EXHIBIT 2.1
OPTION AGREEMENT
THIS OPTION AGREEMENT (this "Agreement") is entered into as of this 27th
day of January, 1999 (the "Effective Date") between Vaxcel, Inc., a Delaware
corporation having its offices at 000 Xxxxxxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxx 00000
("Vaxcel"), and Innovax Corporation, a Delaware corporation having its offices
at 00000 X. Xxxxxxx Xxxxx, Xxxxx X, Xxxx Xxxxxx, Xxxxxxxx 00000 ("Innovax").
BACKGROUND
Vaxcel has an exclusive worldwide license to oral microsphere technology
owned by Southern Research Institute ("SRI") and the UAB Research Foundation
("UAB") (such technology, the "Oral Microsphere Technology"), and under certain
patents related to the Oral Microsphere Technology (the "Oral Microsphere
Technology Patents") pursuant to a License Agreement dated as of August, 1998
between SRI and Vaxcel (the "License Agreement"). Innovax has received and
reviewed a copy of the License Agreement as provided by Vaxcel. Innovax is a
joint venture between Elan Corporation, plc. and Endorex Corporation. Innovax
desires to review certain confidential information relating to the Oral
Microsphere Technology and the Oral Microsphere Technology Patents for the
purpose of evaluating whether to become a sublicensee thereof, or to take an
assignment of the License Agreement pursuant to an option granted by Vaxcel to
Innovax hereunder. This Agreement documents the terms of the disclosure of such
confidential information and the grant of the option.
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the parties hereto hereby agree as follows:
1. Vaxcel hereby grants to Innovax the access to, and the right to review,
the Confidential Information (as defined below), the Trade Secrets (as defined
below) and the Vaxcel Know-How (as defined below), all as related to the Oral
Microsphere Technology and the Oral Microsphere Technology Patents, for a period
commencing on the Effective Date and expiring on March 22, 1999 (such period the
"Evaluation Period") to determine whether (a) to become a sublicensee of the
Oral Microsphere Technology and the Oral Microsphere Technology Patents for oral
delivery of antigens to humans and animals or (b) to exercise the Option (as
defined below). Nothing in this Section 1 shall be deemed to constitute a
license to practice the claims of the Oral Microsphere Technology Patents.
2. Vaxcel hereby grants to Innovax an option and right, but not the
obligation (the "Option") to enter into an Assignment and Assumption Agreement
with Vaxcel in substantially the form as Exhibit A attached hereto (the
"Assignment Agreement"), pursuant to which (a) Vaxcel shall assign to Innovax
all of its rights under the License Agreement and (b) Innovax shall assume all
of Vaxcel's obligations under the License Agreement that are not attributable to
a breach by Vaxcel of the License Agreement.
3. On the Effective Date, Innovax shall pay to Vaxcel an option fee of
$200,000 (the "Option Fee") payable (i) via wire transfer of immediately
available funds in accordance with written wiring instructions provided by
Vaxcel or (ii) by check sent via overnight delivery to the address set forth in
Section 24. The Option Fee is non-refundable; provided, however that, (i) if
Innovax exercises the Option, the Option Fee shall be credited against the
Exercise Price (as defined below) of the Option,(ii) if Innovax exercises the
Option but written consent from SRI is not obtained during the Evaluation Period
or any mutually agreed extension thereof for Vaxcel to assign the License
Agreement to Innovax, the Option Fee shall be fully refunded to Innovax and
(iii) if the License Agreement is terminated for any reason during the
Evaluation Period or any Extension thereof prior to the exercise of the Option,
the Option Fee shall be fully refunded to Innovax. If Vaxcel and Innovax are
unable to obtain SRI's written consent, if required, to the assignment of the
License Agreement and Vaxcel refunds the Option Fee, neither party shall be
bound by the provisions of this Agreement, except that Innovax shall continue to
be bound by the terms of Sections 10-15 hereof for the periods specified in such
Sections.
4. The initial term of the Option during which it may be exercised by
Innovax shall be the Evaluation Period. At any time prior to the expiration of
the Evaluation Period or any Extension (as defined below) thereof, Innovax may
extend the term of the Option for a period of five (5) days (each period, an
"Extension") by providing to Vaxcel written notice of its intention to do so and
by paying to Vaxcel an extension fee of $10,000 per Extension (each payment of
$10,000 an "Extension Fee" and collectively, the "Extension Fees") payable (i)
via wire transfer of immediately available funds in accordance with Vaxcel's
written wiring instructions or (ii) by check sent via overnight delivery to the
address set forth in Section 24. The maximum number of Extensions that may be
granted under this Section 4 is three (3), for an aggregate of fifteen (15)
days. The Extension Fees paid by Innovax, if any, are in addition to the
Exercise Price of the Option. The Option shall be of no further force or effect
after the expiration of the later of the Evaluation Period or any Extension
thereof for which Vaxcel has received the applicable Extension Fee.
5. The exercise price of the Option shall be $600,000 (the "Exercise
Price"). Innovax may exercise the Option at anytime during the Evaluation
Period and any Extension thereof by providing written notice of its intention to
exercise the Option and by paying to Vaxcel the Exercise Price (reduced by the
amount of the Option Fee), payable (i) via wire transfer of immediately
available funds in accordance with Vaxcel's written wiring instructions or (ii)
by check sent via overnight delivery to the address set forth in Section 24. In
addition, on the exercise date, Innovax shall execute and deliver to Vaxcel an
original counterpart signature page to the Assignment Agreement.
6. Concurrently with receipt by Vaxcel of the Exercise Price and an
original counterpart signature page to the Assignment Agreement executed by
Innovax, Vaxcel
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shall execute and deliver to Innovax an original counterpart signature page to
the Assignment Agreement.
7. If the Option has not been exercised by Innovax before the forty-fifth
(45th) day of the Evaluation Period, Innovax and Vaxcel shall promptly meet to
discuss: (i) the progress of negotiations between Innovax and SRI, (ii) the
progress of Vaxcel in its commercially reasonable efforts to obtain consent from
SRI to the assignment to Innovax of the License Agreement, and (iii) the
likelihood that Innovax will require and be requesting an Extension. If this
meeting takes place outside an approximate 200 mile radius of Atlanta, Georgia,
Innovax will pay the reasonable travel expenses of Vaxcel.
8. At any time prior to the expiration of the Evaluation Period and any
Extension thereof, Vaxcel agrees to cooperate with Innovax and to use
commercially reasonable efforts to (i) assist Innovax with Innovax's negotiation
with SRI regarding certain terms of the License Agreement, (ii) obtain SRI's
written consent to the assignment to Innovax of the License Agreement and (iii)
assist SRI in obtaining the consent of UAB; provided, however, that the failure
to obtain UAB's consent shall not have any impact on the obligations of the
parties hereto. In addition, Vaxcel shall not discuss, negotiate, contract with
or otherwise enter into an arrangement with SRI that will in any way jeopardize
Innovax's negotiations with SRI regarding the Oral Microsphere Technology and
the Oral Microsphere Technology Patents; provided, however, that nothing in this
Section 8 shall prohibit Vaxcel from obtaining SRI's written consent to any
change of control of Vaxcel to be effected by a merger, consolidation, sale of
equity interests, sale of substantially all of Vaxcel's assets (other than any
of Vaxcel's rights under the License Agreement) or otherwise (collectively, a
"Vaxcel Change of Control").
9. During the Evaluation Period and any Extension thereof, Vaxcel agrees
that it will not sublicense, sell, assign, transfer, or otherwise dispose of its
rights under the License Agreement to any third party other than Innovax. For
purposes of this Agreement, any Vaxcel Change of Control shall not constitute a
sublicense, sale, assignment, transfer or other disposition or encumbrance of
any of Vaxcel's rights under the License Agreement; provided that the surviving
entity (if other than Vaxcel) acknowledges in writing its obligations under this
Agreement.
10. (a) All Trade Secrets, Confidential Information and Vaxcel Know-How
and all physical embodiments thereof received by Innovax from Vaxcel during
the term of this Agreement are confidential to and are (and will remain)
the sole and exclusive property of Vaxcel and/or its licensor, SRI.
(b) At all times, both during the term of this Agreement and, if the
Option is not exercised by Innovax, after its expiration, Innovax shall
hold all Trade Secrets and Vaxcel Know-How in confidence, and will not use
(except as needed to exercise the rights granted hereunder), copy or
disclose such Trade Secrets or Vaxcel Know-How, or any physical embodiment
thereof.
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(c) At all times during the term of this Agreement and, if the Option
is not exercised by Innovax, for a period of five (5) years following the
expiration of the Evaluation Period and any Extension thereof, Innovax
shall hold the Confidential Information in confidence, and will not use
(except as needed to exercise the rights granted hereunder), copy or
disclose such Confidential Information, or any physical embodiments
thereof.
(d) If Innovax exercises the Option, Innovax hereby agrees that it
shall comply with the confidentiality provisions set forth in Article IX of
the License Agreement, as such License Agreement is amended or modified by
SRI and Innovax.
11. Trade Secrets, Confidential Information and Vaxcel Know-How shall be
maintained under secure conditions by Innovax, using reasonable security
measures and in any event not less than the same security measures used by
Innovax for protection of its own trade secrets, confidential information and
know-how of a similar kind. Innovax shall not remove, obscure, or deface any
proprietary legend relating to Vaxcel's rights on or from any tangible
embodiment of any Trade Secrets, Confidential Information or Vaxcel Know-How
without Vaxcel's prior written consent.
12. If Innovax is ordered by a court, administrative agency, or other
governmental body of competent jurisdiction to disclose Trade Secrets,
Confidential Information or Vaxcel Know-How, or if it is served with or
otherwise becomes aware of a motion or similar request that such an order be
issued, then Innovax will not be liable to Vaxcel for disclosure of Trade
Secrets, Confidential Information or Vaxcel Know-How required by such order if
Innovax complies with the following requirements: (a) if an already-issued
order calls for immediate disclosures, then Innovax shall immediately move for
or otherwise request a stay of such order to permit Vaxcel to respond; (b)
Innovax shall immediately notify Vaxcel of the motion or order by the most
expeditious possible means; and (c) Innovax shall join or agree to (or at a
minimum shall not oppose) a motion or similar request by Vaxcel for an order
protecting the secrecy of the Trade Secrets, Confidential Information and Vaxcel
Know-How including joining or agreeing to (or non-opposition to) a motion for
leave to intervene by Vaxcel.
13. Innovax shall immediately report to Vaxcel any action by any person of
which Innovax has knowledge of which constitutes a breach of Innovax's
obligations under Sections 10-15 hereof.
14. (a) For purposes of this Agreement, "Trade Secrets" means information
related to the Oral Microsphere Technology or the Oral Microsphere
Technology Patents which: (i) derives economic value, actual or potential,
from not being generally known to or readily ascertainable by other persons
who can
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obtain economic value from its disclosure or use; and (ii) is the subject
of efforts that are reasonably under the circumstances to maintain its
secrecy.
(b) For purposes of this Agreement, "Vaxcel Know-How" means any and
all know-how of SRI for formulating, preparing, developing and
manufacturing a Vaccine (as defined in the License Agreement), whether or
not patentable, which has been disclosed or made available by SRI to Vaxcel
as "SRI Know-How" (as defined in the License Agreement) and which Vaxcel
has disclosed or made available to Innovax pursuant to this Agreement or
any other agreement. Vaxcel will clearly designate and identify Vaxcel
Know-How at the time of disclosure to Innovax.
(c) For purposes of this Agreement, "Confidential Information" means
information which is (i) confidential to the business of Vaxcel; (ii) is
designated and identified as such by Vaxcel; and (iii) is not a Trade
Secret. Confidential Information, Vaxcel Know-How and Trade Secrets do not
include: (i) any information that is at the time of receipt by Innovax or
thereafter becomes part of the public domain other than as a result of the
unauthorized actions of Innovax (through publication or otherwise); (ii)
any information that was independently known to Innovax prior to receipt
thereof from Vaxcel as evidenced by written records of Innovax; (iii) any
information that was disclosed to Innovax by a third party having the right
to disclose such information; (iv) information that is subsequently
developed independently by Innovax without knowledge of or access to the
Confidential Information, Vaxcel Know-How or Trade Secrets.
15. During the Evaluation Period and any Extensions thereof, Vaxcel shall
make available to Innovax the Confidential Information, Trade Secrets and Vaxcel
Know-How for the sole purpose of evaluating whether to enter into a sublicense
or to exercise the Option for the Oral Microsphere Technology and the Oral
Microsphere Technology Patents.
16. Vaxcel represents and warrants to Innovax that:
(a) Vaxcel is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware;
(b) subject to obtaining SRI's written consent, Vaxcel's rights under
the License Agreement are assignable to Innovax;
(c) the License Agreement is currently in full force and effect and
there has been no breach by Vaxcel (other than the breach by Zynaxis, Inc.
("Zynaxis") of certain minimum annual payment obligations, which breach has
been cured by Vaxcel to SRI's satisfaction in connection with the merger of
Zynaxis into a
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subsidiary of Vaxcel) and no breach is continuing as of the date hereof and
no breach by Vaxcel shall exist and be continuing during the Evaluation
Period and any Extension thereof;
(d) neither the grant of the Option nor, subject to obtaining SRI's
prior written consent, the assignment of the License Agreement to Innovax
violates (or will violate) or conflicts (or will conflict) with any term of
any agreement between Vaxcel and any third party which would adversely
affect (i) Vaxcel's rights under the License Agreement or (ii) Vaxcel's
ability to assign the License Agreement to Innovax;
(e) Vaxcel has no knowledge of any threatened or pending litigation,
claim, suit or proceeding which would require the disclosure of any
Confidential Information, Vaxcel Know-How or Trade Secrets.
(f) this Agreement is duly authorized by and is, and the Assignment
Agreement upon execution by Vaxcel will be, a legal and binding obligation
of Vaxcel, except as limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally and (ii) laws relating to the
availability of specific performance, injunctive relief and other equitable
remedies.
17. Innovax represents and warrants that:
(a) Innovax is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware;
(b) this Agreement is duly authorized by and is, and the Assignment
Agreement upon execution by Innovax will be, a legal and binding obligation
of Innovax, except as limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally and (ii) laws relating to the
availability of specific performance, injunctive relief and other equitable
remedies.
18. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 16 HEREIN, VAXCEL MAKES NO
EXPRESS OR IMPLIED WARRANTY, STATUTORY OR OTHERWISE, CONCERNING THE ORAL
MICROSPHERE TECHNOLOGY, THE ORAL MICROSPHERE TECHNOLOGY PATENTS OR ANY
INFORMATION PROVIDED TO INNOVAX BY VAXCEL OR ITS AGENTS. SPECIFICALLY, BUT
WITHOUT LIMITING THE FOREGOING, VAXCEL MAKES NO EXPRESS OR IMPLIED WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, QUALITY, USEFULNESS,
NONINFRINGEMENT OR TITLE OF OR TO THE ORAL MICROSPHERE TECHNOLOGY AND THE ORAL
MICROSPHERE TECHNOLOGY PATENTS. ALL PHYSICAL EMBODIMENTS OF THE ORAL
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MICROSPHERE TECHNOLOGY AND ANY INFORMATION RELATED THERETO PROVIDED BY VAXCEL
HEREUNDER ARE PROVIDED ON AN "AS IS" BASIS. VAXCEL DOES NOT WARRANT THE
ACCURACY OF ANY INFORMATION INCLUDED IN TRADE SECRETS, CONFIDENTIAL INFORMATION
OR VAXCEL KNOW-HOW.
19. This Agreement may not be assigned by any party hereto without the
prior written consent of the other party, and any attempt to assign this
Agreement shall be void; provided, however, that Vaxcel may assign this
Agreement to CytRx Corporation, a majority stockholder of Vaxcel. In addition,
a Vaxcel Change of Control shall not constitute an assignment and shall not
require the consent of Innovax, subject to the requirements of Section 9.
20. This Agreement may be executed in counterparts, each of which shall be
deemed an original, and all of which together shall be deemed one and the same
agreement.
21. This Agreement represents the complete agreement between the parties
hereto regarding the subject matter herein contained and supersedes any and all
prior and contemporaneous agreements and understandings between the parties in
regards hereto.
22. This Agreement may be amended only by a written instrument executed by
both parties hereto.
23. This Agreement shall be construed in accordance with the laws of the
State of Georgia, without regard to the conflicts of laws principals thereof.
24. Any notice or communication authorized or required to be provided
hereunder shall be in writing and may be served by hand delivery, by certified
or registered first class mail, postage prepaid (return receipt requested) or by
overnight courier service. All notices sent in accordance with this Section
shall be effective upon delivery to the following address:
If to Vaxcel: Vaxcel, Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: President
with a copy to: Xxxxxx & Bird LLP
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Xx.
If to Innovax: Innovax Corporation
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00000 X. Xxxxxxx Xxxxx
Xxxxx X
Xxxx Xxxxxx, Xxxxxxxx 00000
Attention:_____________________
with a copy to: Elan Pharmaceutical Technologies, a division of Elan
Corporation, plc.
Xxxxxxx Xxxxx
Xxxxxxx Xxxxx
Xxxxxx 0, Xxxxxxx
Attention: Xxxxx Xxxxxxxxx, Vice President & General
Counsel
and Endorex Corporation
00000 X. Xxxxxxx Xxxxx
Xxxxx X
Xxxx Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, President and Chief
Executive Officer
and Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
Vaxcel, Inc.
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
--------------------
Its: President and CEO
--------------------
Innovax Corporation
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
--------------------
Its: ____________________
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