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EXHIBIT 10.58
EXECUTION COPY
SUBSCRIPTION, JOINT DEVELOPMENT AND OPERATING AGREEMENT
ELAN CORPORATION, PLC
ELAN INTERNATIONAL SERVICES, LTD.
AND
CELTRIX PHARMACEUTICALS INC.
AND
CELTRIX NEWCO LTD.
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INDEX
CLAUSE 1 DEFINITIONS
CLAUSE 2 NEWCO'S BUSINESS
CLAUSE 3 REPRESENTATIONS AND WARRANTIES
CLAUSE 4 AUTHORIZATION AND CLOSING
CLAUSE 5 DEVELOPMENT FUNDING
CLAUSE 6 SUBLICENSE AND ASSIGNMENT RIGHTS
CLAUSE 7 OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS/NONCOMPETITION
CLAUSE 8 TRADEMARKS
CLAUSE 9 DIRECTORS; MANAGEMENT AND R&D COMMITTEES
CLAUSE 10 THE BUSINESS PLAN AND REVIEWS
CLAUSE 11 RESEARCH AND DEVELOPMENT
CLAUSE 12 INTELLECTUAL PROPERTY RIGHTS
CLAUSE 13 COMMERCIALIZATION
CLAUSE 14 MANUFACTURING
CLAUSE 15 TECHNICAL SERVICES AND ASSISTANCE
CLAUSE 16 AUDITORS, BANKERS, REGISTERED OFFICE,
ACCOUNTING REFERENCE DATE; SECRETARY; COUNSEL
CLAUSE 17 REGULATORY
CLAUSE 18 TRANSFER OF SHARES; RIGHTS OF FIRST OFFER; TAG ALONG RIGHTS
CLAUSE 19 MATTERS REQUIRING PARTICIPANTS' APPROVAL
CLAUSE 20 DISPUTES
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CLAUSE 21 TERMINATION
CLAUSE 22 INTENTIONALLY OMITTED
CLAUSE 23 CONFIDENTIALITY
CLAUSE 24 COSTS
CLAUSE 25 GENERAL
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THIS SUBSCRIPTION, JOINT DEVELOPMENT AND OPERATING AGREEMENT made this 21st day
of April, 1999
among:
(1) ELAN CORPORATION, PLC, a public limited company incorporated under the
laws of Ireland, and having its registered office at Lincoln House,
Lincoln Place, Dublin 2, Ireland ("ELAN");
(2) ELAN INTERNATIONAL SERVICES, LTD., an exempted company incorporated
under the laws of Bermuda, and having its registered office at
Clarendon House, 2 Church St., Hamilton, Bermuda ("EIS");
(3) CELTRIX PHARMACEUTICALS INC. a corporation duly incorporated and
validly existing under the laws of Delaware, and having its principal
place of business at 2033 Gateway Place, Suite 600, San Jose,
California 95110, United States of America ("CELTRIX"); and
(4) CELTRIX NEWCO LTD. an exempted company incorporated under the laws of
Bermuda, and having its registered office at Clarendon House, 2 Church
St., Hamilton, Bermuda ("NEWCO").
RECITALS:
A. Newco desires to issue and sell to the Participants (as defined below),
and the Participants desire to purchase from Newco, for aggregate
consideration of [*****], apportioned between them as set forth herein,
[*****] ordinary shares (the "SHARES") of Newco's common stock, par
value $1.00 per share (the "COMMON STOCK"), allocated [*****] shares to
Celtrix and [*****] shares to EIS.
B. Elan owns all right, title and interest in and to certain patents which
have been granted or are pending in relation to the MEDIPAD(R) Drug
Delivery System.
C. Celtrix owns all right, title and interest in and to certain patents
that have been granted or are pending in relation to SomatoKine(R).
D. As of the date hereof, Elan has entered into a license agreement with
Newco, and Celtrix has entered into a license agreement with Newco, in
connection with the license to Newco of the Elan Intellectual Property
and the Celtrix Intellectual Property, respectively (each as defined
below).
E. Elan and Celtrix have agreed to co-operate in the establishment and
management of a business for the research, development and
commercialization of the Products (as defined below) based on the
Licensed Technologies (as defined below).
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F. Elan and Celtrix have agreed to enter into this Agreement for the
purpose of recording the terms and conditions of the joint venture and
of regulating their relationship with each other and certain aspects of
the affairs of and their dealings with Newco.
NOW IT IS HEREBY AGREED AS FOLLOWS:
CLAUSE 1
DEFINITIONS
1.1 In this Agreement, the following terms shall, where not inconsistent
with the context, have the following meanings respectively.
"AFFILIATE" of any Person (in the case of a legal entity) shall mean
any other Person controlling, controlled by or under the common control
with such first Person, as the case may be. For the purposes of this
definition, "control" shall mean direct or indirect ownership of 50% or
more of the stock or shares entitled to vote for the election of
directors or capital interests representing at least 50% of the equity
thereof and "controlling" and "controlled" shall be construed
accordingly. Notwithstanding the foregoing, Newco shall not be
construed to be an Affiliate, as defined herein, of Elan or EIS.
"AGREEMENT" means this agreement (which expression shall be deemed to
include the Recitals and the Schedules hereto).
"BUSINESS" means the business of Newco as described in Clause 2 and as
more particularly specified in the Business Plan and such other
business as the Participants may agree from time to time in writing
(each in its sole discretion) should be carried on by Newco.
"BUSINESS PLAN" shall mean the business plan and program of development
to be agreed to by Elan and Celtrix within 60 days of the Closing Date,
with respect to the research, development, and commercialization of the
Products, which shall be reviewed and updated by Elan and Celtrix on an
annual basis, upon mutual written agreement.
"CELTRIX DIRECTORS" has the meaning set forth in Clause 7.
"CELTRIX IMPROVEMENTS" has the meaning assigned thereto in the Celtrix
License Agreement.
"CELTRIX INTELLECTUAL PROPERTY" has the meaning assigned thereto in the
Celtrix License Agreement.
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"CELTRIX KNOW-HOW" shall mean any and all rights owned or licensed by
Celtrix with respect to any knowledge, information, discovery,
invention, trade secret, technique, process, system, formulation,
design, data and expertise relating to SomatoKine(R) whether or not
covered by any patent, copyright, design, trademark, trade secret or
other industrial or intellectual property right.
"CELTRIX LICENSE AGREEMENT" means the license agreement between Celtrix
and Newco, of even date herewith, attached hereto in Schedule 2.
"CELTRIX PATENT RIGHTS" shall mean the patents and patent applications
(including provisional applications) relating to SomatoKine(R) that are
forth in Schedule 1 of the Celtrix License Agreement, that are owned or
licensed by or on behalf of Celtrix. Celtrix Patent Rights shall also
include all extensions, continuations, continuations-in-part,
divisionals, patents-of-addition, re-examinations, re-issues,
supplementary protection certificates and foreign counterparts of such
patents and patent applications and any patents issuing thereon and
extensions of any patents licensed under the Celtrix License Agreement.
"CELTRIX SECURITIES PURCHASE AGREEMENT" means that certain securities
purchase agreement, of even date herewith, by and between Celtrix and
EIS.
"CLOSING DATE" shall mean the date upon which the Transaction Documents
are executed and delivered by the Parties and the transactions effected
thereby are closed.
"COMMON STOCK EQUIVALENTS" means any options, warrants, rights or any
other securities convertible, exercisable or exchangeable, in whole or
in part, for or into Common Stock.
"DIRECTORS" means, at any time, the directors of Newco.
"EIS DIRECTOR" has the meaning set forth in Clause 9.
"ELAN IMPROVEMENTS" has the meaning assigned thereto in the Elan
License Agreement.
"ELAN INTELLECTUAL PROPERTY" has the meaning assigned thereto in the
Elan License Agreement.
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"ELAN KNOW-HOW" shall mean any and all rights owned or licensed by Elan
relating to any knowledge, information, discovery, invention, trade
secret, technique, process, system, formulation, design, data and
expertise with respect to the MEDIPAD(R) Drug Delivery System whether
or not covered by any patent, copyright, design, trademark, trade
secret or other industrial or intellectual property right.
"ELAN LICENSE AGREEMENT" means the license agreement between Elan and
Newco, of even date herewith, attached hereto in Schedule 1.
"ELAN PATENT RIGHTS" shall mean the patents and patent applications
(including provisional applications) relating to the MEDIPAD(R) Drug
Delivery System as set forth in Schedule 1 of the Elan License
Agreement, and that are owned or licensed by or on behalf of Elan. Elan
Patent Rights shall also include all extensions, continuations,
continuations-in-part, divisionals, patents-of-addition,
re-examinations, re-issues, supplementary protection certificates and
foreign counterparts of such patents and patent applications and any
patents issuing thereon and extensions of any patents licensed under
the Elan License Agreement.
"ENCUMBRANCE" means any liens, charges, encumbrances, equities, claims,
options, proxies, pledges, security interests, or other similar rights
of any nature.
"EPT" shall mean Elan Pharmaceutical Technologies, a division of Elan.
"EXCHANGE RIGHT" has the meaning assigned to such term in the Amended
and Restated Certificate of Incorporation of Celtrix in effect on the
date hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE RIGHT TERM" shall mean the period commencing on the Effective
Date and ending on the exercise by Elan of the Exchange Right.
"FIELD" shall mean [*****]
"FINANCIAL YEAR" means each year commencing on January 1 (or in the
case of the first Financial Year, the date hereof) and expiring on
December 31 of each year.
"FULLY DILUTED COMMON STOCK" means all of the issued and outstanding
Common Stock, assuming the conversion, exercise or exchange of all
outstanding Common Stock Equivalents.
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EXCHANGE COMMISSION
"FUNDING AGREEMENT" shall mean the Funding Agreement, dated as of the
date hereof, between EIS and Celtrix.
"LICENSE AGREEMENTS" means the Elan License Agreement and the Celtrix
License Agreement.
"LICENSED TECHNOLOGIES" means, collectively, the Elan Intellectual
Property and the Celtrix Intellectual Property.
"MEDIPAD(R) DRUG DELIVERY SYSTEM" shall mean the [*****] as disclosed
in the Elan Patent Rights set forth in Schedule 1 of the Elan License
Agreement.
"NEWCO INTELLECTUAL PROPERTY" shall mean all rights to technology,
patents and know-how belonging to Newco, other than the Elan
Intellectual Property and the Celtrix Intellectual Property, including
any technology acquired by or licensed to Newco from or by a third
party and any newly developed technology that is not Elan Intellectual
Property or Celtrix Intellectual Property.
"NEWCO MEMORANDUM OF ASSOCIATION AND BYE-LAWS" shall mean the
Memorandum of Association and Bye-Laws of Newco.
"OSTEOPOROSIS" shall mean a skeletal condition characterized by
decreased density of normal mineralized bone, which bone density, as
measured by dual-energy x-ray absorptiometry (DXA), is more than 2.5
standard deviations below the mean for the young adult reference range.
"PARTICIPANT" means Celtrix or Elan, as the case may be, and
"PARTICIPANTS" means both Celtrix and Elan together;
"PARTY" means Elan, Celtrix, or Newco, as the case may be, and
"PARTIES" means all three together;
"PERSON" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental entity or
authority or other entity of whatever nature.
"PERMITTED TRANSFEREE" means any Affiliate or subsidiary of Elan, EIS
or Celtrix, to whom this Agreement may be assigned, in whole or in
part, pursuant to
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the terms hereof or, in the case of Elan/EIS, an off-balance sheet
special purpose entity created by Elan or EIS.
"PRODUCTS" shall mean the MEDIPAD(R) Drug Delivery System incorporating
SomatoKine(R) as its primary active ingredient.
"PROJECT" shall mean all activity as undertaken by or on behalf of
Newco in order to develop the Products in accordance with the Business
Plan.
"REGISTRATION RIGHTS AGREEMENTS" means the Registration Rights
Agreements of even date herewith relating to Newco and Celtrix,
respectively.
"REGULATORY APPLICATION" means any regulatory application or any other
application for marketing approval for a Product, which Newco will file
in any country of the Territory, including any supplements or
amendments thereto.
"REGULATORY APPROVAL" means the final regulatory approval to market a
Product in any country of the Territory, and any other approval which
is required to launch the Product in the normal course of business.
"RHA" means any relevant government health authority (or successor
agency thereof) in any country of the Territory whose approval is
necessary to market a Product in the relevant country of the Territory.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHARES" means the shares of Common Stock of Newco.
"SOMATOKINE"(R) shall mean [*****]
"STOCKHOLDER" means any of EIS, Celtrix, any Permitted Transferee or
any other Person who subsequently becomes bound by this Agreement as a
holder of the Shares, and "STOCKHOLDERS" means all of the Stockholders
together.
"SUBSIDIARY" means any company that is a subsidiary of Newco within the
meaning of applicable laws.
"TECHNOLOGICAL COMPETITOR OF ELAN" shall mean [*****]
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"TECHNOLOGICAL COMPETITOR OF CELTRIX" shall mean [*****]
"TERM" means the term of this Agreement.
"TERRITORY" means [*****]
"TRANSACTION DOCUMENTS" means this Agreement, the Funding Agreement,
the Elan License Agreement, the Celtrix License Agreement, the Celtrix
Securities Purchase Agreement, the Registration Rights Agreements and
associated documentation of even date herewith, by and between Celtrix,
Elan, EIS and Newco, as applicable.
"UNITED STATES DOLLAR" and "US$" and "$" means the lawful currency of
the United States of America.
1.2 In addition, the following definitions have the meanings in the Clauses
corresponding thereto, as set forth below.
DEFINITION CLAUSE
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"Buyout Option" 21.4
"Closing" 4.2
"Common Stock" Recital
"Confidential Information" 23.1
"Co-sale Notice" 18.3
"Elan/Newco Option" 13.2
"Expert" 20.3
"Management Committee" 9.2.1
"Notice of Exercise" 18.2
"Notice of Intention" 18.2
"Offered Shares" 18.2
"Offering Price" 18.2
"Presiding Justice" 20.3
"Proposing Participant" 21.4
"Proposing Participant Price" 21.6
"Purchase Price" 21.6
"R&D Committee" 9.2.2
"Recipient Participant" 21.4
"Recipient Participant Price" 21.6
"Remaining Stockholders" 18.3
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DEFINITION CLAUSE
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"Relevant Event" 21.2
"Selling Stockholder" 18.2
"Tag-Along Right" 18.3
"Transaction Proposal" 18.2
"Transfer" 18.1
"Transferee Terms" 18.3
"Transferring Stockholders" 18.3
1.3 Words importing the singular shall include the plural and vice versa.
1.4 Unless the context otherwise requires, reference to a recital, article,
paragraph, provision, clause or schedule is to a recital, article,
paragraph, provision, clause or schedule of or to this Agreement.
1.5 Reference to a statute or statutory provision includes a reference to
it as from time to time amended, extended or re-enacted.
1.6 The headings in this Agreement are inserted for convenience only and do
not affect its construction.
1.7 Unless the context or subject otherwise requires, references to words
in one gender include references to the other genders.
1.8 Capitalized terms used but not defined herein shall have the meanings
ascribed in the Transaction Documents, if defined therein.
CLAUSE 2
NEWCO'S BUSINESS
2.1 The primary objective of Newco and any Subsidiaries is to carry on the
business of the development, testing, registration, manufacture,
commercialization and licensing of Products in the Territory and to
achieve the objectives set out in this Agreement. The focus of the
collaborative venture will be to develop the Products using the Elan
Intellectual Property, the Celtrix Intellectual Property and the Newco
Intellectual Property in accordance with agreed-upon specifications and
timelines.
2.2 Except as the Participants otherwise agree in writing and except as may
be provided in this Agreement, the Business Plan or the License
Agreements, the Participants shall exercise their respective powers in
relation to Newco so as to ensure that the Business is carried on in a
proper and prudent manner.
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2.3 Each Participant shall use all commercially reasonable and proper means
at its disposal and within its power to maintain, extend and improve
the Business of Newco, within the limits of this Agreement, and to
further the reputation and interests of Newco.
2.4 The central management and control of Newco shall be exercised in
Bermuda and shall be vested in the Directors and such Persons as such
Directors may delegate the exercise of their powers in accordance with
the Newco Memorandum of Association and Bye-Laws. The Participants
shall use their best efforts to ensure that to the extent required
pursuant to the laws of Bermuda, and to ensure the sole residence of
Newco in Bermuda, all meetings of the Directors are held in Bermuda or
other jurisdictions outside the United States and generally to ensure
that Newco is treated as resident for taxation purposes in Bermuda.
CLAUSE 3
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF NEWCO: Newco hereby represents and
warrants to each of the Stockholders as follows, as of the date hereof:
3.1.1 ORGANIZATION: Newco is an exempted company duly organized,
validly existing and in good standing under the laws of
Bermuda, and has all the requisite corporate power and
authority to own and lease its properties, to carry on its
business as presently conducted and as proposed to be
conducted, to execute this Agreement, which has been duly
authorized and is enforceable against Newco in accordance with
its terms, and to carry out the transactions contemplated
hereby.
3.1.2 CAPITALIZATION: As of the date hereof, the authorized capital
stock of Newco consists of [*****] shares of Common Stock.
Prior to the date hereof, no shares of capital stock of Newco
have been issued.
3.1.3 AUTHORIZATION: The execution, delivery and performance by
Newco of this Agreement, including the issuance of the Shares,
have been duly authorized by all requisite corporate actions;
this Agreement has been duly executed and delivered by Newco
and is the valid and binding obligation of Newco, enforceable
against it in accordance with its terms except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting the
enforcement of creditors' rights generally, and except as
enforcement of rights to
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indemnity and contribution hereunder may be limited by United
States federal or state securities laws or principles of
public policy. The Shares, when issued as contemplated hereby,
will be validly issued and outstanding, fully paid and
non-assessable and not subject to preemptive or any other
similar rights of the Stockholders or others.
3.1.4 NO CONFLICTS: The execution, delivery and performance by Newco
of this Agreement, the issuance, sale and delivery of the
Shares, and compliance with the provisions hereof by Newco,
will not:
(i) violate any provision of applicable law, statute,
rule or regulation applicable to Newco or any ruling,
writ, injunction, order, judgment or decree of any
court, arbitrator, administrative agency or other
governmental body applicable to Newco or any of its
properties or assets;
(ii) conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute
(with notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation
or acceleration) under its charter or organizational
documents or any material contract to which Newco is
a party, except where such violation, conflict or
breach would not, individually or in the aggregate,
have a material adverse effect on Newco; or
(iii) result in the creation of, any Encumbrance upon any
of the properties or assets of Newco.
3.1.5 APPROVALS: As of the date hereof, no permit, authorization,
consent or approval of or by, or any notification of or filing
with, any Person is required in connection with the execution,
delivery or performance of this Agreement by Newco. Newco has
full authority to conduct its business as contemplated in the
Business Plan and the Transaction Documents.
3.1.6 DISCLOSURE: This Agreement does not contain any untrue
statement of a material fact or omit to state any material
fact necessary to make the statements contained herein not
misleading. Newco is not aware of any material contingency,
event or circumstance relating to its business or prospects,
which could have a material adverse effect thereon, in order
for the disclosure herein relating to Newco not to be
misleading in any material respect.
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3.1.7 NO BUSINESS; NO LIABILITIES: Newco has not conducted any
business or incurred any liabilities or obligations prior to the
date hereof, except solely in connection with its organization
and formation.
3.2 REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS: Each of the
Stockholders hereby severally represents and warrants to Newco as
follows as of the date hereof:
3.2.1 ORGANIZATION: Such Stockholder is a corporation duly organized
and validly existing under the laws of its jurisdiction of
organization and has all the requisite corporate power and
authority to own and lease its respective properties, to carry
on its respective business as presently conducted and as
proposed to be conducted and to carry out the transactions
contemplated hereby.
3.2.2 AUTHORITY: Such Stockholder has full legal right, power and
authority to enter into this Agreement and to perform its
obligations hereunder, which have been duly authorized by all
requisite corporate action. This Agreement is the valid and
binding obligation of such Stockholder, enforceable against it
in accordance with its terms except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other
laws of general application affecting the enforcement of
creditors' rights generally, and except as enforcement of
rights to indemnity and contribution hereunder may be limited
by United States federal or state securities laws or
principles of public policy.
3.2.3 NO CONFLICTS: The execution, delivery and performance by such
Stockholder of this Agreement, purchase of the Shares, and
compliance with the provisions hereof by such Stockholder will
not:
(i) violate any provision of applicable law, statute,
rule or regulation known by and applicable to such
Stockholder or any ruling, writ, injunction, order,
judgment or decree of any court, arbitrator,
administrative agency or other governmental body
applicable to such Stockholder or any of its
properties or assets;
(ii) conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute
(with notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation
or acceleration) under the charter or organizational
documents of such Stockholder or any material
contract to which such Stockholder is a party, except
where such violation, conflict or breach would not,
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individually or in the aggregate, have a material
adverse effect on such Stockholder; or
(iii) result in the creation of, any Encumbrance upon any
of the properties or assets of such Stockholder.
3.2.4 APPROVALS: As of the date hereof, no permit, authorization,
consent or approval of or by, or any notification of or filing
with, any Person is required in connection with the execution,
delivery or performance of this Agreement by such Stockholder.
3.2.5 INVESTMENT REPRESENTATIONS: Such Stockholder is capable of
evaluating the merits and risks of its investment in Newco.
Such Stockholder has not been formed solely for the purpose of
making this investment and such Stockholder is acquiring the
Common Stock and Preferred Stock for investment for its own
account, not as a nominee or agent, and not with the view to,
or for resale in connection with, any distribution of any part
thereof. Such Stockholder understands that the Shares have not
been registered under the Securities Act or applicable state
and foreign securities laws by reason of a specific exemption
from the registration provisions of the Securities Act and
applicable state and foreign securities laws, the availability
of which depends upon, among other things, the bona fide
nature of the investment intent and the accuracy of such
Stockholders' representations as expressed herein. Such
Stockholder understands that no public market now exists for
any of the Shares and that there is no assurance that a public
market will ever exist for such Shares.
CLAUSE 4
AUTHORIZATION AND CLOSING
4.1 Newco has authorized the issuance to (i) EIS of [*****] shares of
Common Stock and (ii) Celtrix of [*****] shares of Common Stock,
issuable as provided in Clause 4.3 hereof.
4.2 The closing (the "CLOSING") shall take place at the offices of Brock
Silverstein LLC at 153 East 53rd Street, New York, New York 10022 on
the date hereof or such other places if any, as the Parties may agree
and shall occur contemporaneously with the closing under the Celtrix
Securities Purchase Agreement.
4.3 At the Closing:
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4.3.1 Newco shall issue and sell to EIS, and EIS shall purchase from
Newco, upon the terms and subject to the conditions set forth
herein, [*****] shares of Common Stock for an aggregate
purchase price of [*****] Newco shall issue and sell to
Celtrix, and Celtrix shall purchase from Newco, upon the terms
and conditions set forth herein, [*****] shares of Common
Stock for an aggregate purchase price of [*****]
4.3.2 The Parties shall execute and deliver to each other, as
applicable, certificates in respect of the Common Stock
described above and any other certificates, resolutions or
documents which the Parties shall reasonably require.
4.4 EXEMPTION FROM REGISTRATION:
The Shares will be issued under an exemption or exemptions from
registration under the Securities Act. Accordingly, the certificates
evidencing the Shares shall, upon issuance, contain the following
legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY SECURITIES LAWS OF A STATE
OR OTHER JURISDICTION AND MAY NOT UNDER ANY CIRCUMSTANCES BE SOLD,
TRANSFERRED, OR OTHERWISE DISPOSED OF (OTHER THAN TO AN AFFILIATE OF
THE ORIGINAL HOLDER OR AS OTHERWISE PERMITTED IN THE AGREEMENT PURSUANT
TO WHICH THEY WERE ISSUED) EXCEPT PURSUANT TO (i) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE
STATE SECURITIES OR BLUE SKY LAWS, OR (ii) TO THE EXTENT APPLICABLE,
RULE 144 UNDER THE SECURITIES ACT (OR ANY SIMILAR RULE UNDER THE
SECURITIES ACT RELATING TO THE DISPOSITION OF SECURITIES) TOGETHER WITH
AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR APPLICABLE STATE
SECURITIES LAWS.
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CLAUSE 5
DEVELOPMENT FUNDING
It is estimated that Newco will require approximately an additional [*****] (the
"DEVELOPMENT FUNDING") within the first [*****] of the date hereof, to commence
development of the first Product or Products based upon the Elan Technology, the
Celtrix Technology and/or Newco Technology. The funds necessary for such
development shall be provided in accordance with the Participants' respective
ownership in Newco at such time or times as shall be reasonably determined in
good faith by decision of Newco's board of directors with the affirmative vote
of at least the EIS Director and one Celtrix Director, pursuant to the terms and
conditions of the Funding Agreement.
CLAUSE 6
SUBLICENSE AND ASSIGNMENT RIGHTS
6.1 Newco shall not assign or, except as set forth in Section 6.2 below,
otherwise transfer any of its rights under the Licenses for the
Licensed Technologies and/or the Newco Intellectual Property without
the prior written consent of Elan and Celtrix.
6.2 Newco shall not sublicense any of its rights under the Licenses for the
Licensed Technologies and/or the Newco Intellectual Property without
the prior written consent of Elan and Celtrix, which consent shall not
be unreasonably withheld or delayed; provided, that the consent of Elan
and/or Celtrix may be withheld in Elan's or Celtrix's sole discretion
in the case of a proposed sublicense of such rights to a Technological
Competitor of Elan or a Technological Competitor of Celtrix, as the
case may be.
6.3 Newco shall not enter into any agreement with any third party for
development or exploitation of the Elan Intellectual Property and/or
the Celtrix Intellectual Property without the prior written consent of
Elan or Celtrix, respectively, which consent may be withheld in Elan's
or Celtrix's sole discretion, as the case may be. Any agreement between
Newco and any permitted third party for the development or exploitation
of the Elan Intellectual Property and/or the Celtrix Intellectual
Property shall require such third party to maintain the confidentiality
of all information concerning the Elan Intellectual Property and/or the
Celtrix Intellectual Property, as applicable, provided that such
obligation of confidentiality shall be no less stringent than that set
forth in Clause 23 and shall provide that all right, title and interest
in and to any [*****] shall be
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owned by [*****] and all right, title and interest in and to any
[*****] shall be owned by [*****]
6.4 Newco shall not enter into any agreement with any third party for
development of Newco Intellectual Property without the approval of the
Management Committee.
6.5 Upon 30 days' prior notice in writing from Elan to Newco and Celtrix,
Newco shall assign the Newco Intellectual Property including without
limitation, all rights and obligations related thereto, from Newco to a
wholly-owned subsidiary of Newco to be incorporated in Ireland, which
company shall be newly incorporated by Elan and Celtrix to facilitate
such assignment.
CLAUSE 7
OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS/NON-COMPETITION
The Parties acknowledge and agree to be bound by:
7.1 the provisions of Clause 2 of the Elan License Agreement (as
supplemented by the provision of relevant definitions in the Elan
License Agreement) and Clause 2 of the Celtrix License Agreement (as
supplemented by the provision of relevant definitions in the Celtrix
License Agreement) which set forth the agreement between the parties
thereto in relation to the ownership of intellectual property rights;
and
7.2 the provisions of Clause 5 of the Elan License Agreement and the
provisions of Clause 5 of the Celtrix License Agreement which set forth
the agreement between the parties thereto in relation to the
non-competition obligations of Elan and Celtrix, respectively.
CLAUSE 8
TRADEMARKS
8.1 Elan shall grant to Newco [*****] in accordance with the terms and
conditions of the Elan License Agreement. Elan shall at all times be
and remain the owner of such trademark licensed to Newco.
8.2 Celtrix shall grant to Newco [*****]
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in accordance with the terms and conditions of the Celtrix License
Agreement. Celtrix shall at all times be and remain the owner of such
trademark licensed to Newco.
CLAUSE 9
DIRECTORS; MANAGEMENT AND R&D COMMITTEES
9.1. DIRECTORS:
The Board of Directors of Newco shall be composed of [*****] Directors.
Celtrix shall have the right to nominate [*****] directors of Newco
("CELTRIX DIRECTORS") and EIS shall have the right to nominate [*****]
Director of Newco ("EIS DIRECTOR"). Celtrix may appoint [*****] of the
Celtrix Directors to be the chairman of Newco.
9.1.1. If the chairman is unable to attend any meeting of the Board,
[*****] shall be entitled to appoint another Director to act
as chairman in his place at the meeting.
9.1.2. If EIS removes the [*****], or Celtrix removes [*****] EIS or
Celtrix, as the case may be, shall indemnify the other
Stockholder against any claim by such removed Director arising
from such removal.
9.1.3. The Directors shall meet not less than [*****] in each
Financial Year and all Directors' meetings shall be held in
[*****] to the extent required pursuant to the laws of [*****]
9.1.4. At any such meeting, the presence [*****] shall be required to
constitute a quorum and, subject to Clause 19 hereof, the
affirmative vote of a majority of the Directors present at a
meeting at which such a quorum is present shall constitute an
action of the Directors. In the event of any meeting being
inquorate, the meeting shall be adjourned for a period of
seven days. A notice shall be sent to the EIS Director and the
Celtrix Directors specifying the date, time and place where
such adjourned meeting is to be held and reconvened.
9.1.5. The chairman of Newco, or his duly appointed successor, shall
hold office until the first meeting of the Directors after the
[*****] by [*****] of [*****]
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In the event that [*****] is exercised at any time by [*****],
each of [*****] and [*****] shall cause the board of directors
of Newco to be reconfigured so that an [*****] of Directors
are designated by [*****] and [*****.] Thereafter, (a) a
quorum shall require an [*****] and (b) each of [*****] and
[*****] beginning with EIS, shall have the right, exercisable
[*****] to be [*****] of Newco for a term of [*****] If the
chairman of Newco is unable to attend any meeting of the
Directors, the Directors shall be entitled to appoint another
Director to act as chairman of Newco in his place at the
meeting.
9.1.6. In case of an equality of votes at a meeting of the board of
directors of Newco, the chairman of Newco shall not be
entitled to a second or casting vote. In the event of
continued deadlock, the board of directors shall resolve the
deadlock pursuant to the provisions set forth in Clause 20,
9.2. MANAGEMENT AND R&D COMMITTEES:
9.2.1. The Directors shall appoint a management committee (the
"MANAGEMENT COMMITTEE") to perform certain operational
functions, such delegation to be consistent with the
directors' right to delegate powers pursuant to the Newco
Memorandum of Association of Bye-Laws. The Management
Committee shall initially consist of [*****] members, [*****]
of whom will be nominated by EIS and [*****] of whom will be
nominated by Celtrix, and each of whom shall be entitled to
[*****] vote, whether or not present at any Management
Committee meeting during which such operational functions are
discussed. Decisions of the Management Committee shall require
approval by at least [*****] and [*****] Each of EIS and
Celtrix shall be entitled to remove any of their nominees to
the Management Committee and appoint a replacement in place of
any nominees so removed. The number of members of the
Management Committee may be altered if agreed to by a majority
of the directors of Newco; provided that, each of Elan and
Celtrix shall be entitled to appoint [*****] number of members
to the Management Committee.
9.2.2. The Management Committee shall appoint a research and
development committee (the "R&D COMMITTEE") which shall
initially be comprised of [*****] members, [*****] of whom
will be nominated by Elan and [*****] of whom will be
nominated by Celtrix, and each of whom shall have [*****]
vote, whether or not present at an R&D Committee meeting
during which research and development issues are discussed.
Decisions of the R&D
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Committee shall require approval by at least [*****] and
[*****] Each of Elan and Celtrix shall be entitled to remove
any of their nominees to the R&D Committee and appoint a
replacement in place of any nominees so removed. The number of
members of the R&D Committee may be altered if agreed to by a
majority of the Directors; provided that, each of Elan and
Celtrix shall be entitled to appoint an [*****] of members to
the R&D Committee. The R & D Committee shall meet at least
[*****] each calendar quarter alternately at the offices of
Elan and Celtrix (except where otherwise agreed) to monitor
the progress of that portion of the Business Plan that relates
to the Project and to report on their progress to the
Management Committee.
9.2.3 The Management Committee shall be responsible for, inter alia,
devising, implementing and reviewing strategy for the business
of Newco, and the operation of Newco, and in particular,
devising Newco's strategy for research and development and to
monitor and supervise the implementation of Newco's strategy
for research and development. The Management Committee shall
report all significant developments to the Directors on the
occurrence thereof, and in addition, shall report at quarterly
intervals to the Directors in accordance with Clause 10.2 of
this Agreement.
9.2.4. The R&D Committee shall be responsible for:
9.2.4.1. designing that portion of the Business Plan that
relates to the Project for consideration by the
Management Committee;
9.2.4.2. establishing a joint Project team consisting of an
[*****] of team members from Elan and Celtrix,
including [*****] from each of Elan and Celtrix; and
9.2.4.3. implementing such portion of the Business Plan that
relates to the Project, as approved by the Management
Committee.
9.2.4 In the event of any dispute amongst the R&D Committee, the R&D
Committee shall refer such dispute to the Management Committee
whose decision on the dispute shall be binding on the R&D
Committee.
If the Management Committee cannot resolve such matter or any
other matter under consideration by the Management Committee,
then the dispute will be referred to the [*****] and the
[*****]
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and thereafter, in the event of continued deadlock, pursuant
to the deadlock provisions to be set forth in Clause 20,
involving inter alia, the referral of the dispute to an
expert, whose decision, however, will ultimately be
non-binding on the Participants.
9.2.6. [*****] Elan and Celtrix shall permit Newco or its duly
authorized representative on reasonable notice and at any
reasonable time during normal business hours to have access to
inspect and audit the accounts and records of Elan or Celtrix
and any other book, record, voucher, receipt or invoice
relating to the calculation or the cost of the Project and to
the accuracy of the reports which accompanied them. Any such
inspection of Elan's or Celtrix's records, as the case may be,
shall be at the expense of Newco, except that if such
inspection reveals an overpayment in the amount paid to Elan
or Celtrix, as the case may be, for the Project hereunder in
any Financial Year of [*****] or more of the amount due to
Elan or Celtrix, as the case may be, then the expense of such
inspection shall be borne solely by Elan or Celtrix, as the
case may be, instead of by Newco. Any surplus over the sum
properly payable by Newco to Elan or Celtrix, as the case may
be, shall be paid promptly by Elan or Celtrix, as the case may
be, to Newco. If such inspection reveals a deficit in the
amount of the sum properly payable to Elan or Celtrix, as the
case may be, by Newco, Newco shall pay the deficit to Elan or
Celtrix, as the case may be.
CLAUSE 10
THE BUSINESS PLAN AND REVIEWS
10.1 The Directors shall meet together as soon as reasonably practicable
after the Closing Date hereof and shall agree upon and approve the
Business Plan for the current Financial Year within 60 days of the date
hereof. In subsequent Financial Years, the Directors shall meet
together prior to the accounting reference date specified in Clause 16
and agree upon and approve the Business Plan for the following
Financial Year, or any amendment or modification to the Business Plan.
10.2 The Participants agree that the Management Committee shall submit to
the Directors on [*****] or as soon as reasonably practicable
thereafter in each Financial Year a report on the performance of the
Business and research and development activities of Newco, and the
Directors shall hold such meeting as may be necessary to review the
performance of Newco against the Business Plan for the relevant year.
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CLAUSE 11
RESEARCH AND DEVELOPMENT WORK
11.1 Research and development work related to the Products and the Newco
Intellectual Property may include but shall not be limited to,
screening, in-vitro pharmacology, toxicology, stability, prototype
dosage form development, formulation, optimization, clinical and
regulatory activities. Such work shall be agreed to and jointly
conducted by Elan and Celtrix as provided in the Business Plan.
11.2 Elan (or an Affiliate of Elan nominated by Elan, including, without
limitation, Elan Pharmaceutical International, Ltd., an Irish company)
and Celtrix shall undertake for a period of thirty (30) months from the
Effective Date, pursuant to the Business Plan and in accordance with
the terms of the Funding Agreement, certain research and development
work (a) with respect to the development and commercialization of the
Products, and (b) in furtherance of the development of patent rights
and know-how related to the Elan Intellectual Property, Celtrix
Intellectual Property and Newco Intellectual Property. Newco shall pay
Celtrix and Elan or Elan's Affiliate nominated by Elan hereunder for
any research and development work carried out by them on behalf of
Newco at the end of each month during the Project, subject to the
proper vouching of research and development work and expenses. An
invoice shall be issued to Newco by Celtrix or Elan or Elan's Affiliate
nominated by Elan hereunder, as applicable, by the [*****] of the month
following the month in which work was performed. The payments by Newco
to Celtrix or Elan or Elan's Affiliate nominated by Elan hereunder
shall be calculated by reference to [*****] in carrying out such
research and development work, [*****] Research and development
activities that are [*****] shall be charged to Newco at [*****]
CLAUSE 12
INTELLECTUAL PROPERTY RIGHTS
12.1 Newco shall permanently mark or otherwise use reasonable efforts to
cause any third party to permanently mark all Products and/or the
packaging therefor with such license or patent notices to comply with
the laws of the country of sale or otherwise to generally communicate
the existence of any Elan Patents Rights or Celtrix Patent Rights for
the countries of the Territory and in such manner as Elan
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or Celtrix, as the case may be, may reasonably request in writing prior
to the sale or commercial use thereof.
12.2 The Participants shall discuss in good faith all material issues
relating to filing, prosecution and maintenance of Elan Patent Rights
and Celtrix Patent Rights insofar as such patent rights are of
relevance to the License Agreements and any patentable inventions and
discoveries within the Elan Intellectual Property, Celtrix Intellectual
Property and Newco Intellectual Property that relate to the License
Agreements and any patentable improvements thereto. Subject to mutual
agreement to the contrary by Celtrix and Elan the following provisions
shall apply:
12.2.1 Elan, [*****], shall make a good faith effort (a) to secure
the grant of any patent applications within the Elan Patent
Rights that relate to the Field; (b) to file and prosecute
patent applications covering the Elan Improvements that relate
to the Field; (c) to defend all such applications against
third party oppositions; and (d) to maintain in force any
issued patent or letters patent within the Elan Patent Rights
that relate to the Field (including any such patents that may
issue covering any such Elan Improvements that relate to the
Field). Elan shall have the sole right in its reasonable
business discretion to control such filing, prosecution,
defense and maintenance; provided, however, that Newco, at its
request, shall be provided with copies of all documents
relating to such filing, prosecution, defense, and maintenance
in sufficient time to review such documents and comment
thereon prior to filing.
12.2.2 Celtrix, [*****], shall make a good faith effort (a) to secure
the grant of any patent applications within the Celtrix Patent
Rights that relate to the Field; (b) to file and prosecute
patent applications covering the Celtrix Improvements that
relate to the Field; (c) to defend all such applications
against third party oppositions; and (d) to maintain in force
any issued patent or letters patent within the Celtrix Patent
Rights that relate to the Field (including any such patents
that may issue covering any such Celtrix Improvements that
relate to the Field). Celtrix shall have the sole right in its
reasonable business discretion to control such filing,
prosecution, defense and maintenance; provided, however, that
Newco shall have the right to inspect copies of all documents
relating to such filing, prosecution, defense, and
maintenance, and to make copies thereof, upon reasonable prior
notice to Celtrix.
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12.2.3 In the event that a Participant informs Newco that it does not
intend to file patent applications on patentable inventions
and discoveries within its respective Intellectual Property
that relate to the Field or patentable Improvements that
relate to the Field in one or more countries in the Territory
or fails to file such an application within a reasonable
period of time, Newco shall have the right, but not the
obligation, at Newco's [*****] to file and prosecute such
patent application(s) in the joint names of Newco and the
relevant Participant. Upon written request from Newco, the
relevant Participant shall execute all documents, forms and
declarations and do all things as shall be reasonably
necessary to enable Newco to exercise such option and right.
12.2.4 Newco shall have responsibility and shall bear [*****]
necessary (a) to file and prosecute patent applications on
patentable inventions and discoveries within the Newco
Intellectual Property (b) to defend all such applications
against third party oppositions; and (c) to maintain in force
any issued patent, letters patent within the Newco
Intellectual Property (including any patents that issue on
patentable inventions and discoveries within the Newco
Intellectual Property).
12.3 The Participants and Newco shall promptly inform each other in writing
of any infringement or alleged infringement of any patents within the
Elan Patent Rights, Celtrix Patent Rights or Newco Intellectual
Property or any misappropriation or alleged misappropriation of trade
secrets within the Elan Intellectual Property, Celtrix Intellectual
Property or the Newco Intellectual Property by a third party of which
it becomes aware and provide the other with any available evidence of
such infringement or misappropriation.
12.3.1
12.3.1.1 Subject to Clauses 12.3.1.2 and 12.3.1.3 below and
during the term of the License Agreements, Newco
shall have the right to pursue legal action at
[*****] to protect against any such alleged
infringements of the Elan Patent Rights and Celtrix
Patent Rights or misappropriation of the Elan
Intellectual Property and Celtrix Intellectual
Property; provided, however, that such infringements
or misappropriation must relate solely to the Field.
In the event that Newco takes such action, Newco
shall do so at [*****] At Newco's request, the
relevant Participant will co-operate with such
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action insofar as the said action relates to the
Field at Newco's [*****] [*****]
12.3.1.2 In the event that (i) Newco decides, by unanimous
vote of the Management Committee, not to pursue such
infringers, within a reasonable period but in any
event within [*****] after receiving written notice
of such alleged infringement or misappropriation, or
(ii) if such alleged infringement or misappropriation
does not relate [*****] then either Elan, where the
infringement or misappropriation relates [*****] to
the [*****] or Celtrix, where the infringement or
misappropriate relates [*****] to the [*****] (in
either case, the [*****]), may in its discretion
initiate such proceedings in its own name, at [*****]
At the Affected Participant's request, Newco will
cooperate with such action at the [*****] At the
option and in the sole discretion of such Affected
Participant, the Affected Participant may request the
cooperation of the other Participant in such action;
in such case, the Participants may agree to institute
such proceedings in [*****] and shall reach agreement
[*****] to the third party.
12.2.1.3 In the event that the infringement of either the Elan
Patent Rights or Celtrix Patent Rights affects both
the Field as well as other products being developed
or commercialized by the Affected Participant or its
commercial partners outside the Field, then the
[*****] may in its discretion initiate such
proceedings in [*****] At the Affected Participant's
request, Newco will cooperate with such action at the
[*****] [*****]
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the [*****] may request the cooperation of the other
Participant in such action; in such case, the
Participants may agree to institute such proceedings
in [*****] and shall reach agreement [*****] to the
third party.
12.3.2 During the term of the License Agreements, Newco shall have
the first right but not the obligation to bring suit or
otherwise take action against any alleged infringement of the
Newco Intellectual Property or alleged misappropriation of the
Newco Intellectual Property. If any such alleged infringement
or misappropriation occurs which gives rise to a cause of
action both [*****] Newco shall negotiate, together with Elan
and Celtrix, in good faith to determine the cause of action to
be taken. In the event that Newco takes such action, Newco
shall do so solely [*****] and all damages and monetary awards
recovered in or with respect to such action shall be the
property of Newco. At Newco's request, Elan and Celtrix will
cooperate with any such action at Newco's [*****]
12.3.3 In the event that Newco does not bring suit or otherwise take
action against any alleged infringement of the Newco
Intellectual Property or alleged misappropriation of the Newco
Intellectual Property and so notifies the Participants in
writing within [*****] of receiving notice of such
infringement, (i) if only [*****] desires to and does pursue
such suit or take such action [*****], it shall be entitled
[*****] recovered in or with respect to such action, and (ii)
if both Participants want to pursue such suit or action
outside of Newco, they will negotiate in good faith an
appropriate allocation of costs, expenses and recovery
amounts.
12.4 In the event that a claim is or proceedings are brought against Newco
by a third party alleging that the sale, distribution or use of a
Product in the Territory solely because of Newco's use of either the
Elan Intellectual Property or the Celtrix Intellectual Property, as the
case may be, infringes the intellectual property rights of such party,
Newco shall promptly advise either Elan or Celtrix, as the case may be,
of such threat or suit.
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12.5 Newco shall indemnify, defend and hold Elan or Celtrix, as the case may
be, harmless against all actions, losses, claims, demands, damages,
costs and liabilities (including reasonable attorneys fees) relating
directly or indirectly to all such claims or proceedings referred to in
Clause 12.3 provided that Elan or Celtrix, as the case may be, shall
not acknowledge to the third party or to any other person the validity
of any claims of such a third party, and shall not compromise or settle
any claim or proceedings relating thereto without the prior written
consent of Newco, not to be unreasonably withheld or delayed. At its
option, Elan or Celtrix, as the case may be, may elect to take over the
conduct of such proceedings from Newco; provided that Newco's
indemnification obligations shall continue; the costs of defending such
claim shall be borne by Elan or Celtrix, as the case may be; and such
Participant shall not compromise or settle any such claim or proceeding
without the prior written consent of Newco, such consent not to be
unreasonably withheld or delayed.
CLAUSE 13
COMMERCIALIZATION
13.1 Newco will diligently pursue the research, development, prosecution and
commercialization of the Products in accordance with the Business Plan.
The Participants shall reasonably assist and cooperate with Newco in
such research, development, prosecution and commercialization of the
Products.
13.2 Notwithstanding anything contained in this Agreement to the contrary,
[*****] shall have the right [*****] to enter into any agreement with
Newco [*****] Such right of [*****] shall be exercised as follows:
13.2.1 If Newco intends to commercialize or enter into an agreement
with a third party to commercialize the Products, then Newco
immediately shall notify [*****] in writing that [*****] may
elect to enter into negotiations referred to in this Clause
13.2. [*****] shall indicate its desire to enter into such
negotiations pursuant to this Clause 13.2 by delivering
written notice to Newco within [*****] of Elan's receipt of
the written notification from Newco to Elan (the "ELAN/NEWCO
OPTION"). If [*****] elects to enter into such negotiations,
the Parties shall negotiate in good faith the terms of an
applicable agreement.
13.2.2 If, despite such good faith negotiations, [*****] and Newco do
not reach agreement on the terms of such an agreement within
[*****]
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from [*****] exercise of the [*****] then Newco shall be free
to offer a third party[*****] terms to commercialize in the
Territory the Product that is subject to [*****]
CLAUSE 14
MANUFACTURING
14.1 If Newco elects to finance, develop and/or exploit the commercial
production of a Product, it is the expectation of the Participants that
Newco shall enter into a supply agreement with Elan or Celtrix, as the
case may be, to allow for the commercial production of such Product on
behalf of Newco, subject to the following: (a) Celtrix shall
manufacture and supply, and/or subcontract the manufacture and supply,
of SomatoKine(R) with respect to the Products, (b) Elan shall
manufacture and supply, and/or subcontract the manufacture and supply,
of the MEDIPAD(R) Drug Delivery System with respect to the Products,
and (c) Elan shall have the [*****] The supply agreements shall be
negotiated and agreed to by the Parties not later than the date of
completion of Phase III (as such term is commonly used in connection
with FDA applications) of the Project. The terms of the said supply
agreements shall be on normal commercial terms, and shall be negotiated
in good faith by the Parties thereto; provided that the Management
Committee shall have the authority to approve the cost to Newco of such
manufacture and supply of SomatoKine(R) and MEDIPAD(R) Drug Delivery
System to Newco.
CLAUSE 15
TECHNICAL SERVICES AND ASSISTANCE
15.1 Whenever commercially and technically feasible, Newco shall contract
with Celtrix or Elan, as the case may be, to perform such other
services as Newco may require, other than those specifically dealt with
hereunder or in the License Agreements. In determining which Party
should provide such services, the Management Committee shall take into
account the respective infrastructure, capabilities and experience of
Elan and Celtrix.
15.2 Newco shall, if appropriate, conclude an administrative support
agreement with Elan and/or Celtrix on such terms as the Parties thereto
shall in good faith negotiate. The administrative services shall
include one or more of the following administrative services as
requested by Newco:
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15.2.1 accounting, financial and other services;
15.2.2 tax services;
15.2.3 insurance services;
15.2.4 human resources services;
15.2.5 legal and company secretarial services;
15.2.6 patent and related intellectual property services; and
15.2.7 all such other services consistent with and of the same type
as those services to be provided pursuant to this Agreement,
as may be required.
The foregoing list of services shall not be deemed exhaustive and may
be changed from time to time upon written request by Newco.
15.3. The Parties agree that each Party shall effect and maintain [*****]
insurance in respect of all clinical trials and other activities
performed by them on behalf of Newco. The Stockholders and Newco shall
ensure that the industry standard insurance policies shall be in place
for all activities to be carried out by Newco.
15.4 If Elan or Celtrix so requires, Celtrix or Elan, as the case may be,
shall receive, at times and for periods mutually acceptable to the
Parties, employees of the other Party (such employees to be acceptable
to the receiving Party in the matter of qualification and competence)
for instruction in respect of the Elan Intellectual Property or the
Celtrix Intellectual Property, as the case may be, as necessary to
further the Project.
15.5 The employees received by Elan or Celtrix, as the case may be, shall be
subject to obligations of confidentiality no less stringent than those
set out in Clause 23 and such employees shall observe the rules,
regulations and systems adopted by the Party receiving the said
employees for its own employees or visitors.
CLAUSE 16
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SEPARATELY IN A REQUEST FOR CONFIDENTIAL TREATMENT WITH THE SECURITIES AND
EXCHANGE COMMISSION.
AUDITORS, BANKERS, REGISTERED OFFICE,
ACCOUNTING REFERENCE DATE; SECRETARY; COUNSEL
Unless otherwise agreed by the Stockholders and save as may be provided to the
contrary herein:
16.1 the auditors of Newco shall be [*****]
16.2 the bankers of Newco shall be [*****] or such other bank as may be
mutually agreed from time to time;
16.3 the accounting reference date of Newco shall be December 31st in each
Financial Year; and
16.4 the secretary of Newco shall be [*****] or such other Person as may be
appointed by the Directors from time to time.
CLAUSE 17
REGULATORY
17.1 Newco shall keep the other Parties promptly and fully advised of
Newco's regulatory activities, progress and procedures. Newco shall
inform the other Parties of any dealings it shall have with an RHA, and
shall furnish the other Parties with copies of all correspondence
relating to the Products. The Parties shall collaborate to obtain any
required regulatory approval of the RHA to market the Products.
17.2 Newco shall, at its own cost, file, prosecute and maintain any and all
Regulatory Applications for the Products in the Territory in accordance
with the Business Plan.
17.3 Any and all Regulatory Approvals obtained hereunder for any Product
shall remain the property of Newco, provided that Newco shall allow
Elan and Celtrix access thereto to enable Elan and Celtrix to fulfill
their respective obligations and exercise their respective rights under
this Agreement. Newco shall maintain such Regulatory Approvals at its
own cost.
17.4 It is hereby acknowledged that there are inherent uncertainties
involved in the registration of pharmaceutical products with the RHA's
insofar as obtaining approval is concerned and such uncertainties form
part of the business risk
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involved in undertaking the form of commercial collaboration as set
forth in this Agreement. Therefore, except for liabilities resulting
from failure to use reasonable efforts, none of Elan, EIS or Celtrix
shall have any liability to Newco solely as a result of any failure of
a Product to achieve the approval of any RHA.
CLAUSE 18
TRANSFERS OF SHARES;
RIGHT OF FIRST OFFER; TAG ALONG RIGHTS
18.1 GENERAL:
No Stockholder shall, directly or indirectly, sell or otherwise
transfer (each, a "TRANSFER") any Shares held by it except in
accordance with this Agreement. Newco shall not, and shall not permit
any transfer agent or registrar for any Shares to, transfer upon the
books of Newco any Shares from any Stockholder to any transferee, in
any manner, except in accordance with this Agreement, and any purported
transfer not in compliance with this Agreement shall be void.
18.2 RIGHTS OF FIRST OFFER:
If at any time after the end of the Term, a Stockholder shall desire to
Transfer any Shares owned by it (a "SELLING STOCKHOLDER"), in any
transaction or series of related transactions other than a Transfer to
an Affiliate or subsidiary or to an off-balance sheet special purpose
entity established by EIS or Celtrix, as the case may be, then such
Selling Stockholder shall deliver prior written notice of its desire to
Transfer (a "NOTICE OF INTENTION") (i) to Newco and (ii) to the
Stockholders who are not the Selling Stockholder (and any transferee
thereof permitted hereunder, if any), as applicable, setting forth such
Selling Stockholder's desire to make such Transfer, the number of
Shares proposed to be transferred (the "OFFERED SHARES") and the
proposed form of transaction (the "TRANSACTION PROPOSAL"), together
with any available documentation relating thereto and the price at
which such Selling Stockholder proposes to Transfer the Offered Shares
(the "OFFER PRICE"). The "Right of First Offer" provided for in this
Clause 18 shall be subject to any "Tag Along Right" benefiting a
Stockholder which may be provided for by Clause 18.3, subject to the
exceptions set forth therein.
Upon receipt of the Notice of Intention, the Stockholders who are not
the Selling Stockholder shall have the right to purchase at the Offer
Price the Offered Shares, exercisable by the delivery of notice to the
Selling Stockholder (the "NOTICE OF EXERCISE"), with a copy to Newco,
within 10 business days from the date of receipt of the Notice of
Intention. If no such Notice of Exercise has been delivered by the
Stockholders who are not the Selling Stockholder within such
10-business day period, or such Notice of Exercise does not relate to
all of the
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Offered Shares covered by the Notice of Intention, then the Selling
Stockholder shall be entitled to Transfer all of the Offered Shares to
the intended transferee. In the event that all of the Offered Shares
are not purchased by the non-selling Stockholders, the Selling
Stockholder shall sell the available Offered Shares within 30 days
after the delivery of such Notice of Intention on terms no more
favorable to a third party than those presented to the non-selling
Stockholders. If such sale does not occur, the Offered Shares shall
again be subject to the Right of First Refusal set forth in Clause
18.2.
In the event that any of the Stockholders who are not the Selling
Stockholder exercises their right to purchase all of the Offered Shares
(in accordance with this Clause 18.2), then the Selling Stockholder
shall sell all of the Offered Shares to such Stockholder(s), in the
amounts set forth in the Notice of Intention, after not less than 10
business days and not more than 25 business days from the date of the
delivery of the Notice of Exercise. In the event that more than one of
the Stockholders who are not the Selling Stockholders wish to purchase
the Offered Shares, the Offered Shares shall be allocated to such
Stockholders on the basis of their pro rata equity interests in Newco.
The rights and obligations of each of the Stockholders pursuant to the
Right of First Offer provided herein shall terminate upon the date that
the Common Stock is registered under Section 12(b) or 12(g) of the
Exchange Act.
At the closing of the purchase of all of the Offered Shares by the
Stockholders who are not the Selling Stockholder (scheduled in
accordance with Clause 18.2), the Selling Stockholder shall deliver
certificates evidencing the Offered Shares being sold, duly endorsed,
or accompanied by written instruments of transfer in form reasonably
satisfactory to the Stockholders who are not the Selling Stockholder,
duly executed by the Selling Stockholder, free and clear of any adverse
claims, against payment of the purchase price therefor in cash, and
such other customary documents as shall be necessary in connection
therewith.
18.3 TAG ALONG RIGHTS:
Subject to Clause 18.2, a Stockholder (the "TRANSFERRING STOCKHOLDER")
shall not Transfer (either directly or indirectly), in any one
transaction or series of related transactions, to any Person or group
of Persons, any Shares, unless the terms and conditions of such
Transfer shall include an offer to the other Stockholders who have not
exercised the Right of First Offer set forth above in Clause 18.2 (the
"REMAINING STOCKHOLDERS"), to sell Shares at the same price and on the
same terms and conditions as the Transferring Stockholder has agreed to
sell its Shares (the "TAG ALONG RIGHT").
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In the event a Transferring Stockholder proposes to Transfer any Shares
in a transaction subject to this Clause 18.3, it shall notify, or cause
to be notified, the Remaining Stockholders in writing of each such
proposed Transfer. Such notice shall set forth: (i) the name of the
transferee and the amount of Shares proposed to be transferred, (ii)
the proposed amount and form of consideration and terms and conditions
of payment offered by the transferee (the "TRANSFEREE TERMS") and (iii)
that the transferee has been informed of the Tag Along Right provided
for in this Clause 18.3, if such right is applicable, and the total
number of Shares the transferee has agreed to purchase from the
Stockholders in accordance with the terms hereof.
The Tag Along Right may be exercised by each of the Remaining
Stockholders by delivery of a written notice to the Transferring
Stockholder (the "CO-SALE NOTICE") within 10 business days following
receipt of the notice specified in the preceding subsection. The
Co-sale Notice shall state the number of Shares owned by such Remaining
Stockholder which the Remaining Stockholder wishes to include in such
Transfer; provided, however, that without the written consent of the
Transferring Stockholder, the amount of such securities belonging to
the Remaining Stockholder included in such Transfer may not be greater
than such Remaining Stockholder's percentage beneficial ownership of
Fully Diluted Common Stock multiplied by the total number of shares of
Fully Diluted Common Stock to be sold by both the Transferring
Stockholder and all Remaining Stockholders. Upon receipt of a Co-sale
Notice, the Transferring Stockholder shall be obligated to transfer at
least the entire number of Shares set forth in the Co-sale Notice to
the transferee on the Transferee Terms; provided, however, that the
Transferring Stockholder shall not consummate the purchase and sale of
any Shares hereunder if the transferee does not agree to purchase all
such Shares specified in all Co-sale Notices. If no Co-sale Notice has
been delivered to the Transferring Stockholder prior to the expiration
of the 10 business day period referred to above and if the provisions
of this Section have been complied with in all respects, the
Transferring Stockholder shall have the right for a 45 day calendar day
period to Transfer Shares to the transferee on the Transferee Terms
without further notice to any other party, but after such 45-day
period, no such Transfer may be made without again giving notice to the
Remaining Stockholders of the proposed Transfer and complying with the
requirements of this Clause 18.3.
At the closing of any Transfer of Shares subject to this Clause 18.3,
the Transferring Stockholder, and the Remaining Stockholder, in the
event such Tag
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[*****] INDICATES THAT CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED
SEPARATELY IN A REQUEST FOR CONFIDENTIAL TREATMENT WITH THE SECURITIES AND
EXCHANGE COMMISSION.
Along Right is exercised, shall deliver certificates evidencing such
securities as have been transferred by each, duly endorsed, or
accompanied by written instruments of transfer in form reasonably
satisfactory to the transferee, free and clear of any adverse claim,
against payment of the purchase price therefor.
The rights and obligations of each of the Stockholders pursuant to the
Tag Along Rights provided herein shall terminate upon the date that the
Common Stock of Newco is registered under Section 12(b) or 12(g) of the
Exchange Act.
Notwithstanding the foregoing, this Clause 18 shall not apply to any
sale of Common Stock pursuant to an effective registration statement
under the Securities Act in a bona fide public offering.
CLAUSE 19
MATTERS REQUIRING PARTICIPANTS' APPROVAL
19.1 Subject to the provisions of Clause 19.2, in consideration of Celtrix
and Elan agreeing to enter into the License Agreements, the Parties
hereby agree that Newco shall not without the prior approval of all of
the EIS Directors and all of the Celtrix Directors:
19.1.1. engage in any activity other than the Business;
19.1.2. acquire or dispose of assets of a value in excess of [*****]
or sell the principal assets, undertaking or Business of
Newco;
19.1.2. create any fixed or floating charge, lien (other than a lien
arising by operation of law) or other encumbrance over the
whole or any part of the undertaking, property or assets of
Newco or of any Subsidiary;
19.1.4. borrow any sum in excess of a maximum aggregate sum
outstanding at any time of [*****];
19.1.5. make any loan or advance or give any credit (other than normal
trade credit) in excess of [*****] to any Person;
19.1.6. give any guarantee or indemnity to secure the liabilities or
obligations of any Party other than those which it is usual to
give in the ordinary course of a business similar to the
Business;
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[*****] INDICATES THAT CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED
SEPARATELY IN A REQUEST FOR CONFIDENTIAL TREATMENT WITH THE SECURITIES AND
EXCHANGE COMMISSION.
19.1.7. enter into any contract, arrangement or commitment involving
expenditure on capital account or the realization of capital
assets if the amount or the aggregate amount of such
expenditure or realization by Newco would exceed [*****] in
any one year or in relation to any one project, and for the
purpose of this paragraph the aggregate amount payable under
any agreement for hire, hire purchase or purchase on credit
sale or conditional sale terms shall be deemed to be capital
expenditure incurred in the year in which such agreement is
entered into;
19.1.8. issue any unissued Shares or create or issue any new shares
(including a split of the Shares), except as expressly
permitted by the Newco Memorandum of Association and Bye-Laws;
19.1.9. alter any rights attaching to any class of share in the
capital of Newco or alter the Newco Memorandum of Association
and Bye-Laws;
19.1.10. consolidate, sub-divide or convert any of Newco's share
capital or in any way alter the rights attaching thereto;
19.1.11. dispose of Newco or of any shares in Newco;
19.1.12. enter into any partnership or profit sharing agreement with
any Person other than arrangements with trade representatives
and similar Persons in the ordinary course of business;
19.1.13. do or permit or suffer to be done any act or thing whereby
Newco may be wound up (whether voluntarily or compulsorily),
save as otherwise expressly provided for in this Agreement;
19.1.14. issue any debentures or other securities convertible into
shares or debentures or any share warrants or any options in
respect of shares in Newco;
19.1.15. enter into any contract or transaction except in the ordinary
and proper course of the Business on arm's length terms;
19.1.16. acquire, purchase or subscribe for any shares, debentures,
mortgages or securities (or any interest therein) in any
company, trust or other Person;
19.1.17. adopt any employee benefit program or incentive schemes;
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[*****] INDICATES THAT CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED
SEPARATELY IN A REQUEST FOR CONFIDENTIAL TREATMENT WITH THE SECURITIES AND
EXCHANGE COMMISSION.
19.1.18. engage any new employee at remuneration of greater than
[*****] per annum;
19.1.19. pay any remuneration to the Directors by virtue of holding
such office other than Directors who hold executive office;
19.1.20. licence or sub-licence any of the Elan Intellectual Property,
Celtrix Intellectual Property or Newco Intellectual Property;
19.1.21. amend or vary the terms of the Celtrix License Agreement or
the Elan License Agreement;
19.1.22. permit a person other than Newco to own a regulatory approval
relating to the Product(s);
19.1.23. change the authorized signatories on Newco bank accounts;
19.1.24. amend or vary the Business Plan;
19.1.25. alter the number of Directors;
19.1.26. pay dividends or distributions in respect of, or redeem or
repurchase, the equity of Newco;
19.1.27. enter into joint venture agreements or any similar
arrangements with any Person; or
19.1.28. create, acquire or dispose of any Subsidiary or of any shares
in any Subsidiary.
19.3 Notwithstanding any provision in this Agreement to the contrary, any
decision regarding U.S. tax elections to be made by Newco, such as
whether [*****], shall be made by unanimous vote of the Board of
Directors.
CLAUSE 20
DISPUTES
20.1 Should any dispute or difference arise between Elan and Celtrix, or
between Elan or Celtrix and Newco, during the period that this
Agreement is in force, other than a dispute or difference relating to
(i) the interpretation of any provision of this
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Agreement, (ii) the interpretation or application of law, or (iii) the
ownership of any intellectual property, then any Party may forthwith
give notice to the other Parties that it wishes such dispute or
difference to be referred to the chief executive officer of Celtrix and
the President of EPT.
20.2 In any event of a notice being served in accordance with Clause 20.1,
each of the Participants shall within 14 days of the service of such
notice prepare and circulate to the chief executive officer of Celtrix
and the President of EPT a memorandum or other form of statement
setting out its position on the matter in dispute and its reasons for
adopting that position. Each memorandum or statement shall be
considered by the chief executive officer of Celtrix and the President
of EPT who shall endeavor to resolve the dispute. If the chief
executive officer of Celtrix and the President of EPT agree upon a
resolution or disposition of the matter, they shall each sign a
statement which sets out the terms of their agreement. The Participants
agree that they shall exercise the voting rights and other powers
available to them in relation to Newco to assure that the agreed terms
are fully and promptly carried into effect.
20.3 The chief executive officer of Celtrix and the President of EPT shall,
if they are unable to resolve a dispute or difference when it is
referred to them under Clause 20.2, refer the matter to an independent
expert in pharmaceutical product development and marketing (including
clinical development and regulatory affairs) (the "EXPERT"). The Expert
shall be selected by the presiding justice of the Supreme Court of the
State of New York sitting in the County, City and State of New York
(the "PRESIDING JUSTICE") or, if the Expert should have a conflict of
interest, by such other Person as such justice shall select, having
assured himself as to such Person's independence. In each case, the
Expert shall be selected having regard to his suitability to determine
the particular dispute or difference on which the Expert is being
requested to determine. Unless otherwise agreed between the chief
executive officer of Celtrix and the President of EPT, the following
rules shall apply to the appointment of the Expert. The fees of the
Expert shall be shared equally between the Parties in dispute. The
Expert shall be entitled to inspect and examine all documentation and
any other material which the Expert may consider to be relevant to the
dispute. The Expert shall afford each Party a reasonable opportunity
(in writing or orally) of stating reasons in support of such
contentions as each Party may wish to make relative to the matters
under consideration. The Expert shall give notice in writing of his
determination to the Parties within such time as may be stipulated in
his terms of appointment or in the absence of such stipulation as soon
as practicable but in any event within four weeks from the reference of
the dispute or difference to him.
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20.4 Any determination by the Expert of a dispute or difference shall not be
final and binding on the Parties; provided, however, that any
determination by the Expert of a dispute or difference referred by the
Parties pursuant to Clause 21.6. shall be final and binding on the
Parties.
CLAUSE 21
TERMINATION
21.1 This Agreement shall govern the operation and existence of Newco until
(i) terminated by written agreement of all Parties hereto or (ii)
otherwise terminated in accordance with this Clause 21.
21.2 For the purpose of this Clause 21, a "RELEVANT EVENT" is committed or
suffered by a Participant if:
21.2.1 it commits a material breach of its obligations under this
Agreement or the applicable License and fails to remedy it
within 60 days of being specifically required in writing to do
so by the other Participant; provided, however, that if the
breaching Participant has proposed a course of action to
rectify the breach and is acting in good faith to rectify same
but has not cured the breach by the 60th day, such period
shall be extended by such period as is reasonably necessary to
permit the breach to be rectified;
21.2.2 a distress, execution, sequestration or other process is
levied or enforced upon or sued out against a material part of
its property which is not discharged or challenged within 30
days;
21.2.3 it is unable to pay its debts in the normal course of
business;
21.2.4 it ceases wholly or substantially to carry on its business,
otherwise than for the purpose of a reconstruction or
amalgamation, without the prior written consent of the other
Participant (such consent not to be unreasonably withheld);
21.2.5 the appointment of a liquidator, receiver, administrator,
examiner, trustee or similar officer of such Participant or
over all or substantially all of its assets under the law of
any applicable jurisdiction, including without limitation, the
United States of America, Bermuda or Ireland;
21.2.6 an application or petition for bankruptcy, corporate
re-organization, composition, administration, examination,
arrangement or any other procedure similar to any of the
foregoing under the law of any applicable jurisdiction,
including without limitation, the United States of America,
Bermuda or Ireland, is filed, and is not discharged within 60
days, or a Participant applies for or consents to the
appointment of a receiver, administrator, examiner or similar
officer of it or of all or a material part
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of its assets, rights or revenues or the assets and/or the
business of a Participant are for any reason seized,
confiscated or condemned.
21.4 If either Participant commits or suffers a Relevant Event, the other
Participant shall be entitled, within three months of the occurrence of
the Relevant Event, to require the defaulting Participant (the
"RECIPIENT PARTICIPANT") to sell on reasonable terms of payment to the
non-defaulting Participant (the "PROPOSING PARTICIPANT") all (but not
some only) of the Shares, held or beneficially owned by the Recipient
Participant for an amount equal to the fair market value of the Shares
of the Recipient Participant (the "BUYOUT OPTION").
21.5 The Proposing Participant shall notify the Recipient Participant of the
exercise of the Buyout Option, no later than 30 business days prior to
the proposed exercise thereof, by delivering written notice to the
Recipient Participant stating that the Buyout Option is exercised and
the price at which the Proposing Participant is willing to purchase the
Shares of the Recipient Participant.
21.6 In the event that the Participants do not agree upon a purchase price
for the Shares within five Business Days following the receipt by the
Recipient Participant of written notice from the Proposing Participant
pursuant to Clause 21.5 above, the Proposing Participant may contact
the Presiding Justice and request that an independent US-based
arbitrator who is knowledgeable of the pharmaceutical/biotechnology
industry be appointed within 10 Business Days. The Presiding Justice
shall endeavor to select an arbitrator who is technically knowledgeable
in the pharmaceutical/biotechnology industry (and who directly and
through his affiliates, has no business relationship with, or
shareholding in, either the Proposing Participant or the Recipient
Participant). Promptly upon being notified of the arbitrator's
appointment, the Proposing Participant and the Recipient Participant
shall submit to the arbitrator details of their assessment of the fair
market value for the Shares of the Recipient Participant together with
such information as they think necessary to validate their assessment.
The arbitrator shall notify the Recipient Participant of the fair
market value assessed by the Proposing Participant (the "PROPOSING
PARTICIPANT PRICE") and shall notify the Proposing Participant of the
fair market value assessed by the Recipient Participant (the "RECIPIENT
PARTICIPANT PRICE"). The Proposing Participant and the Recipient
Participant shall then be entitled to make further submissions to the
arbitrator within five Business Days explaining why the Recipient
Participant
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[*****] INDICATES THAT CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED
SEPARATELY IN A REQUEST FOR CONFIDENTIAL TREATMENT WITH THE SECURITIES AND
EXCHANGE COMMISSION.
Price or the Proposing Participant Price, as the case may be, is
unjustified. The arbitrator shall thereafter meet with the Proposing
Participant and the Recipient Participant and shall thereafter choose
either the Recipient Participant Price or the Proposing Participant
Price (but not any other price) as the purchase price for the Shares
(the "PURCHASE PRICE") on the basis of which price the Expert
determines to be closer to the fair market value for the Shares of the
Recipient Participant. The arbitrator shall use his best efforts to
determine the Purchase Price within 30 Business Days of his
appointment. The Proposing Participant and the Recipient Participant
shall bear the costs of the arbitrator equally provided that the
arbitrator may, in his discretion, allocate all or a portion of such
costs to one Party. Any decision of the arbitrator shall be final and
binding.
21.7 The Proposing Participant shall purchase the Shares of the Recipient
Participant by delivery of the Purchase Price in cash no later than the
15th Business Day following determination of the Purchase Price by the
Expert.
21.8 The Shares of the Recipient Participant so transferred shall be sold by
the transferor as beneficial owner with effect from the date of such
transfer free from any lien, charge or encumbrance with all rights and
restrictions attaching thereto.
21.9 If the Proposing Participant exercises the Buyout Option, both parties
will negotiate in good faith to agree to additional reasonable
provisions and/or amendments to the License Agreements to protect the
intellectual property rights of the Recipient Party.
21.10 If either Participant commits a Relevant Event, the other Stockholder
shall have in addition to all other legal and equitable rights and
remedies hereunder, the right to terminate this Agreement upon 30 days'
written notice.
21.11 In the event of a termination of the Elan License Agreement and/or the
Celtrix License Agreement, both parties will negotiate in good faith to
determine whether this Agreement should be terminated and if so, which
provisions should survive termination.
21.12 The provisions of Clauses [*****] shall survive the termination of this
Agreement under this Clause 21 in accordance with their terms; all
other terms and provisions of this Agreement shall cease to have effect
and be null and void upon the termination of this Agreement under this
Clause 21.
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CLAUSE 22
[INTENTIONALLY OMITTED]
CLAUSE 23
CONFIDENTIALITY
23.1 The Parties and/or Newco acknowledge and agree that it may be
necessary, from time to time, to disclose to each other confidential
and/or proprietary information, including without limitation,
inventions, works of authorship, trade secrets, specifications,
designs, data, know-how and other information, relating to the Field,
the Products, present or future products, the Newco Intellectual
Property, the Elan Intellectual Property or the Celtrix Intellectual
Property, as the case may be, methods, compounds, research projects,
work in process, services, sales suppliers, customers, employees and/or
business of the disclosing Party, whether in oral, written, graphic or
electronic form (collectively "CONFIDENTIAL INFORMATION").
23.2 Any Confidential Information revealed by a Party to another Party shall
be maintained as confidential and shall be used by the receiving Party
exclusively for the purposes of fulfilling the receiving Party's rights
and obligations under this Agreement, and for no other purpose.
Confidential Information shall not include:
23.2.1 information that is generally available to the public;
23.2.2 information that is made public by the disclosing Party;
23.2.3 information that is independently developed by the receiving
Party, as evidenced by such Party's records, without the aid,
application or use of the disclosing Party's Confidential
Information;
23.2.4 information that is published or otherwise becomes part of the
public domain without any disclosure by the receiving Party,
or on the part of the receiving Party's directors, officers,
agents, representatives or employees;
23.2.5 information that becomes available to the receiving Party on a
non-confidential basis, whether directly or indirectly, from a
source other than the disclosing Party, which source did not
acquire this information on a confidential basis; or
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23.2.6 information which the receiving Party is required to disclose
pursuant to:
(i) a valid order of a court or other governmental body
or any political subdivision thereof or as otherwise
required by law, rule or regulation; or
(ii) other requirement of law; provided, however, that if
the receiving Party becomes legally required to
disclose any Confidential Information, the receiving
Party shall give the disclosing Party prompt notice
of such fact so that the disclosing Party may obtain
a protective order or confidential treatment or other
appropriate remedy concerning any such disclosure.
The receiving Party shall fully co-operate with the
disclosing Party in connection with the disclosing
Party's efforts to obtain any such order or other
remedy. If any such order or other remedy does not
fully preclude disclosure, the receiving Party shall
make such disclosure only to the extent that such
disclosure is legally required; or
23.2.7 information which was already in the possession of the
receiving Party at the time of receiving such information, as
evidenced by its records, provided such information was not
previously provided to the receiving party from a source which
was under an obligation to keep such information confidential;
or
23.2.8 information that is the subject of a written permission to
disclose, without restriction or limitation, by the disclosing
Party.
23.3 Each Party agrees to disclose Confidential Information of another Party
only to those employees, representatives and agents requiring knowledge
thereof in connection with their duties directly related to the
fulfilling of the Party's obligations under this Agreement, so long as
such persons are under an obligation of confidentiality no less
stringent than as set forth herein. Each Party further agrees to inform
all such employees, representatives and agents of the terms and
provisions of this Agreement and their duties hereunder and to obtain
their written consent hereto as a condition of receiving Confidential
Information. Each Party agrees that it will exercise the same degree of
care and protection to preserve the proprietary and confidential nature
of the Confidential Information disclosed by a Party, as the receiving
Party would exercise to preserve its own Confidential Information. Each
Party agrees that it will, upon request of another Party, return all
documents and any copies thereof containing Confidential Information
belonging to or disclosed by such other Party. Each Party shall
promptly notify
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[*****] INDICATES THAT CONFIDENTIAL MATERIAL HAS BEEN OMITTED AND FILED
SEPARATELY IN A REQUEST FOR CONFIDENTIAL TREATMENT WITH THE SECURITIES AND
EXCHANGE COMMISSION.
the other Parties upon discovery of any unauthorized use or disclosure
of the other Parties' Confidential Information.
23.4 Notwithstanding the above, each Party may use or disclose Confidential
Information disclosed to it by another Party to the extent such use or
disclosure is reasonably necessary in filing or prosecuting patent
applications, prosecuting or defending litigation, complying with
patent applications, prosecuting or defending litigation, complying
with applicable governmental regulations or otherwise submitting
information to tax or other governmental authorities, conducting
clinical trials, or granting a permitted sub-license or otherwise
exercising its rights hereunder; provided, that if a Party is required
to make any such disclosure of the other Party's Confidential
Information, other than pursuant to a confidentiality agreement, such
Party shall inform the third party recipient of the terms and
provisions of this Agreement and their duties hereunder and shall
obtain their consent hereto as a condition of releasing to the third
party recipient the Confidential Information.
23.5 Any breach of this Clause 23 by any employee, representative or agent
of a Party is considered a breach by the Party itself.
23.6 The provisions relating to confidentiality in this Clause 23 shall
remain in effect during the Term and for a period of [*****] following
the termination of this Agreement.
23.7 The Parties agree that the obligations of this Clause 23 are necessary
and reasonable in order to protect the Parties' respective businesses,
and each Party expressly agrees that monetary damages would be
inadequate to compensate a Party for any breach by the other Party of
its covenants and agreements set forth herein. Accordingly, the Parties
agree and acknowledge that any such violation or threatened violation
will cause irreparable injury to a Party and that, in addition to any
other remedies that may be available, in law or in equity or otherwise,
any Party shall be entitled to obtain injunctive relief against the
threatened breach of the provisions of this Clause 23, or a
continuation of any such breach by the other Party, specific
performance and other equitable relief to redress such breach together
with its damages and reasonable counsel fees and expenses to enforce
its rights hereunder, without the necessity of proving actual or
express damages.
23.8 If it is necessary for Celtrix to file a copy of this Agreement with
the Securities and Exchange Commission pursuant to applicable law, then
(a) Celtrix shall consult with Elan, and keep Elan fully informed, with
respect thereto, and (b) Celtrix shall use its best efforts to obtain
confidential treatment to the maximum extent possible with respect to
such filing of this Agreement.
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CLAUSE 24
COSTS
24.1 Each Stockholder shall bear its own legal and other costs incurred in
relation to preparing and concluding this Agreement and the Transaction
Documents.
24.2 All other costs, legal fees, registration fees and other expenses
relating to the transactions contemplated hereby, including the costs
and expenses incurred in relation to the incorporation of Newco, shall
be borne by Newco.
CLAUSE 25
GENERAL
25.1 GOOD FAITH:
Each of the Parties hereto undertakes with the others to do all things
reasonably within its power that are necessary or desirable to give
effect to the spirit and intent of this Agreement.
25.2 FURTHER ASSURANCE:
At the request of any of the Parties, the other Party or Parties shall
(and shall use reasonable efforts to procure that any other necessary
parties shall) execute and perform all such documents, acts and things
as may reasonably be required subsequent to the signing of this
Agreement for assuring to or vesting in the requesting Party the full
benefit of the terms hereof.
25.3 NO REPRESENTATION:
Each of the Parties hereto hereby acknowledges that in entering into
this Agreement it has not relied on any representation or warranty
except as expressly set forth herein or in any document referred to
herein.
25.4 FORCE MAJEURE:
Neither Party to this Agreement shall be liable for delay in the
performance of any of its obligations hereunder if such delay is caused
by or results from causes beyond its reasonable control, including
without limitation, acts of God, fires, strikes, acts of war (whether
war be declared or not), insurrections, riots, civil commotions,
strikes, lockouts or other labor disturbances or intervention of any
relevant government authority, but any such delay or failure shall be
remedied by such Party as soon as practicable.
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25.5 RELATIONSHIP OF THE PARTIES:
Nothing contained in this Agreement is intended or is to be construed
to constitute Elan/EIS and Celtrix as partners, or Elan/EIS as an
employee or agent of Celtrix, or Celtrix as an employee or agent of
Elan/EIS.
No Party hereto shall have any express or implied right or authority to
assume or create any obligations on behalf of or in the name of another
Party or to bind another Party to any contract, agreement or
undertaking with any third Party.
25.6 COUNTERPARTS:
This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original and all of
which when taken together shall constitute this Agreement.
25.7 NOTICES:
Any notice to be given under this Agreement shall be sent in writing by
registered or recorded delivery post or reputable overnight courier
such as Federal Express or telecopied to:
Elan/EIS at:
Lincoln House, Lincoln Place, Dublin 2, Ireland
Attention: Vice President & General Counsel
Elan Pharmaceutical Technologies,
a division of Elan Corporation, plc
Telephone: 353-1-709-4000
Fax: 353-1-709-4124
and
Elan International Services, Ltd.
102 St. James Court
Flatts, Smiths FL04
Bermuda
Attention: President
Telephone: 441-292-9169
Fax: 441-292-2224
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with a copy to:
Brock Silverstein LLC
One Citicorp Center, 56th Floor
New York, NY 10022 United States of America
Attention: David Robbins, Esq.
Telephone 212-371-2000
Fax: 212-371-5500
Celtrix at:
2033 Gateway Place, Suite 600
San Jose, CA 95110 United States of America
Attention: President
Telephone: 408-573-6263
Fax: 408-573-6228
with a copy to:
Venture Law Group
2800 Sand Hill Road
Menlo Park, CA 94025 United States of America
Attention: Ned Ruffin
Telephone: 650-854-4488
Fax: 650-233-8386
Newco at:
102 St. James Court
Flatts, Smiths FL04
Bermuda
Attention: Secretary
Telephone: 441-292-9169
Fax: 441-292-2224
or to such other address(es) as may from time to time be notified by
any Party to the others hereunder.
Any notice sent by mail shall be deemed to have been delivered within
three Business Days after dispatch or delivery to the relevant courier
and any notice sent by telecopy shall be deemed to have been delivered
upon confirmation of receipt. Notices of change of address shall be
effective upon receipt. Notices by telecopy shall also be sent by
another method permitted hereunder.
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25.8 GOVERNING LAW;
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to any choice
or conflict or law provision or rule. For the purpose of this Agreement
the Parties submit to the personal jurisdiction of the United States
District Court for the State of New York. The Parties each further
irrevocably consent to the service of any complaint, summons, notice or
other process by delivery thereof to it by any manner in which notices
may be given pursuant to this Agreement.
25.9.1 SEVERABILITY.
If any provision in this Agreement is agreed in writing by the
Parties to be, or is deemed to be, or becomes invalid,
illegal, void or unenforceable under any law that is
applicable hereto, (i) such provision will be deemed amended
to conform to applicable laws so as to be valid and
enforceable without materially altering the intention of the
Parties, and (ii) the validity, legality and enforceability of
the remaining provisions of this Agreement shall not be
impaired or affected in any way.
25.10 AMENDMENTS:
No amendment, modification or addition hereto shall be effective or
binding on any Party unless set forth in writing and executed by a duly
authorized representative of all Parties.
25.11 WAIVER:
No waiver of any right under this Agreement shall be deemed effective
unless contained in a written document signed by the Party charged with
such waiver, and no waiver of any breach or failure to perform shall be
deemed to be a waiver of any future breach or failure to perform or of
any other right arising under this Agreement.
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25.12 ASSIGNMENT:
None of the Parties shall be permitted to assign its rights or
obligations hereunder without the prior written consent of the other
Parties except as follows:
25.12.1 Elan, EIS and/or Celtrix shall have the right to assign their
rights and obligations hereunder to their Affiliates provided,
however, that such assignment does not result in adverse tax
consequences for any other Parties.
25.12.2 Elan, EIS and/or Celtrix shall have the right to assign their
rights and obligations hereunder to an off-balance sheet
special purpose entity established by Elan, EIS and/or
Celtrix.
25.13 WHOLE AGREEMENT/NO EFFECT ON OTHER AGREEMENTS:
This Agreement (including the Schedules attached hereto) and the
Transaction Documents set forth all of the agreements and
understandings between the Parties with respect to the subject matter
hereof, and supersedes and terminates all prior agreements and
understandings between the Parties with respect to the subject matter
hereof. There are no agreements or understandings with respect to the
subject matter hereof, either oral or written, between the Parties
other than as set forth in this Agreement and the Transaction
Documents.
In the event of any ambiguity or conflict arising between the terms of
this Agreement and those of the Newco Memorandum of Association and
Bye-Laws, the terms of this Agreement shall prevail.
No provision of this Agreement shall be construed so as to negate,
modify or affect in any way the provisions of any other agreement
between any of the Parties unless specifically referred to, and solely
to the extent provided herein. In the event of a conflict between the
provisions of this Agreement and the provisions of the License
Agreements, the terms of this Agreement shall prevail unless this
Agreement specifically provide otherwise.
25.14 SUCCESSORS:
This Agreement shall be binding upon and inure to the benefit of the
Parties hereto, their successors and permitted assigns.
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IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement on the day first set forth above.
SIGNED
BY: /s/ Kevin Insley
----------------------------------
for and on behalf of
ELAN CORPORATION, PLC
in the presence of: /s/ [Illegible]
------------------
SIGNED
BY: /s/ Kevin Insley
---------------------------------
for and on behalf of
ELAN INTERNATIONAL SERVICES, LTD.
in the presence of: /s/ [Illegible]
------------------
SIGNED
BY: /s/ Andreas Sommer
----------------------------------
for and on behalf of
CELTRIX PHARMACEUTICALS INC.
in the presence of: /s/ Kia P. Royal-Barrett
-------------------------
SIGNED
BY: /s/ Andreas Sommer
----------------------------------
for and on behalf of
CELTRIX NEWCO LTD.
in the presence of:/s/ Kia P. Royal-Barrett
-------------------------
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SCHEDULE 1
ELAN LICENSE AGREEMENT
52
SCHEDULE 2
CELTRIX LICENSE AGREEMENT