 4, 1995

David A. Scheinberg, M.D., Ph.D.

325 Central Park West, Apt. 3S

New York, NY 10025

			
	      Re:	 	Active Biotherapies, Inc.

Dear David:

     This letter is to confirm the understanding between Progenics Pharmaceuticals, Inc.
(“Progenics”), its wholly-owned subsidiary Active Biotherapies, Inc. (“ABI”) and you regarding the
relationship between us.

     We have negotiated the terms of a Consultant’s Agreement, the definitive form of which is
attached to this letter as Exhibit A (the “Consultant’s Agreement”). We have also negotiated the
terms of Progenics stock options to be granted to you, the definitive form of which is attached to
this letter as Exhibit B (the “Stock Options”).

     Progenics has negotiated a license to certain patents and technology from Memorial
Sloan-Kettering Institute. Progenics is in the process of negotiating a license and supply
arrangement with Cambridge Biotech Corporation (“CBC”), which is currently in bankruptcy
reorganization proceedings.

     By our mutual signatures below, Progenics, ABI and you agree that upon the full execution of a
license and supply agreement with CBC we will finalize the execution and deliver your Consultant’s
Agreement and the Stock Option Certificate in the forms attached. This terms of this letter shall
expire on August 1, 1995.

     Any amounts paid to you as consulting fees for period from January 1, 1994 to the date that
the Consultant’s Agreement and Stock Option Certificate are fully executed, shall be credited
against the accrued fees due to you during such period under the terms of the Consulting Agreement.
If the license and supply agreement with CBC is not executed and the terms of this letter expire,
the amounts paid to you will not be reimbursable to the Company.

     This letter expresses the complete understanding and agreement of the parties and supersedes
all prior agreements and understandings.

 

 

David A. Scheinberg, M.D., Ph.D.

Page 2

     To indicate your agreement to the foregoing, please sign two copies of this letter and return
one copy with the exhibits to the undersigned at Progenics. Additionally, you should sign two
copies of your respective Consultant’s Agreement and Stock Option Certificate and return them to
the undersigned at Progenics. I will execute them at the appropriate time and return an original
copy to you.

	 	 	 	 	 
	 	Very truly yours,

 	 
	 	/s/ PAUL J. MADDON, M.D., PH.D.
 	 
	 	Paul J. Maddon, M.D., Ph.D. 	 
	 	Chairman and CEO 	 
	 

	 	 	 	 	 
	AGREED AND ACCEPTED

 	 	 
	/s/ DAVID A. SCHEINBERG, M.D., PH.D. 	 	            Date May 5, 1995 
	David A. Scheinberg, M.D., Ph.D. 	 	 

 

 

	 	 	 	 	 

ACTIVE BIOTHERAPIES, INC.

CONSULTANT’S AGREEMENT

     This Agreement is made on the 1st day of May, 1995 between Active Biotherapies, Inc., a
Delaware corporation (“ABI”) and David A. Scheinberg, M.D., Ph.D. (the
“Consultant”).

     ABI was incorporated as a subsidiary of Progenics Pharmaceuticals, Inc. (“Progenics”)
to engage in scientific research in the field of developing and commercializing products for the
treatment and diagnosis of human cancers (the “Field”). The Consultant has extensive
experience in the Field, and ABI seeks to benefit from the Consultant’s expertise by retaining the
Consultant as a member of its Scientific Advisory Board (the “SAB”). The Consultant wishes
to perform consulting services in the Field for ABI. Accordingly, ABI and the Consultant agree as
follows:

1. Services.

     (a) Duties. The Consultant shall provide consulting services to ABI with respect to
matters related to the Field, initially with respect to GMK, a proprietary cancer vaccine which has
undergone clinical trials. The Consultant’s services to ABI will include, but not be limited to:
(i) serving on ABI’s SAB and attending SAB meetings; (ii) formulating the scientific and clinical
strategies of ABI with respect to GMK and other products in the Field in conjunction with the SAB,
(iii) presenting such strategies to the Board of Directors of ABI for review, (iv) providing
scientific advice regarding GMK and ABI’s other current and future product lines, the general
direction of its research program, recruitment of personnel, and techniques used in research in the
Field; and (v) generally advising ABI in its efforts to produce, develop, and market products in
the Field. Other responsibilities may include, but are not limited to, coordinating the
manufacturing and clinical trials of ABI’s products under FDA regulatory guidelines, interacting
with government regulatory agencies and the investment community on behalf of ABI, establishing
strategic partnerships, and assisting ABI in obtaining licenses and other rights from institutions
which may be useful in ABI’s business, all under the general guidance of the President of ABI and
its Board of Directors.

     (b) Time To Be Spent on Duties. The Consultant will devote to his activities
hereunder seventy-five percent (75%) of all of the outside consulting time which is allowed to him
from time to time by Memorial Sloan-Kettering Cancer Center, his primary employer (currently
eighteen (18) of twenty-four (24) days per year).

     (c) MSKCC Policies. ABI acknowledges that the Consultant is subject to the policies
of his primary employer, Memorial Sloan-Kettering Cancer Center and/or its affiliates,
Sloan-Kettering Institute for Cancer Research and Memorial Hospital for Cancer and Allied Diseases
(“MSKCC”), as more fully described in the Addendum to this Agreement, and that Consultant’s
obligations under MSKCC’s policies take priority over any obligations the Consultant may have to
ABI by reason of this Agreement. The Consultant agrees that he and his family members will abide
by the rules set forth from time to time by MSKCC which are applicable to faculty or staff
involvement with commercial ventures. The Consultant will conduct himself and his affairs so as to avoid any
actual conflict of interest or appearance of any conflict of interest between his activities with
ABI and his other activities.

 

 

2. Compensation.

     Consultant’s full consideration for the consulting services provided by him shall be as set
forth in this Section 2.

     (a) Cash Compensation. ABI shall pay to the Consultant cash compensation in the
amount of $1,500.00 per month, based on an average of 1.5 consulting days per month, payable
quarterly, for as long as the Consultant remains Involved with ABI. This cash compensation shall
be retroactive to January 1, 1994 and shall accrue but not be payable until the full execution of
this Agreement. Consultant shall be solely and individually responsible for compliance with all
laws and regulations pertaining to payments received including, without limitation, filing of
estimated income tax returns and payment of income and FICA taxes. In addition to the foregoing
amount, ABI shall promptly reimburse the Consultant for all reasonable expenses incurred by the
Consultant in providing consulting services under this Agreement to the extent such expenses do not
exceed the reimbursement limits applicable to senior executives of ABI or Progenics. The
Consultant shall present expense statements or vouchers and such other information as ABI may from
time to time request.

     As used in this Agreement the term “Involved” shall mean that the Consultant is actively
involved with ABI in at least one of the following capacities: (a) as an employee, or (b) as a
consultant or advisor. The determination of whether the Consultant is Involved shall be made by
the Board of Directors of ABI in its reasonable judgment.

     (b) Stock Options. The Consultant will be granted stock options for 200,000 shares
of Progenics Common Stock exercisable at a price of $4.00 per share and expiring on December 31,
2003 (the “Stock Options”). The terms of the Stock Options shall be as set forth in the
Progenics Stock Option Plan and in the stock option agreements representing the Stock Options.

3. Covenant Not To Compete.

     During the period in which this Agreement is in effect and for one (1) year thereafter,
neither Consultant nor any member of his immediate family will, directly or indirectly, own,
(except as an investor in securities listed on a national securities exchange or actively traded
over the counter so long a such investments do not exceed one percent (1%) of the outstanding
securities of the issuer of the same class) manage, operate, join, control, finance or participate
in the ownership, management, operation, control or financing of, or be connected as an officer,
director, partner, principal, agent, representative, consultant or otherwise with, or authorize his
name to be used in any Annual Report, Quarterly Report, Private Placement Memorandum, or other
securities offering materials or advertisement of, or solicit or attempt to solicit business on
behalf of, any person, business or enterprise which is engaged in pharmaceutical research and development, clinical trials, marketing or sales of a product in competition with, or
otherwise competes with Progenics or its affiliates, other than the existing arrangements, if any,
listed in Exhibit A without the express prior written consent of Progenics; provided, however, that
with regard to activities of the Consultant, this Section 3 shall not be deemed to apply to any
agreement or understanding permitted under paragraph 4(c).

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4. Confidentiality.

     (a) Disclosure By Consultant to ABI. The Consultant shall disclose fully and promptly
to ABI all Developments and Ideas which are developed, conceived, reduced to practice or learned by
the Consultant solely or jointly with others, at any time during the term of this Agreement and for
a period of twelve (12) months thereafter. The Consultant will make and maintain written records
of the aforesaid Developments and Ideas and submit promptly the same, and make supplemental oral
disclosure, to ABI. The term “Developments and Ideas” means any and all intellectual and
physical work product having actual or potential value to ABI whether or not patentable or
copyrightable, including inventions, whether or not tested or reduced to practice, discoveries,
improvements, ideas, conceptions, processes, developments, designs, business plans, trade secrets,
mask works, know-how and tangible expressions, computer software, systems, programs or procedures,
which are developed, conceived, reduced to practice or learned by employees or consultants of ABI
solely or jointly with others, which (a) results from, or is suggested by, work which is performed
for ABI or which is funded in whole or in part by ABI, or (b) results from any use of premises,
equipment or property (tangible or intangible) owned, leased, licensed or contracted for by ABI.
Notwithstanding the foregoing, the term Developments and Ideas shall not include any invention or
idea which is provided to the Consultant by another commercial entity with which the Consultant is
involved on terms consistent with the provisions of this Agreement.

     (b) Disclosure of ABI or Progenics Information to Consultant. In providing
consulting services to ABI pursuant to this Agreement, the Consultant may acquire Proprietary
Information. The Consultant agrees not to disclose any Proprietary Information to third parties or
to use any Proprietary Information for any purpose other than performance of consulting services
pursuant to this Agreement, without prior written consent of ABI or Progenics, as the case may be.
As used herein, the term “Proprietary Information” shall include Developments and Ideas as
well as other information that pertains to the products, processes, equipment, programs,
developments, agreements or plans of ABI, Progenics or third parties who have provided such
information to ABI or Progenics, and that is both (i) disclosed or made known by ABI or Progenics
to the Consultant and (ii) identified as “proprietary” by ABI or Progenics at any time.
Proprietary Information does not include information that: (a) is or later becomes available to
the public through no breach of this Agreement by the Consultant; (b) is obtained by the Consultant
from a third party who had the legal right to disclose the information to the Consultant; (c) is
already in the possession of the Consultant on the date this Agreement becomes effective; or, (d)
is required to be disclosed by law, government regulation, or court order. The Consultant also
agrees not to disclose the terms of this Agreement to any person without ABI’s prior written
consent in each instance (which will not be unreasonably withheld); provided, however, the Consultant may
disclose this Agreement to MSKCC and to his financial and legal advisors and as may be required by
law.

     (c) Other Activities of Consultant. The Consultant agrees that he will not enter
into or renew any agreement or undertake any major new projects with another commercial entity
which involve a conflict in activities or time commitments with the business or proposed business
of ABI, other than the existing arrangements listed in Exhibit A hereto, except with the prior
written approval of the Board of Directors of ABI, which will not be unreasonably withheld. The
Consultant will provide ABI as requested from time to time with an update about his activities with
other entities. ABI shall have the right to require the Consultant to terminate any

3

 

relationship
or project which in the reasonable opinion of ABI’s Board of Directors creates a product or time
conflict. Failure of the Consultant to terminate any such relationship shall be considered “Cause”
for termination of the Consultant. However, this provision shall not apply to Consultant’s
obligations to, or research on behalf of, MSKCC, including, without limitation, obligations or
research of Consultant in connection with a transfer by MSKCC of materials or intellectual property
developed in whole or in part by Consultant, or in connection with MSKCC research collaborations.

5. Return of Materials.

     The Consultant agrees promptly to return, following the termination of this Agreement or upon
earlier request by ABI, all drawings, tracings, data, records, apparatus, physical property and
written materials in the Consultant’s possession and which are (i) supplied by ABI in conjunction
with the Consultant’s consulting services under this Agreement or (ii) generated by the Consultant
in the performance of consulting services under this Agreement and not generated in the course of
Consultant’s activities as an employee of MSKCC.

6. Intellectual Property.

     The Consultant hereby assigns to ABI any and all right, title, and interest he may have in any
Developments and Ideas (as defined in paragraph 4a) developed during the term of this Agreement.
Any intellectual property assignable to ABI pursuant to the preceding sentence is hereinafter
referred to as “ABI Intellectual Property”. Upon the request of ABI, the Consultant shall
execute such further assignments, documents, and other instruments as may be necessary to assign
ABI Intellectual Property to ABI and to assist ABI in applying for, obtaining and enforcing patents
or other rights in the United States and in any foreign country with respect to any ABI
Intellectual Property. ABI will bear the cost of preparation of all patent or other applications
and assignments, and the cost of obtaining and enforcing all patents and other rights to ABI
Intellectual Property.

7. Term and Termination.

     (a) Unless terminated earlier under paragraph 7(b), below, this Agreement shall be for a term
of seven (7) years commencing as of January 1, 1994.

     (b) Without limiting any rights which either party to this Agreement may have by reason of
any default by the other party,

     (i) the Consultant may terminate this Agreement:

          (x) voluntarily without Good Reason upon forty-five (45) days written
notice to ABI; or

         &
nbsp;(y) voluntarily with Good Reason upon fifteen (15) days written notice to
ABI.

4

 

     (ii) ABI may terminate this Agreement:

          (x) without Cause upon thirty (30) days written notice to the Consultant;
or

          (y) with Cause upon seven (7) days written notice to the Consultant.

          (z) or due to a Disability

As used herein the following terms shall have the following meanings:

     “Good Reason” shall mean a material breach by ABI or Progenics of its respective
obligations to the Consultant where such material breach has not been cured within thirty (30) days
after ABI receives written notice of the alleged material breach.

     “Cause” shall mean and include (a) that the Consultant has committed willful
misconduct against ABI (including, but not limited to acts such as embezzlement, willful disclosure
of Proprietary Information to a third party without ABI’s knowledge or consent) which results in
material harm to ABI, (b) that the Consultant, in carrying out his duties to ABI as an employee,
consultant, or director, has been guilty of willful misconduct or gross negligence resulting in
either case in material harm to ABI (this provision shall not apply to any particular instance
which is merely the result of any good faith error in judgment), (c) the willful and continued
failure by or inability of the Consultant to substantially perform his duties with ABI under this
Agreement (other than as a result of a disability), which is not cured within 30 days after a
demand for substantial performance is delivered to the Consultant by the Board of Directors which
specifically identifies the manner in which the Board of Directors believes that the Consultant has
not substantially performed his duties, (d) the conviction of the Consultant of a felonious crime,
but not a misdemeanor, involving moral turpitude, and (e) any other act, action, or inaction of a
serious nature constituting misconduct or negligence that constitutes “cause” under applicable law.
A termination which would otherwise be a voluntary termination by the Consultant shall not be
considered a voluntary termination under this Agreement if the Consultant could be terminated by
the Company for Cause once any applicable cure period has lapsed; in such a case such termination
shall be deemed to have been for Cause.

     “Disability” or “Disabled” shall mean at any time (a) a condition which (i)
constitutes a disability as defined from time to time in the long-term disability income insurance
policy, if any, provided by the Company or ABI for its senior executives, without regard to any
waiting periods or (ii) if at such time no such policy is provided to ABI employees, such terms
shall mean that the Consultant is prevented by illness, accident or other disability (mental or
physical) from discharging the material duties under his Consultant Agreement, and (b) such
condition continues for three (3) consecutive months or one or more periods totaling six (6) months
during any consecutive twelve (12) month period.

     (c) Termination of this Agreement under paragraph 7(a) or 7(b), above, shall not affect the
Consultant’s continuing obligations to ABI under paragraphs 3,4,5 and 6 above.

5

 

     (d) If this Agreement is terminated, Consultant shall be entitled solely to the prorated
portion of the cash compensation (under Section 2) payable up to the date of termination and the
Consultant’s option(s) shall be subject to the forfeiture provisions set forth in the Consultant’s
Stock Option Agreement. The Consultant specifically agrees that ABI may offset against amounts it
may owe to the Consultant any debts or liabilities which the Consultant may from time to time owe
to ABI.

8. Miscellaneous.

     (a) This Agreement shall inure to the benefit of and be binding upon the respective heirs,
executors, successors, representatives, and assigns of the parties, as the case may be; provided,
however, the obligations hereunder of Consultant are personal and may not be assigned without the
express written consent of ABI. This Agreement may not be assigned by ABI without the consent of
Consultant, which consent may not be unreasonably withheld or delayed.

     (b) The relationship created by this Agreement shall be that of independent contractor, and
the Consultant shall have no authority to bind or act as agent for ABI or its employees for any
purpose.

     (c) Progenics may identify Consultant as a member of the Scientific Advisory Board in
materials describing ABI. Progenics shall not otherwise use Consultant’s name in publicity,
advertising, or securities offering materials without the prior written approval of Consultant,
which approval shall not be unreasonably withheld or delayed.

     (d) Notice or payments given by one party to the other hereunder shall be in writing and
deemed to have been properly given or paid if deposited with the United States Postal Service,
registered or certified mail, addressed as follows:

	 	 	 	 	 	 	 
	 

	 	Company:
	 	Active Biotherapies, Inc.

777 Old Saw Mill River Road

Tarrytown, NY 10591
	 	 

	 	 	 	 	 	 	 
	 

	 	Consultant:
	 	David A. Scheinberg, M.D., Ph.D.

325 Central Park West, Apt. 3S

New York, NY 10025	 	 

     (e) This Agreement replaces all previous agreements and the discussions relating to the
subject matters hereof and, together with the stock option agreement and any other related
agreements being executed and delivered in connection with this Agreement, constitutes the entire
agreement between ABI and the Consultant with respect to the subject matters of this Agreement.
This Agreement may not be modified in any respect by any verbal statement, representation, or
agreement made by any employee, officer, or representative of ABI, or by any written documents
unless it is signed by an officer of ABI and by the Consultant. ABI and Consultant acknowledge
that any amendment of this Agreement (including, without limitation, any extension of this
Agreement or any change from the terms of paragraph 2 in the consideration to be provided to
Consultant with respect to services to be provided hereunder) or any departure from the terms or
conditions hereof with respect to Consultant’s consulting services for ABI is subject to MSKCC’s
prior written approval.

6

 

     (f) In the event that any or any part of the terms, conditions or provisions contained in
this Agreement shall be determined invalid, unlawful or unenforceable to any extent, such terms,
conditions or provisions shall be severed from the remaining terms, conditions and provisions which
shall continue to be valid and enforceable to the fullest extent permitted by law.

     (g) ABI shall defend and indemnify the Consultant in his capacity as Consultant, director or
officer against any claims, judgments, damages, liabilities, costs and expenses (including
reasonable attorneys’ fees) (“Claims”) arising out of, based upon or related to the Consultant’s
performance of services hereunder, except to the extent that such Claim arises out of Consultant’s
gross negligence or willful misconduct. To the extent Progenics carries liability insurance for
its officers and directors, Progenics will carry, or cause ABI to carry, such insurance for the
officers and directors of ABI in amounts and on terms comparable to that obtained by Progenics for
its officers and directors. Nothing in this section shall be construed to limit any rights which
ABI may have against Consultant.

     IN WITNESS WHEREOF, the parties have executed this Agreement effective the date first stated
above.

	 	 	 	 	 
	 	ACTIVE BIOTHERAPIES, INC.

 	 
	 	By:  	/s/ PAUL J. MADDON, M.D., PH.D.
 	 
	 	 	Paul J. Maddon, M.D., Ph.D. 	 
	 	 	President and CEO 	 

	 	 	 	 	 

	 	 	 	 	 
	 	CONSULTANT:

 	 
	 	/s/ DAVID A. SCHEINBERG, M.D., PH.D.
 	 
	 	David A. Scheinberg, M.D., Ph.D. 	 
	 	 	 

7

 

	 	 	 	 	 

Exhibit A

CONSULTANT’S EXISTING ARRANGEMENTS

David A. Scheinberg, M.D., Ph.D.

1) Cytoclonal Pharmaceuticals, Inc. — Paid Consultant — work limited to development of Taxol,
TNF.IL-1 and related cytokines, antibodies to lung cancer and melanoma.

8exv10w6

 

Exhibit 10.6

Project No: GRA03395

	 	 	 
	

	 	R&D Start Program
   Grant Agreement
	Australian Government
	 	 
	 

Department of Industry

	 	 
	Tourism and Resources
	 	 
	AusIndustry

	 	Particular Conditions

Parties

	 	 	 
	Commonwealth of Australia
	 	 
	acting through the Industry Research
	 	 
	and Development Board
	 	 
	 
	 	 
	ABN 51 835 430 479
	 	 
	(Department of Industry, Tourism and
	 	 
	Resources)
	 	 
	 
	 	 
	Postal address
	 	Department of Industry, Tourism and Resources
	 
	 	GPO Box 85A
	 
	 	MELBOURNE VIC 3001

The Grantee

	 	 	 	 	 
	 
	 	 	 	Universal Biosensors Pty Ltd
	 
	 	- ABN	 	35098234309
	 
	 	- ACN	 	098 234 309
	 
	 	- postal address	 	103 Ricketts Road
	 
	 	 	 	MOUNT WAVERLEY VIC 3149
	 
	 	- business address	 	103 Ricketts Road
	 
	 	 	 	MOUNT WAVERLEY VIC 3149

R&D Start Grant Agreement Particular Conditions

Version 7.3 — Release Date June 04

Author: R&D Start Program Management

1

 

Operative provisions

	1.	 	This Grant is made to the Grantee in respect of the Project by the Industry Research
and Development Board on behalf of the Commonwealth to the Grantee under the R&D Start
Program.

	2.	 	The Grant is made pursuant to the Industry Research and Development Act 1986 and the
relevant Ministerial Directions issued under sections 19 and 20 of that Act.

	3.	 	The Grant is made on the terms and conditions of the Grant Agreement, which comprises the
General Conditions (version 7.3) and the Particular Conditions (including the schedule).

	4.	 	The Grantee acknowledges that it has received and read a copy of the General Conditions
(version 7.3), and agrees that the terms and conditions of the General Conditions form part of
the Grant Agreement.

	5.	 	Terms defined in the General Conditions (version 7.3) have the same meaning in the Particular
Conditions.

	6.	 	If there is an inconsistency between the Particular Conditions and the General
Conditions (version 7.3), the Particular Conditions prevail to the extent of the
inconsistency.

R&D Start Grant Agreement Particular Conditions

Version 7.3 — Release Date June 04

Author: R&D Start Program Management

2

 

Acceptance of terms

	 	 	 	 	 	 	 
	EXECUTED as a deed
	 	 	 	 	 	 
	Date of deed: 25 February 2005
	 	 	 	 	 	 
	Commonwealth of Australia

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	SIGNED for and on behalf of the

	 	 	)	 	 	 
	COMMONWEALTH OF AUSTRALIA by

	 	 	)	 	 	 
	Jayne Facey a delegate of the

	 	 	)	 	 	 
	INDUSTRY RESEARCH AND

	 	 	)	 	 	 
	DEVELOPMENT BOARD in the presence

	 	 	)	 	 	 
	of:

	 	 	)	 	 	 
	Ruth Steele

	 	 	)	 	 	 
	
 
Signature of witness

	 	 	)	 	 	 
	
	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	RUTH STEELE

	 	 	)	 	 	 
	 

Name of witness (block letters)
	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	

	 	 	)	 	 	/s/ Jayne Facey
	 

	 	 	 	 	 	 
	 

	 	 	)	 	 	 

Grantee

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

	 	 	 	 	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Signed by

	 	 	)	 	 	 
	Universal Biosensors Pty Ltd

	 	 	)	 	 	 
	by:

	 	 	)	 	 	 
	/s/
Ian Bennett

	 	 	)	 	 	
	 
Secretary

	 	 	)	 	 	/s/ C. P. H. Kiefel 

	

	 	 	)	 	 	Director
	 
	Ian Bennett

	 	 	)	 	 	C. P. H. Kiefel
	 

Name (please print)
	 	 	)	 	 	 
Name (please print)
	

	 	 	)	 	 	
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 

R&D Start Grant Agreement Particular Conditions

Version 7.3 — Release Date June 04

Author: R&D Start Program Management

3

 

The Schedule

	 	 	 	 	 
	1
	 	Project Title	 	Dry Chemistry Immunosensor
	 
	 	 	 	 
	2
	 	Project Reference Number	 	GRA03395
	 
	 	 	 	 
	3
	 	Project Duration	 	 
	 
	 	 	 	 
	 
	 	(a) Commencement Date:	 	1 October 2004
	 
	 	 	 	 
	 
	 	(b) Completion Date:	 	30 September 2007
	 
	 	 	 	 
	4
	 	Grant	 	A maximum amount of $2,366,064
	 
	 	 	 	 
	5
	 	Grant Percentage of
Eligible Expenditure	 	50%
	 
	 	 	 	 
	6
	 	Interest Rates	 	5.40 % per annum
	 
	 	 	 	 
	7	 	Project Planned Eligible Expenditure by Financial Year

[REDACTED]   -   Confidential portion has been omitted and has been
filed separately with the Securities Exchange Commission pursuant to
a request for confidential treatment.

	 	 	 	 	 
	8
	 	Initial Payment	 	$192,666
	 
	 	 	 	 
	9
	 	Project Description and Planned Outcomes	 	 

The project will develop a single step, disposable immunosensor platform which needs no liquid
reagents other than the sample. The platform will have the potential to give fully quanitiative
results in minutes on microlitre volumes of sample at the doctor’s office or emergency ward without
the operator carrying out any steps other than applying whole blood to the sensor. The target
analyte is the acute phase protein C reactive protein, which indicates the presence of infection or
other form of inflammation. The test will employ antibodies coupled to the enzyme glucose
dehydrogenase in a dry chemical system.

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4

 

	10	 	Performance Milestones and Planned Achievement Date

	 	 	 	 	 
	 	 	Major Milestone	 	Expected
	 	 	 	 	Achievement Date

[REDACTED]      Confidential portion
has been omitted and has been filed separately with the Securities
Exchange Commission pursuant to a request for confidential treatment.

	11	 	Retention Amount $118,304
	 
	12	 	Reports

	 	 	 	 	 	 	 
	Review Type	 	Due Date	 	Report Period	 	Audit Report
	 	 	 	 	 	 	Y/N

[REDACTED]      Confidential portion
has been omitted and has been filed separately with the Securities
Exchange Commission pursuant to a request for confidential treatment.

R&D Start Grant Agreement Particular Conditions

Version 7.3 — Release Date June 04

Author: R&D Start Program Management

5

 

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

Unless the Grantee is otherwise notified by the Commonwealth, commercialisation reports will be
required 1, 2 and 5 years after completion of the Project, in the format supplied by the
Commonwealth at those times.

	13	 	Notices

Notices must be addressed as follows:

	 	a)	 	if given to the Commonwealth, addressed and forwarded to the Director, AusIndustry
State Office, Department of Industry, Tourism and Resources for the attention of an AusIndustry
Customer Service Manager at the following address:

	 		 	
Address: PO Box 85A, MELBOURNE, VIC 3001

Facsimile No: 03 9268 7599

Email address: aivic@industry.gov.au

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

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

Project Manager

Universal Biosensors Pty Ltd

Locked Bag 50

MOUNT WAVERLEY VIC 3149

or as otherwise notified in writing by the Grantee.

	14	 	Special Conditions
	 
	 	 	Nil
	 
	15	 	Repayment of Repayable Contribution under Start Premium
	 
	 	 	Not Applicable

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NATIONAL BENEFIT INDICATORS — COMMERCIALISATION

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

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

As reflected in the project commercialisation plan, overseas commercialisation is reasonable
when it will result in:

	•	 	the maintenance of Australia as the home base for future R&D, manufacture or product
development;
	 
	•	 	an increase in the number of the company’s Australian-based employees.
	 
	•	 	Australian residents receiving commercial compensation through royalties, licence fees,
equity, dividends or outright sale.
	 
	•	 	ongoing development of the commercial outcomes arising from R&D activities involving domestic
and/or international collaboration with other firms and/or research organisations.

As reflected in the project commercialisation plan, overseas production is reasonable in two
circumstances:

(i) in cases where local production is demonstrably uneconomic on grounds of cost, the
Board will consider:

	•	 	the level of commitment to retaining or enhancing the company’s R&D facilities in
Australia.
	 
	•	 	the degree of globalisation of the relevant industry sector.
	 
	•	 	the relative input costs to production as identified by the company.
	 
	•	 	the relative transport costs as identified by the company.
	 
	•	 	the relative costs of skilled labour as identified by the company.
	 
	•	 	legal barriers to entry to foreign markets.
	 
	•	 	any other factors it finds relevant.

(ii) in cases where production or commercialisation demonstrably requires close physical
interaction with overseas companies, customers, suppliers and competitors, the Board will
consider:

	•	 	the level of commitment to retaining or enhancing the company’s R&D facilities in
Australia.
	 
	•	 	the mechanisms established to disseminate knowledge and market intelligence from
overseas to the company’s Australian operations.
	 
	•	 	the industry norms in terms of proximity.
	 
	•	 	the level of competition in the industry sector and the need to innovate quickly.
	 
	•	 	the nature of inputs which require close contact (for example, perishables or knowledge).
	 
	•	 	any other factors it finds relevant.

R&D Start Grant Agreement Particular Conditions

Version 7.3 — Release Date June 04

Author: R&D Start Program Management

7

 

	 	 	 	 	 
	   

	 	An Australian
Government Initiative

	 	 

Commercial Ready Program

Grant Agreement

General Conditions

Table of contents

	 	 	 	 	 	 	 
	Clause	 	 	 	Page
	1

	 	Interpretation
	 	 	2	 
	 
	 	 	 	 	 	 
	2

	 	Warranties
	 	 	6	 
	 
	 	 	 	 	 	 
	3

	 	Payment of Grant
	 	 	7	 
	 
	 	 	 	 	 	 
	4

	 	Conduct of Project
	 	 	9	 
	 
	 	 	 	 	 	 
	5

	 	Confidentiality
	 	 	13	 
	 
	 	 	 	 	 	 
	6

	 	Evaluation
	 	 	14	 
	 
	 	 	 	 	 	 
	7

	 	Project Outcomes
	 	 	14	 
	 
	 	 	 	 	 	 
	8

	 	Other Financial Assistance
	 	 	15	 
	 
	 	 	 	 	 	 
	9

	 	Acquittal of Grant
	 	 	15	 
	 
	 	 	 	 	 	 
	10

	 	Termination
	 	 	16	 
	 
	 	 	 	 	 	 
	11

	 	No Dealing with Grantee’s rights
	 	 	17	 
	 
	 	 	 	 	 	 
	12

	 	Acknowledgement and Public Statements
	 	 	18	 
	 
	 	 	 	 	 	 
	13

	 	Regulatory and Ethical Approvals
	 	 	18	 
	 
	 	 	 	 	 	 
	14

	 	Goods and Services Tax
	 	 	18	 
	 
	 	 	 	 	 	 
	15

	 	Notices
	 	 	19	 
	 
	 	 	 	 	 	 
	16

	 	Right of Commonwealth to recover money
	 	 	20	 
	 
	 	 	 	 	 	 
	17

	 	General
	 	 	20	 

			
	 	 	 
	Commercial Ready Grant Agreement
General Conditions
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	 	page 1

 

 

Operative
provisions

	1	 	Interpretation

	 	1.1	 	Unless the contrary intention appears:
	 
	 	 	 	annual capped grant amount means, for a financial year, the relevant amount
stated in item 7 of the schedule and, in the absence of an amount being stated,
the relevant amount for thatfinancial year is zero.
	 
	 	 	 	application means the application submitted by the Grantee in respect of which
the grant has been awarded.
	 
	 	 	 	Approved Financial-Institution means a deposit taking institution authorised under
the Banking Act 1959 (Cth) to carry on banking business in Australia.
	 
	 	 	 	Board means the Industry Research and Development Board established by section 6
of the Industry Research and Development Act 1986.
	 
	 	 	 	budget means the budget of planned eligible expenditure (by financial year) for
the project in the form set out in item 7 of the schedule.
	 
	 	 	 	commencement date is the date specified in item 3(a) of the schedule, or the
date of execution of this deed, whichever is the later.
	 
	 	 	 	completion date is the completion date for the project set out in item 3(b) of the
schedule, or the date of termination of this deed, whichever is the earlier.
	 
	 	 	 	confidential information comprises information described in item 13 of the
schedule, and any other information that is by its nature confidential, but does
not include any of the information specified in clause 12.3.
	 
	 	 	 	control has the meaning given by section 50AA of the Corporations Act 2001 (Cth).
	 
	 	 	 	deal with means:

	 	(a)	 	sell, license, transfer, novate, declare a trust over or
otherwise dispose of or procure or effect the disposal of, or in any way
whatsoever deal with, any legal or equitable interest or right in any
subject matter; or
	 
	 	(b)	 	effect a change in the beneficial interest or beneficial
unit holding under a trust the trustee of which has an interest or right in
the subject matter.

	 	 	 	Department means the Department of Industry. Tourism and Resources or any
successor.

			
	 	 	 
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	 	 	 	eligible activity means any one
or more of ‘ research and development activities’,
proof of concept activities”, or ‘early stage commercialisation activities’, all
terms having the meaning given in the Guidelines.
	 
	 	 	 	eligible expenditure means expenditure incurred by the Grantee:

	 	(a)	 	on the project;
	 
	 	(b)	 	during the project period (with The exception of final
audit expenses incurred under clause 4.17 which may be incurred after the
completion date), and
	 
	 	(c)	 	that qualifies as eligible expenditure under Program
guidelines issued by the Program Delegate effective at the date of
execution of this deed.

	 	 	 	encumbrance means a security interest or any other legal or equitable interest or
right which is either imposed by law or which is given to any person, over
property or rights under a contract.
	 
	 	 	 	financial year means the 12 month period beginning 1 July of one year and ending.
30 June of the following year.
	 
	 	 	 	floating charge has the meaning given by section 9 of the Corporations Act 2001
(Cth).
	 
	 	 	 	grant means the amount set out in. item 4 of the schedule.
	 
	 	 	 	grant percentage is the percentage figure set out in item 5 of the schedule,
which Figure must not exceed 50%.
	 
	 	 	 	GST has the same meaning as in the A New Tax System (Goods and Services Tax) Act
1999.
	 
	 	 	 	Guide to Managing Your Grant means the document
of that name (or any replacement
document) provided by the Commonwealth to the Grantee from time to time,
including details of the form and content of reports required by the Commonwealth
for the purposes of this deed.
	 
	 	 	 	Guidelines means the Commercial Ready Program Guidelines dated 30 August 2004.
	 
	 	 	 	insolvency event means any of the following:

	 	(a)	 	a person is or states that the person is unable
to pay from the person’s own money all the person’s debts as and when they
become due and payable;
	 
	 	(b)	 	a person is taken or must be presumed to be insolvent or
unable to pay its debts under any applicable legislation:
	 
	 	(c)	 	an application or order is made for the winding up or
dissolution or a resolution is passed or any steps are taken to pass a
resolution for the winding, up or dissolution of a person;

			
	 	 	 
	Commercial Ready Grant Agreement
General Conditions

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	 	(d)	 	an administrator, provisional liquidator, liquidator or person
having a similar or analogous function under the laws of any relevant
jurisdiction is appointed in respect of the corporation or any action
is taken to appoint any such person;
	 
	 	(e)	 	a receiver or receiver and manager is appointed in respect
of any property of a person;
	 
	 	(f)	 	a corporation is deregistered under the Corporations Act
2001 or notice of its proposed deregistration is given to the corporation:
	 
	 	(g)	 	a distress, attachment or execution is levied or becomes
enforceable against any property or a person;
	 
	 	(h)	 	a person enters into or takes any action to enter into an
arrangement (including a scheme of arrangement or a deed of company
arrangement), composition or compromise with, or assignment for the benefit
of all or any class of the persons’ creditors or members or a moratorium
involving any of them; or
	 
	 	(i)	 	anything analogous to or of a similar effect to anything
described above under the law of any relevant jurisdiction occurs in respect
of a person.

	 	 	 	intellectual property means all statutory and other proprietary rights in respect of
trade marks, patents, circuit, layouts, copyrights, designs, moral rights,
confidential information, expertise, knowledge, skills, techniques, methods,
procedures, ideas and concepts, plant varieties and all other rights with respect
to intellectual property as defined in Article 2 of the July 1967 Convention
Establishing the World Intellectual Properly Organisation.
	 
	 	 	 	initial budget is the budget referred to in clause 4.5 that is current on the
commencement date.
	 
	 	 	 	letter of offer means the letter from the Department to the Grantee confirming the
Program Delegate’s approval of the grant for the project.
	 
	 	 	 	matching funding means any funds available to the Grantee for the project, other
than;

	 	(a)	 	progress payments;
	 
	 	(b)	 	funding obtained by the Grantee under a program
administered by the Board or the Department;
	 
	 	(c)	 	funding of a kind that the Guidelines, or any other Program
policies or guidelines issued by the Program Delegate from time to time,
state is not to be regarded as matching funding; or
	 
	 	(d)	 	non-financial (in-kind) assistance.

			
	 	 	 
	Commercial Ready Grant Agreement
General Conditions
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	 	 	 	particular conditions mean the conditions specific to the grant and the project.
	 
	 	 	 	payment date means the date on which a progress payment is or is proposed to be
paid.
	 
	 	 	 	performance milestone means a performance milestone set out in item 10 of the
schedule.
	 
	 	 	 	planned outcomes mean the planned results of the project set out in item 9 of the
schedule and the anticipated national benefits of the project described in the
application.
	 
	 	 	 	Program means the Commercial Ready program, a merit-based program that is
administered by the Department and designed to increase the level of high quality
innovation activity by small to medium sized businesses in Australia.
	 
	 	 	 	Program Delegate means an employee of the Department who has been empowered by
the Minister, or otherwise duly authorised, to carry out the relevant
functions
in respect of the Program.
	 
	 	 	 	Program funding means the funding made available by the Parliament of the
Commonwealth of Australia for the Program in any given financial year, being the
funding specified in the Portfolio Budget Statement (as varied by any Portfolio
Additional Estimates Statement) for that year.
	 
	 	 	 	progress payment has the meaning given in clause 3.2.
	 
	 	 	 	project means the project described in item 9
of the schedule.
	 
	 	 	 	project intellectual property means intellectual property created in the course
of the project including improvements, inventions and discoveries arising out of
the conduct of the project.
	 
	 	 	 	project period means the period beginning on the
commencement date and ending on
the completion date.
	 
	 	 	 	quarter means any one of the 3 month
periods ending 30 September, 31 December, 31
March or 30 June in a given financial year.
	 
	 	 	 	related body corporate has the same meaning as in section 50 of the Corporations
Act 2001 (Cth).
	 
	 	 	 	retention amount is the amount specified in item 11 of the schedule and, in the
absence of an amount being stated, is an amount equal to 5% of the grant.
	 
	 	1.2	 	Unless the contrary intention appears:

	 	(a)	 	a person includes a firm, a body corporate, an
unincorporated association or an. authority;
	 
	 	(b)	 	the singular includes the plural and vice versa;
	 
	 	(c)	 	a reference to a statute, ordinance, code or other law
includes regulations and other instruments made under it and

			
	 	 	 
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General Conditions

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	 	 	 	consolidations, amendments, re-enactments or replacements of any
of them; and
	 
	 	(d)	 	where any word or phrase is given a defined meaning, any
other part of speech or other grammatical form in respect of that word or
phrase has a corresponding meaning.

	 	1.4	 	Headings are inserted for convenience of reference only and are not to
be used in the interpretation of this deed.
	 
	 	1.5	 	Where the last day of any period for the doing of an action falls on a
day that is not a business day in the place that action is required to be done,
the action must be done no later than the end of the next business
day in that
place,
	 
	 	1.6	 	A reference to the schedule is a reference to the schedule contained in
the particular conditions.
	 
	 	1.7	 	A reference to this deed includes these terms and conditions and the
particular conditions.

	2.	 	Warranties

	 	2.1	 	The Grantee warrants that as at the date of execution of this deed and on
each day during its term:

	 	(a)	 	all information provided by the Grantee in the
application is true and correct at the date of the application and on
execution of this deed;
	 
	 	(b)	 	without limiting the generality of clause 2.1 (a):

	 	(1)	 	the project involves any one or more
eligible activities:
	 
	 	(2)	 	the planned outcomes for the project
include either the production, establishment of the commercial
or technical viability, or commercialisation of a new, clearly
identified product, process or service:
	 
	 	(3)	 	the Grantee has or will have available
to it sufficient funds to pay all costs and expenses incurred in
relation to the project, including sufficient matching funding to
pay for eligible expenditure not covered by the grantas and
when all amounts are due to be paid:

	 	(c)	 	the Grantee has complied, and will at all times
continue to comply, with any conditions specified in the letter of
offer:
	 
	 	(d)	 	all information provided by the Grantee and included in
this deed and any information given to the Commonwealth from time to time
under this deed (including information contained in the particular
conditions or included in any report required under this deed), is true
and correct:

      

			
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	 	(e)	 	the Grantee does not have any interests or obligations that
conflict with its interests or obligations under this deed;
	 
	 	(f)	 	the Grantee, has and will have, at all times, all
necessary rights in relation to intellectual property and technical
information, including, but not limited to, all designs, specifications,
data, drawings, plans, reports, models, prototypes and other things
necessary to conduct the project, achieve the planned outcomes and
commercialise the project (or its outcomes); and
	 
	 	(g)	 	the Grantee is not aware of any circumstances which
adversely affects or might adversely affect the Grantee’s ability to
fulfil its obligations under this deed.

	 	2.2	 	If the Grantee becomes aware of a breach of warranty, the Grantee must
immediately notify the Commonwealth of that breach.

	3.	 	Payment of Grant

Payment of Grant

	 	3.1	 	The Commonwealth agrees to pay the grant to the Grantee in
accordance with this deed, subject to sufficient Program funding
being available on the relevant payment date, and this clause 3.

Progress payments

	 	3.2	 	The grant will be paid in instalments
(‘progress payments’) by direct credit to
the bank account established by the Grantee under
clause 4.13.
	 
	 	3.3	 	A progress payment may be made in advance for the next quarterly
period, in the Commonwealth’s absolute discretion.
	 
	 	3.4	 	The Commonwealth is not obliged to make a progress payment:

	 	(a)	 	unless and until the Grantee provides evidence
satisfactory to the Commonwealth that:

	 	(1)	 	it has available to it sufficient
matching funding to meet all eligible expenditure incurred to
date, and forecast to be incurred during the next quarter, that
is not met by the sum of the progress payments paid to date and
the next scheduled progress payment; and
	 
	 	(2)	 	it has made satisfactory progress on
the project, including by meeting all performance milestones due
for completion on or before the payment date: or

	 	(b)	 	if, at the payment date for that payment:

	 	(1)	 	the sum of that progress payment and other progress
payments made in
the financial year in which the

      

			
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	 	 	 	payment date occurs, exceeds the annual capped grant
amount for that financial year:
	 
	 	(2)	 	the sum of all progress payments made to
date and the next scheduled payment, exceeds the grant percentage
of the sum of eligible expenditure incurred to date and budgeted
eligible expenditure for the next quarter:
	 
	 	(3)	 	the Commonwealth has terminated, or is
entitled to terminate, the deed under clause 10; or
	 
	 	(4)	 	the Commonwealth, reasonably believes
that the Grantee is in default of any of its obligations under the
deed, including by not submitting all reports due under this deed
in the form and content satisfactory to the Commonwealth.

	 	3.5	 	The Commonwealth may by notice to the Grantee request that the Grantee
provide to the Commonwealth any information the Commonwealth reasonably requires for
the purposes of determining any of the matters described in clause 3.4. The Grantee
must provide information requested under this clause within 10 days of the
Commonwealth’s request.

Retention amount

	 	3.6	 	Without limiting the operation of clause 3.4, the Commonwealth
may retain the retention amount until such time as the Grantee has
completed the project, and submitted all reports due under this deed
in the form and content satisfactory to the Commonwealth.

Commonwealth
 liability limited

	 	3.7	 	The Commonwealth’s liability under this deed is limited:

	 	(a)	 	in any given financial year, to the lesser of:

	 	(1)	 	the annual capped grant amount for that year: or
	 
	 	(2)	 	the grant percentage of total eligible
expenditure incurred by the Grantee in that financial year: and

	 	(b)	 	in the aggregate, to the lesser of:

	 	(1)	 	the grant: or
	 
	 	(2)	 	the grant percentage of total eligible expenditure.

Eligible expenditure

	 	3.8	 	Expenditure that:

	 	(a)	 	is not paid by the Grantee within 3 months of
the completion date: or
	 
	 	(b)	 	for the purposes of clause 3.7(a) and assessing the
Grantee’s entitlement to progress payments in any given financial

      

			
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	 	 	 	year, is not paid within 3 months of the end of that financial
year; or
	 
	 	(c)	 	is incurred by the Grantee on an eligible
activity in excess of the expenditure threshold for that activity
referred to in clause 4.4, without the Commonwealth’s prior
consent.

	 	 	 	will be deemed not to be eligible expenditure.
	 
	 	3.9	 	The Commonwealth’s determination as to whether expenditure on the
project is eligible expenditure is final and binding on the Grantee.

	4.	 	Conduct of Project

Conduct of project

	 	4.1	 	The Grantee agrees to undertake the project:

	 	(a)	 	at a rate of progress and in a manner sufficient to
achieve each performance milestone by the relevant due date specified in
item 10 of the schedule:
	 
	 	(b)	 	with the aim at all times of achieving the planned
outcomes: and
	 
	 	(c)	 	in accordance with any representations contained in
the application and the other terms of this deed.

	 	4.2	 	Any progress payments paid in advance under clause 3.3 must be
expended by the Grantee on eligible expenditure incurred on the
project.
	 
	 	4.3	 	Subject to clause 4.4, the Grantee may reallocate budgeted expenditure
or vary its work methods and schedules as it considers necessary to undertake
and complete the project, provided it does not materially change the project.
	 
	 	4.4	 	At any point in time, actual total eligible expenditure incurred by
the Grantee on an eligible activity must not exceed 1.25% of the total
amount allocated to that activity in the initial budget, without the
Commonwealth’s prior written consent.

Initial Budget

	 	4.5	 	The budget current at the date of this deed is set out in item 7 of the
schedule. If on this date item 7 is incomplete, the Grantee must give
the Commonwealth a complete budget within 7 days of execution of
this deed.

Revised budget and Variation of annual capped grant amounts

	 	4.6	 	The Grantee must give the Commonwealth:

	 	(a)	 	by 1 February of each financial year: and

      

			
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	 	(b)	 	at any time the Grantee wishes to request a variation to any
one or more of the annual capped grant amounts.

	 	 	 	a revised budget in the approved form, including details of any changes the
Grantee considers necessary so as to ensure the budget continues to
accurately reflect planned eligible expenditure for the project, and an
explanation as to why the requested changes are necessary.
	 
	 	4.7	 	The Commonwealth may either approve or reject a revised budget
provided under clause 4.6.
	 
	 	4.8	 	If the revised budget is approved by the Commonwealth, the then current
budget is replaced by the revised budget approved under clause 4.7.
	 
	 	4.9	 	On approving a revised budget under clause 4.7, the Commonwealth
may in its absolute discretion:

	 	(a)	 	vary any one or more of the annual capped grant amounts
or the grant: and
	 
	 	(b)	 	make any other changes to the particular conditions
that the Commonwealth considers reasonably necessary.

	 	 	having regard to the changes in the timing or amount of actual or budgeted
eligible expenditure on the project.

Project delay

	 	4.10	 	The Grantee must notify the Commonwealth as soon as practicable,
and in any event in its next report due under this deed, if a
performance milestone is not achieved or is unlikely to be achieved
by the date for achievement of that milestone set out in item 10 of
the schedule.
	 
	 	4.11	 	When notifying the Commonwealth under clause 4.10, the Grantee must
specify:

	 	(a)	 	the reason for the delay:
	 
	 	(b)	 	the action the Grantee proposes to take to address the delay:
	 
	 	(c)	 	the anticipated date for achievement of the relevant
performance milestone;
	 
	 	(d)	 	the expected effect (if any) the delay will have on
the project, achievement of its planned outcomes and commercialisation
of the project (or its outcomes); and
	 
	 	(e)	 	changes to key personnel, if any, having an impact on the matters
reported under paragraphs (a) to (d).

	 	4.12	 	If the Commonwealth considers in its absolute discretion that the
failure by the Grantee to achieve a performance milestone by the relevant date
specified in item 10 of the schedule may compromise the capacity of the Grantee
to achieve the national benefits for the

      

			
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	 	 	 	project contemplated under clause 7.1, the Commonwealth may issue a
termination notice pursuant to clause 10.1.

Bank Account

	 	4.13	 	The Grantee must establish a separate account with an Approved Financial
Institution for the sole purpose of handling the grant and interest on the
 grant. The
Grantee must, if it has not already done so, provide the Commonwealth with sufficient
details to identify the account, within 7 days of execution of this deed.
	 
	 	4.14	 	The Grantee must not use the account established under clause 4.13 for any
purpose other than one connected with this deed, including by not depositing funds
other than progress payments into the account. The Grantee agrees to promptly provide
the Commonwealth and the relevant Approved Financial Institution with an authority
enabling the Program Delegate to obtain any details relating to use of the account, on
request.

Reporting

	 	4.15	 	The Grantee must give the Commonwealth the reports described in the Guide to
Managing Your Grant, at the times set out in item 12 of the schedule.
	 
	 	4.16	 	If the Commonwealth requires a report to be audited, the report must be
audited by a member of the Institute of Chartered Accountants, a member of CPA
Australia or a Public Practice Certified Member of the National Institute of
Accountants, not being an employee, shareholder, director other officeholder or
related body corporate of the Grantee, or person having had
any involvement in the
preparation of the Grantee’s application or any other report required under this deed.
	 
	 	4.17	 	If in the Commonwealth’s opinion either the form or content of a report does
not meet the requirements of this deed, or is not adequate for the Commonwealth’s
purposes, the Grantee must submit, a revised report satisfactory to the Commonwealth,
within, 28 days of receiving a notice from the Commonwealth
requiring it to do so.

Records to be kept

	 	4.18	 	The Grantee must keep to the Commonwealth’s satisfaction all records
(including original receipts, invoices and bank statements) necessary to provide a
complete, detailed record and explanation of:

	 	(a)	 	expenditure by the Grantee on the project;
	 
	 	(b)	 	project activities, progress of the project and all steps
taken by the Grantee for the purposes of meeting its obligations under
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	 	(c)	 	any amounts of GST paid by the Grantee in respect of any
supply made to the Commonwealth under this deed; and
	 
	 	(d)	 	any other records relating to the project which are reasonably
required by the Commonwealth from time to time.

	 	4.19	 	Records required to be kept under clause 4.18 must be retained by the Grantee
during the project period and for five years after the completion date.

Inspection and audit

	 	4.20	 	The Department, and any person authorised in writing by the Program Delegate,
may at reasonable times and on reasonable notice enter the Grantee’s premises and
inspect the records kept by the Grantee, and progress with the project, in order to
review the Grantee’s compliance with this deed.
	 
	 	4.21	 	The Grantee must give the Department or its authorised representative all
necessary facilities and assistance to enable them to conduct a review under clause
4.20.
	 
	 	4.22	 	In conducting a review, the Department or its authorised representative may
take copies of any records (including books, documents, invoices,
receipts and any
other papers) that the Department or its authorised representative considers relevant
to the project, or the Grantee’s compliance with this deed.
	 
	 	4.23	 	Without in any way affecting the statutory powers of the Auditor-General
under the Auditor-General Act 1997 and subject to the
provisions of that Act, the
Auditor-General is a person authorised for the purposes of clause 4.20.

Compliance with laws

	 	4.24	 	The Grantee agrees, in conducting the project, commercialising its outcomes
and otherwise performing its obligations under this deed, to comply with all relevant
legislation of the Commonwealth or of any Slate, Territory or local authority,
including the Crimes Act 1914 and the Equal Opportunity for Women in the Workplace Act
1999.

Subcontracting

	 	4.25	 	The Grantee may engage subcontractors to undertake work in relation to the
project.
	 
	 	4.26	 	The Grantee will ensure that any subcontract entered into by the Grantee for
the purposes of the project contains provisions equivalent to
clauses 4.18–4.24 of
this deed.

			
	 	 	 
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	 	4.27	 	The Grantee remains fully responsible for the performance of the project and
meeting all its other obligations under this deed notwithstanding that the Grantee
has subcontracted the performance of any part of the project.
	 
	 	4.28	 	The Grantee agrees to promptly notify the Commonwealth of any issues or
disputes arising under or in relation to a subcontract that:

	 	(a)	 	has or may result in the Grantee failing to comply with
any of its obligations under this deed: or
	 
	 	(b)	 	involves the Grantee withholding payment to the
subcontractor of an amount representing eligible expenditure incurred by
the Grantee on the project.

	 	4.29	 	On receipt of a notice under clause 4.28, the Commonwealth may in its
absolute discretion withhold payment of any further progress payments, pending
satisfactory resolution of the issue or dispute notified to the Commonwealth.
	 
	 	4.30	 	The Grantee agrees to give the Commonwealth a copy of any subcontract
entered into by the Grantee for the performance of work on the project, within 14 days
of the Commonwealth’s request to do so.

5 Confidentiality

	 	5.1	 	Subject to clause 5.2, the Department agrees not to disclose any confidential
information of the Grantee, without the Grantee’s consent.
	 
	 	5.2	 	The Commonwealth will not be taken to have breached its obligations under
clause 5.1 to the extent that the Department discloses confidential information:

	 	(a)	 	to its officers, employees, agents, external professional
advisers or contractors solely to comply with obligations, or to exercise
rights, under this deed;
	 
	 	(b)	 	to its internal management personnel solely to enable
effective management or auditing of deed-related activities;
	 
	 	(c)	 	for a purpose directly related to the enforcement or
investigation of a possible breach of any Commonwealth, State, Territory or
local law;
	 
	 	(d)	 	to its responsible Minister, or in response to a demand by a
House or a Committee of the Commonwealth Parliament;
	 
	 	(e)	 	within the Department, or with the Board or another
government agency, where this serves the Department’s, the Board’s, or the
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	 	(f)	 	as required or permitted by any other law, or an express provision
of this deed, to be disclosed; or
	 
	 	(g)	 	that is in the public domain other than due to a breach
of this clause 5.

6
Evaluation

	 	6.1	 	The Grantee must co-operate in any evaluation of the Program
undertaken by or on behalf of the Commonwealth.
	 
	 	6.2	 	The Grantee must provide information and completed survey forms relating to
the project or the Program at any time during the project period and for five years
after the completion date, at the request of the Commonwealth or any third party
engaged by the Commonwealth for the purposes of undertaking any Program evaluation.
	 
	 	6.3	 	The Grantee must comply with a request under clause 6.2 within 28 days of
receiving the request.

7 Project Outcomes 

	 	7.1	 	The parties acknowledge that the giving of the grant for the purposes of
the project is intended 10 deliver substantial national benefit to Australia. The
parties agree that substantial national benefit will be deemed to have been
satisfactorily delivered where:

	 	(a)	 	on or by the completion date, the Grantee demonstrates
to the Commonwealth’s satisfaction that the planned outcomes have been
achieved; and
	 
	 	(b)	 	the Grantee commercialises the project (or its outcomes)
as represented in the application, on normal commercial terms
and within a reasonable time of completion of the project.

	 	7.2	 	The Grantee agrees to use its best endeavours to:

	 	(a)	 	ensure the planned outcomes are achieved; and
	 
	 	(b)	 	commercialise the project (or its outcomes) in accordance
with clause 7.1 (b).

	 	7.3	 	Without limiting the operation of clause 7.2. the Grantee will be deemed to
have breached that clause where the Commonwealth reasonably believes the Grantee has
acted:

	 	(a)	 	inconsistently with any material representation (as
determined by the Commonwealth acting reasonably) included in the
application; or
	 
	 	(b)	 	in a manner so as to reduce or prevent the national
benefit contemplated under clause 7.1 from being achieved.

			
	 	 	 
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	 	7.4	 	The Grantee must immediately notify the Commonwealth (giving reasons)
if at any time the Grantee:

	 	(a)	 	believes the Grantee’s or the project’s capacity to
achieve the planned outcomes has been compromised; or
	 
	 	(b)	 	wishes to commercialise the project (or its outcomes)
other than as represented in the application and as a result
of the proposed
change:

	 	(1)	 	the project would no longer be
commercialised on normal commercial terms;
	 
	 	(2)	 	significantly additional aspects of the project would be
commercialised in a country other than Australia; or
	 
	 	(3)	 	any overseas commercialisation would
deliver significantly reduced national benefit when compared to the
proposed commercialisation arrangements set out in the application.

	 	7.5	 	If the Grantee fails to comply with either clause 7.2 or 7.4, the
Commonwealth may by notice to the Grantee require the Grantee to repay some
or all of the grant paid to the Grantee, together with interest calculated in
accordance with clause 16.2.

8 Other Financial Assistance 

	 	8.1	 	The Grantee must give the Commonwealth details of any financial assistance
the project receives from another Commonwealth, State or Territory government source
or agency, including the amount of the funding and the name of the program under
which it was provided. The Grantee must provide the information required to be
disclosed under this clause within 28 days of receiving notice of approval of that
other financial assistance.
	 
	 	8.2	 	The Commonwealth may reduce the size of the grant (together with the
retention amount and any annual capped grant amount) after taking into account that
other financial assistance.

9 Acquittal of Grant 

	 	9.1	 	If at any time the sum of the progress payments paid to the Grantee under
this deed exceeds:

	 	(a)	 	the grant; or
	 
	 	(b)	 	the grant percentage of total eligible
expenditure.

	 	 	 	the Commonwealth may by notice to the Grantee require the Grantee to repay the
amount of the excess to the Commonwealth,
plus interest calculated in accordance with clause 16.2.

			
	 	 	 
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	 	9.2	 	If at the end of a financial year the total progress payments paid to the Grantee
with a respect to that year exceeds the annual capped grant amount for that year, the
Commonwealth may by notice to the Grantee require the Grantee to repay the amount of
that excess to the Commonwealth, plus interest calculated in accordance with clause
16.2.
	 
	 	9.3	 	If the Grantee expends the grant (or any progress payment) other than in
accordance with this deed the Commonwealth may by notice to the Grantee require the
Grantee to repay the gram or so much of the grant as the Commonwealth determines,
plus interest
calculated in accordance with clause 16.2.

10 Termination

Immediate termination

	 	10.1	 	The Commonwealth may immediately terminate this deed by notice
to the Grantee if:

	 	(a)	 	an insolvency event occurs in relation to the Grantee;
	 
	 	(b)	 	the Grantee ceases to carry on business, or a
substantial part of its business;
	 
	 	(c)	 	the Grantee breaches any warranty contained in clause 2;
	 
	 	(d)	 	there is a change in control or ownership of the Grantee
which the Commonwealth reasonably considers has an adverse effect on the
Grantee’s ability to comply with any of its obligations under this deed;
	 
	 	(e)	 	the Grantee commits any breech in respect of which this
    deed provides (other than clause 10.2) a notice of
termination may be given; or
	 
	 	(f)	 	the Grantee commits any breach which the Commonwealth
reasonably considers is not capable of remedy.

Termination following notice

	 	10.2	 	If the Grantee breaches this deed and the Commonwealth
reasonably considers that the breach is capable of remedy, the
Commonwealth may terminate this deed by notice to the Grantee, if
the Grantee fails to remedy the breach within 28 days of receiving
notice from the Commonwealth requiring it to do so.

Consequences of termination

	 	10.3	 	On termination of the deed under this clause 10:

	 	(a)	 	the parties are relieved from future performance of this
deed without prejudice to any right of action that has accrued at the date
of termination;
	 
	 	(b)	 	the Grantee must give the Commonwealth:

	 	 	 
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	 	(1)	 	all outstanding reports due under this deed; and
	 
	 	(2)	 	any other reports described in the
Guide to Managing Four Grant, or as otherwise notified to the
Grantee,

	 	 	 	in the form, content and within the timeframes specified in
that guide or as otherwise notified to lie Grantee; and
	 
	 	(c)	 	the Commonwealth may (acting reasonably) by notice to
the Grantee, require the Grantee to repay some or all of the grant, plus
interest calculated in accordance with clause
16.2.

	 	10.4	 	This deed may be terminated at any time by the mutual written
agreement of the parties.

11 No Dealing with Grantee’s rights

	 	11.1	 	Unless expressly authorised to do so under this deed, the Grantee must not deal
with, or grant or create any encumbrance over its rights
under this deed, or its
interest in or rights over the project intellectual property or any other
intellectual properly necessary to conduct the project, achieve the planned outcomes
or commercialise the project (or its outcomes) in accordance
with this deed, without
the prior written consent of the Commonwealth.
	 
	 	11.2	 	A change in control of the Grantee is taken to be dealing with the
Grantee’s rights under this deed.
	 
	 	11.3	 	If the Grantee deals with, or grants or creates any encumbrance over its
rights under this deed, or its rights over or interest in the project intellectual
property or any other intellectual property referred to in clause 11.1, without the
prior written consent of the Commonwealth, the Commonwealth may issue a termination
notice pursuant to clause 10.1.
	 
	 	11.4	 	The Commonwealth may impose conditions (a breach of which is a breach of
this deed) in giving its consent under clause 11.1 including, but not limited to,
requiring the Grantee and any other person concerned in a transaction referred to in
clause 11.1 to execute all documentation as required by the Commonwealth.
	 
	 	11.5	 	The giving of a floating charge over the assets and undertakings of the
Grantee is not to be taken to be a breach of clause 11.1.

12 Acknowledgement and Public Statements

	 	12.1	 	The Grantee must acknowledge the grant and the Program in any public statements
about the project made during the project period and for 5 years after the
completion date.
	 
	 	12.2	 	The Commonwealth may publicise the awarding of the grant at any time
alter it is awarded.

	 	 	 
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	 	12.3	 	The Commonwealth may include in press releases and general
announcements about the grant and in its annual report, the following
information:

	 	(a)	 	the name of the Grantee;
	 
	 	(b)	 	the amount of the grant; and
	 
	 	(c)	 	the title and a description of the project.

13 Regulatory and Ethical Approvals

	 	13.1	 	The Grantee must obtain and maintain any necessary legal, regulatory or ethical
approvals in relation to the conduct of the project.
	 
	 	13.2	 	The Commonwealth may give a notice to the Grantee to obtain or restore an
approval referred to in clause 13.1 within 28 days, or a further period allowed by
the Commonwealth, of receipt of the notice. If the Grantee does not comply with this
notice, the Commonwealth may issue a termination notice pursuant to clause 10.1.
	 
	 	13.3	 	The Grantee expressly consents to the Commonwealth, Its employees and
agents making inquiries of any relevant regulatory agency within the scope of the
warranties in clause 2.1 of this deed in connection with whether or not the Grantee
is complying with those warranties or in connection with any other matter and acting
in reliance on any information resulting from those inquiries.
	 
	 	13.4	 	The Grantee must assist with any inquiry referred to in clause 13.3.
including by executing any authority or other document, as reasonably required by
the Commonwealth.

14 Goods and Services Tax

	 	14.1	 	Unless otherwise indicated, all consideration for any supply
under this deed is
exclusive of any GST imposed in relation to the supply.
	 
	 	14.2	 	If GST is imposed on any supply made by the Grantee to the Commonwealth
under this deed, the Commonwealth will pay the amount Imposed to the Grantee in
addition to the consideration required under this deed.
	 
	 	14.3	 	If for any reason the Commonwealth pays to the Grantee an amount under
clause 14.2 which is more than the GST imposed on the supply, the Grantee must
repay the excess to the Commonwealth on demand, or the Commonwealth may set-off the
excess against any other amounts due to the Grantee.
	 
	 	14.4	 	The Commonwealth is not liable to reimburse the Grantee for any amount in
relation to which the Grantee may claim an input tax credit.

	 	 	 
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	 	14.5	 	If GST is imposed on any supply made by the Grantee to the Commonwealth under
this deed in return for all or any part of the grant, the Commonwealth may issue a
‘recipient created tax invoice’ to the Grantee for the supply in question and the
Grantee must not issue a tax invoice for that supply.
	 
	 	14.6	 	If for any reason the Grantee or the Commonwealth ceases to be registered
for GST purposes, becomes aware of any reason why its registration may be cancelled,
or ceases to satisfy any of the requirements of public ruling GSTR 2000/10, it must
immediately notify the other party.
	 
	 	14.7	 	If the Grantee is of the opinion that it is a ‘government related entity’
and that the grant is ‘specifically covered by any appropriation under an
Australian law’ for the purposes of section 9-15(3)(c) of the A New Tax System
(Goods and Services Tax) Act 1999, the Grantee must immediately notify the Department
and provide materials supporting that opinion.

15 Notices

	 	15.1	 	Any notice, request, approval, consent or other communication to be given or
served pursuant to this deed must be in writing and addressed and signed as the case
may be, as specified in item 14 of the schedule.
	 
	 	15.2	 	A notice, request, approval, consent or other communication must be
delivered by hand, sent by prepaid post, transmitted electronically or transmitted
by facsimile.
	 
	 	15.3	 	A notice, request approval, consent or other communication will be deemed
to be received;

	 	(a)	 	if delivered by hand, upon delivery;
	 
	 	(b)	 	if sent by pre-paid ordinary post within Australia, upon
the expiration of 2 business days after the date on which it was sent; and
	 
	 	(c)	 	if transmitted electronically or by facsimile, upon
receipt by the sender of an electronic or facsimile acknowledgment that the
communication has been properly transmitted to the recipient.

16 Right of Commonwealth to recover money

Debt due to the Commonwealth

	 	16.1	 	An amount notified to the Grantee as owing to the Commonwealth under any of
clauses 7.5, 9 or 10.3(c) is a debt due to the Commonwealth under this deed and is
recoverable by the Commonwealth without further proof of the debt being necessary.

			
	 	 	 
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Interest

	 	16.2	 	If the Commonwealth requires interest to be paid by the
Grantee under any of clauses 7.5, 9 or
10.3(c), the amount of interest will be calculated:

	 	(a)	 	at the rate set out in item 6 of the schedule;
	 
	 	(b)	 	on a daily compounding basis upon the amount of the grant
specified in the notice that is required to be repaid or
reimbursed; and
	 
	 	(c)	 	from and including the date (or dates) of payment of the grant
to the Grantee, up to but excluding the day on which the Grantee
repays the total amount specified in the notice as owing to the
Commonwealth, without any set-off, counter-claim, condition,
abatement, deduction or withholding.

Commonwealth rights

	 	16.3	 	Where the Grantee owes a debt to the Commonwealth under this deed, the Commonwealth may in its
absolute discretion:

	 	(a)	 	require the Grantee to repay the amount of the debt,
within 28 days of receipt of notice of the debt; or
	 
	 	(b)	 	deduct the amount of the debt notified to the Grantee from any
future progress payment (including the retention amount), or any other
amount due from the Department to the Grantee.

	 	16.4	 	Nothing in this clause 16 affects the right of the Commonwealth to recover from the Grantee, either
under this deed or otherwise at law, the whole of any debt owed by the Grantee, or any balance
that remains after deduction under clause 16.3(b).

17 General

	 	17.1	 	A provision of, or a right created under, this deed may not be:

	 	(a)	 	waived except in writing signed by the party granting the
waiver; or
	 
	 	(b)	 	varied except in writing signed by the parties.

	 	17.2	 	This deed and the transactions contemplated by this deed are
governed by the law in force in the Australian Capital Territory.
	 
	 	17.3	 	Each party irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts
of the Australian Capital Territory and courts of appeal from them for determining any dispute
concerning this deed or the transactions contemplated by this deed.
	 
	 	17.4	 	Each party waives any right it has to object to an action being brought in those courts, including
claiming that the action has been

			
	 
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	 	 	 	brought in an inconvenient forum or that those courts do not have
jurisdiction.
	 
	 	17.5	 	Unless expressly stated otherwise in this deed, obligations under this deed terminate 5 years after
the completion date.
	 
	 	17.6	 	Unless expressly stated otherwise in this deed, any discretion conferred on the Commonwealth,
or consent or approval referred to or required under this deed from the Commonwealth, may be
exercised, given or withheld, or may be exercised or given subject to any conditions, as the
Commonwealth (in its absolute discretion) thinks fit.
	 
	 	17.7	 	The Grantee must comply with the special conditions (if any) set out in item 15 of the
schedule. If the special conditions are inconsistent with the rest of this deed, the special
conditions will prevail to the extent of the inconsistency.

			
	 
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