EXECUTION COPY
TERMINATION AGREEMENT
ELAN CORPORATION, PLC
ELAN INTERNATIONAL SERVICES, LTD.
ORASOMAL TECHNOLOGIES, INC.
DOR BIOPHARMA, INC.
AND
INNOVACCINES CORPORATION
INDEX
--------------------------------------------------------------------------------
CLAUSE HEADING PAGE
--------------------------------------------------------------------------------
1 DEFINITIONS 5
2 TERMINATION OF THE NEWCO AGREEMENTS 7
3 REPRESENTATIONS, WARRANTIES, CONFIRMATIONS
AND INDEMNITIES 9
4 INTELLECTUAL PROPERTY 13
5 RIGHTS RELATED TO SECURITIES 14
6 SALE OF SHARES AND COMPLETION
7 CONFIDENTIALITY 15
8 WAIVER OF ACCRUED RIGHTS/MUTUAL RELEASES 18
9 GENERAL 19
--------------------------------------------------------------------------------
2
THIS TERMINATION AGREEMENT made this 12th day of December, 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 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) DOR BIOPHARMA, INC., a Delaware corporation formerly known as Endorex
Corporation, having its principal place of business at 00000 Xxxxxxx Xxxxx,
Xxxx Xxxxxxx, Xxxxxxxx 00000, Xxxxxx Xxxxxx of America ("DOR");
(4) ORASOMAL TECHNOLOGIES, INC., a Delaware corporation having its principal
place of business at 00000 Xxxxxxx Xxxxx, Xxxx Xxxxxxx, Xxxxxxxx 00000,
Xxxxxx Xxxxxx of America; and
(5) INNOVACCINES CORPORATION, a Delaware corporation having its principal place
of business at 00000 Xxxxxxx Xxxxx, Xxxx Xxxxxxx, Xxxxxxxx 00000 Xxxxxx
Xxxxxx of America ("Newco").
RECITALS:
A. The Parties entered into various agreements whereby Elan Corp, EIS,
Orasomal, Newco and DOR established the joint venture company, Newco, and
Elan Corp, pursuant to the Elan License Agreement (as defined below), and
JVP, pursuant to the JVP License Agreement (as defined below), licensed
certain intellectual property to Newco for a specified field of use.
Specifically:
(i) Elan Corp, EIS, DOR, Orasomal and Newco entered into a Subscription,
Joint Development and Operating Agreement dated 21 January 1998, as
amended on 12 May 1999, 5 January 2000 and 6 January 2001 (as so
amended, the "JDOA");
(ii) Elan Corp and Newco entered into a License Agreement dated 21 January
1998, as amended on 12 May 1999, 5 January 2000 and 6 March 2001 (as
so amended, the "Elan License Agreement");
(iii) JVP and Newco entered into a License Agreement dated 21 January 1998,
as amended on 5 January 2000 and 6 March 2001 (as so amended, the "JVP
License Agreement");
3
(iv) EIS, JVP and Newco entered into a Registration Rights Agreement with
respect to the capital stock of Newco, dated as of 21 January 1998
(the "Newco Registration Rights Agreement");
(v) EIS, JVP and Newco entered into a Subscription and Stockholders
Agreement, dated as of 21 January 1998 (the "Newco Subscription
Agreement"); and
The JDOA, Elan License Agreement, JVP License Agreement, Newco Registration
Rights Agreement, Newco Subscription Agreement, and that certain Newco
Management Committee Resolution, dated January 24, 2002, with respect to
the SRI License Agreement and related matters referred to therein, are
together defined in this Agreement as the "Newco Agreements".
B. 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 21
January 1998 (the "Securities Purchase Agreement");
(ii) EIS and JVP entered into a Registration Rights Agreement with respect
to the capital stock of JVP dated 21 January 1998 (the "JVP
Registration Rights Agreement");
(iii) JVP executed and delivered to EIS a Warrant, dated as of 21 January
1998, to purchase 230,770 shares of Common Stock, par value US$.001
per share, of JVP (the "Warrant").
C. The Parties also entered into agreements whereby the Parties agreed to
certain matters related to Newco and also to a joint venture, Endorex
Newco, Ltd. ("Endorex"), established by Elan Corp, EIS and DOR.
Specifically,
(i) Elan Corp, EIS, Elan Pharmaceutical Investments, Ltd. and JVP entered
into an agreement in principle dated June 29, 2002, as subsequently
extended through November 30, 2002 (as so extended, the "Agreement in
Principle"), a copy of which is attached hereto as Exhibit 1; and
(ii) DOR executed and delivered to Elan Pharma International Limited a
promissory note, dated June 29, 2002, in the original principal amount
of $579,742 (the "DOR Note") in settlement of amounts owed to Elan by
Newco under the JDOA and amounts owed to Elan by Endorex.
4
D. The Parties wish to (i) terminate in full the Newco Agreements as set forth
below, and (ii) set forth their agreement in relation to other matters
including, inter alia, the transfer of shares by EIS to JVP, and (iii)
amend certain agreements as set forth below in relation to matters related
to security holdings in 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:
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.
1. DEFINITIONS
"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, 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.
"Balance Sheet" shall mean the unaudited balance sheet of Newco made up to
the Balance Sheet Date, as set forth in Schedule 1.
"Balance Sheet Date" shall mean September 10, 2002.
"DOR Shares" shall have the meaning set forth in Clause 6.1.2 hereof.
"Effective Date" shall mean the date of this Agreement.
"Elan" shall mean Elan Corp and its Affiliates.
"Elan Improvements" shall mean improvements to the Elan Patents (including
without limitation, the Elan Program Patents) and/or the Elan Know-How,
developed (i) by Elan outside the Research and Development Program, (ii) by
Elan, JVP or Newco or by a third party (under contract with Newco, Elan or
JVP) pursuant to the Research and Development Program, 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 Research and Development Program.
"Elan Intellectual Property" shall mean the Elan Patents, the Elan Know-How
and the Elan Improvements.
5
"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 Program Patents" shall have the meaning set forth in the JDOA.
"Elan Trademark" shall have the meaning set forth in the Elan License
Agreement.
"Force Majeure" shall mean causes beyond a Party's reasonable control,
including, without limitation, acts of God, fires, strikes, acts of war, or
intervention of a governmental authority.
"JVP" shall mean DOR and its Affiliates, including without limitation,
Orasomal Technologies, Inc.
"JVP Improvements" shall mean improvements to the JVP Patents (including
without limitation, the JVP Program Patents) and/or the JVP Know-How,
developed (i) by JVP outside the Research and Development Program, (ii) by
JVP, Elan or Newco or by a third party (under contract with Newco, Elan or
JVP) pursuant to the Research and Development Program, 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 Research and Development Program.
"JVP Intellectual Property" shall mean the JVP Patents, the JVP Know-How
and the JVP Improvements.
"JVP Know-How" shall mean "Orasomal Know-How" as such term is defined in
the JVP License Agreement.
"JVP Patents" shall mean "Orasomal Patents" as such term is defined in the
JVP License Agreement.
"JVP Program Patents" shall mean "Orasomal Program Patents" as such term is
defined in the JVP License Agreement.
"JVP Trademarks" shall mean "Orasomal Trademarks" as such term is defined
in the JVP License Agreement.
6
"Newco Intellectual Property" shall mean all rights to patents, know-how
and other intellectual property arising out of the conduct of the Research
and Development Program by any person, including any technology acquired by
Newco from a third party that does not constitute Elan Intellectual
Property or JVP Intellectual Property.
For the avoidance of doubt, any preclinical and clinical data and/or
toxicity, stability and pharmacological data generated pursuant to the
Research and Development Program shall constitute Newco Intellectual
Property.
"Newco IP Product" shall mean a product that utilizes, is based upon, or is
derived, directly or indirectly, from the Newco Intellectual Property.
"Newco Trademark" shall mean US Trademark Application Serial No. 76/118,926
and Community Trademark Application Serial No. 01534726 in classes 5, 10
and 42.
"Party" shall mean Elan Corp, EIS, JVP or Newco, as the case may be, and
"Parties" shall mean all such parties together.
"Product" shall have the meaning set forth in the JDOA.
"Research and Development Program" shall have the meaning set forth in the
JDOA.
"SRI License Agreement" shall mean that certain license agreement among
Vaxcel, Inc., Southern Research Institute and the UAB Research Foundation,
dated August 14, 1998, and assigned to Newco pursuant to an Assignment and
Assumption Agreement between Newco and Vaxcel, Inc. dated April 1, 1999, as
amended April 6, 1999.
"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.
7
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, holding office with Newco
immediately prior to the Effective Date shall resign;
2.2.3 the nominees on the Management Committee of the EIS Director
shall be deemed to have been removed from the Management
Committee by the EIS Director immediately prior to the
dissolution of the Management Committee;
2.2.4 the nominees on the R&D Committee of the nominees of the
Management Committee, shall be deemed to have been removed from
the R&D Committee by the nominees on the Management Committee of
the EIS Director 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, the Elan
Improvements and the Elan Trademarks 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, the
Elan Improvements and/or the Elan Trademarks 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, JVP Know-How, the JVP
Improvements and/or the JVP Trademarks and/or any other patents,
know-how or any other intellectual property rights whatsoever of
JVP, nor any rights to the intellectual property under the SRI
License Agreement;
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;
8
2.2.9 the Parties shall terminate or cause to be terminated any and
all technical services and assistance being conducted in
connection with the Newco Agreements;
2.2.10 for the avoidance of doubt, 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 Research and Development Program, the achievement
of any objectives set forth therein or otherwise; and
2.2.12 Costs and expenses incurred by Newco through September 10, 2002
and not yet reimbursed to Newco in the amount of $2,638.30 shall
be reimbursed by Elan and paid in full to Newco on the Effective
Date.
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.
Elan also acknowledges receipt of $524,500 paid by DOR to Elan
Pharmaceutical Investments, Ltd. On June 29, 2002, which payment was
made pursuant to paragraph 1(b) of the Agreement in Principle.
For the avoidance of doubt, the Parties acknowledge that nothing shall
affect any rights of Elan under the DOR Note.
3. REPRESENTATIONS, WARRANTIES, CONFIRMATIONS AND INDEMNITIES
3.1 Sub-licenses:
Newco represents and warrants to the other Parties that it has not
granted any sub-licences or any other rights of any nature to any
third parties pursuant to the Elan License Agreement or the JVP
License Agreement.
3.2 JVP Shares:
9
JVP confirms to the other Parties that it is the legal and beneficial
owner of 80,100 Newco Voting Common Shares (as defined in the
Securities Purchase Agreement).
3.3 EIS Shares:
EIS confirms to the other Parties that it is the legal and beneficial
owner of 19,900 Newco Voting Common Shares (the "EIS Shares").
3.4 Balance Sheet:
3.4.1 JVP represents and warrants to the other Parties that 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.
3.4.2 JVP represents and warrants to the other Parties that there are
no creditors of Newco except as described in the Balance Sheet.
3.5 Third Party Agreements / Orders / Claims.
3.5.1 Each of the Parties confirms to the other Parties hereto 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 Newco is
not a party to, or bound by, or is a third party beneficiary of
any agreement with any third party, except for the Newco
Agreements, other than as set out in Schedule 3.5.2 ("Newco Third
Party Agreements").
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 and/or
damages arising from such Newco Third Party Agreements.
3.5.3 Each of the Parties confirms to the other Parties hereto 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 confirms to the other Parties that, prior to and
as of the Effective Date, no regulatory applications have been filed
by Newco or by
10
any Party with any government authority in any part of the world for
any product, including without limitation, A Newco IP Product, the
Newco Intellectual Property or otherwise howsoever in relation to the
Research and Development Program.
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'S 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
3.8 Indemnity by JVP and Newco:
11
3.8.1 JVP and Newco, jointly and severally, hereby agree to indemnify
and hold harmless Elan Corp and 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) incurred or
sustained by such Indemnified Party arising in relation to any
claim or proceedings made against Newco or 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 and Newco, jointly and severally,
shall indemnify and hold harmless Elan against any claims,
losses, liabilities or damages and expenses (including reasonable
attorneys' fees and expenses) which may arise in relation to any
claim or proceedings made against Elan Corp or any of its
Affiliates alleging infringement or other unauthorized use of the
proprietary rights of a third party arising from the manufacture,
importation, use, offer for sale, sale or other commercialization
of the Newco Intellectual Property, Newco Trademark and/or Newco
IP Product or any technology related thereto.
3.9 Organization and authority:
Each of the Parties represents and warrants to the other Parties that
it 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 enter into this Agreement and to
carry out the transactions contemplated hereby.
3.10 Approvals:
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 otherwise) is required in connection with the
execution, delivery or performance of this Agreement by such Party, or
if any such
12
Approval or Filing is so required, that same has been obtained or
filed prior to the Effective Date.
3.11 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,
and no other person has a direct or indirect interest, beneficial or
otherwise in the EIS Shares, (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.
3.12 JVP Representations - DOR Shares:
JVP represents and warrants to Elan that (a) the DOR Shares being
issued to EIS pursuant to Clause 6 hereof have been duly and validly
reserved for issuance and, upon issuance, will be validly issued,
fully paid and nonassessable, and will be free of any liens or
encumbrances, other than (i) liens or encumbrances created by EIS and
(ii) restrictions on transfer under state and/or federal securities
laws.
3.13 Trademark Applications.
JVP represents and warrants to the other Parties that JVP and Newco
have not filed for any trademark protection or have 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 Representation 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
4. INTELLECTUAL PROPERTY
13
4.1 Ownership:
On and following the Effective Date:
4.1.2 For the avoidance of doubt, the Elan Patents, the Elan Know-How,
the Elan Improvements and the Elan Trademarks shall remain the
sole and exclusive property of Elan.
A full list of the Elan Improvements developed pursuant to the
Research and Development Program, or otherwise pursuant to the
Newco Agreements is set forth in Schedule 4.1.2.
4.1.3 For the avoidance of doubt, the JVP Patents, the JVP Know-How,
the JVP Improvements and the JVP Trademarks shall remain the sole
and exclusive property of JVP.
A full list of the JVP Improvements developed pursuant to the
Research and Development Program, or otherwise pursuant to the
Newco Agreements is set forth in Schedule 4.1.3.
4.1.4 All Newco Intellectual Property shall be disposed of as follows:
(1) The Newco Intellectual Property set forth on Schedule
4.1.3(1) shall be transferred and assigned to Elan and
neither JVP nor Newco shall have any further rights in or to
such Newco Intellectual Property.
(2) The Newco Intellectual Property set forth on Schedule
4.1.3(2) shall remain the sole and exclusive property of
Newco and Elan shall not have any further rights in or to
such Newco Intellectual Property.
The Parties hereby confirm that Schedules 4.1.3(1) and 4.1.3(2)
together constitute a full list of all Newco Intellectual
Property whether developed pursuant to the Research and
Development Program or otherwise pursuant to the Newco Agreements
and/or licensed to Newco.
5. RIGHTS RELATED TO SECURITIES
5.1 Nothing contained herein shall constitute a waiver of any right of EIS
or any its successors and assigns with respect to their respective
ownership of securities in JVP under any agreements of any kind in
existence with JVP with respect thereto, which agreements shall remain
unmodified and in full force and effect, except as set forth in
Schedule 5.1 hereof. .
14
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; and
6.1.2 the EIS Shares will be sold by EIS to JVP for a total
consideration of Five Hundred Thousand (500,000) shares of common
stock, par value $.001 per share, of DOR (the "DOR Shares").
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 DOR of a stock transfer form in respect
of the EIS Shares duly executed by EIS in favor of DOR or as it
may direct together with the related share certificates;
6.2.2 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));
6.2.3 the resignation of the EIS Director on Newco's Board of
Directors and any alternate director of the EIS Director;
6.2.4 the modification, as appropriate, by board resolutions of Newco
of matters such as the removal of EIS as book keeper for Newco,
the removal of EIS representatives as authorized signatories of
Newco's bank account, the resignation of the Company Secretary
and any other related matters whatsoever; and
6.2.5 any other steps required by this Agreement.
6.3 On the Effective Date, DOR shall deliver to EIS duly executed share
certificate(s) in respect of the DOR Shares, duly executed by DOR.
7. CONFIDENTIALITY
7.1 Confidentiality:
15
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, 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 another 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 another Party.
Each Party shall promptly, upon request of another Party, return
all documents and any copies thereof containing Proprietary
Information belonging to, or disclosed by, such 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.
16
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;
(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 another Party hereto, 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 seven (7) years following the Effective Date of this
Agreement.
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
another 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 a 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:
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 all other Parties.
The terms of any such announcement shall be agreed in good faith
by the Parties.
17
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, with respect to which Elan will be given the
opportunity to request confidential treatment;
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 Parties or Parties prompt notice
of such fact to enable the other Party or Parties 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 9.2.1(2); and EIS (and/or any Affiliate) shall also
be so entitled in connection with Clause 9.2.2 provided that the
relevant third party purchaser or assignee has entered into a
confidentiality agreement on terms no less protective than the
terms of this Clause 7.
8. WAIVER OF ACCRUED RIGHTS/MUTUAL RELEASES
8.1 With effect from the Effective Date, each Party and each of its
Affiliates ("Releasor"):
18
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) or in respect of the DOR Shares or
the DOR Note, which shall remain unmodified and in full force and
effect.
9. GENERAL
9.1 Governing law and jurisdiction:
9.1.1 This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to
conflicts of law principles under the laws of the State of New
York.
9.1.2 For the purposes of this Agreement, the Parties submit to the
nonexclusive jurisdiction of the State and Federal Courts of New
York.
9.2 Assignment:
9.2.1 Subject to Clause 9.2.2 and Clause 9.2.3, 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
19
(2) may assign its rights and obligations to a successor
(whether by merger, consolidation, reorganization 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.
9.2.2 For the avoidance of doubt, nothing in this Clause 10.2 shall
affect the provisions governing assignment of securities in
Schedule 5.1 hereof.
9.3 Notices:
9.3.1 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:
If to JVP at:
00000 Xxxxxxx Xxxxx
Xxxx Xxxxxxx, Xxxxxxxx 00000
Attention: President, Urgent
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to Elan and/or EIS 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.
20
9.3.2 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.
9.4 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.
9.5 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:
9.5.1 such provision will be deemed amended to conform to applicable
laws so as to be valid and enforceable; or
9.5.2 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.
9.6 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.
9.7 Successors:
This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and permitted assigns.
9.8 Amendments:
21
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.
9.9 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.
9.10 Costs:
Each Party shall bear its own costs and expenses in connection with
the transactions contemplated by this Agreement.
9.11 Force Majeure:
No 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; provided, however,
that, no Party to this Agreement shall be excused for a failure or
delay in the performance of any of its payment obligations hereunder,
even if such failure or delay results from Force Majeure.
9.12 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 the other Party. Neither 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, the other
Party, or to bind the other Party in any respect whatsoever.
9.13 Entire agreement:
9.13.1 This Agreement sets forth all of the agreements and
understandings between the Parties with respect to the subject
matter hereof. The Parties acknowledge that as of the Effective
Date the Agreement on Principle will be amended and restated to
reflect the termination of the Newco Agreements under this
Agreement and the Parties agree that there are no agreements or
understandings with respect to the subject matter hereof, either
oral
22
or written, between the Parties other than as set forth in this
Agreement.
9.13.2 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.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE TO FOLLOW
23
IN WITNESS WHEREOF the Parties have executed this Agreement.
SIGNED
BY: /s/ Xxxxx Xxxxx Buryj
---------------------
for and on behalf of
Elan Corporation, plc
SIGNED
BY: /s/ Xxxxx Xxxxxx
----------------------------
for and on behalf of
Elan International Services, Ltd.
SIGNED
BY: /s/ Xxxxx X. Xxxxxx
----------------------------
for and on behalf of
Innovaccines Corporation
SIGNED
BY: /s/ Xxxxx X. Xxxxxx
----------------------------
for and on behalf of
Orasomal Technologies, Inc.
SIGNED
BY: /s/ Xxxxx X. Xxxxxx
----------------------------
for and on behalf of
DOR Biopharma, Inc.
24
SCHEDULE 1
BALANCE SHEET
INNOVACCINES CORPORATION
Sept 10 2002
---------------
ASSETS 0.00
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Accounts Payable 141,582.91
Accrued Expenses 90,109.59
---------------
Total Laibilites 231,692.50
---------------
Total Current Liabilities 231,692.50
---------------
Total Liabilities 231,692.50
Equity
Additional Paid-In Capital 9,999,900.00
Common Stock 100.00
Retained Earnings ############
---------------
Total Equity (231,692.50)
---------------
TOTAL LIABILITIES & EQUITY 0.00
===============
Elan Receivable
1/2 Payables 2,638.80
Total Elan Receivable 2,638.80
================
Accrued Expenses
Total Due SRI 12/31/02 130,000.00
Days from 1/1/02 to 9/10/02 253.00
Accrued Portion of Payment 90,109.59
================
All amounts owed by DOR
25
Accounts Payable
Vendor Invoice # Total Billed Elan Portion
--------------------------------------------------------------------------------------------
Needle & Xxxxxxxxx 58657 18,665.89 9,332.95 Paid by Elan 12/9/02
Needle & Xxxxxxxxx 58658 478.25 239.13 Paid by Elan 12/9/02
Needle & Xxxxxxxxx 58659 11,503.17 5,751.59 Paid by Elan 12/9/02
Needle & Xxxxxxxxx 58660 127.70 63.85 Paid by Elan 12/9/02
Needle & Xxxxxxxxx 59732 18,303.50 9,151.75 Paid by Elan 12/9/02
Needle & Xxxxxxxxx 59733 319.94 159.97 Paid by Elan 12/9/02
Needle & Xxxxxxxxx 59734 460.00 230.00 Paid by Elan 12/9/02
Needle & Xxxxxxxxx 59735 22,629.76 11,314.88 Paid by Elan 12/9/02
Needle & Xxxxxxxxx 59736 5,024.50 2,512.25 Paid by Elan 12/9/02
Needle & Xxxxxxxxx 59737 (948.60) (474.30) Paid by Elan 12/9/02
Needle & Xxxxxxxxx 62785 437.85 218.93 Paid by Elan 12/9/02
Needle & Xxxxxxxxx 62786 949.89 474.95 Paid by Elan 12/9/02
Needle & Xxxxxxxxx 62787 401.40 200.70 Paid by Elan 12/9/02
Needle & Xxxxxxxxx 62788 1,530.16 765.08 Paid by Elan 12/9/02
Needle & Xxxxxxxxx 62789 1,883.25 941.63 Paid by Elan 12/9/02
Needle & Xxxxxxxxx 62790 740.08 370.04 Paid by Elan 12/9/02
Needle & Xxxxxxxxx 63913 28,003.66 14,001.83 Paid by Elan 12/9/02
Needle & Xxxxxxxxx 63914 3,410.00 1,705.00 Paid by Elan 12/9/02
Needle & Xxxxxxxxx 63915 292.00 146.00 Paid by Elan 12/9/02
Needle & Xxxxxxxxx 63916 344.31 172.16 Paid by Elan 12/9/02
Needle & Xxxxxxxxx 66133 111.00 55.50
Needle & Xxxxxxxxx 66135 2,166.60 1,083.30
Xxx Xxxx Aug 02 8,500.00 4,250.00 Paid by Elan 12/9/02
Xxx Xxxx July 02 7,648.60 3,824.30 Paid by Elan 12/9/02
Xxx Xxxx June 02 5,600.00 2,800.00 Paid by Elan 12/9/02
Xxx Xxxx Sept 02 3,000.00 1,500.00
-----------
Total 141,582.91
===========
26
SCHEDULE 3.5.2
NEWCO THIRD PARTY AGREEMENTS
[ATTACHED]
27
SCHEDULE 4.1.2
ELAN IMPROVEMENTS
Vaccine Particles derived from:
BEODAS(TM)/Pharmazome(TM) technology
Process technology
Know-how in use of Caco-2 co-culture for screening formulations and for gene
expression
Gastrointestinal targeting ligands and methods of isolating:
UEA1 peptidomimetic
UEA1 small organics
205 peptide and derivatives
207 peptide and derivatives
Phage-derived peptides
Phage derived peptidomimetics
Ligands for HPT1 and hPepT1 receptors
In Vivo Phage library screening including GIT screening
Avidin surface modification/biotinylated peptides on latex
Maynooth agreement (vaccine testing and evaluation with Kingston Xxxxx);
expertise in pertussis, bacterial challenge models and immunology. Know-how in
vaccines and immunology.
Other Elan technology related to the field: e.g. Quadrant, liposome technology
from TLC
28
Schedule 4.1.3
JVP IMPROVEMENTS
Orasomes (polymerized liposomes)
Orasomes with surface bound UEA-1 or targeting lectin and other ligands depicted
and described in issued JVP Patents
Orasomes with adjuvants (MPL, CT, LT) and such Orasomes with UEA-1 targeting and
targeting with other ligands depicted in issued JVP Patents
OPS (linker technology for surface modification) developed outside the Research
and Development Program and other uses of the OPS technology.
29
SCHEDULE 4.1.3(1)
NEWCO INTELLECTUAL PROPERTY
TRANSFERRED/ASSIGNED TO ELAN
Targeting ligands described in Schedule 4.1.2 and Elan's issued patents with
non-polymerised liposomes as described above for mucosal vaccines (but not to
vaccine stage), i.e., the final formulation composition
Avidin/biotin scaffold system on particulates.
Use of biotinylated peptides bound to surface localized avidin.
Non-Orasomal particulates in the field of mucosal vaccines (specifically
exemplified by alum particles and microparticulates described in Quadrant
technology.
Non-Orasomal particulates including adjuvants (specifically exemplified by use
alum particles for oral vaccination)
30
SCHEDULE 4.1.3(2)
NEWCO INTELLECTUAL PROPERTY
REMAINING IN NEWCO
Polymerized liposomes consisting of DODPC or DPPC and combinations with
cholesterol specifically in the field of mucosal vaccines.
With and without adjuvants (CTB, LT, CT, MPL) and targeting for mucosal vaccines
for use solely with UEA-1 and other lectins and ligands described in issued JVP
patents.
UEA-1 targeting ligands and other ligands described in issued JVP patents with
Orasomes for mucosal vaccines (but not to vaccine stage), i.e., the final
formulation composition, specifically exclusive of Elan ligands described in
Schedule 4.1.2 and Elan's issued patents.
Use of the OPS technology for scaffold development with Orasomes- in vitro and
in vivo
Orasomes (as described above) including adjuvants (exemplified by use of MPL
with Orasomes as described above)
o Antigen/Orasome with co-entrapped lipophilic adjuvant (exemplified as
above)
o With admixed adjuvant toxins (exemplified by the use of CT)
o Exemplified by influenza and tetanus vaccines for oral and intranasal
administration
Non-Orasomal particulates including adjuvants (exemplified by use of MPL with
PLG particles)
All rights granted to Newco pursuant to the SRI License Agreement.
31
EXECUTION COPY
SCHEDULE 5.1
RIGHTS RELATED TO THE SECURITIES
Amendments to the Finance Documents
1. Transfer Restrictions
The following provisions are hereby amended as follows, effective as of the
Effective Date:
Section 9 ("Transfer of Registration Rights") of the JVP Registration Rights
Agreement is hereby amended and restated in its entirety to read as follows:
"9. Transfer of Registration Rights. The rights granted to any Person
under this Agreement may be assigned only to (i) a transferee or assignee
who is an Affiliate of such Person, without limitation on the number of
such assignments, or (ii) on up to four (4) separate occasions, a
transferee or assignee who is not an Affiliate of such Person, in each case
in connection with any transfer or assignment of Registrable Securities by
a Holder, provided, that: (a) such transfer may otherwise be effected in
accordance with applicable securities laws, (b) if not already a party
thereto, the assignee or transferee agrees in writing prior to such
transfer to be bound by the provisions of this Agreement applicable to the
transferor and (c) such transferee shall own Registrable Securities
representing at least 1,000,000 shares of Common Stock, subject to the
Anti-dilution Adjustments."
Except as set forth above with respect to Section 9 of the JVP Registration
Rights Agreement, any and all other provisions, legends or requirements for
legends in any way, directly or indirectly, limiting or conditioning the free
transfer, alienation or assignment of the securities of JVP and associated
rights issued by JVP to EIS or its subsidiaries or Affiliates are hereby deleted
in their entirety and are of no further force and effect (other than any
holdback agreements contemplated by the JVP Registration Rights Agreement). The
Parties hereby agree that the transfer of such securities of JVP are thus no
longer subject to contractual restrictions on transfer of any kind (other than
any holdback agreements contemplated by the JVP Registration Rights Agreement
and except as set forth above with respect to Section 9 of the JVP Registration
Rights Agreement). The Parties recognize that such securities remain subject to
restrictions imposed under applicable securities laws. JVP will use commercially
reasonable efforts to inform its transfer agent, and co-operate with the holder
of such securities to confirm with prospective third party transferees from time
to time, of the elimination of such restrictions and, if the certificate
representing such securities is legended to reflect a contractual restriction,
JVP shall, if requested by the holder of such securities, shall re-issue such
securities without such restrictive legend.
2. BOARD SEAT
Section 4(b) of the Securities Purchase Agreement ("Board of Directors") is
hereby amended and restated in its entirety to read as follows, effective as of
the Effective Date:
"(b) Board of Directors. For as long as EIS and/or its affiliates or
subsidiaries (collectively, for purposes of this Section 4(b), "EIS") shall
collectively own at least 10% of the Common Stock, on a fully diluted basis
(i.e., after giving effect to the conversion, exchange or exercise of all
Common Stock equivalents or convertible, exchangeable or exercisable
securities), EIS shall be entitled to nominate a director (the "EIS
Director"), and the Company shall use its best efforts to cause the EIS
Director to be elected to the Company's board of directors, including by
including the EIS Director in the management slate of directors at each
meeting of stockholders at which an election of directors occurs.
At any time that EIS does not have its own designee sitting on the
Company's board of directors, if EIS so requests, EIS shall be entitled to
appoint an observer to attend each meeting of the Company's board of
directors. The Company shall send to such observer notice of the time and
place of each such meeting in the same manner and at the same time as such
notice shall be given to its directors. The Company shall also provide to
such observer copies of all notices, reports, minutes and consents at the
time and in the manner as they shall be provided to its directors, except
for information reasonably designated as highly confidential and
proprietary information by the Company's board of directors.
The foregoing rights under this Section 4(b) shall not be assignable
by EIS to a person or entity not affiliated with EIS."
2
