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EXHIBIT 10.4
RESEARCH FUNDING AGREEMENT
THIS RESEARCH FUNDING AGREEMENT (the "AGREEMENT") is made as of
this ___ day of August, 2000, by and between AVAX TECHNOLOGIES, INC., a Delaware
corporation ("AVAX") and GENOPOIETIC, S.A., a French SOCIETE ANONYME
("GENOPOIETIC"). Capitalized terms used herein and not otherwise defined herein
shall have the meanings attributed to them in the Stock Contribution Agreement
(as defined below).
WHEREAS, AVAX and Genopoietic, among others, have entered into
that certain Stock Contribution Agreement as of the 17th day of July, 2000 (the
"STOCK CONTRIBUTION AGREEMENT") in accordance with the terms of which AVAX now
desires to contribute certain amounts of money to Genopoietic in order to fund
the ongoing and future scientific research activities of Genopoietic and
Genopoietic desires to perform such research activities.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and in the Stock Contribution Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, AVAX and Genopoietic hereby agree as follows:
SECTION 1. RESEARCH FUNDS. Subject to the fulfillment of the Funding
Conditions (as defined below), AVAX agrees to provide funding to Genopoietic
from time to time for the direct costs of basic scientific research in areas of
mutual interest to AVAX and Genopoietic in an aggregate amount of up to Eight
Million United States Dollars (US$ 8,000,000) (the "RESEARCH FUNDS") payable
over the initial period from the date hereof through July 31, 2001 (the "INITIAL
PERIOD") and the four (4) twelve month periods thereafter (each, a "FUNDING
YEAR") ending on July 31, 2005 (the "FUNDING TERM"). The Research Funds shall be
provided as additional contributions to the capital of Genopoietic or as payment
of indebtedness owed by Genopoietic to third parties or as a long-term loan to
Genopoietic, at AVAX's option.
SECTION 2. INITIAL PAYMENT. Contemporaneously with the execution of
this Agreement, as a part of the Research Funds, AVAX shall transfer to
Genopoietic an initial amount of approximately Two Hundred Thirty-Six Thousand
United States Dollars (US $236,000) (the "INITIAL PAYMENT") to pay for the
following:
(a) the amount to be paid by Genopoietic on the date hereof to
L'UNIVERSITE PIERRE ET MARIE CURIE ("UPMC") pursuant to that certain
CONVENTION dated as of the 19th day of July, 2000 (the "UPMC
AGREEMENT") to purchase certain intellectual property rights; plus
(b) the amount to be paid by Genopoietic to UPMC pursuant to the
UPMC Agreement in exchange for the forgiveness of certain indebtedness
owed to UPMC by Genopoietic.
Genopoietic shall use the Initial Payment and the Research Funds to pay the
debts of Genopoietic as they come due.
SECTION 3. FORMATION OF RESEARCH COMMITTEE; ANNUAL RESEARCH BUDGET.
(a) AVAX and Genopoietic shall form a research committee (the
"COMMITTEE") comprised of four (4) members, two (2) members appointed by AVAX,
one (1) member appointed by Professor David
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R. Klatzmann ("PROF. KLATZMANN") and one (1) member appointed by Professor
Jean-Loup Salzmann ("PROF. SALZMANN"). The Committee shall meet (i) as soon as
practicable after the date of this Agreement to develop a research funding
budget for Genopoietic for the Initial Period and the Funding Year immediately
thereafter (the "INITIAL BUDGET") and (ii) prior to the beginning of each
Funding Year thereafter to develop a research funding budget for Genopoietic for
the following Funding Year (each, an "ANNUAL RESEARCH BUDGET"). The Initial
Budget shall be approved by a majority vote of the members of the Committee, and
upon approval by the Committee and in no event later than three (3) months after
the Closing, such Initial Budget shall be submitted to the Board of Directors of
AVAX (the "BOARD") for final approval, which approval may be withheld in the
Board's reasonable discretion. Thereafter, each Annual Research Budget shall be
approved by a majority vote of the members of the Committee. Upon approval of
each such Annual Research Budget by the Committee and in no event later than
three (3) months prior to the commencement of the Funding Year to which such
Annual Research Budget relates, the Committee shall submit such approved Annual
Research Budget to the Board for final approval, which approval may be withheld
in the Board's reasonable discretion. If the Committee is unable to reach
majority agreement on the Initial Budget or any Annual Research Budget or if the
Initial Budget or any Annual Research Budget is approved by the Committee but
not approved by the Board, then the Board shall determine the Initial Budget or
Annual Research Budget, as appropriate, for the applicable period based on the
overall interests of AVAX taken as a whole (an "AVAX BUDGET"). (The Initial
Budget, each Annual Research Budget and any AVAX Budget shall be generally
referred to herein as a "BUDGET.")
(b) Each Budget shall provide a detailed description of all research
milestones to be achieved during the period to which such Budget relates,
including, but not limited to the activities listed in Section 4(a)(iii)-(vii)
(the "RESEARCH MILESTONES"). Each Budget shall also set forth the amount of
Research Funds to be paid by AVAX to Genopoietic pursuant to such Budget and
shall provide a schedule for the payment of all such Research Funds; provided,
however, that, subject to Section 5 below, the aggregate amount to be funded by
AVAX to Genopoietic in any Funding Year shall not be reduced below Eight Hundred
Thousand United States Dollars (US $800,000).
(c) After the Board either approves the Initial Budget or creates an
AVAX Budget for the Initial Period and the Funding Year thereafter, the
Committee shall meet at least once each calendar quarter during the Funding Term
to review the current Budget and make any changes that it deems appropriate
(each, an "AMENDED BUDGET"). Each Amended Budget shall be approved by a majority
vote of the members of the Committee. If the Committee is unable to reach
majority agreement on any Amended Budget, the Board shall determine the Amended
Budget. If an Amended Budget is approved by the Committee or the Board, such
Amended Budget shall replace the then-current Budget in its entirety, and such
Budget shall be of no further force or effect.
SECTION 4. FUNDING CONDITIONS.
(a) AVAX's obligations to provide Research Funds to Genopoietic is
conditioned on the fulfillment of all of the following conditions as of the date
of each funding (the "FUNDING CONDITIONS"):
(i) Prof. Klatzmann, Prof. Salzmann and Genopoietic shall each
be in full compliance with all of the covenants and agreements
contained in this Agreement, and this Agreement shall remain in full
force and effect in accordance with its terms;
(ii) Prof. Klatzmann and Prof. Salzmann shall each be in full
compliance with all of their duties and obligations pursuant to the
Stock Contribution Agreement and all other agreements or documents
executed by both or either of them pursuant to such Stock Contribution
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Agreement and all such documents shall remain in full force and effect
in accordance with their terms;
(iii) Prof. Klatzmann shall use his best efforts to make no less
than three (3) oral presentations primarily relating to the research
funded by AVAX during the Initial Period and each Funding Year at
scientific conferences or meetings ("Presentations"); provided,
however, that Prof. Klatzmann shall not knowingly or voluntarily
participate in any way in any Presentation without the prior written
approval of AVAX, which approval will not be unreasonably withheld.
AVAX agrees to respond to the request for Presentation within fifteen
(15) days after receipt of such request; provided, however, that such
fifteen (15) day time period may be extended if AVAX determines the
contents of such Presentation should be reviewed by intellectual
property counsel or similar advisors. During each Presentation given
during the Funding Term, Prof. Klatzmann shall acknowledge, in a light
and manner favorable to AVAX, that AVAX has provided substantial
funding and support for the research activities;
(iv) Prof. Klatzmann shall use his best efforts to have no less
than two (2) manuscripts primarily relating to the research funded by
AVAX submitted or accepted for publication in peer-reviewed journals
("Publications") during the first two years of the Funding Term (I.E.
during the Initial Period and the Funding Year thereafter) and during
each Funding Year thereafter shall have no less than two (2)
manuscripts accepted for publication in peer-reviewed journals;
provided, however, that Prof. Klatzmann shall not knowingly or
voluntarily participate in any way in any Publication without the prior
written approval of AVAX, which approval will not be unreasonably
withheld. AVAX agrees to respond to the request for Publication within
thirty (30) days after receipt of such request; provided, however, that
such thirty (30) day time period may be extended if AVAX determines the
contents of such Publication should be reviewed by intellectual
property counsel or similar advisors. In each Publication published
during the Funding Term, Prof. Klatzmann shall acknowledge, in a light
and manner favorable to AVAX, that AVAX has provided substantial
funding and support for the research activities;
(v) In the event that Prof. Klatzmann is involved in any
collaboration (either written or oral) that does not involve the
research funded by AVAX (as described in Section 3 above), Prof.
Klatzmann shall provide a "courtesy copy" to the Chief Executive
Officer of AVAX of any presentation and/or publication material or
information resulting from such collaboration as soon as reasonably
practicable prior to public disclosure of such material or information;
(vi) During the period covered by the Initial Budget, Prof.
Klatzmann and Prof. Salzmann shall conduct research in the following
areas, among others: vectorization, TK Gene on cancer prevention and
GVHD, chrondrocytes and tenocytes and improvements on the AVAX vaccine
technology; provided, however, that these targets may change upon the
mutual written consent of parties hereto;
(vii) Within twelve (12) months after the Closing Date, Prof.
Klatzmann and Prof. Salzmann shall treat patients with haptenized
autologous vaccine in at least one (1) clinical trial based in France
and work on second generation applications or combinations with such
vaccine;
(viii) the Consulting Period (as defined in each of Prof.
Klatzmann's and Prof. Salzmann's Consulting and Assignment Agreements)
shall remain in full force and effect in accordance with the terms of
such agreements; and
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(ix) Genopoietic shall have achieved all Research Milestones
contained in each Budget or Amended Budget during the period covered by
such Budget or Amended Budget, as the case may be.
(b) If Genopoietic does not meet any of the above Funding Conditions
at any time during the Funding Term, AVAX may, in AVAX's sole discretion,
immediately terminate this Agreement and all of AVAX's duties and obligations
hereunder.
SECTION 5. LIMITATION ON FUNDING OBLIGATION. AVAX agrees that it will
use commercially reasonable efforts to have sufficient funds to meet its funding
obligations hereunder. If, however, at any time AVAX determines that it is
unable to allocate sufficient funds to meet its obligations hereunder,
Genopoietic acknowledges and agrees that AVAX shall not be required to fund the
Research Funds until such time as AVAX determines it has sufficient funding to
resume its obligations hereunder and any such suspension of funding hereunder
shall not otherwise affect the terms of this Agreement.
SECTION 6. MISCELLANEOUS.
(a) NOTICES. All notices, requests, claims, demands or other
communications required or permitted by this Agreement or any instrument
provided for herein to be given or made by the parties shall be in writing
(including, without limitation, by telecopy) and shall be deemed delivered if
delivered in person, by telecopy or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties:
If to AVAX: AVAX Technologies, Inc.
Attention: Dave Tousley
4520 Main Street, Suite 930
Kansas City, Missouri 64111 USA
with a copy to: Shook, Hardy & Bacon L.L.P.
Attention: Kevin R. Sweeney, Esq.
1010 Grand Boulevard, Suite 500
Kansas City, Missouri 64106 USA
If to Genopoietic: Genopoietic, S.A.
22 rue Esquirol
75013 Paris, France
Either of the respective parties may, however, designate in writing
such new or other addresses or telecopy numbers to which such notice shall
thereafter be mailed or telecopied. Any notice or demand given in accordance
with this section shall be deemed received on the date of receipt by the
recipient thereof if received prior to 5 p.m. in the place of receipt and such
day is a business day in the place of receipt. Otherwise, any such notice,
request or communication shall be deemed not to have been received until the
next succeeding business day in the place of receipt.
(b) SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. No party shall assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the prior
written consent of each other party hereto. Notwithstanding the preceding
sentence, however, AVAX may assign all or any part of its rights, interests or
obligations hereunder to any of its parents, subsidiaries
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or affiliates without the prior written consent of Genopoietic, provided that
such assignment shall not release AVAX from its obligations hereunder.
(c) GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Missouri,
United States of America, without giving effect to the choice of law provisions
of such State.
(d) COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signature thereto and hereto were upon the same instrument. No provision of this
Agreement is intended to confer upon any person or entity other than the parties
hereto any rights or remedies hereunder.
(e) PUBLICITY. AVAX and Genopoietic each agree that press releases
and other announcements or disclosure with respect to the transactions
contemplated by this Agreement shall be subject to mutual agreement to the
maximum extent feasible consistent with the parties' respective legal
obligations.
(f) ENTIRE AGREEMENT. This Agreement, the Stock Contribution
Agreement and the Consulting Agreements, including any Schedules and Exhibits
attached hereto or thereto, which are all hereby expressly incorporated herein
by this reference, constitutes the entire agreement between the parties with
respect to the subject matter of this Agreement and supersedes all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter of this Agreement. No representation, inducement,
promise, understanding, condition or warranty not set forth herein has been made
or relied upon by either party hereto.
(g) MODIFICATIONS, AMENDMENTS AND WAIVERS. At any time the parties
hereto may, by written agreement signed by the parties (i) extend the time for
the performance of any of the obligations or other acts of the parties hereto,
(ii) waive compliance with any of the covenants or agreements contained in this
Agreement or (c) otherwise amend this Agreement.
(h) HEADINGS. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
(i) JURISDICTION. The parties acknowledge that this Agreement was
drafted, negotiated and executed in large part in Kansas City, Missouri, United
State of America. Except as otherwise expressly provided in this Agreement, any
suit, action or proceeding seeking to enforce any provision of, or based on any
matter arising out of or in connection with, this Agreement or the transactions
contemplated hereby shall be brought in the United States District Court for the
Western District of Missouri or in any Missouri State Court sitting in Kansas
City, Missouri, and each of the parties hereby consents to the jurisdiction of
such courts (and of the appropriate appellate courts therefrom) in any such
suit, action or proceeding and irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such suit, action or proceeding in any such court or that
any such suit, action or proceeding which is brought in any such court has been
brought in an inconvenient forum. Process in any such suit, action or proceeding
may be served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 6.1 shall be
deemed effective service of process on such party.
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(j) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
(k) INTERPRETATION. In the event any portion of this Agreement shall,
for any reason, be held to be invalid, illegal or unenforceable in whole or in
part, the remaining provisions shall not be affected thereby and shall continue
to be valid and enforceable. If, for any reason, a court finds that any
provision of this Agreement is invalid, illegal or unenforceable as written, but
by limiting such provision it would become valid, legal and enforceable, then
such provision shall be deemed to be written, construed and enforced as so
limited. Words and phrases herein shall be construed as in the singular or
plural number, and as masculine, feminine or neuter gender, according to the
context. Nothing contained in this Agreement and no action taken by the parties
pursuant hereto shall be deemed to constitute a partnership, an association, a
joint venture or other entity between the parties.
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IN WITNESS WHEREOF, AVAX and Genopoietic have caused this
Agreement to be executed by their respective duly authorized legal
representatives as of the date first above written.
AVAX TECHNOLOGIES, INC., a Delaware
Corporation
By:
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Name: Jeffrey M. Jonas, M.D.
Title: President and Chief Executive Officer
GENOPOIETIC, S.A., a French SOCIETE
ANONYME
By:
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Name: Charles Salzmann
Title: President Directeur General
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