Exhibit 10.4


 


	
  AERES Biomedical Ltd.

  	
  Lpath
  Therapeutics, Inc.

  



 


****CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT****


 


RESEARCH COLLABORATION AGREEMENT


 


This Research Collaboration Agreement is  (“Agreement”) entered into and effective this
day of                          August,
2005 (hereinafter the “Effective Date”), by and between


 


(1)            AERES Biomedical Limited, whose principal place of business is
situated at 1-3 Burtonhole Lane, Mill Hill, London NW7 1AD, England
(hereinafter also called “AERES”);


 


and:


 


(2)            Lpath Therapeutics, Inc., whose principal place of business is
located at 9191 Towne Center Dr., Suite 310, San Diego, CA 92122  U.S.A. (hereinafter also called “LPT”);


 


Recitals


 


WHEREAS, LPT has identified, developed and has know-how and
proprietary rights to certain monoclonal antibodies, including a murine
monoclonal antibody against Sphingosine-1-phosphate, designated by LPT as SphingomabTM
; and


 


WHEREAS, LPT has research expertise, know-how, and proprietary
rights relating to discovery research leading toward new therapeutic products
based on LPT monoclonal antibodies; and


 


WHEREAS, AERES has genetic engineering expertise to modify
murine antibodies wherein certain regions of the immunoglobulin are changed
from mouse to human, which modification is sometimes, in one aspect, referred
to as “humanizing” or “humanization”; and


 


WHEREAS, AERES has developed processes and vectors to humanize
murine antibodies and has successfully humanized antibodies for third parties
and has the right to grant licenses to third parties under the Licensed Patent
Rights as hereinafter defined; and


 


WHEREAS, AERES is an Affiliate of Medical Research Council
Technology whose principal office is situated at 20 Park Crescent, London W1N
4AL (hereinafter also called “MRCT”); and


 


WHEREAS, LPT is desirous of modifying its SphingomabTM antibody
and of having AERES perform such modification, and AERES is desirous of
carrying out such modification;


 


NOW,
THEREFORE, in
consideration of the foregoing promises and of the mutual covenants and
obligations hereinafter set forth, the parties agree as follows:


 





















 


ARTICLE I - Definitions


 


As used in this Agreement, the following terms when
used with initial capital letters, shall have the following meanings, the
singular shall include the plural and vice versa:


 


1.1       “AERES Invention” shall mean any
discovery or invention to the extent (i) made or conceived or reduced to
practice by or on behalf of AERES in the performance of the humanization of LPT’s
SphingomabTM antibody under this Agreement, whether or not patentable, and (ii) covering
only generally applicable methods or techniques for humanizing antibody
proteins or for constructing a vector or reagent used to humanize or express an
antibody.


 


1.2       “AERES IP” shall mean (i) any AERES
Invention and (ii) all patented and non-patented proprietary technology
and information, in any form whatsoever, that is: (a) necessary or useful
for making and using the Licensed Products, without regard to whether or not
the technology or information is patentable; (b) owned, controlled, or
developed by AERES, as of the Effective Date or hereafter during the term of
this Agreement; and (c) provided by AERES to LPT hereunder, including, but
not limited to discoveries, formulae, materials, practices, methods, knowledge,
know-how, processes, trade secrets, ideas, concepts, manufacturing,
engineering, standard operating procedures, flow diagrams and charts, quality
assurance, quality control data, technical data, manufacturing technology,
research data and records, and all other confidential or proprietary technical
and business information relating to the humanization of murine antibodies,
generation of chimeric antibodies, or any gene expression vectors used in such
methods and all improvements or modifications thereto.  For purposes of clarity, AERES IP includes
AERES Inventions that satisfy (a), (b) and (c), above, while AERES IP does
not include Licensed Patent Rights as defined hereunder.


 


1.3       “Affiliate” shall mean any entity that
directly or indirectly controls, is controlled by, or is under common control
with a party, and for the purposes of this Paragraph 1.3, “control” shall mean
ownership of more than fifty percent (50%) of the voting interest, or such
lower maximum amount allowed by the law governing the ownership of said
organization.


 


1.4       “Business Day” means any day, except
Saturday and Sunday, on which commercial banking institutions are open for
business (i) in New York, U.S.A., in the case of LPT and (ii) in
London, U.K., in the case of AERES.  Any
other reference in this Agreement to “day” whether or not capitalized shall
refer to a calendar day, not a Business Day.


 


1.5       “Commercial Introduction” shall mean the
date upon which LPT or one or more Affiliates or Licensees (as defined
hereunder) first achieves Net Sales following the final issuance of all
required licenses and approvals by the United States Food and Drug
Administration (“FDA”) (or equivalent licenses and approvals in a country other
than the United States) allowing for the manufacture and sale of a Licensed
Product for human use.


 


1.6       “Commercial Sale” means, with respect to
a Licensed Product in a particular country, the sale to a third party purchaser
by LPT, its Affiliates, and/or its Licensees of Licensed Products in such
country after all Regulatory Approvals have been obtained in such


 


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country and, if Regulatory Approval is not required in such country,
any commercial sale of Licensed Products in such country.


 


1.7       “Confidential Information” means all
secret, confidential, or proprietary information or data, whether provided in
written, oral, video, computer, or other form or format, provided by one party
(“the Disclosing Party”) to the other party (the “Receiving Party”) pursuant to
this Agreement or generated pursuant to this Agreement, including, but not
limited to, information relating to the Disclosing Party’s existing or proposed
research and development efforts, patent applications, business or products,
the terms of this Agreement, and any other materials that have not been made
available by the Disclosing Party to the general public.  Notwithstanding the foregoing sentence,
Confidential Information shall not include any information or materials that:


 


(i)        were already known to the Receiving Party
(other than under obligation of confidentiality) at the time of disclosure by
the Disclosing Party, to the extent the Receiving Party has documentary
evidence to that effect;


 


(ii)       were generally available to the public or
otherwise part of the public domain at the time of its disclosure to the
Receiving Party;


 


(iii)      became generally available to the public
or otherwise part of the public domain after its disclosure or development, as
the case may be, and other than through any act or omission of a party in
breach of such party’s confidentiality obligations under this Agreement;


 


(iv)      were subsequently lawfully disclosed to
the Receiving Party by a third party who had no obligation to the Disclosing
Party not to disclose such information to others;


 


(v)       were independently discovered or
developed by or on behalf of the Receiving Party without the use of the
Disclosing Party’s Confidential Information, to the extent the Receiving Party
has documentary evidence to that effect;


 


(vi)      is approved for release by the Disclosing
Party in writing; or


 


(vii)     were required by law to be disclosed.


 


1.8       “Designated Antibody” shall mean a
Humanized Antibody for which LPT seeks regulatory approval through the conduct
of human clinical trials, or a US BLA, or an equivalent regulatory approval in
any country.


 


1.9       “Humanized Antibody” shall mean an
antibody that binds to Sphingosine-1-phosphate and is made by AERES under this
Agreement, the antibody comprising murine complementarity determining regions (‘CDRs’
as identified in Exhibit A 1. Winter Patent”) derived from SphingomabTM
together with human framework regions, and any modifications thereof.


 


1.10     “Licensed Patent Rights” shall mean the
patents and patent applications licensed to AERES and with respect to which
AERES has the right to authorize and grant sublicenses, as


 


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detailed in Exhibit A hereto, including any divisions, renewals,
continuations, extensions, reexaminations, reissues, or continuations-in-part
(to the extent that any such continuation-in-part claims subject matter as
disclosed in the patents and applications listed in Exhibit A) thereof, as
well as any patent that issues from any of the foregoing.


 


1.11     “Licensed Product” shall mean a product
comprising a Humanized Antibody, the manufacture, use, offer for sale, sale, or
importation of which by an unlicensed third party would infringe one or more
Valid Claims of the Licensed Patent Rights, or which incorporates AERES IP or
AERES Inventions.  The term “Licensed
Product” does not include chimeric antibodies or murine antibodies.


 


1.12     “Licensee” shall mean any organization
licensed by LPT to manufacture or sell Licensed Products.  For clarity, the term “Licensee” shall
include any Sublicensee of LPT under the Licensed Patent Rights as herein
defined.


 


1.13     “LPT Invention” shall mean any discovery
or invention to the extent (i) made or conceived or reduced to practice by
or on behalf of AERES, whether alone or jointly with LPT, in the performance of
the humanization of LPT’s SphingomabTM antibody, whether or not patentable, and (ii) not
an AERES Invention.  For the purpose of
clarity, LPT Inventions shall include without limitation all of the DNA
sequences encoding Humanised Antibody genes included in the AERES Deliverables
as defined in Paragraph 2.2 but otherwise excluding DNA sequences encoding for
AERES’ proprietary expression vectors. .


 


1.14     “LPT IP” shall mean any and all patented
and non-patented proprietary technology and information, in any form
whatsoever, that is necessary or useful for making and using Humanized
Antibodies, without regard to whether or not the technology or information is
patentable, which is (i) owned with the right to disclose or otherwise
controlled by LPT as of the Effective Date or hereafter during the term of this
Agreement and is first disclosed by LPT to AERES, or (ii) is assigned, or
is obliged hereunder to be assigned, to LPT by AERES, including, without
limitation, processes, techniques, methods, products, transformed cells, other
biological materials and compositions which are necessary or useful for making
or using the Humanized Antibodies.  LPT
IP shall not include AERES IP or AERES Inventions.


 


1.15     “Net Sales” shall mean the amount
received in respect of gross sales by LPT, its Affiliates and/or its Licensees
from the sale of Licensed Products to independent third parties, less the
following amounts: (i) discounts or rebates actually allowed or granted; (ii) credits
or allowances actually granted on rejections or returns (not exceeding the
original billing), including for recalls or damaged goods; (iii) outbound
freight, postage, shipping, and insurance charges prepaid or allowed; (iv) sales,
tariff duties, surcharges, and/or use or excise taxes, levies, or other similar
governmental charges included in the invoiced amount; and (v) any similar
and customary deductions taken in accordance with U.S. generally accepted
accounting principles (GAAP) consistently applied. Provision of Licensed
Products for promotional, sampling, or educational purposes and for use in
clinical trials contemplated under this Agreement shall not be considered in
determining Net Sales, so long as no consideration (monetary or non-monetary
other than incidental) is received in exchange therefor. No allowance or deduction
shall be made for commissions or collections or overhead, by whatever name
known.


 


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1.16     “Regulatory Approval” in a country means
any and all approvals (including price and reimbursement approvals), licenses,
registrations, or authorization of any governmental agency, necessary for the
manufacture, use, storage, import, transport, and/or sale of a Licensed Product
in such country.


 


1.17     “Research Collaboration” means the
research activities undertaken by the parties in accordance with the Research
Plan as set forth in Annex A hereto.


 


1.18     “Sublicense”, “Sublicense Agreement” and “Sublicensee”
shall mean, and include, without limitation, any relationship in which LPT
grants a third party a license, option, right of first refusal, or other such
right under any of the licenses granted by AERES to LPT under this Agreement
for the purpose of allowing such third party to develop and commercialize one
or more Licensed Products.


 


1.19     “Valid Claim” shall mean a claim in any
unexpired issued patent within the Licensed Patent Rights or AERES IP which has
not been held invalid by a non-appealed or unappealable decision by a court or
other appropriate body of competent jurisdiction.


 


ARTICLE II - Research
Collaboration


 


2.1       Upon the execution of this Agreement and
the receipt from LPT of the necessary materials and information as specified in
Paragraph 2.2, below, AERES will undertake the humanization of LPT’s SphingomabTM
antibody in accordance with the Research set forth in Annex A hereto.  The Research Plan may be amended as mutually
agreed to by the parties.  The parties
agree to use commercially reasonable efforts to perform their respective
responsibilities under the Research Collaboration.


 


2.2       Under the Research Plan, AERES shall
provide the following biological materials, data, information, and reports to
LPT (collectively, the “AERES Deliverables”):


 


(i)        [Gene expression vector
inserts incorporating SphingomabTM heavy chain and light chain
CDRs, one or more (if more than one is made by AERES) of each of (a) and (b) below:]


 


(a)        [SphingomabTM human heavy chain framework region gene insert (but not
the heavy chain expression vector) made by replacing the original human CDRs in
the human heavy chain framework region with the Sphingomab mouse CDRs;] and


 


(b)        [SphingomabTM human light chain framework region gene insert (but not
the light chain expression vector) made by replacing the original human CDRs in
the human light chain framework region with the Sphingomab mouse CDRs;]


 


(ii)       All data and reports relevant to the
humanization of SphingomabTM including, but not limited to data on antigen
binding and expression levels.


 


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(iii)      Final written reports setting forth in
reasonable detail the results of AERES’s humanisation of LPT antibody
SphingomabTM including, without limitation, the structural and synthesis
information (including, but not limited to, the DNA and amino acid sequence
information) for all Humanised Antibodies.


 


2.3       After the Effective Date, LPT shall, at
its expense and without charge to AERES, deliver to AERES at least one cell
line that produces LPT’s SphingomabTM antibody and such LPT know-how including
related technical information as sufficient (in the reasonable judgment of both
parties) to enable AERES to carry out its humanization obligations under this
Agreement (the “LPT Deliverables”).   The
LPT Deliverables shall be deemed to be Confidential Information of LPT;
provided, however, that the obligations hereunder of non-use and non-disclosure
related to any LPT Deliverable shall continue for so long as such LPT
Deliverable remains Confidential Information. 
The transfer from LPT to AERES of the cell line(s) producing LPT’s
SphingomabTM antibody is solely for the purpose of AERES conducting its
humanization obligations under this Agreement, and for no other purpose, and
AERES shall hold the LPT Deliverables in strict confidence.  AERES shall maintain within its sole
possession and control the cell lines producing LPT’s SphingomabTM antibody,
SphingomabTM antibody expressed from such cell line(s), and any vectors
containing LPT’s SphingomabTM antibody. 
Notwithstanding anything to the contrary herein, except for the purpose
of carrying out the activities specified in the Research Plan, AERES will not
for its own account or for the benefit of a third party propagate, culture,
express, produce, distribute, transfer, or sell any LPT Deliverable or any
product or material derived therefrom for any purpose whatsoever without the
prior written consent of LPT.


 


2.4       AERES shall maintain an appropriate,
secure work site for conducting its activities under the Research Plan.  AERES shall cause its research teams
performing the activities under the Research Plan to keep detailed
contemporaneous records and data in connection with the Research Plan, and to
prepare reports detailing work to date, which shall be furnished to LPT in a
timely manner upon completion of each research milestone specified in the
Research Plan or as otherwise agreed between the parties.  AERES shall permit duly authorized employees
of LPT to have access to AERES’s laboratories from time to time at mutually
agreeable times and upon reasonable notice. 
Any AERES personnel performing work pursuant to the Research Plan shall
be obligated under his/her terms and conditions of employment to (i) assign
his/her entire worldwide right, title, and interest in and to any discovery,
invention, improvement, or technological advance, including any AERES
Invention, and any associated intellectual property, including any AERES IP, to
AERES and (ii) comply at all times with the confidentiality obligations
imposed on AERES under this Agreement.


 


2.5       Upon completion of its research
activities hereunder or the earlier termination thereof in accordance with the
terms hereof, AERES shall provide to LPT samples of all Humanised Antibodies
and cell lines expressing the same, as agreed to by the parties, and AERES
shall issue a final written report to LPT. 
The final written report shall set forth in reasonable detail the
results of AERES’ humanisation of LPT antibody [XYZ] including, without
limitation, the structural and synthesis information (including, but not
limited to, the DNA and amino acid sequence information) for all Humanised
Antibodies.


 


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2.6       All worldwide right, title, and interest
in Humanised Antibodies, LPT Inventions and LPT IP shall belong solely to LPT.
At the request of LPT, AERES shall execute such documents as LPT may reasonably
request in order to reflect LPT’s ownership of Humanized Antibodies, LPT
Inventions and LPT IP , and to cooperate with and assist LPT in all material
respects with regard to LPT’s efforts to register LPT’s rights in and to the
Humanised Antibodies, LPT Inventions and LPT IP.  AERES shall maintain, within its sole
possession and control, samples of Humanized Antibodies, samples of any vectors
containing Humanized Antibodies, and samples of cell lines producing Humanized
Antibodies, and AERES shall not distribute, transfer, or sell any such
Humanized Antibodies, vectors, or cell lines (or any AERES Deliverable) to any
third party for any purpose whatsoever without the prior written consent of
LPT.


 


2.7       Notwithstanding anything to the contrary
herein, AERES retains all worldwide right, title, and interest in the Licensed
Patent Rights and AERES IP used or developed in the performance of AERES’s
obligations under this Agreement.  LPT is
granted (under Paragraph 4.1, below) a limited license to use any vectors and
sequences included in the AERES IP only insofar as such vectors and sequences
are used in conjunction with the expression of LPT’s SphingomabTM antibody and
Humanized Antibodies derived therefrom by AERES subject to the terms of this
Agreement.  AERES shall not, except in
the event of termination of this Agreement by AERES pursuant to Paragraphs 8.4,
8.5 or 8.6 hereof, exercise any of its proprietary rights arising hereunder or
otherwise restrict LPT from commercializing any Humanized Antibody produced
hereunder in any manner.  All AERES
Inventions shall be owned by AERES and shall be deemed to be included in the
AERES IP and the Licensed Patent Rights, as applicable.


 


ARTICLE III -
Payments for the Research Collaboration


 


3.1       LPT shall pay to AERES for undertaking to
perform the humanization work pursuant to the Research Collaboration the sum of
[***                    ]
United Kingdom Pounds [***                ]
(the “Initial Payment”).  The Initial
Payment is non-refundable and shall be made within thirty (30) days after the
Effective Date.


 


3.2       LPT will pay AERES in United Kingdom
Pounds for its research efforts carried out in accordance with the Research
Plan the research milestone payments (the “Research Milestone Payments”) as set
forth in the cost schedule attached as Annex B within thirty (30) days
following the documented completion of, and delivery by AERES of the AERES
Deliverables and LPT’s receipt of an invoice from AERES for, each research
milestone specified in Annex A (whether the applicable milestone is achieved by
AERES or any of its Affiliates or consultants). 
The Initial Payment and the Research Milestone Payments shall be paid by
wire transfer in United Kingdom Pounds (UK£) within thirty (30) days of the
date of invoice by wire transfer to the account of AERES Biomedical Ltd. at [***
                                                        ],
or such other bank and/or account as may be notified to LPT by AERES from time
to time, and the transaction identified as “Agreement dated [Effective Date]
between AERES Biomedical Ltd. and LPT”.


 










***CONFIDENTIAL PORTIONS OF
THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.


 


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3.3       In the event that LPT does not agree that
any one of the Research Milestones has been met, LPT shall notify AERES within
ten (10) Business Days from the date of delivery of the materials or
written report required by said Milestone. 
LPT shall be deemed to have accepted a particular AERES Deliverable
unless it notifies AERES of any defect or non-conformity within ten (10) Business
Days after it receives the particular AERES Deliverable.   On receipt of any such notification, LPT and
AERES will each use best efforts to reach agreement on the clarification and
redefinition of the Milestone(s) and (if applicable) corresponding cost schedule.  In the event of a dispute arising under this
Paragraph 3.3, LPT shall pay the disputed amount to AERES and payment so made
will be without prejudice to either party’s right to seek resolution of the
dispute under Paragraph 11.13, below.


 


3.4       Except as otherwise expressly provided
herein or agreed to by the parties in writing, all payments hereunder shall be
made free and clear of and without deduction or deferment in respect of any
demand, set-off, counterclaim, or other dispute, and so far as is legally
possible, such payment shall be made free and clear of any taxes payable on
said payments imposed by or under the authority of government or any public
authority, and, in particular, but without limitation where any sums due to be
paid to AERES hereunder are subject to any withholding or similar tax, LPT
shall pay such additional amount as shall be required to ensure that the net
amount received by AERES hereunder will equal the full amount which would have
been due to AERES hereunder had no such tax been imposed or required by law to
be withheld, unless said tax is withheld for the benefit of AERES.  LPT and, without prejudice to the foregoing,
AERES shall use their best endeavours to do all such lawful acts and to sign
all such lawful documents as will enable LPT to take advantage of any
applicable legal provision or any double taxation treaty with the object of
paying the sums due AERES without imposing or withholding any tax. However, as
of the Effective Date, sales made outside the EU do not attract any UK sales
tax (i.e., they are classified as “VAT Exempt” in respect of UK Value Added
Tax) while, aside from UK Corporation Tax payable by AERES which, for the sake
of clarity, is not rechargeable to LPT under this Paragraph 3.4, AERES is not
aware of any prospective change to the VAT Exempt status or any withholding or
other tax presently payable on sales to the USA.


 


ARTICLE IV - License
Grant and Payments


 


4.1       AERES hereby grants to LPT (i) a
non-exclusive worldwide sublicense, with the right to grant further
Sublicenses, under the Licensed Patent Rights to make, have made, use, import,
offer for sale, and/or sell Licensed Products; and (ii) an exclusive
worldwide license, with the right to grant Sublicenses, under the AERES IP to
make, have made, use, import, offer for sale, and/or sell Licensed Products.


 


4.2       Granting of Sublicenses


 


(i)        LPT, without being required to obtain the
consent of AERES, shall be entitled to grant further non-exclusive Sublicenses
to its Licensees to make, have made, use, import, offer for sale, and/or sell
Licensed Products.


 


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(ii)       LPT undertakes upon the execution of any
Sublicense Agreement under sub-clause 4.1 (i) above promptly to advise
AERES of the identity of the Sublicensee and nature of the rights so licensed.


 


4.3       The following arrangements shall not
require the prior consent of AERES:


 


(i)        The appointment of any person as agent or
distributor to market, sell, use, or otherwise dispose of the Products in any
part of the world.


 


(ii)       The subcontracting of manufacture of
Products by Licensee.


 


4.4       The following arrangement shall require
the prior written consent of AERES:


 


(i)        LPT may authorize a Licensee to grant
further sublicenses under the Licensed Patent Rights in respect of Licensed
Products only with the prior written consent of AERES such consent shall not
unreasonably be withheld but shall be subject to said Licensee also obtaining
the consent of MRC.


 


4.5       Regulatory Milestone Payments. 
In consideration of the rights, privileges, and licenses granted herein,
LPT shall pay to AERES in United States Dollars (US Dollars) each of the
following regulatory milestone payments in respect of each Designated Antibody
(“Regulatory Milestone Payments”):


 


(i)        AERES will receive either: (a) [***                        ]
of LPT’s negotiated Regulatory Milestone Payment (if any) receivable from a
development partner or Licensee, on first filing of a US IND or equivalent in
any country; or [***                            ]
US Dollars [***                                  ];
or: (b) [***                            ]
US Dollars [***                              ],
whichever is the greater of (a) or (b);


 


(ii)       AERES will receive either: (a) [***                          ]
of LPT’s negotiated Regulatory Milestone Payment(s) (if any) receivable from a
development partner or Licensee, subsequent to filing of a US IND or equivalent
in any country and up to or on initiation of the first Phase II clinical trial
in any country; or [***                                            ]
US Dollars [***                          ];
or: (b) [***                                                      ]
US Dollars [***                            ],
whichever is the greater of (a) or (b);


 


(iii)      AERES will receive either: (a) [***                                                        ]
of LPT’s negotiated Regulatory Milestone Payment(s) (if any) receivable from a
development partner or Licensee, subsequent to the filing of a US BLA or
equivalent in any country and up to or on initiation of the first Phase III
clinical trial in any country; or [***                                        ]
US Dollars [***                                                    ]
or: (b) [***                                ]
US Dollars [***                                            ],
whichever is the greater of (a) or (b);


 










***CONFIDENTIAL PORTIONS OF
THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.


 


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(iv)      AERES will receive either: (a) [***                                    ]
of LPTs’ negotiated Regulatory Milestone Payment (if any) from a development
partner or Licensee on the first approval of a US BLA or equivalent in any
country; or [***                               ] US Dollars
[***                                    ],
or: (b) [***                                                        ]
US Dollars [***                                      ],
whichever is the greater of (a) or (b).


 


Each of the above Regulatory Milestone Payments shall
become due and payable forthwith upon the corresponding payment becoming due
and payable to LPT by a development partner or Licensee or, where no such
payment is payable to LPT, on LPT first receiving notification from the
relevant regulatory authority of the granting of the Regulatory Approval upon
which it is contingent, as specified above in this Clause 4.2.  It is understood and agreed that each of the
above Regulatory Milestone Payments shall be due only one time with respect to
any Designated Antibody.


 


4.6       Royalties.  In
consideration of the rights, privileges and license granted herein, LPT shall
pay to AERES on a country-by-country, Licensed Product-by-Licensed Product
basis an earned royalty of [***                       ] of the Net Sales of Licensed Products, provided that there
is at least one Valid Claim within the Licensed Patent Rights in such country
that covers the Licensed Product; if not, the earned royalty shall be to [***                        ]
of Net Sales in such country. All royalties payable by LPT to AERES shall be
paid on a country-by-country basis from the date of the first Commercial Sale
by LPT, its Affiliates, and/or Licensees of each Licensed Product in each
country until the date which is the later of: (i) the expiration of the
last to expire Valid Claim within the Licensed Patent Rights, a which claim
covers the manufacture, use, or sale of the applicable Licensed Product in said
country; or (ii) [***          ]
years after the first Commercial Sale of the applicable Licensed Product in
said country if only covered by AERES IP (the “Royalty Period”); provided,
however, during any portion of the Royalty Period that there is no Valid
Claim in such country, the royalty rate shall be reduced to [***                  ].  On a country-by-country basis and on a
Licensed Product-by-Licensed Product basis, upon the scheduled expiration of
the obligation to pay royalties with respect to the sale of such Licensed
Product in such country, LPT shall have a fully paid-up, royalty free,
perpetual and irrevocable license, with the right to grant Sublicenses, under
the AERES IP to make, have made, use, import, offer for sale and/or sell
Licensed Products in said country.


 


4.7       Limitations. 
The following limitations shall apply with respect to royalties payable
by LPT to AERES pursuant Paragraph 4.3, above:


 


(i)        Sales between LPT and its Affliliates
and/or Licensees shall not be subject to a royalty, but in such cases the
royalty specified in Paragraph 4.3, above, shall be calculated upon LPT’s, its
Affiliates and/or Licensees’ Net Sales to independent third parties in arm’s-length
transactions. An agreement between LPT and an Affiliate shall not be a
sublicSublicense under the Licensed Patent Rights. The obligation to pay a
royalty to AERES under this Article is imposed only


 










***CONFIDENTIAL PORTIONS OF
THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.


 


10





















 


once with respect to the same unit of Licensed Product
regardless of the number of Valid Claims concerning the same.


 


(i)    [***].  In the event that [***] pays [***] as
consideration for [***] or [***] where, [***], under Paragraph [***] will be
(i) [***] or (ii) where the [***] is [***] shall apply country by country only
where and to the extent that such [***].


 


(ii)   Notwithstanding
anything to the contrary herein, it is understood and agreed that the [***]
that is equal to [***] as specified in the following formula:


 


[***]


 


[Where [***]
is the [***] or, if [***] generally shall apply.]


 


4.8       LPT agrees that any Sublicenses under the
Licensed Patent Rights granted by it shall provide that the obligations owed by
LPT to AERES under Articles IV, V, VII, VIII and X of this Agreement (save for
Paragraphs 8.9 and 8.10, which apply only to LPT) shall be reflected in the
wording of the Sublicense with obligations no less onerous for the Sublicensee
than those set forth in this Agreement with respect to LPT which LPT shall use
its best endeavours to enforce to the benefit of AERES in the event of any
breach thereof. In particular LPT shall ensure that AERES can monitor and
enforce payment of all royalties due to it in consequence of this Agreement.


 


4.9       If, during the Term (defined in Paragraph
7.1) of this agreement, MRC grants a license to a third party to the patents
and patent applications set forth in Exhibit A (each a “Third-Party
License Agreement”) at a lower royalty rate than is payable by AERES to MRC
under the terms of the license for Winter Patents and Sub-license for Boss
Patents, dated X, by and between the MRC (as licensor) and AERES (as licensee),
or under another substantial term more favorable to such third party than the
corresponding term of this Agreement, then at LPT’s


 










***CONFIDENTIAL PORTIONS OF
THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.


 


11





















 


sole option, the parties hereto shall amend this Agreement so that the
Royalty rate payable hereunder, or other corresponding term, is the same as the
royalty rate or corresponding term set forth in the Third-Party License
Agreement; provided, however, that if LPT opts to amend this Agreement, and if
such Third-Party License Agreement imposes upon the licensee any other
obligation (including any restriction as to product or territory) which is
associated with the licensee’s operations as licensee and which is more onerous
than any obligation of corresponding nature on the part of Licensee under this
Agreement, then this Agreement shall be amended to require that LPT shall take
on such obligation in order to obtain the amendment of this Agreement to
include the more favorable term.


 


4.10     LPT agrees to forward to AERES in a
timely manner a copy of any and all fully executed agreements entered into with
any Licensee that constitute a Sublicense under this Agreement, and further to
forward to AERES annually a copy of such reports (or the relevant portions
thereof) received by LPT from its Licensees during the preceding twelve (12)
month period under the Sublicenses as shall be pertinent to a royalty
accounting under any such Sublicense agreements.


 


4.11     The above Regulatory Milestone Payments
and royalties due shall be paid by LPT to AERES in US Dollars (USD) by wire
transfer to the account of AERES at [***                                                                                                                    ],
or such other bank and/or account as may be notified to LPT by AERES from time
to time.


 


4.12     If a sum payable under this Agreement
shall be overdue for thirty (30) days, LPT shall pay AERES interest on the sum
outstanding at the rate of [***                      ]
per annum above the base rate of the Royal Bank of Scotland plc applying and
calculated on a daily basis from the date that payment became due in respect of
said sum; provided however, that if such interest rate shall be in excess of
that allowed by applicable law, then the highest rate permitted by law shall
apply. The payment of such interest shall not foreclose AERES from exercising
any other rights it may have as a consequence of the lateness of any payment.


 


4.13     The aggregate amount of the Net Sales
used for computing the amounts payable hereunder shall be computed in U.S.
Dollars, and all royalty payments shall be made in U.S. Dollars.  For purposes of determining the amount of
payments due, the amount of the Net Sales of the Licensed Products in any
foreign currency shall be computed by converting such amounts into U.S. Dollars
at the prevailing commercial rate of exchange for purchasing same quoted in The
Wall Street Journal, New York edition, on the last Business Day of the period
with respect to which such payment is payable hereunder.


 


ARTICLE V - Reports
and Records


 


5.1       LPT shall keep full, true and accurate
books of account containing all particulars that may be necessary for the purpose
of showing the amounts payable to AERES pursuant to Paragraphs 4.5, 4.6 and 4.7
above, and the accuracy of the reports made to AERES hereunder.


 










***CONFIDENTIAL PORTIONS OF
THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT.


 


12





















 


Such records shall be retained by LPT for five (5) years following
the end of the calendar year to which they pertain.   Upon thirty (30) days advance notice to LPT,
AERES shall have the right to direct an independent, certified public
accountant selected by AERES and reasonably acceptable to LPT to inspect LPT’s
books of account no more frequently than once per year during LPT’s normal
business hours for the sole purpose of verifying the accuracy of the reports
made to AERES pursuant to Paragraph 5.2, below. AERES shall be responsible for
the costs of any such inspection, except in the event that the results of the
inspection reveal a discrepancy to be corrected in AERES’s favour of [***                          ]
or more for the period under inspection, then the entire costs of such
inspection shall be paid by LPT.  Any
such discrepancies will be promptly corrected by a payment or refund, as
appropriate.


 


5.2       LPT, within ninety (90) days after June 30
and December 31 of each year after Commercial Introduction, shall deliver
to AERES true and accurate reports, giving such particulars of the business
conducted by LPT, its Affiliates and Licensees during the preceding half year
as shall be pertinent to a royalty accounting hereunder.  These reports shall include at least the
following:


 


(a)                        number of Licensed Products manufactured and sold;


 


(b)                       total billings for Licensed Products sold on a country-by-country basis;


 


(c)                        deductions applicable as provided in Paragraph 1.15, above;


 


(d)                       the total royalties due;


 


(e)                        the names and addresses of all Affiliates and Licensees of LPT under
this Agreement.


 


5.3       With each such report submitted, LPT
shall pay to AERES the royalties due and payable under this Agreement. If no
royalties shall be due, LPT shall so report.


 


ARTICLE VI - Warranties
and Representations


 


6.1       As of the Effective Date, each of LPT and
AERES hereby represents and warrants to the other party hereto as follows:


 


(i)        it is a corporation or entity duly
organized and validly existing under the laws of the state, country or other
jurisdiction of its incorporation or formation;


 


(ii)       it has the power and authority to execute
and deliver this Agreement and to perform its obligations hereunder;


 










***CONFIDENTIAL PORTIONS OF
THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.


 


13





















 


(iii)      the execution, delivery, and performance
by such party of this Agreement and its compliance with the terms and
provisions hereof does not and will not conflict with or result in a breach of
any terms and provisions of or constitute a default under (a) a loan agreement,
guaranty, financing agreement, agreement affecting a product, or other
agreement or instrument binding or affecting it or its property, (b) the
provisions of its charter or operative documents or bylaws, or (c) any
order, writ, injunction, or decree of any court or governmental authority
entered against it or by which any of its property is bound;


 


(iv)      it has the full right and authority to
enter into this Agreement, and that it is not aware of any impediment that
would inhibit its ability to perform its obligations hereunder and comply with
the terms and conditions imposed on it by this Agreement; and


 


(v)       it has the full right, power, and
authority to grant all of the rights, including all right title and interest in
the licenses, granted to the other party under this Agreement.


 


6.2       AERES warrants and represents that, to
its knowledge, there are no outstanding claims against AERES or encumbrances of
AERES that would prevent LPT from making, using or selling Licensed Products.
Notwithstanding the foregoing, LPT acknowledges that it may require licenses to
third party patents not owned or controlled by AERES in addition to the rights
granted under this Agreement.  For the
avoidance of doubt, LPT hereby accepts and agrees that it has the sole responsibility
to pursue and enter into any third party licenses that may be necessary for
this purpose.


 


6.3       Except as otherwise expressly set forth in Paragraphs
6.1 and 6.2, above, AERES makes no representation and extend no warranty of any
kind, either express or implied, in respect of Humanized Antibodies or any
information or materials provided to LPT hereunder, including, but not limited
to, warranties of merchantability, fitness for a particular purpose, and
validity of Licensed Patent Rights claims, issued or pending, AND ALL SUCH WARRANTIES ARE EXPRESSLY DISCLAIMED.


 


6.4       NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
AGREEMENT, NO PARTY SHALL BE LIABLE TO ANOTHER PARTY BY REASON OF ANY
REPRESENTATION OR WARRANTY, CONDITION, OR OTHER TERM OR ANY DUTY OF COMMON LAW,
OR, UNDER THE EXPRESS TERMS OF THIS AGREEMENT, FOR ANY CONSEQUENTIAL, SPECIAL,
OR INCIDENTAL OR PUNITIVE LOSS OR DAMAGE (WHETHER FOR LOSS OF CURRENT OR FUTURE
PROFITS, LOSS OF ENTERPRISE VALUE, OR OTHERWISE), AND WHETHER OCCASIONED BY THE
NEGLIGENCE OF THE RESPECTIVE PARTIES, THEIR EMPLOYEES, OR AGENTS OR OTHERWISE.


 


6.5       Neither party shall be liable for failure or delay in
performing any of its obligations hereunder, excepting any payment obligations,
to the extent such failure or delay is occasioned by compliance with any
governmental regulation, request, or order, or by circumstances beyond the
reasonable control of the party so failing or delaying, including, without
limitation, Acts of God, war, terrorism, insurrection, fire, flood, accident,
labor strikes, work stoppage or slowdown (whether or not such labor event
is within the reasonable control of the parties), or inability to


 


14





















 


obtain raw
materials, supplies, power, or equipment necessary to enable such party to
perform its obligations hereunder.  Each
party shall (a) promptly notify the other party in writing of any such
event of force majeure, the expected duration thereof, and its anticipated
effect on the ability of such party to perform its obligations hereunder, and (b) make
reasonable efforts to remedy any such event of force majeure.


 


ARTICLE VII -
Confidential Information


 


7.1       Confidentiality.  During the Term and for a period of five (5) years
following the expiration or earlier termination hereof, each party shall
maintain in confidence Confidential Information of the other party, and shall
not disclose, use or grant to a third party the right to use any of the
Confidential Information of the other party except on a need-to-know basis to
such party’s directors, officers and employees, such party’s Affiliates’
directors, officers, and employees, and to such party’s consultants, to the
extent such disclosure is reasonably necessary in connection with such party’s
activities as expressly authorized by this Agreement; provided, however, that
no such temporal limitation shall apply to any LPT Deliverable or LPT
Invention.  To the extent that disclosure
to any person, other than an employee of a party with a pre-existing
confidentiality obligation, is authorized by this Agreement, prior to
disclosure, the party wishing to disclose any Confidential Information of the
other party shall obtain written agreement of such person to hold in confidence
and not disclose, use, or grant the use of the Confidential Information of the
other party except as expressly permitted under this Agreement.  Each party shall notify the other party
promptly in writing upon discovery of any unauthorized use or disclosure of the
other party’s Confidential Information.


 


7.2       No party shall disclose any terms or conditions of this Agreement to any
third party without the prior written consent of the other party; provided,
however, that a party, without such consent, may disclose the terms or
conditions of this Agreement: (a) on a need-to-know basis to its legal and
financial advisors who are obligated to maintain such information in
confidence, and (b) to a third party (who is obligated to maintain such
information in confidence) in connection with (i) a prospective equity
investment by such third party, which investment is reasonably expected to be
in excess of three percent (3%) of such party’s market capitalization at such
time, (ii) a merger, consolidation, or similar transaction by such party, (iii) the
sale or license of all or substantially all of the assets of such party
relating to the subject matter of this Agreement, or (iv) a proposed
Sublicensee under this Agreement. 
Notwithstanding the foregoing, prior to execution of this Agreement, the
parties have agreed upon the substance of information that can be used to
describe the terms and conditions of this transaction, and each party may
disclose such information, as modified by mutual written agreement of the
parties, without the consent of the other party.


 


7.3       The confidentiality obligations under this Article VII shall not apply
(a) to the extent that a party is required to disclose information by
applicable law, regulation, or order of a governmental agency or a court of
competent jurisdiction, or (b) to the extent necessary to allow LPT or
AERES (where possible, with adequate safeguards for confidentiality) to defend
against litigation, to prosecute patent applications, to obtain Regulatory
Approvals, or as otherwise required under this Agreement; provided, however,
except with respect to such litigation in defense, patent prosecution, and
Regulatory Approvals, or where such disclosure is required


 


15





















 


pursuant to
this Agreement, such disclosure shall not occur until the Disclosing Party
shall provide written notice thereof to the other party, consult with the other
party with respect to such disclosure, and provide the other party sufficient
opportunity to object to any such disclosure or to request that the Disclosing
Party seek confidential treatment thereof, in which event the Disclosing Party
shall use all reasonable efforts to accommodate the other party’s requests and
in any event to limit such disclosure to the maximum extent possible under the
circumstances.


 


7.4       During the Term, a party (“Publishing Party”) shall submit to the other
party (“Reviewing Party”) for review and approval all proposed academic,
scientific, and medical publications and public presentations relating to
Licensed Products for review in connection with preservation of intellectual
property rights and/or to determine whether Confidential Information should be
modified or deleted; provided, however, that after the approval of an academic,
scientific, or medical publication, and/or after an approved public
presentation has been given, then the Publishing Party shall not have to
resubmit any such information for re-approval should it be republished or
publicly disclosed in another form. 
Written copies of such proposed publications and presentations shall be
submitted to the Reviewing Party not less than fifteen (15) Business Days prior
to submission for publication or presentation and the other party shall provide
comments with respect to such publications and presentations within five (5) Business
Days following its receipt of such written copy.  Notwithstanding the foregoing, no such
publication or presentation shall be made until such publication or
presentation has been approved by the Reviewing Party’s respective patent
counsel.  LPT and AERES shall each comply
with standard academic practice regarding authorship of scientific publications
and recognition of contribution of other parties in any publications relating
to Licensed Products.


 


7.5       Each party agrees that there shall be no public announcement of the
execution of this Agreement without prior written consent of the other party,
which consent shall not be unreasonably withheld or delayed.


 


7.6       Upon termination of this Agreement, the Receiving Party shall promptly
return, or destroy at the Disclosing Party’s option, all of the Disclosing
Party’s Confidential Information, including all reproductions and copies
thereof in any medium, except that the Receiving Party may retain one copy for
its legal files for the sole purpose of complying with, and evidencing
compliance with the terms of this Agreement and any disclosure required by
applicable law, regulation, or order of a governmental agency or a court of
competent jurisdiction.


 


7.7       If either party becomes aware or has knowledge of any unauthorized use or
disclosure of the other party’s Confidential Information, it shall promptly
notify in writing the Disclosing Party of such unauthorized use or disclosure.


 


ARTICLE VIII
- Term and Termination


 


8.1       Unless earlier terminated in accordance with the
subsequent paragraphs of this Article VIII, the term of this Agreement (“Term”)
shall commence on the Effective Date and shall continue on a country-by-country
basis until the end of the Royalty Term in a given country.


 


16





















 


8.2       The Research Collaboration shall commence on the Effective Date and shall
conclude upon the
completion of the Research Collaboration, or at such time as mutually agreed by
the parties.


 


8.3       Either party may, subject to applicable law and to the
provisions set forth herein, terminate this Agreement by giving the other party
written termination notice if, at any time, the other party shall: (i) file
in any court pursuant to any statute a petition for bankruptcy or insolvency,
or for reorganization in bankruptcy, or for an arrangement or for the
appointment of a receiver, trustee or administrator of such party or of its
assets; (ii) propose a written agreement of composition or extension of
its debts; (iii) be served with an involuntary petition against it, filed
in any insolvency proceeding, and such petition shall not be dismissed within
sixty (60) days after the filing thereof; (iv) propose or be a party to
any dissolution; or (v) make an assignment for the benefit of its
creditors.


 


8.4       Should LPT fail to pay AERES the sums
payable under Article III hereof and all payments due and payable under Article IV
hereof, AERES shall have the right to terminate this Agreement sixty (60) days
from the date of giving LPT written notice to such effect, and unless LPT shall
pay AERES within the sixty (60) day period all such undisputed sums, royalties,
and interest as are due and payable hereunder, thereafter AERES may, at its
sole discretion, terminate this Agreement, effective immediately upon providing
LPT written notice to such effect, always provided that either party may refer
the matter to a court of competent jurisdiction in accordance with the
provisions of Paragraph 11.12, below .


 


8.5       Upon any material breach or default of
this Agreement by either party, other than those occurrences set out in
Paragraphs 8.3 and 8.5 hereinabove, which shall always take precedence in that
order over any material breach or default referred to in this Paragraph 8.6,
the non-breaching party shall have the right to terminate this Agreement and
the rights, privileges, and licenses granted hereunder ninety (90) days after
providing written notice of such alleged breach to the allegedly breaching
party.  If the party alleged to be in
breach does not dispute or cure such breach within such ninety (90) day period,
the non-breaching party shall thereafter have the right to terminate this
Agreement, effective immediately on providing written notice to such effect to
the allegedly breaching party.  If the
party alleged to be in breach disputes the alleged breach, it shall have the
right to submit the matter for resolution in accordance with Paragraph 11.13,
below, in which event the ninety (90) day period for curing the alleged breach
shall be stayed pending completion of any proceedings in respect thereof
pursuant to Paragraph 11.12 or 11.13, below.


 


8.6       Notwithstanding any other provision
herein, LPT may terminate this Agreement in its entirety at any time by giving
AERES three (3) month’s prior written notice and upon payment of all
amounts due to AERES through the effective date of termination.


 


8.7       For the avoidance of doubt, this Agreement may be
terminated upon mutual written consent signed by the duly authorized
representatives of both parties.


 


8.8       Upon expiration or termination of this
Agreement for any reason, nothing herein shall be construed to release either
party from any obligation that matured prior to the effective


 


17





















 


date of such expiration or termination. 
LPT and its Affiliates and Licensees may, however, after the effective
date of such termination, sell all Licensed Products, and complete Licensed
Products in the process of manufacture at the time of said termination and sell
the same, provided that LPT shall have paid AERES in full all research payments
due under Article III hereof and provided that LPT shall pay to AERES in
full the royalties due under Article IV hereof and shall submit the
reports required by Article V hereof on the sales of Licensed Products
which shall survive said termination.


 


8.9       Upon termination of this Agreement for
any reason, but not the expiration of the same, all cell lines, materials, and
information belonging to LPT, including, but not limited to LPT antibody
SphingomabTM and any Humanized Antibodies shall be returned to LPT within thirty
(30) days except that, in the event that LPT shall have failed to pay AERES in
full the payments required under Paragraphs 3.1 and 3.2 hereof, AERES reserves
the right to withhold any materials created during any stage of the Research
Plan in respect of which payment has not been made in full unless an
alternative payment has been agreed by the parties and paid in full pursuant to
the provisions for early termination set out in Paragraph 8.9, below, and
except that AERES may retain one sample of all cell lines, materials and
information, including laboratory notebooks, research reports and data, for the
purpose of complying with regulatory requirements or evidentiary requirements
in the event of litigation.


 


8.10     LPT may terminate this Agreement at any
time in respect of the Research Plan specified in Annex A on one (1) month’s
prior written notice to AERES, except that LPT shall not be permitted to
terminate the Research Collaboration prior to completion of Milestone 1 (at
Annex A), and provided that if LPT for any reason terminates this Agreement
during any subsequent stage of the Research Collaboration (i.e., before
completion of Milestone 2 or 3 and, if applicable, Milestone 4 at Annex A),
then LPT shall pay AERES for that stage forthwith when such termination by LPT
pursuant to this Paragraph 8.9 takes effect. 
AERES shall use its reasonable endeavours to mitigate and reduce the
costs borne by it in respect of the incomplete stage. Unless LPT has terminated
this Agreement as provided hereunder, LPT shall be deemed to have approved the
commencement of each stage of the Research Collaboration specified in Annex A
without intermission on the completion of the previous stage.  Said completion shall not be deemed
conditional upon LPT agreeing that the relevant Milestone has been met.


 


8.11     Upon termination of this Agreement for
any reason, all Sublicenses entered into by LPT prior to the effective date of
such termination (other than Sublicenses based on any license that has become
fully paid-up and irrevocable pursuant to Paragraph 4.5 above, which shall
survive any such termination) will be assigned to and assumed by AERES.


 


8.12     The right of either party to terminate
this Agreement shall not be affected in any way by its waiver of or failure to
take action with respect to any previous default.


 


8.13     Termination of this Agreement for any
reason shall be without prejudice to:


 


(a)                        any party’s right to receive all payments to which such party is
entitled under this Agreement and obtain performance of any obligations
provided


 


18





















 


for in this Agreement which survive
termination by their terms or by fair interpretation of this Agreement; and


 


(b)                       any other remedies which any party may then or thereafter have
hereunder.


 


ARTICLE IX - Patents


 


9.1       Any and all patents and patent
applications in respect of AERES Inventions or to the production of antibodies
other than Humanized Antibodies hereunder shall be owned by AERES, which shall
have the sole right to prosecute such applications and patents and will meet
all costs in relation thereto.  LPT will
assign and hereby does assign any and all rights as necessary to vest such
ownership of AERES Inventions and AERES IP in AERES and cause its employees,
officers, and agents to execute any necessary documents for such assignment.


 


9.2       Any and all patents and patent
applications in respect of LPT Inventions or relating specifically to Humanized
Antibodies and their use shall be owned by LPT, which shall have the sole right
to prosecute such applications and patents and will meet all costs in relation
thereto.  AERES will assign and hereby
does assign any and all rights as necessary to vest such ownership of LPT
Inventions and LPT IP in LPT and cause its employees, officers, and agents to
execute any necessary documents for such assignment.


 


9.3       The parties shall consult and co-operate
fully on patent filings pursuant to Paragraphs 9.1 and 9.2, which consultation
and co-operation shall not delay timely filing of patent applications by either
party.  Each party shall assist the other
in the prosecution of patent applications and patents arising from the Research
Collaboration.  Each party shall supply
the other in a timely manner with copies of relevant prosecution-related
documents.


 


9.4       The parties shall cooperate, if necessary and
appropriate, with each other in gaining patent term extensions, including,
without limitation, supplementary protection certificates, and any other
extensions that are now available or become available in the future wherever
applicable to AERES Inventions and/or LPT Inventions covering Licensed Products
or any process relating to the manufacture thereof or any element thereof.  The parties shall, if necessary and
appropriate, use reasonable efforts to agree upon a joint strategy relating to
patent term extensions, but, in the absence of mutual agreement with respect to
any extension issue, a patent shall be extended if a party elects to extend
such patent.  All filings for such
extension shall be made by the party to whom the patent is assigned; provided,
however, that in the event that AERES elects not to file for an extension,
AERES shall (i) inform LPT of its intention not to file and (ii) effective
immediately upon such election, hereby grants LPT the right to file for such
extension.


 


9.5       For the avoidance of doubt, it is hereby
stated that LPT will not assert any of its claims to intellectual property
arising out of the Research Collaboration pursuant to this Agreement against
AERES in a manner which would inhibit AERES’s freedom to work in the general
area of antibody engineering and production excluding Humanised
Antibodies.  During the term of this
Agreement, AERES will not assert AERES IP or Licensed Patent Rights or any of
its claims to intellectual property arising out of the Research Collaboration
against LPT in a


 


19





















 


manner which would prevent LPT from making, having made, using,
offering for sale, selling, importing, or otherwise commercializing any
Humanized Antibody produced hereunder.


 


ARTICLE X - Infringement


 


10.1     Third Party Infringement of the Licensed Patent Rights


 


(i)        If either party becomes aware of any infringement of the Licensed Patent
Rights by a third party, such party shall promptly notify the other party of
the infringement in writing and provide a summary of the relevant facts and
circumstances known to such Party relating to such infringement.  LPT shall not notify any third party of the
infringement of any of the Licensed Patent Rights without first obtaining the
written consent of AERES and/or MRCT.


 


(ii)       The parties will cooperate to the extent possible and AERES shall consult
with its licensor in order to determine the course of action.


 


10.2     Third Party Infringement of Intellectual Property Rights


 


(i)        Each party shall have the right, at its sole discretion, on its own behalf
and expense, to institute, prosecute, and control any action or proceeding to
restrain infringement by a third party of any of its rights in respect of
Inventions, know-how, and intellectual property owned by such Party.


 


ARTICLE XI - Miscellaneous


 


11.1     Any notice required to be given hereunder
shall be deemed given if communicated in the English language and delivered to
the party to be notified at its address shown below or at such other address as
may be furnished from time to time by the party to be notified to notifying
party in writing either (a) by registered air mail, postage prepaid, which
notice shall be effective five (5) days after the date of mailing or (b) in
person, by telefax (with proof of transmission and confirmation by first class
mail postage paid) or overnight courier, which notice shall be effective on the
Business Day immediately following the date of such delivery.


 


If to LPT:


 


Lpath Therapeutics, Inc.

9191 Towne Center Dr., Suite 310, 

San Diego, CA 92122  

U.S.A.


 


Attention: President and Chief Executive Officer


 


If to AERES Biomedical Ltd.:


 


20





















 


AERES Biomedical Ltd.,

1-3 Burtonhole Lane,

Mill Hill,

London, NW7 1AD

U.K.


 


Attention: Chief Executive Officer


 


11.2     Each of the parties shall contribute, to
the extent reasonable, facilities, supplies, personnel, and other resources
without charge or expense to the other as may be necessary for proper
performance of the respective obligations under this Agreement and that are
consistent with Annex A.  To the extent
reasonable and except as may otherwise be expressly provided, each party shall
bear its own out-of-pocket costs and disbursements incurred in the performance
of this Agreement.


 


11.3     Nothing contained in this Agreement, or
otherwise, shall constitute the parties as partners with one another or render
either liable for the debts or accounts of the other. Furthermore, nothing in
this Agreement shall be construed to constitute, create, give affect to or
otherwise imply a joint venture or formal business organization of any kind.


 


11.4     LPT agrees to indemnify and hold harmless
both AERES and MRCT, and their respective officers, employees, and agents from
and against any and all claims, damages, and liabilities asserted by third
parties arising from (i) the manufacture, use, or sale by LPT, its
Affiliates and/or its Licensees, or by any other party authorized by LPT, its
Affiliates or its Licensees, of Licensed Products and services licensed under
this Agreement or the use thereof by others, and/or (ii) the breach of any
LPT representation or warranty set forth herein said representation or warranty
being untrue in any material respect when made, LPT, except to the extent that
such claims, damages or liabilities arise from the gross negligence or willful
misconduct of AERES.


 


11.5     AERES agrees to indemnify and hold
harmless LPT and its respective officers, employees, and agents from and
against any and all claims, damages, and liabilities asserted by third parties
arising from the breach of any AERES representation or warranty set forth
herein said representation or warranty being untrue in any material respect
when made, except to the extent that such claims, damages, or liabilities arise
from the gross negligence or willful misconduct of LPT.


 


11.6     This Agreement and the rights and license
granted herein shall be binding upon and shall inure to the benefit of
successors of the parties hereto, or to an assignee of all of the goodwill and
entire business and assets of a party hereto, but shall not otherwise be
assignable without the prior written consent of the other party, which consent
will not be unreasonably withheld but shall be conditional, inter alia, upon the formal acceptance by the assignee of
the payment obligations and terms and conditions of this Agreement.


 


11.7     The parties hereto acknowledge that this
Agreement, including Exhibit A and Annex A attached hereto, sets forth the
entire Agreement and understanding of the parties hereto


 


21





















 


as to the subject matter hereof, and shall not be subject to any change
or modification except by the execution of a written instrument subscribed to
by the parties hereto.


 


11.8     The failure of any party to exercise or
enforce any right granted in this Agreement shall not be deemed to be a waiver
of such right or operate to bar the exercise of enforcement thereof at any time
or times thereafter.


 


11.9     Except where required by law, neither
party shall use the name of any other party or make specific reference to the
terms of this Agreement in any press release, advertisement or other public
statement without the prior written consent and approval of the other party.


 


11.10   The provisions of this Agreement are
severable, and in the event that any provisions of this Agreement shall be
determined to be invalid or unenforceable under any controlling body of the
law, such invalidity or unenforceability shall not in any way affect the
validity or enforceability of the remaining provisions hereof.


 


11.11   All captions herein are for convenience only,
and shall not be interpreted as having any substantive effect.


 


11.12   This Agreement shall be construed, governed,
interpreted, and applied in accordance with the laws of England., except that
questions affecting the construction and effect of any patent shall be
determined by the law of the country in which the patent was granted.


 


11.13   Except with respect to breaches of Articles
III, IV, VII or X, if there is any dispute between the parties relating to the
interpretation, implementation, or application of this Agreement, or any other
matter in connection with it, they will attempt in good faith to negotiate a
settlement.  If the matter is not
resolved by negotiation, the parties will refer the dispute to mediation in
accordance with CDR (Centre for Dispute Resolution, London) procedures (“ADR”).  If the parties fail to agree on a settlement
within 28 days of the initiation of the ADR procedure, either party may refer
the matter to a court of competent jurisdiction in accordance with the
provisions of Paragraph 11.12, above.


 


11.14   The terms of Paragraphs 3.1 and 3.2, and
Articles IV, V, VII, and
XI shall survive the expiration or termination for any reason of this Agreement
and continue for as long as necessary to permit their full discharge.


 


11.15   This Agreement may be signed in two (2) counterparts,
each of which shall be deemed an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.


 


*              *              *              *              *


 


22





















 


IN WITNESS THEREOF, the parties hereto have caused this Agreement to be
duly executed in duplicate by their authorized officers effective as of the
date first written above.


 


Signed:-


 


For and on behalf of AERES Biomedical Ltd.




 


	
  By:

  	
  /s/ Dr. Tarran Jones

  	
   

  
	
   

  	
  Name: 

  	
  Dr. Tarran Jones

  
	
   

  	
  Title: 

  	
  Chief Executive Officer

  
				



 


Signed:-


 


For and on behalf of Lpath Therapeutics, Inc.


 


 


	
  By:

  	
  /s/ Scott Pancoast

  	
   

  
	
   

  	
  Name: 

  	
  Mr. Scott Pancoast

  
	
   

  	
  Title: 

  	
  President and Chief Executive Officer

  
				



 


 


Date:


 





















 


	
  AERES BIOMEDICAL

  	
  CONFIDENTIAL

  	
  EXHIBIT
  A

  



 


EXHIBIT A


 


	
  Inventor:

  	
   

  	
  Gregory Paul Winter

  	
   

  
	
  Applicant:

  	
   

  	
  Medical Research Council

  	
   

  
	
  Title:

  	
   

  	
  Recombinant DNA Products and Methods

  	
   

  
	
  UK
  Priority Application:

  	
   

  	
  UK PA 8607679 (27.03.86)

  	
   

  



 


Final Application


 


	
   

  	
   

  	
   

  	
   

  	
  Date of filing

  	
   

  
	
   

  	
   

  	
  Application number

  	
   

  	
  (Publication date)

  	
   

  
	
   

  	
   

  	
  (Publication number)

  	
   

  	
  *(Grant date)

  	
   

  
	
  Territory

  	
   

  	
  *(Patent number)

  	
   

  	
  (Expiry date)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  UK

  	
   

  	
  8707252

  	
   

  	
  26.03.87

  	
   

  
	
   

  	
   

  	
  (GB
  2188638A)

  	
   

  	
  (7.10.87)

  	
   

  
	
   

  	
   

  	
  *(GB
  2188638B)

  	
   

  	
  *(23.05.90)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (25.03.2007)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EUROPE

  	
   

  	
  87/302620.7

  	
   

  	
  26.03.87

  	
   

  
	
  (Austria,
  Belgium,

  	
   

  	
  (EP
  0239400A)

  	
   

  	
  (30.09.87)

  	
   

  
	
  France,
  Germany,

  	
   

  	
  *(239400)

  	
   

  	
  *(03.08.94)

  	
   

  
	
  Greece,
  Italy, Liechtenstein,

  	
   

  	
   

  	
   

  	
  (25.03.2007)

  	
   

  
	
  Luxembourg,
  Netherlands,

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Spain,
  Sweden,

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Switzerland)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CANADA

  	
   

  	
  533071

  	
   

  	
  26.03.87

  	
   

  
	
   

  	
   

  	
  *(1,340,879)

  	
   

  	
  *(25.01.2000)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (24.01.2017)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  USA
  (Parent) 07/782717

  	
   

  	
  25.10.91

  	
   

  	
  (continuation
  of 903776 filed 04.09.86)

  	
   

  
	
   

  	
   

  	
  *(5,225,539)

  	
   

  	
  *(06.07.93)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (05.07.2010)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  USA (Continuation-in-part)

  	
   

  	
  08/452,462

  	
   

  	
  26.05.95.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Continuation application derived from
  continuation- in-part 07/189814 filed 03.05.88)

  	
   

  
	
   

  	
   

  	
  *(6,548,640)

  	
   

  	
  *(15.04.2003)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (07.12.2015)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JAPAN

  	
   

  	
  73970/87

  	
   

  	
  27.03.87

  	
   

  
	
   

  	
   

  	
  (296890/87)

  	
   

  	
  (24.12.87)

  	
   

  
	
   

  	
   

  	
  *(2912618)

  	
   

  	
  *(09.04.99)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (26.03.2007)

  	
   

  



 


AERES Biomedical Limited, 1-3 Burtonhole Lane, Mill
Hill, London NW7 1AD.  Tel:  +44 (0)20 8906
7220  Fax:  +44 (0)20 8906 7202
Website: http://www.aeresbiomedical.com/
www.aeresbiomedical.com


 


B-1





















 


	
  Title

  	
  Multichain Polypeptides or Proteins and
  Processes for their Production

  
	
   

  
	
  Subject Matter:

  	
  Expression of multichain proteins, such
  as antibodies, in single host cells

  
	
   

  	
   

  	
   

  
	
  Inventors

  	
  Michael Alan Boss

  	
   

  
	
   

  	
  John Henry Kenten

  	
   

  
	
   

  	
  John Spencer Emtage

  	
   

  
	
   

  	
  Clive Ross Wood

  	
   

  
	
   

  	
   

  	
   

  
	
  Priority Applications Date: 25
  March 1983

  	
   

  
	
  Earliest Publication Date/No: 27
  September 1984/WO84/03712

  	
   

  
				



 


	
  Territory

  	
   

  	
  Application Date

  	
   

  	
  Application No.

  	
   

  	
  Patent No

  	
   

  	
  Expiry Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  *Europe

  	
   

  	
  23.03.84

  	
   

  	
  84301996.9

  	
   

  	
  0120694

  	
   

  	
  23.03.04

  	
   

  
	
  *Europe (divisional)

  	
   

  	
  23.03.84

  	
   

  	
  92202982.2

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Japan

  	
   

  	
  23.03.84

  	
   

  	
  501609/84

  	
   

  	
  2594900

  	
   

  	
  23.03.04

  	
   

  
	
  Japan (divisional)

  	
   

  	
  23.03.84

  	
   

  	
  228332/94

  	
   

  	
  3186463

  	
   

  	
  23.03.04

  	
   

  
	
  Japan (divisional)

  	
   

  	
  23.03 84

  	
   

  	
  104862/97

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Japan (divisional)

  	
   

  	
  23.03.84

  	
   

  	
  2001-063448

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  USA (divisional 1)

  	
   

  	
  23.04.84

  	
   

  	
  08/320381

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  USA (divisional 2)

  	
   

  	
  23.04.84

  	
   

  	
  08/450727

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  USA (divisional 3)

  	
   

  	
  23.04.84

  	
   

  	
  08/453449

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  USA (divisional 4)

  	
   

  	
  23.04.84

  	
   

  	
  08/452420

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  United
  Kingdom

  	
   

  	
  23.03.84

  	
   

  	
  8407571

  	
   

  	
  213763

  	
   

  	
  23.03.04

  	
   

  



 










*includes:  Austria, Belgium, France, Germany, Italy,
Liechtenstein, Luxembourg, Netherlands, Sweden, Switzerland, and United
Kingdom.


 


AERES Biomedical Limited, 1-3 Burtonhole Lane, Mill Hill, London NW7
1AD.  Tel:  +44 (0)20 8906 7220  Fax:  +44 (0)20 8906 7202 Website:
http://www.aeresbiomedical.com/ www.aeresbiomedical.com


 


B-2





















 


ANNEX A


 


Research Plan for the Chimerization and
Humanization of Lpath’s Mouse Anti-Sphingosine-1-phosphate
Antibody (SphingomabTM )


 


Stage
0: Contract signed (£ [***                  ]
up-front payment to AERES from Lpath)


 


Stage
I: Hybridoma Sequencing and Chimerization.


 


1. Transfer of
materials and reagents


 


1.1. Lpath provides the hybridoma cell line producing the mouse
antibody together with details of the antibody light and heavy chain class and
subclass.


 


1.2. Lpath provides information on the medium composition, culture
conditions, passage times and splitting ratios of the hybridoma cell line.


 


1.3. Lpath provides confirmation of the designated human constant
regions to be used in the chimerized/humanized version of mouse antibody.


 


1.4. Lpath Therapeutics provides all protocol and all reagents that are
necessary to measure the binding of the mouse antibody and the newly generated
chimerized antibody to antigen.


 


1.5. Lpath provides purified mouse antibody, including concentration
and potency, to use as a reference sample in the antigen binding assays.


 


1.7. AERES establishes Lpath’s antigen-binding assays at AERES. If help
requested, Lpath will assist set-up.


 


2.
Characterizing by AERES of SphingomabTM


 


2.1. PCR-cloning and DNA sequencing the mouse antibody variable region
genes.


 


2.2. Propagate the hybridoma cell line producing the mouse antibody in
the appropriate growth media. Harvest these cells and prepare from them RNA and
cDNA.


 


2.3. Using primers designed to anneal to DNA sequences of
immunoglobulin leader peptides and constant regions, PCR-clone the variable
region genes of the mouse antibody.


 










***CONFIDENTIAL PORTIONS OF
THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.


 


AERES Biomedical Limited, 1-3 Burtonhole Lane, Mill
Hill, London NW7 1AD.  Tel:  +44 (0)20 8906
7220  Fax:  +44 (0)20 8906 7202
Website: Website:  www.aeresbiomedical.com


 


Annex A-1





















 


2.4. Sequence the variable region DNA of the mouse antibody light and
heavy chains expressed by the hybridoma cell line.


 


2.4. AERES provides Lpath all DNA and/or amino acid sequence data on
the VH and VL portions of the mouse antibody.


 


3.
Construction and expression of the chimeric antibody.


 


3.1. Modify the 5’- and 3’-ends of the cloned mouse antibody light and
heavy chain variable region DNAs, in order to join them in a functional manner
to the appropriate human constant region genes.


 


3.2. Ligate and clone the adapted mouse heavy and light chain variable
region DNAs into expression vectors containing the designated human
immunoglobulin heavy and light chain constant region sequences.


 


3.3. Introduce the vectors engineered to express the chimeric light and
heavy chains into mammalian cells for transient expression.


 


3.4. Collect conditioned medium from the mammalian cells and measure
the concentration of chimeric antibody and its ability to bind antigen.


 


3.5. Provide Lpath with the preliminary data on the transient
expression of the chimeric antibody and its binding to antigen.


 


3.5.1. Analysis of all data obtained relating to the variable region
DNA and amino acid sequences of the mouse antibody.


 


3.5.2. Propagation of the mouse hybridoma cell line producing mouse
antibody.


 


3.5.3. Isolation of RNA from the mouse hybridoma cell line and
PCR-cloning of the mouse light and heavy chain variable region genes of mouse
antibody.


 


3.5.4. DNA sequencing of the cloned variable region genes of mouse
antibody.


 


3.5.5. PCR-modification of the mouse light and heavy chain variable
region genes to allow their expression with the designated human constant
regions, as a chimeric antibody.


 


3.5.6. DNA sequencing of the PCR-products and transfer of the
sequencing data to Lpath.


 


AERES Biomedical Limited, 1-3 Burtonhole Lane, Mill
Hill, London NW7 1AD.  Tel:  +44 (0)20 8906 3811  Fax:  +44 (0)20 8906 3811
Website: Website:  www.aeresbiomedical.com


 


Annex A-2





















 


3.5.7. Construction of vectors to express the chimeric antibody and
transient expression of the chimeric antibody in mammalian cells.


 


3.5.8. Transfer of preliminary data on the expression of the chimeric
antibody in mammalian cells and the binding of chimeric antibody to the target
antigen to Lpath.


 


3.6. AERES provides Lpath all cloning plasmids containing the heavy and
light chain variable region genes only of the chimeric antibody used in Stage I


 


3.7. Lpath pays Project Milestone 1 (£ [***                  ])


 


Stage
II: Design of the humanised antibody SphingomabTM (hMAb)


 


4. Modeling
the structure of the mouse antibody variable regions and the design of the
humanized variable regions.


 


4.1. Build a model of the three-dimensional structure of the mouse
antibody variable regions.


 


4.2. Compare the amino acid sequences of the variable regions of the
mouse antibody to our database of published immunoglobulin sequences. Identify
the most suitable human framework regions to replace the mouse light and heavy
chain framework regions in the humanised antibody. Involve Lpath in decision on
framework region strategy.


 


4.3. Using the three-dimensional model of the mouse antibody variable
regions and the results of the database searches, design the amino acid
sequence of one or more humanized versions of the heavy and light chain
variable regions.


 


4.4. Provide Lpath the results of the database searches and the amino
acid sequence design.


 


4.4.1. Construction of a molecular model of the mouse variable regions
of the Lpath antibody.


 


4.4.2. Design of the humanized variable regions based on the most
suitable human donor framework sequences, identified following database
searches and analysis of the mouse model.


 










***CONFIDENTIAL PORTIONS OF
THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.


 


AERES Biomedical Limited, 1-3 Burtonhole Lane, Mill
Hill, London NW7 1AD.  Tel:  +44 (0)20 8906 3811  Fax:  +44 (0)20 8906 3811
Website: Website:  www.aeresbiomedical.com


 


Annex A-3





















 


4.4.3. Transfer of the protein sequence design data to Lpath.


 


4.5 Lpath pays Project Milestone 2 (£ [***                  ])


 


Stage
III. Generation of the humanized antibody


 


5.
Construction, expression and analysis of the humanized antibody variants


 


5.1. Design the recombinant antibody DNA sequences of the first version
of the humanized antibody light and heavy chain variable regions.


 


5.2. Synthesize, clone and DNA sequence the first version of the
humanized light and heavy chain variable region genes.


 


5.3. Sub-clone the humanized variable region genes into expression
vectors containing the designated human constant region genes. Decision re
whether constant region genes are, e.g. IgG1 or IgG3 to be made after
discussion and consultation with Lpath.


 


5.4. Introduce the vectors engineered to express the humanized light
and heavy chains into mammalian cells for transient expression.


 


5.5. Collect the mammalian cell conditioned medium and measure the
secreted antibody concentration and its binding to antigen.


 


5.6. In light of the antigen binding data, continue the humanization
strategy, generating and analyzing additional versions of the humanized
antibody variable regions as appropriate until the best combination of
humanized heavy and light chains is identified.


 


5.7. In consultation with Lpath, select the best humanized antibody.


 


5.8. Provide to Lpath preliminary data on the expression of the
humanized antibodies in mammalian cells and the ability of the humanized
antibodies to bind to the cognate antigen.


 


5.8.1. Synthesis of the humanised light and heavy chain variable region
genes and DNA sequence confirmation of the cloned material.


 


5.8.2. Transfer of the sequence data.


 










***CONFIDENTIAL PORTIONS OF
THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.


 


AERES Biomedical Limited, 1-3 Burtonhole Lane, Mill
Hill, London NW7 1AD.  Tel:  +44 (0)20 8906 3811  Fax:  +44 (0)20 8906 3811
Website: Website:  www.aeresbiomedical.com


 


Annex A-4





















 


5.8.3. Construction of vectors that express a humanized antibody
(CDR-grafted variable regions plus human heavy and light chain constant
regions) in mammalian cells.


 


5.8.4. Co-transfection of the vectors into mammalian cells and
expression of the humanised antibody in mammalian cells.


 


5.8.5. Transfer of preliminary data on the expression of the humanized
antibody in mammalian cells.


 


5.8.6. Transfer of conditioned medium containing humanized antibody
from mammalian cells, together with humanized antibody expression and antigen
binding data.


 


5.9. AERES
provides Lpath all cloning plasmids containing the heavy and light chain
variable region genes only of all the humanized SphingomabTM (hMAb) antibody
variants used in Stage III


 


5.10. AERES provides written report to Lpath describing humanization
process.


 


5.11. Lpath pays Project Milestone 3 (£ [***                    ])


 










***CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT.


 


AERES Biomedical Limited, 1-3 Burtonhole Lane, Mill
Hill, London NW7 1AD.  Tel:  +44 (0)20 8906 3811  Fax:  +44 (0)20 8906 3811
Website: Website:  www.aeresbiomedical.com


 


Annex A-5





















 


ANNEX B


 


Payment Terms


 


[***                            ]
of the contract price (Project Milestones 1, 2, and 3) will be invoiced to LPT
and will be payable on signature.  This
advance payment is non-refundable. All further payments are due and payable
within thirty (30) days from the date of invoice.


 


The above quotations do not include any duties, taxes or governmental
charges. Such taxes and charges shall be paid by LPT.


 


Payments Schedule


 


The payments specified in Annex A and Annex B (Payment Terms) above
will be invoiced to LPT, and paid in British Pounds (UK£) as provided in the
Agreement, according to the following schedule:-


 


	
  Contract Signature:

  	
   

  	
  £

  	
  [***          ]

  	
   

  
	
  Milestone 1 completion:

  	
   

  	
  £

  	
  [***          ]

  	
   

  
	
  Milestone 2 completion:

  	
   

  	
  £

  	
  [***          ]

  	
   

  
	
  Milestone 3 completion:

  	
   

  	
  £

  	
  [***          ]

  	
   

  
	
  Total Contract Payments:

  	
   

  	
  £

  	
  [***          ]

  	
   

  



 


The above quotation will apply to a Monoclonal
Antibody Humanization Project contracted for up to 31 July 2005. After
this date, revised prices may apply (subject to further quotation).


 


The above quotations do not include any taxes, customs
duties, or other governmental charges that may apply.  Such taxes and charges if applicable shall be
paid by LPT, as provided in Paragraph 3.4 of this Agreement.


 










***CONFIDENTIAL PORTIONS OF
THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.


 


AERES Biomedical Limited, registered in England and
Wales No. 3800327.  Registered Office:
8th Floor, Aldwych House, 81 Aldwych, London WC2B 4HP, United Kingdom.


 


Annex B-1