Exhibit 10.27
[CONFIDENTIAL TREATMENT REQUESTED] /*/ INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
CONFIDENTIAL
TERMINATION AGREEMENT
ELAN CORPORATION, PLC
ELAN PHARMA INTERNATIONAL LIMITED
ELAN INTERNATIONAL SERVICES, LTD.
ACUSPHERE, INC.
AND
ACUSPHERE NEWCO, LTD
INDEX
-----
CLAUSE 1 DEFINITIONS
CLAUSE 2 TERMINATION OF THE NEWCO AGREEMENTS
CLAUSE 3 REPRESENTATIONS/WARRANTIES/CONFIRMATONS AND INDEMNITIES
CLAUSE 4 INTELLECTUAL PROPERTY
CLAUSE 5 RIGHTS RELATED TO SECURITIES
CLAUSE 6 SALE OF SHARES AND COMPLETION
CLAUSE 7 CONFIDENTIALITY
CLAUSE 8 WAIVER OF ACCRUED RIGHTS / MUTUAL RELEASES
CLAUSE 9 PAYMENTS, REPORTS AND AUDITS
CLAUSE 10 GENERAL
2
THIS TERMINATION AGREEMENT made this 26 day of September 2002 (this "AGREEMENT")
AMONG:-
(1) ELAN CORPORATION, PLC, a public limited company incorporated under the
laws of Ireland and having its registered office at Xxxxxxx Xxxxx,
Xxxxxxx Xxxxx, Xxxxxx 0, Xxxxxxx ("ELAN CORP");
(2) ELAN PHARMA INTERNATIONAL LIMITED, a private limited company
incorporated under the laws of Ireland, and having its registered
office at XXX Xxxxx, Xxxxxxx Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxx Xxxxx,
Xxxxxxx ("EPIL SHANNON");
(3) 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");
(4) ACUSPHERE, INC. a Delaware corporation having its principal place of
business at 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx, Xxxxxx Xxxxxx
of America; and
(5) ACUSPHERE NEWCO, LTD., an exempted company incorporated under the laws
of Bermuda, and having its registered office at Xxxxxxxxx Xxxxx, 0
Xxxxxx Xx., Xxxxxxxx, Xxxxxxx.
RECITALS:
--------
A. The Parties entered into various agreements whereby Elan Corp, EPIL
Xxxxxxx, EIS and JVP established the joint venture company, Newco, and
Elan Corp, EPIL Xxxxxxx and JVP each licensed certain intellectual
property to Newco for a specified field of use. Specifically:
(i) Elan Corp, EIS, EPIL Xxxxxxx, JVP and Newco entered into a
Subscription, Joint Development and Operating Agreement dated
30 June 2000 (the "JDOA");
(ii) Elan Corp, EPIL Xxxxxxx and Newco entered into a License
Agreement dated 30 June 2000 (the "ELAN LICENSE AGREEMENT");
(iii) JVP and Newco entered into a License Agreement dated 30 June
2000 (the "JVP LICENSE Agreement"); and
Newco, JVP and EIS entered into a Registration Rights Agreement with
respect to the capital stock of Newco dated 30 June 2000 (the "NEWCO
REGISTRATION RIGHTS AGREEMENT").
B. The JDOA, Elan License Agreement, JVP License Agreement and Newco
Registration Rights Agreement, are together defined in this Agreement
as the "NEWCO AGREEMENTS".
C. The Parties also entered into agreements whereby JVP sold and EIS
purchased certain securities of JVP and the Parties agreed to certain
matters related to the ownership of such securities. Specifically:
(i) EIS and JVP entered into a Securities Purchase Agreement dated
30 June 2000 (the "SECURITIES PURCHASE AGREEMENT") providing,
in part, for the issuance by JVP to EIS of that certain
Convertible Subordinated Promissory Note due June 30, 2006 in
the maximum aggregate principal amount of $8,010,000 (the
"PROMISSORY NOTE"), 1,232,308 shares of JVP's Series G
Non-Voting Convertible Preferred Stock, $.01 par value per
share (the "SERIES G PREFERRED STOCK"), and 1,127,819 shares
of JVP's Series H Convertible Preferred Stock, $.01 par value
per share (the "SERIES H PREFERRED STOCK");
(ii) JVP and EIS entered into an Exchange Agreement on 30 June 2000
(the "NEWCO EXCHANGE AGREEMENT");
(iii) JVP, EIS, and other Shareholders as listed therein entered
into a Sixth Amended and Restated Investors' Rights Agreement
with respect to the capital stock of JVP dated 30 June 2000,
which agreement has been amended and restated from time to
time thereafter (as amended, the "JVP REGISTRATION RIGHTS
AGREEMENT"); and
(iv) JVP, the Founders (as listed therein) and the Investors (as
listed therein and one of whom is EIS) entered into a Fifth
Amended and Restated Co-Sale Agreement dated 30 June 2000,
which agreement has been amended and restated from time to
time thereafter (as amended, the "CO-SALE Agreement").
D. Pursuant to the terms of that certain Assignment and Assumption
Agreement and related Xxxx of Sale each dated as of 1 January 2001 (the
"NOTE ASSIGNMENT AGREEMENT"), EIS sold, transferred, assigned and set
over all of its right, title and interest in, to and under the
Promissory Note (but EIS retained the conversion rights contained
therein) to EPIL Xxxxxxx.
E. Pursuant to the terms of that certain Assignment and Assumption
Agreement and related Xxxx of Sale each dated as of 15 March 2001 (the
"SHARE ASSIGNMENT
2
AGREEMENTS"), EIS sold, transferred, assigned and set over all of its
right, title and interest in, to and under (i) all of its shares of
Series G Preferred Stock and Series H Preferred Stock; (ii) the Newco
Exchange Agreement; (iii) the JVP Registration Rights Agreement; (iv)
the Co-Sale Agreement; and (v) Sections 3, 4(e), 7, 8, 9, 10, 11, 12,
13, 14, 15, 16 and 17 (relating to representations, indemnification and
sundry clauses) of the Securities Purchase Agreement (without limiting
EIS's rights and benefits under the Securities Purchase Agreement or
expanding the obligations of JVP thereunder), to ELAN PHARMACEUTICALS
INVESTMENT III, LTD. an exempted limited liability company incorporated
under the laws of Bermuda ("EPIL III").
F. Pursuant to the terms of that certain Assignment and Assumption
Agreement and related Xxxx of Sale each dated as of 1 July 2002 (the
"EPIL III ASSIGNMENT AGREEMENT"), EPIL III sold, transferred, assigned
and set over all of its right, title and interest in, to and under (i)
all of its shares of Series G Preferred Stock and Series H Preferred
Stock; (ii) the Newco Exchange Agreement; (iii) the JVP Registration
Rights Agreement; (iv) the Co-Sale Agreement; and (v) Sections 3, 4(e),
7, 8, 9, 10, 11, 12, 13, 14, 15, 16 and 17 (relating to
representations, indemnification and sundry clauses) of the Securities
Purchase Agreement (without limiting EIS's rights and benefits under
the Securities Purchase Agreement or expanding the obligations of JVP
thereunder), to Xxxxxx Bay Holdings, Ltd., ("XXXXXX BAY").
G. Pursuant to Clause 2.3 of the JDOA, the parties thereto initially
nominated as a Compound, [CONFIDENTIAL TREATMENT REQUESTED] /*/, for
administration via the pulmonary route for local effect and controlled
release using a Mode of Administration (other than [CONFIDENTIAL
TREATMENT REQUESTED] /*/) to treat asthma [CONFIDENTIAL TREATMENT
REQUESTED] /*/ (the "FIRST R&D PROGRAM").
Pursuant to Clause 2.6 of the JDOA, the parties thereto terminated all
of Newco's activities in relation to the First R&D Program.
Pursuant to Clause 2.6 of the JDOA, the parties thereto nominated as a
substitute Compound, [CONFIDENTIAL TREATMENT REQUESTED] /*/, for
administration via the pulmonary route for local effect and controlled
release using a Mode of Administration (other than [CONFIDENTIAL
TREATMENT REQUESTED] /*/) to treat asthma [CONFIDENTIAL TREATMENT
REQUESTED] /*/ (the "SECOND R&D PROGRAM"). No written agreement was
executed by the Parties to give effect to the nomination of the
substitute Compound or the commencement of the Second R&D Program.
H. The Parties wish to (i) terminate in full the Newco Agreements as set
forth below, (ii) terminate the Securities Purchase Agreement solely as
it relates to the Parties
3
and (iii) set forth their agreement in relation to other matters
including, inter alia, the transfer of shares by EIS to JVP.
IN CONSIDERATION OF THE MUTUAL COVENANTS CONTAINED HEREIN, AND OTHER GOOD AND
VALUABLE CONSIDERATION, THE RECEIPT AND ADEQUACY OF WHICH ARE HEREBY
ACKNOWLEDGED, IT IS HEREBY AGREED AS FOLLOWS:
1 DEFINITIONS:
CAPITALISED TERMS USED IN THIS AGREEMENT SHALL HAVE THE SAME MEANINGS
ASSIGNED TO THEM IN THE NEWCO AGREEMENTS, UNLESS SUCH TERMS ARE
EXPRESSLY DEFINED TO THE CONTRARY IN THIS AGREEMENT.
"AFFILIATE" shall mean any corporation or entity controlling,
controlled or under the common control of any other corporation or
entity, excluding, in the case of Elan Corp, an Elan JV. For the
purpose of this definition, (i) "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; and (ii) Newco shall
not be an Affiliate of Elan Corp or EIS. EPIL III is not an Affiliate
of Elan Corp.
"ACUSPHERE [CONFIDENTIAL TREATMENT REQUESTED] /*/ PRODUCT PATENTS"
shall mean the patent applications and/or patents, now existing or
currently pending and set forth in Schedule 5, together with the patent
applications and/or patents hereafter filed or obtained by JVP within
six months from the Effective Date which result from inventions
discovered pursuant to the Project (such patent applications and
patents to be included on Schedule 5 by JVP six months following the
Effective Date), and any foreign counterparts thereof and all
divisionals, continuations, continuations-in-part (to the extent that
there is subject matter claimed in the continuations-in-part
developedpursuant to the Project), any foreign counterparts thereof and
all patents issuing on any of the foregoing and any foreign
counterparts thereof, together with all registrations, reissues,
re-examinations, supplemental protection certificates, or extensions
thereof, and any foreign counterparts thereof.
"ACUSPHERE COMPETITOR" shall mean a Person (or Affiliate thereof) which
manufactures, markets or sells (or licenses the right to manufacture,
market or sell), or actively engages in research and development of,
products designed to treat asthma [CONFIDENTIAL TREATMENT REQUESTED]
/*/.
"AGREED COST DEDUCTIONS" shall mean the sum of $3,701,131 and any
research and development costs, clinical trial costs, clinical trial
manufacturing costs and/or regulatory costs (where such work is carried
out by JVP and/or Newco, charged at cost without the addition of any
profit margin) incurred by Newco
4
and/or JVP directly related to the development of the [CONFIDENTIAL
TREATMENT REQUESTED] /*/ Product between September 1, 2002 and the Date
of Commercialization.
"BALANCE SHEET" shall mean the unaudited balance sheet of Newco made up
to the Balance Sheet Date, as set forth in Schedule 3.4.
"BALANCE SHEET DATE" shall mean 30 June 2002.
"[CONFIDENTIAL TREATMENT REQUESTED] /*/ PRODUCT" shall mean a
formulation of [CONFIDENTIAL TREATMENT REQUESTED] /*/ for
administration via the pulmonary route for local effect and controlled
release using a Mode of Administration (other than [CONFIDENTIAL
TREATMENT REQUESTED] /*/) to treat asthma [CONFIDENTIAL TREATMENT
REQUESTED] /*/ . For the avoidance of doubt, the [CONFIDENTIAL
TREATMENT REQUESTED] /*/ Product does not comprise, or incorporate in
any way, any intellectual property of Elan.
"[CONFIDENTIAL TREATMENT REQUESTED] /*/ PRODUCT" shall mean a
formulation of [CONFIDENTIAL TREATMENT REQUESTED] /*/ for
administration via the pulmonary route for local effect and controlled
release using a Mode of Administration (other than [CONFIDENTIAL
TREATMENT REQUESTED] /*/) to treat asthma [CONFIDENTIAL TREATMENT
REQUESTED] /*/, the manufacture, use or sale of which would infringe a
valid claim under the Acusphere [CONFIDENTIAL TREATMENT REQUESTED] /*/
Product Patents. For the avoidance of doubt, the [CONFIDENTIAL
TREATMENT REQUESTED] /*/ Product does not comprise, or incorporate in
any way, any intellectual property of Elan.
"COMMERCIALIZATION AGREEMENT" shall mean:
(i) any license agreement, research and development agreement, or
alternate form of collaboration or commercialisation agreement
such as, but not limited to, a co-promotion or co-marketing
arrangement to research, develop, import, make, use, offer for
sale and/or sell the [CONFIDENTIAL TREATMENT REQUESTED] /*/
Product; or
(ii) any Disposal Agreement; or
(ii) an agreement comprising an option to do any of the foregoing.
"CPI" shall mean the Consumer Price Index for all Urban Consumers, U.S.
City Average published by the Bureau of Labor Statistics of the United
States Department of Labor, or any successor index thereof.
5
"CPI PERCENTAGE" shall mean a percentage equal to the percentage yearly
increase in the CPI as of January 1 of each calendar year.
"DATE OF COMMERCIALIZATION" shall mean the date of closing by JVP
and/or Newco and any third party of a Commercialization Agreement.
"DEFERRED CONSIDERATION" shall have the meaning set forth in Clause
6.4.
"DEFERRED CONSIDERATION PERIOD" shall mean the period commencing on the
Effective Date and expiring on a Sub-Territory by Sub-Territory basis:
(i) on the 15th anniversary of the date of the first commercial
sale of the [CONFIDENTIAL TREATMENT REQUESTED] /*/ Product in
the Sub-Territory concerned, provided that in the case of
Europe, this 15 year period shall run from the date of the
first commercial sale of the [CONFIDENTIAL TREATMENT
REQUESTED] /*/ Product in any of the Major European Markets;
or
(ii) in any Sub-Territory upon the expiration of the life of the
last to expire of any Acusphere [CONFIDENTIAL TREATMENT
REQUESTED] /*/ Product Patent in that Sub-Territory;
whichever date is later to occur.
"DISPOSAL AGREEMENT" shall mean any agreement for the assignment or
outright sale or disposition of all of JVP and/or Newco's intellectual
property rights in the [CONFIDENTIAL TREATMENT REQUESTED] /*/ Product
(other than to an Affiliate), but excluding the sale of JVP as a whole
(whether by merger, stock sale, consolidation, reorganisation, sale of
all or substantially all of its assets or other similar event).
"EFFECTIVE DATE" shall mean the date of this Agreement.
"EIS SHARES" shall have the meaning set forth in Clause 3.3.
"ELAN" shall mean Elan Corp and its Affiliates, including without
limitation, EPIL Xxxxxxx and EIS.
"ELAN IMPROVEMENTS" shall mean improvements to the Elan Patents and/or
the Elan Know-How, developed (i) by Elan outside the Project, (ii) by
Elan, JVP or Newco or by a third party (under contract with Newco, Elan
or JVP) pursuant to the Project, and/or (iii) jointly by any
combination of Elan, JVP, Newco or a third party (under contract with
Newco, Elan or JVP) pursuant to the Project.
6
"ELAN JV" shall mean an entity that Elan and a third party (i)
establish or have established; (ii) take shareholdings in or have a
right to take shareholdings in; and (iii) grant certain licenses in and
to certain intellectual property rights for the purpose of implementing
a strategic alliance.
"ELAN KNOW-HOW" shall have the meaning set forth in the Elan License
Agreement.
"ELAN PATENTS" shall have the meaning set forth in the Elan License
Agreement.
"ELAN TRADEMARK" shall mean all trade names or trademarks of Elan,
registered or unregistered, now existing under applicable law.
"FDA" shall mean the United States Food and Drug Administration or any
other successor agency.
"FORCE MAJEURE" shall mean causes beyond a Party's reasonable control,
including, without limitation, acts of God, fires, strikes, acts of
terrorism or war (whether war be declared or not), or intervention of a
governmental authority.
"FTE RATE" shall mean Full Time Equivalent Employee Rate, equaling
$250,000 per full time equivalent ("FTE") per year on the Effective
Date, an FTE being the equivalent of 1880 hours per year per employee,
to be increased on January 1 of each calendar year after the Effective
Date by an amount equal to (i) the then current FTE Rate multiplied by
(ii) the CPI Percentage.
"INITIAL CONSIDERATION" shall have the meaning set forth in Clause
6.1.2.
"IN MARKET" shall mean the sale of the [CONFIDENTIAL TREATMENT
REQUESTED] /*/ Product by Newco and/or JVP to an unaffiliated third
party, such as a wholesaler, managed care organization, hospital or
pharmacy in the Territory, and shall exclude the transfer pricing of
the [CONFIDENTIAL TREATMENT REQUESTED] /*/ Product by one Affiliate of
Newco and/or JVP to another Affiliate of Newco and/or JVP.
"JVP" shall mean Acusphere, Inc. and its Affiliates.
"JVP IMPROVEMENTS" shall mean improvements to the JVP Patents and/or
the JVP Know-How, developed (i) by JVP outside the Project, (ii) by
JVP, Elan or Newco or by a third party (under contract with Newco, Elan
or JVP) pursuant to the Project, and/or (iii) jointly by any
combination of JVP, Elan, Newco or a third party (under contract with
Newco, Elan or JVP) pursuant to the Project.
"JVP KNOW-HOW" shall mean Acusphere Know-How (as such term is defined
in the JVP License Agreement).
7
"JVP PATENTS" shall mean Acusphere Patents (as such term is defined in
the JVP License Agreement).
"JVP TRADEMARKS" shall mean all trade names or trademarks of JVP,
registered or unregistered, now existing under applicable law.
"MAJOR EUROPEAN MARKETS" shall mean Spain, UK, Germany, Italy and
France.
"NDA" shall mean a New Drug Application, or any comparable successor
form of application, filed with the FDA, including any supplements or
amendments thereto which may be filed.
"NET MANUFACTURING PROFITS" shall mean any payment realized by JVP or
Newco upon the supply or sale of the [CONFIDENTIAL TREATMENT REQUESTED]
/*/ Product to its partner in connection with a Commercialization
Agreement in excess of the cost of goods sold for the [CONFIDENTIAL
TREATMENT REQUESTED] /*/ Product, based on the cost of goods sold
calculation set forth in the relevant Commercialization Agreement (if
such is contained therein), or in the absence of such a calculation
therein, consistent with JVP's cost of goods sold calculation for all
similar third party dealings used for the purposes of JVP's audited
financial statements, as determined in accordance with generally
accepted U.S. accounting principles.
"NET REVENUES" shall mean:
(i) all license fees, license option payments (whether in relation
to the grant or exercise of any license option), sublicense
fees, milestone payments, royalties on sales of the
[CONFIDENTIAL TREATMENT REQUESTED] /*/ Product, and any other
kinds of revenue whatsoever received by Newco or JVP in
respect of the commercialization of the [CONFIDENTIAL
TREATMENT REQUESTED] /*/ Product; and
(ii) any Net Manufacturing Profits realized by Newco or JVP;
(iii) any consideration received by Newco or JVP in respect under
any Disposal Agreement;
(iv) research and development payments received by Newco or JVP in
relation to research and development of the [CONFIDENTIAL
TREATMENT REQUESTED] /*/ Product, where such payments are made
other than for reimbursement of direct expenses incurred by
Newco or JVP, and where such payments are made other than on
the FTE Rate, the aggregate excess over the FTE Rate;
8
(v) any premium paid by a subscriber for stock of JVP and/or Newco
in connection with any Commercialization Agreement; provided
that the premium shall be defined as follows:
(1) where JVP and/or Newco is not publicly listed on a
recognised stock exchange, the premium paid over the
fair market value of such stock as reasonably
determined by the board of directors of JVP and/or
Newco in good faith and certified in a board
resolution, taking into account (i) the most recently
or concurrently completed arm's length transaction in
which the primary consideration for the stock is cash
between the JVP or Newco and an unaffiliated third
party that is not part of a strategic investment and
the closing of which occurs within the six months
preceding or on the date of such calculation, if any),
(ii) the general market conditions for private biotech
securities, and (iii) the general state of progress in
clinical and commercial activities in JVP and/or Newco;
or
(2) where JVP and/or Newco is publicly listed on a
recognised stock exchange, the premium paid over the
average closing price of such stock of JVP and/or Newco
for the 30 trading day period immediately prior to any
such subscription;
provided that the amounts calculated pursuant to paragraphs (i) to (v)
above shall be reduced by:
(i) deductions in respect of any customs and excise duties or
other sales taxes (but (for the avoidance of doubt) not income
or corporation tax), directly related to the receipt of
revenue by by Newco and/or JVP, as set out above; and
(ii) the Agreed Cost Deductions.
"NET SALES" shall mean that sum determined, in accordance with
generally accepted U.S. accounting principles, by deducting the
following deductions from the aggregate gross In Market sales proceeds
billed for the [CONFIDENTIAL TREATMENT REQUESTED] /*/ Product in the
Territory by Newco and/or JVP or its Affiliate, as the case may be:
(i) customs and excise duties or other sales taxes (but (for the
avoidance of doubt) not income or corporation tax), directly
related to the sale of the [CONFIDENTIAL TREATMENT REQUESTED]
/*/ Product in the Territory which are actually paid by Newco
and/or JVP;
(ii) a discount from the gross sales proceeds to cover such normal
costs as are incurred by Newco and/or JVP in respect of
industry standard transport,
9
shipping and insurance costs; and industry standard or
mandatory discounts or rebates directly related to the sale of
the [CONFIDENTIAL TREATMENT REQUESTED] /*/ Product in the
Territory;
(iii) amounts repaid or credited by Newco and/or JVP consistent with
its normal business practices for similar products, by reason
of the rejection or return of goods.
"NEWCO" shall mean Acusphere Newco, Ltd. and its Affiliates.
"NEWCO INTELLECTUAL PROPERTY" shall mean have the meaning set forth in
the JDOA.
"NEWCO TRADEMARK" shall mean "Acusphere Newco, Ltd."
"PARTY" shall mean Elan Corp, EPIL Shannon, EIS, JVP or Newco, as the
case may be, and "PARTIES" shall mean all such parties together.
"PRODUCTS" shall mean [CONFIDENTIAL TREATMENT REQUESTED] /*/ Product
and [CONFIDENTIAL TREATMENT REQUESTED] /*/ Product.
"PROJECT" shall have the meaning set forth in the JDOA, and shall
include without limitation both the First R&D Program and the Second
R&D Program.
"SECURITIES ACT" shall have the meaning set forth in Clause 3.11.
"SUB-TERRITORY" shall mean each of North America, Europe and Japan
"TERRITORY" shall mean all of the Sub-Territories together.
"UNITED STATES DOLLAR" and "US$" and "$" shall mean the lawful currency
of the United States of America.
2 TERMINATION OF THE NEWCO AGREEMENTS
2.1 Subject to the provisions of Clause 2.2 hereof, the Parties
hereby agree to terminate the Newco Agreements, including
without limitation, those provisions expressly stated to
survive termination, in each case with effect from the
Effective Date.
All the provisions of the Newco Agreements shall terminate
forthwith with effect from the Effective Date and be of no
further legal force or effect.
10
2.2 For the avoidance of doubt and without prejudice to the
generality of the foregoing Clause 2.1, the Parties hereby
acknowledge and agree as follows as of the Effective Date:
2.2.1 the Management Committee and the R&D Committee (as
such terms are defined in the JDOA) shall each be
dissolved forthwith with effect from the Effective
Date and thereby cease to have any function;
2.2.2 the EIS Director, Xxxxx Xxxxxx, and his alternate
director, Xxxxx Xxxxx Buryj, holding office with
Newco immediately prior to the Effective Date shall
resign as directors of Newco;
2.2.3 the nominees on the Management Committee of Elan
shall be deemed to have been removed from the
Management Committee by Elan immediately prior to
the dissolution of the Management Committee pursuant
to Clause 2.2.1;
2.2.4 the nominees on the R&D Committee of Elan shall be
deemed to have been removed from the R&D Committee
by Elan immediately prior to the dissolution of the
Management Committee pursuant to Clause 2.2.1;
2.2.5 all rights granted to Newco pursuant to the Elan
License Agreement to use the Elan Patents, the Elan
Know-How and the Elan Improvements shall terminate
forthwith;
2.2.6 with effect from the Effective Date, neither JVP nor
Newco shall have any rights in or to the Elan
Patents, the Elan Know-How and/or the Elan
Improvements and/or any other patents, know-how or
any other intellectual property rights whatsoever of
Elan;
2.2.7 with effect from the Effective Date, Elan shall not
have any rights in or to the JVP Patents, the JVP
Know-How and/or the JVP Improvements and/or any
other patents, know-how or any other intellectual
property rights whatsoever of JVP;
2.2.8 Elan shall terminate or shall cause to be terminated
any and all research and development work being
conducted in connection with or pursuant to any
Research and Development Program of Newco, the Newco
Agreements, or otherwise on behalf of Newco;
2.2.9 the Parties shall terminate or cause to be terminated
all technical services and assistance (if any) being
conducted in connection with the Newco Agreements;
11
2.2.10 none of the Parties shall have any obligation to
provide working capital, research or development
funding, or other funding or financing of any nature
to Newco;
2.2.11 Elan shall not have any obligation to pay any
milestone payment or make any milestone investment to
or in Newco or JVP whether relating to the Project,
the achievement of any objectives set forth therein
or otherwise.
2.3 Each of the Parties acknowledges and agrees with the other
Parties that, as of the Effective Date, no monies are owed or
are refundable by any of the Parties to the others pursuant to
the Newco Agreements, and any amounts shown as owing by Newco
to Elan and/or JVP on the Balance Sheet as of the Balance
Sheet Date are, as of the Effective Date, hereby deemed
forgiven and extinguished in all respects by Elan and/or JVP
respectively.
For the avoidance of doubt, the Parties acknowledge that Newco
is liable to pay any fees which are due and owing to Codan
Corporate Administrative Services upon the Effective Date and
which are disclosed on Schedule 2.3, or which become due and
owing thereafter.
For the avoidance of doubt, this Clause 2.3 does not in any
way negate or affect the provisions of Clause 6.4 (which
relates to the Deferred Consideration).
3 REPRESENTATIONS, WARRANTIES, CONFIRMATIONS AND INDEMNITIES
3.1 SUB-LICENSES:
Each of the Parties acknowledges and agrees that Newco has not
granted any sub-licenses or any other rights of any nature to
any third parties relating to intellectual property rights
held by Newco pursuant to the Elan License Agreement or the
JVP License Agreement.
3.2 JVP SHARES:
JVP represents and warrants to the other Parties that it is
the legal and beneficial owner of (i) 6,000 Common Shares (as
defined in the JDOA) and (ii) 3,612 Preferred Shares (as
defined in the JDOA).
12
3.3 EIS SHARES:
EIS represents and warrants to the other Parties that it is
the legal and beneficial owner of 2,388 Preferred Shares (the
"EIS SHARES").
3.4 BALANCE SHEET:
JVP represents and warrants to the other Parties that, to
JVP's knowledge, the Balance Sheet is accurate and that, since
the Balance Sheet Date, there has been no material adverse
change in the financial position or prospects of Newco.
JVP represents and warrants to the other Parties that, to
JVP's knowledge, as of the Effective Date, there are no other
creditors of Newco other than as described in the Balance
Sheet.
3.5 THIRD PARTY AGREEMENTS / ORDERS / CLAIMS:
3.5.1 Each of the Parties represents and warrants to the
other Parties that, as of the Effective Date, to its
actual knowledge, Newco is not a party to, or bound
by, any judgment, order, decree or other directive of
or stipulation with any court or any governmental or
regulatory authority.
3.5.2 JVP represents and warrants to the other Parties
that, to its actual knowledge, Newco is not a party
to, or bound by, or is a third party beneficiary of
any agreement with any third party ("NEWCO THIRD
PARTY AGREEMENT(s)").
For the avoidance of doubt and with reference to the
indemnity in Clause 3.8.1, the Parties agree that the
indemnity in Clause 3.8.1 shall extend to any claims,
losses, liabilities or damages arising from such
Newco Third Party Agreements, in the event that the
representation and warranty in Clause 3.5.2 were to
be inaccurate..
3.5.3 Each of the Parties represents and warrants to the
other Parties that, as of the Effective Date, to its
actual knowledge, there are no claims, suits or
proceedings pending or threatened against Newco.
3.6 REGULATORY APPLICATIONS:
Each of the Parties represents and warrants to the other
Parties that, to its actual knowledge, prior to and as of the
Effective Date, no regulatory applications have been filed by
Newco or by any Party with any government authority in any
part of the world for any of the Products,
13
Newco Intellectual Property, or otherwise howsoever in
relation to the Project.
3.7 EXCLUSION OF WARRANTIES / LIABILITY:
WITH REFERENCE TO THE TRANSFER BY EIS TO JVP OF THE EIS SHARES
AS PROVIDED BY CLAUSE 6 ON THE EFFECTIVE DATE (BUT WITHOUT
PREJUDICE TO EIS' REPRESENTATIONS AND WARRANTIES EXPRESSLY
MADE HEREIN, INCLUDING WITHOUT LIMITATION EIS' REPRESENTATION
AND WARRANTY UNDER CLAUSE 3.3 HEREOF AS TO ITS LEGAL AND
BENEFICIAL OWNERSHIP OF THE EIS SHARES AND ITS OBLIGATION
UNDER CLAUSE 6.1.1 HEREOF TO TRANSFER THE EIS SHARES TO JVP
FREE FROM ALL LIENS, CHARGES AND ENCUMBRANCES), THE PARTIES
ACKNOWLEDGE AND AGREE THAT EIS AND ITS AFFILIATES MAKE NO
REPRESENTATION OR WARRANTY OF ANY NATURE TO JVP OR ANY OTHER
PERSON IN RELATION TO NEWCO OR ANY OF ITS AFFAIRS PAST,
PRESENT OR FUTURE.
JVP ACKNOWLEDGES THAT IT IS ENTERING INTO THIS AGREEMENT IN
RELIANCE EXCLUSIVELY ON ITS OWN BUSINESS JUDGEMENT, THE
INFORMATION WHICH HAS BEEN AVAILABLE TO IT AS A SHAREHOLDER OF
NEWCO AND OTHERWISE AND ON THE DUE DILIGENCE IT HAS CARRIED
OUT IN RELATION TO NEWCO.
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, ALL OTHER
WARRANTIES, CONDITIONS OR REPRESENTATIONS, EXPRESS OR IMPLIED,
STATUTORY OR OTHERWISE, ARE HEREBY EXPRESSLY EXCLUDED BY THE
PARTIES.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, NO
PARTY SHALL BE LIABLE TO ANY OTHER PARTY BY REASON OF ANY
REPRESENTATION OR WARRANTY, CONDITION OR OTHER TERM OR ANY
DUTY OF COMMON LAW, OR UNDER THE EXPRESS TERMS OF THIS
AGREEMENT, FOR ANY CONSEQUENTIAL SPECIAL OR INCIDENTAL OR
PUNITIVE LOSS OR DAMAGE (WHETHER FOR LOSS OF CURRENT OR FUTURE
PROFITS, LOSS OF ENTERPRISE VALUE OR OTHERWISE) AND WHETHER
OCCASSIONED BY THE NEGLIGENCE OF THE RESPECTIVE PARTIES, THEIR
EMPLOYEES OR AGENTS OR OTHERWISE.
14
3.8 INDEMNITY BY JVP ON ACTIVITIES OF NEWCO:
3.8.1 JVP hereby agrees to indemnify and hold harmless Elan
Corp, EIS and their respective Affiliates, officers,
directors, agents, representatives, employees and
shareholders, and any person holding office on or
prior to the Effective Date as an EIS Director (as
defined in the JDOA) (or any alternate director of
the EIS Director) or as a member of the Management
Committee or the R&D Committee (each such person or
entity referred to as an "INDEMNIFIED PARTY") against
any claims, losses, liabilities or damages and
expenses (including reasonable attorneys' fees and
expenses) reasonably incurred or sustained by such
Indemnified Party arising in relation to any claim or
proceedings made by third parties against an
Indemnified Party which relate in any way to the
activities of Newco, past present or future,
including without limitation, claims arising with
respect to the conduct of clinical trials (if any) by
Newco, or by JVP or any other person or entity on
behalf of Newco whether in connection with the
Project or otherwise.
3.8.2 For the avoidance of doubt and without prejudice to
the generality of Clause 3.8.1, JVP shall indemnify
and hold harmless Elan against any claims, losses,
liabilities or damages and expenses (including
reasonable attorneys' fees and expenses) which are
reasonably incurred and which may arise in relation
to any claim or proceedings made by third parties
against Elan Corp or any of its Affiliates alleging
infringement or other unauthorised use of the
proprietary rights of a third party arising from the
manufacture, importation, use, offer for sale, sale
or other commercialization of any of the Products and
the Newco Intellectual Property.
3.8.3 For the avoidance of doubt and with reference to the
indemnity in Clause 3.8.1, the Parties acknowledge
that a Phase 1 PK Analysis Clinical Trial was carried
out by the JVP on behalf of Newco with respect to the
development of the [CONFIDENTIAL TREATMENT REQUESTED]
/*/ Product and agree that the indemnity in Clause
3.8.1 shall extend to any claims, losses, liabilities
or damages arising from such Phase 1 PK Analysis
Clinical Trial.
3.8.4 Prior to or upon the Effective Date, JVP shall
furnish Elan Corp with copies of all policies of
comprehensive general liability insurance and/or
other insurance coverages (the "POLICIES") which
15
it holds in respect of the Phase 1 PK Analysis
Clinical Trial referred to in Clause 3.8.3.
3.8.5 Each of the Parties represents and warrants that, to
its actual knowledge, no clinical trials were carried
out with respect to the development of the
[CONFIDENTIAL TREATMENT REQUESTED] /*/.
3.8.6 Any Indemnified Party seeking indemnification
pursuant to this Clause 3.8 from or against the
assertion of any claim by a third person (an
"INDEMNIFICATION CLAIM") shall give prompt notice to
JVP; provided, however, that failure to give prompt
notice shall not relieve JVP of any liability
hereunder (except to the extent JVP has suffered
actual material prejudice by such failure).
3.8.7 Within thirty (30) days of receipt of notice from the
Indemnified Party pursuant to Clause 3.8.6, JVP shall
have the right exercisable by written notice to the
Indemnified Party to assume the defense of an
Indemnification Claim. If JVP assumes such defense,
JVP may select counsel to handle such defense. If JVP
does not assume the defense of any Indemnification
Claim in accordance with this Clause 3.8.7, then,
upon ten (10) days' written notice to JVP, the
Indemnified Party may assume the defense of the
Indemnification Claim. In such event, the Indemnified
Party shall be entitled under this Clause 3.8.7 as
part of its damages to indemnification for the costs
of such defense.
3.8.8 If JVP has been advised by the written opinion of
counsel to the Indemnified Party that the use of the
same counsel to represent both the Indemnified Party
and JVP would present a conflict of interest, then
the Indemnified Party may select its own counsel to
represent the Indemnified Party in the defense of the
matter and the costs of such defense shall be borne
by JVP. JVP shall be entitled to continue to handle
its own representation in such matter through its own
counsel.
3.8.9 The party controlling the defense of an
Indemnification Claim shall have the right to consent
to the entry of judgement with respect to, or
otherwise settle, the Indemnification Claim with the
prior written consent of the other party, which
consent shall not be unreasonably withheld.
3.8.10 JVP or the Indemnified Party, as the case may be,
shall cooperate in the defense or prosecution of any
Indemnification Claim. JVP or the Indemnified Party,
as the case may be, shall have the right to
16
participate, at its own expense, in the defense or
settlement of any Indemnification Claim.
3.8.11 FOR THE AVOIDANCE OF DOUBT, THE SOLE AND EXCLUSIVE
OBLIGATION OF JVP TO THE INDEMNIFIED PARTY FOR
INDEMNIFICATION CLAIMS ARISING UNDER THIS CLAUSE 3.8
OR CLAUSE 3.5.2 SHALL BE LIMITED TO THE
INDEMNIFICATION OBLIGATIONS SET FORTH IN THIS CLAUSE
3.8.
3.9 ORGANIZATION AND AUTHORITY:
Each of the Parties represents and warrants to the other
Parties that it is a corporation duly organised and validly
existing under the laws of its jurisdiction of organisation
and has all the requisite corporate power and authority to
enter into this Agreement and to carry out the transactions
contemplated hereby.
3.10 APPROVALS:
Except as set forth in Clause 6.3, each of the Parties
represents and warrants to the other Parties that no permit,
authorization, consent or approval of or by ("APPROVAL"), or
any notification of or filing with ("FILING"), any person or
entity (governmental or otherwse) is required in connection
with the execution, delivery or performance of this Agreement
by such Party, or if any such Approval or Filing is so
required, that same has been obtained or filed prior to the
Effective Date.
3.11 NO CONFLICTS:
Each of the Parties represents and warrants to the other
Parties that, as of the Effective Date, the execution,
delivery and performance by such Party of this Agreement, and
the compliance with the provisions hereof by such Party, will
not:
3.11.1 violate any provision of applicable law, statute,
rule or regulation applicable to such Party or any
ruling, writ, injunction, order, judgment or decree
of any court, arbitrator, administrative agency or
other governmental body applicable to such Party or
any of its properties or assets;
3.11.2 conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute a
default, or give rise to any right of termination,
cancellation or acceleration under the charter or
organizational documents of such Party or any contract
to which
17
such Party is a party, except where such violation,
conflict or breach would not, individually or in the
aggregate, have a material adverse effect on such
Party.
3.12 INVESTMENT REPRESENTATIONS:
JVP hereby represents and warrants to the other Parties that,
as of the Effective Date, (i) it is sophisticated in
transactions of this type and capable of evaluating the merits
and risks of its investment in Newco, (ii) it has not been
formed solely for the purpose of making this investment and is
acquiring the EIS Shares 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, , (iii) it understands that the EIS Shares have not
been registered under the Securities Act of 1933, as amended
(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 its representations as
expressed herein and (iv) it understands that no public market
now exists for any of the EIS Shares and that there is no
assurance that a public market will ever exist for such
shares.
3.13 TRADEMARK APPLICATIONS:
Each of the Parties represents and warrants to the other
Parties that, to its actual knowledge, Newco has not filed for
any trademark protection or has not adopted any new trademark,
apart from the Newco Trademark, in connection with Newco's
business or any product or service provided thereunder.
3.14 ACUSPHERE [CONFIDENTIAL TREATMENT REQUESTED] /*/ PRODUCT
PATENTS:
JVP hereby represents and warrants to Elan that JVP has
provided full and accurate disclosure in Schedule 5 of all
patents and patent applications filed or pending by JVP on the
Effective Date which cover the [CONFIDENTIAL TREATMENT
REQUESTED] /*/ Product.
3.15 REPRESENTATIONS AND WARRANTIES AS OF THE EFFECTIVE DATE:
Except where expressly stated otherwise, each of the
representations and warranties in this Agreement are made as
of the Effective Date.
18
4 INTELLECTUAL PROPERTY
4.1 OWNERSHIP:
On and following the Effective Date:
4.1.1 For the avoidance of doubt, the Elan Patents, the
Elan Know-How, the Elan Improvements and/ or the Elan
Trademarks shall remain the sole and exclusive
property of Elan.
Elan confirms that no Elan Improvements were
developed pursuant to the Project, or otherwise
pursuant to the Newco Agreements.
4.1.2 For the avoidance of doubt, the JVP Patents, the JVP
Know-How, the JVP Improvements and/or the JVP
Trademarks shall remain the sole and exclusive
property of JVP.
4.1.3 All Newco Intellectual Property shall remain the sole
and exclusive property of Newco.
4.1.4 A full list of the JVP Improvements and/or the Newco
Intellectual Property developed pursuant to the
Project, or otherwise pursuant to the Newco
Agreements is set forth in Schedule 4.1.
4.2 For the avoidance of doubt, to the extent that Elan may have
any right to any intellectual property rights listed in
Schedule 4.1, Elan hereby assigns such intellectual property
rights to JVP on the Effective Date.
5 RIGHTS RELATED TO SECURITIES
5.1 The Parties hereby agree to terminate the Securities Purchase
Agreement as between the parties, including without
limitation, those provisions expressly stated to survive
termination, with effect from the Effective Date.
5.2 The Parties hereby agree to terminate and cancel the
Promissory Note, with effect from the Effective Date.
5.3 All the provisions of the Securities Purchase Agreement as
between the Parties and the Promissory Note shall terminate
forthwith with effect from the Effective Date and be of no
further legal force or effect.
5.4 Notwithstanding Clauses 5.1, 5.2 and 5.3 hereof, the Parties
acknowledge that Xxxxxx Bay has the right, title and interest
in, to and under (i) the 2,517,448 shares of common stock of
JVP issued upon conversion of the
19
shares of Series G Preferred Stock and Series H Preferred
Stock transferred thereto (including the payment of
paid-in-kind dividends issuable in connection with such
conversion); (ii) the Newco Exchange Agreement; (iii) the JVP
Registration Rights Agreement; (iv) the Co-Sale Agreement; and
(v) Sections 3, 4(e), 7, 8, 9, 10, 11, 12, 13, 14, 15, 16 and
17 (relating to representations, indemnification and sundry
clauses) of the Securities Purchase Agreement.
5.5 For the avoidance of doubt, Elan hereby represents and
warrants to the other Parties that it has assigned any and all
rights in or under the Newco Exchange Agreement to EPIL III
and that EPIL III has assigned any and all rights in or under
the Newco Exchange Agreement to Xxxxxx Bay. The Parties hereby
acknowledge that JVP and Xxxxxx Bay have terminated the Newco
Exchange Agreement as of the Effective Date pursuant to an
agreement between Xxxxxx Bay and JVP. Accordingly, neither
Elan nor EPIL III and, to Elan's knowledge, neither Xxxxxx Bay
nor any other party has any right, title or interest in or
under the Newco Exchange Agreement.
6 SALE OF SHARES AND COMPLETION
6.1 Subject to the terms of this Agreement:
6.1.1 EIS shall sell as legal and beneficial owner and JVP
shall purchase, free from all liens, charges and
encumbrances and together with all rights now or
hereafter attaching to them, the EIS Shares;
6.1.2 the EIS Shares will be sold by EIS to JVP for a total
initial consideration of $10 (the "INITIAL
CONSIDERATION") and the Deferred Consideration.
6.2 On the Effective Date, Elan and JVP shall take or (to the
extent that the same is within its powers) cause to be taken
the following steps prior to or at directors and shareholders
meetings of Newco, or such other meetings, as appropriate:
6.2.1 the delivery by EIS to JVP of a stock transfer form
in respect of the EIS Shares duly executed by EIS in
favour of JVP or as it may direct together with the
related share certificates;
6.2.2 the payment by JVP to EIS of the Initial
Consideration;
6.2.3 the transfer to JVP (or as it may direct) of the
share register, and all books and records of Newco in
the possession of Elan (including any minute books
and any company seal(s));
20
6.2.4 the change of the registered office of Newco from
Xxxxxxxxx Xxxxx, 0 Xxxxxx Xx., Xxxxxxxx, Xxxxxxx;
6.2.5 the resignation of the EIS Director on Newco's Board
of Directors and any alternate director of the EIS
Director as provided in Clause 2.2.2;
6.2.6 the adoption of new Bye-Laws of Newco;
6.2.7 the modification, as appropriate, by board
resolutions of Newco of matters such as the removal
of EIS as book keepers for Newco, the removal of EIS
representatives as authorised signatories of Newco's
bank account, the resignation of the Company
Secretary and any other related matters whatsoever;
6.2.8 any other steps required by this Agreement.
6.3 JVP shall, prior to or on the Effective Date, notify the
Bermuda Monetary Authority of the transfer of the EIS Shares.
6.4 DEFERRED CONSIDERATION:
In consideration of the sale by EIS to JVP of the EIS Shares
under Clause 6.1, JVP and its Affiliates (excluding Newco)
shall be jointly and severally liable to pay to EIS as
deferred consideration ("DEFERRED CONSIDERATION"):
6.4.1 if Newco and/or JVP sells the [CONFIDENTIAL TREATMENT
REQUESTED] /*/ Product In Market, 1% of Net Sales
during the Deferred Consideration Period; or
6.4.2 if Newco and/or JVP enters into a Commercialization
Agreement with any third party, 8% of Net Revenues in
the Territory during the Deferred Consideration
Period.
7 CONFIDENTIALITY
7.1 CONFIDENTIALITY:
7.1.1 The Parties agree that it may be necessary pursuant to this
Agreement, from time to time, to disclose to each other
confidential and proprietary information, including without
limitation, inventions, trade secrets, specifications,
designs, data, know-how and other proprietary information,
21
processes, services and business of the disclosing Party.
The foregoing together with the terms of this Agreement shall
be referred to collectively as "ADDITIONAL CONFIDENTIAL
INFORMATION".
The Parties also agree that it may have been necessary to
disclose to each other Confidential Information (as defined in
the JDOA) pursuant to the Newco Agreements.
Together Additional Confidential Information and Confidential
Information shall be referred to collectively as "PROPRIETARY
INFORMATION".
7.1.2 Save as otherwise specifically provided herein, and subject to
Clause 7.2 and 7.3, each Party shall disclose Proprietary
Information of the other Party only to those employees,
representatives and agents requiring knowledge thereof in
connection with fulfilling the Party's obligations under this
Agreement, and not to any other third party.
Each Party further agrees to inform all such employees,
representatives and agents of the terms and provisions of this
Agreement relating to Proprietary Information and their duties
hereunder and to obtain their agreement hereto as a condition
of receiving Proprietary Information.
Each Party shall exercise the same standard of care as it
would itself exercise in relation to its own confidential
information (but in no event less than a reasonable standard
of care) to protect and preserve the proprietary and
confidential nature of the Proprietary Information disclosed
to it by the other Party.
Each Party shall promptly, upon request of the other Party,
return all documents and any copies thereof containing
Proprietary Information belonging to, or disclosed by, such
other Party, save that it may retain one copy of the same
solely for the purposes of ensuring compliance with this
Clause 7.
7.1.3 Any breach of this Clause 7 by any person informed by one of
the Parties is considered a breach by the Party itself.
7.1.4 Proprietary Information shall be deemed not to include:
(1) information which is in the public domain;
(2) information which is made public through no breach of
this Agreement;
22
(3) information which is independently developed by a
Party, as evidenced by such Party's records;
(4) information that becomes available to a receiving
Party on a non-confidential basis, whether directly
or indirectly, from a source other than the other
Party, which source did not acquire this information
on a confidential basis.
7.1.5 The provisions relating to confidentiality in this Clause 7
shall remain in effect during the term of this Agreement, and
for a period of 10 years following the Effective Date of this
Agreement; provided, however, that, with respect to any
Proprietary Information which remains a "trade secret" under
applicable law, the provisions relating to confidentiality in
this Clause 7 with respect thereto shall survive for so long
as such information so remains a "trade secret".
7.1.6 The Parties agree that the obligations of this Clause 7 are
necessary and reasonable in order to protect the Parties'
respective businesses, and each Party agrees that monetary
damages may be inadequate to compensate a Party for any breach
by the other Party of its covenants and agreements set forth
herein.
The Parties agree that any such violation or threatened
violation may cause irreparable injury to a Party and that, in
addition to any other remedies that may be available, in law
and equity or otherwise, each Party shall be entitled to seek
injunctive relief against the threatened breach of the
provisions of this Clause 7, or a continuation of any such
breach by the other Party, specific performance and other
equitable relief to redress such breach together with damages
and reasonable counsel fees and expenses to enforce its rights
hereunder.
7.2 ANNOUNCEMENTS:
7.2.1 Subject to Clause 7.3, no announcement or public statement
concerning the existence, subject matter or any term of this
Agreement shall be made by or on behalf of any Party without
the prior written approval of the other Party or Parties.
The terms of any such announcement shall be agreed in good
faith by the Parties.
Upon execution of this Agreement, JVP may issue a press
release in the form attached hereto as Schedule 7.2.1, and
thereafter the Parties shall be
23
permitted to make public statements consistent with the
content of such release.
7.3 REQUIRED DISCLOSURES:
7.3.1 A Party (the "DISCLOSING PARTY") will be entitled to make an
announcement or public statement concerning the existence,
subject matter or any term of this Agreement, or to disclose
Proprietary Information that the Disclosing Party is required
to make or disclose pursuant to:
(1) a valid order of a court or governmental authority;
or
(2) any other requirement of law or any securities or
stock exchange (including, without limitation, the
Securities Act);
provided that if the Disclosing Party becomes legally required
to make such announcement, public statement or disclosure
hereunder, the Disclosing Party shall give the other Party or
Parties prompt notice of such fact to enable the other Party
or Parties, if it (or they) so choose, to seek a protective
order or other appropriate remedy concerning any such
announcement, public statement or disclosure.
The Disclosing Party shall fully co-operate with the other
Party or Parties in connection with that other Party's or
Parties' efforts to obtain any such order or other remedy.
If any such order or other remedy does not fully preclude
announcement, public statement or disclosure, the Disclosing
Party shall make such announcement, public statement or
disclosure only to the extent that the same is legally
required.
7.3.2 Each of the Parties shall be entitled to provide a copy of
this Agreement (and any subsequent amendments hereto) and the
Newco Agreements to a potential third party purchaser in
connection with Clause 10.2.1(2); or to any potential third
party investor(s) or lender(s) in the course of any financing
by any Party ; and EIS (and/or any Affiliate) shall also be
entitled to so provide in connection with Clause 10.2.2; and
JVP and/or Newco shall also be entitled to so provide to any
potential third party to any Commercialization Agreement
PROVIDED THAT the relevant third party purchaser, investor,
lender, assignee, or potential third party to any
Commercialization Agreement has entered into a confidentiality
agreement on terms no less protective than the terms of this
Clause 7.
Notwithstanding anything to the contrary contained
herein, the existence, subject matter and terms of
this Agreement may be disclosed on a non-
24
confidential basis if in connection with a public
offering of JVP's equity securities.
8 WAIVER OF ACCRUED RIGHTS/MUTUAL RELEASES
8.1 With effect from the Effective Date, each Party and each of
its Affiliates ("RELEASOR"):-
8.1.1 waives any accrued rights that Releasor may have
accrued against the other Parties and each of its
Affiliates, officers, directors, representative,
agents and employees and the assigns and successors in
interest of any of the foregoing entities
("RELEASEES"), whether known or unknown, foreseen or
unforeseen, fixed or contingent, of any nature
whatsoever from the beginning of time to the Effective
Date under the Newco Agreements; and
8.1.2 fully and finally releases and discharges the
Releasees from any and all manner of actions, claims,
promises, debts, sums of money, demands, obligations,
in law or in equity, directly or indirectly, whether
known or unknown, foreseen or unforeseen, fixed or
contingent, of any nature whatsoever that Releasor may
have by reason of any act, omission, matter,
provision, cause or thing whatsoever from the
beginning of time to the Effective Date under the
Newco Agreements.
8.2 For the avoidance of doubt the provisions of this Clause 8
shall not in any way act as a waiver by any of the Parties in
respect of any of the provisions set forth in this Agreement
(including, for the avoidance of doubt, Clause 3.8.1
(Indemnity by JVP on future activities of Newco) and/or Clause
6.4 (Deferred Consideration)).
9 PAYMENTS, REPORTS AND AUDITS
9.1 With reference to Clause 6.4, Newco and/or JVP shall keep true and
accurate records of Net Revenues or Net Sales and any deductibles made
in calculating same for a period of three (3) years following the
calendar quarter (or any part thereof) in which such Net Revenues or
Net Sales occurred. Where Newco and/or JVP has Net Revenues or Net
Sales, Newco and/or JVP shall deliver to EIS a written statement (the
"STATEMENT") thereof within 45 days following the end of each calendar
quarter (or any part thereof) in which such Net Revenues or Net Sales
occurred. The financial officers of EIS and Newco and/or JVP shall
agree upon the precise format of the Statement.
25
9.2 Payments due on Net Revenues or Net Sales on sales amounts in a
currency other than US Dollars shall first be calculated in the foreign
currency and then converted to US Dollars on the basis of the exchange
rate in effect for the purchase of US Dollars with such foreign
currency quoted in the Wall Street Journal (or comparable publication
if not quoted in the Wall Street Journal) on the last business day of
the calendar quarter in which such Net Revenues or Net Sales occurred.
9.3 Any income or other taxes which JVP and/or its Affiliates (excluding
Newco) is required by law to pay or withhold on behalf of EIS with
respect to such Net Revenues or Net Sales payments under this Agreement
shall be deducted from the amount of such Net Revenues or Net Sales
payments. JVP and/or its Affiliates (excluding Newco) shall furnish EIS
as part of the Statement an accounting of any such payments. JVP and/or
its Affiliates (excluding Newco) shall promptly provide EIS, upon
request, with a certificate or other documentary evidence to enable EIS
to seek a refund or a foreign tax credit with respect to any such tax
so withheld or deducted by JVP and/or its Affiliates (excluding Newco).
The parties will reasonably cooperate in completing and filing
documents required under the provisions of any applicable tax treaty or
under any other applicable law, in order to enable JVP and/or its
Affiliates (excluding Newco) to make such payments to EIS without any
deduction or withholding.
9.4 Payment of monies hereunder shall be made by JVP and/or its Affiliates
(excluding Newco) to EIS within 45 days of the Statement.
All payments due hereunder shall be made in U.S. Dollars.
9.5 All payments due hereunder shall be made to the designated bank account
of EIS in accordance with such timely written instructions as EIS shall
from time to time provide.
9.6 Without prejudice to EIS's other remedies hereunder, JVP and/or its
Affiliates (excluding Newco) shall pay interest to EIS on sums not paid
to EIS on the date on which payment should have been made pursuant to
the applicable provisions of this Agreement ("DUE DATE") over the
period from the Due Date until the date of actual payment (both before
and after judgement) at the Prime Rate publicly announced by Xxxxxx
Guaranty Trust Company of New York at its principal office on the Due
Date (or next to occur business day, if such date is not a business
day) plus 3%, such interest to be payable on demand from time to time
and compounded quarterly.
9.7 For the 180 day period following the close of each calendar year of the
Agreement, JVP and/or its Affiliates (excluding Newco) will, in the
event that EIS reasonably requests such access, provide independent
certified accountants selected by EIS
26
(other than independent certified accountants of record) (reasonably
acceptable to JVP and/or its Affiliates (excluding Newco)) with access,
during regular business hours and subject to the confidentiality
provisions as contained in this Agreement, to JVP's and/or its
Affiliates' (excluding Newco) books and records solely for the purpose
of verifying the accuracy and reasonable composition of the
calculations hereunder for the calendar year then ended.
In addition, the independent certified accounts performing the
inspection shall execute a confidentiality agreement reasonably
acceptable to JVP, EIS and such accounting firm which shall limit the
disclosure to EIS of confidential information disclosed to such
accounting firm while performing such inspection solely to such
information as is reasonably necessary to determine if JVP has complied
with this Agreement, or if not, the amount and manner of any deficiency
or surplus for the period reviewed.
9.8 Any such inspection of JVP's records shall be at the expense of EIS,
except that if any such inspection reveals a deficiency in the amount
of the Deferred Consideration actually paid to EIS hereunder in any
calendar year quarter of five percent (5.0%) or more of the amount of
any Deferred Consideration actually due to EIS hereunder, then the
expense of such inspection shall be borne solely by JVP. If such
inspection reveals a surplus in the amount of Deferred Consideration
actually paid to EIS by JVP, EIS shall promptly reimburse JVP the
surplus without interest.
9.9 JVP and/or Newco shall, promptly following the execution of any
Commercialisation Agreement (and any subsequent amendment thereto),
provide Elan with a copy of the financial provisions and any other
relevant terms of such Commercialisation Agreement.
9.10 In the event that JVP and/or Newco shall enter into any
Commercialisation Agreement with any third party, together with other
products of JVP and/or Newco by the method commonly known in the
pharmaceutical industry as "bundling" and the price attributable to the
[CONFIDENTIAL TREATMENT REQUESTED] /*/ Product is less than the average
price which would have been attributable thereto on an "arms length"
basis, the Net Sales or Net Revenues attributable thereto hereunder
shall be adjusted by the Parties to reflect an average price on an
"arms length" basis.
27
10 GENERAL
10.1 GOVERNING LAW AND JURISDICTION:
10.1.1 This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York
without regard to conflicts of law principles under the laws
of the State of New York.
10.1.2 For the purposes of this Agreement, the Parties submit to the
nonexclusive jurisdiction of the State and Federal Courts of
New York.
10.2 ASSIGNMENT
10.2.1 Subject to Clause 10.2.2 and Clause 10.2.3, this Agreement
shall not be assigned by any Party without the prior written
consent of the others, save that any Party:
(1) may assign this Agreement in whole or in part and
delegate its duties hereunder to its Affiliate or
Affiliates without such consent; and
(2) may assign its rights and obligations to a successor
(whether by merger, stock sale, consolidation,
reorganisation or other similar event) or purchaser of
all or substantially all of its assets relating to
such Party's technology related to this Agreement,
provided that such successor or purchaser has agreed
in writing to assume all of such Party's rights and
obligations hereunder and a copy of such assumption is
provided to the other Parties.
10.2.2 EIS (and/or any Affiliate) shall be entitled to assign the
rights of EIS (or any Affiliate) to the Deferred Consideration
under Clause 6.4 and Clause 9 to any third party other than an
Acusphere Competitor without the consent of any other Party
hereto. EIS (and/or any Affiliate) shall promptly notify the
other Parties hereto of any such assignment identifying the
assignee, provided, however, that any payment of Deferred
Consideration by JVP to EIS (in accordance with the terms of
this Agreement) prior to the receipt of any such notice by JVP
hereunder shall constitute a good discharge of such payment
obligation against the assignee.
10.3 NOTICES
10.3.1 Any notice to be given under this Agreement shall be sent in
writing in English by registered airmail, internationally
recognized courier or telefaxed to the following addresses:
28
If to Newco at:
Acusphere Newco, Ltd.,
c/o Acusphere, Inc
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Chief Executive Officer
Telephone 000-000-0000
Fax: 000-000-0000
Xxxxxxx Xxxxxxxx & Xxxxx
Cedar Xxxxx
00 Xxxxx Xxxxxx
Xxxxxxxx
XX 00
Xxxxxxx
Xxxxxxxxx: Xxxxxx Xxxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
with a copy to JVP at:
Acusphere, Inc
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Chief Executive Officer
Telephone 000-000-0000
Fax: 000-000-0000
If to JVP at:
Acusphere, Inc
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Chief Executive Officer
Telephone 000-000-0000
Fax: 000-000-0000
with a copy to:
Xxxxxxxx X. Xxxxxxxxxx
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
29
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: 000-000-0000
Fax: 000-000-0000
If to Elan, EIS, and/or EPIL Xxxxxxx at:
Elan Corporation, plc
Elan Pharma International Limited
Elan International Services, Ltd.
C/o Elan International Services, Ltd.
000 Xx. Xxxxx Xxxxx
Xxxxxx,
Xxxxxx XX00
Bermuda
Attention: Secretary
Telephone: 000 000 0000
Fax: 000 000 0000
or to such other address(es) and telefax numbers as may from
time to time be notified by any Party to the others hereunder.
10.3.2 Any notice sent by mail shall be deemed to have been delivered
within seven (7) working days after dispatch or delivery to
the relevant courier and notice sent by fax shall be deemed to
have been delivered upon confirmation receipt. Notice of
change of address shall be effective upon receipt.
10.4 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.
10.5 SEVERABILITY
If any provision in this Agreement is agreed by the Parties to be, or
is deemed to be, or becomes invalid, illegal, void or unenforceable
under any law that is applicable hereto:
10.5.1 such provision will be deemed amended to conform to applicable
laws so as to be valid and enforceable; or
30
10.5.2 if it cannot be so amended without materially altering the
intention of the Parties, it will be deleted, with effect from
the date of this 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.
10.6 FURTHER ASSURANCES
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.
10.7 SUCCESSORS
This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and permitted assigns.
10.8 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 each Party.
10.9 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.
10.10 COSTS
Each Party shall bear its own costs and expenses in connection with the
transactions contemplated by this Agreement.
10.11 FORCE MAJEURE:
Neither Party to this Agreement shall be liable for failure or delay in
the performance of any of its obligations hereunder if such failure or
delay results from Force Majeure, but any such failure or delay shall
be remedied by such Party as soon as practicable.
31
10.12 RELATIONSHIP OF THE PARTIES:
The Parties are independent contractors under this Agreement. Nothing
herein contained shall be deemed to create or establish an employment,
agency, joint venture, or partnership relationship between the Parties
or any of their agents or employees, or any other legal arrangement
that would impose liability upon one Party for the act or failure to
act of any other Party.
No Party shall have any express or implied power to enter into any
contracts, commitments or negotiations or to incur any liabilities in
the name of, or on behalf of, any other Party, or to bind any other
Party in any respect whatsoever.
10.13 ENTIRE AGREEMENT:
10.13.1 This Agreement sets forth all of the 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.
10.13.2 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 the Parties
unless specifically provided herein and only to the
extent so specified.
10.14 TAX RETURNS:
JVP shall prepare and file all future tax returns for Newco, making any
elections it deems necessary or appropriate.
32
SCHEDULE 2.3
Codan Services Invoice 4156759 in the amount of $4745.20
33
SCHEDULE 3.4
BALANCE SHEET
34
SCHEDULE 4.1
JVP IMPROVEMENTS / NEWCO INTELLECTUAL PROPERTY
o [CONFIDENTIAL TREATMENT REQUESTED] /*/
o [CONFIDENTIAL TREATMENT REQUESTED] /*/
o [CONFIDENTIAL TREATMENT REQUESTED] /*/
o [CONFIDENTIAL TREATMENT REQUESTED] /*/
35
SCHEDULE 5
ACUSPHERE [CONFIDENTIAL TREATMENT REQUESTED] /*/ PRODUCT PATENTS
[CONFIDENTIAL TREATMENT REQUESTED] /*/
[CONFIDENTIAL TREATMENT REQUESTED] /*/
[CONFIDENTIAL TREATMENT REQUESTED] /*/
36
IN WITNESS WHEREOF the Parties have executed this Agreement.
SIGNED
BY: /s/ Xxxxxx Xxxxx
------------------------------------
for and on behalf of
ELAN CORPORATION, PLC
SIGNED
BY: /s/ Xxxxxx Xxxxx
------------------------------------
for and on behalf of
ELAN PHARMA INTERNATIONAL LIMITED
SIGNED
BY: /s/ illegible signature
------------------------------------
for and on behalf of
ELAN INTERNATIONAL SERVICES, LTD.
SIGNED
BY: /s/ Xxxxxx X. Xxxxx
------------------------------------
for and on behalf of
ACUSPHERE NEWCO, LTD.
SIGNED
BY: /s/ Xxxxxx X. Xxxxx
------------------------------------
for and on behalf of
ACUSPHERE, INC.
37
