Tanox Inc. Contracts
Sample Business Contracts
Research and Licence Agreement - Tanox Inc. and Biovation Ltd.
RESEARCH AND LICENCE AGREEMENT
This Agreement is made this 21st day of April, 1999,
BETWEEN
TANOX, INC. of 10301 Stella Link, Houston, Texas 77025, USA
(hereinafter "TANOX")
and
BIOVATION LIMITED of Crombie Lodge, Aberdeen Science Park, Balgownie Drive,
Aberdeen AB22 BGU, Scotland, UK (hereinafter "BIOVATION").
WHEREAS TANOX owns or has rights to commercialize (i) certain MONOCLONAL
ANTIBODIES which each bind to a specific antigen, and to the cell lines
producing them, and (ii) other products, including a novel interferon-a fusion
protein and the expression system for it, (collectively hereinafter referred to
as the "PRODUCTS"); and
WHEREAS BIOVATION has certain technology, materials and know-how for the genetic
engineering of MONOCLONAL ANTIBODIES in a manner which removes potentially
immunogenic sequences in the variable region of antibodies and introduces human
constant regions to produce an antibody for therapeutic or IN VIVO diagnostic
purposes designed to avoid or substantially minimize immunogenic response IN
VIVO. The technology is described in International Patent Application
PCT/GB98/01473 and the procedure is referred to hereinafter in this Agreement as
"Delmmunisation," with the product of such Delmmunisation referred to as a
"Delmmunised" product or said to be "Delmmunised"; and
WHEREAS TANOX wishes BIOVATION to apply its technology and know-how to perform
the Delmmunisation on certain of its PRODUCTS and BIOVATION wishes to perform
such services;
NOW THEREFORE it is hereby agreed as follows:
1. DEFINITIONS
In this Agreement, the following terms have the following meanings:
(a) "EFFECTIVE DATE" shall mean the date first written above.
(b) "TECHNICAL INFORMATION" shall mean technical and scientific
information and technology which is owned by and in the possession of
BIOVATION at the EFFECTIVE DATE.
1
<PAGE>
(c) "MONOCLONAL ANTIBODIES" shall mean and include collectively certain
monoclonal antibodies specific for certain antigens and the cell lines
which produce them (and which Tanox has the right to develop and
commercialize) such Monoclonal Antibodies being described more
specifically in the Materials Transfer Agreement between the parties
dated March 17, 1999, or in Schedule II or otherwise specified as
provided by TANOX pursuant to this Agreement.
(d) "IFN PRODUCTS" shall mean and include interferon and/or fusion
proteins with interferon conjugated to an immunoglobulin Fc,
preferably through a peptide linker, and the expression system
therefor, as generally described in U.S. Patent No. 5,723,125 ("IFN
PRODUCT"), assigned to TANOX.
(e) "PRODUCTS" shall mean and include MONOCLONAL ANTIBODIES and IFN
PRODUCTS.
(f) The "RESEARCH PROGRAMME" shall mean the Delmmunisation programme
outlined in Schedule I, as applied to MONOCLONAL ANTIBODIES or as
modified and applied to IFN PRODUCTS.
(g) "DEIMMUNISED ANTIBODIES" shall mean any and all MONOCLONAL ANTIBODIES
which are Deimmunised as a result of the RESEARCH PROGRAMME and which
are substantially non-immunogenic.
(h) "DEIMMUNISED IFN" shall mean any and all IFN PRODUCTS which are
Deimmunized as a result of the RESEARCH PROGRAMME and which have
substantially reduced or no immunogenicity, as agreed by the parties.
(i) "FINAL PRODUCTS" shall mean the DEIMMUNISED ANTIBODIES and the
DEIMMUNISED IFN.
(j) "CONFIDENTIAL INFORMATION" shall mean any and all information
disclosed by TANOX to BIOVATION with reference to the PRODUCTS or the
RESEARCH PROGRAMME, whether such information is in tangible or
intangible form, including non-technical or technical information,
trade secrets, know-how, inventions, processes and samples.
CONFIDENTIAL INFORMATION shall include any oral disclosure of such
information, provided that BIOVATION is notified or otherwise
reasonably informed that such information is confidential or a written
summary of such oral disclosure is provided to BIOVATION within thirty
(30) days of disclosure thereof.
2
<PAGE>
(k) "PROPRIETARY TECHNOLOGY" shall mean any and all technology,
techniques, assays or biological materials, including vectors,
antibodies, cell lines, host cells, expression systems, plasmids,
organisms, or DNA or RNA sequences, provided by TANOX to BIOVATION.
(l) "PATENT RIGHTS" shall mean any and all patent applications and any
divisionals, continuations, continuations-in-part or patents of
addition thereof, and any patents issuing from or claiming priority to
any of the foregoing, or any extensions, supplemental protection
certificates, reissues, renewals or re-examinations of such patents,
which arise from the RESEARCH PROGRAMME.
(m) "DELIVERABLES" shall mean any and all inventions, materials,
improvements, technology and intellectual property rights, including
PATENT RIGHTS, arising out of the RESEARCH PROGRAMME or relating to
the FINAL PRODUCTS including, without limitation, all specific data
reports, specific cell lines, specific plasmids, antibodies and fusion
proteins.
(n) "NET SALES" shall mean the total gross receipts from sales of FINAL
PRODUCTS by or on behalf of TANOX, its affiliates and sublicensees to
third parties, or from leasing, renting or otherwise making FINAL
PRODUCTS available to third parties on a payment basis whether
invoiced or not, less unpaid accounts receivable, returns and
allowances actually granted, packaging costs, insurance costs,
freight, taxes, excise or customs duties, and wholesaler, quantity or
cash discounts customary in the trade. No deductions shall be made for
commissions paid to individuals, whether they be with independent
sales agencies or regularly employed by TANOX and on its payroll, or
for the cost of collections of unpaid accounts.
(o) "AVERAGE PERCENTAGE EXPERIENCING IMMUNOGENIC REACTION" shall mean,
with respect to each Final Product, as applicable, the Overall Average
of the percentage of Comparable Patients, as determined at the time
the first royalty payment is due for the applicable DEIMMUNISED
ANTIBODY, who had an immunogenic (HAHA) reaction to humanized
(CDR-grafted) antibodies which target antigens, respectively, in the
Same Class as such DEIMMUNISED ANTIBODY. For purposes of determining
the Average Percentage Experiencing Immunogenic Reaction with respect
to a particular Deimmunised Antibody, "Overall Average", "Comparable
Patients", and "Class" shall have the following meaning or be
determined in the following manner, irespectively:
(i) Overall Average shall be determined by first identifying all
humanized (CDR-grafted) antibodies targeting antigens in the
3
<PAGE>
Same Class with respect to which the percentage of Comparable
Patients having an immunogenic reaction to each of such humanized
(CDR-grafted) antibodies is known and then computing the average
of all such known percentages;
(ii) Comparable Patients shall mean patients whose immune system
function is generally characterized in the same manner as either
immunocompetent or immunocompromised; and
(iii) Same Class shall mean antigens primarily targeted by a
Monoclonal Antibody that has characteristics of only of the
following classes, which will be agreed by the Parties for each
of the Monoclonal Antibodies to be Deimmunised: (i) primarily
present on antigen presenting cells ("APC"); (ii) present on
cells, but not primarily on APC ("Non-APC"); (iii) primarily a
soluble antigen.
The Monoclonal Antibodies which have been transferred to Biovation or
which are now identified as possible candidates for Deimmunisation
target the following antigen classes:
(i) APC - CD40 and CD4 ; (ii) non-APC - G-CSF-receptor; and (iii)
soluble antigen - anti-factor D
2. COLLABORATION
2.1 TANOX has already transferred to BIOVATION three MONOCLONAL ANTIBODIES as
to which TANOX desires BIOVATION to initiate Delmmunisation under the
RESEARCH PROGRAMME, along with all CONFIDENTIAL INFORMATION and such
PROPRIETARY TECHNOLOGY as Tanox deems necessary for BIOVATION to perform
the Delmmunisation thereon. TANOX may, at its election, transfer to
BIOVATION three additional PRODUCTS along with all CONFIDENTIAL INFORMATION
and such PROPRIETARY TECHNOLOGY as Tanox deems necessary for BIOVATION to
perform the Delmmunisation thereon, and BIOVATION shall be obligated to
perform such Delmmunisation under the terms and conditions of this
Agreement with respect to the first such additional PRODUCT if it is
transferred to BIOVATION on or before March l, 2000, and with respect to
the second and third such additional PRODUCTS provided that they are
transferred to BIOVATION on or before October 1, 2000 and on or before May
1, 2001, respectively. Prior to transferring any IFN PRODUCT to BIOVATION
under this Article 2.1, the parties shall first agree to the price and the
research plan (analogous to Schedule I attached) for BIOVATION to produce a
DEIMMUNISED IFN. All such PRODUCTS transferred under this Article 2.1 are
and shall remain the property of TANOX and BIOVATION shall have no rights
therein. Upon receipt of any MONOCLONAL ANTIBODIES, BIOVATION agrees to use
its best efforts to immediately begin and to complete Delmmunisation
thereof within six
4
<PAGE>
months from receipt, as described in SCHEDULE I, and upon receipt of any
IFN PRODUCTS, BIOVATION agrees to use its best efforts to complete
Delmmunization thereof within the time frame as agreed by the parties.
2.2 During the RESEARCH PROGRAMME, BIOVATION'S principal investigator and
representative shall be Dr. Frank Carr and TANOX'S principal representative
shall be Dr. David Thomas or other such person or persons as the respective
parties shall identify to the other by written notice.
2.3 BIOVATION shall provide TANOX with a written research report and a final
report upon completion of the RESEARCH PROGRAMME for each PRODUCT, as
provided in Schedule I. If required by TANOX, Biovation will deliver to
TANOX at the completion of Stage 1 of the RESEARCH PROGRAMME for each
MONOCLONAL ANTIBODY, a corresponding chimeric antibody and plasmids
containing DEIMMUNISED V regions from the MONOCLONAL ANTIBODIES, with
sufficient information and materials for TANOX to reasonably verify
satisfactory completion of Stage 1. The representatives or their designees
shall keep in contact during the conduct of the RESEARCH PROGRAMME for each
PRODUCT.
2.4 Upon completion of the RESEARCH PROGRAMME for each PRODUCT, BIOVATION shall
provide to TANOX a cell line producing a DEIMMUNISED ANTIBODY or a host
cell producing a DEIMMUNISED IFN derived from the starting PRODUCT with
sufficient information and materials for TANOX to reasonably verify that
the FINAL PRODUCT retains the required binding affinity and specificity.
BIOVATION shall also provide to TANOX samples of any materials created
during the RESEARCH PROGRAMME and not previously provided, such as plasmids
and cell lines, as appropriate, along with any protocol for using or
storing such materials.
2.5 If TANOX requests BIOVATION to perform a human T cell immunogenicity assay
for any DEIMMUNISED ANTIBODY, the parties have agreed that BIOVATION would
perform such assay for no more than $80,000 per DEIMMUNISED ANTIBODY, with
appropriate reductions if TANOX requests such assay for two or more
DEIMMUNISED ANTIBODIES, and would use diligent efforts to complete such
assay as soon as reasonably practical.
3. FUNDING AND PRODUCT SPECIFICATION
3.1 PAYMENTS AND OBLIGATIONS
a) In consideration for the Delmmunisation performed by BIOVATION, TANOX
shall pay BIOVATION: (i)US$112,889 within 10 days of the later of the
EFFECTIVE DATE or the transfer of each MONOCLONAL ANTIBODY to
BIOVATION for Delmmunisation; and (ii) two subsequent payments of
US$112,889 at quarterly intervals measured from the date of
5
<PAGE>
such first payment for each MONOCLONAL ANTIBODY so transferred. If
Tanox elects, pursuant to Article 2.1, to transfer additional
MONOCLONAL ANTIBODIES to BIOVATION for Delmmunisation (I.E., in
addition to the three MONOCLONAL ANTIBODIES already transferred), the
payment schedule for each such additional MONOCLONAL ANTIBODY shall be
the same as set forth above in this Article 3.1 (a), but the amount of
each payment shall be reduced to US$86,666.
b) BIOVATION is obligated to produce DEIMMUNISED ANTIBODIES, for each
MONOCLONAL ANTIBODY provided to it by TANOX for Delmmunisation, having
the same specificity as the corresponding MONOCLONAL ANTIBODY and with
binding efficiency for the specific antigen which is not more than
3-fold lower than that of a corresponding chimeric antibody with
matched human constant regions, or a corresponding humanized antibody
(if provided by TANOX), and to provide TANOX 100 (micron) g of
DEIMMUNISED ANTIBODY and supply to TANOX a cell line producing each
DEIMMUNISED ANTIBODY with sufficient information and materials for
TANOX to reasonably verify satisfactory completion of the RESEARCH
PROGRAMME. BIOVATION is obligated to produce at least one DEIMMUNISED
IFN, following TANOX providing one or more IFN PRODUCTS to BIOVATION,
which DEIMMUNISED IFN shall have an activity to be agreed by the
parties before beginning such production, and to provide TANOX 100
(micron) g of such purified DEIMMUNISED IFN and supply to TANOX a host
cell producing such DEIMMUNISED IFN, with sufficient information and
materials for TANOX to reasonably verify that the DEIMMUNISED IFN has
the agreed level of non-immunogenicity and meets the agreed
specifications therefor, including, but not limited to, the agreed
activity.
c) In the event that, pursuant to clinical testing in humans, a FINAL
PRODUCT is found to induce any immunogenic reaction IN VIVO, if
requested by TANOX within five years of the EFFECTIVE DATE, BIOVATION
agrees to use its best efforts, as determined in light of surrounding
circumstances at such time, to redo the Delmmunisation and to provide
TANOX with an improved FINAL PRODUCT as soon as possible. BIOVATION
agrees to perform such activities for a price which is proportionally
reduced from the total of payments under Article 3.1 (a), based on the
relative difference between such activities and the total of
activities in the RESEARCH PROGRAMME, but with such price subject to
increases no greater than the UK Retail Price Index.
d) TANOX shall pay BIOVATION a royalty of 1.66% on NET SALES of FINAL
PRODUCTS; provided, however, that if, any DEIMMUNISED ANTIBODY is
judged by a court of competent jurisdiction in a particular territory
to be an infringement of any third party patents relating to antibody
humanization in that territory including but not limited to Protein
6
<PAGE>
Design Labs' U S. Patent Nos. 5,530,101; 5,693,761; 5,693,762 and
European Patent No. 0451216 or related United States or foreign
patents (other than the Boss patents held by Celltech relating to
antibody co-co-expression, the Winter patents held by MRC relating to
antibody humanization and the Cabilly patents held by Genentech
relating to chimeric antibodies and the United States Cabilly patent
application relating to antibody co-expression), or if TANOX is
required to license or licenses, because licensing is appropriate in
the opinion of independent counsel, any such third party patents
relating to antibody humanization in a particular territory (other
than those excluded above) for any DEIMMUNISED ANTIBODY, the royalty
shall be reduced in that territory by 50% of the royalty percentage
rate relating to any such third party patents subject to a minimum
royalty of 0.83% on NET SALES of such DEIMMUNISED ANTIBODY; provided
further, however, that a DEIMMUNISED ANTIBODY shall only be subject to
royalties under this Article 3.1(d) if it elicits an immunogenic
response in no more than 25% of the AVERAGE PERCENTAGE EXPERIENCING
IMMUNOGENIC REACTIONS. The royalty due under this Article 3.1 (d)
shall be payable in a specific territory until the earlier of: (i) 10
years from the first sale of a FINAL PRODUCT in that specific
territory, or (ii) a judgment or declaration by a court or
governmental agency or other competent tribunal in that specific
territory that BIOVATION's patents covering the Delmmunisation
procedure used for such FINAL PRODUCT and/or which are derived from
International Patent Application PCT/GB98/01473, are invalid or
unenforceable, or in the event that such patents have expired in that
specific territory. TANOX may withhold from royalties due BIOVATION
amounts for payment of any withholding tax that TANOX has actually
paid to any taxing authority with respect the royalty payments due to
BIOVATION hereunder.
3.2 Commencing with the date of the first sale of FINAL PRODUCT, TANOX shall
pay all royalties due to BIOVATION, pursuant to Article 3.1 (d) quarterly
in arrears and within sixty (60) days of 31 December, 31 March, 30 June and
30 September for the preceding quarter or any part thereof. TANOX shall,
and shall procure that its licencees and sub-licensees of the FINAL PRODUCT
shall, keep full, true and accurate books of account or verified copies
thereof setting out the price and volume of sales and other disposals of
FINAL PRODUCT and such other particulars as may be pertinent to determine
product revenue and the amount of royalties due thereon to BIOVATION. TANOX
shall produce a statement thereof in respect of each quarter which shall be
certified by a responsible officer of TANOX and which shall accompany each
payment of royalties. TANOX shall provide at the end of each calendar year
a certified statement detailing product revenue and setting out total
royalties due hereunder during that year. The said books or verified copies
thereof shall be open, during regular business hours for two (2) years
following the end of the calendar year to which they pertain, to the
inspection of an independent certified public accountant retained by
BIOVATION
7
<PAGE>
and acceptable to TANOX for the purpose of verifying TANOX's royalty
statements (and TANOX's compliance in all other respects with this
Agreement), such inspections to occur not more often than once each
calendar year. The costs and expenses relating to such inspection shall be
borne by BIOVATION unless it is established that as a result of an error
TANOX has failed to pay at least ninety percent (90%) of the full amount
due and owing under this Agreement, in which event the costs and expenses
of such inspection shall be borne by TANOX. In addition any outstanding
payments due to BIOVATION which are identified as a result of carrying out
the investigation shall be made over to BIOVATION as soon as is possible.
3.3 All payments under Article 3.1 (a) shall be due within thirty days of
receipt of invoice by TANOX of invoice from BIOVATION; provided, however,
that in the event that a DEIMMUNISED ANTIBODY among the first three
PRODUCTS transferred to BIOVATION under Article 2.1 does not meet the
specificity or binding affinity required under Article 3.1 (b), then Tanox
may offset US$79,750 against any payments due Biovation under this
Agreement, including, without limitation, payments due under Article 3.1
(a) for each such DEIMMUNISED ANTIBODY and, with respect to any other
DEIMMUNISED ANTIBODY received from BIOVATION the amount of such offset
allowed shall be $65,000. Notwithstanding anything in this Agreement to the
contrary, Tanox may suspend payments with respect to any Monoclonal
Antibody with respect to which Delmmunisation is in progress as follows:
(i) Tanox may suspend the first quarterly payment due after the initial
payment until 10 days following successful completion of all stage 1
activities in the Research Programme and (ii) Tanox may suspend the final
quarterly payment until 10 days following successful completion of all
stage 2 activities in the Research Programme.
3.4 Payments shall be made by cheque drawn upon a UK clearing bank or paid into
BIOVATION'S designated bank account. BIOVATION reserves the right to
suspend all work on a PRODUCT in the event payment is more than 30 days
past due with respect to such PRODUCT; provided, however, that BIOVATION
must have first notified TANOX that such payment is past due at least 30
days prior to suspending work.
3.5 Subject to Article 3.3, any payments due hereunder which are not paid
within thirty days of receipt by TANOX of invoice from BIOVATION shall then
be subject to the levy of daily interest charges at the rate of 3% over the
prevailing Barclays UK bank interest rate calculated from the published
rate on the last day of each preceding month where a balance is due.
4. RIGHTS TO TECHNOLOGY
4.1 With respect to each FINAL PRODUCT produced under the RESEARCH PROGRAMME,
provided that no payments under Article 3.1 (a) are overdue,
8
<PAGE>
BIOVATION shall assign to TANOX all rights to the FINAL PRODUCT and to the
DELIVERABLES, including all of the PATENT RIGHTS.
4.2 Pursuant to Article 4.1, TANOX shall be free to use the DELIVERABLES and
FINAL PRODUCTS, including any methods, protocols and procedures it receives
from BIOVATION, in any manner whatsoever subject to the provisions of
Article 7.4.
4.3 BIOVATION agrees to cooperate with TANOX's reasonable requests for
assistance in the filing, prosecution, maintenance, enforcement or defense
of any PATENT RIGHTS, including by filing patent applications or taking any
such actions in its own name, at Tanox's request. TANOX shall reimburse
BIOVATION for all out-of-pocket expenses incurred by BIOVATION during such
cooperation.
4.4 With respect to each FINAL PRODUCT produced under the RESEARCH PROGRAMME,
upon completion of the RESEARCH PROGRAMME provided that no payments under
Article 3.1 (a) for such FINAL PRODUCT are overdue, BIOVATION agrees to
grant to TANOX a non-exclusive worldwide licence to BIOVATION's patents
relating to Delmmunisation technology, including all such patents based on,
relating to or derived from International Patent Application
PCT/GB98/01473, and a non-exclusive sublicence to all of BIOVATION's rights
under the National Institutes of Health patents relating to Veneering
technology, which are based on, relate to or are derived from U.S.
Application Serial Nos. 08/109,187 and 08/609,218, for the purpose of
making, using and selling the FINAL PRODUCTS. Such sublicence may be
terminated in the event that BIOVATION's licence from the National
Institutes of Health is terminated although at such time, and at any time
during the term of the sublicence, TANOX will have the option to licence
directly from the National Institutes of Health subject to approval by the
National Institutes of Health. In the event that TANOX enters such a direct
licence with the National Institutes of Health, TANOX shall receive a full
credit for percentage royalties paid in connection therewith against the
royalty due under Article 3.1 (d); provided, however, that in no event
shall the total of the under this Article 4.4 reduce the royalties
otherwise due under Article 3.1 (d) to less than 0.83%.
5. TERMS AND TERMINATION
5.1 The term of this Agreement shall commence on the EFFECTIVE DATE and shall
continue until the expiration of the royalty obligation set forth in
Article 3.1 (d) for all PRODUCTS, unless earlier terminated in accordance
with this Article 5.
5.2 Either party shall have the right to immediately terminate this Agreement
in the event the other party: (i) shall fail to perform any of its material
obligations under this Agreement and such default is not cured within 60
days of notice of default,
9
<PAGE>
or (ii) shall file for protection under bankruptcy or similar statutes or
shall be liquidated or placed in receivership.
5.3 Upon expiration or termination of this Agreement, BIOVATION shall deliver
possession and title to all DELIVERABLES and FINAL PRODUCTS and shall
return any materials, PRODUCTS, CONFIDENTIAL INFORMATION or PROPRIETARY
TECHNOLOGY received from TANOX. TANOX's obligations for payment for work
performed by BIOVATION prior to the date of expiration or termination of
this Agreement, all obligations of assignment and cooperation under Article
4, the confidentiality and non-use obligations of Article 6 and the
warranties and disclaimers of Article 7 shall survive expiration or
termination of this Agreement, and, following expiration or termination of
this Agreement, all licenses and sublicenses under Article 4 shall become
fully paid up and royalty-free and irrevocable thereafter, except as
otherwise provided therein.
6. CONFIDENTIALITY
6.1 BIOVATION agrees that it will hold the CONFIDENTIAL INFORMATION and any
PROPRIETARY TECHNOLOGY received from TANOX in secrecy and confidence and
will not disclose it to any third person, nor use it for any purpose other
than the evaluation which is the purpose of this Agreement, except to the
extent that such CONFIDENTIAL INFORMATION:
a. was known to BIOVATION at the time it was received, and BIOVATION
promptly so notifies TANOX, or it is subsequently developed
independently by BIOVATION without any reliance on the information
received, as evidenced by written record; or
b. was publicly known when received from TANOX or thereafter becomes
publicly known through no fault of BIOVATION; or
c. is made known to BIOVATION by a third person who did not derive it
from TANOX and who does not impose any obligation or confidence on
BIOVATION, as evidenced by written record; or
d. is approved for disclosure by prior written consent of TANOX; or
e. is required by government authority, and reasonable notice of the
impending disclosure has been given to TANOX, and TANOX has been
provided an opportunity to limit the disclosure to the extent
possible, for example, by cooperating in drafting a protective order.
6.2 BIOVATION further agrees that it will restrict disclosure of the
CONFIDENTIAL INFORMATION, PROPRIETARY TECHNOLOGY and PRODUCTS to within its
own organization (and will not export except as approved by TANOX and then,
only in compliance with the rules of the United States Export
Administration) to
10
<PAGE>
those persons having a need to know it for the purpose of this Agreement,
and then, only if such persons are subject to obligations of
confidentiality and non-use of the same scope as set forth set forth in
this Article 6.
6.3 The above obligations relating to CONFIDENTIAL INFORMATION shall expire
five (5) years from the date of BIOVATION receiving the CONFIDENTIAL
INFORMATION.
6.4 All CONFIDENTIAL INFORMATION, PROPRIETARY TECHNOLOGY and PRODUCTS shall
remain the sole and exclusive property of TANOX.
6.5 This Agreement shall not be construed as granting any license rights to
BIOVATION. with respect to the CONFIDENTIAL INFORMATION, PROPRIETARY
TECHNOLOGY or PRODUCTS.
7. WARRANTIES AND DISCLAIMERS
7.1 BIOVATION represents and warrants that the performance of its obligation
hereunder will not conflict with any existing obligation to a third party.
7.2 Except as otherwise provided in this agreement, neither party makes any
representations or warranties whatsoever, whether express or implied, with
regard to any materials, information or know-how, including, without
limitation, the CONFIDENTIAL INFORMATION, PROPRIETARY TECHNOLOGY and
TECHNICAL INFORMATION. In particular, neither party makes any warranty of
fitness for a particular purpose or of merchantability.
7.3 BIOVATION shall not be responsible for any claims brought against TANOX by
third parties in respect of any damage or injury directly resulting from
the use of the DELIVERABLES. TANOX shall not be responsible for any damage
or injury resulting from BIOVATION's use of the CONFIDENTIAL INFORMATION,
PROPRIETARY TECHNOLOGY, PRODUCTS OR DELIVERABLES, and BIOVATION shall
indemnify and hold harmless TANOX from all claims relating to such damage
or injury.
7.4 TANOX, and not BIOVATION, is responsible in its sole discretion for
obtaining additional licences to any patents and technologies required for
the commercialisation of the FINAL PRODUCTS and BIOVATION will assist TANOX
in obtaining such licences or in activities relating thereto, including in
litigation relating to such licences or to the validity, infringement or
enforceability of such patents; provided, however, that TANOX shall
reimburse BIOVATION for all out-of-pocket expenses incurred by BIOVATION
during such assistance.
8. FORCE MAJEURE
If the performance of this Agreement or any obligation hereunder, is prevented,
restricted or interfered with by reason of fire or other casualty or accident,
strikes or
11
<PAGE>
labour disputes, inability to procure raw materials, power or supplies, war,
invasion, civil commotion or other violence, compliance with any order of any
governmental authorities or any other act or conditions whatsoever beyond
reasonable control of either party hereto, the party so affected upon giving a
prompt notice to the other party shall be excused from such performance to the
extent of such prevention, restriction or interference; provided, however, that
the party so affected shall use its best efforts to avoid or remove such causes
of non-performance and shall continue performance hereunder with the utmost
despatch whenever such causes are removed; provided further, however, that if
such non-performance shall continue for a period of more than 6 months, the
other party shall have the right to terminate this Agreement.
9. ASSIGNMENT
In the event that BIOVATION shall be acquired by another company, or be merged
with another company, this Agreement shall be assumed by and binding upon any
such company. However, excluding this exception, this Agreement shall not be
assigned by BIOVATION without the prior written consent of TANOX. TANOX may
assign this Agreement to its affiliates and subsidiaries, and this Agreement
shall be assumed by and binding upon any company TANOX is acquired by or merges
with, but Tanox may not assign this Agreement to other parties without
BIOVATION's prior written consent.
10. ARBITRATION
The parties hereto shall attempt to amicably settle all disputes, controversies
or differences which may arise between them out of or in relation to this
Agreement. In case of failure of amicable settlement between the parties hereto,
all such disputes, controversies or differences shall be finally settled by
binding arbitration before three arbitrators selected by the parties from a pool
of potential arbitrators. The arbitration shall take place in England, under
English law, in accordance with the Rules of Conciliation and Arbitration of the
International Chamber of Commerce if BIOVATION is the responding party and in
Houston, Texas, under Texas law, if TANOX is the responding party, in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The arbitration award shall be final and binding, may impose
injunctive or other equitable relief including specific performance, and may be
enforced by any court having jurisdiction, or by courts where the arbitration
took place or where a party resides.
II. NOTICES
(a) All notices and statements required to be given to either party shall
be despatched by express courier (E.G., DHL or FedEx) or by telefax,
with confirmation, addressed to such party at the following address:
To BIOVATION
Dr. Frank J. Carr
Biovation Limited
12
<PAGE>
Chief Executive Officer
Crombie Lodge
Aberdeen Science Park
Balgownie Drive
Aberdeen AB22 8GU
Scotland
Tel: 44 1224 707337
Fax: 44 1224 708816
To Tanox, Inc.
Dr. Nancy Chang, President
Tanox, Inc.
10301 Stella Link
Houston
Texas 77025
USA
copy to: Head of Legal Affairs
Tel: 1 713 664 2288
Fax: 1 713 664 8914
(b) All notices and statements shall be deemed effective the following
day, if sent by telefax, or three business days after shipping, if
sent by express courier.
(c) Each party hereto may change its address or person to whom notice is
directed set forth above for the purpose of this Agreement by giving a
written notice to the other party from time to time.
12. ENTIRE AGREEMENT
This Agreement contains the entire understanding of the parties hereto with
respect to the subject matter contained herein. There are no restrictions,
promises, covenants or understandings other than those expressly set forth
herein; except that the obligations of the Confidentiality Agreement between the
parties of October, 1998 remains in full force and effect. No rights or duties
on the part of either party hereto are to be implied or inferred beyond those
expressly herein provided for. The parties hereto may, from time to time during
the continuance of this Agreement, modify, vary or alter any of the provisions
of this Agreement but only by an instrument duly executed by the parties hereto.
13. AMENDMENTS; WAIVERS
This Agreement may be amended and any of its terms or conditions may be waived
only by a written instrument executed by both parties, or, in the case of a
waiver, by the party waiving compliance. The failure of either party at any
time to require performance of any
13
<PAGE>
provision hereof shall in no manner affect its rights a later time to enforce
the same. No waiver by either party of any condition or term in any instance
shall be construed as a further or continuing waiver of such condition or term
or of another condition or term.
14. NO AGENCY
The relationship between the parties is that of independent contractor. Nothing
herein shall be deemed to constitute TANOX, on the one hand, or BIOVATION, on
the other hand, as the agent or representative of the other, or as master and
servant, employer and employee, joint venturers or partners for any purpose.
Neither party shall use the other's name without the consent of the other.
15. SEVERABILITY
In the event one or more provisions of this Agreement should for any reason be
held by any court or authority having applicable jurisdiction to be invalid,
illegal or unenforceable, such provision(s) shall either be reformed to comply
with applicable law or stricken if not so conformable, so as not to affect the
validity or enforceability of the remainder of this Agreement.
16. MISCELLANEOUS PROVISIONS
(a) Each party acknowledges that it has negotiated and entered into this
Agreement in good faith.
(b) The Schedules I and II attached are incorporated and considered part
of this Agreement.
IN WITNESS WHEREOF, the parties hereto may have caused this Agreement to be
executed in duplicate originals, in which case each counterpart shall be
considered an original.
BIOVATION LTD
Signed: /s/ DR. FRANK J. CARR
Dr. Frank J. Carr
Chief Executive Officer
TANOX, INC.
Signed: /s/ NANCY T. CHANG
Nancy T. Chang, CEO
14
<PAGE>
SCHEDULE 1
RESEARCH PROGRAMME:
STAGES AND TIMESCALES
PROJECT: APPLICATION OF DEIMMUNISATION TECHNOLOGY FOR
DEIMMUNISATION OF MONOCLONAL ANTIBODIES
(V = variable region; C = constant region; CDR = complementarity
determining region; H = heavy; L = light)
STAGE 1:
Provision and growth of starting monoclonal antibody producing cell lines.
Confirmation of starting antibody production (simple assays provided by TANOX).
Optional V region sequencing or sequence verification.
Computer analysis of VH and VL chain sequences for immunogenic epitopes.
Design of DEIMMUNISED V regions.
Construction of DEIMMUNISED V region frameworks.
Construction of control chimeric antibody (if not already available).
TIMESCALE: 3 months from start.
DELIVERABLES: Plasmids containing DEIMMUNISED V regions.
A report is to be delivered to TANOX.
STAGE 2:
Cloning of DEIMMUNISED VH and VL fragments into expression vectors.
Addition of human heavy chain gamma 1 and light chain kappa constant region gene
fragments (or other C regions specified by TANOX).
Transfection into mouse NSO myeloma cell line (or other cell line specified by
TANOX).
Selection and analysis of clones for DEIMMUNISED ANTIBODY production.
Purification of DEIMMUNISED ANTIBODY.
TIMESCALE: 3 months.
DELIVERABLES: Supply the control chimeric antibody, the recombinant cell-line
stably producing a DEIMMUNISED ANTIBODY, and 100 (micron)g of purified
DEIMMUNISED ANTIBODY.
A report is to be delivered to Tanox.
15
<PAGE>
SCHEDULE II
PRODUCTS
ISOTYPE OF STARTING
DESIGNATED NAME ANTIGEN ANTIBODY
--------------- ------- -------------------
(1) 5D12 CD40 Human IgG4
(2) 5A8 CD4 Human IgG4
(3) 166-93 G-CSF Receptor Murine IgG1
(4) 166-32 or Factor D Human IgG1
IFNa-Fc Human IgG4
16
<PAGE>
IMPLEMENTATION
Payment due now: $225,778 (5A8 and 5D12)
First report due by July 21 (completion of Stage I); Second payment due
Final report due by October 21, at completion; third payment due
For the most favorable pricing: we must provide an additional product by March
l, 2000, then another by October l, 2000, and a final one by May l, 2001. Each
payment would be reduced to $86,666 for these three products.
Interferon products require a separate negotiation of pricing and scheduling
May provide novel patentable products with enhanced activity
Begin recording immunogenicity data for humanized antibodies in clinical trials.
Examine products to determine if PDL license is needed
If he loses his NIH license, we go to NIH and get it, if needed.