EXHIBIT 10
RESEARCH, DEVELOPMENT AND LICENCE AGREEMENT DATED MAY 11, 1999 BETWEEN
PRAXIS PHARMACEUTICALS, INC. AND FAIRCHILD INTERNATIONAL INC.
RESEARCH, DEVELOPMENT AND LICENCE AGREEMENT DATED THE 11TH DAY OF MAY, 1999
BETWEEN:
PRAXIS PHARMACEUTICALS, INC.,
a body corporate incorporated pursuant to the laws of the State of Utah, one of
the United States of America and having an office at ANUTECH Court, North
Road, in the City of Canberra, ACT, Australia ("Praxis Pharmaceuticals")
- and -
FAIRCHILD INTERNATIONAL INC.,
a body corporate incorporated pursuant to the laws of the Province of British
Columbia, Canada and having an office at Suite 600, 595 Hornby Street, City of
Vancouver, British Columbia, Canada ("FAIRCHILD")
WHEREAS:
A. The Australian National University is the owner of certain patents related to
the invention entitled "Phosphosugar-based anti-inflammatory and/or
immunosuppressive drugs" and certain patent applications related to an invention
entitled "Novel phosphosugars and phosphosugar-containing compounds having
anti-inflammatory activity" which are described in more detail herein;
B. ANUTECH PTY Ltd. ("Anutech"), the commercialization company of the Australian
National University, has entered into an agreement as agent for and on behalf of
the Australian National University with Praxis Pharmaceuticals pursuant to which
Praxis Pharmaceuticals has been granted an exclusive license for the use of the
inventions described above in specified areas of application;
C. Praxis Pharmaceuticals has and intends to continue to conduct research and
development related to the above described inventions;
D. Praxis Pharmaceuticals wishes to obtain funding from FAIRCHILD to conduct
research in the area of arthritis and dermal wrinkles and related to the above
inventions;
E. FAIRCHILD wishes to obtain an exclusive, world-wide license to make, use and
sell products and processes developed by Praxis Pharmaceuticals relating to
arthritis and dermal wrinkles;
NOW THEREFORE, in consideration of the mutual terms and conditions contained
herein, the parties hereto agree as follows:
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PART I - DEFINITIONS AND INTERPRETATION
SECTION 1 - DEFINITIONS
In this Agreement, including this Section, the following defined terms have the
meanings indicated:
(a) "Anutech License Agreements" means the agreement entered into between
Anutech and Praxis Pharmaceuticals dated 27th October, 1997, a copy of
which is attached hereto as Schedule "D";
(b) "Closing Date" means September 30th, 1999
(c) "Confidential Information" means confidential or proprietary
information, trade secrets, know-how and technical information related
to the inventions claimed pursuant to the Patents and any other
information disclosed in confidence by Praxis Pharmaceuticals to
FAIRCHILD or by FAIRCHILD to Praxis Pharmaceuticals;
(d) "Field of Use" means arthritis and dermal wrinkles;
(e) "Intellectual Property" means any and all methods, devices,
techniques, discoveries, inventions (whether or not paten table),
know-how, ideas, processes, trade secrets and other proprietary
information, including any patent right, copyright, trade secret or
similar right;
(f) "Licensed Patent Applications" means:
(i) the patent applications relating to the invention entitled "Novel
phosphosugars and phosphosugar-containing compounds having
anti-inflammatory activity", including United State Patent
Application No. 08/953305, Australian Application No. 41866/97
and any patent applications filed now or in the future in any
country which disclose and claim the same inventions or the
priority of Australian Provisional Application PO 3098/96, filed
October 18, 1996; and
(ii) all patent applications related to the New Intellectual Property;
(g) "Licensed Patents" means:
(i) the patents described on Schedule "A" hereto;
(ii) all patents issued out of the Patent Applications;
(iii)any patents issued in any country disclosing and claiming the
same inventions as those claimed in the patents referred to in
clauses (i) and (ii) hereof; and
(iv) all divisions, re-issues, re-examinations, continuations,
renewals and extensions of the foregoing;
(h) "Licensed Product" means any product the manufacture or use of which
is covered by a Valid Claim;
(i) "Licensed Technology" means:
(i) the inventions disclosed and claimed in the Licensed Patent
Applications and Licensed Patents;
(ii) any additional Intellectual Property related to the inventions
referred to in clause (i), their description, use, or
application; and
(iii)all Confidential Information in any way related to the
inventions referred to in clause (i) hereof and the Intellectual
Property referred to in clause (ii) hereof;
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(j) "Net Revenue" means all consideration received by FAIRCHILD:
(i) for the sale or other disposition of Licensed Products; and
(ii) pursuant to the terms of any sublicenses granted by FAIRCHILD in
accordance with Section 11(3); less the following:
(A) all costs incurred by FAIRCHILD in the development of
Licensed Products, including, without limitation, payments
made by FAIRCHILD to Praxis Pharmaceuticals pursuant to
Section 8, costs and expenses incurred by FAIRCHILD pursuant
to Section 13 and expenses incurred by FAIRCHILD in
connection with obtaining Regulatory Approvals, including
those referred to in Section 17;
(B) all costs of direct materials, labor and overhead expenses
required in the manufacture and production of Licensed
Products;
(C) costs incurred by FAIRCHILD in connection with the
marketing, selling and distribution of Licensed Products;
(D) any tax or government charge (other than an income tax)
levied on the sale, transportation or delivery of Licensed
Product;
(E) trade and quantity discounts or rebates actually allowed and
taken; and
(F) credits or allowances given or made for rejection or return
of previously sold Licensed Products;
(k) "New Intellectual Property" means Intellectual Property that is
developed by Praxis Pharmaceuticals during the conduct of the Research
Projects performed by Praxis Pharmaceuticals in accordance with
Section 8;
(l) "Regulatory Approval" means any approvals, licenses, registrations or
authorizations of any relevant authority having jurisdiction necessary
for the development, use, importation, packaging, marketing,
distribution, sale, storage and transportation of the Licensed
Products;
(m) "Research Projects" means the Research and Development Projects
relating to dermal wrinkles and arthritis conducted in accordance with
Section 8;
(n) "Shares" means shares in the capital stock of FAIRCHILD described as
Class A Common and having the rights set out on Schedule "B" hereto;
(o) "Valid Claim" means a claim of any issued and unexpired Licensed
Patent which claim has not been held unenforceable, unpatentable or
invalid by a decision of a court or government body of competent
jurisdiction, unappealable or unappealed within the time allowed for
appeal, which has not been rendered unenforceable through disclaimer
or otherwise, and which has not been lost through an interference
proceeding or by abandonment.
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SECTION 2 - GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by and interpreted in accordance with the laws
in force in the Province of British Columbia. The parties hereby submit to the
jurisdiction of the Courts of British Columbia.
SECTION 3 - CURRENCY
All monetary units, except as expressly stated otherwise in this Agreement, are
in United States dollars.
SECTION 4 - AFFILIATES
For the purpose of this Agreement, a company is an Affiliate of a party if:
(a) the party owns or controls, directly or indirectly, 50% or more of the
voting stock of that company;
(b) the party owns or controls, directly or indirectly, sufficient voting
stock in that company to elect a majority of the directors of that
company;
(c) that company owns or controls, directly or indirectly, 50% or more of
the voting stock of the party;
(d) that company owns or controls, directly or indirectly, sufficient
voting stock in the party to elect a majority of the directors of the
party;
(e) an organization owns or controls, directly or indirectly, 50% or more
of the voting stock of the party and that company; or
(f) an organizations owns or controls, directly or indirectly, sufficient
voting stock in the party and the company to elect a majority of the
directors of the party and that company.
SECTION 5 - SCHEDULES
The following Schedules are incorporated into and form part of this Agreement:
Schedule "A" - Patents
Schedule "B" - Share Rights
Schedule "C" - Research Projects
Schedule "D" - Anutech License
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PART II - PURCHASE AND SALE OF SHARES
SECTION 6 - SUBSCRIPTION AND PURCHASE
(1) In consideration for the licensing rights to the Praxis Pharmaceuticals
Intellectual Property, FAIRCHILD hereby agrees to transfer, on or before
the Closing Date, 260,000 pre-split shares or 2.6 million post-split shares
of Fairchild International Inc. to Praxis Pharmaceuticals, and guarantees
that the Shares will be issued as fully paid up and non-accessible Shares;
that the Shares be allotted and that a certificate for the Shares be issued
to Praxis Pharmaceuticals.
(2) Praxis Pharmaceuticals shall certify as at the Closing Date that the
following representations and warranties are correct:
(a) Praxis Pharmaceuticals is engaged primarily in the business of
developing a unique panel of natural carbohydrate based compounds and
exploiting commercial applications of such;
(b) there are no material lawsuits against Praxis Pharmaceuticals, or its
directors or officers that are related to the business of Praxis
Pharmaceuticals, nor, to the best of the knowledge of Praxis
Pharmaceuticals and its directors and officers are any being
contemplated;
(c) Praxis Pharmaceuticals is current in all taxes owed, including payroll
taxes, and on all debts, accounts payable and leases;
(d) Praxis Pharmaceuticals has provided copies of its most recent
financial statements to FAIRCHILD and the information contained in
such financial statements is complete and accurately reflects Praxis
Pharmaceuticals' situation, financial and otherwise;
(e) a copy of every material executed lease, license, partnership or
collaboration agreement (whether technical, marketing, manufacturing
or other) stockholder agreement, loan agreement, employment agreement,
purchase and sale agreement has been provided to FAIRCHILD;
(f) a comprehensive listing and description of all Intellectual Property
in the name of Praxis Pharmaceuticals or obtained by Praxis
Pharmaceuticals through licensing has been provided to FAIRCHILD as
have copies of file wrappers for all Licensed Patent Applications and
there are no existing or potential patent disputes of which Praxis
Pharmaceuticals is aware or for which Praxis Pharmaceuticals has not
provided full and complete disclosure to FAIRCHILD;
(g) a complete and current listing of Praxis Pharmaceuticals' capital
structure and the terms and conditions associated therewith has been
provided to FAIRCHILD, including a list of all shareholders, options,
Warrants, puts and other instruments that may affect FAIRCHILD's
equity position after shareholdings are fully diluted;
(h) there are no material written or oral agreements with any other person
or corporation pursuant to which Praxis Pharmaceuticals or it
directors or officers have agreed to do anything beyond the
requirements of the formal written contracts referred to in clause
(e);
(i) the transfer of the Shares to Praxis Pharmaceuticals contemplated by
this Agreement will not constitute a breach of any contract or
commitment to which FAIRCHILD is a party;
(j) Praxis Pharmaceuticals has filed all necessary tax returns;
(k) this Agreement has been duly authorized, executed and delivered by
Praxis Pharmaceuticals and is a legal, valid and binding obligations
of Praxis Pharmaceuticals enforceable by FAIRCHILD in accordance with
its terms, except as enforcement may be limited by bankruptcy,
insolvency and other laws affecting the rights of creditors generally;
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(l) the execution and delivery of this Agreement by Praxis Pharmaceuticals
and the completion of the transactions herein will not result in a
breach or violation of any of the provisions of any obligation of
Praxis Pharmaceuticals under any contract to which Praxis
Pharmaceuticals may be a party; any judgment, decree, order or award
of any court, governmental body or arbitrator having jurisdiction over
Praxis Pharmaceuticals; or any applicable law, statute, ordinance,
regulation or rule;
(m) the issue of the Shares to Praxis Pharmaceuticals is in compliance
with the constating documents of FAIRCHILD; and
(n) Praxis Pharmaceuticals is not a non-resident of Canada within the
meaning of Section 116 of the Income Tax Act (Canada).
(3) If at any time prior to the Closing Date:
(a) Praxis Pharmaceuticals shall have failed to comply with any term or
condition contained herein;
(b) any representations and warranties set out in Section 6(2) is
incorrect in any material respect;
(c) there is any material default under debts owed by Praxis
Pharmaceuticals which default has not been cured within any applicable
grace period; or
(d) any material final judgments are rendered against Praxis
Pharmaceuticals;
FAIRCHILD may terminate this Agreement upon written notice to Praxis
Pharmaceuticals.
(4) All registration and recording fees payable to third parties in connection
with the closing of the transactions outlined in this Section 6 shall be
borne by Praxis Pharmaceuticals.
SECTION 7 - PURCHASE OF ADDITIONAL SHARES
Praxis Pharmaceuticals shall not purchase any Shares in addition to those to
which Praxis Pharmaceuticals is entitled pursuant to Section 6 unless such
purchase is made in conjunction with or pursuant to an agreement between Praxis
Pharmaceuticals and FAIRCHILD for the acquisition by Praxis Pharmaceuticals of
voting control of FAIRCHILD.
PART III - RESEARCH AND DEVELOPMENT
SECTION 8 - RESEARCH PROJECTS
(1) Praxis Pharmaceuticals shall conduct the Research Projects and perform all
work described in Schedule "C".
(2) Praxis Pharmaceuticals shall commence work on October 1st, 1999 and shall
use reasonable efforts to complete the Research Projects in accordance with
the work schedule included as part of Schedule "C".
(3) The Research Projects shall be performed by Praxis Pharmaceuticals in a
thorough and diligent manner in accordance with Good Laboratory Practices
and normal professional standards.
(4) Praxis Pharmaceuticals shall report to FAIRCHILD at the times and in the
manner set forth in Schedule "C".
(5) FAIRCHILD shall pay to Praxis Pharmaceuticals the total sum of $250,000.00
USD, after deduction for any loans to the company, payable as an initial
payment of $62,500 USD and then in three equal quarterly installments of
$50,000 USD payable on the first day of each month commencing on January
1st, 2000 and a single, and final, quarterly payment of $37,500 USD on
October 1st, 2000, such payments to be exclusive of any taxes, whether
municipal, provincial, federal or Goods and Services. The funds paid by
FAIRCHILD to Praxis Pharmaceuticals pursuant to this Section 8 shall only
be used by Praxis Pharmaceuticals for the conduct of the Research Projects
and shall only be expended in accordance with the budget included as part
of Schedule "C", unless Praxis Pharmaceuticals obtains prior written
authorization from FAIRCHILD.
(6) FAIRCHILD and Praxis Pharmaceuticals shall, not less than once every three
(3) months, review and evaluate progress on the Research Projects.
Following such reviews milestones as set out in Schedule C may be revised
as and when needed by mutual agreement between FAIRCHILD and Praxis
Pharmaceuticals.
(7) Praxis Pharmaceuticals shall use reasonable efforts to ensure that the
technology used in the Research Projects does not infringe on any patents
or proprietary rights of other persons.
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SECTION 9 - RECORDS AND CONFIDENTIALITY
(1) Praxis Pharmaceuticals shall maintain complete and accurate records of the
activities conducted and results obtained pursuant to the Research
Projects, all in accordance with good scientific practice. Upon written
request from FAIRCHILD, Praxis Pharmaceuticals shall provide copies of any
such records to FAIRCHILD.
(2) Praxis Pharmaceuticals shall keep full, accurate and complete records of
books of account relating to financial aspects of the Research Projects.
FAIRCHILD, or a designate of FAIRCHILD, may from time to time upon
reasonable prior written notice to Praxis Pharmaceuticals examine, audit or
have examined or audited the records and books of account of Praxis
Pharmaceuticals.
(3) All data, reports, plans, records, logs and other information relating to
the Research Projects shall be treated by Praxis Pharmaceuticals and
FAIRCHILD as the confidential property of both parties and both parties
shall use all reasonable efforts to ensure that such information is kept
strictly confidential during the term of this Agreement and for a period of
ten (10) years thereafter. Nothing herein shall prevent Praxis
Pharmaceuticals from using, disclosing or authorizing disclosure of
information:
(a) which is or becomes part of the public domain through no act or
failure on the part of Praxis Pharmaceuticals;
(b) which was in Praxis Pharmaceuticals' possession prior to its
development pursuant to the Research Projects or prior to receipt or
acquisition from FAIRCHILD;
(c) which is disclosed to Praxis Pharmaceuticals by a third party without
a covenant of confidentiality, provided that such third party is, to
the knowledge of Praxis Pharmaceuticals, under no obligation of
confidentiality with respect to the information; or
(d) with the prior written authorization of FAIRCHILD.
SECTION 10 - OWNERSHIP OF NEW INTELLECTUAL PROPERTY
(1) New Intellectual Property shall promptly be disclosed by Praxis
Pharmaceuticals to FAIRCHILD and thereafter shall be included as part of
the Licensed Technology and licensed to FAIRCHILD pursuant to Section 11.
(2) All expenses connected with preparing, filing, prosecuting, obtaining,
maintaining and enforcing intellectual property rights related to the New
Intellectual Property shall be borne by FAIRCHILD.
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PART IV - LICENCE
SECTION 11 - GRANT
(1) Praxis Pharmaceuticals hereby grants to FAIRCHILD an exclusive, world-wide
sublicense under the Licensed Patent Applications and Licensed Patents, and
an exclusive, world-wide sublicense under the New Intellectual Property, to
use the Licensed Technology and to make, use and sell any products,
compounds, compound uses, processes, applications, methods or procedures
within the Field of Use.
(2) FAIRCHILD shall be entitled to grant further sublicenses of the rights
granted by Praxis Pharmaceuticals to FAIRCHILD pursuant to Section 11(1)
hereof. FAIRCHILD shall advise Praxis Pharmaceuticals in writing of any and
all sublicenses granted by FAIRCHILD in accordance with this Section 11(3)
and shall provide Praxis Pharmaceuticals with the following information:
(a) name of the sublicencee;
(b) the amount of any license fee or royalties payable by the sub
licensee; and
(c) such further information as may be reasonably requested by Praxis
Pharmaceuticals.
(3) FAIRCHILD may assign this Agreement to an Affiliate of FAIRCHILD or may
transfer or assign the rights and obligations of FAIRCHILD pursuant to
Parts III, IV or V, or any combination thereof, to an Affiliate of
FAIRCHILD.
FAIRCHILD shall advise Praxis Pharmaceuticals in writing of any such
transfer or assignment.
Notwithstanding any such transfer or assignment, FAIRCHILD shall at all
times remain liable to Praxis Pharmaceuticals for the performance of the
obligations set out herein, including the obligation to pay to Praxis
Pharmaceuticals a share of Net Revenue in accordance with Section 12.
SECTION 12 - REVENUE
(1) Net Revenue shall be apportioned between the parties and FAIRCHILD shall
pay to Praxis Pharmaceuticals an amount equal to thirty five percent (35%)
of Net Revenue of Praxis Pharmaceuticals products for so long as there are
Valid Claims.
(2) All payments required to be made pursuant to Section 12(1) shall be made
according to Section 8(5).
SECTION 13 - RECORDS AND REPORTS
(1) FAIRCHILD shall keep full, accurate and complete records and books of
account relating to Net Revenue and any amounts payable by FAIRCHILD to
Praxis Pharmaceuticals pursuant to Section 12 hereof.
(2) All payments made by FAIRCHILD to Praxis Pharmaceuticals pursuant to
Section 12 shall be accompanied by a report providing such information as
is reasonably required by Praxis Pharmaceuticals to determine an accurate
determination of the amounts payable by FAIRCHILD to Praxis Pharmaceuticals
in accordance with Section 12.
(3) Praxis Pharmaceuticals may from time to time, upon reasonable prior notice
to FAIRCHILD have the records and books of account maintained by FAIRCHILD
in accordance with Section 13(1) hereof audited or examined by a duly
authorized independent chartered accountant to ascertain the accuracy of
the payments made. All costs of any audit, examination or report shall be
payable by Praxis Pharmaceuticals, unless the report discloses an
underpayment of five (5%) percent or more, in which case the cost of the
audit, examination or report shall be payable by FAIRCHILD.
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SECTION 14 - PROTECTION, ENFORCEMENT AND INFRINGEMENTS
(1) Praxis Pharmaceuticals shall permit FAIRCHILD to control and direct
(including the selection of patent agents or patent attorneys) the
preparation, filing and prosecution of all patent applications the subject
of this Agreement included within the Field of Use of the Licensed
Technology, including the New Intellectual Property.
Without limiting the generality of the foregoing, Praxis Pharmaceuticals
shall, upon FAIRCHILD's request and at FAIRCHILD's cost and expense, file
and prosecute patent applications to protect the Licensed Technology in any
country that a patent application has not been filed. FAIRCHILD shall
consult with Praxis Pharmaceuticals on the content of all patent
applications and related filings. Praxis Pharmaceuticals shall bear all
costs related to the preparation, filing, prosecution and maintenance with
respect to the Licensed Patents described on Schedule "A", the Licensed
Patent Applications described in Section 1(g)(i) and any other patents or
Licensed Patent Applications that disclose and claim the same inventions.
FAIRCHILD shall pay all costs of preparing, filing, prosecuting and
maintaining all Licensed Patent Applications and Licensed Patents related
to the New Intellectual Property.
(2) If either party believes that any Licensed Patents are being infringed by
another person, that party shall promptly notify the other party and shall
provide any evidence of infringement which is reasonably available.
FAIRCHILD shall have the first right and option, but not the obligation, to
bring an action for infringement, at FAIRCHILD's sole cost and expense,
against the alleged infringer. If FAIRCHILD elects to take such action, the
conduct of the action shall be entirely under the direction and control of
FAIRCHILD. If FAIRCHILD exercises the rights contained herein, FAIRCHILD
may name Praxis Pharmaceuticals as a party plaintiff in such action, suit
or proceeding, if reasonably necessary under the circumstances, provided
that FAIRCHILD shall indemnify and hold Praxis Pharmaceuticals and Anutech
harmless from any costs or expenses incurred in connection with such
action, suit or proceeding. Any damages or sums recovered by FAIRCHILD in
any such action, suit or proceeding, or any settlement thereof, shall be
retained by FAIRCHILD, but, to the extent that the recovery reflects lost
sales of Licensed Products, the net amount after deducting expenses
incurred by FAIRCHILD, shall be included as part of Net Revenue.
(3) If FAIRCHILD elects not to pursue an action for infringement, whether alone
or jointly with Praxis Pharmaceuticals, Praxis Pharmaceuticals shall have
the right and option, but not the obligation, at Praxis Pharmaceutical's
sole cost and expense, to bring the action for infringement against the
alleged infringer. Any damages or sums recovered by Praxis Pharmaceuticals
in such action, suit or proceeding, or any settlement thereof, shall be
retained by Praxis Pharmaceuticals, but, to the extent that the recovery
reflects lost sales of Licensed Products, Praxis Pharmaceuticals shall pay
to FAIRCHILD one-half of the net amount after deducting expenses incurred
by Praxis Pharmaceuticals.
(4) The parties shall cooperate in defending any impeachment, interference or
infringement action, suit or proceeding brought against either Praxis
Pharmaceuticals or FAIRCHILD related to the Licensed Technology.
(5) The parties shall not take any actions that may be reasonably known to
compromise the position of the other party with respect to legal
proceedings commenced or to be commenced or being defended by the other
party.
(6) The parties shall render all reasonable assistance, including providing all
documents in their possession and any witnesses as are or may be required
in the conduct of any proceedings referred to herein. If any party renders
such assistance at the request of another party, the requesting party shall
reimburse the assisting party for expenses incurred to render such
assistance.
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SECTION 15 - WARRANTIES, INDEMNITIES AND INSURANCE
(1) Praxis Pharmaceuticals represents and Warrants to FAIRCHILD that, as of the
Closing Date:
(a) Praxis Pharmaceuticals owns or has valid and enforceable licenses of
the Licensed Technology free and clear of all liens, charges, security
interests and encumbrances, licenses and other restrictions;
(b) the Anutech License Agreement is in full force and effect, unamended
and that neither Praxis Pharmaceuticals nor Anutech are in default of
any of the terms and conditions contained therein;
(c) to the best of Praxis Pharmaceutical's knowledge and belief, the
practicing of the Licensed Technology will not infringe the rights of
any other person; and
(d) to the best of Praxis Pharmaceutical's knowledge and belief, it is not
aware of any activities or conduct of any other person that would
constitute infringement of the Licensed Technology.
(2) The parties shall assume and be liable for their own losses, damages and
expenses of any nature whatsoever which they may suffer, sustain, pay or
incur by reason of any matter or thing arising out of, or in any way
related to this Agreement, except for such losses, costs, damages and
expenses as are the result of the willful breach of any term herein by the
other party or the willful or negligent acts or omissions of the other
party.
(3) Each party shall indemnify and hold harmless the other party, its employees
and agents, from and against any and all claims, demands and costs
whatsoever that may arise out of, directly or indirectly, the indemnifying
party's performance of this Agreement or that of the indemnifying party's
employees or agents. Such indemnifications shall survive this Agreement.
(4) Praxis Pharmaceuticals shall, at its own expense and without limiting its
liabilities herein, maintain comprehensive or commercial general liability
insurance with an insurer in an amount not less than $1,000,000.00 per
occurrence (annual general aggregate, if any, not less than $2,000,000.00),
insuring against bodily injury, personal injury and property damage,
including loss of use thereof. Such insurance shall include blanket
contractual liability.
(5) From the date that any Product arising out of the Licensed Technology is
first applied for therapeutic human use (and for the term or foreseeable
term of the human use) FAIRCHILD undertakes to hold product liability
insurance to the value of at least $10,000,000.00. Such policies shall name
Praxis Pharmaceuticals as additional insured's and shall be purchased from
a reputable insurer. Certificates evidencing the coverage shall be provided
to Praxis Pharmaceuticals.
SECTION 17 - REGULATORY APPROVALS
(1) FAIRCHILD shall use reasonable efforts to obtain Regulatory Approvals.
(2) Praxis Pharmaceuticals shall assist FAIRCHILD in obtaining Regulatory
Approvals in the various countries by providing such information and data
as may be in the possession of Praxis Pharmaceuticals necessary for or of
assistance in obtaining any Regulatory Approvals. FAIRCHILD shall be
responsible for all regulatory, agency, filing, inspection and other fees
and expenses and charges incurred in connection with obtaining any
Regulatory Approvals pursuant to Section 17(1).
(3) Praxis Pharmaceuticals shall ensure that all information and data generated
by Praxis Pharmaceuticals that is related to the Clinical Trials or would
be of any assistance to FAIRCHILD in obtaining Regulatory Approvals shall
be maintained in a form suitable for submission to regulatory authorities
and shall at all times be kept secure and confidential.
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PART VI - GENERAL
SECTION 18 - TERM AND TERMINATION
(1) The term of this Agreement shall expire on the expiration of the last
Licensed Patent. Upon the expiration of this Agreement, FAIRCHILD's license
pursuant to Section 11 shall become a fully paid-up, perpetual license.
(2) This Agreement may be terminated at any time upon the mutual agreement of
the parties.
(3) If:
(a) either party has breached any of its obligations pursuant to this
Agreement and fails to remedy such breach or to commence and
diligently pursue reasonable steps to remedy such breach within sixty
(60) days after notice in writing from the other party;
(b) either party becomes bankrupt or insolvent or takes the benefit of any
statute for bankrupt or insolvent debtors or makes any proposal,
assignment or arrangement with its creditors, or any steps are taken
or proceedings commenced by any person for the dissolution, winding up
or termination of either parties existence or the liquidation of its
assets; or
(c) a trustee, receiver, receiver manager or like person is appointed with
respect to the business or assets of a party; the party in default may
terminate this Agreement by giving written notice to the party in
default.
(4) If Praxis Pharmaceuticals is in default of any of its obligations related
to the performance of the Research Projects, and has failed to remedy such
breach within sixty (60) days after notice in writing from FAIRCHILD,
FAIRCHILD may terminate the Research Projects immediately upon written
notice to Praxis Pharmaceuticals. If FAIRCHILD terminates the Research
Projects in accordance with this Section 18(4):
(a) FAIRCHILD shall reimburse Praxis Pharmaceuticals for costs and
expenses incurred in accordance with the budget included as part of
Schedule "C" to the date of termination;
(b) FAIRCHILD shall have no further obligation with respect to the conduct
of the Research Projects or any costs and expenses related thereto;
(c) notwithstanding the termination of the Research Project, all New
Intellectual Property developed prior to the date of termination shall
be disclosed by Praxis Pharmaceuticals to FAIRCHILD and shall be
included as part of the Licensed Technology and licensed to FAIRCHILD
pursuant to Section 11; and
(d) FAIRCHILD shall have the right to complete the Research Project, or
any part thereof at its own cost and expense and any results;
improvements to Intellectual Property sublicensed from Praxis
Pharmaceuticals under the terms of this Agreement; new patents and
patent applications arising from this shall be deemed to be New
Intellectual Property.
(5) The following sections shall survive termination of this Agreement: 1, 2,
3, 4, 5, 9 and 15.
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SECTION 19 - PUBLICITY
(1) A copy of all public announcements and press releases which either party
intends to release or make regarding products or technology covered by the
license shall be provided to the other party prior to being released or
made.
Any public announcement or news release that names, refers to or in any way
identifies both parties shall be approved by both parties prior to being
released or made. Each party shall respond to a request for approval within
five (5) working days of receipt of the copy and the approval of each party
shall not be unreasonably withheld.
(2) If either party is prevented from complying with Section 19(1) as a result
of the requirements of a Securities Commission or other regulatory body,
the party shall not be considered to be in breach of this Agreement, but
shall use reasonable efforts to consult with and keep the other party
informed.
(3) The parties shall not use each other's name in any advertising material
without the prior written consent of the other party, which consent may be
arbitrarily withheld.
(4) Subject to subsection (3), FAIRCHILD shall be responsible for and have
control of labeling of Licensed Products.
SECTION 20 - COMPLIANCE WITH LAWS
The parties shall observe and comply with all applicable laws, ordinances, codes
and regulations of Government agencies, including Federal, Provincial, Municipal
and local governing bodies having jurisdiction.
SECTION 21 - RELATIONSHIP
Nothing in this Agreement shall be construed as:
(a) constituting either party as the agent, employee or representative of
the other party; or
(b) creating a partnership or as imposing upon either party any
partnership duty, obligation or liability to the other party.
SECTION 22 - NOTICES
All notices or other communications required or permitted to be given hereunder
shall be in writing and shall be sent to the following addresses or such other
addresses as the relevant party may notify from time to
time:
TO: William B Cowden, CEO
Praxis Pharmaceuticals Inc.
GPO Box 1978
Canberra, ACT, Australia 2601
Facsimile: 61 2 6279 9758
TO: Byron Cox
FAIRCHILD INTERNATIONAL Inc.
#600 - 595 Hornby Street
Vancouver, British Columbia V6C 1A4
Facsimile: (604) 646-5649
Notices sent by prepaid registered mail shall be deemed to be received by the
addressee on the 7th day (excluding Saturdays, Sundays, statutory holidays and
any period of postal disruption) following the mailing thereof. Notices
personally served or transmitted by facsimile shall be deemed received when
actually delivered or transmitted, provided such delivery shall be made during
normal business hours.
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SECTION 23 - ASSIGNMENT
Except as expressly permitted pursuant to Section 11, the parties shall not
assign this Agreement or any part thereof, or any rights hereunder without the
prior written consent of the other party, such consent not to be unreasonably
withheld.
SECTION 24 - FURTHER ASSURANCES
The parties shall with reasonable diligence take all action, do all things,
attend or cause their representatives to attend all meetings and execute all
further documents, agreements and assurances as may be required from time to
time in order to carry out the terms and conditions of this Agreement in
accordance with their true intent.
SECTION 25 - SETTLEMENT OF DISPUTES
(1) If there is any dispute or disagreement related to or arising out of this
Agreement (the "Disagreement") the parties shall refer the Disagreement for
resolution to their respective Chief Executive Officers, or their nominees.
(2) If the Disagreement is not resolved pursuant to Section 25(1) within thirty
(30) days (or such longer period as agreed upon between the parties), a
mediator shall be appointed by the parties who shall assist the parties in
resolving the Disagreement.
(3) If the Disagreement is not resolved under Section 25(2) within thirty (30)
days (or such longer period as agreed upon between the parties) either
party may refer the Disagreement to be resolved by arbitration conducted as
follows:
(a) either party may require arbitration by giving written notice to
arbitrate to the other party, which written notice shall identify the
nature of the Disagreement;
(b) if the parties are able to agree upon a single arbitrator, the
arbitration shall be conducted before the single arbitrator;
(c) if the parties have been unable to agree upon the selection of a
single arbitrator within two (2) weeks after receipt of the notice
requiring arbitration, each party shall within one (1) further week,
by notice in writing given to the other party, nominate one neutral
arbitrator. If either party fails to nominate an arbitrator in
accordance with this clause, the arbitrator so nominated shall proceed
to conduct the arbitration alone. If both parties nominate neutral
arbitrators in accordance with this clause, the two arbitrators so
nominated shall nominate a third arbitrator within one (1) week of
their nomination;
(d) the arbitrator or arbitrators shall immediately proceed to hear and
determine the Disagreement. The parties agree that it is important
that all Disagreements are resolved promptly and the parties therefore
agree that the arbitration shall be required to be conducted
expeditiously and that the final disposition shall be accomplished
within two (2) weeks. The parties shall ensure that the arbitrator or
arbitrators upon accepting the nomination shall agree that the
arbitrator has time available for the timely handling of the
arbitration in order to achieve final disposition within two (2)
weeks;
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(e) the decision of the arbitrator or arbitrators shall be rendered in
writing, without reasons and shall be promptly served upon both
parties. If the arbitration is being conducted before a panel of three
arbitrators, the decision of any two of the three arbitrators shall be
decision of the arbitration panel. The decision of the arbitrator or
arbitrators shall be binding upon the parties;
(f) in the event of the death, resignation, incapacity, neglect or refusal
to act of any arbitrator, and if the neglect or refusal continues for
a period of five (5) days after notice in writing of such has been
given by either party, another arbitrator shall be nominated to
replace the arbitrator by the person who has originally nominated that
arbitrator;
(g) the costs of the arbitration shall be in the discretion of the
arbitrators, and shall be borne by the parties in accordance with the
decision of the arbitrators;
SECTION 26 - ENUREMENT
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
PRAXIS PHARMACCEUTICALS PHARMACEUTICALS, INC.
Per: /S/ BRETT CHARLTON (PRESIDENT)
FAIRCHILD INTERNATIONAL INC.
Per: /S/ BYRON COX
SCHEDULE A
LICENSED PATENTS
PHOSPHOSUGAR-BASED ANTI-INFLAMMATORY AND/OR IMMUNOSUPPRESSIVE DRUGS
International Application No. PCT/AU89/00350
Inventors - William Cowden, Christopher Parish, David Willenborg
Priority date - 18 August 1988
International filing date - 18 August 1989
ANUTECH reference 140
COUNTRY APPLICATION NO. PATENT NO. STATUS
Australia 41875/89 627500 granted
Europe 89909685.3 0429522 granted
Japan 509079/89 examination requested
USA 988001 5506210* granted - 9 April 1996
NOVEL PHOSPHOSUGARS AND PHOSPHOSUGAR-CONTAINING COMPOUNDS HAVING
ANTIINFLAMMATORY ACTIVITY
Inventors - William Cowden, Christopher Parish, David Willenborg
Priority date - 18 October 1996
ANUTECH reference 278
COUNTRY APPLICATION NO. PATENT NO. STATUS
Australia PO3098/96 INT on 18 October 1997
Australia 41866/97 examination requested
USA 08/953305 examination requested
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SCHEDULE D
PRAXIS PHARMACEUTICALS INC.
and
ANUTECH PTY LIMITED
-------------------
LICENCE AGREEMENT
-----------------
PRAXIS PHARMACCEUTICALS Inc.
GPO Box 1978
Canberra, ACT 2601
Australia
Tel: (02) 6249 2939
Fax: (02) 6279 9758
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION. . . . . . . . . . . . . . . . . . . . .1
2. GRANT OF LICENCE. . . . . . . . . . . . . . . . . . . . . . . . . . . .4
3. LICENCE CONSIDERATION. . . . . . . . . . . . . . . . . . . . . . . . . .4
4. LICENCE TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5. PERFORMANCE OF PRAXIS PHARMACCEUTICALS. . . . . . . . . . . . . . . . 4
6. RIGHT TO SUBLICENSE. . . . . . . . . . . . . . . . . . . . . . . . . . 5
7. GST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
8. OWNERSHIP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
9. PROTECTION OF PATENTS. . . . . . . . . . . . . . . . . . . . . . . . . 6
10. INFRINGEMENT AND ENFORCEMENT OF PATENTS. . . . . . . . . . . . . . . 7
11. REPORTS, PAYMENTS AND ACCOUNTING. . . . . . . . . . . . . . . . . . . 7
12. CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
13. PUBLICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
14. USE OF NAME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
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15. INDEMNITY AND INSURANCE . . . . . . . . . . . . . . . . . . . . . . . .9
16. WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
17. ASSIGNMENT, TRANSFER . . . . . . . . . . . . . . . . . . . . . . . . . 11
18. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
19. MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . 12
20. TERMINATION OF LICENCE AND RESEARCH & DEVELOPMENT AGREEMENT. . . 15
21. SCHEDULE 1 - ANU Intellectual Property . . . . . . . . . . . . . . . 17
THIS AGREEMENT IS MADE ON THE 14TH DAY OF OCTOBER 1999 BETWEEN:
ANUTECH PTY LIMITED, ACN 008 548 650 with its registered office at ANUTECH
Court, Cnr Barry Drive and Daley Road, Acton, Australian Capital Territory,
Australia 2601 ("ANUTECH").
AND:
PRAXIS PHARMACCEUTICALS PHARMACEUTICALS INC., a company incorporated in Utah
with its office at Suite 600, 595 Hornby Street, Vancouver, BC, Canada ("Praxis
Pharmaceuticals").
RECITALS:
A. Praxis Pharmaceuticals was incorporated on 20 June 1997 with the intention
that it raises capital, acquire intellectual property and research, develop
and commercialize pharmaceuticals.
B. ANU possesses intellectual property in the area of phosphosugars and their
analogues as anti-inflammatory agents.
C. Praxis Pharmaceuticals wishes to license the ANU intellectual property in
order to undertake further research and development and commercialization
of the intellectual property.
D. In accordance with the terms and conditions set forth in this agreement,
ANUTECH is willing to grant such a license to Praxis Pharmaceuticals with
its term dependant on Praxis Pharmaceuticals achieving research and
commercialization milestones.
E. ANUTECH is the commercial subsidiary of the ANU and regularly provides
services to its clients by engaging the services of the ANU.
IT IS AGREED AS FOLLOWS:
DEFINITIONS AND INTERPRETATION
1.1 In this Agreement, unless there is something inconsistent with the context,
the following terms and expressions shall have the following meanings:
"AFFILIATE" means, in relation to a person, the person's related bodies
corporate (within the meaning of the Corporations Law), entities who are
partners or joint venture's of or trustees for the person or with whom the
person is acting in concert and the directors agents, officers and
employees of the person or any of those related bodies corporate or
entities.
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"ANU INTELLECTUAL PROPERTY" means the following intellectual property owned
by the ANU:
(a) Intellectual Property in relation to phosphosugars and their
anti-inflammatory activity; and
(b) the patents and patent applications set out in Schedule 1, including
all divisions, continuations, continuations-in-part, renewals,
extensions and additions thereof.
"COMMENCEMENT DATE" means the day of 1999.
"CONFIDENTIAL INFORMATION" means any information whether written, oral,
electronic or in any other form which is disclosed by a party or its
representatives, is claimed as confidential to itself and which relates to
the ANU Intellectual Property, Research, Results, Products, Agreement and
business of the parties. It includes all copies and notes generated from
the disclosure but does not include information which:
(a) is in the public domain at the time of disclosure;
(b) becomes a part of the public domain after disclosure, otherwise than
as a result of any unauthorized activity and/or omission on the part
of the recipient;
(c) the recipient can prove is already in its own possession at the time
of disclosure and which was not acquired from the other party directly
or indirectly;
(d) is rightfully acquired from a third party who did not obtain it under
an obligation of confidentiality; or
(e) is legally required to be disclosed - the party required to make
disclosure shall notify the other to allow that party to assert
whatever exclusions are available.
"DOLLAR", "DOLLAR" OR "$" means Australian dollars unless otherwise
indicated.
"FIELD" means the use of phosphosugars as neutriceuticals, complementary
medicines or cosmetics for the treatment of any applicable condition and
expressly excludes:
(a) the use of phosphosugars as ethical therapeutics; and
(b) topical application for wound care; and
(c) use of fructose-1,6-diphosphate, administered non-topically, for the
treatment or prophylaxis of ischaemic disorders in humans, which
includes transplantation and immunosuppression.
"GST" means a tax on goods and services as defined by Commonwealth
legislation.
"INTELLECTUAL PROPERTY" shall mean all intellectual property rights and
includes:
(a) Trade Marks: means any trade mark or trade name whether registered or
not under, or by reference to which, a product or service is known;
(b) Patents: meaning any patents or patent applications including all
divisions, continuations, renewals, extensions and patents of addition
thereof which have been or are in the future filed and granted as a
patent;
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(c) Copyright subsisting in any form or manner whether written or stored
in any form (whether visible or not) including without limitation
brochures, design logos, insignia, computer programs, software,
firmware and hardware;
(d) Designs (whether or not registered); and
(e) Know-How: meaning the unpatented, technical information, processes,
formulae, technical and technological documentation, reports, computer
programs, biological materials, procedures or methods, all current and
accumulated knowledge, skills and experience.
"NET SALES" means:
(a) for an arms length sale of any Product means the gross amount invoiced
by Praxis Pharmaceuticals, or its Affiliates less the following:
(i) transport and insurance related charges actually allowed and
taken;
(ii) trade, quantity or cash discounts or rebates actually allowed and
taken;
(iii)credits or allowances given or made on account of price
adjustments, recalls or destruction requested or made by an
appropriate government agency; and
(iv) any tax (excluding income tax), excise or other government charge
upon or measured by the sale, transportation, delivery or use of
the Product, which is actually incurred by the seller.
(b) for a non-arms length sale, means the highest of the most recent Net
Sales at which Praxis Pharmaceuticals, its Affiliates, its
subsidiaries, joint venture's licensees or agents has sold similar
quantities of Products in an arms length sale.
"PRODUCTS" means any matter, article or thing which incorporates or arises
from the whole or partial use of ANU Intellectual Property or Results.
"RESULTS" means all Intellectual Property, materials (including substances,
compounds, biological material, products, samples and devices) in whatever
form and information however known or recorded (including trade secrets,
processes, techniques, designs, plans, data, test results, findings,
evaluations and reports) generated as a result of any exploitation of or in
any connection with any research and development conducted at the ANU
within the Field.
"SUBLICENSE FEES" means all payments to Praxis Pharmaceuticals in
consideration for rights to the ANU Intellectual Property, Results and
Products pursuant to a sublicense, assignment, joint venture, strategic
alliance or other arrangement.
Sublicense Fees shall not include:
(a) fees for research and development undertaken by Praxis Pharmaceuticals
including for example preclinical research and clinical studies; nor
(b) the royalty percentage above that is required to be paid by Praxis
Pharmaceuticals pursuant to clause 3 (License Consideration).
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1.2 In this Agreement unless the contrary intention appears:
(a) a reference to a clause, schedule, attachment, annexure or appendix is
a reference to a clause of or schedule, attachment, annexure or
appendix to this Agreement and references to this Agreement include
any recital, schedule annexure, attachment, or appendix;
(b) a reference to this Agreement or another instrument includes any
variation or replacement of either of them;
(c) a reference to a statute, ordinance, code or other law includes
regulations and other instruments under it and consolidations,
amendments, re-enactments or replacements of any of them;
(d) the singular includes the plural and vice versa;
(e) if a period of time is specified and dates from a given day or the day
of an act or event, it is to be calculated exclusive of that day;
(f) if an event must occur on a stipulated day, which is not a business
day, then the stipulated day will be taken to be the next business
day;
(g) headings are inserted for convenience and do not affect the
interpretation of this Agreement;
(h) words importing any one gender shall mean and include masculine,
feminine and/or neuter where appropriate;
(i) words importing natural persons shall (where appropriate) mean and
include corporations and unincorporated associations and vice versa;
(j) schedules and attachments form part of and are incorporated in this
Agreement.
(k) no provision of this Agreement will be construed adversely to a party
solely on the ground that the party was responsible for the
preparation of this agreement or that provision; and
(l) an expression importing a natural person includes any company,
partnership, joint venture, association, corporation or other body
corporate and any government, governmental, administrative, judicial
or semi-governmental agency or body.
1.3 For the avoidance of doubt the recitals to this Agreement shall form part
of this Agreement and in the event of any inconsistency between the
recitals and the other provisions of this Agreement the other provisions of
this Agreement shall prevail.
GRANT OF LICENCE
1.4 ANUTECH grants to Praxis Pharmaceuticals an exclusive, worldwide license to
use and exploit the ANU Intellectual Property and Results within the Field,
including the right to sublicense pursuant to clause 6 (Right to
Sublicense).
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LICENCE CONSIDERATION
1.5 In consideration for the grant of the license Praxis Pharmaceuticals will
pay to ANUTECH:
a) a 4% royalty on Net Sales of Products by Praxis Pharmaceuticals;
b) 50% of all royalty income on Net Sales of Products received from sub
licensees;
c) 15% of all Sublicense Fees.
d) ANUTECH shall maintain the right to hold 300,000 shares issued to
ANUTECH 31 March 1999. These shares will be held in escrow for a
period of 12 months from the date of issue.
1.6 The obligation in clause 3.1 survives the termination of the license in
clause 2.1 or this Agreement.
LICENCE TERM
1.7 The License in clause 2.1 commences upon the Commencement Date and ends on
the expiration of the last to expire of the patents covered by this
Agreement, unless otherwise earlier terminated pursuant to clause 5
(Performance of Praxis Pharmaceuticals) or clause 18 (Termination).
PERFORMANCE OF PRAXIS PHARMACCEUTICALS
1.8 If Praxis Pharmaceuticals fails to comply with the following performance
milestones, ANUTECH has at its election the right to terminate this
Agreement in accordance with clause 18(Termination).
1.9 Commercialization milestones
a) Praxis Pharmaceuticals shall use best efforts to commercialize the ANU
Intellectual Property and Results by undertaking an ongoing and active
research, developmental, manufacturing, marketing, licensing or
capital raising program, as appropriate, directed toward the
exploitation of the ANU Intellectual Property and Results within the
Field.
b) Part of these best efforts includes Praxis Pharmaceuticals providing
to ANUTECH as soon as practicable a business plan (and any updates
thereafter) which addresses Praxis Pharmacceuticals's capacities,
objectives and strategies for such a commercialization program.
c) Praxis Pharmaceuticals shall also provide ANUTECH with an annual
written report (on the anniversary of the Commencement Date) on its
progress towards achieving these commercialization milestones.
RIGHT TO SUBLICENSE
1.10 ANUTECH grants to Praxis Pharmaceuticals the right to sublicense ANU
Intellectual Property and Results within the Field, subject to:
a) the prior written approval of ANUTECH, which shall not be unreasonably
withheld;
b) the sub licensee being bound to similar terms as contained in this
Agreement; and
c) the royalty and Sublicense Fee stream provided for in clause 3
(License Consideration) are reserved.
GST
1.11 The parties acknowledge that this Agreement, including all pricing and
compensation terms, whether by way of reimbursement, indemnity or otherwise
has been drafted without taking into account the effect, if any, of GST.
The following principles apply when determining the amount (including
royalties) payable (the Payment) for any rights, services, or any other
thing granted or supplied pursuant to this Agreement.
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1.12 If GST is payable in relation to the granting of rights, supply of services
or any other thing, the Payment will be the consideration specified herein
plus GST (if any).
1.13 If the Payment is determined by reference to any cost, expense or liability
incurred by a party (the Payee), the reference to cost, expense or
liability means the actual amount incurred by the Payee less the amount of
any GST input tax credit the Payee is entitled to claim in respect of that
cost, expense or liability. The Payee will be assumed to be entitled to
claim full input tax credits unless it demonstrates that its entitlement is
otherwise prior to the date on which the Payment must be made.
1.14 If the Payment is a reimbursement or indemnification of a loss determined
(including a percentage of sales revenue) by reference to revenue received
and costs incurred, the revenue will be the revenue earned net of GST and
the costs will be determined in accordance with clause 7.3.
1.15 If a party sets off an amount otherwise payable under this Agreement, the
principles set out above shall be applied to calculate the amount to be set
off as if that amount had been paid.
1.16 Each party agrees to do all things, including providing invoices or other
documentation containing stipulated information, that may be necessary or
desirable to enable or assist the other party to claim any credit, set off,
rebate or refund in relation to any GST included in any payment made under
this Agreement.
OWNERSHIP
1.17 The following shall be owned by the ANU and licensed to Praxis
Pharmaceuticals pursuant to the terms of this Agreement:
a) improvements to ANU Intellectual Property ; and
b) new patents and patent applications arising from the use of ANU
Intellectual Property.
PROTECTION OF PATENTS
1.18 With respect to the existing ANU Intellectual Property patents and patent
applications:
a) the parties shall cooperate in the prosecution and maintenance of the
patents and patent applications with the relevant patent offices;
b) from the Commencement Date, one third of any past and future costs and
expenses incurred in their filing, maintenance and renewal shall be
borne by Praxis Pharmaceuticals;
c) Praxis Pharmaceuticals may select the countries in which patent
applications are to be filed in the name of the ANU; and
d) if Praxis Pharmaceuticals decides not to request patent protection for
an invention in any country, ANU may file or maintain at its own cost
patent applications which Praxis Pharmaceuticals has declined to file
or maintain, and such patent applications or granted patents shall lie
outside the provision of this Agreement.
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1.19 With respect to any new paten table inventions arising from the Results and
use of ANU Intellectual Property:
a) Praxis Pharmaceuticals may request ANUTECH to file and prosecute a
patent application, in ANU's name, for the invention or agree to treat
the invention as a trade secret;
b) the parties shall cooperate in the prosecution and maintenance of the
patents and patent applications with the relevant patent offices;
c) all costs and expenses incurred in filing, maintaining and renewing
the patents and patent applications shall be borne by Praxis
Pharmaceuticals;
d) Praxis Pharmaceuticals may select the countries in which patent
applications are to be filed in the name of the ANU; and
e) if Praxis Pharmaceuticals decides not to request patent protection for
an invention in any country, ANU may file or maintain at its own cost
patent applications which Praxis Pharmaceuticals has declined to file
or maintain, and such patent applications or granted patents shall lie
outside the provision of this Agreement.
INFRINGEMENT AND ENFORCEMENT OF PATENTS
1.20 Infringement
In the event of any patent, the subject of this Agreement, being infringed
Praxis Pharmaceuticals may at its own cost and in its own name litigate
such infringement and may settle or compromise such litigation in such a
manner as Praxis Pharmaceuticals shall determine provided that Praxis
Pharmaceuticals shall consult with ANUTECH in good faith in relation to
those proceedings.
1.21 Enforcement
In the event that litigation is taken or threatened by a third party
against any rights associated with any patents the subject of this
Agreement, the parties shall consult in good faith and use their best
endeavors mutually to determine the manner in which these proceedings are
to be defended or resisted and to act accordingly provided always that the
parties shall first seek the opinion of counsel experienced in such
matters.
1.22 In any litigation, ANUTECH shall cooperate with Praxis Pharmaceuticals in
making available all relevant records, papers, information and the like
which may be relevant and in its possession.
1.23 Nothing herein shall preclude ANUTECH from defending or pursuing any such
actions.
REPORTS, PAYMENTS AND ACCOUNTING
1.24 Within 30 days after the first day of January, April, July and October of
each year, Praxis Pharmaceuticals shall provide to ANUTECH a true and
accurate royalty report. This royalty report will cover payments due under
clause 3 (License Consideration) and specify:
a) the total quantity of Products sold or provided by it and by its sub
licensees;
b) the Net Sales price at which the Products were sold or provided;
c) the calculation of the royalty due;
d) the total royalties so calculated and due to ANUTECH; and
e) the amount of Sublicense Fees and the royalty due.
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1.25 For the term of this Agreement and simultaneous with the delivery of each
such royalty report, Praxis Pharmaceuticals shall pay to ANUTECH the
royalty and any other payments due under this Agreement for the period
covered by such report.
Praxis Pharmaceuticals shall be responsible for all payments that are due
to ANUTECH but have not been paid by Praxis Pharmaceuticals' sub licensees
to Praxis Pharmaceuticals.
1.26 All payments hereunder by Praxis Pharmaceuticals shall be payable in
Australian Dollars.
1.27 During the term of this Agreement, Praxis Pharmaceuticals shall keep
complete and accurate records of its and its sub licensee's sales of
Products and Sublicense Fees in sufficient detail to enable compliance with
its obligations under this Agreement to be verified.
1.28 Praxis Pharmaceuticals shall permit ANUTECH or its representatives, at
ANUTECH's expense, to periodically examine its books, ledgers and records
during business hours and with 48 hours notice for the purpose of and to
the extent necessary to ensure that Praxis Pharmaceuticals has complied,
and is complying, with its obligations under this Agreement.
1.29 In the event that the difference between the amount of royalty due and the
amount of royalty actually paid exceeds 5% then Praxis Pharmaceuticals
shall pay the amount of the underpayment plus the cost of such examination.
1.30 If Praxis Pharmaceuticals fails to pay ANUTECH an amount due under this
Agreement, Praxis Pharmaceuticals shall upon notification pay to ANUTECH
the amount owing together with interest, such interest to be at the rate
applicable to overdrafts charged by the Commonwealth Bank of Australia at
the date of payment, calculated daily from the due date or the date the
shortfall in payment was effective, as the case may be. The payment of such
interest shall not preclude ANUTECH from exercising any other rights it may
have because any payment is overdue.
CONFIDENTIALITY
1.31 The parties acknowledge that the Confidential Information is valuable to
the party in question and each party undertakes to keep the Confidential
Information secret and to protect and preserve the confidential nature and
secrecy of the Confidential Information.
1.32 The recipient of Confidential Information must:
1.33 keep it confidential;
1.34 use it only for the purposes of the Agreement;
1.35 not disclose it to any person other than:
(a) to those of the recipient's employees or legal advisers who have a
need to know and who have first been directed and have undertaken
orally or in writing to keep it confidential; or
(b) to other people, such as contractors, visitors and agents who have a
need to know and who have agreed in writing to keep it confidential in
accordance with this Agreement
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1.36 not copy it or any part of it other than as strictly necessary for the
purposes of this Agreement and must mark any such copy "Confidential";
1.37 promptly comply with any request by the discloser to return or destroy any
or all copies of Confidential Information; and
1.38 implement security practices against any unauthorized copying, use or
disclosure of the Confidential Information.
1.39 Each party shall take:
a) reasonable efforts to ensure that any person who has access to
Confidential Information does not make any unauthorized use,
reproduction or disclosure of that information; and
b) reasonable steps to enforce the confidentiality obligations imposed or
required to be imposed by this agreement, including diligently
prosecuting at its cost any breach or threatened breach of such
confidentiality obligations by a person to whom it has disclosed
Confidential Information and, where appropriate, making applications
for interim or interlocutory relief.
1.40 The provisions of this clause 12 shall continue to have effect for a period
of four (4) years after termination or expiry of this Agreement.
1.41 Upon the termination or expiry of this agreement the recipient of
Confidential Information shall deliver (or with the discloser's prior
consent, destroy or erase) to the discloser all material forms of
Confidential Information in its or its representatives possession, power or
control. The return of Confidential Information under this clause does not
release either party or their representatives from their confidentiality
obligations under this clause.
PUBLICATION
1.42 If ANUTECH or its employees or agents wish to publish or otherwise disclose
any information contained in the ANU Intellectual Property or Results,
other than in accordance with clause 12 (Confidentiality), including by way
of written disclosure or any oral disclosure at any seminar, lecture or
other meeting ("Publication"), the following procedures shall be observed:
(a) ANUTECH shall submit the Publication to Praxis Pharmaceuticals 30 days
prior to disclosure;
(b) within the 30 day period Praxis Pharmaceuticals will consider whether
to agree to the Publication and shall advise ANUTECH what part (if
any) of the information it does not wish published;
(c) if Praxis Pharmaceuticals does not advise ANUTECH within the 30 day
period that it objects to the Publication it shall be deemed to have
consented to the Publication;
(d) if Praxis Pharmaceuticals does advise ANUTECH of its objection then
the information in question will not be published:
(i) until the date upon which the complete Australian specification
in relation thereto becomes open to public inspection at the
Australian Patents Office; and
(ii) in the case of information which is not paten table or which it
is not proposed to patent, for so long as further confidential
research or development work or potential or actual commercial
exploitation is being actively pursued in relation thereto but in
any case not to exceed 2 years;
(e) where appropriate, ANUTECH will make proper acknowledgment of Praxis
Pharmaceuticals.
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USE OF NAME
1.43 Any proposed use of a party's name by the other in any published material
(including prospectus information) must be approved by the other party in
writing prior to release of that published material.
INDEMNITY AND INSURANCE
1.44 Praxis Pharmaceuticals hereby agrees to defend, indemnify and hold harmless
ANUTECH, ANU and their employees from and against any and all demands,
claims, liabilities, damages, costs and expenses which may be brought
against or incurred by ANUTECH, ANU and their employees as a result of the
use to which Praxis Pharmaceuticals or its sub licensees make of the ANU
Intellectual Property, Results and Products the subject of the license
granted in this Agreement, other than to the extent (if any) that the same
are caused solely by the gross negligence of ANUTECH, ANU or of any of
their employees.
The indemnity above shall also apply to actions that may arise out of the
capital raising that Praxis Pharmaceuticals undertakes for the purposes of
this Agreement.
1.45 From the date that any Product arising out of the ANU Intellectual Property
is first applied for human use (and for the term or foreseeable term of the
human use) Praxis Pharmaceuticals undertakes to hold product liability
insurance to the value of at least $5,000,000.00 .
1.46 Praxis Pharmaceuticals shall at all times maintain in full force and effect
general liability insurance with limits of not less than $5,000,000.00.
1.47 Such policies shall name ANUTECH and the ANU as additional insured and
shall be purchased from a reputable insurer. Certificates evidencing the
coverage shall be provided to ANUTECH.
WARRANTIES
1.48 Right to enter Agreement
Each Party hereby warrants to the other that it has the full right, power,
authority and liberty to enter into this Agreement and to perform all of
its respective duties and obligations hereunder. Each party warrants to the
other that it is not under any other duty or obligation, which is contrary
to or inconsistent with any of its duties, and obligations hereunder.
1.49 No contrary agreements
Each party hereby warrants to the other that it will not enter into any
agreement, arrangement or understanding with any third party which is
contrary to or inconsistent with any of that party's rights, duties and
obligations under this Agreement.
1.50 Status of ANUTECH
ANUTECH warrants and covenants that it enters into this Agreement as agent
for and on behalf of ANU having full power and authority so to do, and with
the express consent of ANU, to the intent that each and every of the
warranties, covenants, terms and conditions of this Agreement are given by
and bind both ANUTECH in its own right and ANU.
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1.51 Due diligence
Praxis Pharmaceuticals warrants that it has undertaken a due diligence
examination of the ANU Intellectual Property licensed in this agreement and
warrants that it satisfied itself as to ANU's rights to and the validity of
the ANU Intellectual Property, in particular the patents and patent
applications set out in Schedule 1.
1.52 ANU Intellectual Property
To the best of its knowledge ANUTECH warrants and covenants that in respect
of ANU Intellectual Property either:
(a) ANU is the sole legal and beneficial owner; or
(b) ANU has such rights to the ANU Intellectual Property, as will enable
ANUTECH to perform its obligations under this Agreement.
ANUTECH makes no warranty as to whether the US Patent 5520926 (and
corresponding international patents or applications) in the name of
British Technology Group Limited infringes the ANU Intellectual
Property.
1.53 Results achieving purpose
ANUTECH makes no representations or warranties as to the accuracy or
completeness of the Results generated by ANUTECH, or their capability to
achieve a particular purpose.
1.54 Fundamental Terms
Each party acknowledges that the warranties contained in this clause 16
(Warranties) are fundamental terms of this Agreement.
ASSIGNMENT, TRANSFER
1.55 This Agreement may not be assigned or otherwise transferred by Praxis
Pharmaceuticals without the prior written consent of ANUTECH. An assignment
is deemed to include a change in greater than 50% beneficial ownership of
shares in Praxis Pharmaceuticals with the exception of such a change in
share holding in Praxis Pharmaceuticals through capital raising.
1.56 Any permitted assignee shall assume all obligations of its assignor under
this Agreement.
1.57 No assignment shall relieve Praxis Pharmaceuticals of responsibility for
the performance of any accrued obligation(s) which Praxis Pharmaceuticals
then has hereunder.
TERMINATION
1.58 A party may terminate this Agreement upon 30 days written notice to the
other party on the occurrence of any of the following by the other party:
a) upon or after the bankruptcy, insolvency, dissolution or winding up of
such party (other than dissolution or winding up for the purposes of
reconstruction or amalgamation); or
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b) the failure of such party to comply with its obligations under this
agreement, if such default is not cured (if capable of being cured)
within 30 days of the party not in default giving notice of the
default; or
c) if the representations and warranties made under this Agreement prove
inaccurate or false in any material respect.
1.59 Without limiting clause 18.1 (b), ANUTECH may terminate this Agreement upon
30 days written notice to Praxis Pharmaceuticals in the event Praxis
Pharmaceuticals:
a) fails to make any payment which is due and payable pursuant to this
Agreement and such payment remains unpaid for more than 30 days; or
b) fails to achieve any of the performance milestones in accordance with
clause 5 and is demonstrated not to be making best efforts in
attempting to achieve these milestones and such default is not cured
(if capable of being cured) within 90 days of ANUTECH giving notice of
the default.
1.60 The provisions of this clause 18 and clauses 3.1 (License Consideration) 12
(Confidentiality), 11 (Reports, Payments and Accounting), 15 (Indemnity and
Insurance, 19.12 (Governing Law) and19.9 (Dispute Resolution) shall
continue in full force and effect notwithstanding the termination, any
alterations or additions to the other provisions of this Agreement.
1.61 Upon termination of this Agreement and except as otherwise expressly
provided:
a) Any rights or obligations of a party, which may have arisen or accrued
prior to termination shall not be affected;
b) all licenses granted to Praxis Pharmaceuticals under the terms of this
Agreement shall terminate and Praxis Pharmaceuticals shall cease its
exploitation of the relevant intellectual property other than provided
for in clause 18.4 (d);
c) Praxis Pharmaceuticals shall promptly pay to ANUTECH any amounts due
under the terms of this Agreement including royalties and Sublicense
Fees which have accrued as of the date of termination;
d) Praxis Pharmaceuticals may sell all inventory of the Product that it
may have on hand at the date of termination provided that it pays
royalties as provided in this Agreement.
1.62 If any party terminates the Agreement and sub licensees are not then in
default under the terms of their sublicense agreements hereunder, ANUTECH
shall have the right (but not the obligation) to assume and continue
sublicense agreements with payments there under being made by the sub
licensees directly to ANUTECH without any further obligations on the part
of Praxis Pharmaceuticals with respect thereto.
1.63 Waiver by either party of any breach (or a succession of breaches) of any
one or more of the provisions of this Agreement shall not deprive such
party of any right to terminate this Agreement pursuant to the terms of
this clause 18 upon the occasion of any subsequent breach.
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MISCELLANEOUS PROVISIONS
1.64 Binding obligations
The duties and obligations imposed and the benefits conferred by this
Agreement are to be binding upon and to inure to the parties and to their
respective successors and permitted assigns.
1.65 Other instruments
Each party shall prepare and execute such other instruments and documents
and do such other acts and things as may be necessary or desirable to
ensure each party has such rights and interest as are contemplated for it
by this Agreement or as may be necessary or desirable to give full effect
to the provisions of this Agreement.
1.66 Whole Agreement
This Agreement combines the whole understanding of the Parties relating to
its subject matter and it supersedes and cancels any and all agreements,
understandings or commitments made by the same Parties with respect to the
same subject matter. Any purported representations, warranties or other
promises of the Parties not recorded in it are of no effect.
1.67 Amendment
The variation or waiver of a provision of this Agreement or a Party's
consent to a departure from a provision by another Party, will be
ineffective unless in writing executed by the Parties. The requirements
concerning variation or waiver apply to this clause itself.
1.68 No waiver
No waiver by either party of any breach (or a succession of breaches) of
any one or more of the provisions of this Agreement by the other party
shall be deemed to be a waiver of any subsequent breach of the same or any
other provision.
1.69 Illegality
If any provision of this Agreement shall be construed so as to be illegal
or invalid the legality or the validity of any other provision shall not be
affected thereby. Any legal or invalid provisions shall be sever able and
all other provisions shall remain in full force and effect.
1.70 Notices
A party notifying or giving notice under this Agreement must notify
(a) in writing;
(b) addressed to the address of the recipients specified below or as
altered by notice given in accordance with this clause; and
(c) delivered by hand, facsimile, registered mail or post.
A notice shall be deemed received:
(a) if hand delivered on the date of delivery
(b) if sent by facsimile on generation of an acknowledgment that the
transmission has been successfully completed,
(c) if sent by registered mail on acknowledgment of receipt by or on
behalf of the recipient
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(d) if dispatched by post, after 5 days including day of posting.
If a notice is received on a day other than a business day or after 4.30 pm
on a business day, then it is deemed received on the next business day.
Notice addresses
ANUTECH Pty Ltd Praxis Pharmaceuticals Inc.
GPO Box 4 GPO Box 1978
CANBERRA ACT 2601 Canberra ACT 2601
Or
ANUTECH Court Suite 600, 595 Hornby Street,
Cnr. Barry Drive and Daley Road Vancouver, BC, Canada
ACTION ACT 2601
Facsimile 02 6257 1433 Facsimile: 1 (604)646 5649
1.71 Force Majeure
No party shall be responsible or liable to any other party for, nor shall
this Agreement be terminated as a result of any party's failure to perform
any of its obligations hereunder, with the exception of payment of monies
due and owing, if such failure results from circumstances beyond the
control of such party, including, without limitation, requisition by any
government authority or the effect of any statute, ordinance or
governmental order or regulations, wars, strikes, lockouts, riots, epidemic
disease, act of god, civil commotion, fire, earthquake, storm, failure of
public utilities, common carriers or suppliers, or any other circumstances,
whether or not similar to the above causes. The parties shall use
reasonable efforts to avoid or remove any such causes and shall resume
performance under this Agreement as soon as feasible Whenever such cause is
removed; provided however that the foregoing shall not be construed to
require a party to settle any labor dispute or to commence, continue or
settle any litigation.
If after six months the force majeure continues, the Parties must meet in
good faith to discuss the situation and endeavor to achieve a mutually
satisfactory resolution of the problem.
1.72 Dispute resolution
If a dispute arises between the Parties out of or relating to this
Agreement (the "Dispute"), any Party seeking to resolve the Dispute must do
so strictly in accordance with the provisions of this clause.
Compliance with this clause is a condition precedent to seeking relief in
any court or tribunal in respect of the Dispute.
A Party seeking to resolve the Dispute must notify the existence and nature
of the Dispute to the other Party ("the Notification"). Upon receipt of a
Notification the Parties must refer resolution of the Dispute to their
respective chief executive officers or their nominees.
If the Dispute has not been resolved within thirty (30) days of receipt of
the Notification then any Party may refer the Dispute to the Australian
Commercial Dispute Centre Limited ("ACDC") for mediation. The parties must
negotiate in good faith, and in accordance with the Conciliation Rules of
ACDC, to resolve the Dispute.
If the Dispute has not been resolved within sixty (60) days of referral to
ACDC either Party is free to initiate proceedings in a court.
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1.73 Stamp Duty
All stamp duty levied upon this agreement shall be paid by Praxis
Pharmaceuticals.
1.74 Costs
Each Party agrees to bear its own legal and other costs and expenses in
connection with the preparation and execution of this Agreement and of
other related documentation.
1.75 Governing law
This Agreement shall be construed in accordance with and governed by the
laws of the Australian Capital Territory, Australia, and the parties hereby
submit themselves to the jurisdiction of the courts in and of that
Territory.
TERMINATION OF LICENCE AND RESEARCH & DEVELOPMENT AGREEMENT
1.76 The parties entered into a License and Research & Development Agreement
dated 27 October 1997 and an Addendum to the License and Research &
Development Agreement dated 8 October 1998 ("License and R&D Agreement").
1.77 The parties have agreed to end the License and R&D Agreement by mutual
agreement with effect from the Commencement Date of this Agreement.
1.78 With effect from the Commencement Date of this Agreement:
(a) the parties agree that the License and R&D Agreement is terminated;
and
(b) each party permanently releases each other party from any actions,
suits, causes of action, arbitration, debts, dues, costs, claims,
demands, verdicts and judgments, either at law or in equity or arising
under statute ("Claims") which but for their entry into this
termination, they or any of them have or may have against each other
arising from or in connection with the early termination of the
License and R&D Agreement.
1.79 Each party must:
(a) use its best efforts to do all things necessary or desirable to give
full effect to this termination; and
(b) refrain from doing anything that might hinder performance of this
termination.
IN WITNESS: this Agreement shall be duly executed and shall commence from
the Commencement Date:-
(The COMMON SEAL of
PRAXIS PHARMACCEUTICALS
PHARMACEUTICALS INC
was hereunto affixed in accordance
with its constitution in the presence of: )
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/S/ BRETT CHARLTON /S/ W.B. COWDEN
Director/Secretary Director
BRETT CHARLTON W.B. COWDEN
Name Name
(The COMMON SEAL of
ANUTECH PTY LIMITED
was hereunto affixed in accordance
with its constitution in the presence of: )
/S/ T. SARTESCHI /S/ JOHN D. BELL
Director/Secretary Director
T. SARTESCHI JOHN D. BELL
COMPANY SECRETARY MANAGING DIRECTOR
Name Name
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