TRANSACTION AGREEMENT
Exhibit
10.7
THIS
TRANSACTION AGREEMENT
dated as
of the 6th day of May, 2006,
BETWEEN:
INEX
PHARMACEUTICALS CORPORATION,
a
company amalgamated under the laws of British Columbia company and having an
office at #000 - 0000 Xxxxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx X0X
0X0
(“INEX”)
AND:
HANA
BIOSCIENCES, INC.,
a
company incorporated under the laws of Delaware and having an office at
000
Xxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxx
Xxx
Xxxxxxxxx, XX 00000, U.S.A.
(“Hana”)
WHEREAS:
(A) Under
a
Letter of Intent dated March 15, 2006, INEX, its direct and indirect
subsidiaries IE Oncology Company Limited and Inex Pharmaceuticals, Inc.
(“IPI”),
and
Hana agreed in principle to a transaction (the “Transaction”)
involving the licensing, sublicensing, and assignment, as the case may be,
by
INEX, IE oncology and IPI of all rights they hold to technologies for the
sphingosomal formulation of certain chemotherapeutic agents;
(B) Subsequent
to the Letter of Intent, all such rights held by IE Oncology and IPI were
transferred to Inex; and
(C) This
Agreement confirms the manner in which the Transaction will be completed as
well
as other rights and obligations of the parties;
NOW
THEREFORE,
in
consideration of the premises and the mutual covenants and agreements herein
the
parties covenant and agree as follows:
ARTICLE
1
DEFINITIONS,
INTERPRETATION AND EXHIBITS
1.1 Definitions:
In
addition to the terms defined elsewhere in this Agreement, unless there is
something in the subject matter or context inconsistent therewith, the following
terms will have the meanings ascribed to them:
(a) “Agreement”
means
this Agreement including the exhibits attached hereto as the same may be
supplemented or amended from time to time;
(b) “Asset
Purchase Agreement”
means
an asset purchase agreement under which certain assets of INEX related to the
manufacture and development of the Products are sold to Hana by
INEX;
(c) “Bankruptcy
Proceeding”
means
the proceedings between INEX and Xxxxx Trading and Shepherd Investments
International, Ltd.;
(d) “BCA”
means
the Business
Corporations Act,
S.B.C.
2002, c.57, as amended;
(e) “Business
Day”
in
any
particular place means a day which is neither a Saturday or Sunday, nor a
statutory holiday at that place;
(f) “Clinical
Trial Agreements”
means
those agreements identified as “Clinical Trial Agreements” in Exhibit A
hereto;
(g) “Closing”
will
have the meaning set forth in §5.1;
(h) “Closing
Date”
will
have the meaning set forth in §2.3(b);
(i) “Closing
Documents”
will
the meaning set forth in §5.1(a);
(j) “Competitive
Product”
means
any liposomal medicinal product which incorporates the Products encapsulated
in
a liposome not proprietary to INEX for use in the Hana Field;
(k) “Confidentiality
Agreements”
means
those agreements identified as “Confidentiality Agreements” in Exhibit A
hereto;
(l) “Definitive
Agreements”
has
the
meaning set out in §2.1(a);
(m) “Deposits”
will
have the meaning set forth in §2.2(b);
(n) “DHSM
Patents”
means
the patents issuing from those dihydrosphingomyelin patent applications set
forth in Exhibit E hereto;
(o) “Elan
Assignment and Novation Agreement”
means
an assignment and novation agreement under which Elan Pharmaceuticals Inc.
and
certain of its affiliates agree to the assignment by INEX to Hana of the Amended
and Restated License Agreement dated Xxxxx 0, 0000 xxxxx XXXX, XX and Elan
Pharmaceuticals Inc.;
(p) “Escrow
Agent”
means
LMLS Services Inc.;
(q) “INEX
Cash”
means
the US $200,000 deposited by INEX with the Escrow Agent;
(r) “Interim
Development Plan”
means
an interim plan for obtaining and maintaining Regulatory Approvals for each
Product in the Territory, together with a corresponding budget accounting for
the anticipated development costs to be expended or incurred by Hana in
conducting such activities; until such time as the terms of the final
Development Plan is complete;
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(s) “Institution”
means
the university, research hospital or clinic which is a party to a Clinical
Trial
Agreement;
(t) “Investigator”
means
the Person charged with responsibility for overseeing or acting as primary
contact under a Clinical Trial Agreement;
(u) “License
Agreement”
means
that license agreement dated May 6, 2006 under which INEX licenses to Hana
certain patents and technology related to the Products, and sublicenses to
Hana
the BCCA Patents and the MD Xxxxxxxx License and patents referenced
therein;
(v) “Operations
Agreements”
means
those research and development, material transfer, collaborative research and
supply and manufacturing agreements identified as “Operations Agreements” in
Exhibit A hereto;
(w) “Payment”
will
have the meaning set forth in §2.2;
(x) “Person”
includes an individual, sole proprietorship, partnership, unincorporated
association, unincorporated syndicate, unincorporated organization, trust,
body
corporate, trustee, executor, administrator or other legal representative and
the Crown or any other applicable government authority, agency or
instrumentality thereof;
(y) “Registration
Rights Agreement”
means
a
registration rights agreement under which certain shares in the capital stock
of
Hana, which form part of the consideration due under the License Agreement,
will
be registered;
(z) “Restricted
Business”
means
the business of Developing, Manufacturing or Commercializing any Product, as
well as any future generation products for any formulations containing
vincristine, vinorelbine or topotecan. A Person will be deemed engaged in the
Restricted Business if such Person sells, transfers or assigns (including by
license) any rights to such technology, patents, or improvements thereto
(including any products incorporating or resulting from any of the foregoing),
to a third party; provided however, that INEX will not be deemed to be engaged
in the Restricted Business as result of practicing the rights reserved to INEX
in the Definitive Agreements or as a result of the transaction with Hana
contemplated by this Agreement.
(aa) “Service
Agreement”
means
a
service agreement dated May 6, 2006 for the provision of certain services by
INEX, its affiliates and/or subcontractors to Hana related to the manufacture
and development of the Products;
(bb) “Termination
Agreement”
means
that certain termination agreement among Elan Corporation, PLC, Elan Pharma
International Limited, Elan International Services, Ltd., Monksland Holdings,
B.V., INEX, INEX International Holdings Ltd., IE Oncology and Elan
Pharmaceuticals Inc. made as of April 3, 2003;
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(cc) “Transaction”
has
the
meaning set out in Recital (A);
(dd) “UBC”
means
the University of British Columbia; and
(ee) “UBC
Sublicense Agreement”
means
a
sublicense agreement between INEX and Hana for certain patents and technology
relating to ionophore loading and sphingosome preparation, including methods
and
apparatus.
1.2 Meaning:
Words
and phrases that are not otherwise defined herein and are defined in the License
Agreement or the BCA will have the same meaning herein as in the License
Agreement of the BCA, as the case may be, unless the context otherwise requires;
words and phrases that are not otherwise defined herein and are defined in
any
of the Other Definitive Agreements will have the same meaning herein as in
such
other applicable Definitive Agreement in which such word or phrase is
defined.
1.3 Supremacy:
Unless
otherwise specified in this Agreement, in the event of a conflict between the
terms of this Agreement and the License Agreement, the terms of the License
Agreement will govern. In the event of a conflict between the terms of this
Agreement and any of the other Definitive Agreements (except the License
Agreement), the terms of this Agreement will govern.
1.4 Currency:
All
amounts of money referred to in this Agreement are expressed in lawful money
of
the United States of America unless otherwise specified.
1.5 Interpretation
Not Affected by Headings:
The
division of this Agreement into articles, sections, subsections, paragraphs
and
subparagraphs and the insertion of headings are for convenience of reference
only and will not affect the construction or interpretation of the provisions
of
this Agreement. The terms “this Agreement”, “hereof’, “herein”, “hereunder” and
similar expressions refer to this Agreement and the exhibits hereto as a whole
and not to any particular article, section, subsection, paragraph or
subparagraph hereof and include any agreement or instrument supplementary or
ancillary hereto.
1.6 Number
and Gender:
In this
Agreement, unless the context otherwise requires, words importing the singular
include the plural and vice versa and words importing either gender include
both
genders and the neuter.
1.7 Date
for any Action:
If any
date on which any action that is required to occur hereunder is not a Business
Day in the place where the action is required to occur, the action will be
required to occur on the next succeeding day which is a Business Day at that
place.
1.8 Exhibits:
All
exhibits hereto are hereby incorporated into and form part of this
Agreement.
ARTICLE
2
TRANSACTIONS
2.1 Transactions:
Subject
to the terms and conditions contained in this Agreement, the parties will effect
the Transaction by:
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(a) executing
and delivering the Definitive Agreements:
(i) the
License Agreement,
(ii) the
Asset
Purchase Agreement,
(iii) the
Service Agreement,
(iv) the
Registration Rights Agreement,
(v) the
UBC
Sublicense Agreement, and
(vi) the
Elan
Assignment and Novation Agreement,
(b) agreeing
to the Interim Development Plan, and
(c) paying
the consideration due INEX under §2.2.
2.2 Consideration
Payable to INEX:
In
consideration for completing the Transaction, Hana will pay to INEX $11,500,000
(the “Payment”)
made
up as follows:
(a) the
issue
of 1,006,711 shares of Hana’s common stock;
(b) the
initial deposit of $500,000 and 111,857 shares of Hana’s common stock made by
Hana and held by the Escrow Agent (the “Deposits”);
and
(c) $1,000,000
payable by way of wire transfer or other readily available funds on
Closing;
the
Payment to be allocated in the manner set out in the attached Exhibit B
hereto.
2.3 When
Agreements Effective:
Each of
the Definitive Agreements will be deemed to be effective on a temporary basis
as
of the date of execution thereof by all parties to each such Definitive
Agreement. However, INEX and Hana agree that each Definitive Agreement will
be
delivered by one party to the other subject to the following
conditions:
(a) the
Transaction will not close and the Definitive Agreements will not be considered
fully effective unless and until all Definitive Agreements have been executed
by
all parties thereto;
(b) the
closing of the Transaction must take place on or before May 31, 2006 (the
“Closing
Date”);
and
2.4 If
all of
the Definitive Agreements are not executed and delivered by all parties thereto
and the Transaction does not close by the Closing Date, the Definitive
Agreements will be deemed to have been terminated with retroactive effect,
and
all of the rights and obligations of each of the parties thereunder will revert
to those rights and obligations which each party had prior to the date of
signing each such Definitive Agreement.
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ARTICLE
3
REPRESENTATIONS
AND WARRANTIES
3.1 Representations
and Warranties of Each Party:
Each
party hereby represents and warrants to the other party that:
(a) it
is a
corporation duly incorporated and validly subsisting under the laws of its
jurisdiction of incorporation, and has full capacity and authority to enter
into
this Agreement and the Definitive Agreements and to perform its covenants and
obligations under those agreements,
(b) it
has
taken all corporate actions necessary to authorize the execution and delivery
of
this Agreement and the Definitive Agreements,
(c) neither
the execution and delivery of this Agreement nor, when executed a Definitive
Agreement, or the performance of any covenant or obligation under this Agreement
or a Definitive Agreement, will constitute a material default under, or be
a
material contravention or breach of, any:
(i) provision
of its constating documents or any other governing corporate documents,
(ii) judgment,
decree, order, law, statute, rule or regulation applicable to it, or
(iii) agreement
or instrument to which it is a party or by which it is bound, and
(d) no
dissolution, winding up, bankruptcy, liquidation or similar proceedings have
been commenced in respect of it other than the Bankruptcy
Proceeding.
3.2 Representations
and Warranties of Hana:
Hana
represents and warrants to the other parties that:
(a) the
authorized capital stock of Hana consists of 100,000,000 shares of common stock,
of which 22,689,920 shares are issued and outstanding as of May 4, 2006 (without
giving effect to the shares of Hana common stock included in the Payment),
and
10,000,000 shares of preferred stock, par value $0.001 per share, none of which
is issued and outstanding. All of such issued and outstanding shares of Common
Stock have been validly issued and are outstanding as fully paid and
non-assessable; and
(b) Hana
has
filed all reports, schedules, forms, statements and other documents required
to
be filed by it under the U.S. Exchange Act, including pursuant to Section 13(a)
of the U.S. Exchange Act, for the two years preceding the date hereof (the
foregoing materials, including the exhibits thereto and the documents
incorporated by reference therein, being collectively referred to as the
“SEC
Reports”).
As at
the time of filing, the SEC Reports complied in all material respects with
the
requirements of their respective forms and, except to the extent updated or
superseded by any subsequently filed report, were complete and correct in all
material respects as of the dates at which the information was furnished, and
contained (as of such dates) no untrue statements of a material fact nor omitted
to state any material fact necessary in order to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading;
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(c) Hana
meets the registrant eligibility requirements for the use of SEC Form S-3 for
the registration of secondary offerings of securities under the U.S. Securities
Act as of the date of this Agreement and will meet such eligibility requirements
as of the Closing Date.
3.3 Representations
and Warranties of INEX:
INEX
represents and warrants to Hana that:
(a) INEX
is
an “accredited
investor”,
as
such term is defined in Rule 501 of Regulation D promulgated under the U.S.
Securities Act of 1933, as amended (the “Securities
Act”),
in
that as of the date of this Agreement INEX has total assets of at least
$5,000,000 and it was not formed for the specific purpose of acquiring the
shares of Hana common stock included in the Payment.
(b) INEX
is
acquiring the shares of Hana common stock included in the Payment for its own
account, for investment intent and not with a view toward distribution. INEX
understands that, should it later desire to resell such shares, it will do
so
only pursuant to an effective registration statement under the Securities Act
or
pursuant to a valid exemption from the registration requirements of such
Securities Act, which exemption will be confirmed by the opinion of counsel
reasonably satisfactory to Hana.
(c) INEX
acknowledges that it has reviewed, or has had the opportunity to review, copies
of Hana’s (1) Annual Report on Form 10-K for the year ended December 31, 2005,
(2) Definitive Proxy Statement on Schedule 14A relating to its Annual Meeting
of
Stockholders to be held May 9, 2006, and (3) Current Reports on Form 8-K filed
since January 1, 2006, all as filed with the SEC.
(d) INEX
has
had an opportunity to ask questions of and receive answers from officers or
other representatives of Hana concerning the terms and conditions of the
issuance of the shares of Hana common stock included in the Payment or Hana’s
business or financial condition, and INEX has received all additional
information concerning Hana to the extent such information was requested by
INEX
or its agents.
(e) INEX
acknowledges that the certificate(s) representing the shares of Hana common
stock included in the Payment will contain a legend, substantially in the form
as follows:
“The
shares represented by this certificate have not been registered under the
Securities Act of 1933 (the “Act”)
and
are “restricted securities” as that term is defined in Rule 144 under the Act.
The shares may not be offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the Act or pursuant
to an
exemption from registration under the Act, the availability of which is to
be
established to the satisfaction of the Company.”
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ARTICLE
4
PRE-CLOSING
COVENANTS
4.1 Commitment
to Effect:
Subject
to termination of this Agreement, the parties will each use all reasonable
efforts and do all things reasonably required to complete the execution of
all
of the Definitive Agreements by the parties thereto and to otherwise cause
the
Transaction to occur.
4.2 Covenants:
Each
party will do and perform all such acts and things, and execute and deliver
all
such agreements, assurances, notices and other documents and instruments, as
may
reasonably be required to facilitate the carrying out of the intent and purpose
of this Agreement.
4.3 Interim
Development Plan:
INEX
and Hana will use reasonable commercial efforts to complete the Interim
Development Plan on or before the Closing.
4.4 Work
under Service Agreement:
Hana
acknowledges and agrees that the Service Agreement will be effective April
3,
2006 and that prior to the Closing, work has been undertaken (and after the
Closing work will continue to be undertaken) by INEX, its affiliates or
subcontractors, pursuant to the terms of the Service Agreement. Hana further
acknowledges and agrees that Hana will compensate INEX for all services
performed by INEX from the Effective Date of the Service Agreement, regardless
of when the Closing occurs.
ARTICLE
5
CLOSING
5.1 Closing:
The
closing of the Transaction (the “Closing”)
will
take place on the Closing Date in the following manner:
(a) each
of
the fully executed Definitive Agreements, once executed, together with any
other
documents contemplated thereby or which the parties thereto may reasonably
request be delivered at Closing (together with the Definitive Agreements, the
“Closing
Documents”),
will
be jointly held in escrow by Lang Xxxxxxxx LLP (“Lang”)
and
Xxxxxx Xxxxxxx Xxxxxx & Brand LLP (“Maslon”)
until
such time as all Definitive Agreements have been fully executed by all parties
thereto and INEX and Hana:
(i) have
each
delivered to the other a written confirmation that all Closing Documents have
been completed and the Closing may proceed;
(ii) have
delivered a joint direction to each of Lang and Maslon to release the Closing
Documents from escrow; and
(iii) have
delivered a joint direction to the Escrow Agent, as escrow agent of the Deposits
and the INEX Cash, to release to INEX the Deposits, together with the INEX
Cash,
to Lang on behalf of INEX.
(b) upon
receipt of the joint direction from INEX and Hana, each of Lang and Maslon
will:
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(i) deliver
their opinions as contemplated by §5.2(e);
(ii) confirm
that the Escrow Agent will release the Deposits and the INEX Cash to Lang;
(iii) release
the Closing Documents; and
(iv) confirm
that the Closing of the Transaction is complete, upon receipt of the Deposits
and the INEX Cash by Lang.
5.2 Closing
Conditions:
The
respective obligations of the parties to complete the Transactions will be
subject to the satisfaction or waiver of the following conditions:
(a) INEX
and
Hana each will have obtained, or, to the reasonable satisfaction of the other,
obviated the need to obtain, all consents, approvals or waivers from
governmental bodies or agencies, regulatory authorities and third parties,
including without limitation, INEX’s licensors, reasonably necessary for the
execution and delivery of the Definitive Agreements;
(b) the
respective boards of directors of INEX and Hana will have approved the
Transaction;
(c) there
will have been no material legal or governmental proceedings seeking to
restrain, enjoin or otherwise prohibit, nor will any court or governmental
authority of competent jurisdiction have issued any order restraining, enjoining
or otherwise prohibiting the consummation of the Transaction;
(d) each
of
INEX and Hana will have made such investigation of materials related to the
financial, business and legal condition and prospects of the other as may be
reasonably necessary to become and remain familiar with the business operations
and financial condition of each such party; and
(e) each
of
Lang and Maslon will have delivered their opinions dealing with the matters
set
forth in Exhibit C hereto;
(f) each
of
the parties will have with reasonable diligence, done all such things and
provided all such reasonable assurances as may be required to consummate the
transactions contemplated by this Agreement, and each party will provide such
further documents or instruments required by the other parties as may be
reasonably necessary or desirable to give effect to the purpose of this
Agreement and carry out its provisions whether before or after the
Closing;
and
(g) this
Agreement will not have been terminated pursuant to §9.1.
Except
for the conditions set out in §§5.2(b), (c) and (f), which may not be waived,
any of the other conditions in §5.2 may be waived by the party otherwise
entitled to performance of such conditions at its discretion, and in
writing.
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5.3 Survival
of Representations, Warranties and Covenants:
All of
the provisions of this Agreement which by their nature survive the Closing
or
termination of this Agreement (including without limitation, the provisions
of
Article 7 and Article 6) will survive indefinitely.
ARTICLE
6
POST-CLOSING
COVENANTS
6.1 Reasonable
Commercial Efforts:
After
the Closing, each of the parties will fully cooperate with the others and exert
reasonable commercial efforts in order to complete the assignment of the
agreements set forth in Exhibit A hereto to Hana. Until such time as the
agreements are assigned to Hana, INEX agrees that it will hold such agreements
in trust for the benefit of Hana, and perform all obligations pursuant to such
agreements, provided that Hana promptly reimburses INEX for all costs associated
with doing so.
6.2 Access
to Lab Books:
INEX
agrees to grant access, during INEX’s normal business hours, to Hana or Hana’s
employees, contractors or agents, as the case may be, in order to review from
time to time the laboratory note books (the “Lab
Books”)
related to the manufacture and development of the Products and currently
maintained by INEX, provided that Hana gives INEX at least five (5) Business
Days prior written notice of its wish to review the Lab Books. Hana acknowledges
and agrees that the Lab Books contain information that is unrelated to the
Products (the “INEX
Information”)
and is
confidential and proprietary to INEX. As such, Hana acknowledges and agrees
that
it is prohibited from disclosing the INEX Information, and that it is governed
by the provisions of Article 10 of the License Agreement, which apply to the
INEX Information mutatis
mutandis.
6.3 Right
of First Refusal on Future Products:
If
after the Closing, INEX acquires, develops or obtains a license (provided that
such license allows for a sublicense of rights as contemplated hereby, INEX
having used commercially reasonable efforts to negotiate such allowance) for
any
products encapsulating one or more of the Products in a liposome other than
a
liposome that includes sphingomyelin and cholesterol, and where the
sphingomyelin comprises less than 20% dihydrosphingomyelin, then INEX will,
at
the request of Hana, license such products to Hana on terms which are
substantially similar to the terms set out for each such Product in the License
Agreement.
6.4 Payment
of Royalties:
Hana
acknowledges and agrees that upon Hana taking a direct license from UBC and
upon
the assignment or sub-license of the patents or agreements (as the case may
be)
set forth in Exhibit D hereto, Hana will be solely responsible for any payment
obligations to any third parties thereunder while continuing to be responsible
for all payment obligations to INEX as set forth in the License Agreement and
the UBC Sublicense Agreement.
6.5 Completion
of Development Plan:
INEX
and Hana will agree upon the terms of and execute the Development Plan within
30
days of Closing.
6.6 Assumption
of Indebtedness to Elan:
Hana
acknowledges and agrees with INEX that the Definitive Agreements amount to
a
Commercialization Agreement (as defined in the Termination Agreement), and
therefore upon receipt of a Regulatory Approval (as defined in the Termination
Agreement) of Sphingosomal Vincristine, Hana will pay to Elan International
Services, Ltd. on behalf of INEX and its subsidiary INEX International Holdings
Ltd. the sum of $2,500,000 in accordance with §6.4.1(3) of the Termination
Agreement. Hana further acknowledges and agrees that Hana will be responsible
for, indemnify, hold harmless and defend the INEX Indemnitees from and against
any and all Damages suffered or incurred by any INEX Indemnitee arising out
of,
related to, resulting from or in connection with Hana’s failure to make payment
to Elan International Services, Ltd. as contemplated by this §6.6.
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6.7 BCCA
Patents:
After
the Closing, with respect to the BCCA Patents:
(a) INEX
will
make commercially reasonable efforts to obtain the consent of Aradigm
Corporation (“Aradigm”)
to the
assignment of the BCCA Patents to Hana on or before the 6 month anniversary
of
the Closing;
(b) Subject
to Aradigm’s consent to the assignment of the BCCA Patents, INEX and Hana will
each make commercially reasonable efforts to execute an assignment and license
agreement which will cover:
(i) the
assignment by INEX to Hana of the BCCA Patents; and
(ii) the
license back by Hana to INEX, of the BCCA Patents for use by INEX in all fields
other than the Hana Field, provided that such license back is an irrevocable,
exclusive, world-wide, royalty-bearing (to MD Xxxxxxxx but not to Hana) license,
with a right of INEX right to sublicense, the BCCA Patents (and any related
technology) outside the Hana Field; and
(c) Hana
will
not be relieved of any milestone, royalty or sublicensing payments which Hana
would otherwise have made to INEX in respect of the BCCA Patents had the
assignment of BCCA Patents to Hana not taken place.
6.8 Xxxxxx
and Xxxxxx Patents:
After
the Closing, with respect to the MD Xxxxxxxx License and the patents referred
to
therein:
(a) INEX
will
make commercially reasonable efforts to obtain the consent of MD Xxxxxxxx to
the
assignment of the MD Xxxxxxxx License to Hana on or before the 6 month
anniversary of the Closing;
(b) Subject
to MD Anderson’s consent to the assignment of the MD Xxxxxxxx License and the
Xxxxxx and Xxxxxx patents referred to therein, INEX and Hana will each make
commercially reasonable efforts to execute a license agreement which will cover
the license by Hana to INEX of the Xxxxxx and Xxxxxx patents, provided that
such
license is an irrevocable, exclusive, world-wide, royalty-bearing (to the
British Columbia Cancer Agency, but not to Hana) license, with the right of
INEX
to sublicense the Xxxxxx and Xxxxxx patents (and any related technology) and
any
improvements thereto outside the Hana Field; and
(c) Hana
will
not be relieved of any milestone, royalty or sublicensing payments which Hana
would otherwise have made to INEX in respect of Hana’s use of the Xxxxxx and
Xxxxxx patents had the assignment not taken place.
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6.9 UBC
Technology:
After
the Closing, with respect to UBC:
(a) INEX
will
make commercially reasonable efforts to assist Hana in obtaining a direct
license from UBC of the same patents and technology as those licensed pursuant
to the UBC Sublicense Agreement (the “UBC
Technology”)
for
use by Hana within the Hana Field.
(b) As
long
as INEX or Tekmira Pharmaceuticals Corporation (“Tekmira”)
continues to hold a license to the UBC Technology, Hana’s financial obligations
to INEX (or Tekmira, as the case may be) in respect of the UBC Technology will
survive, notwithstanding the fact that Hana may have a direct license from
UBC
for the UBC Technology, and royalties will continue to be payable to INEX (or
Tekmira, as the case may be) as well as to UBC.
6.10 DHSM
Patents:
After
Closing, with respect to the DHSM Patents:
(a) Hana
will
reimburse INEX for 10% of all costs and expenses incurred by INEX or its
Affiliate after Closing in connection with prosecution and maintenance of the
applications for the DHSM Patents;
(b) Hana
will
have the right (the “Option”) (upon 45 days’ prior written notice to INEX) to
obtain a license to the Intellectual Property Rights in and to the DHSM Patents
by Hana solely in connection with Hana’s (or Hana’s Affiliates’ or
Sublicensees’) manufacture, use, sale, offering for sale or importing of the
Products or any of them throughout the Territory;
(c) Upon
exercise of the Option, Hana will reimburse INEX (or INEX’s Affiliate, as the
case may be) for 40% of all costs and expenses incurred by INEX in connection
with the prosecution of the applications for the DHSM Patents (and after
issuance of each of the DHSM Patents, for the maintenance for each such DHSM
Patent) to the date of the exercise of the Option; and
(d) After
exercise of the Option, Hana and INEX will each use commercially reasonable
efforts to negotiate a license agreement covering Hana’s license of the
Intellectual Property Rights in and to the DHSM Patents by Hana solely in
connection with Hana’s (or Hana’s Affiliates’ or Sublicensees’) manufacture,
use, sale, offering for sale or importing of a liposome that includes
sphingomyelin (where the sphingomyelin comprises more than 20%
dihydrosphingomyelin) and cholesterol, together with an encapsulated form of
vincristine, vinorelbine or topotecan, on terms substantially similar to those
set forth in the License Agreement, save and except that it shall be a term
of
such license agreement that Hana will reimburse INEX (or INEX’s Affiliate, as
the case may be) for 50% of all future costs and expenses incurred by INEX
in
connection with the prosecution of the applications for the DHSM Patents (and
after issuance of each of the DHSM Patents, for the maintenance of each such
DHSM Patent).
6.11 Continuing
Obligations:
Notwithstanding any other provision of any of the Definitive Agreements
(including without limitation, the Elan Assignment and Novation Agreement),
INEX
agrees that should any obligations of INEX or IE Ocology arise to UBC or NeXstar
Pharmaceuticals, Inc. under Amended and Restated License Agreement among Elan
Pharmaceuticals, Inc, INEX and IE Oncology dated April 3, 2003, wherein INEX
and
IE Oncology agreed to assume responsibility for royalty, milestone and other
payments, if any, arising under (a) that certain agreement between The
Liposome Company and NeXstar Pharmaceuticals, Inc. dated March 24, 1993; and
(b)
that certain UBC Research Project Agreement (as amended) dated May 8, 1984
between UBC and The Liposome Company, and assigned to Elan Pharmaceuticals
Inc.
on December 28, 2001, INEX will be responsible for any such obligations.
Further, INEX acknowledges that any such obligations will continue
notwithstanding the assignment of such Amended and Restated License Agreement
by
INEX to Hana, and INEX will be responsible for, indemnify, hold harmless and
defend the Hana Indemnitees from and against any and all Damages suffered or
incurred by any Hana Indemnitee arising out of, related to, resulting from
or in
connection with INEX’s failure to carry out any such
obligations.
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6.12 Confidentiality
Agreements:
INEX
will hold the Confidentiality Agreements in trust for the benefit of Hana,
and
Hana will have the right (at its sole cost and expense) to commence any action
at law or in equity against any Third Party which is alleged to have breached
the provisions of any Confidentiality Agreement. INEX will cooperate with Hana
in any action taken by Hana against any Third Party arising from or related
to
the provisions of a Confidentiality Agreement, provided that Hana reimburses
INEX for any of its expenses associated therewith.
6.13 Clinical
Trial Agreements:
INEX
and Hana hereby acknowledge and agree that:
(a) INEX
will
make commercially reasonable efforts to assign and Hana will make commercially
reasonable efforts to take the assignment of each of the Clinical Trial
Agreements, provided that each such assignment will take place after completion
of the clinical trial(s) contemplated by each such Clinical Trial
Agreement;
(b) As
of the
Closing, Hana will assume all financial obligations of INEX and its affiliates,
if any, under each such Clinical Trial Agreement (including without limitation,
all costs and expenses incurred by INEX and its affiliates related to operating
the trails, travel expenses, salary and benefits costs of employees working
on
such trials, data management, statistical analysis and reporting);
(c) For
any
patient enrolled in a Product-related trial operated pursuant to a Clinical
Trial Agreement prior to Closing, INEX will be liable for any Damages suffered
by any such patient which arise from a claim that is made by such patient prior
to the 30th
day
after such patient receives his or her last dose of a Product pursuant to the
Clinical Trial Agreement;
(d) For
any
patient enrolled in a Product-related trial operated pursuant to a Clinical
Trial Agreement after Closing, Hana will be liable for any Damages suffered
by
any such patient, and will be responsible for, indemnify, hold harmless and
defend the INEX Indemnities from and against any and all Damages suffered or
incurred by any INEX Indemnitee arising out of, related to, resulting from
or in
connection with the Clinical Trial Agreement pursuant to which such patient
was
treated, including without limitation, INEX’s or Hana’s conduct of a clinical
trial pursuant to such Clinical Trial Agreement;
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(e) As
of the
Closing, Hana will assume all liabilities to Institutions or Investigators
pursuant to each Clinical Trial Agreement provided that such liabilities relate
to or are associated with any claim made by any patient enrolled in a
Product-related trial operated pursuant to such Clinical Trial Agreement against
an Institution or Investigator, and will be responsible for, indemnify, hold
harmless and defend the INEX Indemnities from and against any and all Damages
suffered or incurred by any INEX Indemnitee arising out of, related to,
resulting from or in connection with the Clinical Trial Agreement pursuant
to
which such patient was treated, including without limitation, INEX’s or Hana’s
conduct of a clinical trial pursuant to such Clinical Trial Agreement;
and
(f) INEX
and
Hana will jointly prepare, approve, execute and send a notice to each
Institution and Investigator for the purpose of informing each such Institution
and Investigator of Hana’s and INEX’s allocation of liability and
indemnifications set out in this §6.13.
6.14 Operating
Agreements:
INEX
and Hana acknowledge and agree that each will use commercially reasonable
efforts to ensure that the Operating Agreements are assigned by INEX to Hana
as
soon as is practicable after Closing.
6.15 Complete
List:
INEX
and Hana acknowledge and agree that the agreements set forth in Exhibit A hereto
are not exhaustive, and that INEX will provide a comprehensive list of
agreements to be included as Exhibit A hereto within 45 days of Closing, and
upon delivery, such list will become Exhibit A to this Agreement.
ARTICLE
7
NON-COMPETITION
7.1 Launch
of Competitive Product:
Hana
hereby agrees that in the event Hana or its Affiliate(s), either alone or in
partnership, in collaboration or in conjunction with any Person other than
INEX
or INEX’s Affiliate(s), whether as principal, agent, employee, director,
officer, shareholder, licensor or in any capacity or manner whatsoever, whether
directly or indirectly, Develops, Manufactures or Commercializes any Competitive
Product during the Term in
a
particular country(ies) in the Territory,
all
licenses and sublicenses granted by INEX to Hana in respect of such Product
in
such country(ies) in the Territory will
terminate and Hana’s rights thereunder will
revert
to INEX.
7.2 Cure
by Hana:
Notwithstanding the provisions of §7.1, if Hana or its Affiliate(s) acquires an
entity or all or substantially all of the assets of an entity during the Term
and such entity distributes or the assets of such entity includes a Competitive
Product, Hana or its Affiliate will have 6 months in which to divest itself
of
such Competitive Product or to otherwise cease distribution of such Competitive
Product, and upon such divestiture or cessation, Hana will not be in violation
of §7.1.
7.3 Non-Competition:
INEX
hereby agrees that in the event INEX or its Affiliate(s) either
alone or in partnership, in collaboration or in conjunction with any Person
other than Hana or Hana’s Affiliate(s), whether as principal, agent, employee,
director, officer, shareholder, licensor or in any capacity or manner
whatsoever, whether directly or indirectly, engages in the Restricted Business,
INEX shall grant to Hana, a permanent, fully paid up, exclusive, royalty-free
license in respect of such Product in such country(ies) in the Territory where
INEX or
its
Affiliate(s) has engaged in the Restricted Business.
The
term “engage” as used herein, includes, but will not be limited to, giving
advice or technical or financial assistance, by loan, guarantees, stock
transactions or in any other manner to any Person, firm, association, trust,
venture or corporation doing or proposing to undertake such Restricted Business
in the Territory.
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7.4 Cure
by INEX:
Notwithstanding the provisions of §7.3, if INEX or its Affiliate(s) engages in a
Restricted Business, INEX or its Affiliate(s), as the case may be, will have
6
months from the date of receipt of written notice from Hana requiring INEX
or
its Affiliate(s) as the case may be, to cease all activity(ies) involving such
Restricted Business as set forth in such written notice (and provided that
INEX
or its Affiliate(s), as the case may be, will do all such reasonable things
and
provide all such reasonable assurances as may be required to ensure that the
Intellectual Property Rights and Confidential Information of Hana is returned
to
Hana), in which case INEX (or its Affiliate(s), as the case may be) will not
be
in violation of §7.3.
7.5 Modification:
In the
event that any portion of this §7.5 is considered by a court of competent
jurisdiction to be excessive in its duration, scope or in the area to which
it
applies, it will be considered modified and valid for such scope, duration
and
for such area as said court may determine reasonable under the circumstances.
In
recognition of the irreparable harm that a violation of this §7.5 would cause
Hana, Hana will have the right to enforce this Agreement by specific remedies,
which will include, among other things, temporary restraining orders and
temporary and permanent injunctions. In the event of any such violation, INEX
agrees to be liable for, jointly and severally, and pay the reasonable legal
fees incurred by Hana in pursuing any of its rights with respect to such
violation or violations in addition to the actual damages sustained by Hana
as a
result thereof.
The
duration of the Non-Compete Period will be extended beyond the time period
set
forth above for a period equal to the duration of any breach or default of
either such covenant by INEX.
ARTICLE
8
ASSIGNMENT
8.1 Assignment:
No
party may assign its rights or obligations under this Agreement or the
Definitive Agreements without the prior written consent of the other party,
save
and except that notwithstanding any other provisions of this Agreement or of
any
of the Definitive Agreements, INEX and Hana may assign this Agreement (or any
of
the Definitive Agreements except the Registration Rights Agreement) in whole
or
in part to a wholly-owned subsidiary, provided, however that in the event INEX
assigns this Agreement in whole or in part to its subsidiary Tekmira
Pharmaceuticals Corporation (“Tekmira”)
and
subsequent to such assignment, a controlling interest in the capital stock
of
Tekmira is sold by INEX, all of Tekmira’s rights and obligations under such
assignment will automatically revert to INEX.
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ARTICLE
9
TERMINATION
9.1 Termination:
If the
Transaction does not Close on May 31, 2006, either of Hana or INEX may terminate
this Agreement upon delivery of written notice to the other.
9.2 Effect
of Termination:
Upon
termination of this Agreement in accordance with §9.1, each of the parties will
with reasonable diligence and at no cost to INEX except for those which INEX
may
directly incur in connection herewith, do all such things and provide all such
reasonable assurances as may be required to ensure that the Intellectual
Property Rights (as such term is defined in both the License Agreement and
the
UBC Sublicense Agreement) in the Products vest again with INEX as though none
of
the Definitive Agreements were ever executed or any performance by any party
was
taken thereunder, whether in whole or in part; provided however, that INEX
will
be entitled to receive and retain all payments and reimbursements made by Hana
to INEX in respect of any and all services rendered in accordance with the
Service Agreement.
ARTICLE
10
GENERAL
10.1 Notices:
All
notices which may or are required to be given pursuant to any provision of
this
Agreement will be given or made in writing and will be delivered or telecopied,
addressed as follows:
(a) in
the
case of INEX:
INEX
Pharmaceuticals Corporation
000
-
0000 Xxxxxxxx Xxxxxxx
Xxxxxxx,
XX X0X 0X0
Attention:
Xxx
Xxxxxxxx, Vice President, Finance
and
Chief
Financial Officer
Facsimile:
(000)
000-0000
with
a
copy to:
Lang
Xxxxxxxx LLP
1500
-
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx,
X.X. X0X 0X0
Attention: Xxx
Xxxxxx
Facsimile:
(000)
000-0000
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(b) in
the
case of Hana:
Hana
Biosciences, Inc.
000
Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx
000
Xxxxx
Xxx
Xxxxxxxxx, XX
00000,
U.S.A.
Attention:
Xxxx
X.
Xxx
President
and Chief Executive Officer
Facsimile:
(000)
000-0000
with
a
copy to:
Xxxxxx
Xxxxxxx Xxxxxx & Brand, LLP
3300
Xxxxx Fargo Center
00
Xxxxx
0xx
Xxxxxx
Xxxxxxxxxxx,
Xxxxxxxxx
XXX
Attention:
Xxxxxxxxxxx
X. Xxxxxx
Facsimile:
(000)
000-0000
10.2 Binding
Effect:
This
Agreement will be binding upon and will enure to the benefit of the parties
and
their respective successors and permitted assigns.
10.3 Amendment:
This
Agreement may only to be amended by the written agreement of the parties
hereto.
10.4 Waiver:
No
waiver or release of any provision of this Agreement, will be effective unless
in writing and executed by the party granting such waiver or
release.
10.5 Governing
Law:
This
Agreement will be governed by and be construed in accordance with the laws
of
the State of Washington and the laws of the United States of America applicable
therein.
10.6 Jurisdiction:
The
parties agree that the courts of the State of Washington will have exclusive
jurisdiction to determine all disputes and claims arising between the
parties.
10.7 Expenses:
All
expenses incurred by a party in connection with this Agreement, the Arrangement
and the transactions contemplated hereby and thereby will be borne by the party
that incurred the expense.
Signature
Page Follows
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10.8 Entire
Agreement:
This
Agreement constitute the entire agreement between the parties with respect
to
the subject matter of this Agreement and supersedes all prior and
contemporaneous agreements, understanding, negotiations and discussions, whether
oral or written, of the parties.
10.9 Time
of Essence:
Time is
of the essence of this Agreement.
10.10 Counterparts:
This
Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original but all of which together will constitute one and
the
same instrument.
IN
WITNESS WHEREOF
the
parties have executed this Agreement as of the date first above
written.
INEX
PHARMACEUTICALS CORPORATION
Per: /s/
Xxxxxxx
Xxxxx
Authorized
Signatory
HANA
BIOSCIENCES, INC.
Per: /s/
Xxxx X.
Xxx
Authorized
Signatory
Signature
Page to Transaction Agreement
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