EXHIBIT 1.3
Execution Copy
Funding Agreement
Among
Elan Corporation, plc
And
Elan International Services, Ltd.
And
Targeted Genetics Corporation
INDEX
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CLAUSE 1 SUBSEQUENT FUNDING
CLAUSE 2 TERMINATION
CLAUSE 3 GENERAL
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FUNDING AGREEMENT made this 20th day of July, 1999
among:
(1) ELAN CORPORATION, PLC, a public limited company incorporated under the laws
of Ireland, and having its registered office at Xxxxxxx Xxxxx, Xxxxxxx
Xxxxx, Xxxxxx 0, Xxxxxxx ("Elan");
(2) ELAN INTERNATIONAL SERVICES, LTD., a private limited company incorporated
under the laws of Bermuda, and having its registered office at Xxxxxxxxx
Xxxxx, 0 Xxxxxx Xx., Xxxxxxxx, Xxxxxxx ("XXX"); and
(3) TARGETED GENETICS CORPORATION a corporation incorporated under the laws of
Washington and having its principal place of business at 0000 Xxxxx Xxx,
Xxxxx 000, Xxxxxxx, Xxxxxxxxxx, Xxxxxx Xxxxxx of America ("TGEN").
RECITALS:
A. EIS and TGEN have formed a joint venture Bermuda private limited company to
be known as Targeted Genetics Newco, Ltd. ("Newco").
B. As of the date hereof, Elan, EIS, TGEN and Newco have entered into a
Subscription, Joint Development and Operating Agreement (the "JDOA") for
the purpose of recording the terms and conditions of the joint venture and
of regulating their relationship with each other and certain aspects of the
affairs of and their dealings with Newco.
C. The parties have agreed that capitalized terms when used in the Recitals
hereto and in this Agreement shall bear the same meanings as ascribed to
such terms in the JDOA.
D. Elan is beneficially entitled to the use of certain patents which have been
granted or are pending relating to Base Technologies, Drug Delivery
Technologies or Gene Delivery Technologies controlled by Elan.
E. TGEN is beneficially entitled to the use of certain patents that have been
granted or are pending relating to Base Technologies, Gene Delivery
Technologies or Drug Delivery Technologies controlled by TGEN.
F. As of the date hereof, Elan has entered into a license agreement with
Newco, and TGEN has entered into a license agreement with Newco, in
connection with the license to Newco of the Elan Intellectual Property and
the TGEN Intellectual Property, respectively.
G. Elan and TGEN have agreed to co-operate in the establishment and management
of a business for the research, development and commercialization of the
Products based on their respective technologies.
CLAUSE 1
SUBSEQUENT FUNDING
1.1 It is estimated that Newco will require an additional $15,000,000 to
develop Platforms and Products based upon the TGEN Intellectual Property,
the Elan Intellectual Property and/or the Newco Technology (the "Subsequent
Funding"). During the Research and Development Term, EIS and TGEN shall
provide to Newco, by way of an unconditional capital contribution to Newco
up to an aggregate maximum amount of $15,000,000, such funding to be
provided on a pro rata basis in accordance with their respective ownership
interest in Newco (i.e., initially, 80.1% by TGEN and 19.9% by EIS).
1.2 The Subsequent Funding shall be provided by EIS and TGEN at such times as
shall be necessary for the development of the Platforms and Products, as
shall be reasonably determined in good faith by the unanimous decision of
the Newco Directors. The Subsequent Funding shall be contributed on the
following terms:
1.2.1 The minimum amount of each request for Subsequent Funding shall be
U.S.$500,000 (except in the event that an amount less than
U.S.$500,000 remains available for funding, in which case such
lesser amount may be funded);
1.2.2 There shall be no Event of Default (as defined in the Convertible
Note) under the Convertible Note on the date of the Subsequent
Funding (except to the extent that any Event of Default has been
waived by EIS); and
1.2.3 Each request for Subsequent Funding shall be consistent with the
Business Plan and the Research and Development Plan or as otherwise
approved by the Newco Directors.
1.3 Each request for Subsequent Funding shall be delivered from the Management
Committee to each of the Participants, which notice shall set forth:
(i) the amount of the Subsequent Funding requested;
(ii) the date requested to fund such amount, which date shall not be
earlier than 15 business days from the date such request is made; and
(iii) a reasonably detailed narrative and summary of the uses and
application thereof, to the extent the request is inconsistent with
Newco's budget.
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CLAUSE 2
TERMINATION
2.1 This Agreement shall govern the funding commitments of EIS and TGEN with
respect to Newco until terminated by written agreement of all Parties
hereto.
CLAUSE 3
GENERAL
3.1 Good Faith:
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Each of the Parties hereto undertakes with the others to do all things
reasonably within its power that are necessary or desirable to give effect
to the spirit and intent of this Agreement.
3.2 Further Assurance:
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At the request of any of the Parties, the other Party or Parties shall (and
shall use reasonable efforts to procure that any other necessary parties
shall) execute and perform all such documents, acts and things as may
reasonably be required subsequent to the signing of this Agreement for
assuring to or vesting in the requesting Party the full benefit of the
terms hereof.
3.3 No Representation:
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Each of the Parties hereto hereby acknowledges that in entering into this
Agreement it has not relied on any representation or warranty except as
expressly set forth herein or in any document referred to herein.
3.4 Force Majeure:
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No Party to this Agreement shall be liable for delay in the performance of
any of its obligations hereunder if such delay is caused by or results from
causes beyond its reasonable control, including without limitation, acts of
God, fires, strikes, acts of war (whether war be declared or not),
insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances or intervention of any relevant government authority, but any
such delay or failure shall be remedied by such Party as soon as
practicable.
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3.5 Relationship of the Parties:
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Nothing contained in this Agreement is intended or is to be construed to
constitute Elan or EIS, on one hand, and TGEN, on the other hand, as
partners, or Elan or EIS as an employee or agent of TGEN, or TGEN as an
employee or agent of Elan or EIS.
No Party hereto shall have any express or implied right or authority to
assume or create any obligations on behalf of or in the name of another
Party or to bind another Party to any contract, agreement or undertaking
with any third Party.
3.6 Counterparts:
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This Agreement may be executed in any number of counterparts, and each such
counterpart hereof shall be deemed to be an original instrument, but all
such counterparts together shall constitute this Agreement.
3.7 Notices:
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All notices, demands and requests of any kind to be delivered to any party
in connection with this Agreement shall be in writing and shall be deemed
to have been duly given if personally or hand delivered or if sent by an
internationally-recognized overnight delivery or by registered or certified
mail, return receipt requested and postage prepaid, or by facsimile
transmission addressed as follows:
if to TGEN, to:
Targeted Genetics Corporation
0000 Xxxxx Xxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx Coie
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
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Elan at:
Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxx 0
Xxxxxxx
Attention: Vice President & General Counsel
Elan Pharmaceutical Technologies,
a division of Elan Corporation, plc
Telephone: 000-0-000-0000
Fax: 000-0-000-0000
with a copy to:
Xxxxx Xxxxxxxxxxx LLC
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx, Esq.
Telephone 000-000-0000
Fax: 000-000-0000
EIS at:
Elan International Services, Ltd.
000 Xx. Xxxxx Xxxxx
Xxxxxx, Xxxxxx XX00
Bermuda
Attention: President
Telephone: 000-000-0000
Fax: 000-000-0000
with a copy to:
Xxxxx Xxxxxxxxxxx LLC
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx, Esq.
Telephone 000-000-0000
Fax: 000-000-0000
or to such other address as the party to whom notice is to be given may
have furnished to the other party hereto in writing in accordance with
provisions of this Section 3.7. Any such notice or communication shall be
deemed to have been effectively given (i) in the case of personal or hand
delivery, on the date of such delivery, (ii) in the case of an
internationally-recognized overnight delivery service, on the second
business day after the
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date when sent, (iii) in the case of mailing, on the fifth business day
following that day on which the piece of mail containing such communication
is posted, and (iv) in the case of facsimile transmission, on the date of
telephone confirmation of receipt.
3.8 Governing Law:
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This Agreement shall be governed by and construed in accordance with the
substantive (as opposed to procedural) laws of the State of New York,
without giving effect to principles thereof relating to conflicts of laws.
Any dispute hereunder shall be adjudicated in a forum set forth in the
Securities Purchase Agreement.
3.9 Severability:
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If any provision in this Agreement is agreed by the Parties to be, deemed
to be or is or becomes invalid, illegal, void or unenforceable under any
law that is applicable hereto, such provision will be deemed amended to
conform to applicable laws so as to be valid and enforceable, and the
validity, legality and enforceability of the remaining provisions of this
Agreement shall not be impaired or affected in any way.
3.10 Amendments:
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No amendment, modification or addition hereto shall be effective or binding
on any Party unless set forth in writing and executed by a duly authorized
representative of all Parties.
3.11 Waiver:
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No waiver of any right under this Agreement shall be deemed effective
unless contained in a written document signed by the Party charged with
such waiver, and no waiver of any breach or failure to perform shall be
deemed to be a waiver of any future breach or failure to perform or of any
other right arising under this Agreement.
3.12 Assignment:
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None of the Parties shall be permitted to assign its rights or obligations
hereunder without the prior written consent of the other Parties except as
follows:
3.12.1 Elan, EIS and/or TGEN shall have the right to assign their rights
and obligations hereunder to their Affiliates or subsidiaries
provided, however, that such assignment does not result in adverse
tax consequences for any other Parties.
3.13 Whole Agreement/No Effect on Other Agreements:
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This Agreement and the other Transaction Documents set forth all of the
agreements and understandings between the Parties with respect to the
subject matter hereof, and supersedes
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and terminates all prior agreements and understandings between the Parties
with respect to the subject matter hereof. There are no agreements or
understandings with respect to the subject matter hereof, either oral or
written, between the Parties other than as set forth in this Agreement and
the other Transaction Documents.
No provision of this Agreement shall be construed so as to negate, modify
or affect in any way the provisions of any other agreement between any of
the Parties unless specifically referred to, and solely to the extent
provided herein. In the event of a conflict between the provisions of this
Agreement and the provisions of the License Agreements, the terms of this
Agreement shall prevail unless this Agreement specifically provides
otherwise.
3.14 Successors:
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This Agreement shall be binding upon and inure to the benefit of the
Parties hereto, their successors and permitted assigns.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties hereto have executed this Funding
Agreement on the day first set forth above.
SIGNED
BY: /s/ Xxxxx Xxxxxx
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for and on behalf of
ELAN CORPORATION, PLC
in the presence of: /s/ [illegible]
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SIGNED
BY: /s/ Xxxxx Xxxxxx
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for and on behalf of
ELAN INTERNATIONAL SERVICES, LTD.
in the presence of: /s/ [illegible]
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SIGNED
BY: /s/ Xxxxxxx Xxxxxx
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for and on behalf of
TARGETED GENETICS CORPORATION
in the presence of: /s/ Xxx Xxxxxxx
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