Exhibit 10.1
Amended JDOA
Execution Version
Dated January 15, 2002
AMENDED AND RESTATED
SUBSCRIPTION, JOINT DEVELOPMENT AND OPERATING AGREEMENT
BETWEEN
ELAN CORPORATION, PLC
ELAN INTERNATIONAL SERVICES, LTD.
AND
GENEREX BIOTECHNOLOGY CORPORATION
AND
GENEREX (BERMUDA), LTD.
INDEX
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CLAUSE 1 DEFINITIONS
CLAUSE 2 NEWCO'S BUSINESS
CLAUSE 3 REPRESENTATIONS AND WARRANTIES
CLAUSE 4 AUTHORIZATION AND CLOSING
CLAUSE 5 DIRECTORS; MANAGEMENT AND R&D COMMITTEES
CLAUSE 6 THE BUSINESS PLAN AND REVIEWS
CLAUSE 7 RESEARCH AND DEVELOPMENT
CLAUSE 8 COMMERCIALIZATION
CLAUSE 9 OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS/NONCOM PETITION
CLAUSE 10 INTELLECTUAL PROPERTY RIGHTS
CLAUSE 11 CROSS LICENSING/EXPLOITATION OF PRODUCTS OUTSIDE FIELDS
CLAUSE 12 REGULATORY MATTERS/CLINICAL TRIALS
CLAUSE 13 MANUFACTURING
CLAUSE 14 TECHNICAL SERVICES AND ASSISTANCE
CLAUSE 15 AUDITORS, BANKERS, ACCOUNTING REFERENCE DATE; SECRETARY
CLAUSE 16 TRANSFER OF SHARES; RIGHTS OF FIRST OFFER; TAG ALONG RIGHTS
CLAUSE 17 MATTERS REQUIRING DIRECTORS' APPROVAL
CLAUSE 18 DISPUTES
CLAUSE 19 TERMINATION
CLAUSE 20 SHARE RIGHTS
CLAUSE 21 CONFIDENTIALITY
CLAUSE 22 COSTS
CLAUSE 23 GENERAL
THIS AMENDED AND RESTATED SUBSCRIPTION, JOINT DEVELOPMENT AND OPERATING
AGREEMENT made this 15th day of January 2002
BETWEEN:
(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;
(2) ELAN INTERNATIONAL SERVICES, LTD., a Bermuda exempted limited liability
company incorporated under the laws of Bermuda, and having its
registered office at Clarendon House, 2 Church St., Hamilton, Bermuda
("EIS");
(3) GENEREX BIOTECHNOLOGY CORPORATION a corporation duly incorporated and
validly existing under the laws of Delaware; and
(4) GENEREX (BERMUDA), LTD. a Bermuda exempted limited liability company
incorporated under the laws of Bermuda, and having its registered
office at Clarendon House, 2 Church St., Hamilton, Bermuda ("Newco").
RECITALS:
A. Newco, Generex, Elan and EIS have entered into a Subscription, Joint
Development and Operating Agreement, dated as of January 17, 2001 (the
"Original JDOA"). Capitalized terms used herein are defined below.
B. Pursuant to the Original JDOA, Newco issued and sold to Generex, and
Generex purchased from Newco, for aggregate consideration of $7.5
million, 6,000 Newco's common shares, par value $1.00 per share (the
"Common Shares").
Additionally, Newco issued and sold to the Shareholders (as defined
below), and the Shareholders purchased from Newco, for aggregate
consideration of $7.5 million apportioned between them as set forth
herein, 6,000 Newco's preference Shares, par value $1.00 per share (the
"Preference Shares"), allocated 3,612 Preference Shares to Generex for
aggregate consideration of $4.515 million and 2,388 Preference Shares
to EIS for aggregate consideration of $2.985 million.
B. As of the Closing Date, Elan had entered into the Original Elan License
Agreement, and Generex has entered into the Original Generex License
Agreement.
C. Elan and Generex have agreed to co-operate in the research, development
and commercialization of the Products (as defined below) based on their
respective technologies.
D. Elan and Generex entered into the Original JDOA for the purpose of
recording the terms and conditions regulating their relationship with
each other, with respect to the licenses of intellectual property
granted under the Original License Agreements.
E. Contemporaneously herewith, Elan and Newco are amending the Original
Elan License Agreement and entering into the Amended Elan License
Agreement with respect to the Elan Intellectual Property and Generex
and Newco are amending the Original Generex License Agreement and
entering into the Amended Generex License Agreement with respect to the
Generex Intellectual Property.
F. The Parties desire to desire to amend and restate the Original JDOA in
its entirety, in accordance with the terms and conditions set forth
below.
NOW IT IS HEREBY AGREED AS FOLLOWS:
CLAUSE 1
DEFINITIONS
1.1 In this Amended JDOA, the following terms shall, where not inconsistent
with the context, have the following meanings respectively.
"Abandoned Compound" shall have the meaning as such term is defined in
Clause 2.
"Additional Compound" shall have the meaning as such term is defined in
clause 2.
"Affiliate" shall mean any corporation or entity controlling,
controlled or under the common control of Elan or Generex or any third
party, as the case may be, excluding, in the case of Elan an Elan JV.
For the purpose of this definition, (i) "control" shall mean direct or
indirect ownership of fifty percent (50%) or more of the Shares or
shares entitled to vote for the election of directors and (ii) Newco
shall not be an Affiliate of Elan or EIS.
"Alternative Compound(s)" shall have the meaning as such term is
defined in Clause 2.4.
2
"Amended Elan License Agreement" shall mean the amended and restated
license agreement between Elan and Newco, of even date herewith,
attached hereto in Schedule 1.
"Amended Generex License Agreement" shall mean the amended and restated
license agreement between Generex and Newco, of even date herewith,
attached hereto in Schedule 2.
"Amended JDOA" shall mean this Amended and Restated Subscription, Joint
Development and Operating Agreement (which expression shall be deemed
to include the Recitals and the Schedules hereto).
"Amended License Agreements" shall mean the Amended Elan License
Agreement and the Amended Generex License Agreement.
"Board" shall mean the board of directors of Newco.
"Buccal Delivery" shall mean the delivery of the majority of a dose of
a pharmaceutical agent to and through the tissues of the mouth and/or
throat.
"Business" shall mean the business specified in the Business Plan.
"Business Plan" shall mean the business plan and program of development
to be agreed by Elan and Generex pursuant to Clause 6, with respect to
the research, development, and commercialization of the Products, which
Business Plan shall contain, among other things, to the extent
practicable, the research and development objectives, desired Product
specifications, clinical indications, preliminary clinical trial
designs (Phase I/II), development timelines, budgeted costs and the
relative responsibilities of Generex and Elan as it relates to the
implementation of the R&D Plan.
"Certificate of Designations" shall mean that certain certificate of
designations, preferences and rights of Series A Preferred Stock of
Generex issued on or prior to the Closing Date.
"Closing Date" shall mean January 17, 2001, the date upon which the
Original Definitive Documents were executed and delivered by the
Parties and the transactions effected thereby were closed.
"Common Shares Equivalents" shall mean any options, warrants, rights or
any other securities convertible, exercisable or exchangeable, in whole
or in part, for or into Common Shares.
"Compound(s)" shall mean Morphine and/or any Additional Compound that
is approved in writing by the Management Committee in accordance with
Clause 2.
3
"Definitive Documents" shall mean this Amended JDOA, the Amended Elan
License Agreement, the Amended Generex License Agreement, the Generex
Securities Purchase Agreement, the Registration Rights Agreements, the
Certificate of Designations and associated documentation of even date
therewith or herewith, by and between Generex, Elan, EIS and Newco, as
applicable.
"Development Funding" shall have the meaning set forth in Clause 6.
"Directors" shall mean, at any time, the directors of Newco.
"Effective Date" shall mean the date of this Amended JDOA.
"EIS Director" has the meaning set forth in Clause 5.
"EIS/Newco Option" shall have the meaning set forth in Clause 8.
"Elan" shall mean Elan Corporation, plc. and the Affiliates of Elan
Corporation, plc. within the Drug Delivery Business Unit of the Elan
Group. For the avoidance of doubt, "Elan" shall exclude the Excluded
Entities.
"Elan Group" shall mean all the Affiliates of Elan Corporation, plc.
"Elan Intellectual Property" has the meaning assigned thereto in the
Amended Elan License Agreement.
"Elan JV" shall mean an entity that Elan and a third party (i)
establish or have established, (ii) take shareholdings in or have a
right to take shareholdings in, and (iii) grant certain licenses in and
to certain intellectual property rights for the purpose of implementing
a strategic alliance.
"Elan License" has the meaning assigned thereto in the Amended Elan
License Agreement.
"Encumbrance" shall mean any liens, charges, encumbrances, equities,
claims, options, proxies, pledges, security interests, or other similar
rights of any nature.
"EPIL" shall mean Elan Pharma International Ltd, a private limited
company incorporated under the laws of Ireland.
"Exchange Right" has the meaning assigned to such term in the
Certificate of Designations in effect on the Closing Date.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Excluded Entities" shall mean Neuralab Ltd.; and the Affiliates
(present and future) of Elan Corporation, plc. within the
Biopharmaceuticals Business Unit of the Elan, including, without
limitation, Elan Pharma International Limited Elan Pharmaceuticals,
Inc. and EPIL (only to the extent that EPIL is the owner of patents,
know-how or other intellectual property or technology invented and/or
developed within the Biopharmaceuticals Business Unit of the Elan
Group).
4
"FDA" shall mean the United States Food and Drug Administration or any
other successor agency in the USA.
"Fields" shall mean Field 1 and Field 2.
"Field 1" shall mean the Buccal Delivery of Morphine for the treatment
of all types of pain.
"Field 2" shall mean the Buccal Delivery of any Additional Compound
selected by the Management Committee pursuant to Clause 2 for the
treatment of prostate cancer and endometriosis and/or the suppression
of testosterone and estrogen.
"Financial Year" shall mean each year commencing on August 1 (or in the
case of the first Financial Year, the Closing Date) and expiring on
July 31 of each year.
"Fully Diluted Common Shares" shall mean all of the issued and
outstanding Common Shares, assuming the conversion, exercise or
exchange of all outstanding Common Shares Equivalents.
"Generex" shall mean Generex Biotechnology Corporation, a Delaware
corporation, and its Affiliates.
"Generex Directors" has the meaning set forth in Clause 5.
"Generex Intellectual Property" has the meaning assigned thereto in the
Amended Generex License Agreement.
"Generex License" shall have the meaning assigned thereto in the
Amended Generex License Agreement.
"Generex Securities Purchase Agreement" shall mean that certain
securities purchase agreement, dated as of January 16, 2001, by and
between Generex and EIS.
"Licensed Technologies" shall mean, collectively, the Elan Intellectual
Property and the Generex Intellectual Property.
"Morphelan(TM)" shall mean Elan's proprietary ingestible, [ * ] of
Morphine.
"Morphine" shall mean all forms of morphine, including, without
limitation, morphine sulfate; provided, however, that Morphelan(TM)
shall not be included.
5
"Newco Intellectual Property" shall mean all rights to patents,
know-how and other intellectual property arising out of the conduct of
the Project by any person, including any technology acquired by Newco
from a third party that does not constitute Elan Intellectual Property
or Generex Intellectual Property.
For the avoidance of doubt, (a) any preclinical and clinical data
and/or toxicity, stability and pharmacological data generated pursuant
to the Project shall constitute Newco Intellectual Property, and (b)
any patent application filed by Newco, or by Elan or Generex on behalf
of Newco, and any patent issued pursuant thereto, covering a Product
shall constitute Newco Intellectual Property.
"Newco Bye-Laws" shall mean the Memorandum of Association and Byelaws
of Newco Limited.
"Original Definitive Documents" shall mean the Original JDOA, Original
Elan License Agreement, the Original Generex License Agreement, the
Generex Securities Purchase Agreement, the Registration Rights
Agreements, the Certificate of Designations and associated
documentation of even date therewith, by and between Generex, Elan, EIS
and Newco, as applicable.
"Original Elan License Agreement" shall mean the license agreement
between Elan and Newco, dated January 16, 2001.
"Original Generex License Agreement" shall mean the license agreement
between Generex and Newco, dated January 16, 2001.
"Original License Agreements" shall mean the Original Elan License
Agreement and the Original Generex License Agreement.
"Original JDOA" shall mean the Subscription, Joint Development and
Operating Agreement, dated as of January 17, 2001, by and between Elan,
Generex, EIS and Newco.
"Participant" shall mean Generex or Elan, as the case may be, and
"Participants" shall mean both of the Participants together.
"Party" shall mean Elan, Generex, or Newco, as the case may be, and
"Parties" shall mean all such parties together.
"Person" shall mean 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.
6
"Permitted Transferee" shall mean any Affiliate or subsidiary of Elan,
EIS or Generex, to whom this Amended JDOA may be assigned, in whole or
in part, pursuant to the terms hereof or in the case of Elan or EIS, a
special purpose financing entity created by Elan or EIS.
"Product" shall mean an appropriate pharmaceutical formulation of a
Compound.
"Project" shall mean all activities as undertaken by Elan, Generex and
Newco in order to develop the Products pursuant to the Business Plan,
the R&D Plan and otherwise pursuant to this Amended JDOA.
"R&D Plan" shall mean the program of work, including the budget, agreed
by the Management Committee as part of the Business Plan that relates
to the formulation, biopharmaceutical and Phase II clinical development
of the Products and such further research and development work as may
be agreed by the Management Committee from time to time.
"R&D Program(s)" shall mean any research and development program(s)
commenced by Newco pursuant to the Project.
"R&D Term" shall mean shall mean the period commencing on the Closing
Date and ending on the 4th anniversary thereof.
"Registration Rights Agreements" shall mean the Registration Rights
Agreements dated as of January 16, 2001 relating to Newco and Generex,
respectively.
"Regulatory Application" shall mean 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" shall mean the final 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" shall mean 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" shall mean the Securities Act of 1933, as amended.
"Shares" shall mean the Common Shares and Preference Shares of Newco.
7
"Shareholder" shall mean any of EIS, Generex, any Permitted Transferee
or any other Person who subsequently becomes bound by this Amended JDOA
as a holder of the Shares, and "Shareholders" shall mean all of the
Shareholders together.
"Technological Competitor of Elan" shall have the meaning assigned
thereto in the Amended Elan License Agreement.
"Term" shall mean the term of this Amended JDOA.
"Territory" shall mean all of the countries of the world.
"United States Dollar" and "US$" and "$" shall mean 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
"AAA" 18.4
"Buyout Option" 19.3
"Closing" 4.3
"Common Shares" Recital
"Confidential Information" 21.1
"Co-sale Notice" 16.4
"Expert" 18.3
"Funding" 6.4.1
"JDOA" Recital
"Management Committee" 5.2.1
"Notice of Exercise" 16.3
"Notice of Intention" 16.3
"Offered Shares" 16.3
"Offer Price" 16.3
"Preference Shares" Recital
"Proposing Participant" 19.5
"Proposing Participant Price: 19.5
"Purchase Price" 19.5
"Recipient Participant" 19.3
"Recipient Participant Price" 19.5
"Relevant Event" 19.2
"Remaining Shareholders" 16.4
"Selling Shareholder" 16.3
"Tag-Along Right" 16.4
"Transaction Proposal" 16.3
"Transfer" 16.1
"Transferee Terms" 16.4
"Transferring Shareholder" 16.4
"Work" 6.4.2
8
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 Amended JDOA.
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 Amended JDOA 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
assigned thereto in the Definitive Documents, if defined therein.
CLAUSE 2
BUSINESS
2.1 The primary objective of this Amended JDOA is to regulate the business
of the development, testing, registration, manufacture,
commercialization and licensing of Products in the Territory and to
achieve the other objectives set out in this Amended JDOA. The focus of
the Business will be the development of the Products using the Elan
Intellectual Property, the Generex Intellectual Property and the Newco
Intellectual Property to agreed-upon specifications and timelines.
2.2 The central management and control of Newco shall be exercised in
Bermuda and shall be vested in the Directors and such Persons as they
may delegate the exercise of their powers. The Shareholders agree to
conduct the Business in such a manner as to ensure that Newco is liable
to taxation in Bermuda and not in any other jurisdiction. The
Participants shall use their best endeavors 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.
2.3 The initial Compound that has been selected and approved for the
Project is Morphine in Field 1. Subject to Clause 2.4, the Management
Committee may, in its discretion, select and approve (in accordance
with the procedures for Management Committee decision making set forth
in Clause 5), in addition to Morphine, an additional compound (each an
"Additional Compound") for the Project, in Field 2, having regard to
the following criteria:
9
2.3.1 the market potential of the proposed Additional Compound in
Field 2 in the Territory (including consideration of the
current and anticipated competition), as estimated by the
Management Committee;
2.3.2 the development cost of the proposed Additional Compound in
Field 2 in the Territory, as estimated by the Management
Committee; and
2.3.3 the results of regulatory and intellectual property due
diligence primarily focused on determining whether there are
any regulatory or intellectual property issues which might
impact the development and marketing of the proposed Additional
Compound in Field 2 in the Territory.
Notwithstanding the foregoing, a proposed Additional Compound shall not
be selected and approved if such proposed Additional Compound is
subject to contractual obligations of Elan or Generex existing at the
date of nomination that would restrict the conduct by Newco of a R&D
Program in Field 2 in the Territory or the ability of Newco to
commercialize the proposed Additional Compound in Field 2 in the
Territory.
Prior to the approval of any Additional Compound hereunder, the Parties
shall discuss in good faith whether any amendments are required to the
Definitive Documents as a result of such approval, such as amending the
provisions regulating non-competition.
2.4 Subject to the provisions of Clause 6.4, the Management Committee may
determine that any R&D Program commenced as part of the Project in
respect of a particular Compound should be terminated where such
Compound fails to meet agreed specifications or the R&D Program reveals
scientific or technical or intellectual property issues which would
have a material adverse effect on the development and commercialization
of the Compound in the applicable Field in the Territory.
In such event, the Management Committee shall review in good faith
(with reference to criteria identical to those set forth in Clause 2.3)
the possibility of selecting an alternative Compound in Field 1 or
Field 2 for development ("Alternative Compound"), which Alternative
Compound may be in-licensed to Newco from Elan, Generex or a third
party. The Management Committee may, in its discretion, review in good
faith (with reference to criteria identical to those set forth in
Clause 2.3) the possibility of selecting more than one Alternative
Compound.
If the Parties should agree to in license to Newco an Alternative
Compound, the Parties shall discuss in good faith whether any
amendments are required to the Definitive Documents as a result of such
approval, such as amending the provisions regulating non-competition.
10
2.5 In the event that the Management Committee terminates any R&D Program
in respect of any Compound ("Abandoned Compound") pursuant to Clause
2.4:
2.5.1 Newco and Generex shall confirm to Elan in writing that the
Elan License has terminated insofar as it previously related
to the Abandoned Compound;
2.5.2 Newco and Elan shall confirm to Generex in writing that the
Generex License has terminated insofar as it previously
related to the Abandoned Compound; and
2.5.3 Elan and Generex will cease to be bound by the non-competition
obligations set forth in Clause 4 of the Amended Elan License
Agreement and the Amended Generex License Agreement, as the
case may be, or otherwise set forth in the Definitive
Documents in respect of the Abandoned Compound, and the
Parties shall discuss in good faith what additional amendments
are required to the Definitive Documents.
CLAUSE 3
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Newco: Newco hereby represents and
warrants to each of the Shareholders as follows, as of the Closing Date
and the Effective Date:
3.1.1 Organization: Newco was, as of the Closing Date, and is, as of
the Effective Date 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.
3.1.2 Capitalization: The authorized capital Shares of Newco
consists of 6,000 Common Shares and 6,000 Preference Shares.
Prior to the Closing Date, no shares of capital stock of Newco
had been issued.
3.1.3 Authorization: The execution, delivery and performance by
Newco of the Original JDOA, including the issuance of the
Shares and the execution, delivery and performance by Newco of
this Amended JDOA have been or will be duly authorized by all
requisite corporate actions; the Original JDOA was on the
Closing Date and this Amended JDOA has been duly executed and
delivered by Newco; the Original JDOA was on the Closing Date
and this Amended JDOA is the valid and binding obligation of
Newco, enforceable against it in accordance with their
respective 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. The Shares issued pursuant to the Original JDOA
have been validly issued and outstanding, fully paid and
non-assessable and not subject to preemptive or any other
similar rights of the Shareholders or others.
11
3.1.4 No Conflicts: The execution, delivery and performance by Newco
of the Original JDOA, the issuance, sale and delivery of the
Shares, and compliance with the provisions hereof by Newco,
did not, and the execution, delivery and performance by Newco
of this Amended JDOA 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
did not or 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: No permit, authorization, consent or approval of or
by, or any notification of or filing with, any Person was
required in connection with the execution, delivery or
performance of the Original JDOA by Newco or is required in
connection with the execution, delivery or performance of this
Amended JDOA by Newco. Newco has full authority to conduct its
business as contemplated in the Business Plan and the
Definitive Documents.
3.1.6 Disclosure: Neither the Original JDOA nor this Amended JDOA
contains any untrue statement of a material fact or omits to
state any material fact necessary to make the statements
contained herein or therein not misleading. Newco was not on
the Closing Date and is not on the Effective Date aware of any
material contingency, event or circumstance relating to its
business or prospects, which could have had, or could have a
material adverse effect thereon, in order for the disclosure
herein or in the Original JDOA relating to Newco not to be or
have been misleading in any material respect.
12
3.1.7 No Business; No Liabilities: Newco did not conduct any
business or incurred any liabilities or obligations prior to
the Closing Date, except solely in connection with its
organization and formation and has not conducted any business
or incurred any liabilities or obligations since the Closing
Date except in the ordinary course of business, as
contemplated by the Original JDOA and this Amended JDOA.
3.2 Representations and Warranties of the Shareholders: Each of
the Shareholders hereby severally represents and warrants to
Newco as follows as of the Closing Date and the Effective
Date:
3.2.1 Organization: Such Shareholder was on the Closing Date and is
a corporation duly organized and validly existing under the
laws of its jurisdiction of organization and had on the
Closing Date 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 Shareholder had on the Closing Date and has
full legal right, power and authority to enter into the
Original JDOA and this Amended JDOA, respectively, and to
perform its obligations hereunder and thereunder, which have
been duly authorized by all requisite corporate action. The
Original JDOA was on the Closing Date and this Amended JDOA is
the valid and binding obligation of such Shareholder,
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
Shareholder of the Original JDOA, the purchase of Shares by
the Shareholder, and compliance with the provisions of the
Original JDOA by such Shareholder did not, and the execution,
delivery and performance by such Shareholder of this Amended
JDOA and compliance with the provisions hereof will not:
(i) violate any provision of applicable law, statute, rule
or regulation known by and applicable to such
Shareholder or any ruling, writ, injunction, order,
judgment or decree of any court, arbitrator,
administrative agency or other governmental body
applicable to such Shareholder or any of its
properties or assets, except where such violation
would not, individually or in the aggregate, have a
material adverse effect on such Shareholders;
13
(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 Shareholder or any material contract
to which such Shareholder is a party, except where
such violation, conflict or breach did not or would
not, individually or in the aggregate, have a material
adverse effect on such Shareholder; or
(iii) result in the creation of, any Encumbrance upon any of
the properties or assets of such Shareholder.
3.2.4 Approvals: As of the Closing Date and the Effective Date, 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 the
Original JDOA or this Amended JDOA by such Shareholder.
3.2.5 Investment Representations: Such Shareholder is sophisticated
in transactions of this type and capable of evaluating the
merits and risks of its investment in Newco. Such Shareholder
was not been formed solely for the purpose of acquiring the
Common Shares and Preference Shares and such Shareholder
acquired the Common Shares and Preference Shares for
investment for its own account, not as a nominee or agent, and
not with the view to, or for resale in connection with, any
distribution of any part thereof. Such Shareholder 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 Shareholders' representations as expressed
herein and in the Original JDOA. Such Shareholder 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.
14
CLAUSE 4
AUTHORIZATION AND CLOSING
4.1 On the Closing Date, Newco authorized the issuance to (i) EIS of 2,388
Preference Shares and (ii) Generex of 6,000 Common Shares and 3,612
Preference Shares, all of which Shares have been validly issued and are
non-assessable, and no other Shares or rights to purchase Shares or
securities convertible into Shares have been issued by Newco.
4.2 On the Closing Date, Generex and EIS subscribed for the number of
Shares set forth in Clause 4.1 and paid to Newco in consideration
therefor (to a bank account established by Newco in connection with
Completion) the subscription amounts each as provided in Recital B.
4.3 The closing of the purchases of the Shares (the "Closing") took place
on the Closing Date contemporaneously with the closing under the
Generex Securities Purchase Agreement.
4.4 At the Closing, the following occurred:
4.4.1 Newco issued and sold to EIS, and EIS purchased from Newco,
upon the terms and subject to the conditions set forth in the
Original JDOA, 2,388 Preference Shares for an aggregate
purchase price of $2,985,000 million;
Newco issued and sold to Generex, and Generex purchased from
Newco, upon the terms and conditions set forth in the Original
JDOA, (i) 6,000 Common Shares for an aggregate purchase price
of $7,500,000 and (ii) 3,612 Preference Shares for an
aggregate purchase price of $4,515,000;
4.4.2 the Parties executed and delivered to each other, as
applicable, certificates in respect of the Common Shares and
Preference Shares described above and any other certificates,
resolutions or documents which the Parties reasonably
required;
4.4.3. the adoption by Newco of Newco Bye-Laws;
4.4.4. the appointment of Kevin Insley, Anna E. Gluskin, Rose C.
Perri, Stephen J. Rossiter and Dawn Griffiths as Directors of
Newco;
4.4.5. the resignation of all directors and the secretary of Newco
holding office prior to the execution of the Original JDOA and
delivery of written confirmation under seal by each Person so
resigning that he had no claim or right of action against
Newco and that Newco was not in any way obligated or indebted
to him; and
15
4.4.6. the transfer to Newco of the share register.
4.5 Exemption from Registration:
The Shares have been issued under an exemption or exemptions from
registration under the Securities Act. Accordingly, the certificates
evidencing the Shares contain and any certificates to be issued
replacing such certificates 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.
4.6. Newco shall use reasonable efforts to file any documents that require
filing with the Registrar of Companies in Bermuda within the prescribed
time limits. EIS and Generex shall provide all reasonable co-operation
to Newco in relation to the matters set forth in this Clause 4.6.
4.7. In the event that EIS exercises the Exchange Right, Newco shall,
immediately upon such exercise, take all necessary steps to ensure that
EIS obtains full legal right, title and interest in and to the
Preference Shares covered thereby.
The Parties acknowledge that such Shares have been pledged to EIS
pursuant to the Generex Securities Purchase Agreement and that EIS has
physical possession of such Shares; upon such exercise, EIS shall be
entitled to keep and retain such Shares, which shall be owned by EIS as
provided above. In connection with the foregoing, Newco and the
Participants shall take all necessary or appropriate steps to ensure
such ownership by EIS.
16
CLAUSE 5
DIRECTORS; MANAGEMENT AND R&D COMMITTEES
5.1. Directors:
5.1.1 Prior to the exercise of the Exchange Right, the Board shall
be composed of five Directors.
Generex shall have the right to nominate four directors of
Newco, at least two of which such directors shall be residents
of Bermuda ("Generex Directors") and EIS shall have the right
to nominate one Director of Newco ("EIS Director") which
Director, save as further provided herein, shall only be
entitled to 15% of the votes of the Board.
In the event that the Exchange Right is exercised by EIS
within 2 years following the Closing Date, the EIS Director
shall only be entitled to 15% of the votes of the Board until
the expiry of 2 years from the Closing Date.
In the event that the Exchange Right is exercised by EIS at
any time after two years following the Closing Date, or upon
the expiry of 2 years following the Closing Date where the
Exchange Right has been exercised by EIS within 2 years
following the Closing Date, and provided that EIS satisfies
the payment obligations described in Clause 6.4.2 that are
triggered by the exercise of the Exchange Right and the
payment obligations that are otherwise required by the
Exchange Right, then each of Generex, and EIS shall cause the
Board to be reconfigured so that an equal number of Directors
are designated by EIS and Generex and that each of the
Directors has equal voting power. After the Board is
reconfigured as provided above, the Board cannot be
reconfigured again unless otherwise mutually agreed to by
Generex and Elan.
5.1.2 If EIS removes the EIS Director, or Generex removes any of the
Generex Directors, EIS or Generex, as the case may be, shall
indemnify the other Shareholder against any claim by such
removed Director arising from such removal.
5.1.3 The Directors shall meet not less than three times in each
Financial Year and all Board meetings shall be held in Bermuda
to the extent required to ensure the sole residence of Newco
in Bermuda.
5.1.4 At any such meeting, the presence of the EIS Director and at
least two of the Generex Directors shall be required to
constitute a quorum and, subject to Clause 17 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
Generex Directors specifying the date, time and place where
such adjourned meeting is to be held and reconvened.
17
5.1.5 On the Closing Date, Generex may appoint one of the Generex
Directors to be the chairman of Newco. The chairman of Newco
shall hold office until:
(i) the first meeting of the Board following the exercise
by EIS of the Exchange Right, where the Exchange Right
has been exercised by EIS after two years following the
Closing Date; or
(ii) the first meeting of the Board following the expiry of
2 years following the Closing Date where the Exchange
Right has been exercised by EIS within 2 years
following the Closing Date
(in each case the "Chairman Status Board Meeting")
After the Chairman Status Board Meeting, each of EIS and
Generex, beginning with EIS at the Chairman Status Board
Meeting, shall have the right, exercisable alternatively, of
nominating one Director to be chairman of Newco for a term of
one year.
If the chairman is unable to attend any meeting of the Board
held prior to the Chairman Status Board Meeting, the Generex
Directors shall be entitled to appoint another Generex
Director to act as chairman in his place at the meeting.
If the chairman of Newco is unable to attend any meeting of
the Board held after the Chairman Status Board Meeting, the
Directors shall be entitled to appoint another Director to act
as chairman of Newco in his place at the meeting.
5.1.6 In case of an equality of votes at a meeting of the Board, the
chairman of Newco shall not be entitled to a second or casting
vote. In the event of continued deadlock, the Board shall
resolve the deadlock pursuant to the provisions set forth in
Clause 18.
5.2 Management Committee:
5.2.1 Newco's board of directors shall appoint a management
committee (the "Management Committee") to consist initially of
four members, two of whom shall be nominated by Elan and two
of whom shall be nominated by Generex, and each of whom shall
be entitled to one vote, whether or not present at any
Management Committee meeting. Each of Elan and Generex shall
be entitled to remove any of their nominees to the Management
Committee and appoint a replacement therefor. 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 Generex shall be entitled to appoint an equal
number of members to the Management Committee; and provided
further that if EIS has converted the Series A Preference
Stock into shares of Common Stock of Generex (except upon such
conversion due to a Significant Transaction as defined in the
Certificate of Designations), then the Management Committee
shall be appointed by each Party in numbers proportional to
Generex's and EIS' ownership share in Newco. Decisions of the
Management Committee shall require approval of at least one
Elan nominee on the Management Committee and one Generex
nominee on the Management Committee; provided, however, (a) if
EIS has converted the Series A Preference Stock into shares of
Common Stock of Generex (except upon such conversion due to a
Significant Transaction as defined in the Certificate of
Designations), then all decisions of the Management Committee
shall require approval of a majority of the members of the
Management Committee only, except as provided in the last
sentence of this Clause 5.2; and provided further that (b) a
party may proceed under Clause 6.4 notwithstanding the failure
to obtain Management Committee approval. Notwithstanding
anything contained in this Amended JDOA to the contrary,
approval of Elan's designee and Generex's designee to the
Management Committee shall be required for the matters set
forth on Schedule 3.
18
5.2.2 The Management Committee shall be responsible for, inter alia:
5.2.2.1 devising, implementing and reviewing the Business
Plan and strategy for the Project; and
5.2.2.2 implementing the Business Plan in relation to the
Project.
The Management Committee shall use its reasonable efforts to
operate and fulfill its responsibilities as contemplated
hereunder in an efficient and economical manner.
Subject to the oversight and approval of the Management
Committee, the Parties acknowledge that Generex shall be
primarily responsible for implementing the preliminary
clinical plans with respect to the Project as set forth on
Schedule 4, which clinical plans the Parties acknowledge have
not been finalized.
5.2.3 If the Management Committee cannot resolve any dispute within
the Management Committee, after 15 days or such other period
as may be agreed by the Management Committee, the dispute will
be referred to a designated senior officer of each of Elan and
Generex, and thereafter, in the event of continued deadlock,
pursuant to the deadlock provisions set forth in Clause 18.
19
CLAUSE 6
THE BUSINESS PLAN AND REVIEWS
6.1 The Management Committee will commence preparation of and approve a
Business Plan for Newco as soon as practicable after the Effective Date
for the current Financial Year. The Management will use all reasonable
efforts to complete the Business Plan within [ * ] after the Effective
Date.
The Management Committee shall present the Business Plan, including
aspects of the Business Plan relating to funding and expenditures, and
any proposed changes to the Business Plan to the Directors from time to
time, but not less frequently than on a quarterly basis, for the review
and approval of the EIS Director and the Generex Directors.
If Elan and Generex cannot agree upon (i) a Business Plan, (ii) any
change to the Business Plan or (iii) the implementation of the Business
Plan, then either Party may elect to proceed nevertheless on the basis
of the procedure set forth in Clause 6.4.
6.3 It is estimated that Newco will require $6,000,000 to commence and
continue the development of the Products (the "Development Funding").
Subject to Clause 6.4, during the R&D Term, EIS and Generex may provide
to Newco, by way of contributed surplus up to an aggregate maximum
amount of US$6,000,000, such funding to be provided by EIS and Generex
on a pro rata basis based on their respective equity interests, on a
fully diluted basis, at the time of each such funding, in Newco.
Development Funding calls shall be made by Newco to the Participants in
such amounts and at such times as determined by the Management
Committee except as otherwise provided herein.
Neither Participant shall be obliged to provide Development Funding to
Newco in the absence of quarterly approval of the Business Plan and a
determination by each Participant, in its sole discretion, that
Development Funding shall be provided for the development of the
Products.
6.4 Funding
6.4.1 Notwithstanding anything contained in Clause 5 to the
contrary, in the event that;
20
(A) EIS declines to provide its share (in accordance with EIS'
ownership share of Newco) of any funding either approved
by the Management Committee in accordance with the
Business Plan, or proposed unilaterally by Generex, for
the development or commercialization of a Product (such
fundings, collectively, a "Funding"), then
(B) Generex may elect to continue to provide Funding to
support such work. In such event, Newco shall issue to
Generex a quantity of the Common Shares and/or Preference
Shares of Newco (with Generex determining whether it
desires to be issued Common Shares, Preference Shares or a
combination of both) equal to:
(1) the total of
(a) the amount of the Funding actually paid by
Generex with respect to the applicable funding
event, including EIS' share of such Funding,
minus
(b) the product of (x) the amount of the Funding
actually paid by Generex with respect to the
applicable funding event, including EIS' share
of such Funding, and (y) Generex' percentage
ownership of Newco (immediately prior to any
such issuance),
(2) divided by the actual per share purchase price
of the Newco Common Shares and Preference
Shares, originally sold to EIS and Generex on
the Effective Date.
An example of the above calculation is attached hereto as
Schedule 5. At the request of Generex, the other Parties shall
execute all such documents and perform all such acts as may
reasonably be necessary to issue to Generex the additional
Common Shares and/or Preference Shares as contemplated by this
Clause.
6.4.2 Notwithstanding anything contained in Clause 5 of this Amended
JDOA to the contrary, if EIS declines to provide its share (in
accordance with EIS' ownership share of Newco) of any Funding
for
(A) the development of a Product, or
(B) the commercialization of a Product, provided that EIS has
not exercised the Exchange Right as of the date such
Funding for commercialization of the Product was required,
and Generex elects to continue to provide Funding to support
such work with respect to the Product (the "Work"), then
subject to Generex's compliance with the remaining provisions
of this Clause 6.4.2, Generex shall have the sole right to
manage the Work without regard to the Management Committee;
provided that if at any time EIS retroactively contributes its
full share of such Funding, plus interest at 10% per annum
compounded semi-annually, then (i) Generex and Newco shall
accept such funding from EIS, (ii) the Work shall thereafter
be managed again by the Management Committee in accordance
with the procedures set forth in Clause 5, and (iii) Generex
and Newco shall execute all such documents and perform all
such acts as may reasonably be necessary to issue to EIS the
amount of additional Common Shares and/or Preference Shares
necessary to restore EIS' percentage ownership of Newco to
what it was prior to the issuance of Common Shares and/or
Preference Shares to Generex pursuant to Clause 6.4.1.
21
If Generex manages the Work, then Generex agrees to indemnify,
defend and hold harmless Elan and its Affiliates with respect
to any claims, losses, liabilities and damages (including
reasonable attorneys fees) incurred or sustained by Elan and
its Affiliates arising out of or in connection with the Work
and/or Product. In such event, Generex agrees to maintain in
force for a reasonable and appropriate period to be agreed
upon in the Definitive Documents, general and product
liability insurance coverages with a minimum limit of $5
million and shall cause Elan to be named as additional insured
under such policies. Generex shall provide Elan with proof of
such coverage upon Elan's request and such policy shall
provide that Elan be given at least thirty (30) days prior
written notice of any cancellation, termination or change in
such insurance.
If EIS elects to exercise the Exchange Right, EIS shall
thereupon be required to contribute its full share of any
Funding that it may have previously declined to provide with
respect to the Product as described in this Clause 6.4.2, plus
10% interest compounded semi-annually. If EIS exercises the
Exchange Right and simultaneously contributes its full share
of any Funding as described in the previous sentence, then the
provisions of Clauses 6.4.1 and 6.4.2 shall be deemed
terminated and of no further force and effect.
6.4.3 If Generex declines to provide its full share (in accordance
with its ownership share of Newco) of any Funding for the
development of a Product, and EIS elects to continue to
provide Funding to support such work, then EIS, at its option,
may elect by written notice to Newco and Generex to - provide
such additional funding to reach clinical development
objectives and commercialize such Product in the applicable
Field in the Territory outside of the Project and outside of
Newco. In the event EIS elects to exercise such option, each
of Generex and Newco shall grant to Elan - a license to Newco
Intellectual Property and Generex Intellectual Property, on
terms and conditions to be negotiated on an arm's length basis
(including, without limitation, whether such licenses are
exclusive or non-exclusive), for Elan's continued research,
clinical development, and commercialization of the Product in
the applicable Field, in the Territory and outside the Project
and outside of Newco.
22
6.4.4 If EIS has converted the Series A Preference Stock into shares
of Common Stock of Generex (except upon such conversion due to
a Significant Transaction as defined in the Certificate of
Designations), Generex, at its option, may elect by written
notice to Newco and Elan to pursue clinical development
objectives and commercialize Products in the applicable Field
in the Territory outside of the Project and outside of Newco.
In the event Generex elects to exercise such option, each of
Elan and Newco shall grant to Generex a license to Newco
Intellectual Property and Elan Intellectual Property, on terms
and conditions to be negotiated on an arm's length basis
(including, without limitation, whether such licenses are
exclusive or non-exclusive), for Generex's continued research,
clinical development, and commercialization of the Product in
the applicable Field, in the Territory and outside the Project
and outside of Newco.
6.4.5 Reference is made to Clause 5(c) of the Securities Purchase
Agreement for a description of certain additional matters
relating to funding in the event EIS elects to exercise it
Exchange Right.
CLAUSE 7
RESEARCH AND DEVELOPMENT WORK
7.1 Subject to the provisions of Clause 6.3, each of Elan and Generex, at
its respective discretion, may provide research and development
services to Newco, at the request of Newco and as articulated in the
Business Plan in furtherance of the development and commercialization
of the Products and cultivation of patent rights and know-how related
to the Elan Intellectual Property, Generex Intellectual Property and
Newco Intellectual Property.
7.2 Subject to Clause 7.3, the cost of any research and development work
undertaken by Elan and/or Generex shall be calculated based on a rate
of [ * ] per FTE (Full Time Equivalent Employee Rate) per year (an FTE
being the equivalent of [ * ] hours per year per employee). The
foregoing cost method shall be applied (i) in the case of Elan to work
performed on behalf of the Project by employees of Elan and (ii) in the
case of Generex to work performed on behalf of the Project by
consultants engaged by Generex to provide services generally for
Generex rather than specifically for the Project and by Generex's
employees, officers and directors. Except as provided above, research
and development work that is sub-contracted by Elan or Generex to third
party providers shall be charged by Elan or Generex to Newco at the
amount invoiced by the relevant third party provider.
23
7.3 The cost charged by Elan and/or Generex to Newco in respect of the
provision by Elan and/or Generex to Newco of any clinical trial
supplies pursuant to the Project shall be agreed by the Parties as soon
as practicable in advance of supply to Newco.
7.4 Newco shall pay Generex and Elan for any research and development work
carried out by them on behalf of Newco at the end of each month during
the R&D Program, subject to the proper vouching of research and
development work and expenses. An invoice shall be issued to Newco by
Generex or Elan, as applicable, by the 30th day of the month following
the month in which work was performed.
7.5 Elan and Generex 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 Generex and any other book, record, voucher,
receipt or invoice relating to the calculation or the cost of the R&D
Program and to the accuracy of the reports which accompanied them. Any
such inspection of Elan's or Generex'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 Generex, as the
case may be, for the R&D Program hereunder in any Financial Year of 5%
or more of the amount due to Elan or Generex, as the case may be, then
the expense of such inspection shall be borne solely by Elan or
Generex, as the case may be, instead of by Newco. Any surplus over the
sum properly payable by Newco to Elan or Generex, as the case may be,
shall be paid promptly by Elan or Generex, as the case may be, to
Newco. If such inspection reveals a deficit in the amount of the sum
properly payable to Elan or Generex, as the case may be, by Newco,
Newco shall pay the deficit to Elan or Generex, as the case may be.
CLAUSE 8
COMMERCIALIZATION
8.1 Newco shall diligently pursue the research, development, prosecution
and commercialization of the Products as provided in the Business Plan.
8.2 At such time as Newco notifies Elan in writing that Newco in good faith
intends to commercialize a Product, EIS or any Affiliate shall have a
first option to negotiate the terms of any agreement for the
commercialization of such Product, which option shall be exercised
within [ * ] of Elan's receipt of such written notification from Newco
(the "EIS/Newco Option"); provided, however, that EIS and its
Affiliates shall be entitled to the benefits of the EIS/Newco Option
only if EIS has exercised the Exchange Right. If EIS or any Affiliate
elects to enter into such negotiations, the Parties shall negotiate in
good faith the terms of the agreement for the commercialization of such
Product by EIS or the relevant Affiliate.
24
If, despite good faith negotiations, EIS or the relevant Affiliate and
Newco do not reach agreement within [ * ] from EIS' exercise of the
EIS/Newco Option, then Newco shall be free for a period of [ * ]
thereafter to enter into negotiations with a third party (other than a
Technological Competitor Of Elan) to agree terms upon which the third
party would commercialize the Product in the Territory, provided that
such terms when taken as a whole, are not more favorable to the third
party than the principal terms of the last written proposal offered by
Newco to EIS or the relevant Affiliate or by EIS or the relevant
Affiliate to Newco, as the case may be.
If Newco has not entered into an agreement with a third party within
the [ * ] period described above, the EIS/Newco Option shall be deemed
to have re-commenced upon the same terms as set forth herein.
CLAUSE 9
OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS; NON-COMPETITION
9.1. The Parties acknowledge and agree to be bound by the provisions of
Clause 3 of the Amended Elan License Agreement and Clause 3 of the
Amended Generex License Agreement, which set forth the agreement
between the Parties in relation to the ownership of the Elan
Intellectual Property, the Generex Intellectual Property and the Newco
Intellectual property respectively. The Parties shall co-operate to
execute and deliver documents and take all such other actions as may
reasonably be requested on behalf of the owner of the intellectual
property described in Clauses 17 of the Amended License Agreements to
effect or evidence the ownership of intellectual property as provided
therein.
9.2 The Parties acknowledge and agree to be bound by the provisions of
Clause 4 of the Amended Elan License Agreement and the provisions of
Clause 4 of the Amended Generex License Agreement, which set forth the
agreement between the parties thereto in relation to the
non-competition obligations of Elan and Generex, respectively.
25
CLAUSE 10
INTELLECTUAL PROPERTY RIGHTS
10.1 Elan, at its sole discretion and expense, may (i) secure the grant of
any patent applications within the Elan Patents (as such term is
defined in the Amended Elan License Agreement) in the Fields; (ii) file
and prosecute patent applications on patentable inventions and
discoveries relating to the same; (iii) defend all such applications
against third party oppositions; and (iv) maintain in force any issued
letters patent relating to the same. Elan shall have the right in its
discretion to control such filing, prosecution, defense and
maintenance.
10.2 Generex, at its sole discretion and expense, may (i) secure the grant
of any patent applications within the Generex Patents (as such term is
defined in the Amended Generex License Agreement) in the Fields; (ii)
file and prosecute patent applications on patentable inventions and
discoveries relating to the same; (iii) defend all such applications
against third party oppositions; and (iv) maintain in force any issued
letters patent that relate to the same. Generex shall have the right in
its discretion to control such filing, prosecution, defense and
maintenance.
10.3 All results of research and development pursuant to the Project and
relating to the Elan Intellectual Property, the Generex Intellectual
Property, the Compounds, the Products, or the Fields, as the case may
be, shall be promptly disclosed by each Party to the Management
Committee. The Management Committee shall review on an ongoing basis
whether such results constitute Generex Intellectual Property, Elan
Intellectual Property or Newco Intellectual Property having regard to
the provisions of this Amended JDOA. In the event that the disclosing
Party informs the other Parties that it does not intend to file patent
applications on disclosed patentable inventions and discoveries, or
maintain pending patent applications and issued patents that are
Generex Intellectual Property or Elan Intellectual Property, as the
case may be, relating to the Products or the Fields in one or more
countries in the Territory or fails to file such an application within
a reasonable period of time, Newco may request such disclosing Party to
file, prosecute and/or maintain such patents(s) and/or patent
application(s) at Newco's expense. The disclosing Party shall comply
with such request unless the disclosing party believes such request is
without merit. Any such resulting patent would be owned by the
disclosing party but would not be subject to the royalty provisions of
Clause 5 of the Amended License Agreements.
10.4 Newco at its expense shall have the right but shall not be obligated
(i) to file and prosecute patent applications on patentable inventions
and discoveries which are Newco Intellectual Property; (ii) to defend
all such applications against third party oppositions; and (iii) to
maintain in force any issued letters patent, which are Newco Patents.
Newco shall have the right to control such filing, prosecution, defense
and maintenance provided that other Parties 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 or response, as the case may be.
26
10.5 In the event that Newco informs both Elan and Generex that it does not
intend to file an application on disclosed patentable inventions and
discoveries or maintain any pending patent application(s) or issued
patent(s) that are Newco Intellectual Property, Elan shall have the
right to file and prosecute such patent applications on inventions that
relate predominantly to the Elan Intellectual Property, and Generex
shall have the right to file and prosecute and maintain such patent
applications on inventions which relate predominantly to the Generex
Intellectual Property, and Elan and Generex agree to negotiate in good
faith on the course of action to be taken with respect to Newco
Intellectual Property that relates equally to both Elan Intellectual
Property and Generex Intellectual Property.
10.6 Each Party shall notify the Management Committee in a timely manner of
any decision to abandon a pending or issued patent relating to the
Compounds, the Products, or the Fields. The Management Committee or the
Party in receipt of such notice shall have the option of requesting the
owner of the pending or issued patent to continue the prosecution or
maintenance of such pending or issued patent at Newco's expense,
provided that such decision is commercially reasonable. Such
intellectual property shall not be subject to the provisions of the
royalty payment in Clause 5 of the Amended License Agreements.
10.7 The Parties shall promptly inform each other in writing of any actual
or alleged unauthorized use in the Fields of Elan Intellectual
Property, the Generex Intellectual Property or the Newco Intellectual
Property by a third party of which it becomes aware and provide the
others with any available evidence of such unauthorized use.
10.8 At its option, Elan or Generex, as the case may be, shall have the
first option to enforce its respective intellectual property rights, at
its own expense and for its own benefit, in connection with any
unauthorized use of the Elan Intellectual Property or the Generex
Intellectual Property, as the case may be, in the Fields. At the
enforcing Party's request, the other Parties shall cooperate with the
Party exercising such option. Should Elan or Generex, as the case may
be, decide not to enforce any of its rights with respect to the Elan
Intellectual Property or the Generex Intellectual Property,
respectively, against such unauthorized use in the Fields within a
reasonable period but in any event within twenty (20) days after
receiving written notice of such actual or alleged unauthorized use,
Newco may, in its discretion, request the Party exercising such option
to initiate such proceedings in Newco's name with express third party
beneficiary rights reasonably required hereunder to enforce such
intellectual property rights in connection with such unauthorized use,
at Newco's expense and for Newco's benefit; provided that such actual
or alleged unauthorized conduct involve any Compound. Elan or Generex,
as the case may be, shall cooperate in commencing such action on
Newco's behalf unless Elan or Generex believe, in good faith, that such
an action is without merit. Alternatively, the Parties may agree to
enforce any or all of the Parties' rights with respect to their
respective intellectual property in their joint names and shall reach
an agreement as to the proportion in which they shall share the
proceeds recovered or otherwise received and costs and/or expenses
incurred as a result of commencing any such action.
27
10.9 Newco shall have the first right, but not the obligation, to commence a
lawsuit or otherwise take action in connection with any alleged
infringement of the Newco Patents or alleged unauthorized use of the
Newco Intellectual Property. In the event that Newco takes such action,
Newco shall do so at its own cost and expense and all damages and
monetary award recovered in or with respect to such action shall be the
property of Newco. Newco shall keep Elan and Generex timely informed of
any action commenced so as to enable Generex and Elan to provide input
in any such action; Newco shall reasonably take into consideration any
such input. At Newco's request, the Parties shall cooperate with Newco
with respect to any such action, at Newco's cost and expense.
10.10 In the event that Newco does not commence a lawsuit or otherwise take
action against an infringement of any Newco Patents or misappropriation
of the Newco Intellectual Property, then (i) if only one Participant
determines to pursue such lawsuit or take such action at its own cost
and expense, such Participant shall be entitled to any and all damages
and monetary award recovered in or with respect to such action and (ii)
if the Participants pursue such suit or action outside of Newco, they
shall negotiate, in good faith, an appropriate allocation of costs,
expenses and recovery amounts. At the Participant's request, Newco
shall cooperate with such Participant in any such action, at the
Participant's cost and expense.
10.11 In the event that a claim or proceeding is brought against Newco by a
third party alleging that the sale, offering for sale, manufacturing,
importing, distribution or use of a Product in the Territory or use of
the Elan Intellectual Property or the Generex Intellectual Property, as
the case may be, infringes the intellectual property rights of such
third party, Newco shall promptly advise the other Parties of such
threat or suit.
10.12 Except for claims by Newco against either Participant or by a third
party against Newco where there has been a breach of representation or
warranty under the Amended Elan License Agreement or the Amended
Generex License Agreement, by Elan or Generex, respectively, Newco
shall indemnify, defend and hold harmless Elan or Generex, as the case
may be, against all actions, losses, claims, demands, damages, costs
and liabilities (including reasonable attorneys fees) relating directly
or indirectly to all other claims or proceedings of the nature
described in Clause 10.11, provided that Elan or Generex, 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 to Newco, not to be unreasonably withheld or
delayed. At its option, Elan or Generex, 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 Generex, as the case may
be and such Party 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.
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CLAUSE 11
CROSS LICENSING/EXPLOITATION OF PRODUCTS OUTSIDE THE FIELDS
11.1 Solely for the purposes of, and only to the extent necessary, to enable
Elan to conduct research and development work on behalf of Newco, Newco
hereby grants to Elan a non-exclusive, worldwide, royalty-free, fully
paid-up license for the terms of the Amended License Agreements:
11.1.1 to use the Newco Intellectual Property in the Fields, and
11.1.2 subject to the terms and conditions of the Amended Generex
License Agreement and the Amended Elan License Agreement, a
sublicense to use the Generex Intellectual Property and the
Elan Intellectual Property in the Fields.
11.2 Solely for the purposes of, and only to the extent necessary, to enable
Generex to conduct research and development work on behalf of Newco,
Newco hereby grants to Generex a non-exclusive, worldwide,
royalty-free, fully paid-up license for the terms of the Amended
License Agreements:
11.2.1 to use the Newco Intellectual Property in the Fields, and
11.2.2 subject to the terms and conditions of the Amended Elan
License Agreement and the Amended Generex License Agreement, a
sublicense to use the Elan Intellectual Property and the
Generex Intellectual Property in the Fields.
11.3 Elan and/or Generex shall be entitled to exploit the Newco Intellectual
Property outside the Fields subject to the Parties negotiating a
license agreement in good faith pursuant to which Newco will grant to
Elan and/or Generex, as the case may be, a license under the Newco
Intellectual Property outside the Fields (which license agreement shall
provide, inter alia, whether the license of Newco Intellectual Property
will be exclusive or non-exclusive). The financial terms of the said
license agreement shall be negotiated by the Parties with reference to,
inter alia, the following criteria:
29
11.3.1 the amount of monies expended by Newco in developing the Newco
Intellectual Property;
11.3.2 the materiality of the contribution of the Newco Intellectual
Property by comparison to the further research and development
work to be conducted, and the materiality of the contribution
of the Elan Intellectual Property and the Generex Intellectual
Property;
11.3.3 the financial return likely to be earned by Elan or Generex,
as the case may be, from the proposed exploitation outside the
Fields; and
11.3.4 the impact of the proposed exploitation of the Newco
Intellectual Property outside the Fields on the exploitation
of the Newco Intellectual Property within the Fields.
CLAUSE 12
REGULATORY MATTERS/CLINICAL TRIALS
12.1 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.
12.2 Newco shall, [ * ], file, prosecute and maintain any and all Regulatory
Applications for the Products in the Territory in accordance with the
Business Plan.
12.3 Any and all Regulatory Approvals obtained hereunder for any Product
shall remain the property of Newco, provided that Newco shall allow
Elan and Generex access thereto to enable Elan and Generex to fulfill
their respective obligations and exercise their respective rights under
this Amended JDOA. Newco shall maintain such Regulatory Approvals at
its own cost.
12.4 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 involved in undertaking the form of
commercial collaboration as set forth in this Amended JDOA.
12.5 The Management Committee shall be responsible for determining Newco's
strategy as regards the conduct of any clinical trials with respect to
the development of the Products. Any agreement between Newco and Elan
or Generex, as the case may be, or between Newco and any independent
third party relating to the conduct of any clinical trial with respect
to the development of the Products shall require the prior approval in
writing of Elan and Generex.
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12.6 The Parties agree that each Party shall effect and maintain
comprehensive general liability insurance in respect of all clinical
trials and other activities performed by them on behalf of Newco. The
Participants and Newco shall ensure that the industry standard
insurance policies shall be in place for all activities to be carried
out by Newco.
CLAUSE 13
MANUFACTURING
13.1 It is the expectation of the Parties that Newco shall enter into a
supply agreement with Elan or Generex, as the case may be, to allow for
the commercial production of such Product on behalf of Newco. In
determining which of Elan or Generex shall provide such services, the
Management Committee shall, in good faith, consider all relevant
factors including the respective infrastructure and relevant experience
of the respective Parties.
Any such supply agreement (including a quality agreement) shall be
negotiated and agreed by Newco and Elan or Generex, as the case may be
not later than the date of completion of Phase III (as such term is
commonly used in connection with FDA applications) of the R&D Plan. The
terms of the said supply agreement shall be negotiated in good faith on
standard industry and commercial terms.
If each of Elan and Generex does not exercise its right hereunder to
manufacture and supply, and/or subcontract the manufacture and supply
the Product, then Newco shall be free to enter into negotiations with a
third party (other than a Technological Competitor of Elan) to agree to
terms upon which the third party would be licensed by Elan (on
licensing terms satisfactory to Elan), by Generex (on licensing terms
satisfactory to Generex) and by Newco to the extent necessary (on
licensing terms satisfactory to Newco) to manufacture the relevant
Product in the Territory, which terms when taken as a whole, are not
more favorable to the third party than the principal terms of the last
written proposal offered by Newco to Elan or by Elan to Newco, as the
case may be.
13.2 Subject to the provisions of Clause 13.1, Newco shall be responsible
for manufacturing, or having manufactured, all quantities of Products
required for the development and commercialization of Products for use
in the Fields.
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CLAUSE 14
TECHNICAL SERVICES AND ASSISTANCE
14.1 Whenever commercially and technically feasible, Newco shall contract
with Generex 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 Amended 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 Generex. There shall be no obligation upon either of
Generex or Elan to perform such services.
14.2 Newco shall, if the Participants so agree, conclude an administrative
support agreement with Elan and/or Generex 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:
14.2.1 accounting, financial and other services;
14.2.2 tax services;
14.2.3 insurance services;
14.2.4 human resources services;
14.2.5 legal and company secretarial services;
14.2.6 patent and related intellectual property services; and
14.2.7 all such other services consistent with and of the same type
as those services to be provided pursuant to this Amended
JDOA, 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.
14.3 If Elan or Generex so requires, Generex 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
Generex Intellectual Property, as the case may be, as necessary to
further the Project.
14.4 The employees received by Elan or Generex, as the case may be, shall be
subject to obligations of confidentiality no less stringent than those
set out in Clause 21 and such employees shall observe the rules,
regulations and systems adopted by the Party receiving the said
employees for its own employees or visitors.
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CLAUSE 15
AUDITORS, BANKERS, ACCOUNTING REFERENCE DATE; SECRETARY
Unless otherwise agreed by the Participants and save as may be provided to the
contrary herein:
15.1 the bankers of Newco shall be Bank of Bermuda or such other bank as may
be mutually agreed from time to time;
15.2 the accounting reference date of Newco shall be July 31st in each
Financial Year; and
15.3 the secretary of Newco shall be I.S. Outerbridge or such other Person
as may be appointed by the Directors from time to time.
CLAUSE 16
TRANSFERS OF SHARES;
RIGHT OF FIRST OFFER; TAG ALONG RIGHTS
General:
16.1. Until such time as the Common Shares shall be registered pursuant to
the Exchange Act and be publicly traded in an established securities
market, no Shareholder shall, directly or indirectly, sell or otherwise
transfer (each, a "Transfer") any Shares held by it except in as
expressly permitted by and accordance with the terms of this Amended
JDOA. 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 Shareholder to any transferee, in any manner, except in
accordance with this Amended JDOA, and any purported transfer not in
compliance with this Amended JDOA shall be void.
During the R&D Term, no Shareholder shall, directly or indirectly, sell
or otherwise Transfer any of its legal and/or beneficial interest in
the Shares held by it to any other Person. After completion of the R&D
Term, a Shareholder may Transfer Shares provided such Shareholder
complies with the provisions of Clauses 16.2 and 16.3.
Notwithstanding anything contained herein to the contrary, at all
times, EIS and/or Generex shall have the right to Transfer any Shares
to their Affiliates provided, however, that such assignment does not
result in adverse tax consequences for any other Parties and EIS shall
have the right to Transfer any Shares to a special purpose financing or
similar entity established by Elan or EIS; provided, that such
Affiliates or other Permitted Transferee to which such legal and/or
beneficial interest in the Shares have been transferred shall agree to
be expressly subject to and bound by all the limitations and provisions
which are embodied in this Amended JDOA.
33
16.2 No Shareholder shall, except with the prior written consent of the
other Shareholder, create or permit to subsist any Encumbrance over, or
grant any option or other rights in all or any of the Shares held by it
(other than by a Transfer of such Shares in accordance with the
provisions of this Amended JDOA).
16.3 Rights of First Offer:
If at any time after the end of the R&D Term a Shareholder shall desire
to Transfer any Shares owned by it (a "Selling Shareholder"), in any
transaction or series of related transactions other than a Transfer to
an Affiliate or subsidiary or in the case of EIS to a special purpose
financing or similar entity established by EIS, then such Selling
Shareholder shall deliver prior written notice of its desire to
Transfer (a "Notice of Intention") (i) to Newco and (ii) to the
Shareholders who are not the Selling Shareholder (and any transferee
thereof permitted hereunder, if any), as applicable, setting forth such
Selling Shareholder'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, if any, and the
price at which such Selling Shareholder proposes to Transfer the
Offered Shares (the "Offer Price"). The "Right of First Offer" provided
for in this Clause 16 shall be subject to any "Tag Along Right"
benefiting a Shareholder which may be provided for by Clause 16,
subject to the exceptions set forth therein.
Upon receipt of the Notice of Intention, the Shareholders who are not
the Selling Shareholder shall have the right to purchase at the Offer
Price the Offered Shares, exercisable by the delivery of notice to the
Selling Shareholder (the "Notice of Exercise"), with a copy to Newco,
within [ * ] from the date of receipt of the Notice of Intention. If no
such Notice of Exercise has been delivered by the Shareholders who are
not the Selling Shareholder within such [ * ] period, or such Notice of
Exercise does not relate to all of the Offered Shares covered by the
Notice of Intention, then the Selling Shareholder 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 Shareholders, the Selling Shareholder shall sell the
available Offered Shares within [ * ] after the delivery of such Notice
of Intention on terms no more favorable to a third party than those
presented to the non-selling Shareholders. If such sale does not occur,
the Offered Shares shall again be subject to the Right of First Offer
set forth in Clause 16.3.
34
In the event that any of the Shareholders who are not the Selling
Shareholder exercises their right to purchase all of the Offered Shares
(in accordance with this Clause 16), then the Selling Shareholder shall
sell all of the Offered Shares to such Shareholder(s), in the amounts
set forth in the Notice of Intention, after not less than [ * ] and not
more than [ * ] from the date of the delivery of the Notice of
Exercise. In the event that more than one of the Shareholders who are
not the Selling Shareholders wish to purchase the Offered Shares, the
Offered Shares shall be allocated to such Shareholders on the basis of
their pro rata equity interests in Newco.
The rights and obligations of each of the Shareholders pursuant to the
Right of First Offer provided herein shall terminate upon the date that
the Common Shares 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
Shareholders who are not the Selling Shareholder (scheduled in
accordance with Clause 16), the Selling Shareholder shall deliver
certificates evidencing the Offered Shares being sold, duly endorsed,
or accompanied by written instruments of transfer in form reasonably
satisfactory to the Shareholders who are not the Selling Shareholder,
duly executed by the Selling Shareholder, 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.
16.4 Tag Along Rights:
Subject to Clause 16.3, a Shareholder (the "Transferring Shareholder")
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 Shareholders (the
"Remaining Shareholders"), to sell Shares at the same price and on the
same terms and conditions as the Transferring Shareholder has agreed to
sell its Shares (the "Tag Along Right").
In the event a Transferring Shareholder proposes to Transfer any Shares
in a transaction subject to this Clause 16.4, it shall notify, or cause
to be notified, the Remaining Shareholders 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 16.4, if such right is applicable, and the total
number of Shares the transferee has agreed to purchase from the
Shareholders in accordance with the terms hereof.
35
The Tag Along Right may be exercised by each of the Remaining
Shareholders by delivery of a written notice to the Transferring
Shareholder (the "Co-sale Notice") within [ * ] following receipt of
the notice specified in the preceding subsection. The Co-sale Notice
shall state the number of Shares owned by such Remaining Shareholder
which the Remaining Shareholder wishes to include in such Transfer;
provided, however, that without the written consent of the Transferring
Shareholder, the amount of such securities belonging to the Remaining
Shareholder included in such Transfer may not be greater than such
Remaining Shareholder's percentage beneficial ownership of Fully
Diluted Common Shares multiplied by the total number of Fully Diluted
Common Shares to be sold by both the Transferring Shareholder and all
Remaining Shareholders. Upon receipt of a Co-sale Notice, the
Transferring Shareholder 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 Shareholder shall not consummate the purchase and sale of
any Shares hereunder if the transferee does not purchase all such
Shares specified in all Co-sale Notices. If no Co-sale Notice has been
delivered to the Transferring Shareholder prior to the expiration of
the [ * ] period referred to above and if the provisions of this
Section have been complied with in all respects, the Transferring
Shareholder shall have the right for a [ * ] period to Transfer Shares
to the transferee on the Transferee Terms without further notice to any
other party, but after such [ * ], no such Transfer may be made without
again giving notice to the Remaining Shareholders of the proposed
Transfer and complying with the requirements of this Clause 16.
At the closing of any Transfer of Shares subject to this Clause 16.4,
the Transferring Shareholder, and the Remaining Shareholder, in the
event such Tag 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.
Notwithstanding the foregoing, this Clause 16.4 shall not apply to any
sale of Common Shares pursuant to an effective registration statement
under the Securities Act in a bona fide public offering.
CLAUSE 17
MATTERS REQUIRING DIRECTORS' APPROVAL
17.1 In consideration of Generex and Elan agreeing to enter into the Amended
License Agreements, the Parties hereby agree, notwithstanding the
provisions of Clause 6.4 that Newco shall not without the prior
approval in writing of the EIS Director and a Generex Director:
36
17.1.1. issue any unissued Shares or unissued Common Shares
Equivalents, or create or issue any new shares (including
a split of the Shares) or Common Shares Equivalents,
except as expressly permitted by the Newco Bye-Laws;
17.1.2. alter any rights attaching to any class of share in the
capital of Newco or alter the Newco Bye-Laws;
17.1.3. consolidate, sub-divide or convert any of Newco's share
capital or in any way alter the rights attaching thereto;
17.1.4 dispose of all or substantially all of the assets of
Newco;
17.1.5. do or permit 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 Amended JDOA;
17.1.6. subject to Clause 23.13, assign, license or sub-license
any of the Newco Intellectual Property;
17.1.7 alter the number of Directors
17.1.8. change the domicile of Newco from, or discontinue Newco
out of, Bermuda;
17.1.9 register any Shares of Newco for public trading with any
governmental authority for public trading in any
securities market;
17.1.10 declare or pay any dividend or make any distribution,
directly or indirectly, with respect to its capital
Shares; or issue, sell, exchange, deliver, redeem,
purchase or otherwise acquire or dispose of any shares of
its capital stock or other securities; and
17.1.11 adopt or register or use any trade name, trademark or
service mark on behalf of Newco.
CLAUSE 18
DISPUTES
18.1 Except as provided in Clause 21.7, should any dispute or difference
arise between Elan and Generex, or between Elan or Generex and Newco,
during the period that this Amended JDOA is in force, then any Party
may forthwith give notice to the other Parties that it wishes such
dispute or difference to be referred to a designated senior officer of
each of Elan and Generex.
37
18.2 In any event of a notice being served in accordance with Clause 18.1,
each of the Participants shall within [ * ] of the service of such
notice prepare and circulate to the designated senior officer of each
of Elan and Generex 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
designated senior officers of each of Elan and Generex who shall
endeavor to resolve the dispute. If designated senior officers of each
of Elan and Generex 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 procure that the agreed terms are fully and promptly carried into
effect.
18.3 In the event the designated senior officers of each of Elan and Generex
are unable to resolve a dispute or difference within [ * ] of its being
referred to them under Clause 18.1, the following procedures shall
apply:
18.3.1 If the dispute relates to the interpretation of this Amended
JDOA or any other Definitive Document or the compliance of the
Parties with their legal obligations thereunder other than
confidentiality obligations, or the ownership of any
intellectual property, the provisions of Clauses 23.9.2 and
23.9.3 shall govern.
18.3.2 If the dispute does not relate to the interpretation of this
Amended JDOA or any other Definitive Document or the
compliance of the Parties with their legal obligations
thereunder, or the ownership of any intellectual property, the
provisions of Clause 18.4 shall govern.
18.4 The designated senior officers of each of Elan and Generex shall, if
they are unable to resolve a dispute or difference described in Clause
18.3.2 within [ * ] of such referral, and if so agreed to by Elan and
Generex, refer the matter to an independent expert in pharmaceutical
product development and marketing (including clinical development and
regulatory affairs) jointly selected by the designated senior officers
of each of Elan and Generex (the "Expert").
In the event the designated senior officers of each of Elan and Generex
cannot agree upon the designation of the Expert, the Participants shall
request the American Arbitration Association ("AAA"), sitting in the
City of New York to select the Expert. 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 designated senior
officers of each of Elan and Generex, the following rules shall apply
to the appointment of the Expert. The fees of the AAA and the Expert
shall be shared equally by the Participants. 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.
38
18.5 Any determination by the Expert of a dispute or difference shall not be
binding on the Parties.
CLAUSE 19
TERMINATION
19.1 his Amended JDOA shall govern the operation and existence of Newco
until
19.1.1 terminated by written agreement of all Parties hereto; or
19.1.2 otherwise terminated in accordance with this Clause 19.
19.2 For the purpose of this Clause 19, a "Relevant Event" is committed by a
Participant if:
19.2.1 it commits a material breach of its representations,
warranties or obligations under this Amended JDOA and fails to
cure 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 cure the breach and is acting in good faith to cure
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 cured, provided that such period shall
not be extended by more than 90 days, unless otherwise agreed
in writing by the Parties; or
19.2.2 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; or
19.2.3 it is unable to pay its debts in the normal course of
business; or
19.2.4 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); or
39
19.2.5 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; or
19.2.6 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 of its assets,
rights or revenues or the assets and/or the business of a
Participant are for any reason seized, confiscated or
condemned.
19.3 If either Participant commits 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 90% of the fair market value of the
Shares of the Recipient Participant (the "Buyout Option").
19.4 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.
19.5 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 19.4 above, the Proposing Participant may contact
the American Arbitration Association, sitting in New York City and
request that an independent US-based arbitrator who is knowledgeable of
the pharmaceutical/biotechnology industry be appointed within 10
business days. The AAA 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 90% of the fair market value assessed by the Proposing Participant
(the "Proposing Participant Price") and shall notify the Proposing
Participant of 90% 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 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 arbitrator determines to be closer to 90%
of 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.
40
19.6 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.
19.7 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.
19.8 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 Amended License Agreements to
protect the intellectual property rights of the Recipient Party.
19.9 If either Participant commits a Relevant Event, the other Shareholder
shall have in addition to all other legal and equitable rights and
remedies hereunder, the right to terminate this Amended JDOA upon 30
days' written notice.
19.10 In the event of a termination of the Amended Elan License Agreement
and/or the Amended Generex License Agreement, both parties will
negotiate in good faith to determine whether this Amended JDOA should
be terminated and if so, which provisions should survive termination.
19.11 The provisions of Clauses 1 (Definitions); 3 (Representations); 7.4 and
7.5 (Development Work); 9 (Ownership of Intellectual Property); 10.4,
10.5, 10.7, and 10.9 to 10.12, inclusive (Intellectual Property
Rights); 11.3 (Exploitation Outside the Fields); 12.3, 12.5, and 12.6
(Regulatory Matters); 16 (Transfers of Shares); 17 (Matters Requiring
Directors' Approval); 19.3 to 19.11, inclusive (Termination); 20 (Share
Rights); 21 (Confidentiality); 22.2 (Costs) and 23 (General) shall
survive the termination of this Amended JDOA under this Clause 19; all
other terms and provisions of this Amended JDOA shall cease to have
effect and be null and void upon the termination of this Amended JDOA.
41
CLAUSE 20
SHARE RIGHTS
The provisions regulating the rights and obligations attaching to the Common
Shares and the Preference Shares are set out in the Newco Bye-laws.
CLAUSE 21
CONFIDENTIALITY
21.1 The Parties and/or Newco acknowledge and agree that it may be
necessary, from time to time, to disclose to each other or give access
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 Fields, the Products, present or future products, the Newco
Intellectual Property, the Elan Intellectual Property or the Generex
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").
21.2 Save as otherwise specifically provided herein, 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 Amended JDOA, and for no other purpose. Confidential
Information shall not include:
21.2.1 information that is generally available to the public;
21.2.2 information that is made public by the disclosing Party;
21.2.3 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;
21.2.4 information that is published or otherwise becomes known to
the public without any disclosure by the receiving Party, or
on the part of the receiving Party's directors, officers,
agents, representatives or employees;
42
21.2.5 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
21.2.6 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
21.2.7 information that is the subject of a written permission to
disclose, without restriction or limitation, by the disclosing
Party.
21.3 The receiving Party will be entitled to disclose Confidential
Information which the receiving Party is required to disclose pursuant
to:
21.3.1 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; or
21.3.2 any other requirement of law;
provided 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.
21.4 Save as otherwise specifically provided herein, each Party agrees to
disclose Confidential Information of another Party only to those
employees, representatives, agents requiring knowledge thereof in
connection with their duties directly related to the fulfilling of the
Party's obligations under this Amended JDOA, so long as such persons
are under an obligation of confidentiality no less stringent than as
set forth herein. With respect to third parties, each Party further
agrees that, in the event it becomes necessary to disclose Confidential
Information of another Party, the disclosing Party shall only disclose
such Confidential Information as is reasonably necessary to further or
fulfill the disclosing Party's obligations under this Amended JDOA and
then only so long as such third party is under an obligation of
confidentiality no less stringent than as set forth herein, provided
that, solely with respect to the Generex Intellectual Property or the
Elan Intellectual Property, as the case may be, and only to the extent
the Generex Intellectual Property or the Elan Intellectual Property to
be disclosed constitutes Confidential Information, prior to disclosure,
a disclosing Party shall provide Generex or Elan, as the case may be,
with reasonable notice as to the Confidential Information with respect
to Generex Intellectual Property or Elan Intellectual Property, as the
case may be, to be disclosed. Each Party further agrees to inform all
such employees, representatives and agents of the terms and provisions
of this Amended JDOA and their duties hereunder and to obtain their
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 the other Parties upon discovery of any unauthorized
use or disclosure of the other Parties' Confidential Information.
43
21.5 Any breach of this Clause 21 by any employee, representative or agent
of a Party is considered a breach by the Party itself.
21.6 The provisions relating to confidentiality in this Clause 21 shall
remain in effect during the Term and for a period of [ * ] following
the termination of this Amended JDOA.
21.7 The Parties agree that the obligations of this Clause 21 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 21, 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. The dispute resolution procedures set forth in Clause
18 shall not apply to any breach or threatened breach of the provisions
of this Clause 21.
44
CLAUSE 22
COSTS
22.1 Each Shareholder shall bear its own legal and other costs incurred in
relation to preparing and concluding this Amended JDOA and the
Definitive Documents.
22.2 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 23
GENERAL
23.1 Exclusion of liability:
Notwithstanding anything to the contrary in this Amended JDOA, no Party
shall be liable to any other Party by reason of any representation or
warranty, condition or other term or any duty of common law, or under
the express terms of this Amended JDOA, for any consequential, special
or incidental or punitive loss or damage (whether for loss of current
or future profits, loss of enterprise value or otherwise) and whether
occasioned by the negligence of the respective Parties, their employees
or agents or otherwise.
23.2 Good Faith:
Each of the Parties agrees to act reasonably in giving effect to the
provisions of this Amended JDOA.
23.3 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 Amended
JDOA for assuring to or vesting in the requesting Party the full
benefit of the terms hereof.
23.4 No Representation:
Each of the Parties hereto hereby acknowledges that in entering into
this Amended JDOA it has not relied on any representation or warranty
except as expressly set forth herein or in any document referred to
herein.
45
23.5 Force Majeure:
Neither Party to this Amended JDOA 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.
23.6 Relationship of the Parties:
Nothing contained in this Amended JDOA is intended or is to be
construed to constitute Elan or EIS and Generex as partners, or Elan or
EIS as an employee or agent of Generex, or Generex as an employee or
agent of Elan or 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.
23.7 Counterparts:
This Amended JDOA 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 Amended JDOA.
23.8 Notices:
Any notice to be given under this Amended JDOA shall be sent in writing
in English by registered or recorded delivery post or reputable
overnight courier or telefaxed to:
Elan at:
c/o Elan International Services, Ltd.,
102 St. James Court,
Flatts, Smiths FL04,
Bermuda.
Attention: President
Telephone: 441-292-9169
Fax: 441-292-2224
and
46
Elan International Services, Ltd.
102 St. James Court
Flatts, Smiths FL04
Bermuda
Attention: President
Telephone: 441-292-9169
Fax: 441-292-2224
Generex at:
Generex Biotechnology Corporation
33 Harbour Square, Suite 202,
Toronto, Ontario
Canada M5J 2G2
Attn: Chief Executive Officer
Telephone 416-364-8288
Fax: 416-364-8782
with a copy to:
Eckert Seamans Cherin & Mellott, LLC
1515 Market Street
9th Floor
Philadelphia, PA 19102
Attention: [ * ], Esq.
Newco at:
Clarendon House,
2 Church St.,
Hamilton,
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 7
business days after dispatch or delivery to the relevant courier and
any notice sent by telefax shall be deemed to have been delivered upon
confirmation of receipt. Notices of change of address shall be
effective upon receipt. Notices by telefax shall also be sent by
another method permitted hereunder.
47
23.9 Governing Law
23.9.1. This Amended JDOA shall be governed by and construed in accordance with
the laws of the State of New York.
23.9.2 In the event that a dispute regarding the matters described in Clause
18.3.1 is not resolved pursuant to the provisions of Clause 18.1, the
Parties agree to consider other dispute resolution mechanisms including
mediation.
23.9.3 In the event that the Parties fail to agree on a mutually acceptable
dispute resolution mechanism under Clause 23.9.2 or in the event that
the dispute is not resolved pursuant to any dispute resolution
mechanism agreed by the Parties under Clause 23.9.2 within 6 months,
the dispute shall be finally settled by the courts of competent
jurisdiction. For the purposes of this Amended JDOA the parties submit
to the [ * ] jurisdiction of the courts of the State of New York.
23.10 Severability:
If any provision in this Amended JDOA is agreed by the Parties to be,
deemed to be or becomes invalid, illegal, void or unenforceable under
any law that is applicable hereto, such provision will be deemed
amended to conform to applicable laws so as to be valid and enforceable
or, if it cannot be so amended without materially altering the
intention of the Parties, it will be deleted, with effect from the date
of such agreement or such earlier date as the Parties may agree, and
the validity, legality and enforceability of the remaining provisions
of this Amended JDOA shall not be impaired or affected in any way.
23.11 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.
23.12 Waiver:
No waiver of any right under this Amended JDOA 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 Amended JDOA.
48
23.13 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:
23.13.1 Elan, EIS and/or Generex 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.
23.13.2 Elan and EIS shall have the right to assign their rights and
obligations hereunder to a special purpose financing or
similar entity established by Elan or EIS.
23.14 Assignment of Newco Intellectual Property:
Upon one month's prior notice in writing from Elan to Newco and
Generex, Newco shall assign the Newco Intellectual Property from Newco
to a wholly-owned subsidiary of Newco to be incorporated in Ireland,
which company shall be newly incorporated to facilitate such
assignment.
23.15 Whole Agreement:
Except as otherwise provided in Section 9 of the Generex Securities
Agreement, this Amended JDOA (including the Schedules attached hereto)
and the Definitive Documents set forth all of the agreements and
understandings between the Parties with respect to the subject matter
hereof, and supersede 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 Amended JDOA and the Definitive Documents and the Newco Bye-laws.
In the event of any ambiguity or conflict arising between the terms of
this Amended JDOA and those of the Newco Bye-Laws, the terms of this
Amended JDOA shall prevail except with respect to the rights and
obligations attaching to the Common Shares and the Preference Shares,
where the Newco Bye-Laws shall prevail.
No provision of this Amended JDOA 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 Amended JDOA and the provisions of the Amended
License Agreements, the terms of this Amended JDOA shall prevail unless
this Amended JDOA specifically provide otherwise.
49
Nothing contained herein shall be deemed to negate any rights or
obligations of any of the Parties that have accrued between the Closing
Date and the Effective Date, save to the extent expressly provided
herein.
23.16 Successors:
This Amended JDOA shall be binding upon and inure to the benefit of the
Parties hereto, their successors and permitted assigns.
IN WITNESS WHEREOF, the Parties hereto have executed this Amended JDOA on the
day first set forth above.
SIGNED
BY:_______________________
for and on behalf of
ELAN CORPORATION, PLC
SIGNED
BY:_______________________
for and on behalf of
ELAN INTERNATIONAL SERVICES, LTD.
SIGNED
BY:_______________________
for and on behalf of
GENEREX BIOTECHNOLOGY CORPORATION
SIGNED
BY:_______________________
for and on behalf of
GENEREX (BERMUDA), LTD.
50
Schedule 1
[ * ]
51
Schedule 2
[ * ]
52
Schedule 3
Decisions of the Management Committee
1. Make a material Newco determination outside the ordinary
course of Business, including, among other things, acquiring
or disposing of intellectual property and licenses or
sublicenses, changing the Business as it relates to the
Licensed Technologies; and entering into joint ventures and
similar arrangements as they relate to the Licensed
Technologies;
2. [ * ], enter into any contract or transaction except in the
ordinary course of business on arm's length terms;
3. amend or vary the terms of the Amended Generex License
Agreement or the Amended Elan License Agreement;
4. [ * ], permit a person other than Newco to own a regulatory
approval relating to the Product(s);
5. [ * ], amend or vary the Business Plan or the Newco budget as
they relate to the Licensed Technologies.
53
Schedule 4
Preliminary Clinical Plan
[ * ]
54
Schedule 5
Clause 6.4 Calculation
I.
- --------------------------------------------------------------------------------
- Funding
Ownership Provided to
Percentage Date
Generex 80% 8,000,000
EIS 20% 2,000,000
- --------------------------------------------------------------------------------
Next Funding Requirement 1,000,000
Necessary Contribution Based
on Next FundingRequirement:
Generex 800,000
EIS 200,000
- --------------------------------------------------------------------------------
Assume EIS chooses to fund $0 and Generex chooses to fund the entire $1,000,000.
Generex would be issued the following amount of Common Shares and/or Preference
Shares:
(Total of Funding Paid by Generex in Applicable
Funding Event) - (Total Funding
Paid by Generex in Applicable Funding Event )x (Generex's
percentage ownership of Newco
immediately before the Applicable Funding Event)
divided by
per share purchase price of Common Shares and Preference Shares
(1,000,000) - (1,000,000) x (.8)
per share purchase price = shares
- --------------------------------------------------------------------------------
55