Exhibit 10.16


 


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


 


LICENCE
AGREEMENT


 


between


 


LONZA
BIOLOGICS PLC


 


and


 


LPATH,
INC


 

















 


INDEX


 


	
  ARTICLE

  	
   

  	
  TITLE

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Definitions

  	
   

  	
   

  
	
  2.

  	
   

  	
  Supply of
  System and Know-How

  	
   

  	
   

  
	
  3.

  	
   

  	
  Ownership of
  Property and Intellectual Property

  	
   

  	
   

  
	
  4.

  	
   

  	
  Licences

  	
   

  	
   

  
	
  5.

  	
   

  	
  Payments

  	
   

  	
   

  
	
  6.

  	
   

  	
  Royalty
  Procedures

  	
   

  	
   

  
	
  7.

  	
   

  	
  Liability
  and Warranties

  	
   

  	
   

  
	
  8.

  	
   

  	
  Indemnification

  	
   

  	
   

  
	
  9.

  	
   

  	
  Confidentiality

  	
   

  	
   

  
	
  10.

  	
   

  	
  Intellectual
  Property Enforcement

  	
   

  	
   

  
	
  11.

  	
   

  	
  Term and
  Termination

  	
   

  	
   

  
	
  12.

  	
   

  	
  Assignment

  	
   

  	
   

  
	
  13.

  	
   

  	
  Governing
  Law and Jurisdiction

  	
   

  	
   

  
	
  14.

  	
   

  	
  Force
  Majeure

  	
   

  	
   

  
	
  15.

  	
   

  	
  Illegality

  	
   

  	
   

  
	
  16.

  	
   

  	
  Miscellaneous

  	
   

  	
   

  
	
  17.

  	
   

  	
  Notice

  	
   

  	
   

  
	
  18.

  	
   

  	
  Interpretation

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  Patent
  Rights

  	
   

  	
   

  
	
  2

  	
   

  	
  Cell Line
  Testing

  	
   

  	
   

  



 

















 


THIS AGREEMENT
is made the 8th day of August 2006


 


BETWEEN


 


LONZA
BIOLOGICS PLC of 228 Bath Road, Slough, Berkshire SL1 4DX, England (hereinafter
referred to as “Biologics”), and


 


Lpath, Inc, of
6335 Ferris Square, Suite A, San Diego, CA 92121, USA, (hereinafter referred to as “Licensee”)


 


WHEREAS


 


A.                                   Biologics is the proprietor of the System and has the right to grant
certain Intellectual Property rights in relation thereto (all as hereinafter
defined), and


 


B.                                    The Licensee wishes to take a licence under Intellectual Property
(as hereinafter defined) of which Biologics is the proprietor to commercially
exploit the Product (as hereinafter defined) in the form hereunder.


 


NOW THEREFORE
the parties hereby agree as follows:


 


1.             Definitions


 


1.1           “Affiliate” means any company, corporation, limited liability
company, partnership, or other entity that directly or indirectly controls, is
controlled by or is under common control, directly or indirectly, with the
relevant party to this Agreement. “Control” means the ownership of more than
fifty percent (50%) of the issued share capital of the party in question or the
legal power to direct or cause the direction of the general management and
policies of the party in question.


 


1.2           “Cell Lines” means those cell lines referred to in Clause 2.1.1(b).


 


1.3           “Competing Contract Manufacturer” shall mean any party who
undertakes or performs more than fifty percent (50%) of their business as a
third party manufacturer of monoclonal antibodies and/or therapeutic proteins
or any product of a similar nature to which this Agreement relates.


 

















 


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


 


1.4           “Effective Date” means the date first above written.


 


1.5           “First Commercial Sale” means the date of the first sale or other
disposal of Product for consideration by Licensee or its Affiliates or
sublicensees 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 Product for human use.


 


1.6           “Intellectual Property” means System Know-How and Patent Rights.


 


1.7           “Know-How” means technical and other information, whether patented
or unpatented, including, but without prejudice to the generality of the
foregoing, ideas, concepts, trade secrets, know-how, inventions, discoveries,
data, formulae, specifications, processes, procedures for experiments and tests
and other protocols, results of experimentation and testing, fermentation and
purification techniques, and assay protocols.


 


1.8           “Net Selling Price” means ***:


 


1.8.1        ***;


1.8.2        ***;


1.8.3        ***; and


1.8.4        ***;


1.8.5        ***;


1.8.6        ***; and


1.8.7        ***.


 


Upon any sale
or other disposal of Product by or on behalf of Licensee or its Affiliates or
sublicensees hereunder other than a bona fide arms length transaction
exclusively for money or upon any use of the Product for purposes which do not
result in a disposal of such Product in consideration of sales revenue
customary in the country of use, such sale, other disposal, or use shall be
deemed to constitute a sale ***.


 

















 


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


 


For the
avoidance of doubt, *** shall not be considered in determining Net Sales.


 


***.


 


1.9           “Patent Rights” means the patents and applications, short
particulars of which are set out in Schedule 1 hereto, and all patents and
applications thereof of any kind throughout the world, whether national or
regional, including, but without prejudice to the generality of the foregoing,
author certificates, inventor certificates, improvement patents, utility
certificates and models and certificates of addition, and including any
divisions, renewals, continuations, continuations in part, reissues, patent disclosures,
improvements and extensions of reissue thereof.


 


1.10         “Product” means a humanized monoclonal antibody known as SphingomabTM,
which targets sphingosine-1-phosphate (S1P), or an S1P-binding fragment
thereof, of which Licensee is the proprietor and which is obtained by the
expression of any one gene or of any combination of genes by use of the System.


 


1.11         “Strategic Partner” means a party with whom Licensee has entered
into a contractual relationship, to identify a therapeutic target and/or
collaborate in the performance of research and development of a Product or a
product of which the Strategic Partner is the Proprietor. In no event may any
entity that is primarily a Competing Contract Manufacturer be deemed a
Strategic Partner for the purposes of this Agreement.


 


1.12         “System” means Biologics’ glutamine synthetase gene expression
system consisting of the Cell Lines, the Vectors, and the System Know-How,
whether used individually or in combination with each other. For the avoidance
of doubt, any gene proprietary to Licensee inserted into the System for the
purposes of producing Product does not form part of the System.


 

















 


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


 


1.13         “System Know-How” means Know-How relating directly or indirectly to
the System known to Biologics from time to time, of which Biologics is the
proprietor.


 


1.14         “Territory” means world-wide.


 


1.15         “Valid Claim” means a claim of any unexpired issued patent within
the Patent Rights which has not been held unenforceable or invalid by the
decision of a court or other governmental agency of competent jurisdiction
unappealable or unappealed within the time allowed for appeal, and which has
not been admitted to be invalid or unenforceable through re-issue or disclaimer
or otherwise.


 


1.16         “Vectors” means those vectors referred to in Clause 2.1.1(a).


 


2.             Supply of the System and System Know-How


 


2.1           Unless previously supplied by Biologics under a separate agreement,
Biologics shall, *** Licensee the following:


 


2.1.1        (a)            Vectors


Approximately
*** of vector ***.


Approximately
*** of vector ***.


Approximately
*** of vector ***.


Approximately
*** of vector ***.


 


Notwithstanding
the foregoing, upon request by Licensee, Biologics shall supply such additional
quantities of vectors listed above as may be reasonably requested by Licensee
from time to time during the term of this Agreement. Such supply will be ***.


 


(b)            Cell Lines


Two *** vials
of the Chinese Hamster Ovary cell line ***.


 

















 


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


 


Notwithstanding
the foregoing, upon request by Licensee, Biologics shall supply such additional
quantities of cell lines listed above as may be reasonably requested by
Licensee from time to time during the term of this Agreement. Such supply will
be ***.


 


2.1.2        System Know-How


 


System
Know-How contained as at the date hereinabove in (a) manuals of operating
procedures for the System, (b) regulatory information on CD-ROM, and (c) Vector
nucleotide sequences. During the term of this Agreement, Biologics shall
provide to Licensee *** such additional, updated, or revised System Know-How
that Biologics decides to make available to licensees of the System generally. Biologics
may develop additional, updated, or revised System Know-How for which it
intends to charge licensees, and Licensee shall be informed of the availability
of such additional, updated, or revised System Know-How.


 


2.2           Licensee shall use the System only in the expression of Product by
insertion of gene(s) coding for Product(s) into the System, and shall not use,
cause the use of, or permit to be used the System for any purpose not directly
authorised by this Agreement.


 


3.             Ownership of Property and Intellectual Property


 


3.1           It is hereby acknowledged and agreed that, as between the parties,
any and all property and Intellectual Property in the System is vested in
Biologics, and any and all property and Intellectual Property in the Product is
vested in Licensee.


 


3.2           The provisions of this Clause 3 shall survive termination of this
Agreement.


 

















 


4.             Licences


 


4.1           Biologics hereby grants to Licensee, and Licensee hereby accepts on
behalf of Licensee, a world-wide non-exclusive licence (with the right to grant
and authorize sublicenses, subject to Clause 4.3, below) under the Intellectual
Property to exploit the System make, have made, use, develop, manufacture,
market, sell, have sold, offer for sale, distribute, import, and export Product
in the Territory.


 


4.2           Save as expressly provided by Clause 2.2, above, Licensee hereby
undertakes not to make any modifications or adaptations to the System during
the subsistence of this Agreement.


 


4.3           Subject to the provisions of this Clause 4.3, Licensee shall be
entitled to authorize and grant sublicences to the rights granted by Clause
4.1, above, to any one or more third parties but only for the purpose of any
such third party using the System to produce Product, provided always:


 


4.3.1        Licensee shall ensure any such sublicensee’s use of the System, the
Intellectual Property, and the Product is undertaken solely for the purpose of
establishing a manufacturing process for Product, or producing Product, for
Licensee or its Affiliates or Strategic Partners; and


 


4.3.2        Any sublicensee shall not, by virtue of this Agreement, be granted
any right or licence, either express or implied, under any patent or
proprietary right vested in Biologics or otherwise, to use the System, the
Intellectual Property, or the Product other than for the purposes of establishing
a manufacturing process for Product or producing Product, Licensee shall in no
event transfer to a sublicensee (i) a Vector or (ii) a Cell Line that has not
been transfected with a Vector encoding at least a portion of the Product, and
Licensee agrees to ensure that any such sublicensee shall not assign, transfer,
further sublicense or otherwise make over the benefit or the burden of the
rights granted to it pursuant to this Agreement other than pursuant to an
Agreement subject to the terms of this Agreement; and


 

















 


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


 


4.3.3        Any sublicense granted shall be expressly subject and subordinate to
the terms of this Agreement, and it shall be Licensee’s responsibility to
ensure the strict adherence by any sublicensee hereunder to the terms and
conditions of this Agreement;


 


4.3.4        ***; and


 


4.3.5        *** Licensee shall provide Biologics a copy of any such sublicense
(the financial terms of which Licensee shall have the right to redact) within
thirty (30) days after the execution of such sublicense.


 


4.4           If, on a country-by-country basis, any granted patents that form
part of the Patent Rights (including any re-issued patents and unexpired
patents), subsequently expire or no longer contain a Valid Claim, such Patent
Rights shall automatically fall outside the scope of this Agreement and the
provisions of Clauses 4.1 to 4.3, above, shall only apply, with respect to
granted patents, to those granted patents which contain a Valid Claim and form
part of the Patents Rights for as long as those granted patents remain in
force.


 


4.5           Notwithstanding Clause 4.4, above, on a country-by-country basis,
where no Valid Claims within the Patent Rights remain in force, the provisions
of Clauses 4.1 to 4.3, above, shall only apply for as long as the System
Know-How remains secret and substantial.


 


5.             Payments


 


5.1           In consideration of the licence granted to Licensee pursuant to Clause
4.1 above, and in consideration for the right to sublicense the rights granted
by Clause 4.1 pursuant to Clause 4.3, above, Licensee shall pay Biologics as
follows:


 


5.1.1        ***;


 


5.1.2        ***:


 

















 


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


 


5.1.2.1     ***; and


 


5.1.2.2     ***.


 


5.1.3        ***:


 


5.1.3.1     ***; and


 


5.1.3.2     ***.


 


5.2           [Intentionally left blank]


 


5.3           If, on a country-by-country basis, the manufacture, use, tender,
importation, and/or sale of the Product are not protected by a Valid Claim
within the Patent Rights, then in respect of sales in such countries:


(a)           ***;


(b)           ***;


(c)           ***;


(d)           ***.


 


5.4           ***.


 


5.5           The following *** shall apply with respect to ***:


 


(a)           ***. The obligation to pay any *** under this Agreement shall be
imposed only once with respect to the same unit of Product, regardless of the
number of Valid Claims concerning the same;


 


(b)           Notwithstanding anything to the contrary herein, Licensee’s
obligations to pay royalties hereunder shall in any event expire at the later
to occur of (i) expiration of the last to expire patent right within the
Intellectual Property or (ii) the ten (10) year anniversary of the First
Commercial Sale.


 

















 


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


 


6.             Royalty Procedures


 


6.1           Licensee shall keep true
and accurate records and books of account containing all data necessary for the
calculation of royalties payable to Biologics. Such records shall be retained
by Licensee for *** following the end of the calendar year to which they
pertain. Such records and books of account shall, upon reasonable notice having
been given by Biologics (which in no event shall be less than *** prior
notice), be open at all reasonable times during regular business hours for
inspection by an independent certified public accountant selected by Biologics
and reasonably acceptable to Licensee. Such independent accountant shall agree
to maintain the confidentiality of the information and materials disclosed
during any inspection. Any such inspection shall be conducted in a manner that
does not interfere unreasonably with the operations of Licensee’s business.
Biologics may perform an inspection ***. Each inspection shall begin upon the
date specified by Biologics and shall be completed ***. The independent
accountant shall agree to be bound by reasonable confidentiality provisions in
favor of Licensee. Biologics shall pay the costs of the independent accountant
conducting such audit, unless the results of the inspection reveal an
underpayment of *** or more by Licensee for the entire period under audit, in
which case, Licensee shall pay the reasonable costs of the independent
accountant. If an inspection concludes that an overpayment or underpayment has
occurred during the audited period, such payment shall be remitted by the party
responsible for such payment to the other party within *** after the date of
the accountant’s written report identifying the overpayment or underpayment is
delivered to the party responsible for such payment.


 


6.2           Licensee shall prepare a
statement in respect of each *** that shall show for the immediately preceding
*** details of the sales of Product and the *** due and payable to Biologics
thereon.


 


Such statement
shall be submitted to Biologics within *** after the end of the *** to which it
relates, together with a remittance for the royalties due to Biologics, provided,
however, that with respect to the ***, such statement shall not be due until
***.


 


6.3           All sums due under this
Agreement:


 

















 


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


 


6.3.1        shall be made in pounds sterling to Biologics. Payments due to
Biologics in currencies other than pounds sterling shall first be ***. The rate
of exchange shall be ***.


 


6.3.2        are exclusive of any applicable taxes, levies, imposts, duties, and
fees of whatever nature imposed by or under the authority of any government or
public authority, and shall be paid by Licensee (other than value added taxes
or taxes on Biologics’ income). The parties agree to co-operate in all respects
reasonably necessary to take advantage of such double taxation treaties as may
be available.


 


6.4           Where Biologics does not receive payment of any sum by the due date,
***.


 


7.             Liability and Warranties


 


7.1           ***, subject to the warranty given in clause 7.2(a) below.


 


7.2           Biologics warrants that (a) the patents included in the Patent
Rights are the only patents that must be licensed from Biologics or its
Affiliates in order to operate or otherwise use the System to express Product
from the System, (b) it has not received any suit or claim alleging that the
practice of the Intellectual Property infringes the intellectual property
rights of a third party, (c) that as of the Effective Date, to the best of its
knowledge, operation or use of the System does not infringe the intellectual
property rights vested in any third party, and (d) the Cell Lines have been
properly tested in accordance with the tests set forth in Schedule 2, below,
which testing may be updated or modified in writing by Biologics from time to
time during the term of this Agreement.


 


7.3           Licensee hereby acknowledges that in order to exploit the rights
contained herein, other than with respect to the System for the purpose of
expressing Product from the System, Licensee may require licences under
Biologics patent rights other than those herein licensed or under third party
patent rights (including those vested in Affiliates of Biologics) that may be
infringed by the use by the Licensee of the rights licensed herein, and it is
hereby agreed that it shall be the Licensee’s responsibility to satisfy itself
as to the need for such


 

















 


licences and
if necessary to obtain such licences. No licence is granted save as expressly
provided herein, and no licence in addition thereto shall be deemed to have
arisen or be implied by way of estoppel or otherwise.


 


7.4           Each Party (“Indemnifying Party”) shall indemnify, defend, and hold
harmless the other Party (“Indemnified Party”) and its directors, officers,
servants, and agents at all times in respect of any and all losses, damages,
costs, and expenses suffered or incurred as a result of any contractual,
tortuous, or other claims or proceedings by third parties against Indemnified
Party arising out of the Indemnifying Party’s breach of this Agreement, including
breach of representations and warranties, violation of applicable law,
negligence, or wilful misconduct.


 


7.5           With respect to product liability claims or proceedings, the
following shall apply: (a) except to the extent provided in (b) below, Licensee
shall indemnify, defend, and hold harmless Biologics and its directors,
officers, servants, and agents at all times in respect of any and all losses,
damages, costs, and expenses suffered or incurred as a result of any tortious
claims or proceedings of death or bodily injury relating to the Product, and
(b) Biologics shall indemnify and hold harmless Licensee and its directors,
officers, servants, and agents at all times in respect of any and all losses,
damages, costs and expenses suffered or incurred as a result of any tortious
claims or proceedings of death or bodily injury relating to the Product to the
extent such claims or proceedings result from defects in the System, or from
Biologics breach of this Agreement.


 


7.6           A party (the “Indemnitee”) that intends to claim indemnification
under Clause 7.3 or 7.4, above, shall notify the Indemnifying Party in writing
within thirty (30) days of receipt of notice of any loss, claim, damage,
liability, or action in respect of which the Indemnitee intends to claim such
indemnification, and the Indemnifying Party shall have the right to participate
in, and, to the extent the Indemnifying Party so desires, to assume the defense
thereof, unless the assumption of such defense would be inappropriate due to
actual or potential differing interests between the parties which in such case
the Indemnitee may retain its own counsel at the expense of the Indemnifying
Party. The indemnity agreement in this Clause 7 shall not apply to amounts paid
in settlement of any loss, claim, damage, liability, or action if such
settlement is effected without the Indemnifying Party’s prior written consent. The
failure to


 

















 


deliver
written notice to the Indemnifying Party within a reasonable time after
learning of such liability or the commencement of any such action, if
prejudicial to the Indemnifying Party’s ability to defend such action, shall
relieve the Indemnifying Party of any liability to the Indemnitee under Clause
7.3 or 7.4, above, with respect to the particular claim(s). At the Indemnifying
Party’s request, the Indemnitee shall cooperate fully with the Indemnifying
Party and its legal representatives in the investigation of any action, claim,
or liability covered hereunder, and provide full information with respect
thereto.


 


7.7           Any condition or warranty other than those relating to title that
might otherwise be implied or incorporated within this Agreement by reason of
statute or common law or otherwise is hereby expressly excluded.


 


7.8           The terms of this Clause 7 shall survive termination of the
Agreement for whatever reason.


 


7.9           As of the Effective Date, each of Licensee and Biologics hereby
represents and warrants to the other as follows:


 


(a)            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;


 


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


 


(c)            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) any agreement or instrument binding or affecting
it or its property, (b) any contract entered , 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;


 


(d)            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


 


(e)            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.


 

















 


8.             Confidentiality


 


8.1           Licensee expressly
acknowledges that the System Know-How and any other Know-How with which it is
supplied by Biologics pursuant to this Agreement is supplied in circumstances
imparting an obligation of confidence, and Licensee agrees to keep such
Know-How or System Know-How secret and confidential and to respect Biologics’
proprietary rights therein and to use the same for the sole purpose of this
Agreement and not during the period of this Agreement or at any time for any
reason whatsoever to disclose or permit to be disclosed such Know How or System
Know-How to any third party other than sublicensees hereunder for use in
accordance with the terms of this Agreement. Licensee shall procure, and cause
its Affiliates and sublicensees to procure, that only its employees shall have
access to the Know How or System Know-How on a need to know basis and that all
such employees shall be informed of their secret and confidential nature and
shall be subject to the same obligations as Licensee and its sublicensee
hereunder pursuant to this Clause 8.1.


 


8.2           Licensee hereby undertakes
and agrees to keep the System secure and safe from loss, damage, theft, misuse,
and unauthorised access, and shall procure that the System shall be made
available only to employees of Licensee and its sublicensees on a need to know
basis and subject to the same obligations of confidence as provided in Clause
8.1 hereof, and to use the same for the sole purpose of this Agreement.


 


8.3           Biologics expressly
acknowledges that any information provided by Licensee to Biologics is supplied
in circumstances imparting an obligation of confidence, and Biologics agrees to
keep such information secret and confidential and to respect Licensee’s
proprietary rights therein and to use the same for the sole purpose of this
Agreement and not during the period of this Agreement or at any time for any
reason whatsoever to disclose or permit to be disclosed such information to any
third party.


 


8.3           Both parties undertake and
agree not to at any time for any reason whatsoever disclose or permit to be
disclosed to any third party or otherwise make use of or permit to be made use
of any trade secrets or confidential information or materials relating to the
business affairs or finances of the other


 

















 


or of any
suppliers, agents, distributors, licensees or other customers of the other
which comes into their possession pursuant to this Agreement.


 


8.4           The obligations of confidence referred to in this Clause 8 shall not
extend to any information, which the receiving party demonstrates:


 


8.4.1        is or shall become generally available to the public otherwise than
by reason of a breach by the recipient party of such information of the
provisions of this Clause 8;


 


8.4.2        is known to the recipient party of such information and is at its
free disposal prior to its receipt from the other;


 


8.4.3        is subsequently disclosed to the recipient party without obligations
of confidence by a third party owing no such obligation of confidentiality to
the disclosing party; and


 


8.4.4        Biologics or Licensee may be required to disclose to a government
agency for the purpose of any statutory, regulatory, or similar legislative
requirement applicable to the production of Product or to meet the requirements
of any Stock Exchange to which the parties may be subject, but only to the
extent (i) the recipient party notifies the disclosing party in advance of such
required disclosure, (ii) such disclosure is indeed required, (iii) that the
recipient party cooperates with the disclosing party in attempting to obtain
secrecy orders or other confidential treatment, (iv) any such required
disclosure contains such information as is required to be disclosed, and (v)
subject to obligations of secrecy wherever possible; and


 


8.4.5        can be demonstrated by competent written evidence as having been
independently developed by the recipient of the information in question without
access to or use or knowledge of the information of the disclosing party.


 


8.5           The obligations of both parties under this Clause 8 shall survive
the expiry or termination of this Agreement for whatever reason.


 
















 


9.             Intellectual Property Enforcement


 


9.1           Biologics hereby undertakes and agrees that at its own cost and
expense it will:


 


9.1.1        prosecute or procure prosecution of such of the Patent Rights which
are patent applications diligently so as to secure the best commercial
advantage obtainable, as determined by Biologics in its commercially reasonable
discretion, and will pursue, as determined by Biologics in its commercially
reasonable discretion, all necessary actions against any third party that
Biologics reasonably believes is infringing, misappropriating or violating any
Intellectual Property; and


 


9.1.2        pay or procure payment of all renewal fees in respect of the Patent
Rights valid and subsisting for the full term thereof and in particular will
procure such renewal of the registrations thereof as may be necessary from time
to time so far as it is reasonable to do so with particular reference to
commercial considerations.


 


9.2                           Licensee shall promptly notify Biologics in writing of any
infringement or improper or unlawful use of or of any challenge to the validity
of the Patent Rights and/or Know-How of which Licensee becomes aware. Biologics
undertakes and agrees to take all such steps and proceedings and to do all
other acts and things as may in Biologics’ sole discretion be necessary to
restrain any such infringement or improper or unlawful use or to defend such
challenge to validity and Licensee shall permit Biologics to have the sole
conduct of any such steps and proceedings including the right to settle them
whether or not Licensee is a party to them. Licensee shall have the right at
its own cost and for its own benefit to initiate, prosecute, and control the
enforcement of the Patent Rights against infringement by a Third Party in the
Territory if all of the following conditions are fulfilled (a) the product
manufactured through the infringing activity is a competing product to the
Product, (b) Biologics has not granted rights to third parties which prevent
Biologics from granting such a right to enforce to Licensee, and (c) Biologics
does not initiate proceedings within sixty (60) days of being requested to do
so by Licensee. In such event, and to the extent necessary, Biologics agrees to
cooperate with Licensee, at Licensee’s expense, in enforcing the Patent Rights,
including being


 

















 


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


 


joined as
party to any action to abate such infringement. Licensee shall be entitled to
retain any recovery obtained from any enforcement activity it prosecutes.


 


10.           Term and Termination


 


10.1         Unless terminated earlier in accordance with the provisions of this
Clause 10 or Clause 14, this Agreement shall continue in force in each country
of the world, until expiry of the last Valid Claim, or for so long as the
System Know-How is identified and remains secret and substantial, whichever is
later.


 


10.2         Licensee may terminate this Agreement by giving sixty (60) days
notice in writing to Biologics.


 


10.3         Either Biologics or Licensee may terminate this Agreement forthwith
by notice in writing to the other upon the occurrence of any of the following
events:


 


10.3.1                 if the other commits a breach of this Agreement that in the case of
a breach capable of remedy shall not have been remedied within *** of the
receipt by the other of a notice identifying the breach and requiring its
remedy; and


 


10.3.2                 if the other is unable to pay its debts or enters into compulsory or
voluntary liquidation (other than for the purpose of effecting a reconstruction
or amalgamation in such manner that the company resulting from such
reconstruction or amalgamation if a different legal entity shall agree to be
bound by and assume the obligations of the relevant party under this Agreement)
or compounds with or convenes a meeting of its creditors or has a receiver
appointed over all or any part of its assets or takes or suffers any similar
action in consequence of a debt, or ceases for any reason to carry on business.


 


10.4         If at any time during this Agreement Licensee knowingly, directly or
indirectly, opposes or assists any third party to oppose the grant of letters
patent or any patent application within any of the Patent Rights, Biologics
shall be entitled at


 

















 


any time
thereafter to terminate all or any of the licences granted hereunder forthwith
by notice to Licensee.


 


10.5         If this Agreement is terminated for any reason, any and all licences
granted hereunder shall terminate with effect from the date of termination and
Licensee shall destroy all Vectors, Cell Lines, and Product forthwith, and
shall certify such destruction immediately thereafter in writing to Biologics;
provided, however, that in the event Biologics terminates this Agreement, any
sublicense granted hereunder by Licensee to a Strategic Partner in respect of
Product and in effect at the time of termination shall survive, subject however
to (i) the Strategic Partner not being in material breach of their sublicence,
and (ii) such sublicence being replaced by an agreement between Biologics and
such Strategic Partner on terms equivalent to those contained in this Agreement.
Notwithstanding the foregoing, Licensee (or its Affiliates or sublicensees)
may, however, after the effective date of such termination, sell all Products,
and complete Products in the process of manufacture at the time of said
termination and sell the same, provided that Licensee shall pay to Biologics in
full all payments due under Clause 5, above, and shall submit the reports required
by Clause 6.2, above.


 


10.6         Termination for whatever reason or expiration of this Agreement
shall not affect the accrued rights of the parties arising in any way out of
this Agreement as at the date of termination. The right to recover damages against
the other and all provisions which are expressed to survive this Agreement
shall remain if full force and effect.


 


11.           Assignment


 


11.1         Save as expressly provided by Clause 4, neither party shall be
entitled to assign, transfer, charge, or in any way make over the benefit
and/or the burden of this Agreement without the prior written consent of the
other, which consent shall not be unreasonably withheld or delayed, save that
(i) either party shall be entitled without the prior written consent of the other
party to assign, transfer, charge, sub-contract, deal with, or in any other
manner make over the benefit and/or burden of this Agreement to an Affiliate or
to any 50/50 joint venture company of which Biologics or Licensee, as the case
may be, is the beneficial owner of fifty percent (50%) of the issued share
capital thereof or to any company with which that party may merge or to any
company to


 

















 


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


 


which that
party may transfer its assets and undertaking, and (ii) Licensee shall be
entitled without the prior written consent of Biologics to assign this
Agreement in the event Licensee sells or otherwise transfers all or
substantially all of its assets related to this Agreement to a third party,
including an Affiliate of Licensee or a sublicensee, whether by acquisition,
sale, merger, or operation of law.


 


11.2         This Agreement shall be binding upon the successors and assigns of
the parties, and the name of a party appearing herein shall be deemed to
include the names of its successors and assigns, provided always that nothing
herein shall permit any assignment by either party except as expressly provided
herein.


 


12.           Governing Law and Jurisdiction


 


12.1         The validity, construction, interpretation, and performance of this
Agreement shall be governed by the laws of the State of ***, without reference
to conflicts of law principles, 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. .


 


12.2         The parties hereby submit to the non-exclusive jurisdiction of the
state and federal courts located in *** with regard to the resolution of a
dispute between the parties relating to the validity, interpretation,
implementation, or application of this Agreement, or any other matter in
connection with it. Either party shall have the right to take proceedings in
any other jurisdiction for the purposes of enforcing a judgement or order
obtained from a state or federal court in the United States.


 


13.           Force Majeure


 


Neither party
shall be in breach of this Agreement if there is any total or partial failure
of performance by it of its duties and obligations under this Agreement
occasioned by any act of God, including without limitation, fire, act of
government or state, war, civil commotion, insurrection, embargo, epidemic,
terrorism or earthquake, prevention from or hindrance in obtaining any raw
materials, energy or other supplies, labour


 

















 


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


 


disputes of
whatever nature and any other reason beyond the control of either party. If
either party is unable to perform its duties and obligations under this
Agreement as a direct result of the effect of one of the reasons set out in
this Clause 13 such party shall give written notice to the other of such
inability stating the reason in question. The operation of this Agreement shall
be suspended during the period (and only during the period) in which the reason
continues. Forthwith upon the reason ceasing to exist the party relying upon it
shall give written notice to the other of this fact. If the reason continues
for a period of more than *** and substantially affects the commercial basis of
this Agreement the party not claiming under this Clause 13 shall have the right
to terminate this Agreement by giving written notice of such termination to the
other party.


 


14.           Invalidity


 


14.1         If any provision or term of this Agreement or any part thereof shall
become or be declared illegal, invalid, or unenforceable for any reason
whatsoever, including, but without limitation, by reason of the provisions of
any legislation or other provisions having the force of law or by reason of any
decision of any Court or other body or authority having jurisdiction over the
parties hereto or this Agreement, including the EC Commission or the European
Court of Justice:


 


(i)            such provision shall, so
far as it is illegal, invalid or unenforceable, be given no effect by the
Parties and shall be deemed not to be included in this Agreement;


 


(ii)           the other provisions of
this Agreement shall be binding on the Parties as if such provision was not
included therein; and


 


(iii)          the Parties agree to
negotiate in good faith to amend such provision to the extent possible for
incorporation herein in such reasonable manner as most closely achieves the
intention of the Parties without rending such provision invalid or
unenforceable.


 


15.           Miscellaneous


 


15.1         This Agreement, including Schedules 1 and 2 appended hereto,
embodies and sets forth the entire agreement and understanding of the parties
with


 

















 


respect to the
subject matter hereof, and supersedes all prior oral and written agreements,
understandings, or arrangements relating to the subject matter of this
Agreement. Neither party shall be entitled to rely on any agreement,
understanding, or arrangement which is not expressly set forth in this
Agreement.


 


15.2         This Agreement shall not be amended, modified, varied, or
supplemented except in writing signed by duly authorised representatives of the
parties.


 


15.3         No failure or delay on the part of either party hereto to exercise
any right or remedy under this Agreement shall be construed or operated as a
waiver thereof nor shall any single or partial exercise of any right or remedy
under this Agreement preclude the exercise of any other right or remedy or
preclude the further exercise of such right or remedy as the case may be. The
rights and remedies provided in this Agreement are cumulative and are not
exclusive of any rights or remedies provided by law or equity.


 


15.4         Except as required by law, the text of any press release or other
communication to be published by or in the media whether of a scientific nature
or otherwise and concerning this Agreement shall require the prior written
approval of Biologics and Licensee; provided, however, that once approved, the
substance of any such disclosure may be used subsequently by the disclosing
party without having to again obtain the other party’s prior written approval.


 


15.5         Each of the parties hereto shall be responsible for its respective
legal and other costs incurred in relation to the preparation, enforcement,
interpretation, or performance of this Agreement or any provision or obligation
hereunder.


 


15.6         The parties to this Agreement do not
intend that any term hereof should be enforceable by virtue of the Contracts
(Rights of Third Parties) Act 1999, or by any other statute or common-law
principle, by any person who is not a party to this Agreement.


 


16.           Notice


 


16.1         Any notice or other document to be given under this Agreement shall
be in writing and shall be deemed to have been duly given if left at or sent by


 

















 


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


 


registered
post or by a reputable overnight courier to a party or delivered in person to a
party at the address set out below for such party or such other address as the
party may from time to time designate by written notice to the other(s):


 


Address of
Biologics


Lonza
Biologics plc, 228 Bath Road, Slough, Berkshire SL1 4DX


Facsimile: ***


For the
attention of the Head of Legal Services


 


Address of
Licensee


Lpath, Inc., 6335 Ferris Square, Suite A, San Diego, CA 92121, USA


Facsimile: 858.678.0900


For the
attention of: President and CEO insert]


 


16.2         All such notices and documents shall be in the English language. Any
such notice or other document shall be deemed to have been received by the
addressee seven (7) working days following the date of dispatch of the notice
or other document by post or, where the notice or other document is sent by
hand, at the time of such delivery. To prove the giving of a notice or other
document it shall be sufficient to show that it was dispatched.


 


17.           Interpretation


 


17.1         The headings in this Agreement are inserted only for convenience and
shall not affect the construction hereof.


 


17.2         Where appropriate words denoting a singular number only shall
include the plural and vice versa.


 


[remainder
of this page intentionally left blank]


 

















 


17.3         Reference to any statute or statutory provision includes a reference
to the statute or statutory provision as from time to time amended, extended or
re-enacted.


 


AS WITNESS the hands of the duly authorised representatives of the
parties hereto


 


 


	
  Signed for
  and on behalf of

  	
    /s/

  	
   

  
	
  LONZA
  BIOLOGICS PLC

  	
   

  
	
   

  	
   

  
	
   

  	
     Director

  	
  TITLE

  
	
   

  	
   

  
	
  Signed for
  and on behalf of

  	
    /s/   Scott
  R. Pancoast

  	
   

  
	
  LPATH, INC.

  	
  President
  & CEO

  	
  TITLE

  
				



 

















 


SCHEDULE
1


 


PATENT
RIGHTS


 


	
  Biologics
  Ref. No.

  	
   

  	
  L.B.P.07 (PA
  98)

  
	
   

  	
   

  	
   

  
	
  Subject
  Matter:

  	
   

  	
  Expression
  of polypeptides, such as antibodies, in myeloma cell lines

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
  Transformed
  Myeloma Cell-Line and a Process for the Expression of a Gene Coding for a
  Eukaryotic Polypeptide Employing Same

  
	
   

  	
   

  	
   

  
	
  Origin:

  	
   

  	
  Celltech
  invention

  
	
  Registered
  Owner:

  	
   

  	
  Lonza Group
  AG

  
	
   

  	
   

  	
   

  
	
  Priority
  Application Dates:

  	
   

  	
  1st April
  1985 (GB 8508442); 3rd September 1985 (GB 8521815)

  
	
   

  	
   

  	
   

  
	
  Earliest
  Publication Date/No:

  	
   

  	
  9th October
  1986 (WO86/05807)

  



 


	
  Territory

  	
   

  	
  Appl. Date

  	
   

  	
  Patent No.

  	
   

  	
  Expiry Date

  	
   

  
	
  Australia

  	
   

  	
  01.04.86

  	
   

  	
  584417

  	
   

  	
  01.04.06

  	
   

  
	
  Canada

  	
   

  	
  01.04.86

  	
   

  	
  1319120

  	
   

  	
  15.06.10

  	
   

  
	
  *Europe

  	
   

  	
  01.04.86

  	
   

  	
  0216846

  	
   

  	
  01.04.06

  	
   

  
	
  Russia

  	
   

  	
  01.04.86

  	
   

  	
  2079553

  	
   

  	
  01.04.06

  	
   

  
	
  United
  Kingdom

  	
   

  	
  01.04.86

  	
   

  	
  2183662

  	
   

  	
  01.04.06

  	
   

  
	
  USA
  (cont.III)

  	
   

  	
  07.06.95

  	
   

  	
  5981216

  	
   

  	
  09.11.16

  	
   

  



 






*includes:
Austria, Belgium, France, Germany, Italy, Luxembourg, Netherlands, Sweden and
Switzerland


 

















 


	
  Biologics
  Ref. No.

  	
   

  	
  PA 108

  
	
   

  	
   

  	
   

  
	
  Subject
  Matter:

  	
   

  	
  GS Coding
  sequence

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
  Recombinant
  DNA which encodes glutamine synthetase

  
	
   

  	
   

  	
   

  
	
  Origin:

  	
   

  	
  University
  Glasgow /R.H. Wilson joint invention with former Celltech Limited.

  
	
  Registered
  Owner:

  	
   

  	
  Celltech
  Therapeutics Ltd.; The University Court of the University of Glasgow

  
	
   

  	
   

  	
   

  
	
  Inventors:

  	
   

  	
  Bebbington,
  Christopher Robert

  
	
   

  	
   

  	
  Wilson,
  Richard Harris

  
	
   

  	
   

  	
   

  
	
  Priority
  Application Dates:

  	
   

  	
  23rd
  January 1986 (GB 1986-1597)

  
	
  Earliest
  Publication Date/No:

  	
   

  	
  30th
  July 1987 (WO87/04462)

  



 


	
  Territory

  	
   

  	
  Appli. Date

  	
   

  	
  Patent No.

  	
   

  	
  Expiry Date

  	
   

  
	
  *Europe

  	
   

  	
  23.01.87

  	
   

  	
  256055

  	
   

  	
  23.01.07

  	
   

  
	
  Japan

  	
   

  	
  23.01.87

  	
   

  	
  07032712

  	
   

  	
  23.01.07

  	
   

  
	
  Canada

  	
   

  	
  23.01.87

  	
   

  	
  1338901

  	
   

  	
  11.02.14

  	
   

  
	
  Australia

  	
   

  	
  23.01.87

  	
   

  	
  599081

  	
   

  	
  23.01.07

  	
   

  
	
  USA

  	
   

  	
  23.10.87

  	
   

  	
  5122464

  	
   

  	
  16.06.09

  	
   

  
	
  USA Cont.III

  	
   

  	
  08.07.94

  	
   

  	
  5770359

  	
   

  	
  16.06.09

  	
   

  
	
  USA Cont.IV

  	
   

  	
  07.06.95

  	
   

  	
  5827739

  	
   

  	
  16.06.09

  	
   

  



 






*includes:
Austria, France, Germany, Luxembourg, Netherlands, Sweden, Switzerland/LI,
Belgium, Great Britain, Italy,


 

















 


	
  Biologics
  Ref. No.

  	
   

  	
  L.B.P. 09
  (PA 140)

  
	
   

  	
   

  	
   

  
	
  Subject
  Matter:

  	
   

  	
  Expression
  systems containing a hCMV promoter

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
  Recombinant
  DNA Expression Vectors

  
	
   

  	
   

  	
   

  
	
  Origin:

  	
   

  	
  Celltech
  invention

  
	
  Registered
  Owner:

  	
   

  	
  Lonza Group
  AG

  
	
   

  	
   

  	
   

  
	
  Priority
  Application Date:

  	
   

  	
  23rd July
  1987 (GB 8717430)

  
	
  Earliest
  Publication Date/No:

  	
   

  	
  9th February
  1989 (WO89/01036)

  



 


	
  Territory

  	
   

  	
  Appl. Date

  	
   

  	
  Patent No.

  	
   

  	
  Expiry Date

  	
   

  
	
  *Europe

  	
   

  	
  22.07.88

  	
   

  	
  0323997

  	
   

  	
  22.07.08

  	
   

  
	
  Japan

  	
   

  	
  22.07.88

  	
   

  	
  2505268

  	
   

  	
  22.07.08

  	
   

  
	
  USA (cont.II)

  	
   

  	
  09.02.94

  	
   

  	
  5591639

  	
   

  	
  07.01.14

  	
   

  
	
  USA (divisional)

  	
   

  	
  16.04.96

  	
   

  	
  5658759

  	
   

  	
  22.07.08

  	
   

  



 






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


 

















 


	
  Biologics
  Ref. No.

  	
   

  	
  L.B.P. 10
  (PA 177)

  
	
   

  	
   

  	
   

  
	
  Subject
  Matter:

  	
   

  	
  Operation of
  glutamine synthetase expression systems in lymphoid cells

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
  Recombinant
  DNA Methods, Vectors and Host Cells

  
	
   

  	
   

  	
   

  
	
  Origin:

  	
   

  	
  Celltech
  invention

  
	
  Registered
  Owner:

  	
   

  	
  Lonza Group
  AG

  
	
   

  	
   

  	
   

  
	
  Priority
  Application Date:

  	
   

  	
  18th April
  1988 (GB 8809129)

  
	
  Earliest
  Publication Date/No:

  	
   

  	
  25th October
  1989 (EP 0338841)

  
	
   

  	
   

  	
  02nd
  November 1989 (WO89/10404)

  



 


	
  Territory

  	
   

  	
  Appl. Date

  	
   

  	
  Patent No.

  	
   

  	
  Expiry Date

  	
   

  
	
  (1)Australia

  	
   

  	
  18.04.89

  	
   

  	
  624616

  	
   

  	
  18.04.09

  	
   

  
	
  Canada

  	
   

  	
  18.04.89

  	
   

  	
  1338891

  	
   

  	
  04.02.14

  	
   

  
	
  *Europe

  	
   

  	
  18.04.89

  	
   

  	
  0338841

  	
   

  	
  18.04.09

  	
   

  
	
  (1)Japan

  	
   

  	
  18.04.89

  	
   

  	
  2007380

  	
   

  	
  18.04.09

  	
   

  
	
  (1)USA (cont I)

  	
   

  	
  12.06.92

  	
   

  	
  5879936

  	
   

  	
  09.03.16

  	
   

  
	
  (1)USA (cont II)

  	
   

  	
  23.01.95

  	
   

  	
  5891693

  	
   

  	
  06.04.16

  	
   

  



 






*includes:
Austria, Belgium, France, Germany, Greece, Italy, Luxembourg, Netherlands,
Spain, Sweden, Switzerland, United Kingdom


 

















 


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


 


SCHEDULE
2


 


Cell Testing (***)


 




	
  Test

  	
   

  	
  Method

  	
   

  	
  Result

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  	
  ***