EXHIBIT 10.12
CONFIDENTIAL TREATMENT HAS BEEN SOUGHT FOR
PORTIONS OF THIS EXHIBIT PURSUANT TO RULE 24B-2
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
EXECUTION COPY
FUNDING AGREEMENT
AMONG
ELAN PHARMA INTERNATIONAL LIMITED
AND
ELAN INTERNATIONAL SERVICES, LTD.
AND
PHOTOGEN TECHNOLOGIES, INC.
INDEX
CLAUSE 1 SUBSEQUENT FUNDING
CLAUSE 2 TERMINATION
CLAUSE 3 GENERAL
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FUNDING AGREEMENT made this 20th day of October, 1999
AMONG:
(1) ELAN PHARMA INTERNATIONAL LIMITED, a public limited company
incorporated under the laws of Ireland, and having its registered
office at XXX Xxxxx, Xxxxxxx Xxxxxxxx Xxxx, Xxxxxx Xxxxx, Xxxxxxx
("ELAN");
(2) ELAN INTERNATIONAL SERVICES, LTD., a exempted limited liability
company incorporated under the laws of Bermuda, and having its
registered office at Xxxxxxxxx Xxxxx, 0 Xxxxxx Xx., Xxxxxxxx, Xxxxxxx
("XXX"); and
(3) PHOTOGEN TECHNOLOGIES, INC. a corporation incorporated under the
laws of Nevada and having its principal place of business at 0000 Xxx
Xxxxx Xxxxxxx, Xxxxx X, Xxxxxxxxx, Xxxxxxxxx 00000, Xxxxxx Xxxxxx of
America ("PHOTOGEN").
RECITALS:
A. EIS and Photogen have formed a Bermuda exempted limited liability
company to be known as Photogen Newco Ltd. ("NEWCO").
B. Elan is beneficially entitled to the use of certain patents which
have been granted or are pending in relation to nanoparticulate medical
diagnostic imaging agents.
C. Photogen is beneficially entitled to the use of certain patents that
have been granted or are pending in relation to nanoparticulate medical
diagnostic imaging agents.
D. As of the date hereof, Elan has entered into a license agreement
with Newco, and Photogen has entered into a license agreement with
Newco, in connection with the license to Newco of the Elan Intellectual
Property and the Photogen Intellectual Property, respectively.
E. Elan and Photogen have agreed to co-operate in the research and
development of a business for the research, development and
commercialization of the Products based on their respective
technologies.
F. As of the date hereof, Elan, EIS, Photogen and Newco have entered
into a Subscription, Joint Development and Operating Agreement, dated
as of the date hereof (the "JDOA") for the purpose of recording the
terms and conditions of the research, development and commercialization
and governing certain aspects of the affairs of and their dealings with
Newco. 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.
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CLAUSE 1
SUBSEQUENT FUNDING
1.1 It is estimated that Newco will require an additional [****] to
commence development of the Products based upon the Photogen
Intellectual Property, the Elan Intellectual Property and/or the
Newco Technology (the "SUBSEQUENT FUNDING"). Within 36 months of the
Closing Date, EIS and Photogen may provide to Newco, by way of an
unconditional contribution to Newco of surplus or such other funding
mechanism or loan as may be agreed by EIS and Photogen up to an
aggregate maximum amount of [****], such funding to be provided on a
PRO RATA basis in accordance with their respective ownership
interest in Newco taking into account the non-voting preferred stock
of Newco held by EIS (i.e., initially, 80.1% by Photogen and 19.9%
by EIS).
1.2 The Subsequent Funding shall be provided by EIS and Photogen, each
in its sole discretion, at such times that shall be necessary for the
development of the Products as provided in the Business Plan or as
otherwise approved by the Newco Directors, including the EIS Director
(or after the Exchange Right by a majority of the EIS Directors). The
Subsequent Funding shall be funded on the following terms:
1.2.1 The minimum amount of each disbursement of the Subsequent
Funding shall be U.S.$[****] (except in the event that an
amount less than U.S.$[****] remains available for funding, in
which case such lesser amount may be funded), allocated
between EIS and Photogen as provided in Section 1.1 above;
1.2.2 There shall be no Event of Default (as defined in the Note)
under the Note on the date of the Subsequent Funding (except
to the extent that any Event of Default has been waived by
EIS);
1.2.3 Such funding shall be provided in accordance with the
Business Plan and the Research and Development Plan or as
otherwise approved by the Newco Board of Directors (including
at least one Newco Director designated by EIS and all of the
Newco Directors designated by Photogen); and
1.2.4 Such funding shall be subject to the receipt by Elan or
EIS of any required approvals under the Mergers and Takeovers
(Control) Acts 1978-1996 (the "IRISH MERGERS ACT").
1.2.5 Photogen's share of all or part of the Subsequent
Funding may, at its option, be provided under the Note or out
of its own funds.
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[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
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EXCHANGE ACT OF 1934, AS AMENDED.
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1.3 In the event that Elan or EIS is unable to obtain approval under
the Irish Mergers Act within three months after a determination of the
necessity of such funding by the Newco Directors, the parties hereto
shall work together in good faith, each in its sole discretion, to
agree on an alternative funding mechanism. If any party hereto is
unable to make its required funding contribution the other party's
funding contribution shall be correspondingly suspended.
1.4 Each request for Subsequent Funding shall be delivered from the
Management Committee to each of the Stockholders upon 15 business days'
prior written notice, which notice shall set forth:
(i) the amount of the Subsequent Funding requested;
(ii) the date requested to fund such amount (which with
respect to Photogen, shall not be a date earlier than Photogen
receives a disbursement under the Note to permit funding of
its share of the Subsequent Funding, if applicable); and
(iii) a reasonably detailed narrative and summary of the uses and
application thereof.
CLAUSE 2
TERMINATION
2.1 This Agreement shall govern the funding methodology of EIS and
Photogen with respect to Newco until terminated by written agreement of
all Parties hereto.
CLAUSE 3
GENERAL
3.1 GOOD FAITH:
Each of the Parties hereto acknowledges that funding hereunder shall be
undertaken only at the discretion, subject to the foregoing, of each
funding party and 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:
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
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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 RELIANCE ON REPRESENTATIONS AND WARRANTIES:
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:
Neither 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.
3.5 RELATIONSHIP OF THE PARTIES:
Nothing contained in this Agreement is intended or is to be construed
to constitute Elan or EIS, on one hand, and Photogen, on the other
hand, as partners, or Elan or EIS as an employee or agent of Photogen,
or Photogen 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:
This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and all of
which when taken together shall constitute this Agreement.
3.7 NOTICES:
Any notice to be given under this Agreement shall be sent in writing by
registered or recorded delivery post or reputable overnight courier
such as Federal Express or telecopied to:
Elan at:
Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxx 0
Xxxxxxx
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Attention: Vice President & General Counsel
Elan Pharmaceutical Technologies,
a division of Elan Corporation, plc
Telephone: 000-0-000-0000
Fax: 000-0-000-0000
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
Photogen at:
0000 Xxx Xxxxx Xxxxxxx, Xxxxx X
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Chief Executive Officer
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to:
Xxxxxx & Xxxxx
Suite 3600
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: 000-000-0000
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or to such other address(es) as may from time to time be notified by
any Party to the others hereunder.
Any notice sent by mail shall be deemed to have been delivered within
three working days after dispatch or delivery to the relevant courier
and any notice sent by telecopy shall be deemed to have been delivered
upon confirmation of receipt by telephone. Notices of change of address
shall be effective upon receipt.
3.8 GOVERNING LAW:
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 resolved in a forum set forth
in the Securities Purchase Agreement.
3.9 SEVERABILITY:
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
or, if it cannot be so amended without materially altering the
intention of the Parties, it will be deleted, with effect from the date
of such agreement or such earlier date as the Parties may agree, 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:
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 after the date hereof.
3.11 WAIVER:
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:
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 Photogen shall have the right to assign their
rights and
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obligations hereunder to their Affiliates provided, however,
that such assignment does not result in adverse tax
consequences for any other Parties.
3.12.2 Elan and EIS shall have the right to assign their
rights and obligations hereunder to a special purpose
financing or similar vehicle established by Elan or EIS.
2.11.3 Elan, EIS and/or Photogen shall have the right to
assign or otherwise transfer their rights and obligations
hereunder in connection with a sale of all or substantially
all of the assets of such Party to which the Transaction
Documents relate, whether by merger, sale of stock, sale of
assets or otherwise.
2.11.4 Notwithstanding the above, if an assignment takes
place, the assignor shall continue to be liable for its
rights and obligations hereunder.
3.13 WHOLE AGREEMENT/NO EFFECT ON OTHER AGREEMENTS:
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 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 provide otherwise.
3.14 SUCCESSORS:
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
-------------------------------------
for and on behalf of
ELAN PHARMA INTERNATIONAL LIMITED
in the presence of: /s/
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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/
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SIGNED
BY: /s/ Xxxx Xxxxxx
-------------------------------------
for and on behalf of
PHOTOGEN TECHNOLOGIES, INC.
in the presence of: /s/
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