Exhibit 10.15
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
SUBSCRIPTION, JOINT DEVELOPMENT AND OPERATING AGREEMENT
ELAN PHARMA INTERNATIONAL LIMITED
ELAN INTERNATIONAL SERVICES, LTD.
AND
PHOTOGEN TECHNOLOGIES, INC.
AND
PHOTOGEN NEWCO LTD.
INDEX
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CLAUSE 1 DEFINITIONS
CLAUSE 2 BUSINESS
CLAUSE 3 REPRESENTATIONS AND WARRANTIES
CLAUSE 4 AUTHORIZATION AND CLOSING
CLAUSE 5 DIRECTORS; MANAGEMENT AND R&D COMMITTEES
CLAUSE 6 THE BUSINESS PLAN AND REVIEWS
CLAUSE 7 RESEARCH AND DEVELOPMENT
CLAUSE 8 COMMERCIALIZATION
CLAUSE 9 SUBLICENSE AND ASSIGNMENT RIGHTS
CLAUSE 10 OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS/[****]
CLAUSE 11 INTELLECTUAL PROPERTY RIGHTS
CLAUSE 12 CROSS LICENSING/EXPLOITATION OF PRODUCTS OUTSIDE FIELD
CLAUSE 13 REGULATORY
CLAUSE 14 MANUFACTURING
CLAUSE 15 TECHNICAL SERVICES AND ASSISTANCE
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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 EXCHANGE ACT OF 1934, AS AMENDED.
CLAUSE 16 AUDITORS, BANKERS, REGISTERED OFFICE,
ACCOUNTING REFERENCE DATE; SECRETARY; COUNSEL
CLAUSE 17 TRANSFER OF SHARES; RIGHTS OF FIRST OFFER; TAG ALONG RIGHTS
CLAUSE 18 MATTERS REQUIRING PARTICIPANTS' APPROVAL
CLAUSE 19 DISPUTES
CLAUSE 20 TERMINATION
CLAUSE 21 SHARE RIGHTS
CLAUSE 22 CONFIDENTIALITY
CLAUSE 23 COSTS
CLAUSE 24 GENERAL
THIS SUBSCRIPTION, JOINT DEVELOPMENT AND OPERATING AGREEMENT made this 20th
day of October, 1999
BETWEEN:
(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, Xxxxxxx, Xxxxxx Xxxxx,
Xxxxxxx ("EPIL");
(2) ELAN INTERNATIONAL SERVICES, LTD., an exempted limited liability
company incorporated under the laws of Bermuda, and having its
registered office at Xxxxxxxxx Xxxxx, 0 Xxxxxx Xx., Xxxxxxxx, Xxxxxxx
("XXX");
(3) PHOTOGEN TECHNOLOGIES, INC. a corporation duly incorporated and
validly existing under the laws of Nevada and having its principal
place of business at 0000 Xxx Xxxxx, Xxxxxxxxx, XX. 00000, Xxxxxx
Xxxxxx of America ("Photogen"); and
(4) PHOTOGEN NEWCO LTD. an exempted limited liability company incorporated
under the laws of Bermuda, and having its registered office at
Xxxxxxxxx Xxxxx, 0 Xxxxxx Xx., Xxxxxxxx, Xxxxxxx ("XXXXX").
RECITALS:
A. Newco desires to issue and sell to Photogen and Photogen desires to
purchase from Newco, for aggregate consideration of $12,015,000, 12,000
ordinary shares of Newco's common stock, par value $1.00 per share (the
"COMMON STOCK"). Additionally, Newco desires to issue and sell to EIS
and EIS desires to purchase from Newco, for aggregate consideration of
$2,985,000, 2,980 shares of Newco's non-voting convertible preferred
stock, par value $1.00 per share (the "PREFERRED STOCK").
B. As of the date hereof, EPIL 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 (each as defined
below).
C. Elan and Photogen have agreed to co-operate in the research,
development and commercialization of the Products (as defined below)
based on their respective technologies.
D. Elan and Photogen have agreed to enter into this Agreement for the
purpose of recording the terms and conditions regulating their
relationship with each other, with respect to the Licensed Technologies
and with Newco.
NOW IT IS HEREBY AGREED AS FOLLOWS:
CLAUSE 1
DEFINITIONS
1.1 In this Agreement, the following terms shall, where not
inconsistent with the context, have the following meanings
respectively.
"AFFILIATE" shall mean any corporation or entity controlling,
controlled or under the common control of Elan or Photogen, as the case
may be. For the purpose of this definition, "control" shall mean direct
or indirect ownership of fifty percent (50%) or more of the stock or
shares entitled to vote for the election of directors. Newco is not an
Affiliate of Elan or EIS.
"AGREEMENT" shall mean this agreement (which expression shall be deemed
to include the Recitals and the Schedules hereto).
"ALLIANCE" shall mean Alliance Pharmaceutical Corp., whose principal
place of business is at 0000 Xxxxxxx Xxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx.
"ALLIANCE AGREEMENT" shall mean the Agreement dated 9 August 1999,
between Alliance, Photogen and Xx. Xxxxxx Xxxx ("XX XXXX"), which
agreement, inter alia, assigned the Method Patents from Alliance and
Xx. Xxxx to Photogen.
"BOARD" shall mean the board of directors of Newco.
"BUSINESS" shall mean the business specified in the Business Plan.
"BUSINESS PLAN" shall mean the business plan and program of development
to be agreed by Elan and Photogen pursuant to Clause 6, that shall
contain, among other things, to the extent practicable, the research
and development objectives, desired Product specifications, clinical
indications, preliminary clinical trial designs (Phase I/II),
development timelines, budgeted costs and the relative responsibilities
of Photogen and Elan as it relates to the implementation of the
R&D Plan.
"CERTIFICATE OF DESIGNATIONS" shall mean that certain certificate of
designations, preferences and rights of Series A Preferred Stock of
Photogen issued on the date hereof.
"CLOSING DATE" shall mean the date upon which the Transaction Documents
are executed and delivered by the Parties and the transactions effected
thereby are closed.
"COMMON STOCK EQUIVALENTS" shall mean any options, warrants, rights or
any other securities convertible, exercisable or exchangeable, in whole
or in part, for or into Common Stock.
"COMPOUNDS" shall mean the diagnostic imaging agents compounds [****].
"CONTROL" shall mean the ability to grant a license or sublicense as
contemplated herein without violating the terms of any agreement with
any third party.
"DIRECTORS" shall mean, at any time, the directors of Newco.
"EIS DIRECTOR" has the meaning set forth in Clause 5.
"ELAN" shall mean EPIL (a wholly owned subsidiary of Elan Corporation,
plc., which owns the Nanocrystal-TM- technology formerly controlled by
NanoSystems LLC, formerly a subsidiary of the Xxxxxxx Kodak Company)
and Affiliates and subsidiaries of Elan Corporation, plc. within the
division of Elan Corporation, plc. carrying on business as Elan
Pharmaceutical Technologies ("EPT") but shall not include Affiliates
and subsidiaries (present or future) of Elan Corporation plc. within
the division of Elan Corporation, Plc carrying on business as Elan
Pharmaceuticals which incorporates, inter alia, Targon Corporation,
Athena Neurosciences, Inc., Elan Pharmaceuticals, Inc., Elan
Diagnostics, Carnrick Laboratories, and Elan Europe Limited.
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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 EXCHANGE ACT OF 1934, AS AMENDED.
"ELAN IMPROVEMENTS" shall mean improvements relating to the Elan
Patents and/or the Elan Know-How , developed (i) by Elan not pursuant
to the Project, (ii) by Elan pursuant to the Project except for that
portion of improvements relating solely and specifically to Product(s)
(iii) by Newco or Photogen or by a third party (under contract with
Newco) pursuant to the Project except for that portion of improvements
relating solely and specifically to Product(s), and/or (iv) jointly by
any combination of Elan, Photogen or Newco pursuant to the Project
except for that portion of improvements relating solely and
specifically to Product(s), except as limited by agreements with
unaffiliated third parties.
Subject to third party agreements with unaffiliated third parties, Elan
Improvements shall constitute part of Elan Intellectual Property and be
included in the license of the Elan Intellectual Property pursuant to
Clause 3.1 solely for the purposes set forth therein. If the inclusion
of a Elan Improvement in the license of Elan Intellectual Property is
restricted or limited by a third party agreement, Elan shall use
reasonable commercial efforts to minimize any such restriction or
limitation.
"ELAN INTELLECTUAL PROPERTY" shall mean the Elan Know-How, the Elan
Patents and the Elan Improvements.
For the avoidance of doubt, Elan Intellectual Property shall exclude
(i) Elan's patent rights and know-how relating to drug delivery devices
including parenteral administration of a diagnostic imaging agent via a
drug delivery device such as Medipad and (ii) inventions, patents and
know-how owned, licensed or Controlled by Axogen Limited and Neuralab
Limited, and by all Affiliates and subsidiaries (present or future) of
Elan Corporation, plc. within the division of Elan Corporation, plc.
carrying on business as Elan Pharmaceuticals which incorporates, inter
alia, Targon Corporation, Athena Neurosciences, Inc., Elan
Pharmaceuticals, Inc., Elan Diagnostics, Carnrick Laboratories, and
Elan Europe Limited.
"ELAN KNOW-HOW" shall mean any and all rights owned, or Controlled by
Elan to any Know-How relating to nanoparticulate medical diagnostic
imaging agents including, without limitation, [****]
The primary examples of the Elan Know-How existing as of the date
hereof are set forth on Schedule 1 of the Elan License Agreement, which
listing is not necessarily exhaustive.
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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 EXCHANGE ACT OF 1934, AS AMENDED.
"ELAN LICENSE AGREEMENT" shall mean the license agreement between Elan
and
Newco, of even date herewith, attached hereto in Schedule 1.
"ELAN PATENTS" shall mean any and all Patent Rights owned or Controlled
by Elan, now existing, currently pending or hereafter filed by Elan
relating to nanoparticulate medical diagnostic imaging agents
including, without limitation, [****]. Representative Elan Patents
existing as of the date hereof are set forth in Schedule 1 of the Elan
License Agreement.
"ENCUMBRANCE" shall mean any liens, charges, encumbrances, equities,
claims, options, proxies, pledges, security interests, or other similar
rights of any nature.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXCHANGE RIGHT" has the meaning assigned to such term in Section 5.a
of the Certificate of Designations in effect on the date hereof.
"FIELD" shall mean the research, development, manufacture and
commercialization of nanoparticulate x-ray, CT, and/or MRI diagnostic
imaging agents using radio-opaque molecules containing Iodine that
passively target to lymphnodes involved in a disease state following
parenteral administration to a mammal to locate, diagnose and/or treat
cancer and/or other diseases.
For the avoidance of doubt, the Field does not include:
(1) active targeting agents, including but not limited to
monoclonal antibodies, short-chain antibodies or any other
active targeting agents including protein, peptide or
peptidomimetic targeting agents; or
(2) ultrasound diagnostic imaging agents.
"FINANCIAL YEAR" shall mean each year commencing on January 1 (or in
the case of the first Financial Year, the date hereof) and expiring on
December 31 of each year.
"FULLY DILUTED COMMON STOCK" shall mean all of the issued and
outstanding Common Stock, assuming the conversion, exercise or exchange
of all outstanding Common Stock Equivalents.
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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 EXCHANGE ACT OF 1934, AS AMENDED
"FUNDING AGREEMENT" shall mean the Funding Agreement, dated as of the
date hereof, among EIS, Elan and Photogen.
"GENERAL NYCOMED AGREEMENT" shall mean the License Agreement between
The General Hospital Corporation (acting, inter alia, as agent for
Nycomed) and Photogen which agreement sublicenses or licenses, as
applicable, inter alia, certain rights with respect to the Compounds
[****] and [****] to Photogen.
"GENERAL NYCOMED PATENTS" shall mean the patents included in the GenNyc
Intellectual Property.
"GENNYC INTELLECTUAL PROPERTY" shall mean all the rights to and under
the General Patent Rights, the Joint Patent Rights and the [****]
Patent Rights (as those terms are defined in the General Nycomed
Agreement) which are licensed or sublicensed as applicable to Photogen
pursuant to the General Nycomed Agreement.
The primary examples of GenNyc Intellectual Property existing as of the
date hereof are set forth on Schedule 2 of the Photogen License
Agreement, which listing is not necessarily exhaustive.
"KNOW-HOW" shall mean information and know-how, whether patentable or
not, including but not limited to any and all discoveries, inventions,
substances, data, techniques, processes, systems, formulations, designs
and commercial information relating to design, development,
manufacture, assembly, use or sale.
"LICENSE AGREEMENTS" shall mean the Elan License Agreement and the
Photogen License Agreement.
"LICENSED TECHNOLOGIES" shall mean the Elan Intellectual Property,
the Photogen Intellectual Property and the GenNyc Intellectual
Property.
"METHOD PATENTS" shall mean the patent family that contains the [****]
Patent, the [****] Patent, [****] and others as described in Exhibit B
of the Alliance Agreement.
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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 EXCHANGE ACT OF 1934, AS AMENDED.
"NEWCO INTELLECTUAL PROPERTY" shall mean all Patent Rights and Know-How
and other intellectual property arising pursuant to the Project by any
person, that does not constitute Elan Intellectual Property or Photogen
Intellectual Property and any technology licensed or acquired by Newco
from a third party.
For avoidance of doubt, Newco Intellectual Property includes all
improvements developed pursuant to the Project and relating solely and
specifically to Product(s).
"NEWCO MEMORANDUM OF ASSOCIATION AND BYE-LAWS" shall mean the
Memorandum of Association and Bye-Laws of Newco.
"NEWCO PATENTS" shall mean any and all Patent Rights now existing,
currently pending or hereafter filed or obtained relating to the Newco.
"NOTE" shall mean that certain convertible promissory note, of even
date herewith, by and between Photogen and EIS.
"NYCOMED" shall mean Nycomed Imaging AS doing business as Nycomed
Amersham, whose principal place of business is at 000 Xxxxxxxx Xxxxxx,
Xxxxxxxxx, XX 00000, XXX.
"PARTICIPANT" shall mean Photogen or Elan, as the case may be, and
"PARTICIPANTS" shall mean both of the Participants together as the
context requires;
"PARTY" shall mean Elan, Photogen, or Newco, as the case may be, and
"PARTIES" shall mean all three together.
"PATENT RIGHTS" shall mean any and all patents and patent applications,
including all divisionals, continuations, continuations-in-part,
extensions, patents-of-additions, re-examinations, re-issues,
supplementary protection certificates and foreign counterparts of such
patents and patent applications and any patents issuing thereon and
extensions thereon.
"PERMITTED TRANSFEREE" shall mean any Affiliate or subsidiary of Elan,
EIS or Photogen, to whom this Agreement may be assigned, in whole or in
part, pursuant to the terms hereof or in the case of Elan/EIS, a
special purpose financing or similar vehicle created by Elan or EIS.
"PERSON" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental entity or
authority or other entity of whatever nature.
"PHOTOGEN" shall mean Photogen and its Affiliates, excluding Newco.
"PHOTOGEN DIRECTORS" has the meaning set forth in Clause 5.
"PHOTOGEN IMPROVEMENTS" shall mean improvements relating to the
Photogen Patents and/or the Photogen Know-How, developed (i) by
Photogen not pursuant to the Project, (ii) by Photogen pursuant to the
Project except for that portion of improvements relating solely and
specifically to Product(s) (iii) by Newco or Elan or by a third party
(under contract with Newco) pursuant to the Project except for that
portion of improvements relating solely and specifically to Product(s),
and/or (iv) jointly by any combination of Photogen, Elan or Newco
pursuant to the Project except for that portion of improvements
relating solely and specifically to Product(s), except as limited by
agreements with unaffiliated third parties.
Subject to third party agreements with unaffiliated third parties,
Photogen Improvements shall constitute part of Photogen Intellectual
Property and be included in the license of the Photogen Intellectual
Property pursuant to Clause 4.1 solely for the purposes set forth
therein. If the inclusion of a Photogen Improvement in the license of
Photogen Intellectual Property is restricted or limited by a third
party agreement, Photogen shall use reasonable commercial efforts to
minimize any such restriction or limitation.
"PHOTOGEN INTELLECTUAL PROPERTY" shall mean the Photogen Know-How,
the Photogen Patents and the Photogen Improvements.
"PHOTOGEN KNOW-HOW" shall mean any and all rights owned, licensed or
Controlled by Photogen to Know-How, relating to medical diagnostic
imaging agents, methods of treatment using medical diagnostic imaging
agents and related compositions.
The primary examples of the Photogen Know-How existing as of the date
hereof are set forth on Schedule 1 of the Photogen License Agreement,
which listing is not necessarily exhaustive, and includes Know-How
owned, licensed or Controlled by Photogen related to the Method
Patents.
"PHOTOGEN LICENSE AGREEMENT" shall mean the license agreement between
Photogen and Newco, of even date herewith, attached hereto in Schedule
2.
"PHOTOGEN PATENTS" shall mean any and all Patent Rights owned or
Controlled by Photogen other than Patent Rights included in the GenNyc
Intellectual Property, now existing, currently pending or hereafter
filed by Photogen relating to
nanoparticulate medical diagnostic imaging agents including medical
diagnostic imaging agents, methods of treatment using medical
diagnostic imaging agents and related compositions.
The primary examples of Photogen Patents existing as of the date hereof
are set forth on Schedule 1 of the Photogen License Agreement, which
listing is not necessarily exhaustive, and includes the Method Patents.
"PHOTOGEN SECURITIES PURCHASE AGREEMENT" shall mean that certain
securities purchase agreement, of even date herewith, by and between
Photogen and EIS.
"PRODUCT" shall mean a formulation containing one or more x-ray, CT,
and/or MRI Compounds in nanoparticulate form developed by or on behalf
of Newco pursuant to the Project.
"PROJECT" shall mean all activities as undertaken by Elan, Photogen and
Newco in order to develop the Products.
"R&D PLAN" shall mean the program of work, including the budget, agreed
by the Management Committee as part of the Business Plan and such
further research and development work as may be agreed by the
Management Committee from time to time.
"R&D PROGRAM" shall mean any research and development program
commenced by Newco pursuant to the Project.
"R&D TERM" shall mean the period commencing on the Closing Date and
continuing for a period of [****] thereafter, or as extended by
agreement of the Participants.
"REGISTRATION RIGHTS AGREEMENTS" shall mean the Registration Rights
Agreements of even date herewith relating to Newco and Photogen,
respectively.
"REGULATORY APPLICATION" shall mean any regulatory application or any
other application for marketing approval for a Product, which Newco
will file in any country of the Territory, including any supplements or
amendments thereto.
"REGULATORY APPROVAL" shall mean the final approval to market a Product
in any country of the Territory, and any other approval which is
required to launch the Product in the normal course of business.
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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 EXCHANGE ACT OF 1934, AS AMENDED
"RHA" shall mean any relevant government health authority (or
successor agency thereof) in any country of the Territory whose
approval is necessary to market a Product in the relevant country of
the Territory.
[****]
[****]
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SHARES" shall mean the shares of Common Stock and shares of Preferred
Stock of Newco.
"STOCKHOLDER" shall mean any of EIS, Photogen, any Permitted Transferee
or any other Person who subsequently becomes bound by this Agreement as
a holder of the Shares, and "STOCKHOLDERS" shall mean all of the
Stockholders together.
"SUBSIDIARY" shall mean any company that is a subsidiary of Newco
within the meaning of applicable laws.
"TECHNOLOGICAL COMPETITOR OF ELAN" shall mean a company, corporation or
person listed in Schedule 3 and successors thereof or any additional
broad-based technological competitor of Elan added to such Schedule
from time to time upon mutual agreement of the Parties.
"TERM" shall mean the term of this Agreement.
"TERRITORY" shall mean all of the countries of the world.
"TRANSACTION DOCUMENTS" shall mean this Agreement, the Funding
Agreement, Elan License Agreement, the Photogen License Agreement, the
Note, the Warrant, the Photogen Securities Purchase Agreement, the
Registration Rights Agreements, the Certificate of Designations and
associated documentation of even date herewith, by and between
Photogen, Elan, EIS and Newco, as applicable.
"UNITED STATES DOLLAR" and "US$" and "$" shall mean the lawful
currency of the United States of America.
[****]
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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 EXCHANGE ACT OF 1934, AS AMENDED.
[****]
1.2 In addition, the following definitions have the meanings in the
Clauses corresponding thereto, as set forth below.
DEFINITION CLAUSE
"AAA" 20.6
"Buyout Option" 20.4
"Closing" 4.3
"Common Stock" Recital A
"Confidential Information" 22.1
"Co-sale Notice" 17.5
"Junior Securities" 21.1
"Management Committee" 5.2.1
"Notice of Exercise" 17.4
"Notice of Intention" 17.4
"Offered Shares" 17.4
"Offer Price" 17.4
"Preferred Stock" Recital A
"Proposing Participant" 20.4
"Proposing Participant Price: 20.6
"Purchase Price" 20.6
"R&D Committee" 5.2.2
"Recipient Participant" 20.4
"Recipient Participant Price" 20.6
"Remaining Stockholders" 17.5
"Relevant Event" 20.2
"Selling Stockholder" 17.4
"Tag-Along Right" 17.5
"Transaction Proposal" 17.4
"Transfer" 17.1
"Transferee Terms" 17.5
"Transferring Stockholder" 17.5
1.3 Words importing the singular shall include the plural and vice versa.
1.4 Unless the context otherwise requires, reference to a recital,
article, paragraph, provision, clause or schedule is to a recital,
article, paragraph, provision, clause or schedule of or to this
Agreement.
1.5 Reference to a statute or statutory provision includes a reference to
it as from time to time amended, extended or re-enacted.
1.6 The headings in this Agreement are inserted for convenience only and
do not affect its construction.
1.7 Unless the context or subject otherwise requires, references to words
in one gender include references to the other genders.
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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 EXCHANGE ACT OF 1934, AS AMENDED.
1.8 Capitalized terms used but not defined herein shall have the meanings
ascribed in the Transaction Documents, if defined therein.
CLAUSE 2
BUSINESS
2.1 This Agreement shall regulate the business of the
development, testing, registration, manufacture,
commercialization and licensing of Products in the Territory
and to achieve the other objectives set out in this Agreement.
The focus of the Business will be to develop the Products using
the Elan Intellectual Property, the Photogen Intellectual
Property and the Newco Intellectual Property to agreed upon
specifications and timelines.
2.2 The central management and control of Newco shall be exercised in
Bermuda and shall be vested in the Directors and such Persons as they
may delegate the exercise of their powers in accordance with the Newco
Memorandum of Association and Bye-Laws. The Stockholders shall use
their best endeavors to ensure that to the extent required pursuant to
the laws of Bermuda, and to ensure the sole residence of Newco in
Bermuda, all meetings of the Directors are held in Bermuda or other
jurisdictions outside the United States and generally to ensure that
Newco is treated as resident for taxation purposes in Bermuda.
2.3 Additional diagnostic imaging agent(s) may be selected from the
Elan Intellectual Property or the Photogen Intellectual
Property in the Field during the Term or from Newco
Intellectual Property and designated as Compound(s) by the
unanimous vote of the Management Committee. In such case, the
Parties shall negotiate in good faith such amendments as are
required to this Agreement, such as amending the provisions
regulating non-competition.
CLAUSE 3
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF NEWCO: Newco hereby represents and
warrants to each of the Stockholders as follows, as of the date hereof:
3.1.1 ORGANIZATION: Newco is an exempted company duly organized,
validly existing and in good standing under the laws of
Bermuda, and has all the requisite corporate power and
authority to own and lease its properties, to carry on its
business as presently conducted and as proposed to be
conducted.
3.1.2 CAPITALIZATION: As of the date hereof, the authorized capital
stock of Newco consists of 12,000 shares of Common Stock and
12,000 shares of Preferred Stock. Prior to the date hereof, no
shares of capital stock of Newco have been issued.
3.1.3 AUTHORIZATION: The execution, delivery and performance by
Newco of this Agreement, including the issuance of the
Shares, have been duly authorized by all requisite
corporate actions; this Agreement has been duly executed
and delivered by Newco and is the valid and binding
obligation of Newco, enforceable against it in accordance
with its terms except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of
general application affecting the enforcement of creditors'
rights generally, and except as enforcement of rights to
indemnity and contribution hereunder may be limited by
United States federal or state securities laws or
principles of public policy. The Shares, when issued as
contemplated hereby, will be validly issued and
outstanding, fully paid and non-assessable and not subject
to preemptive or any other similar rights of the
Stockholders or others.
3.1.4 NO CONFLICTS: The execution, delivery and performance by Newco
of this Agreement, the issuance, sale and delivery of the
Shares, and compliance with the provisions hereof by Newco,
will not:
(i) violate any provision of applicable law, statute,
rule or regulation applicable to Newco or any ruling,
writ, injunction, order, judgment or decree of any
court, arbitrator, administrative agency or other
governmental body applicable to Newco or any of its
properties or assets;
(ii) conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute
(with notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or
acceleration) under its charter or organizational
documents or any material contract to which Newco is a
party, except where such violation, conflict or breach
would not, individually or in the aggregate, have a
material adverse effect on Newco; or
(iii) result in the creation of, any Encumbrance upon any of
the properties or assets of Newco.
3.1.5 APPROVALS: As of the date hereof, no permit, authorization,
consent or approval of or by, or any notification of or filing
with, any Person is required in connection with the execution,
delivery or performance of this Agreement by Newco. Newco has
full authority to conduct its business as contemplated in the
Business Plan and the Transaction Documents.
3.1.6 DISCLOSURE: This Agreement does not contain any untrue
statement of a material fact or omit to state any material
fact necessary to make the statements contained herein not
misleading. Newco is not aware of any material contingency,
event or circumstance relating to its business or prospects,
which could have a material adverse effect thereon, in order
for the disclosure herein relating to Newco not to be
misleading in any material respect.
3.1.7 NO BUSINESS; NO LIABILITIES: Newco has not conducted any
business or incurred any liabilities or obligations prior to
the date hereof, except solely in connection with its
organization and formation.
3.2 REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS: Each of the
Stockholders hereby severally represents and warrants to Newco as
follows as of the date hereof:
3.2.1 ORGANIZATION: Such Stockholder is a corporation duly organized
and validly existing under the laws of its jurisdiction of
organization and has all the requisite corporate power and
authority to own and lease its respective properties, to carry
on its respective business as presently conducted and as
proposed to be conducted and to carry out the transactions
contemplated hereby.
3.2.2 AUTHORITY: Such Stockholder has full legal right, power
and authority to enter into this Agreement and to perform
its obligations hereunder, which have been duly authorized
by all requisite corporate action. This Agreement is the
valid and binding obligation of such Stockholder,
enforceable against it in accordance with its terms except
as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general
application affecting the enforcement of creditors' rights
generally, and except as enforcement of rights to indemnity
and contribution hereunder may be limited by United States
federal or state securities laws or principles of public
policy.
3.2.3 NO CONFLICTS: The execution, delivery and performance by such
Stockholder of this Agreement, purchase of the Shares, and
compliance with the provisions hereof by such Stockholder will
not:
(i) violate any provision of applicable law, statute,
rule or regulation known by and applicable to such
Stockholder or any ruling, writ, injunction, order,
judgment or decree of any court, arbitrator,
administrative agency or other governmental body
applicable to such Stockholder or any of its
properties or assets;
(ii) conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute
(with notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or
acceleration) under the charter or organizational
documents of such Stockholder or any material contract
to which such Stockholder is a party, except where
such violation, conflict or breach would not,
individually or in the aggregate, have a material
adverse effect on such Stockholder; or
(iii) result in the creation of, any Encumbrance upon any of
the properties or assets of such Stockholder.
3.2.4 APPROVALS: As of the date hereof, no permit, authorization,
consent or approval of or by, or any notification of or filing
with, any Person is required in connection with the execution,
delivery or performance of this Agreement by such Stockholder.
3.2.5 INVESTMENT REPRESENTATIONS: Such Stockholder is
sophisticated in transactions of this type and capable of
evaluating the merits and risks of its investment in Newco.
Such Stockholder has not been formed solely for the purpose
of making this investment and such Stockholder is acquiring
the Common Stock and Preferred Stock for investment for its
own account, not as a nominee or agent, and not with the
view to, or for resale in connection with, any distribution
of any part thereof. Such Stockholder understands that the
Shares have not been registered under the Securities
Act or applicable state and foreign securities laws by
reason of a specific exemption from the registration
provisions of the Securities Act and applicable state and
foreign securities laws, the availability of which depends
upon, among other things, the bona fide nature of the
investment intent and the accuracy of such Stockholders'
representations as expressed herein. Such Stockholder
understands that no public market now exists for any of the
Shares and that there is no assurance that a public market
will ever exist for such Shares.
CLAUSE 4
AUTHORIZATION AND CLOSING
4.1 Newco has authorized the issuance to (i) EIS of 2,980 shares of
Preferred Stock and (ii) Photogen of 12,000 shares of Common Stock,
issuable as provided in Clause 4.3 hereof.
4.2 Photogen and EIS hereby subscribe for the number of Shares set forth in
Clause 4.1 and shall pay to Newco in consideration therefor, by wire
transfer of immediately available funds (to a bank account established
by Newco in connection with Completion) the subscription amounts each
as provided in Clause 4.4.1.
4.3 The closing (the "CLOSING") shall take place at the offices of Xxxxx
Xxxxxxxxxxx LLC at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the
date hereof or such other places if any, as the Parties may agree and
shall occur contemporaneously with the closing under the Photogen
Securities Purchase Agreement.
4.4 At the Closing, each of the Stockholders shall take or (to the extent
within its powers) cause to be taken the following steps at directors
and shareholder meetings of Newco, or such other meetings or locations,
as appropriate:
4.4.1 Newco shall issue and sell to EIS, and EIS shall purchase from
Newco, upon the terms and subject to the conditions set forth
herein, 2,980 shares of Preferred Stock for an aggregate
purchase price of $2,985,000. Newco shall issue and sell to
Photogen, and Photogen shall purchase from Newco, upon the
terms and conditions set forth herein, (i) 12,000 shares of
Common Stock for an aggregate purchase price of $12,015,000.
4.4.2 the Parties shall execute and deliver to each other, as
applicable, certificates in respect of the Common Stock and
Preferred Stock described above and any other certificates,
resolutions or documents which the
Parties shall reasonably require;
4.4.3. the adoption by Newco of Newco=s Memorandum of Association
and Bye-Laws;
4.4.4. the appointment of Xxxxx Xxxxxx, Xxxx Xxxxxx and Xxxx
Xxxxxxx as Directors of Newco;
4.4.5. the resignation of all directors and the secretary of Newco
holding office prior to the execution of this Agreement and
delivery of written confirmation under seal by each Person
so resigning that he has no claim or right of action
against Newco and that Newco is not in any way obligated or
indebted to him; and
4.4.6. the transfer to Newco of the share register.
4.5 EXEMPTION FROM REGISTRATION:
The Shares will be issued under an exemption or exemptions from
registration under the Securities Act. Accordingly, the certificates
evidencing the Shares shall, upon issuance, contain the following
legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY SECURITIES LAWS OF A STATE OR OTHER
JURISDICTION AND MAY NOT UNDER ANY CIRCUMSTANCES BE
SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF (OTHER
THAN TO AN AFFILIATE OF THE ORIGINAL HOLDER OR AS
OTHERWISE PERMITTED IN THE AGREEMENT PURSUANT TO
WHICH THEY WERE ISSUED) EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY
LAWS, OR (ii) TO THE EXTENT APPLICABLE, RULE 144
UNDER THE SECURITIES ACT (OR ANY SIMILAR RULE UNDER
THE SECURITIES ACT RELATING TO THE DISPOSITION OF
SECURITIES) TOGETHER WITH AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE CORPORATION THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR
APPLICABLE STATE SECURITIES LAWS.
4.6. Newco shall use reasonable efforts to file any documents that require
filing with the Registrar of Companies in Bermuda within the prescribed
time limits. EIS and Photogen shall provide all reasonable co-operation
to Newco in relation to the matters set forth in this Clause 4.6.
4.7. In the event that EIS exercises the Exchange Right prior to the
third anniversary of the Closing Date as set forth in Section 5 of
the Certificate of Designations, and Photogen is required to
transfer to EIS any shares of Common Stock, Newco shall,
immediately upon such exercise, take all necessary steps to ensure
that each share to be transferred by Photogen to EIS upon
exercise of the Exchange Right is duly and validly issued and
that EIS has full legal right, title and interest in and to such
shares of Preferred Stock thereby exchanged. The Parties
acknowledge that such Shares have been pledged to EIS pursuant to
the Photogen Securities Purchase Agreement and that EIS has
physical possession of such Shares; upon such exercise, EIS shall
be entitled to keep and retain such shares, which shall be owned
by EIS as provided above. In connection with the foregoing,
Newco and the Participants shall take all necessary or
appropriate steps to ensure such ownership by EIS.
CLAUSE 5
DIRECTORS; MANAGEMENT AND R&D COMMITTEES
5.1. DIRECTORS:
5.1.1 Prior to the exercise of the Exchange Right, the Board shall
be composed of three Directors.
Photogen shall have the right to nominate two directors of
Newco, ("PHOTOGEN DIRECTORS") and EIS shall have the right to
nominate one Director of Newco ("EIS DIRECTOR") which
Director, [****]. To the extent required by applicable Bermuda
law, in the event that the EIS Director is not a resident of
Bermuda, at least one Photogen Director shall be a resident of
Bermuda
[****]
[****]
5.1.2 If EIS removes the EIS Director, or Photogen removes any of
the Photogen Directors, EIS or Photogen, as the case may be,
shall indemnify the other Stockholder against any claim by
such removed Director arising
from such removal.
5.1.3 The Directors shall meet not less than three times in each
Financial Year and all Board meetings shall be held in Bermuda
to the extent required pursuant to the laws of Bermuda or to
ensure the sole residence of Newco in Bermuda provided that
Directors may attend such meetings telephonically.
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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 EXCHANGE ACT OF 1934, AS AMENDED.
5.1.4 At any such meeting, the presence of the EIS Director and at
least one of the Photogen Directors shall be required to
constitute a quorum and, subject to Clause 18 hereof, the
affirmative vote of a majority of the Directors present at a
meeting at which such a quorum is present shall constitute an
action of the Directors. In the event of any meeting being
inquorate, the meeting shall be adjourned for a period of
seven days. A notice shall be sent to the EIS Director and the
Photogen Directors specifying the date, time and place where
such adjourned meeting is to be held and reconvened.
5.1.5 [****]
(i) [****]
(ii) [****]
(in each case the "CHAIRMAN STATUS BOARD MEETING")
[****]
If the chairman is unable to attend any meeting of the Board
held prior to the Chairman Status Board Meeting, the Photogen
Directors shall be entitled to appoint another Photogen
Director to act as chairman in his place at the meeting.
If the chairman of Newco is unable to attend any meeting of
the Board held after the Chairman Status Board Meeting, the
Directors shall be entitled to appoint another Director to act
as chairman of Newco in his place at the meeting.
5.1.6 In case of an equality of votes at a meeting of the Board, the
chairman of Newco shall not be entitled to a second or casting
vote. In the event of continued deadlock, the Board shall
resolve the deadlock pursuant to the provisions set forth in
Clause 19.
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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 EXCHANGE ACT OF 1934, AS AMENDED.
5.2 MANAGEMENT AND R&D COMMITTEES:
5.2.1 The Board shall appoint a management committee (the
"MANAGEMENT COMMITTEE") to consist of four members, two of
whom shall be nominated by Elan and two of whom shall be
nominated by Photogen, and each of whom shall be entitled to
one vote, whether or not present at any Management Committee
meeting. Decisions of the Management Committee shall require
the approval of all four members of the Management Committee.
Elan and Photogen shall be entitled to remove any of their
nominees to the Management Committee and appoint a replacement
in place of any nominees so removed. The number of members of
the Management Committee may be altered if agreed to by a
majority of the Directors and of the shareholders of Newco;
provided that, each of Elan and Photogen shall be entitled to
appoint an equal number of members to the Management
Committee. The Management Committee shall be responsible for,
INTER ALIA, devising, implementing and reviewing strategy for
the Project.
5.2.2 The Management Committee shall appoint a research and
development committee (the "R&D COMMITTEE"), which shall be
comprised of four members, two of whom shall be nominated by
Elan and two of whom shall be nominated by Photogen, and each
of whom shall have one vote, whether or not present at an R&D
Committee meeting during which research and development issues
are discussed. Decisions of the R&D Committee shall require
approval of all four members of the R&D Committee.
Elan and Photogen shall be entitled to remove any of their
nominees to the R&D Committee and appoint a replacement in
place of any nominees so removed. The number of members of the
R&D Committee may be altered if agreed to by a majority of the
directors and shareholders of Newco provided that each of Elan
and Photogen shall be entitled to appoint an equal number of
members to the R&D Committee.
5.2.3 The R&D Committee shall be responsible for:-
(i) designing that portion of the Business Plan that
relates to the Project for consideration by the
Management Committee;
(ii) establishing a joint Project team consisting of an
equal number of team members from Elan and Photogen,
including one Project leader from each of Elan and
Photogen; and
(iii) implementing such portion of the Business Plan that
relates to the Project, as approved by the Management
Committee.
5.2.4 In the event of any dispute amongst the R&D Committee, the R&D
Committee shall refer such dispute to the Management Committee
whose decision on the dispute shall be binding on the R&D
Committee.
If the Management Committee cannot resolve the matter, the
dispute will be referred to a designated senior officer of
each of Elan and Photogen, and thereafter, in the event of
continued deadlock, pursuant to the deadlock provisions to be
set forth in Clause 19, involving inter alia, the referral of
the dispute to an expert, whose decision, however, will
ultimately be non-binding on the Participants. This process
shall also apply to any dispute within the Management
Committee.
Any ultimate deadlock within the Management Committee or the
Board (subject to applicable laws and the bye-laws of Newco)
will be settled by binding arbitration pursuant to Clause 24.
5.2.5 Elan and Photogen shall permit Newco or its duly authorized
representative on reasonable notice and at any reasonable
time during normal business hours to have access to inspect
and audit the accounts and records of Elan or Photogen and any
other book, record, voucher, receipt or invoice relating to
the calculation or the cost of the R&D Program and to the
accuracy of the reports which accompanied them. Any such
inspection of Elan's or Photogen's records, as the case may
be, shall be at the expense of Newco, except that if such
inspection reveals an overpayment in the amount paid to Elan
or Photogen, as the case may be, for the R&D Program hereunder
in any Financial Year of [****]% or more of the amount due to
Elan or Photogen, as the case may be, then the expense of such
inspection shall be borne [****] by Elan or Photogen, as the
case may be, instead of by Newco. Any surplus over the sum
properly payable by Newco to Elan or Photogen, as the case may
be, shall be paid promptly by Elan or Photogen, as the case
may be, to Newco. If such inspection reveals a deficit in the
amount of the sum properly payable to Elan or Photogen, as
the case may be, by Newco, Newco shall pay the deficit to Elan
or Photogen, as the case may be.
----------------
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
CLAUSE 6
THE BUSINESS PLAN AND REVIEWS
6.1 The Directors shall meet together as soon as reasonably practicable
after the Closing Date hereof and shall agree upon and approve the
Business Plan for the current Financial Year within 60 days of the
Closing Date.
6.2 The Business Plan shall be reviewed and agreed by the unanimous
approval of the EIS Director and of Photogen Directors on a quarterly
basis.
6.3. Neither Participant shall be obliged to provide funding to Newco in the
absence of quarterly approval of the Business Plan and a determination
by each Participant, in its sole discretion, that Subsequent Funding
(as such term is defined in the Funding Agreement) shall be provided
for the development of the Products.
CLAUSE 7
RESEARCH AND DEVELOPMENT WORK
7.1 Subject to the provisions of Clause 6.3, Elan and Photogen, at Newco's
request, may undertake research and development work related to the
development and commercialization of the Products, at the request of
Newco and as articulated in the Business Plan, in furtherance of the
development and commercialisation of the Products and cultivation of
patent rights and know-how related to the Elan Intellectual Property,
Photogen Intellectual Property and Newco Intellectual Property.
7.2 The cost of such development work shall be Elan's and Photogen's, as
the case may be, [****] costs in respect thereof, [****] of such costs.
Research and development work that is sub-contracted by Elan or
Photogen to third party providers shall be charged by Elan or Photogen
to Newco at the amount invoiced by the relevant third party provider.
7.3 [****]
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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 EXCHANGE ACT OF 1934, AS AMENDED.
CLAUSE 8
COMMERCIALIZATION
8.1 Newco shall diligently pursue the research, development, prosecution
and commercialization of the Products, as provided in the Business
Plan.
8.2 [****]
[****]
If Newco has not entered into an agreement with a third party within
the 6 month period described above, the Elan/Newco Option shall be
deemed to have re-commenced upon the same terms as set forth herein.
CLAUSE 9
SUBLICENSE AND ASSIGNMENT RIGHTS
9.1 Newco shall not be permitted to assign, license or sublicense any of
its rights in respect of the Newco Intellectual Property without the
prior written consent of Elan and Photogen, as the case may be, which
consent will not be unreasonably withheld or delayed; PROVIDED THAT
Elan shall in all cases, in its sole discretion, be entitled to
withhold its consent in the case of a proposed sublicense to any
Technological Competitor to Elan.
9.3 The Parties acknowledge and agree to be bound by the provisions of
Clause 2.5 of the Elan License Agreement and the provisions of Clause
2.7 of the Photogen License Agreement which set forth the agreement
between the Parties thereto in relation to sub-licensing of the Elan
Intellectual Property and the Photogen Intellectual Property
respectively.
----------------
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
CLAUSE 10
OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS /[****]
10.1 The Parties acknowledge and agree to be bound by the provisions of
Clause 3.1 of the Elan License Agreement and Clause 3.1 of the Photogen
License Agreement which set forth the agreement between the parties
thereto in relation to the ownership of the Elan Intellectual Property,
the Photogen Intellectual Property and the Newco Intellectual property
respectively.
10.2 The Parties acknowledge and agree to be bound by the provisions the
provisions of Clause 4 of the Elan License Agreement and the provisions
of Clause 4 of the Photogen License Agreement which set forth the
agreement between the parties thereto in relation to the [****]
obligations of Elan and Photogen, respectively.
CLAUSE 11
INTELLECTUAL PROPERTY RIGHTS
11.1 Subject to Clause 11.8 herein, Elan has the sole and exclusive right,
at its sole discretion and at its cost and expense, to prepare, file,
prosecute, enforce, maintain, and protect against infringement or
unauthorized use of all such Elan Patent Rights, and any other Elan
Intellectual Property.
11.2 Subject to Clause 11.8 herein, Photogen, at its cost and expense, shall
prepare, file, prosecute, enforce, maintain, and protect against
infringement or unauthorized use of all such Photogen Patent Rights,
and any other Photogen Intellectual Property.
11.3 Title and all other ownership rights to the GynNyc Intellectual
Property, including the Patent Rights, shall be governed by the General
Nycomed Agreement
11.4 Newco, at its cost and expense, shall prepare, file, prosecute and
maintain and protect against infringement of all patents and patent
applications relating to Newco Intellectual Property. Newco shall
timely appraise both Photogen and Elan in writing of any such activity
prior to occurrence of the same.
----------------
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
11.5 In the event that a Party informs the other Parties that it does not
intend to file patent applications on patentable inventions and
discoveries within the Photogen or Elan Intellectual Property as the
case may be, in the Field in one or more countries in the Territory or
fails to file such an application within a reasonable period of time,
Newco shall have the option at its expense to file and prosecute such
patent application(s) in the joint names of Newco and the Party not
intending or failing to so file. Upon written request from Newco, such
Party shall execute all documents, forms and declarations and to do all
things as shall be reasonably necessary to enable Newco to exercise
such option.
11.6 In the event that Newco informs both Elan and Photogen that it does not
intend to file an application on the Newco Intellectual Property in or
outside the Field, Elan shall have the right to file and prosecute such
inventions that Elan invents solely and Photogen shall have the right
to file and prosecute such patent applications on inventions which
Photogen invents solely and Elan and Photogen agree to negotiate in
good faith on the course of action to be taken with respect to Newco
Intellectual Property that both Elan and Photogen invent.
11.7 The Parties shall promptly inform each other in writing of any alleged
infringement of any patents within the Elan Patents, the Photogen
Patents or the Newco Patents or the GenNyc Intellectual Property or any
alleged misappropriation of trade secrets within the Elan Intellectual
Property, the Photogen Intellectual Property by a third party of which
it becomes aware and provide the others with any available evidence of
such infringement or misappropriation.
11.8 Newco shall have the right to enforce at its own expense and for its
own benefit the Elan Patents and the Photogen Patents or
misappropriation of the Elan Intellectual Property and the Photogen
Intellectual Property, against any third party infringement or
misappropriation, insofar as such infringements or misappropriation
relates solely to the Field. In the event that Newco takes such action,
Newco shall do so at its own cost and expense. At Newco's request, the
Parties shall cooperate with such action. Any recovery remaining after
the deduction by Newco of the reasonable expenses (including attorney's
fees and expenses) incurred in relation to such infringement proceeding
shall belong to Newco. Should Newco decide not to pursue such
infringers, within a reasonable period but in any event within sixty
(60) days after receiving written notice of such alleged infringement
or misappropriation either Party may in its discretion initiate such
proceedings in its own name, at its expense and for its own benefit,
and at such Party's request, Newco shall cooperate with such action.
Alternatively, the Parties may agree to institute such proceedings in
their joint names and shall reach agreement as to the proportion in
which they shall share the proceeds of any such proceedings, and the
expense of any costs not recovered, or the costs or damages payable to
the third party. If the infringement of the Elan Patents or the
Photogen Patents affects both the Field as well as other products being
developed or commercialized by Photogen or Elan or its commercial
partners outside the Field, Photogen or Elan shall endeavor to agree as
to the manner in which the proceedings should be instituted and as to
the proportion in which they shall share the proceeds of any such
proceedings, and the expense of any costs not recovered, or the costs
or damages payable to the third party.
11.9 Newco shall have the first right but not the obligation to bring suit
or otherwise take action against any alleged infringement of the Newco
Patents or alleged misappropriation of the Newco Intellectual Property.
If any such alleged infringement or misappropriation occurs that gives
rise to a cause of action both inside and outside the Field, Newco, in
consultation with the other Parties, shall determine the cause of
action to be taken. In the event that Newco takes such action, Newco
shall do so at its own cost and expense and all damages and monetary
award recovered in or with respect to such action shall be the property
of Newco. Newco shall keep Elan and Photogen informed of any action in
a timely manner so as to enable Photogen and Elan to provide input in
any such action and Newco shall reasonably take into consideration any
such input. At Newco's request, the Parties shall cooperate with any
such action at Newco=s cost and expense.
11.10 In the event that Newco does not bring suit or otherwise take action
against all infringement of the Newco Patents or misappropriation of
the Newco Intellectual Property (i) if only one Party determines to
pursue such suit or take such action at its own cost and expense, it
shall be entitled to all damages and monetary award recovered in or
with respect to such action and (ii) if the other Parties pursue such
suit or action outside of Newco, they shall negotiate in good faith an
appropriate allocation of costs, expenses and recovery amounts.
In the event that a claim is or proceedings are brought against Newco
by a third party alleging that the sale, distribution or use of a
Product in the Territory or use of the Elan Intellectual Property or
the Photogen Intellectual Property, as the case may be, infringes the
intellectual property rights of such Party, Newco shall promptly advise
the other Parties of such threat or suit.
11.11 All actions of Newco required under this Clause 11 shall be
determined by the unanimous action of the Management Committee.
CLAUSE 12
CROSS-LICENSES / EXPLOITATION OF NEWCO INTELLECTUAL OUTSIDE THE FIELD
12.1 Solely for the purpose of and insofar as is necessary, in each case,
for Elan to perform its obligations under the Elan License Agreement,
Newco shall grant to Elan a [****] worldwide, [****], fully paid-up
license for the term of the License Agreements:
12.1.1 to use the Newco Intellectual Property in the Field, and
12.1.2 subject to the terms and conditions of the Photogen License
Agreement, a [****] to use the Photogen Intellectual Property
in the Field, and subject to the terms and conditions of the
Photogen License Agreement and the General Nycomed Agreement,
the GenNyc Intellectual Property in the Field.
12.2 Solely for the purpose of and insofar as is necessary, in each case,
for Photogen to perform its obligations to Newco under the Photogen
License Agreement, Newco shall grant to Photogen a [****] worldwide,
[****], fully paid-up license for the term of the License Agreements:
12.2.1 to use the Newco Intellectual Property in the Field, and
12.2.2 subject to the terms and conditions of the Elan License
Agreement, a sublicense to use the Elan Intellectual Property
in the Field.
12.3 Elan shall be entitled to exploit the Newco Intellectual Property
outside the Field subject to the Parties negotiating a license
agreement in good faith (including all material provisions thereof,
including as to whether the license should be exclusive or
non-exclusive), pursuant to which Newco will grant Elan a license under
the Newco Intellectual Property outside the Field on a Product by
Product basis. The financial terms of the said license agreement shall
have regard, inter alia, to:
12.3.1 the amount of monies expended by Newco in developing the
Newco Intellectual Property;
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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 EXCHANGE ACT OF 1934, AS AMENDED.
12.3.2 the materiality of the Newco Intellectual Property by
comparison to the further research and development work to be
conducted, and of the Elan Intellectual Property and the
Photogen Intellectual Property; and
12.3.3 the financial return likely to be earned by Elan from the
proposed exploitation outside the Field; and
12.3.4 the impact of the proposed exploitation of the Newco
Intellectual Property outside the Field on the exploitation of
the Newco Intellectual Property within the Field.
12.4 Photogen shall be entitled to exploit the Newco Intellectual Property
outside the Field subject to the Parties negotiating a license
agreement in good faith (including all material provisions thereof,
including as to whether the license should be exclusive or
non-exclusive), pursuant to which Newco will grant Photogen a license
under the Newco Intellectual Property outside the Field on a Product by
Product basis. The financial terms of the said license agreement shall
have regard, inter alia, to:
12.4.1 the amount of monies expended by Newco in developing the Newco
Intellectual Property;
12.4.2 the materiality of the Newco Intellectual Property by
comparison to the further research and development work to be
conducted, and of the Elan Intellectual Property and the
Photogen Intellectual Property; and
12.4.3 the financial return likely to be earned by Photogen from the
proposed exploitation outside the Field; and
12.4.4 the impact of the proposed exploitation of the Newco
Intellectual Property outside the Field on the exploitation of
the Newco Intellectual Property within the Field.
CLAUSE 13
REGULATORY
13.1 Newco shall keep the other Parties promptly and fully advised of
Newco's regulatory activities, progress and procedures. Newco shall
inform the other Parties of any dealings it shall have with an RHA, and
shall furnish the other Parties with copies of all correspondence
relating to the Products. The Parties
shall collaborate to obtain any required regulatory approval of the RHA
to market the Products.
13.2 Newco shall, at its own cost, file, prosecute and maintain any and all
Regulatory Applications for the Products in the Territory in accordance
with the Business Plan.
13.3 Subject to Clause 13.5, and subject to a determination by Newco that
one or more Regulatory Approvals should be held in the name of Newco's
commercial partner such as a sub-licensee, any and all Regulatory
Approvals obtained hereunder for any Product shall remain the property
of Newco, provided that Newco shall allow Elan and Photogen access
thereto to enable Elan and Photogen to fulfill their respective
obligations and exercise their respective rights under this Agreement.
Newco shall maintain such Regulatory Approvals at its own cost.
13.4 It is hereby acknowledged that there are inherent uncertainties
involved in the registration of pharmaceutical products with the RHA's
insofar as obtaining approval is concerned and such uncertainties form
part of the business risk involved in undertaking the form of
commercial collaboration as set forth in this Agreement.
13.5 All Regulatory Approvals and the DMF (Drug Master File) relating to
the Elan Intellectual Property shall be processed by and be the
absolute property of Elan.
CLAUSE 14
MANUFACTURING
Elan shall have the [****] right to manufacture and supply, and/or subcontract
the manufacture and supply of the Products.
A supply agreement with Elan shall be subject to negotiation and mutual
agreement by the Parties not later than the date of completion of Phase III (as
such term is commonly used in connection with FDA applications) of the R&D Plan.
The terms of the said supply agreements shall be on [****] terms, and shall be
negotiated in good faith by the Parties thereto.
[****]
[****]
CLAUSE 15
TECHNICAL SERVICES AND ASSISTANCE
15.1 Whenever commercially and technically feasible, Newco shall contract
with Photogen or Elan, as the case may be, to perform such other
services as Newco may require, other than those specifically dealt with
hereunder or in the License Agreements. In determining which Party
should provide such services, the Management Committee shall take into
account the respective infrastructure, capabilities and experience of
Elan and Photogen. There shall be no obligation upon either of Photogen
or Elan to perform such services.
----------------
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
15.2 Newco shall, if the Participants so agree, conclude an administrative
support agreement with Elan and/or Photogen on such terms as the
Parties thereto shall in good faith negotiate. The administrative
services shall include one or more of the following administrative
services as requested by Newco:
15.2.1 accounting, financial and other services;
15.2.2 tax services;
15.2.3 insurance services;
15.2.4 human resources services;
15.2.5 legal and company secretarial services;
15.2.6 patent and related intellectual property services; and
15.2.7 all such other services consistent with and of the same type
as those services to be provided pursuant to this Agreement,
as may be required.
The foregoing list of services shall not be deemed exhaustive and may
be changed from time to time upon written request by Newco.
15.3. The Parties agree that each Party shall effect and maintain
comprehensive general liability insurance in respect of all clinical
trials and other activities performed by them on behalf of Newco. The
Stockholders and Newco shall ensure that the industry standard
insurance policies shall be in place for all activities to be carried
out by Newco.
15.4 If Elan or Photogen so requires, Photogen or Elan, as the case may be,
shall receive, at times and for periods mutually acceptable to the
Parties, employees of the other Party (such employees to be acceptable
to the receiving Party in the matter of qualification and competence)
for instruction in respect of the Elan Intellectual Property or the
Photogen Intellectual Property, as the case may be, as necessary to
further the Project.
15.5 The employees received by Elan or Photogen, as the case may be, shall
be subject to obligations of confidentiality no less stringent than
those set out in Clause 22 and such employees shall observe the rules,
regulations and systems adopted by the Party receiving the said
employees for its own employees or visitors.
CLAUSE 16
AUDITORS, BANKERS, REGISTERED OFFICE,
ACCOUNTING REFERENCE DATE; SECRETARY; COUNSEL
Unless otherwise agreed by the Stockholders and save as may be provided to the
contrary herein:
16.1 the auditors of Newco shall be [****];
16.2 the bankers of Newco shall be [****] or such other bank as may be
mutually agreed from time to time;
16.3 the accounting reference date of Newco shall be December 31st in
each Financial Year; and
16.4 the secretary of Newco shall be [****] or such other Person as may
be appointed by the Directors from time to time.
CLAUSE 17
TRANSFERS OF SHARES;
RIGHT OF FIRST OFFER; TAG ALONG RIGHTS
GENERAL:
17.1. No Stockholder shall, directly or indirectly, sell or otherwise
transfer (each, a "TRANSFER") any Shares held by it except in as
expressly permitted by and accordance with the terms of this Agreement.
Newco shall not, and shall not permit any transfer agent or registrar
for any Shares to, transfer upon the books of Newco any Shares from any
Stockholder to any transferee, in any manner, except in accordance with
this Agreement, and any purported transfer not in compliance with this
Agreement shall be void.
----------------
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
During the R&D Term, no Stockholder shall, directly or indirectly, sell
or otherwise Transfer any of its legal and/or beneficial interest in
the Shares held by it to any other Person. After completion of the R&D
Term, a Stockholder may Transfer Shares provided such Stockholder
complies with the provisions of Clauses 17.2 and 17.3.
Notwithstanding anything contained herein to the contrary, at all
times, EIS and/or Photogen shall have the right to Transfer any Shares
to their Affiliates provided, however, that such assignment does not
result in adverse tax consequences for any other Parties. EIS shall
have the right to Transfer any Shares to an Affiliate or special
purpose financing or similar entity established by Elan or EIS;
provided, that such Affiliates or special purpose financing or similar
entity shall agree to be expressly subject to and bound by all the
limitations and provisions which are embodied in this Agreement.
17.2 No Stockholder shall, except with the prior written consent of the
other Stockholder, create or permit to subsist any Encumbrance over or
in, all or any of the Shares held by it (other than by a Transfer of
such Shares in accordance with the provisions of this Agreement).
17.3 No Stockholder shall, except with the prior written consent of the
other Stockholder, create or permit to subsist any pledge, lien or
charge over, or grant any option or other rights in all or any of the
Shares held by it (other than by a Transfer of such Shares in
accordance with the provisions of this Agreement) made by it to Newco
unless any Person in whose favour any such pledge, lien, or charge is
created or permitted to subsist or such option or rights are granted or
such interest is disposed of shall be expressly subject to and bound by
all the limitations and provisions which are embodied in this
Agreement.
17.4 RIGHTS OF FIRST OFFER:
If at any time after the end of the R&D Term a Stockholder shall desire
to Transfer any Shares owned by it (a "SELLING STOCKHOLDER"), in any
transaction or series of related transactions other than a Transfer to
an Affiliate or subsidiary or in the case of EIS to a special purpose
financing or similar entity established by EIS, then such Selling
Stockholder shall deliver prior written notice of its desire to
Transfer (a "NOTICE OF INTENTION") (i) to Newco and (ii) to the
Stockholders who are not the Selling Stockholder (and any transferee
thereof permitted hereunder, if any), as applicable, setting forth such
Selling Stockholder's desire to make such Transfer, the number of
Shares proposed to be transferred (the "OFFERED SHARES") and the
proposed form of transaction (the "TRANSACTION PROPOSAL"), together
with any available documentation relating thereto, if any, and the
price at which such Selling Stockholder proposes to Transfer the
Offered
Shares (the "OFFER PRICE"). The "Right of First Offer" provided for
in this Clause 17 shall be subject to any "Tag Along Right"
benefiting a Stockholder which may be provided for by Clause 17,
subject to the exceptions set forth therein.
Upon receipt of the Notice of Intention, the Stockholders who are not
the Selling Stockholder shall have the right to purchase at the Offer
Price the Offered Shares, exercisable by the delivery of notice to the
Selling Stockholder (the "NOTICE OF EXERCISE"), with a copy to Newco,
within 10 business days from the date of receipt of the Notice of
Intention. If no such Notice of Exercise has been delivered by the
Stockholders who are not the Selling Stockholder within such
10-business day period, or such Notice of Exercise does not relate to
all of the Offered Shares covered by the Notice of Intention, then the
Selling Stockholder shall be entitled to Transfer all of the Offered
Shares to the intended transferee. In the event that all of the Offered
Shares are not purchased by the non-selling Stockholders, the Selling
Stockholder shall sell the available Offered Shares within 30 days
after the delivery of such Notice of Intention on terms no more
favorable to a third party than those presented to the non-selling
Stockholders. If such sale does not occur, the Offered Shares shall
again be subject to the Right of First Offer set forth in Clause 17.4.
In the event that any of the Stockholders who are not the Selling
Stockholder exercise their right to purchase all of the Offered Shares
(in accordance with this Clause 17), then the Selling Stockholder shall
sell all of the Offered Shares to such Stockholder(s), in the amounts
set forth in the Notice of Intention, after not less than 10 business
days and not more than 25 business days from the date of the delivery
of the Notice of Exercise. In the event that more than one of the
Stockholders who are not the Selling Stockholders wish to purchase the
Offered Shares, the Offered Shares shall be allocated to such
Stockholders on the basis of their pro rata equity interests in Newco.
The rights and obligations of each of the Stockholders pursuant to the
Right of First Offer provided herein shall terminate upon the date that
the Common Stock is registered under Section 12(b) or 12(g) of the
Exchange Act.
At the closing of the purchase of all of the Offered Shares by the
Stockholders who are not the Selling Stockholder (scheduled in
accordance with Clause 17), the Selling Stockholder shall deliver
certificates evidencing the Offered Shares being sold, duly endorsed,
or accompanied by written instruments of transfer in form reasonably
satisfactory to the Stockholders who are not the Selling Stockholder,
duly executed by the Selling Stockholder, free and clear of any adverse
claims, against payment of the purchase price therefor in cash, and
such other customary documents as shall be necessary in connection
therewith.
17.5 TAG ALONG RIGHTS:
Subject to Clause 17.4, a Stockholder (the "TRANSFERRING STOCKHOLDER")
shall not Transfer (either directly or indirectly), in any one
transaction or series of related transactions, to any Person or group
of Persons, any Shares, unless the terms and conditions of such
Transfer shall include an offer to the other Stockholders (the
"REMAINING STOCKHOLDERS"), to sell Shares at the same price and on the
same terms and conditions as the Transferring Stockholder has agreed to
sell its Shares (the "TAG ALONG RIGHT").
In the event a Transferring Stockholder proposes to Transfer any Shares
in a transaction subject to this Clause 17.5, it shall notify, or cause
to be notified, the Remaining Stockholders in writing of each such
proposed Transfer. Such notice shall set forth: (i) the name of the
transferee and the amount of Shares proposed to be transferred, (ii)
the proposed amount and form of consideration and terms and conditions
of payment offered by the transferee (the "TRANSFEREE TERMS") and (iii)
that the transferee has been informed of the Tag Along Right provided
for in this Clause 17, if such right is applicable, and the total
number of Shares the transferee has agreed to purchase from the
Stockholders in accordance with the terms hereof.
The Tag Along Right may be exercised by each of the Remaining
Stockholders by delivery of a written notice to the Transferring
Stockholder (the "CO-SALE NOTICE") within 10 business days following
receipt of the notice specified in the preceding subsection. The
Co-sale Notice shall state the number of Shares owned by such Remaining
Stockholder which the Remaining Stockholder wishes to include in such
Transfer; provided, however, that without the written consent of the
Transferring Stockholder, the amount of such securities belonging to
the Remaining Stockholder included in such Transfer may not be greater
than such Remaining Stockholder's percentage beneficial ownership of
Fully Diluted Common Stock multiplied by the total number of shares of
Common Stock to be sold by both the Transferring Stockholder and all
Remaining Stockholders. Upon receipt of a Co-sale Notice, the
Transferring Stockholder shall be obligated to transfer at least the
entire number of Shares set forth in the Co-sale Notice to the
transferee on the Transferee Terms; provided, however, that the
Transferring Stockholder shall not consummate the purchase and sale of
any Shares hereunder if the transferee does not purchase all such
Shares specified in all Co-sale Notices. If no Co-sale Notice has been
delivered to the Transferring Stockholder prior to the expiration of
the 10 business day period referred to above and if the provisions of
this Section have been complied with in all respects, the Transferring
Stockholder shall have the right for a 30 day calendar day period to
Transfer Shares to the transferee on the Transferee Terms without
further notice to any other party, but after such 30-day period, no
such Transfer may be made without again giving notice to the Remaining
Stockholders of the proposed Transfer and
complying with the requirements of this Clause 17.
At the closing of any Transfer of Shares subject to this Clause 17, the
Transferring Stockholder, and the Remaining Stockholder, in the event
such Tag Along Right is exercised, shall deliver certificates
evidencing such securities as have been Transferred by each, duly
endorsed, or accompanied by written instruments of transfer in form
reasonably satisfactory to the transferee, free and clear of any
adverse claim, against payment of the purchase price therefor.
Notwithstanding the foregoing, this Clause 17 shall not apply to any
sale of Common Stock pursuant to an effective registration statement
under the Securities Act in a bona fide public offering.
CLAUSE 18
MATTERS REQUIRING PARTICIPANTS' APPROVAL
18.1 In consideration of Photogen and Elan agreeing to enter into the
License Agreements, the Parties hereby agree that Newco shall not
without the prior approval of the EIS Director and all of the Photogen
Directors:
18.1.1. make a material Newco determination outside the ordinary
course of business, including, among other things,
acquisitions or dispositions of intellectual property and
licenses or sublicenses, changes in the Business or the Newco
budget; entry into joint ventures and similar arrangements as
they relate to the Licensed Technologies and changes to the
Business Plan as they relate to the Licensed Technologies;
18.1.2. issue any unissued Shares or unissued Common Stock
Equivalents, or create or issue any new shares (including a
split of the Shares) or Common Stock Equivalents, except as
expressly permitted by the Newco Memorandum of Association
and Bye-Laws (it being agreed that Newco shall not issue
additional shares of authorized but unissued shares of
Preferred Stock without the prior approval of the EIS
Director and all of the Photogen Directors except to the
extent provided for in the Transaction Documents);
18.1.3. alter any rights attaching to any class of share in the
capital of Newco or alter the Newco Memorandum of Association
and Bye-Laws;
18.1.4. consolidate, sub-divide or convert any of Newco's share
capital or in
any way alter the rights attaching thereto;
18.1.5. dispose of all or substantially all of the assets of Newco;
18.1.6. do or permit or suffer to be done any act or thing whereby
Newco may be wound up (whether voluntarily or compulsorily),
save as otherwise expressly provided for in this Agreement;
18.1.7. enter into any contract or transaction except in
the ordinary and proper course of the Business on
arm's length terms;
18.1.8. licence or sub-licence any of the Elan Intellectual
Property, Photogen Intellectual Property, Newco
Intellectual Property;
18.1.9. amend or vary the terms of the Photogen License Agreement
or the Elan License Agreement;
18.1.10. permit a person other than Newco to own a regulatory
approval relating to the Product(s);
18.1.11. approve, amend or vary the Business Plan or the Newco
budget;
18.1.12. alter the number of Directors; and
18.1.13. whether any shares of Newco shall be registered for public
trading with any governmental authority for public trading
in any securities market other than pursuant to demand
registration under the Registration Rights agreement
applicable to Newco.
CLAUSE 19
DISPUTES
19.1 Should any dispute or difference arise between Elan and Photogen, or
between Elan or Photogen and Newco, during the period that this
Agreement is in force, other than a dispute or difference relating to
(i) the interpretation of any provision of this Agreement, (ii) the
interpretation or application of law, or (iii) the ownership of any
intellectual property, then any Party may forthwith give notice to the
other Parties that it wishes such dispute or difference to be referred
to the chief executive officer of Photogen and the President of EPT.
19.2 In any event of a notice being served in accordance with Clause 19.1,
each of the Participants shall within 14 days of the service of such
notice prepare and circulate to the chief executive officer of each
Participant a memorandum or other form of statement setting out its
position on the matter in dispute and its reasons for adopting that
position. Each memorandum or statement shall be considered by the chief
executive officers of the Participants who shall endeavor to resolve
the dispute. If the chief executive officers of the Participants agree
upon a resolution or disposition of the matter, they shall each sign a
statement which sets out the terms of their agreement. The Participants
agree that they shall exercise the voting rights and other powers
available to them in relation to Newco to procure that the agreed terms
are fully and promptly carried into effect.
19.3 In the event the chief executive officers of the Participants are
unable to resolve a dispute or difference when it is referred to them
under Clause 19.1 which relates to the interpretation of this Agreement
or any other Transaction Document or the compliance of the Parties with
their legal obligations thereunder, such dispute or difference shall be
referred to arbitration in accordance with Clause 24.8.3 hereof. If the
dispute or difference does not relate to the interpretation of this
Agreement or any other Transaction Document or the compliance of the
Parties with their legal obligations thereunder, the provisions of
Clause 24.8.2 shall govern.
CLAUSE 20
TERMINATION
20.1 This Agreement shall govern the operation and existence of
Newco until:
20.1.1 terminated by written agreement of all Parties hereto; or
20.1.2 otherwise terminated in accordance with this Clause 20.
20.2 For the purpose of this Clause 20, a "RELEVANT EVENT" is committed
or suffered by a Participant if:
20.2.1 it commits a material breach of its obligations under this
Agreement or the applicable License and fails to remedy it
within 60 days of being specifically required in writing to do
so by the other Participant; provided, however, that if the
breaching Participant has proposed a course of action to
rectify the breach and is acting in good faith to rectify same
but has not cured the breach by the 60th day, such period
shall be extended by such period as is reasonably necessary to
permit the breach to be rectified; or
20.2.2 a distress, execution, sequestration or other process is
levied or enforced
upon or sued out against substantially all of its assets
which is not discharged or challenged within 30 days; or
20.2.3 it is unable to pay its debts in the normal course of
business; or
20.2.4 it ceases wholly or substantially to carry on its business,
otherwise than for the purpose of a reconstruction or
amalgamation, without the prior written consent of the other
Participant (such consent not to be unreasonably withheld); or
20.2.5 the appointment of a liquidator, receiver, administrator,
examiner, trustee or similar officer of such Participant or
over all or substantially all of its assets under the law of
any applicable jurisdiction, including without limitation, the
United States of America, Bermuda or Ireland; or
20.2.6 an application or petition for bankruptcy, corporate
re-organization, composition, administration, examination,
arrangement or any other procedure similar to any of the
foregoing under the law of any applicable jurisdiction,
including without limitation, the United States of America,
Bermuda or Ireland, is filed, and is not discharged within 60
days, or a Participant applies for or consents to the
appointment of a receiver, administrator, examiner or similar
officer of it or of all or a material part of its assets,
rights or revenues or the assets and/or the business of a
Participant are for any reason seized, confiscated or
condemned.
20.4 If either Participant commits or suffers a Relevant Event, the other
Participant shall be entitled, within three months of the occurrence of
the Relevant Event, to require the defaulting Participant (the
"RECIPIENT PARTICIPANT") to sell on reasonable terms of payment to the
non-defaulting Participant (the "PROPOSING PARTICIPANT") all (but not
some only) of the Shares, held or beneficially owned by the Recipient
Participant for an amount equal to [****]% of the fair market value of
the Shares of the Recipient Participant (the "BUYOUT OPTION").
20.5 The Proposing Participant shall notify the Recipient Participant of the
exercise of the Buyout Option, no later than 30 business days prior to
the proposed exercise thereof, by delivering written notice to the
Recipient Participant stating that the Buyout Option is exercised and
the price at which the Proposing Participant is willing to purchase the
Shares of the Recipient Participant.
----------------
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
20.6 In the event that the Participants do not agree upon a purchase price
for the Shares within five Business Days following the receipt by the
Recipient Participant of written notice from the Proposing Participant
pursuant to Clause 20.5 above, the Proposing Participant may contact
the American Arbitration Association ("AAA"), sitting in New York City
and request that an independent US-based arbitrator who is expert in
valuation and the pharmaceutical/biotechnology industry be appointed
within 10 Business Days. The AAA shall endeavor to select an arbitrator
who is technically knowledgeable in the pharmaceutical/biotechnology
industry (and who directly and through his affiliates, has no business
relationship with, or shareholding in, either the Proposing Participant
or the Recipient Participant). Promptly upon being notified of the
arbitrator's appointment, the Proposing Participant and the Recipient
Participant shall submit to the arbitrator details of their assessment
of the fair market value for the Shares of the Recipient Participant
together with such information as they think necessary to validate
their assessment. The arbitrator shall notify the Recipient Participant
of [****]% of the fair market value assessed by the Proposing
Participant (the "PROPOSING PARTICIPANT PRICE") and shall notify the
Proposing Participant of [****]% of the fair market value assessed by
the Recipient Participant (the "RECIPIENT PARTICIPANT PRICE"). The
Proposing Participant and the Recipient Participant shall then be
entitled to make further submissions to the arbitrator within five
Business Days explaining why the Recipient Participant Price or the
Proposing Participant Price, as the case may be, is unjustified. The
arbitrator shall thereafter meet with the Proposing Participant and the
Recipient Participant and shall thereafter choose either the Recipient
Participant Price or the Proposing Participant Price (but not any other
price) as the purchase price for the Shares (the "PURCHASE PRICE") on
the basis of which price the expert determines to be closer to [****]%
of the fair market value for the Shares of the Recipient Participant.
The arbitrator shall use his best efforts to determine the Purchase
Price within 30 Business Days of his appointment. The Proposing
Participant and the Recipient Participant shall bear the costs of the
arbitrator equally provided that the arbitrator may, in his discretion,
allocate all or a portion of such costs to one Party. Any decision of
the arbitrator shall be final and binding.
20.7 The Proposing Participant shall purchase the Shares of the Recipient
Participant by delivery of the Purchase Price in cash no later than the
15th Business Day following determination of the Purchase Price by the
expert.
----------------
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
20.8 The Shares of the Recipient Participant so transferred shall be sold by
the transferor as beneficial owner with effect from the date of such
transfer free from any lien, charge or encumbrance with all rights and
restrictions attaching thereto. If the Proposing Participant elects to
purchase the Shares of the Recipient Participant, the Shares of the
Recipient Participant shall be sold by the Recipient Participant as
beneficial owner for a price equal to [****]% of the Purchase Price
with effect from the date specified by the Proposing Participant in its
notice of election free from any lien, charge or encumbrance together
with all rights attaching thereto.
20.9 If the Proposing Participant exercises the Buyout Option, both parties
will negotiate in good faith to agree to additional reasonable
provisions and/or amendments to the License Agreements to protect the
intellectual property rights of the Recipient Party.
20.10 If either Participant commits a Relevant Event, the other Stockholder
shall have in addition to all other legal and equitable rights and
remedies hereunder, the right to terminate this Agreement upon 30 days'
written notice.
20.11 In the event of a termination of the Elan License Agreement and/or the
Photogen License Agreement, both parties will negotiate in good faith
to determine whether this Agreement should be terminated and if so,
which provisions should survive termination.
20.12 The provisions of Clauses 1.1, 3, 6, 5.1, 10, 19, 20 and 22 shall
survive the termination of this Agreement under this Clause 20.10 or by
mutual consent pursuant to Clause 20.1 in accordance with their terms;
all other terms and provisions of this Agreement shall cease to have
effect and be null and void upon the termination of this Agreement
under this Clause 20.10 or by mutual consent pursuant to Clause 20.1.
CLAUSE 21
SHARE RIGHTS
[****]
----------------
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
CLAUSE 22
CONFIDENTIALITY
22.1 The Parties and/or Newco acknowledge and agree that it may be
necessary, from time to time, to disclose to each other
confidential and/or proprietary information, including without
limitation, inventions, works of authorship, trade secrets,
specifications, designs, data, know-how and other information,
relating to the Field, the Products, present or future products,
the Newco Intellectual Property, the Elan Intellectual Property or
the Photogen Intellectual Property, as the case may be, methods,
compounds, research projects, work in process, services, sales
suppliers, customers, employees and/or business of the disclosing
Party, whether in oral, written, graphic or electronic form
(collectively "CONFIDENTIAL INFORMATION").
22.2 Any Confidential Information revealed by a Party to another Party shall
be maintained as confidential and shall be used by the receiving Party
exclusively for the purposes of fulfilling the receiving Party's rights
and obligations under this Agreement, and for no other purpose.
Confidential Information shall not include:
22.2.1 information that is generally available to the public;
22.2.2 information that is made public by the disclosing Party;
22.2.3 information that is independently developed by the receiving
Party, as evidenced by such Party's records, without the aid,
application or use of the disclosing Party's Confidential
Information;
22.2.4 information that is published or otherwise becomes part of the
public domain without any disclosure by the receiving Party,
or on the part of the receiving Party's directors, officers,
agents, representatives or employees;
22.2.5 information that becomes available to the receiving Party on a
non-confidential basis, whether directly or indirectly, from a
source other than the disclosing Party, which source did not
acquire this information on a confidential basis;
22.2.6 information which the receiving Party is required to disclose
pursuant to:
(i) a valid order of a court or other governmental body
or any political
subdivision thereof or as otherwise required by law,
rule or regulation;
(ii) other requirement of law; provided, however, that
if the receiving Party becomes legally required
to disclose any Confidential Information, the
receiving Party shall give the disclosing Party
prompt notice of such fact so that the
disclosing Party may obtain a protective order
or confidential treatment or other appropriate
remedy concerning any such disclosure. The
receiving Party shall fully co-operate with the
disclosing Party in connection with the
disclosing Party's efforts to obtain any such
order or other remedy. If any such order or
other remedy does not fully preclude
disclosure, the receiving Party shall make such
disclosure only to the extent that such
disclosure is legally required;
22.2.7 information which was already in the possession of the
receiving Party at the time of receiving such information, as
evidenced by its records, provided such information was not
previously provided to the receiving party from a source which
was under an obligation to keep such information confidential;
or
22.2.8 information that is the subject of a written permission to
disclose, without restriction or limitation, by the disclosing
Party.
22.3 Each Party agrees to disclose Confidential Information of another Party
only to those employees, representatives and agents requiring knowledge
thereof in connection with their duties directly related to the
fulfilling of the Party's obligations under this Agreement, so long as
such persons are under an obligation of confidentiality no less
stringent than as set forth herein. Each Party further agrees to inform
all such employees, representatives and agents of the terms and
provisions of this Agreement and their duties hereunder and to obtain
their consent hereto as a condition of receiving Confidential
Information. Each Party agrees that it will exercise a reasonable
degree of care and protection to preserve the proprietary and
confidential nature of the Confidential Information disclosed by a
Party. Each Party agrees that it will, upon request of another Party,
return all documents and any copies thereof containing Confidential
Information belonging to or disclosed by such other Party. Each Party
shall promptly notify the other Parties upon discovery of any
unauthorized use or disclosure of the other Parties' Confidential
Information.
22.4 Notwithstanding the above, each Party may use or disclose Confidential
Information disclosed to it by another Party to the extent such use or
disclosure is reasonably necessary in filing or prosecuting patent
applications, prosecuting or defending litigation, complying with
patent applications, prosecuting or defending
litigation, complying with applicable governmental regulations or
otherwise submitting information to tax or other governmental
authorities, conducting clinical trials, or granting a permitted
sub-license or otherwise exercising its rights hereunder; provided,
that if a Party is required to make any such disclosure of the
other Party's Confidential Information, other than pursuant to a
confidentiality agreement, such Party shall inform the third party
recipient of the terms and provisions of this Agreement and their
duties hereunder and shall obtain their commitment to abide by the
provisions of Clause 22 as a condition of releasing to the third
party recipient the Confidential Information.
22.5 Any breach of this Clause 22 by any employee, representative or
agent of a Party is considered a breach by the Party itself.
22.6 The provisions relating to confidentiality in this Clause 22 shall
remain in effect during the Term and for a period of [****] following
the termination of this Agreement.
22.7 The Parties agree that the obligations of this Clause 22 are necessary
and reasonable in order to protect the Parties= respective businesses,
and each Party expressly agrees that monetary damages would be
inadequate to compensate a Party for any breach by the other Party of
its covenants and agreements set forth herein. Accordingly, the Parties
agree and acknowledge that any such violation or threatened violation
will cause irreparable injury to a Party and that, in addition to any
other remedies that may be available, in law or in equity or otherwise,
any Party shall be entitled to obtain injunctive relief against the
threatened breach of the provisions of this Clause 22, or a
continuation of any such breach by the other Party, specific
performance and other equitable relief to redress such breach together
with its damages and reasonable counsel fees and expenses to enforce
its rights hereunder, without the necessity of proving actual or
express damages.
CLAUSE 23
COSTS
22.1 Each Stockholder shall bear its own legal and other costs incurred in
relation to preparing and concluding this Agreement and the Transaction
Documents.
22.2 All other costs, legal fees, registration fees and other expenses
relating to the transactions contemplated hereby, including the costs
and expenses incurred in relation to the incorporation of Newco, shall
be borne by Newco.
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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 EXCHANGE ACT OF 1934, AS AMENDED.
CLAUSE 24
GENERAL
24.1 GOOD FAITH:
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.
24.2 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 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.
24.3 NO REPRESENTATION:
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.
24.4 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.
24.5 RELATIONSHIP OF THE PARTIES:
Nothing contained in this Agreement is intended or is to be construed
to constitute Elan/EIS and Photogen as partners, or Elan/EIS as an
employee or agent of Photogen, or Photogen as an employee or agent of
Elan/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.
24.6 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.
24.7 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/EIS 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
and
Elan International Services, Ltd.
000 Xx. Xxxxx Xxxxx
Xxxxxx, Xxxxxx XX00
Bermuda
Attention: President
Telephone: 000-000-0000
Fax: 000-000-0000
Photogen at:
0000 Xxx Xxxxx
Xxxxxxxxx
XX0000
XXX
Attention: Chief Executive Officer
Telephone: 000 000 000 0000
Fax: 000 000 000 0000
with a copy to:
Xxxxxx & Xxxxx
Suite 3600
000 Xxxx Xxxxxx
Xxxxxxx
Xxxxxxxx 00000
XXX
Attention: Xxxxxxxx X Xxxxxx
Telephone 000 000 000 0000
Fax: 000 000 000 0000
Newco at:
000 Xx. Xxxxx Xxxxx
Xxxxxx, Xxxxxx XX00
Bermuda
Attention: Secretary
Telephone: 000-000-0000
Fax: 000-000-0000
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 Business 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. Notices of change of address shall be
effective upon receipt. Notices by telecopy shall also be sent by
another method permitted hereunder.
24.8 GOVERNING LAW; ARBITRATION
24.8.1. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
24.8.2. The Parties will attempt in good faith to resolve any
dispute arising out of or relating to this Agreement
promptly by negotiation between executives of the Parties.
In the event that such negotiations do not result in a
mutually acceptable resolution, the Parties agree to
consider other dispute resolution mechanisms
including mediation.
In the event that the Parties fail to agree on a mutually
acceptable dispute resolution mechanism within 90 days of
written notice of a dispute by one Party to the other
Party, any such dispute shall be finally settled by
arbitration pursuant to Clause 24.8.3.
24.8.3 Any dispute under this Agreement (including any ultimate
deadlock within the Management Committee or the Board
(subject to applicable laws and the Newco Memorandum of
Association and Bye-Laws)) which is not settled by mutual
consent under Clause 24.8.2 shall be finally settled by
binding arbitration, conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration
Association by one arbitrator appointed in accordance with
said rules. Such arbitrator shall be reasonably
satisfactory to each of the Parties; provided, that if the
Parties are unable to agree upon the identity of such
arbitrator within [****] days of demand by either Party,
then either Party shall have the right to petition a
presiding justice of the Supreme Court of New York, New
York County, to appoint an arbitrator.
The arbitration shall be held in New York, New York.
The arbitrator shall determine what discovery will be
permitted, consistent with the goal of limiting the cost
and time which the Parties must expend for discovery;
provided the arbitrator shall permit such discovery as he
deems necessary to permit an equitable resolution of the
dispute.
Any written evidence originally in a language other than
English shall be submitted in English translation
accompanied by the original or a true copy thereof.
The costs of the arbitration, including administrative and
arbitrator's fees, shall be shared equally by the Parties
and each Party shall bear its own costs and attorneys' and
witness' fees incurred in connection with the arbitration.
----------------
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
In rendering judgement, the arbitrator shall be instructed
by the Parties that he shall be permitted to select solely
from between the proposals for resolution of the relevant
issue presented by each Party, and not any other proposal.
A disputed performance or suspended performances pending
the resolution of the arbitration must be completed within
30 days following the final decision of the arbitrators or
such other reasonable period as the arbitrator determine in
a written opinion.
Any arbitration under this Agreement shall be completed
within one year from the filing of notice of a request for
such arbitration.
The arbitration proceedings and the decision shall not be
made public without the joint consent of the Parties and
each Party shall maintain the confidentiality of such
proceedings and decision unless otherwise permitted by the
other Party.
The Parties agree that the decision shall be the sole,
exclusive and binding remedy between them regarding any and
all disputes, controversies, claims and counterclaims
presented to the arbitrator. Application may be made to any
court having jurisdiction over the Party (or its assets)
against whom the decision is rendered for a judicial
recognition of the decision and an order of enforcement.
24.9 SEVERABILITY:
If any provision in this Agreement is agreed by the Parties to be,
deemed to be 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.
24.10 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.
24.11 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.
24.12 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:
24.12.1 Elan, EIS and/or Photogen shall have the right to
assign their rights and obligations hereunder to their
Affiliates provided, however, that such assignment does
not result in adverse tax consequences for any other
Parties.
24.12.2 Elan and EIS shall have the right to assign their
rights and obligations hereunder to a special purpose
financing or similar entity established by Elan or EIS
which assignee shall be capable of fulfilling such
obligations.
24.13 WHOLE AGREEMENT/NO EFFECT ON OTHER AGREEMENTS:
This Agreement (including the Schedules attached hereto) and the
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 Transaction
Documents.
In the event of any ambiguity or conflict arising between the terms of
this Agreement and those of the Newco Memorandum of Association and
Bye-Laws, the terms of this Agreement shall prevail.
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.
24.14 SUCCESSORS:
This Agreement shall be binding upon and inure to the benefit of the
Parties hereto, their successors and permitted assigns.
SCHEDULE 1
ELAN LICENSE AGREEMENT
SCHEDULE 2
PHOTOGEN LICENSE AGREEMENT
SCHEDULE 3
TECHNOLOGICAL COMPETITORS OF ELAN
[****]
(including any and all divisions or subsidiaries of such entities and
successor entities).
----------------
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
IN WITNESS WHEREOF, the Parties hereto have executed this 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:
------------------------------
SIGNED
BY: /s/ Xxxxx Xxxxxx
--------------------------------
for and on behalf of
ELAN INTERNATIONAL SERVICES, LTD.
in the presence of:
------------------------------
SIGNED
BY: /s/ Xxxx Xxxxxx
--------------------------------
for and on behalf of
PHOTOGEN TECHNOLOGIES, INC.
in the presence of: /s/
-----------------------------
SIGNED
BY: /s/ Xxxx Xxxxxx
--------------------------------
for and on behalf of
PHOTOGEN NEWCO LTD.
in the presence of:
-----------------------------
