Exhibit 10.9
OPTION AGREEMENT
Option agreement dated as of June 1, 2001 between B. TWELVE, INC., a
corporation existing under the laws of the State of Florida (the "Corporation")
and XXXX-XXX XXXXXX, an individual residing in the Province of Ontario (the
"Optionee").
WHEREAS the Optionee is an employee of the Corporation and plans to
render faithful and efficient service to the Corporation in that capacity,
AND WHEREAS the Corporation desires to continue to receive the benefit
of the services of the Optionee and to more fully identify his interest with the
Corporation's future and success,
AND WHEREAS the corporate milestones for the Corporation are correlated
with the anticipated progress in the scientific research and corporate
development of the Corporation.
Specifically, the Scientific and Corporate objectives of the Corporation are
aligned with the planned research and development of the following two (2)
scientific platforms (each a "Scientific Platform" and collectively, the
"Scientific Platforms") and one (1) corporate target (the "Corporate Target"):
1. VITAMIN B12 ANALOGUES - these are chemically modified Vitamin B12
molecules that are targeted to the Vitamin B12 receptor with potential
applications for the treatment of patients with either cancer or some
forms of arthritis or potentially other diseases of the immune system.
2. ANTIBODIES TO TRANSCOBALAMIN II - Transcobalamin II ("XX XX") is a
protein that is found in the blood stream. Vitamin B12 combines with XX
XX in the blood stream and in turn the Vitamin B12 and XX XX complex
combines with the Vitamin B12 receptor on the cell surface. Monoclonal
antibodies to XX XX are aimed at inhibiting the binding of XX XX alone
or combined with Vitamin B12 to bind to the Vitamin B12 receptor.
3. CORPORATE TARGET - The Company is seeking financing opportunities and
is pursuing strategic alliance negotiations intended to provide near
term revenues through licensing, milestone and royalty payments,
thereby offsetting the risk associated with more medium term
opportunities.
The milestones outlined below (each a "Milestone" and collectively, the
"Milestones") describe the anticipated achievements of the scientific and
corporate effort of the Corporation with regard to the Scientific Platforms and
Corporate Strategy above described.
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With respect to the "Vitamin B12 analogues" Scientific Platform, there
are two (2) Milestones described as follows:
FIRST MILESTONE
Demonstration that new Vitamin B12 analogues are active in cell culture
bioassays. New Vitamin B12 analogues have been developed by the Corporation.
Existing or new Vitamin B12 analogues are to be characterized by their ability
to alter the biological activity (i.e. apoptosis) of either cancer cells, cells
of the immune system or other appropriate cell culture bioassays.
SECOND MILESTONE
Demonstration that new Vitamin B12 analogues are active in animal models.
Selected candidates (Vitamin B12 analogues) obtained in sufficient quantities
are to be tested in animal models for biological activity against cancer, for
modulation of the immune system or other appropriate standard systems.
With respect to the "Antibodies to Transcobalamin II" Scientific Platform, there
is one (1) Milestone described as follows:
THIRD MILESTONE
Pre-clinical advancement of human monoclonal antibody candidate(s) to the XX XX
protein or to the TCII-Vitamin B12 complex or to the vitamin B12 pathway.
Specific type(s) of monoclonal antibodies are currently being selected and
characterized to a form suitable for administration to human administration in
anticipation of filing an IND or equivalent. Selected monoclonal antibody(ies)
candidate(s) is to be selected. This step is anticipated to be a requirement to
initiate with manufacturing and acute toxicity studies in anticipation of the
filing of an IND or equivalent.
With respect to the "Corporate Target", there is three (3) Milestones described
as follows:
FOURTH MILESTONE
The Company is seeking financing opportunities. The Company needs to secure a
minimum financing of $2,000,000 through one or a series of financing. Under this
milestone, the financing is to be effected for cash, unless otherwise agreed by
the Board of Directors.
FIFTH MILESTONE
The Company is seeking substantial financing opportunities. In addition to the
previous $2,000,000 raised, the Company is to secure an additional financing of
$3,000,000 for a total of $5,000,000 through one or a series of financing. Under
this milestone, the financing is to be effected for cash, unless otherwise
agreed by the Board of Directors.
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SIXTH MILESTONE
The Company is pursuing strategic alliance negotiations. Those strategic
alliance negotiations are intended to but not limited to provide near and long
term revenues through licensing, milestone and royalty payments, thereby
offsetting the risk associated with more medium term opportunities. Also, should
be considered the intangible aspect of the agreement(s) in terms of increasing
the corporate profile and validating the technology.
The above milestones are hereinafter referred to as the "First Milestone",
"Second Milestone", Third Milestone", "Fourth Milestone", "Fifth Milestone", and
"Sixth Milestone", respectively.
NOW THEREFORE in consideration of the foregoing, the sum of $10.00 and
the mutual agreements contained herein and other good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged), the parties
hereto agree as follows:
1. OPTION TO PURCHASE. The Corporation hereby grants to the Optionee, on
and subject to the terms and conditions hereinafter set forth, the
irrevocable right and option (the "Option") exercisable in accordance
with the terms of this Agreement to purchase from the Corporation a
maximum of 137,500 authorized and unissued common shares in the capital
of the Corporation (the "Optioned Shares") at purchase price of $.0001
per Optioned Share (the "Option Price").
2. VESTING OF THE OPTION.
(a) The Option shall vest with respect to 30,000 of the Optioned
Shares (the "First Milestone Optioned Shares"), upon the
achievement by the Optionee of all parts of the First
Milestone, which the Optionee is to use his best efforts to
achieve on or before March 31, 2002.
(b) The Option shall vest with respect to 50,000 of the Optioned
Shares (the "Second Milestone Optioned Shares"), upon the
achievement by the Optionee of the Second Milestone, which the
Optionee is to use his best efforts to achieve on or before
March 31, 2002.
(c) The Option shall vest with respect to 17,500 of the Optioned
Shares (the "Third Milestone Optioned Shares"), upon the
achievement by the Optionee of all parts of the Third
Milestone, which the Optionee is to use his best efforts to
achieve on or before December 31, 2002.
(d) The Option shall vest with respect to 15,000 of the Optioned
Shares (the "Fourth Milestone Optioned Shares"), upon the
achievement by the Optionee of the Fourth Milestone, which the
Optionee is to use his best efforts to achieve on or before
December 15, 2001.
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(e) The Option shall vest with respect to 15,000 of the Optioned
Shares (the "Fifth Milestone Optioned Shares"), upon the
achievement by the Optionee of the Fifth Milestone, which the
Optionee is to use his best efforts to achieve on or before
August 31, 2002.
(f) The Option shall vest with respect to 10,000 of the Optioned
Shares (the "Sixth Milestone Optioned Shares"), upon the
achievement by the Optionee of the Sixth Milestone, which the
Optionee is to use his best efforts to achieve on or before
June 30, 2003.
(g) Notwithstanding the vesting requirements set out in
subsections 2(a) through (f) above, all Optioned Shares not
already vested shall vest immediately in the event of the
following:
(i) the sale of all or substantially all of the
Corporation's assets for net proceeds to the
Corporation of $25,000,000, of which $10,000,000 has
to be in cash;
(ii) the sale of all the shares of the Corporation,
excluding a reverse take-over transaction; and
(iii) the termination without Cause (as defined below) of
Xxxxxx as an employee of the Corporation.
In this agreement, "Cause" shall mean:
(i) fraud, embezzlement or gross insubordination on the
part of the Optionee;
(ii) conviction or the entry of a plea of nolo contendere
by the Optionee for any felony or indictable offence;
(iii) a material breach of, or the willful failure or
refusal by the Optionee to perform and discharge, his
duties, responsibilities or obligations under any
agreement with the Corporation or any of its
subsidiaries or affiliates that is related to the
Optionee's employment with the Corporation (other
than by reason of disability or death) that is not
corrected with thirty (30) days immediately following
written notice to the Optionee by the Corporation,
such notice to state with specificity the nature of
the breach, failure or refusal; provided that it such
breach, failure or refusal cannot reasonably be
corrected within thirty (30) days of written notice
thereof, correction shall be commenced by the
Optionee within such thirty (30) day period and
completed within a reasonable period thereafter; or
(iv) any act of willful misconduct by the Optionee with
(A) is intended to result in substantial personal
enrichment of the Optionee at the expense of the
Corporation or any of its subsidiaries or affiliates,
or (B) has a material adverse impact on the business
or reputation of the Corporation or any of its
subsidiaries or affiliates (such determination to be
made by the Board in its reasonable judgment).
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(h) Notwithstanding the dates prescribed for vesting set out in
subsection 2(a) through (f) above, all Optioned Shares not
already vested shall vest immediately upon filing of an IND or
equivalent.
(3) EXERCISE OF OPTION. The Option with respect to vested Optioned Shares
shall be exercisable prior to the end of the Term.
(4) TERM.
(a) Subject to Subsection 4(b) below, the Option shall be
exercisable until five (5) years from the date the Option is
granted (the "Term"). At the end of the Term, all vested or
unvested Options granted hereunder shall expire and shall no
longer be exercisable.
(b)
(i) If the Optionee ceases to be an employee of the
Corporation by reason of his death or voluntary
resignation:
(A) Any vested Options shall be exercisable by
the Optionee or his estate, as the case may
be, until the first (1st) anniversary of the
date of the Optionee's death or voluntary
resignation.
(B) The vesting of Options held by the Optionee
automatically shall cease on the date of the
Optionee's death or voluntary resignation.
(ii) If the Optionee is terminated for Cause, any vested
Options held by the Optionee shall be exercisable by
the Optionee for a period of three (3) months from
termination; provided however, if the Optionee is
dismissed for Cause and the Corporation achieves one
or more Milestones in the three (3) month period
subsequent to his dismissal, the Optionee shall be
entitled to exercise the Optioned Shares relating to
such Milestone(s) for a further period of thirty (30)
days from the date in which the Optionee is informed
that such Milestone(s) was achieved.
(iii) If the Optionee is terminated otherwise than for
Cause, any vested Options held by the Optionee shall
be exercisable by the Optionee for a period of three
(3) months from termination.
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5. MANNER OF EXERCISE OF OPTION. During the Term, the Optionee, subject to
the provisions of this Agreement, may exercise the Option to purchase
on a cumulative basis, to the extent hereinafter provided, all or any
part of the number of Shares subject to the Option which have vested in
accordance with Section 2 until the total number of Optioned Shares
subject to the Option stated in Section 1 has been purchased; provided,
however, that the Option may only be exercised (in each case to the
nearest full Optioned Share) during the Term and in units of 10,000
Optioned Shares or such fewer number of Optioned Shares as may remain
subject to this Option.
6. NOTICE OF EXERCISE OF OPTION. This Option shall be exercised upon
providing notice in writing to the Corporation addressed to Corporation
at such place as the Corporation's executive office may then be located
(the "Notice"), which Notice shall indicate the number of Optioned
Shares (which have vested) for which the Option is being exercised, and
which Notice shall be accompanied by payment in full to the Corporation
of the Option Price for such Optioned Shares in cash or by certified
cheque.
7. RIGHT OF A SHAREHOLDER. After receipt of (i) a Notice, and (ii) payment
in full of the Option Price for the Optioned Shares for which the
Option is being exercised, the Corporation shall, within five (5)
business days, take all actions necessary to issue such Optioned Shares
to the Optionee and to prepare and deliver share certificates
representing such Optioned Shares so issued and register such Optioned
Shares in the name of the Optionee. The Optionee shall have no right as
a shareholder with respect to such Optioned Shares until the issuance
of such share certificates, and no adjustment shall be made for
dividends or other rights for which the record date is prior to the
time such share certificates are issued. The Corporation shall deliver
share certificates in respect of such Optioned Shares within five (5)
business days after receipt of items (i) and (ii) above. The issuance
of the Optioned Shares is conditional upon the Optionee entering into
an agreement with the other shareholders of the Corporation agreeing to
be bound by the provisions of the Amended and Restated Unanimous
Shareholders Agreement dated January 15, 2001 among the Corporation and
its shareholders in respect of the Optioned Shares.
8. TRANSFER OF OPTION. The Option granted pursuant to this Agreement shall
not be assignable or transferable by the Optionee, except to members of
the Optionee's immediate family provided that the Optionee continues to
be bound by the provisions of this Agreement.
9. ADJUSTMENT. In the event that prior to the exercise of the Option,
there is any change in the number of outstanding common shares of the
Corporation as a result of (i) the consolidation, merger or
amalgamation of the Corporation with or into another body corporate;
(ii) the conversion, exchange, redesignation, reclassification,
consolidation or subdivision of the common shares; or (iii) any other
capital reorganization of the Corporation whether by reorganization,
arrangement, stock dividend, transfer, sale, continuance or otherwise,
then the number of the Optioned Shares subject to the Option and the
Option Price thereof shall be adjusted appropriately.
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10. NECESSARY APPROVALS. The obligation of the Corporation to sell and
deliver the Optioned Shares on the exercise of the Option is subject to
the approval of any governmental authority or stock exchanges on which
the shares in the capital of the Corporation are listed for trading
which may be required in connection with the authorization, issuance or
sale of the Optioned Shares by the Corporation. If any of the Optioned
Shares cannot be issued to any Optionee after the exercise of the
Option therefor for any reason including, without limitation, the
failure to obtain such approval, then the obligation of the Corporation
to issue such Optioned Shares shall terminate and any Option Price paid
to the Corporation shall be returned to the Optionee.
11. CHANGES TO MILESTONES OR SCIENTIFIC PLATFORMS. The parties to this
Agreement recognize, that it is conceivable that the Milestones
described in this Agreement may have to be altered or adjusted, from
time to time, based on the actual results of the scientific research or
corporate activities conducted by the Corporation or as new approaches
to scientific research evolve. The parties to this Agreement agree that
any new approaches and changes in direction of the Corporation's
Scientific Platforms and Corporate Target, must be approved by the
Board of Directors.
In the event one or more new Milestones or one of the existing
Scientific Platforms or Corporate Target should be altered or
discontinued by the Corporation, the parties further acknowledge that
the Board of Directors of the Corporation shall have the power and
discretion to vest, substitute or cancel any or all of the options
allocated to existing Milestones.
12. CURRENCY. All monetary amounts in this Agreement refer to lawful money
of the United States of America, unless specified.
13 GOVERNING LAW. This Agreement and the Option shall be governed by and
interpreted and enforced in accordance with the laws of the State of
Florida and the federal laws of the United States of America applicable
therein.
14. ENUREMENT. This Agreement shall enure to the befit of and be binding
upon the parties hereto and their respective heirs, executors,
successors and permitted assigns.
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IN WITNESS WHEREOF the parties have caused this option agreement to be
executed by their respective duly authorized officers.
B. TWELVE, INC.
Per:
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Witness: Xxxx-Xxx Xxxxxx
By Signing, Xx. Xxxxxx acknowledges that he understands
the contents of this Agreement and that he has been given
the opportunity to obtain independent legal advice and has
either done so or has chosen not to obtain such advice.
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