SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
December 16, 1999 (November 26, 1999)
Date of Report (Date of earliest event reported)
AVAX TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 000-29222 13-3575874
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
4520 Main Street
Suite 930
Kansas City, MO 64111
(Address of principal executive offices)
(816) 960-1333
(Registrant's telephone number, including area code)
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Item 5. Other Events
(a) Long-term Follow-up Data of Patients Treated with M-Vax(TM).
On November 26, 1999, the Company's Executive Vice President presented
nine-year follow-up data of stage III melanoma patients from Company-sponsored
Phase 2 studies of M-Vax, an immunotherapy designed for the treatment of
melanoma and the Company's lead development product, at the 26th Annual
Scientific Meeting of the Clinical Oncological Society of Australia in
Melbourne. The data was obtained from an ongoing study of a group of 71 patients
with advanced skin cancer who were cancer-free two years following treatment
with M-Vax, and then monitored for up to 9.8 years. The median follow-up time as
of November, 1999 was 5.3 years.
David Berd, M.D., Professor of Medicine at Thomas Jefferson University,
and the inventor of M-Vax, began studies of M-Vax in 1989. At the time M-Vax was
administered, 39 of the 71 patients were deemed to have little chance of
long-term survival because their cancer had spread to one or more lymph nodes.
Of those 71 patients, 49 survived 5 years or more. Moreover, the overall
survival rate for the 6 patients that have been monitored for more than 9 years,
is approximately 85% (5 of 6 had survived). No serious or long-term toxic
effects of M-Vax were observed in any of these patients.
In addition, the data have confirmed earlier findings by showing that a
patient's clinical outcome was strongly influenced by the development of a
positive immune response to the patient's own tumor cells, as measured by a
delayed type hypersensitivity test. A delayed type hypersensitivity test
measures the activity of T-lymphocytes, which are cells that are crucial in
triggering the body's immune system.
(b) Australian Joint Venture.
On November 25, 1999, the Company executed a definitive joint venture
agreement with Neptunus International Holdings Limited ("NIHL") in Australia,
under the subsidiary name, AVAX Holdings Australia Pty Limited ("AVAX
Holdings"). Pursuant to the joint venture agreement, AVAX Holdings, through its
affiliated entities, will manufacture and market M-Vax in Australia, and has
similar rights in New Zealand.
As part of the agreement, NIHL paid $3,600,000 (AUD), and will pay an
additional $400,000 (AUD) by December 25, 1999 , for the purchase of a 20%
interest in the joint venture entities. NIHL also has the option to purchase an
additional 30% interest in the joint venture entities for $6,000,000 (AUD).
Under the terms of the agreement, the Company has been granted options to
purchase common stock equivalent to 5% of NIHL's fully diluted shares.
On June 15, 1999, the Company announced that it had entered into a letter
agreement with NIHL, and that subject only to licensure of a manufacturing
facility by Australia's Therapeutic Goods Administration, the Company would
begin to market M-Vax in Australia. The Company is currently in the final stages
of choosing a location for its clean-room facility, which will be the
manufacturing and distribution center for M-Vax in Australia. The Company
expects to begin the build-out of this facility by January, 2000.
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Item 7. Financial Statements and Exhibits.
Exhibits.
10.1 Shareholders Agreement dated November 25, 1999, among AVAX Australia
Holdings Pty Limited, Eastpac Inc., Jetona Pty Ltd and Neptunus
International Holdings Limited
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AVAX TECHNOLOGIES, INC.
Date: December 16, 1999
By: /s/ Jeffrey M. Jonas
--------------------------
Name: Jeffrey M. Jonas, M.D.
Title: President and Chief Executive Officer
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Exhibit Index
Exhibit Number Description
- -------------- -----------
10.1 Shareholders Agreement dated November 25, 1999.
4
Exhibit 10.1
Shareholders Agreement
Date: 25 November 1999
AVAX Australia Holdings Pty Limited
AVAX Holdings
Eastpac Inc.
NIHL Sub
Jetona Pty Ltd
NIHL ServiceCo
Neptunus International Holdings Limited
NIHL
[GRAPHIC OMITTED] Copyright Clayton Utz
1
Liability is limited by the Solicitors Scheme under the Professional Standards
Act 1994 NSW
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TABLE OF CONTENTS
Clause Page
1. DEFINITIONS AND INTERPRETATION 1
2. THE COMPANIES 7
3. BUSINESS OF THE COMPANIES 9
4. CONTRIBUTION OF WORKING CAPITAL AND OWNERSHIP OF THE COMPANIES 10
5. DIRECTORS OF THE COMPANIES 12
6. CHAIRMAN OF THE BOARD 15
7. MANAGEMENT OF THE COMPANIES 15
8. TRANSACTION AGREEMENTS 18
9. NIHL OPTIONS 18
10. CONFIDENTIALITY 18
11. CONFIDENTIALITY OF COMMERCIAL CONTACTS 20
12. NO COMPETITION WITH THE COMPANIES 21
13. FINANCIAL REPORTS AND DIVIDEND AND BORROWING POLICIES 23
14. CHANGE OF CONTROL, DEFAULT AND LIQUIDATION 26
15. ELECTION NOT TO CONTRIBUTE WORKING CAPITAL 31
16. PRE-EMPTION RIGHTS WHERE BONA FIDE OFFER 32
17. STATEMENT ON SHARE CERTIFICATES 35
18. FURTHER JOINT VENTURES 35
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TABLE OF CONTENTS
Clause Page
19. FURTHER AVAX LICENCES 36
20. PUBLICITY 38
21. GUARANTEE AND INDEMNITY 39
22. TERM 42
23. NOTICES 42
24. GOVERNING LAW AND JURISDICTION 45
25. ARBITRATION 45
26. MISCELLANEOUS 46
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SHAREHOLDERS AGREEMENT dated 25 November 1999
BETWEEN AVAX AUSTRALIA HOLDINGS PTY LIMITED, ACN 089 164 090 of c/-
Clayton Utz, Level 31, 1 O'Connell Street, Sydney, New South
Wales, Australia ("AVAX Holdings")
AND EASTPAC INC., of c/- Tengis Limited, 11/F Tower 2, The
Gateway, 25-27 Canton Road, Kowloon, Hong Kong ("NIHL Sub")
AND JETONA PTY LTD, ACN 089 914 152 of Level 8, 157-159 Walker
Street, North Sydney, New South Wales, Australia ("NIHL
ServiceCo")
AND NEPTUNUS INTERNATIONAL HOLDINGS LIMITED, ARBN 065 824 302 of
Level 8, 157-159 Walker Street, North Sydney, New South Wales,
Australia ("NIHL")
RECITALS
A. AVAX Holdings is the legal and beneficial owner of the whole of the issued
capital of AVAX Australia and AVAX Manufacturing.
B. The parties hereto have reached agreement on the manner in which those
companies will be owned, controlled and funded by them and wish by this
document to record their said agreement.
C. NIHL ServiceCo will provide certain services to AVAX Australia and will
receive a fee in relation thereto.
D. NIHL Sub and NIHL ServiceCo are wholly owned subsidiaries of NIHL and, in
consideration of AVAX Holdings entering into this Agreement, NIHL has
agreed to guarantee to AVAX Holdings the due and punctual performance by
NIHL Sub and NIHL ServiceCo of the Obligations and to indemnify AVAX
Holdings in respect of any breach by NIHL Sub or NIHL ServiceCo of any of
the Obligations.
THE PARTIES AGREE:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Agreement:
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""A" Class Ordinary Shares" means the shares in the capital of the
Companies referred to in clause 2.2(a).
"Additional Shareholder" has the meaning given in clause 15.2(e).
A reference to a person who is an "associate" of another person is a
reference to a person who is an associate of that other person within the
meaning of the Corporations Law.
"AVAX Australia" means AVAX Australia Pty Limited, ACN 089 164 536.
"AVAX Australia Licence and Distribution Agreement" means the agreement
annexed to this agreement and marked "A".
"AVAX Manufacturing" means AVAX Australia Manufacturing Pty Limited, ACN
089 164 563.
"AVAX Manufacturing Licence Agreement" means the agreement annexed to this
agreement and marked "B".
"AVAX Technologies" means AVAX Technologies, Inc., a company incorporated
in Delaware, United States of America, and having its address at 4520 Main
Street, Suite 930, Kansas City, Missouri 64111, United States of America.
""B" Class Ordinary Shares" means the shares in the capital of the
Companies referred to in clause 2.2(b).
"Business" means (in relation to AVAX Australia) the business described in
clause 3.1(a) and means (in relation to AVAX Manufacturing) the business
described in clause 3.1(b) and, where appropriate, will mean both of them.
"Business Day" means any day (not being a Saturday or Sunday) on which
banks are open for general banking business in Melbourne, Australia and
Kansas City, Missouri, USA.
""C" Class Ordinary Shares" means the shares in the capital of the
Companies referred to in clause 2.2(c).
"Companies" means each of AVAX Australia and AVAX Manufacturing.
"Confidential Information" means all the information relating to the
Business, the Licensed Products, Proprietary Property, other products of
AVAX Technologies and its affiliates, licensors, and licensees,
information provided by the Originators and information derived from
efforts to Develop the Licensed Products which is or has
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been disclosed by AVAX Holdings (or any of its representatives) to either
of the Companies, NIHL, NIHL ServiceCo or NIHL Sub (or any of their
representatives) (orally or in writing) but excludes the Excluded
Information.
"Constitution" means (in relation to AVAX Australia) the Constitution of
AVAX Australia and means (in relation to AVAX Manufacturing) the
Constitution of AVAX Manufacturing and "Constitutions" means each of them.
"Contacts" means, in relation to the parties, any names, addresses,
telephone or facsimile numbers of institutions, buyers, sellers,
suppliers, investors, brokers, financiers or other parties involved or to
be involved with the Business or who would be interested in using the
Business.
"Corporations Law" means the Corporations Law of Victoria and includes
where applicable a separate reference to the Corporations Law of each
State or Territory of Australia other than Victoria.
"Develop" in relation to the Licensed Products means the conduct of
research into the Licensed Products and the development of the Licensed
Products.
"Development Agreement" means the agreement annexed to this Agreement and
marked "C".
"Directors" means the directors of the Companies from time to time.
A reference to a person "entitled to" shares in a company is a reference
to a person entitled to those shares within the meaning of the
Corporations Law.
"Event of Default" has the meaning given in clause 14.2.
"Excluded Information" means information and/or material and/or Contacts,
other than Proprietary Property, which is, in relation to the recipient:
(a) at the time of supply or access to the recipient:
(i) already in or subsequently enters the public domain through no
fault, action or omission of the recipient; or
(ii) already lawfully known to the recipient; or
(b) subsequently received by the recipient without any breach by the
recipient of its obligations to the Originator under this Agreement
as will be documented by the written records of the recipient
maintained in the ordinary course of business.
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The recipient will bear the burden of proving by clear and convincing
evidence the existence of any of the exceptions provided in this
definition of "Excluded Information" prior to any use or disclosure of
Confidential Information other than as provided by this Agreement. If the
recipient elects to rely on any such exception with respect to any
Confidential Information, then, prior to any use or disclosure of
Confidential Information other than as provided by this Agreement, the
recipient will notify the disclosing party in writing of its intent to so
use or disclose, which will include:
(a) an identification of the specific Confidential Information and
exception to be relied on;
(b) the basis for the recipient's reliance on such exception with
respect to such Confidential Information; and
(c) the nature of the intended use or disclosure.
In the event that the disclosing party fails to advise the recipient in
writing within forty-five (45) calendar days after its receipt of such
notice that, in its opinion, the so-identified exception(s) provided in
this definition of "Excluded Information" do not apply to the identified
Confidential Information, then the disclosing party will be deemed to have
waived any objection to the identified use or disclosure of the identified
Confidential Information. If, however, the disclosing party objects within
such time period to the identified use or disclosure of the identified
Confidential Information, then the recipient will not make such use or
disclosure without:
(a) the written consent of the disclosing party; or
(b) complying with the dispute resolution provisions of clause 25
hereof.
"Executive Service Agreement" means the agreement annexed to this
Agreement and marked "D".
"Group" means (in relation to AVAX Holdings) AVAX Holdings and its Related
Bodies Corporate and means (in relation to NIHL Sub) NIHL Sub and its
Related Bodies Corporate and means (in relation to Additional
Shareholders) the Additional Shareholders and their respective Related
Bodies Corporate.
"GST" means any goods and services tax implemented in Australia under any
legislation (such legislation including without limitation the A New Tax
System (Goods and Services Tax) Act 1999).
"holding company" has the meaning given in section 9 of the Corporations
Law.
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"Introduction" means the introduction by one party to another party of
third parties involved or proposed to be involved in the Business.
"Joint Venture" means the incorporated joint venture between the
Shareholders formed and governed by this Agreement.
"Licensed Products" means (in relation to AVAX Australia) those products
referred to as "Products" in the AVAX Australia Licence and Distribution
Agreement and means (in relation to AVAX Manufacturing) those products
referred to as "Products" in the AVAX Manufacturing Licence Agreement.
"Material Contract" means any contract to which a Company is party that:
(b) potentially affects the value of the assets or liabilities of the
relevant Company by $50,000 or more;
(c) involves capital expenditure by the relevant Company in excess of
$50,000;
(d) may result in a significant or permanent change to the nature or
operation of the Business; or
(e) relates to key personnel or the supply of key services to the
relevant Company.
"NIHL Option Deed" means the deed annexed to this Agreement and marked
"E".
"Non-Voting Shares" means shares in the Companies that have the same
dividend rights as "A" Class Ordinary Shares but do not carry any voting
rights in any circumstances.
"Obligations" means all of the obligations of NIHL Sub and NIHL ServiceCo
under this Agreement.
"Ordinary Shares" means the "A" Class Ordinary Shares, the "B" Class
Ordinary Shares and the "C" Class Ordinary Shares and, for the avoidance
of doubt, excludes the Non-Voting Shares.
"Originators" means the parties who created the intellectual property
which enables the manufacture of the Licensed Products and who granted to
AVAX Holdings the right to license those rights.
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"Proprietary Property" means all trade secrets, confidential information,
designs, technical drawings, processes, procedures, formulae,
specifications and other information relating to the Licensed Products.
"Related Body Corporate" of an entity means any body corporate which is
related to that entity within the meaning of the Corporations Law provided
that, for the purposes of this Agreement, AVAX Australia and AVAX
Manufacturing shall be deemed not to be Related Bodies Corporate of any of
the Shareholders.
"Shares" means issued shares in the Companies from time to time.
"Shareholder" means one of NIHL Sub or AVAX Holdings or any Additional
Shareholder and "Shareholders" means all of them.
"Taxes" means all income, stamp and other taxes, levies, imposts,
deductions, charges and withholdings plus interest thereon and penalties,
if any, and charges, fees or other amounts made on or in respect thereof.
"Territory" means Australia and New Zealand.
"Transaction Agreements" means this Agreement, the AVAX Australia Licence
and Distribution Agreement, the AVAX Manufacturing Licence Agreement and
the Development Agreement or any of them.
"Working Capital" means TEN MILLION DOLLARS ($10,000,000) to be
contributed by NIHL Sub to AVAX Australia. The parties acknowledge that
the working capital needs of the Companies include research and
development for the Licensed Products.
1.2 Interpretation
In this Agreement:
(a) headings are for convenience only and do not affect interpretation;
and unless the context indicates a contrary intention:
(b) the expression "person" includes an individual, the estate of an
individual, a corporation, an authority, an association or a joint
venture (whether incorporated or unincorporated), a partnership and
a trust;
(c) a reference to any party includes that party's executors,
administrators, successors and permitted assigns, including any
person taking by way of novation;
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(d) a reference to any document (including this Agreement) is to that
document as varied, novated, ratified or replaced from time to time;
(e) a reference to any statute or to any statutory provision includes
any statutory modification or re-enactment of it or any statutory
provision substituted for it, and all ordinances, by-laws,
regulations, rules and statutory instruments (however described)
issued under it;
(f) words importing the singular include the plural (and vice versa),
and words indicating a gender include every other gender;
(g) references to parties, clauses, schedules, exhibits or annexures are
references to parties, clauses, schedules, exhibits and annexures to
or of this Agreement, and a reference to this Agreement includes any
schedule, exhibit or annexure to this Agreement;
(h) where a word or phrase is given a defined meaning, any other part of
speech or grammatical form of that word or phrase has a
corresponding meaning; and
(i) a reference to "$" or "dollar" is to Australian currency.
1.3 Recitals and annexures
The Recitals and annexures form part of this Agreement, and defined terms
in the Recitals have the meaning given them in clause 1.1.
2. THE COMPANIES
2.1 Current Shareholdings
The Shareholders acknowledge that AVAX Holdings currently holds the whole
of the issued capital of the Companies.
2.2 Division of share capital in the Companies
The issued capital of the Companies will be divided into:
(a) "A" Class Ordinary Shares which will be held by AVAX Holdings;
(b) "B" Class Ordinary Shares which will be held by NIHL Sub;
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(c) "C" Class Ordinary Shares which will be held by Additional
Shareholders, if any; and
(d) Non-Voting Shares which will be held by AVAX Holdings.
The only differentiation between the "A" Class Ordinary Shares, the "B"
Class Ordinary Shares and the "C" Class Ordinary Shares will be the
different voting rights to be exercised by the Directors appointed by the
holders of those Ordinary Shares, as described in clause 5 and clause
15.2(e)(i).
2.3 Subscription for Shares
AVAX Holdings will, if it has not already done so, subscribe for
sufficient Shares so that it holds 5,200 "A" Class Ordinary Shares in each
of the Companies for a total consideration of $104 ($52 for each Company)
and will pay the Companies for its said Shares in full upon subscribing.
2.4 Constitutions
(a) At the request of any Shareholder, the Constitutions will be amended
so as to be consistent with the terms of this Agreement.
(b) If there is any inconsistency between the provisions of this
Agreement and a Constitution, the former will prevail to the extent
of the inconsistency.
2.5 First Directors
(a) The first Directors of AVAX Australia will be Jeffrey Martin Jonas,
David Lothrop Tousley and Kelvin Edward Hopper (who will be regarded
as having been appointed by AVAX Holdings) and Peter Buchanan
Simpson, Richard Langley Stewart Hill and Hudson Hak Fun Chen (who
will be regarded as having been appointed by NIHL Sub).
(b) The first Directors of AVAX Manufacturing will be Jeffrey Martin
Jonas, Ernest Warren Yankee and Kelvin Edward Hopper (who will be
regarded as having been appointed by AVAX Holdings) and Peter
Buchanan Simpson, Richard Langley Stewart Hill and Hudson Hak Fun
Chen (who will be regarded as having been appointed by NIHL Sub).
2.6 Secretary and public officer
The first secretary of the Companies will be Peter Buchanan Simpson and
the first public officer will be Peter Buchanan Simpson.
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2.7 Registered office
The registered office of the Companies will be c/- Clayton Utz, Level 31,
1 O'Connell Street, Sydney, Australia or at such other location as
determined by the Directors.
2.8 Banking
The Companies' banker will be the North Sydney (Cnr Miller & Berry
Streets) branch of the Commonwealth Bank of Australia and the first
signatory to the Companies' bank account will be Peter Buchanan Simpson,
except that any cheque for $50,000 or more must be counter-signed by
Kelvin Edward Hopper or any other person nominated by AVAX Holdings.
2.9 Auditors
The auditors of the Companies will be Ernst & Young.
2.10 Financial year
Subject to receipt of the necessary consents from the relevant Australian
regulatory authorities, the financial year of the Companies will be the 12
month period from 1 January to 31 December in each year provided that the
first financial year of the Company will be the period from the date of
this Agreement until the next following 31 December.
3. BUSINESS OF THE COMPANIES
3.1 Nature of business
(a) The business of AVAX Australia will be the sale and distribution of
the Licensed Products in accordance with the AVAX Australia Licence
and Distribution Agreement.
(b) The business of AVAX Manufacturing will be the manufacture of the
Licensed Products in accordance with the AVAX Manufacturing Licence
Agreement and the conduct of research and development in relation to
the Licensed Products in accordance with the Development Agreement.
3.2 Place where Business will be carried on
The Business of the Companies will be carried on in the Territory.
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4. CONTRIBUTION OF WORKING CAPITAL AND OWNERSHIP OF THE COMPANIES
4.1 Initial ownership
(a) AVAX Holdings will initially own the whole of the issued capital of
the Companies.
(b) Subject to clause 4.4, NIHL Sub will earn up to a 50% interest in
the Companies by the contribution of Working Capital pursuant to
clause 4.2.
4.2 Contribution of Working Capital by NIHL Sub
NIHL Sub will contribute the Working Capital to AVAX Australia in
accordance with the following:
(a) $3,600,000 on the date of execution of this Agreement;
(b) $400,000 on the date which is 30 days after the date of execution of
this Agreement;
(c) subject to clause 4.4, $3,000,000 on 31 March 2000; and
(d) subject to clause 4.4, $3,000,000 on 30 June 2000.
4.3 Issue of Shares following contribution of Working Capital
Upon NIHL Sub:
(a) making the contribution referred to in clause 4.2(a), AVAX Holdings
will procure that the Companies issue to NIHL Sub:
(i) 1,141 "B" Class Ordinary Shares in AVAX Australia for a total
consideration of $3,598,859; and
(ii) 1,141 "B" Class Ordinary Shares in AVAX Manufacturing for a
total consideration of $1,141,
such that AVAX Holdings holds 82% of the Ordinary Shares and NIHL
Sub holds 18% of the Ordinary Shares;
(b) making the contribution referred to in clause 4.2(b), the
Shareholders will procure that the Companies issue to NIHL Sub:
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(i) 159 "B" Class Ordinary Shares in AVAX Australia for a total
consideration of $399,841; and
(ii) 159 "B" Class Ordinary Shares in AVAX Manufacturing for a
total consideration of $159,
such that AVAX Holdings holds 80% of the Ordinary Shares and NIHL
Sub holds 20% of the Ordinary Shares;
(c) making the contribution referred to in clause 4.2(c), the
Shareholders will procure that the Companies issue to NIHL Sub:
(i) 1,500 "B" Class Ordinary Shares in AVAX Australia for a total
consideration of $2,998,500; and
(ii) 1,500 "B" Class Ordinary Shares in AVAX Manufacturing for a
total consideration of $1,500,
such that AVAX Holdings holds 65% of the Ordinary Shares and NIHL
Sub holds 35% of the Ordinary Shares; and
(d) making the contribution referred to in clause 4.2(d), the
Shareholders will procure that the Companies issue:
(i) to NIHL Sub:
A. 2,400 "B" Class Ordinary Shares in AVAX Australia for a
total consideration of $2,997,600; and
B. 2,400 "B" Class Ordinary Shares in AVAX Manufacturing
for a total consideration of $2,400; and
(ii) to AVAX Holdings, 10 Non-Voting Shares in each of the
Companies for a total consideration of $20 ($10 for each
Company),
such that AVAX Holdings holds 50% of the Ordinary Shares and NIHL
Sub holds 50% of the Ordinary Shares and AVAX Holdings holds all of
the Non-Voting Shares.
4.4 Election to contribute Working Capital
(a) NIHL Sub must make the contributions referred to in clauses 4.2(a)
and (b) and has no right to elect otherwise.
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(b) NIHL Sub must, prior to the dates referred to in clauses 4.2(c) and
(d), elect in writing to AVAX Holdings whether or not it will make
the relevant contribution, with such election being binding upon
NIHL Sub.
(c) If NIHL Sub fails to make an election in accordance with paragraph
(b), it will be deemed to have elected to make the relevant
contribution provided that NIHL Sub will not be entitled to elect to
make a contribution, and will not be deemed to have elected to make
that contribution, where the previous contribution due from NIHL Sub
has not been paid in full.
4.5 Payment of Working Capital
NIHL Sub will pay the contributions referred to in clause 4.2 into bank
accounts respectively nominated by AVAX Australia and AVAX Manufacturing
for the amounts referred to in clause 4.3.
4.6 Equal ownership proportions
Each Shareholder must at all times hold the same proportion of the issued
capital of AVAX Australia as it does in AVAX Manufacturing.
4.7 Funding of AVAX Manufacturing
The Shareholders will ensure that AVAX Australia provides loan funds to
AVAX Manufacturing in such amounts and on such terms as the respective
Boards of Directors of the Companies from time to time agree.
4.8 Further contributions
Subject to the provisions of this clause 4, neither Shareholder will be
obliged to contribute further funds to the Companies either by way of loan
or subscription for Shares unless otherwise agreed in writing.
5. DIRECTORS OF THE COMPANIES
5.1 Number of Directors
Subject to clauses 5.2 and 15.2(e)(i), the number of Directors of the
Companies will be 6.
5.2 Appointment of Directors
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(a) Subject to clauses 5.2(b), (c) and (d), each of AVAX Holdings and
NIHL Sub will be entitled to appoint 3 nominees to the Boards of the
Companies and will be entitled to replace any such nominee.
(b) If NIHL Sub does not make the contribution referred to in clause
4.2(a), NIHL Sub:
(i) will not be entitled to appoint any nominees to the Boards of
the Companies;
(ii) will cause the nominees of NIHL Sub (if any) to resign from
their office as Director forthwith; and
(iii) will lose its rights under clause 5.4(b).
(c) If NIHL Sub does not make the contribution referred to in clause
4.2(b) or clause 4.2(c), NIHL Sub:
(i) will only be entitled to appoint one nominee to the Boards of
the Companies and will be entitled to replace any such
nominee; and
(ii) will cause the other 2 nominees of NIHL Sub to resign from
their office as Director forthwith.
(d) If NIHL Sub makes the contribution referred to in clause 4.2(c)
but does not make the contribution referred to in clause
4.2(d), NIHL Sub:
(i) will only be entitled to appoint 2 nominees to the Boards of
the Companies and will be entitled to replace any such
nominee; and
(ii) will cause the other nominee of NIHL Sub to resign from his or
her office as Director forthwith.
5.3 Alternate Directors
Each Director will have power to appoint any person, who is approved for
that purpose by a majority of the other Directors after receipt of an
instrument appointing an alternate director, to be the alternate of the
Director to act in his place during such times as such Director
determines.
5.4 Directors' votes
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(a) Those Directors nominated by AVAX Holdings will be entitled to a
vote equal to the percentage of the Ordinary Shares owned by AVAX
Holdings.
(b) Subject to clause 5.2(b), those Directors nominated by NIHL Sub will
be entitled to a vote equal to the percentage of the Ordinary Shares
owned by NIHL Sub.
(c) Those Directors nominated by Additional Shareholders, if any, will
be entitled to a vote equal to the percentage of the Ordinary Shares
owned by Additional Shareholders.
(d) If less than all nominees of a Shareholder attend a meeting of
Directors, the attending nominee(s) may exercise all of the
Directors' votes referred to in paragraph (a), (b) or (c) (as
appropriate).
(e) The Chairman of Directors will not, in the case of an equality of
votes, have a second or casting vote.
5.5 Quorum for meetings of Directors and Shareholders
(a) Subject to clause 5.5(b), the quorum for a meeting of Directors or
members of the Companies will be one representative from each of
AVAX Holdings, NIHL Sub and (if applicable) Additional Shareholders.
(b) The quorum for a meeting of Directors of the Companies at which any
decision set out in clauses 7.4(a) to (j) will be made will be all
Directors of the relevant Company.
(c) Each of the Shareholders will use its reasonable endeavours to
ensure that:
(i) at least one representative from that Shareholder attends each
meeting of Directors or members of the Companies referred to
in clause 5.5(a); and
(ii) all Directors attend each meeting of Directors of the
Companies referred to in clause 5.5(b).
5.6 Use of technology for meetings
The Directors may confer or hold meetings through the use of any
technology, including radio, telephone, closed circuit television or
other electronic means or telecommunications device for audio or
audio-visual communication.
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6. CHAIRMAN OF THE BOARD
The Shareholders will cause the Directors to elect a chairman of the
Companies and to elect him according to the following rules:
(a) until 31 December 2000 the chairman of the Companies will be a
Director appointed by AVAX Holdings;
(b) subject to paragraph (c):
(i) during the calendar year immediately following 31 December
2000, the chairman of the Companies will be a Director
appointed by NIHL Sub; and
(ii) during subsequent calendar years, the chairmanship of the
Companies will alternate between a Director appointed by AVAX
Holdings and a Director appointed by NIHL Sub;
(c) whilstever NIHL Sub holds less than 50% of the Ordinary Shares, the
chairman of the Companies will be a Director appointed by AVAX
Holdings.
7. MANAGEMENT OF THE COMPANIES
7.1 Conduct of Business
The Boards of Directors of the Companies will control the manner in which
the Business is conducted.
7.2 Business plans
The Shareholders will cause the Directors to prepare or have prepared in
relation to each financial year of the Companies a business plan and
annual budget and will cause the Directors of the Companies to see that
during the relevant financial year the Business is managed in accordance
with the relevant business plan and annual budget.
7.3 Expenditure by management
Any item or items of expenditure in excess of $50,000 in relation to any
one capital item or an aggregate of $50,000 per annum in respect of
expense items for either Company will to the extent that such expenditure
is not provided for in the relevant business plan and annual budget
require the prior approval of the relevant Board of
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Directors before any commitment in relation thereto is entered into by the
relevant Company.
7.4 Board decisions
Decisions of the Boards of Directors of the Companies will be by simple
majority of all Directors of the respective Company, except that, subject
to clause 15.2(d), the following decisions will require a special majority
of not less than 85% up to 31 March 2000, not less than 70% from 31 March
2000 to 30 June 2000 and not less than 65% thereafter:
(a) pursuant to clause 7.3, expenditures in excess of $50,000;
(b) entry into, or termination of, a Material Contract;
(c) termination of operations;
(d) disposal of the Business;
(e) material change in the Business;
(f) corporate restructure;
(g) establishment of and later changes to planning and strategy relating
to:
(i) regulatory compliance and development;
(ii) intellectual property; and
(iii) manufacturing;
(h) approval of a business plan or annual budget for the Business;
(i) decisions materially affecting the parties' respective rights in
respect of the licensing of rights relating to the Licensed
Products; and
(j) subject to clause 15.2(e), any issue of Shares other than as
provided for in this Agreement.
7.5 No materially prejudicial action
Notwithstanding the provisions of clause 7.4, but subject to clause 15.2,
neither Shareholder will act in a manner likely to materially prejudice
the interests of the other Shareholder in relation to the Joint Venture,
except where:
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(a) the other Shareholder is in breach of this Agreement or any other
Transaction Agreement; or
(b) the firstmentioned Shareholder is acting in accordance with the
terms of this Agreement,
and each Shareholder will procure that none of their respective Related
Bodies Corporate so act.
7.6 Peter Buchanan Simpson
NIHL Sub will procure that Peter Buchanan Simpson acts as Managing
Director of the Companies to assist in the management of the Business for
a minimum period of 2 years and, in this regard, will procure that Peter
Buchanan Simpson enters into the Executive Service Agreement.
7.7 Obligations of NIHL ServiceCo
NIHL ServiceCo will:
(a) locate and recommend the employment of appropriate persons to
manage the Companies;
(b) establish the means to conduct the Business;
(c) advise AVAX Australia on matters to commercialise and develop
the Licensed Products in the Territory;
(d) provide management of the marketing and sales for AVAX
Australia,
and will:
(e) enter into a contract to that effect satisfactory to AVAX
Holdings, if required;
(f) provide quarterly reports to AVAX Australia summarising the
results of its activities referred to in paragraphs (a) to (d)
above; and
(g) where required by the GST law, issue a tax invoice or other
documentation which enables AVAX Australia to claim a credit
or refund of GST in a timely manner.
7.8 NIHL ServiceCo fee
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(a) Subject to clause 7.8(b), in consideration of the services provided
by NIHL ServiceCo under clause 7.7, the Shareholders will agree upon
a quarterly fee (if any) ("NIHL ServiceCo Fee") to be paid by AVAX
Australia to NIHL ServiceCo for such services and will procure that
AVAX Australia pays the NIHL ServiceCo Fee to NIHL ServiceCo.
(b) Whilstever AVAX Australia is either unprofitable or has profits less
than the NIHL ServiceCo Fee, NIHL ServiceCo will not receive a fee
pursuant to clause 7.8(a), unless otherwise agreed in writing by the
parties.
7.9 Technical Services
Technical services will only be provided to the Companies:
(a) by AVAX Technologies or one of its Related Bodies Corporate; and
(b) at the request of and on terms approved by the Managing Director of
the relevant Company,
unless otherwise agreed by the parties.
8. TRANSACTION AGREEMENTS
8.1 Contemporaneous Execution
Each of the Shareholders acknowledge that all of the Transaction
Agreements will be entered into contemporaneously and, where necessary,
will procure that the Companies, as applicable, enter into the Transaction
Agreements.
8.2 Compliance with Transaction Agreements
The Shareholders will procure that the Directors vote in such a manner so
as to ensure that the Companies comply with all of their obligations under
the Transaction Agreements.
9. NIHL OPTIONS
Contemporaneously with this Agreement, NIHL will enter into the NIHL
Option Deed with AVAX Technologies pursuant to which NIHL will grant to
AVAX Technologies options to acquire 5.03% of the issued share capital of
NIHL as at the date of this Agreement.
10. CONFIDENTIALITY
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10.1 Confidential Information and Proprietary Property
In consideration for access to the Proprietary Property being granted to
NIHL Sub and the Companies, each of NIHL, NIHL Sub and NIHL ServiceCo
acknowledges and agrees that:
(a) the Confidential Information is disclosed to NIHL Sub (and NIHL and
NIHL ServiceCo , if applicable) in confidence and is and will at all
times be owned by AVAX Holdings or some Related Body Corporate of
AVAX Holdings (other than AVAX Australia or AVAX Manufacturing) and
it will not claim any ownership interest in the Proprietary
Property, either for itself or for AVAX Australia or AVAX
Manufacturing;
(b) it must, subject to the terms of this Agreement, hold all
Confidential Information and/or Proprietary Property in strict
confidence;
(c) it must not reveal any Confidential Information and/or Proprietary
Property to any person except strictly on a need-to-know basis to
persons approved in writing by AVAX Holdings and for the purposes of
this Agreement and to persons who have executed written
confidentiality undertakings at least as comprehensive as provided
in this Agreement, a copy of which will be provided to AVAX
Holdings;
(d) it will not use any Confidential Information and/or Proprietary
Property except for the purposes of this Agreement;
(e) it must take all reasonable steps to ensure that its officers,
employees, contractors and agents also observe the obligations of
these provisions; and
(f) it will not make, use, sell, duplicate, transfer or have made, used,
sold, duplicated or transferred to others (except AVAX Holdings or
any of its Related Bodies Corporate) or assist or permit any other
party to make, use, sell, duplicate, transfer any product or process
in whole or in part comprising or incorporating any of the
Proprietary Property without the prior written permission of AVAX
Holdings. Only after obtaining such written permission from AVAX
Holdings may NIHL Sub permit any third party to have any access to
or use any of the Proprietary Property.
10.2 Disclosure
For the purposes of this Agreement, it is agreed that each of the parties
may disclose those terms of the Transaction Agreements and any other
agreements between AVAX Holdings, AVAX Australia, AVAX Technologies, AVAX
International IP
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Holdings Inc and the Originators relating to the Licensed Products as is
necessary to enable them to observe their legal obligations, whether
arising under the Corporations Law, the Official Listing Rules of the
Australian Stock Exchange Limited or the United States Securities Exchange
Commission or otherwise, provided that the party first provides written
notice to each of the other parties of the exact terms of the intended
disclosure and obtains the written consent of each of the other parties to
the disclosure, which consent will not be unreasonably withheld.
11. CONFIDENTIALITY OF COMMERCIAL CONTACTS
11.1 Subject to the provisions of clause 10, each of the parties covenant and
agree with each other that:
(a) an Introduction may lead to Contacts;
(b) the Contacts are the result of the acts of the other party and are
the property of the other party and, unless authorised in writing by
the other party, should not be used for any purpose other than in
relation to the Business; and
(c) in consideration of the Introduction and the disclosure of the
Confidential Information they will not disclose any Contact or
attempt to negotiate or negotiate or attempt to participate or
participate in any transaction with any Contact unless authorised in
writing by the other party.
11.2 Each of the parties covenant and agree with each other that in
consideration of the Introduction and disclosure of the Confidential
Information, unless authorised in writing by each other party they will:
(a) keep absolutely secret the fact of supply and all of the
Confidential Information received by it;
(b) not make or cause to be made any copy, duplicate, replica, summary,
precis or otherwise make or construct any document, material or
thing similar to any of the Confidential Information;
(c) not allow any other person, firm, corporation or other entity
whatsoever to view, read, encode, copy, record whether on computer
disk, tape or other electronic or mechanical means, or otherwise, to
come into contact with the Confidential Information;
(d) not discuss in detail or general the fact that the Confidential
Information has been supplied, the purpose of the supply of the
Confidential
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Information or the contents of the Confidential Information with any
person, firm, corporation or other entity whatsoever;
(e) return each copy of the Confidential Information supplied by the
other party as and when required to do so, without retaining any
copies or allowing any other entity to do so; and
(f) not utilise in any way directly or indirectly any Confidential
Information supplied by the other party to its financial, managerial
or strategic benefit or to the financial, managerial and strategic
detriment of the other party however such detriment may arise.
11.3 Each of the parties must procure that its Related Bodies Corporate,
officers, employees, agents and advisers (whether or not still employed or
engaged in that capacity) do not do or omit to do anything which, if done
or omitted to be done by them, would be a breach of their obligations
under this Agreement.
11.4 Each of the parties covenant and agree with each other that their
covenants in accordance with clause 10 and this clause 11 apply world-wide
and will continue beyond the termination of this Agreement until they are
released in writing by all other parties.
11.5 Each of the parties acknowledges that damages are not a sufficient remedy
for any other party for any breach of clauses 10 and 11 hereof and the
party whose rights under clauses 10 and 11 hereof are breached is entitled
to specific performance or injunctive relief (as appropriate) as a remedy
for any such breach or threatened breach by any other party in addition to
any other remedies available at equity or in law.
12. NO COMPETITION WITH THE COMPANIES
12.1 During the term of this Agreement
Subject to clause 12.3, each Shareholder covenants with the other
Shareholder(s) and for the benefit of the Companies that while any member
of the firstmentioned Shareholder's Group holds Shares, neither the
firstmentioned Shareholder nor any member of the firstmentioned
Shareholder's Group will, without the prior written consent of the other
Shareholder(s), directly or indirectly engage or otherwise than through
the Companies, be concerned or interested in any business in the Territory
which involves the manufacture, development and/or marketing of cancer
therapeutics, whether on its own or as an associate of another person.
12.2 Covenant not to compete
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(a) Subject to clause 12.3, in the event that a Shareholder(s):
(i) acquires another Shareholder's interest in the Companies
pursuant to clause 14.7(a); or
(ii) terminates this Agreement pursuant to clause 14.7(b),
neither the defaulting party (as defined in clause 14.6) nor any
member of the defaulting party's Group will, without the prior
written consent of the other Shareholder(s), directly or indirectly,
engage, be concerned or interested in any business in the Territory
which involves the manufacture, development and/or marketing of
cancer therapeutics, whether on its own or as an associate of
another person for 3 calendar years thereafter.
(b) Subject to clause 12.3, in the event that AVAX Holdings exercises
its option pursuant to clause 15.2(c), neither NIHL Sub nor any
member of NIHL Sub's Group will, without the prior written consent
of AVAX Holdings, directly or indirectly, engage, be concerned or
interested in any business in the Territory which involves the
manufacture, development and/or marketing of cancer vaccines or
immunotherapies, whether on its own or as an associate of another
person for 3 calendar years thereafter.
12.3 Exceptions
The restrictions imposed by clauses 12.1 and 12.2 will not apply to:
(a) any holding by any member of either Group of shares in a listed
company which confer not more than 5% of the votes which could be
cast at a general meeting of the company concerned on matters and in
circumstances not being such as to bring into play any special
voting rights or restrictions on voting rights;
(b) any interest which any member of either Group has for no longer than
6 months after it has become a member of its Group and which arises
as a result of an acquisition of a corporation the business of which
does not consist mainly of a business the same as or similar to the
Business; or
(c) any holding by any member of either Group of shares in a company
which was previously a member of that Group while the Group's shares
in the company confer the right to not more than 5% of the dividends
payable by the company and confer not more than 5% of the votes
which could be cast at a general meeting of the company on matters
and in circumstances not being such as to bring into play any
special voting rights or restrictions on voting rights.
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13. FINANCIAL REPORTS AND DIVIDEND AND BORROWING POLICIES
13.1 Financial reports
The Shareholders will ensure that each of the Companies:
(a) causes its financial affairs to be audited in accordance with
statutory requirements at the end of each financial year and at the
request and cost of the requesting Shareholder at such other times
as either Shareholder may request;
(b) provides to each of the Directors and to each of the Shareholders as
soon as available, and in any event within 60 days after the end of
each financial year of the Companies, a copy of its audited balance
sheet as at the end of that financial year, and a copy of its
audited profit and loss account for that financial year in all
reasonable detail and subject to any contrary determination by the
Directors prepared in conformity with generally accepted Australian
accounting principles and practices at the relevant time (including
the Australian Accounting Standards and the Approved Accounting
Standards) consistently applied;
(c) provides to each of the Directors as soon as available, and in any
event not later than 60 days after the end of each financial half
year, a copy of its balance sheet at the end of that financial half
year and a copy of its profit and loss account for that financial
half year prepared in reasonable detail sufficient to present to the
auditors of the Companies if an audit is required by either
Shareholder;
(d) provides such figures and confirmations to each Shareholder as may
be reasonably required by that Shareholder for inclusion in or for
the preparation of its own accounts and reports within 30 days after
the end of each financial half year and each financial year of that
Shareholder or within such other period as may be agreed upon by the
Shareholders; and
(e) provides to each of the Directors and to each Shareholder within 21
days after the end of the relevant month all monthly reports and as
soon as available other financial accounts, projections, budgets and
reports that may be prepared on its behalf from time to time as well
as any other information as may be required by the Directors from
time to time.
13.2 Profits of AVAX Australia
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The Shareholders will co-operate to ensure that unless otherwise
determined by the Directors:
(a) AVAX Australia is managed so as to maximise its long term Profits
(as defined in clause 13.3) and the return on its Shareholders'
funds in the long term and so as to make the most profitable use of
its resources; and
(b) the whole of the Profits of AVAX Australia arising in each financial
year are distributed by way of dividend in accordance with this
Agreement.
13.3 Meaning of "Profits"
In this clause 13 the expression "Profits" means the actual realised
profits of a Company available for distribution after tax in accordance
with Australian law after excluding any profits arising on the revaluation
of the Company's assets from time to time plus:
(a) the markup referred to in clause 13.6(b)(i); and
(b) the fee referred to in clause 13.6(b)(ii).
13.4 Declaration of dividends
Unless otherwise determined by the Directors the Shareholders will cause
it to be the case that the Directors make the following declarations of
dividend to the Shareholders in each financial year:
(a) by 30 April an interim dividend of an amount equal to the Profits as
subsequently determined for the first 3 months of the financial
year;
(b) by 31 July an interim dividend of an amount equal to the Profits as
subsequently determined for the first half of the financial year;
(c) by 31 October an interim dividend of an amount equal to the Profits
as subsequently determined for the first 9 months of the financial
year;
(d) by 31 January or the day following the annual general meeting of the
Company, whichever is the later, a final dividend of an amount equal
to the Profits as subsequently determined for the financial year;
and
(e) at any other time determined by the Directors such dividend or
interim dividend as such Directors determine,
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in each case after deducting the amount of any previous interim dividend
declared in respect of that financial year and after making provision for
any loss expected to be incurred during the remainder of the financial
year.
13.5 Payment of dividends
The Shareholders will cause it to be the case that any interim dividend
declared as aforesaid will be paid by the relevant Company promptly after
the date of declaration and that any final dividend will be declared and
paid promptly after the annual general meeting of the Company at which the
relevant accounts of the Company are approved by the Shareholders.
13.6 Dividend entitlement
(a) Notwithstanding any other provision of this Agreement (other than
this clause 13.6) or the other Transaction Agreements, the Profits
of the Companies will be distributed to the Shareholders by way of
dividend in such a manner as to ensure that each Shareholder
receives Profits in proportion to the number of Ordinary Shares and
Non-Voting Shares held by that Shareholder.
(b) Solely for the purposes of calculating the proportion of Profits to
be paid by way of dividend to the Shareholders:
(i) any markup earnt by AVAX Holdings pursuant to clause 3.2 of
the AVAX Australia Licence and Distribution Agreement will be
notionally treated as Profit received by AVAX Holdings;
(ii) any fee paid to NIHL ServiceCo pursuant to clause 7.8 of this
Agreement will be notionally treated as Profit received by
NIHL Sub;
(iii) the licence fee payable to AVAX Holdings under clause 10.3 of
the AVAX Australia Licence and Distribution Agreement will be
recognised as an expense of AVAX Australia and will not be
notionally treated as Profit received by AVAX Holdings;
(iv) any additional Taxes (excluding GST) incurred by AVAX
Australia as a direct result of the procedure whereby Licensed
Products are manufactured by AVAX Manufacturing and first sold
to AVAX Holdings before being sold to AVAX Australia will be
notionally treated as Profit received by AVAX Holdings; and
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(v) any additional Taxes (excluding GST) incurred by AVAX
Australia as a direct result of any fee paid to NIHL Sub
pursuant to clause 7.8 of this Agreement will be notionally
treated as Profit received by NIHL Sub.
For the avoidance of doubt, the parties agree that additional Taxes
will be deemed to be incurred by AVAX Australia if, in the case of
AVAX Holdings, the amount of the markup referred to in clause
13.6(b)(i) is not claimable by AVAX Australia as a tax deduction
and, in the case of NIHL Sub, the amount of the fee referred to in
clause 13.6(b)(ii) is not claimable by AVAX Australia as a tax
deduction.
13.7 Disputes
Any dispute, controversy or claim arising from the distribution of Profits
pursuant to clause 13.6 will be referred to and finally settled in
accordance with clause 25, provided that the Shareholders shall first seek
an opinion from the auditors of the Company concerned.
14. CHANGE OF CONTROL, DEFAULT AND LIQUIDATION
14.1 Effect
Each of the Shareholders covenant and agree with each other that in the
event that:
(a) subject to clause 14.3, a person who is at the date of this
Agreement entitled to less than 10% of the voting shares of a
Shareholder ("target company"):
(i) becomes entitled to more than 10% of the voting shares of the
target company; and
(ii) at any time thereafter finds himself in a situation whereunder
he and/or his associates constitute half or more of the board
of directors of the target company or whereunder the board of
directors of the target company customarily acts in accordance
with the wishes of that person and/or his associates or
customarily consults with that person and/or his associates in
relation to major business decisions of the target company; or
(b) an Event of Default occurs and the defaulting party fails to remedy
the default within 30 days after written notice from any other
Shareholder requiring it to do so; or
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(c) a Shareholder is in breach of any of its material obligations under
this Agreement and fails to remedy such breach within 30 days after
written notice to that Shareholder from any other Shareholder
requiring it to do so; or
(d) there is a persistent or serious failure by a Shareholder to comply
with the terms of this Agreement or any further or other agreement
entered into pursuant to the terms of this Agreement; or
(e) NIHL Sub does not make the contribution referred to in clause 4.2(a)
or clause 4.2(b) or following an election, or a deemed election, by
NIHL Sub to make a further contribution to Working Capital pursuant
to clause 4.4, NIHL Sub fails to make the relevant contribution to
Working Capital,
the provisions of clause 14.7 will apply.
14.2 Events of Default
Each of the Shareholders covenant and agree with each other that for the
purpose of clause 14.1(b), the following will be the Events of Default:
(a) if a petition is presented or a resolution is passed for the
winding-up of a party or a notice of intention to propose such
resolution is given (except for the purposes of reconstruction or
amalgamation);
(b) if a receiver of the undertaking of or any part of the income of the
party is appointed;
(c) if any part of the assets of any party is resumed or confiscated or
fortified and in the reasonable opinion of the other party such
event would prejudice the carrying out of the obligations of the
party so affected;
(d) if any distress of execution is issued against any party or any of
the assets thereof for any amount in excess of $10,000 and is not
stayed or satisfied within 7 days;
(e) if a party ceases to carry on business or stops or suspends payment
or states its intention to do so;
(f) if a party is unable to pay its creditors within the meaning of the
Corporations Law or proposes or makes a composition or arrangement
with its creditors or any of them;
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(g) if a party without the prior written consent of the other party has
reduced or attempts to reduce its capital; and
(h) if a party is placed under official management or if a written
request is received from any creditor thereof to summon a meeting
therefore.
14.3 Listed companies
Clause 14.7 will not apply where an entitlement under clause 14.1(a)
arises as a result of an acquisition of shares in a company whose shares
are listed on a recognised stock exchange as at the date of this
Agreement.
14.4 Reconstructions
Notwithstanding anything contained in clause 14.1(a), clause 14.7 will not
apply if a corporation becomes the holding company of a Shareholder as a
result of a corporate reconstruction.
14.5 Breach incapable of being remedied
For the purposes of clause 14.1(c), a breach which is not a wilful breach
and which by its nature cannot be remedied will be deemed to have been
remedied if the act or conduct constituting the breach ceases immediately
upon receipt of the notice referred to in clause 14.1(c) and does not
occur again for a period of at least 6 months.
14.6 Meaning of "defaulting party"
In clauses 14.7, 14.8 and 14.9, the expression the "defaulting party"
means the target company (as that expression is defined in clause
14.1(a)); or, as the case may require, the Shareholder in relation to
which there has occurred one of the events referred to in clause 14.1(b);
or, as the case may require, the Shareholder mentioned first in clauses
14.1(c) or (d); or, as the case may require, NIHL Sub in clause 14.1(e).
14.7 Consequences of "default"
If, by clause 14.1, this clause 14.7 is made to apply, any of the other
Shareholders will have the right to:
(a) acting jointly or individually, acquire the defaulting party's
interest (pro rata in the event Additional Shareholders exist and
Shareholders act jointly) in the Companies free of any encumbrance,
for an amount equal to the value of the defaulting party's interest
in accordance with clause 14.8; or
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(b) acting jointly, terminate this Agreement in accordance with clause
14.9.
14.8 Acquisition of defaulting party's interest
If any other Shareholder(s) elects to exercise its or their rights
pursuant to clause 14.7(a), the following procedure will apply:
(a) the other Shareholder(s) making such election will serve a notice in
writing ("Election Notice") on the defaulting party not later than
12 months (in the case of 14.1(a)), 6 months (in the case of 14.1
(d) or (e)) and one month (in the case of 14.1(b) or (c)) from the
date upon which such other Shareholder(s) becomes aware of the
relevant event setting out:
(i) such other Shareholder's election to exercise its or their
rights pursuant to clause 14.7(a);
(ii) a description of the relevant event that created those rights;
(b) when an Election Notice has been given, the Shareholders will cause
their respective chief executive officers to meet and discuss the
selection of an appropriate valuer to value the defaulting party's
interest in the Companies no later than one month or any longer
period which the Shareholders agree upon after the giving of the
Election Notice and the Shareholders will make bona fide efforts to
agree upon a valuer within that period;
(c) if, at the expiration of the period referred to in paragraph (b),
the Shareholders have been unable to agree on the selection of a
valuer, the valuation of the defaulting party's interest in the
Companies will be referred to arbitration in accordance with clause
25, the result of which will be binding on the Shareholders;
(d) upon receipt of a valuation by the agreed valuer or the arbitrator
(as the case may be) ("Valuation"), the defaulting party must
transfer all of its Shares to the other Shareholder(s) who have made
such election, pro rata in accordance with their respective holdings
of Ordinary Shares, against payment of a purchase price equal to the
Valuation, in the manner specified below. Settlement of the sale and
purchase will occur within 10 days of receipt of the valuer's or
arbitrator's decision. The defaulting party is obliged to deliver at
the place nominated for settlement duly executed transfers of its
Shares, together with all share certificates relating thereto,
immediately on receipt of full payment (by way of cash or bank
cheque) for the Shares, but not otherwise;
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(e) the costs of the agreed valuer or arbitrator will either:
(i) be paid by the defaulting party from its proceeds of sale; or
(ii) deducted from the purchase price and remitted by such other
Shareholder(s) to the agreed valuer or arbitrator; and
(f) all rights and obligations of the parties under this Agreement with
respect to the defaulting party will cease from the date of
settlement of the sale and purchase pursuant to clause 14.8(d)
(except for the confidentiality provisions in clauses 10 and 11 and
the non-compete provisions in clause 12).
14.9 Consequences of termination
If the other Shareholder(s) elects to terminate this Agreement in
accordance with clause 14.7(b):
(a) the other Shareholder(s) making such election will serve a notice in
writing on the defaulting party not later than 12 months (in the
case of 14.1(a)), 6 months (in the case of 14.1 (d) or (e)) and one
month (in the case of 14.1(b) or (c)) from the date upon which such
other Shareholder(s) becomes aware of the relevant event setting
out:
(i) such other Shareholder's election to exercise its or their
rights pursuant to clause 14.7(b); and
(ii) a description of the relevant event that created those rights;
(b) all rights and obligations of the parties under this Agreement will
cease from the date of the notice referred to in clause 14.9(a)
(except for the confidentiality provisions in clauses 10 and 11 and
the non-compete provisions in clause 12);
(c) the assets of the Companies will be sold and any proceeds will be
distributed to each Shareholder in accordance with the percentage of
the Ordinary Shares owned by it; and
(d) the Shareholders will co-operate to effect the winding-up of the
Companies.
14.10 Shareholders to cause Directors to give effect to clause 14
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Each Shareholder will cause its appointees to the Board of directors or
the Companies to give effect to this clause 14.
14.11 Rights
Each of the Shareholders covenant and acknowledge that the exercise of any
rights pursuant to this clause 14 are without prejudice to any other
rights accruing to any party.
15. ELECTION NOT TO CONTRIBUTE WORKING CAPITAL
15.1 Effect
Notwithstanding any other provision of this Agreement, in the event that:
(a) NIHL Sub elects to cease to make further contributions to Working
Capital pursuant to clause 4.4(b); or
(b) NIHL Sub is a defaulting party (as defined in clause 14.6) for the
purposes of clause 14.1,
the provisions of clause 15.2 will apply from the date of such election or
default (as the case may be) in addition, in the circumstances referred to
in paragraph (b), to the provisions of clause 14.
15.2 Consequences
If, by clause 15.1, this clause 15.2 is made to apply, the parties agree
that:
(a) NIHL Sub will lose its rights under clause 18 of this Agreement;
(b) NIHL Sub will lose its rights under clause 19 of this Agreement;
(c) AVAX Holdings will have the option to acquire NIHL Sub's interest in
the Companies free of any encumbrance, for an amount equal to the
value of NIHL Sub's interest and, in this regard:
(i) the procedure set out in clause 14.8 will apply as though NIHL
Sub were a defaulting party; and
(ii) the period referred to in clause 14.8(a) will be 6 months;
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(d) the decisions set out in clause 7.4 will no longer require the
special majorities set out in that clause so that all decisions of
the Boards of Directors of the Companies will be by simple majority;
(e) if directed by AVAX Holdings, as determined in its sole discretion,
the Companies may issue new shares in the Companies to a third party
or parties ("Additional Shareholders") and that:
(i) each Additional Shareholder will be entitled to appoint 3
Directors to the Boards of the Companies who will be entitled
to a vote equal to the percentage of the Ordinary Shares owned
by the relevant Additional Shareholder;
(ii) AVAX Holdings may divulge Confidential Information to
prospective and actual Additional Shareholders; and
(iii) if directed by AVAX Holdings, as determined in its sole
discretion, the parties will make whatever other changes to
this Agreement as are required to allow an Additional
Shareholder to become a party to this Agreement; and
(f) the provisions of clause 5.2 shall apply (as appropriate).
16. PRE-EMPTION RIGHTS WHERE BONA FIDE OFFER
16.1 Disposal
Subject to clause 16.8, a Shareholder must not dispose of any of its
Shares unless that Shareholder receives a Bona Fide Offer, in which case
no Shares will be disposed of unless and until the pre-emption rights in
this clause 16 have been exhausted.
16.2 Interpretation
For the purposes of this clause 16:
"Bona Fide Offer" means a bona fide written offer setting out the terms
and conditions on which a third party (except a Related Body Corporate of
a Shareholder) has offered to purchase all (but not some only) of those of
the Shares held by a Shareholder, including the Purchase Price in
Australian dollars, being an offer which is open and remains open for
acceptance at least until the provisions of clause 16.7 apply.
"dispose" means sell, assign, transfer or otherwise dispose of.
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"Offering Shareholder" means a Shareholder proposing to dispose of its
Shares.
"Purchase Price" means the cash consideration for the disposal of the Sale
Shares specified in a Transfer Notice.
"Sale Shares" means the Shares which are the subject of a Transfer Notice,
being all (but not some only) of those of the Shares held by the relevant
Shareholder.
"Transfer Notice" means a notice in writing to the other Shareholder(s)
specifying the identity of the third party making the Bona Fide Offer and
annexing a true and complete copy of the Bona Fide Offer.
16.3 Offering Shareholder to give notice
An Offering Shareholder must give a Transfer Notice to the other
Shareholder(s). A Transfer Notice is not revocable except with the
sanction of the Directors of the Companies.
16.4 Nature of offer
The Transfer Notice constitutes an offer to sell the Sale Shares for the
Purchase Price free of any mortgage, charge, lien, encumbrance or adverse
interest.
16.5 Time
(a) A Transfer Notice must be given to the other Shareholder(s) within
14 days after the date on which the Offering Shareholder receives a
Bona Fide Offer which it intends, subject to this clause 16, to
accept.
(b) A Transfer Notice must specify the period within which the offer
constituted by the Transfer Notice may be accepted and will be
deemed to be declined if not accepted, that period being not less
than 30 days or more than 60 days, provided that, where consent is
required under the Foreign Acquisitions and Takeovers Act, that
period will be no less than 60 days.
16.6 Transfer of Sale Shares
If the other Shareholder(s) (each an "Accepting Shareholder") accepts the
offer constituted by the Transfer Notice, the Offering Shareholder must
transfer the Sale Shares against payment of the Purchase Price in the
manner specified below. Settlement of the sale and purchase will occur
within 10 days of the Offering Shareholder becoming bound under this
clause 16.6 to transfer the Sale Shares to the
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Accepting Shareholder(s). The Offering Shareholder is obliged to deliver
at the place nominated for settlement duly executed transfers of the Sale
Shares, together with all share certificates relating thereto, immediately
on receipt of full payment (by way of cash or bank cheque) for the Sale
Shares, but not otherwise. Unless otherwise agreed by the Accepting
Shareholder(s), the Accepting Shareholder(s) will purchase the Sale Shares
pro rata in accordance with their respective holdings of Ordinary Shares.
16.7 Sale to third party
(a) If the offer constituted by the Transfer Notice is declined or
deemed to be declined under clause 16.5(b) or the Accepting
Shareholder(s) fail to make full and proper payment to the Offering
Shareholder under clause 16.6, the Offering Shareholder is, subject
to clause 16.7(b), at liberty to dispose of the Sale Shares in
accordance with the terms of the Bona Fide Offer to the person or
persons making that offer within 3 calendar months after the date of
such decline.
(b) It will be a condition of transfer of the Sale Shares to a third
person pursuant to clause 16.7(a) that:
(i) the third person enter into a Deed of Assumption under which
the third person agrees to be bound by this Agreement on terms
acceptable to the other Shareholder(s) acting reasonably; and
(ii) the third person is acceptable to the other Shareholder(s),
acting reasonably, taking into account the third person's
business reputation, respectability and financial stability.
16.8 Pre-emption procedure inapplicable
The preceding provisions of this clause 16 do not apply in relation to a
disposal of Shares where:
(a) all the Directors of the Companies unanimously consent in writing to
that effect; or
(b) the person to whom the Shares are to be disposed is a Related Body
Corporate of the Offering Shareholder.
16.9 Directors obligation to register
The Directors of the Companies are bound to register any transfer of
Shares made in accordance with this clause 16.
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17. STATEMENT ON SHARE CERTIFICATES
The Shareholders will cause the Companies to endorse on each of the
Companies' share certificates the following legend:
"The shares to which this certificate relates are subject to and
transferable only in accordance with the provisions of the
Shareholders Agreement dated [ ] among AVAX Australia
Holdings Pty Limited, Eastpac Inc., Jetona Pty Ltd and Neptunus
International Holdings Limited."
18. FURTHER JOINT VENTURES
18.1 Right of first refusal
AVAX Holdings agrees to grant to NIHL Sub a right of first refusal to
participate, on a 50% basis, with an Additional Joint Venturer in Further
Joint Ventures in accordance with this clause 18.
18.2 Interpretation
For the purposes of this clause 18:
"Additional Joint Venturer" means AVAX Holdings or any Related Body
Corporate of AVAX Holdings that becomes entitled to develop, manufacture,
sell and/or distribute the Licensed Products in one or more of the
Countries.
"Countries" means the Peoples Republic of China, Thailand, Malaysia,
Singapore and the Philippines.
"Notice" means a notice in writing to NIHL Sub identifying the Further
Joint Venture and annexing a copy of a joint venture agreement to be
entered into between the Additional Joint Venturer and NIHL Sub in
relation to the Further Joint Venture.
"Further Joint Venture" means future joint ventures between an Additional
Joint Venturer and a third party involving the development, manufacture,
sale and/or distribution of the Licensed Products in one or more of the
Countries.
18.3 Additional Joint Venturer to give Notice
Prior to the entry by an Additional Joint Venturer into a Further Joint
Venture with a third party, the Additional Joint Venturer must give a
Notice to NIHL Sub. A Notice is not revocable
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18.4 Nature of offer
A Notice constitutes an offer by the Additional Joint Venturer to enter
into a joint venture with NIHL Sub on the terms of the joint venture
agreement annexed to the Notice.
18.5 Time
A Notice must specify the period within which the offer constituted by the
Notice may be accepted, that period being not less than 30 days. NIHL Sub
will make a good faith effort to respond to the offer constituted by the
Notice in less than 30 days and, if NIHL Sub fails to accept the offer
constituted by the Notice within the time period specified in the Notice,
NIHL Sub will be deemed to have rejected that offer.
18.6 Entry into Further Joint Venture
If NIHL Sub accepts the offer constituted by the Notice, the Additional Joint
Venturer and NIHL Sub must enter into the joint venture agreement in the
form annexed to the Notice within 10 days of the acceptance of the offer
by NIHL Sub.
18.7 Joint venture with a third party
If the offer constituted by the Notice is rejected or deemed to be
rejected under clause 18.5 or NIHL Sub fails to enter into the joint
venture agreement in the form annexed to the Notice within the time period
set out in clause 18.6, the Additional Joint Venturer will be at liberty
to enter into a joint venture with a third party on terms no more
favourable to the third party than those contained in the Notice within 3
calendar months after the date of such rejection or deemed rejection.
18.8 Compliance by Additional Joint Venturer
AVAX Holdings will procure that an Additional Joint Venturer complies with
the provisions of this clause 18.
19. FURTHER AVAX LICENCES
19.1 Right of first refusal
AVAX Holdings agrees to grant to NIHL Sub a right of first refusal to be
granted rights in the Territory in respect of any right an Additional
Rights Licensor may acquire in respect of the sale and distribution of
products under:
(a) the Rutgers Licence; and
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(b) the Texas A&M Licence,
in accordance with this clause 19.
19.2 Interpretation
For the purposes of this clause 19:
"Additional Rights Licensor" means AVAX Holdings or any Related Body
Corporate of AVAX Holdings that is entitled to grant a licence in respect
of the sale and distribution of products under the Rutgers Licence and/or
the Texas A&M Licence (or both of them) in the Territory.
"Notice" means a notice in writing to NIHL Sub identifying the Rights and
annexing a copy of a licence and distribution agreement to be entered into
between the Additional Rights Licensor and NIHL Sub in relation to the
Rights.
"Rights" means those rights acquired by an Additional Rights Licensor in
respect of the sale and distribution of products in the Territory under
the Rutgers Licence or the Texas A&M Licence (or both of them) which the
Additional Rights Licensor proposes to license in the Territory.
"Rutgers Licence" means the interest of AVAX Technologies in its licence
agreements with Rutgers University and the University of Medicine and
Dentistry of New Jersey, certain patent applications relating to a series
of topoisomerase inhibitor compounds for the potential treatment of cancer
and infectious diseases.
"Texas A&M Licence" means the interest of AVAX Technologies in its licence
agreements with Texas A&M University System, an issued US patent and
certain patent applications relating to a series of novel anti-estrogen
compounds for the potential treatment of cancer.
19.3 Additional Rights Licensor to give Notice
Prior to the grant of any Rights by an Additional Rights Licensor to a
third party, the Additional Rights Licensor must give a Notice to NIHL
Sub. A Notice is not revocable.
19.4 Nature of offer
A Notice constitutes an offer by the Additional Rights Licensor to license
the Rights to NIHL Sub on the terms of the licence and distribution
agreement annexed to the Notice.
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19.5 Time
A Notice must specify the period within which the offer constituted by the
Notice may be accepted, that period being not less than 30 days. NIHL Sub
will make a good faith effort to respond to the offer constituted by the
Notice in less than 30 days and, if NIHL Sub fails to accept the offer
constituted by the Notice within the time period specified in the Notice,
NIHL Sub will be deemed to have rejected that offer.
19.6 License of the Rights
If NIHL Sub accepts the offer constituted by the Notice, the Additional
Rights Licensor and NIHL Sub must enter into the licence and distribution
agreement in the form annexed to the Notice within 10 days of the
acceptance of the offer by NIHL Sub.
19.7 License to third party
If the offer constituted by the Notice is rejected or deemed to be
rejected under clause 19.5 or NIHL Sub fails to enter into the licence and
distribution agreement in the form annexed to the Notice within the time
period set out in clause 19.6, the Additional Rights Licensor will be at
liberty to license the Rights to a third party on terms no more favourable
to the third party than those contained in the Notice within 3 calendar
months after the date of such rejection or deemed rejection.
19.8 Compliance by Additional Rights Licensor
AVAX Holdings will procure that an Additional Rights Licensor complies
with the provisions of this clause 19.
19.9 Property of AVAX Technologies
NIHL Sub acknowledges that the Rights are and remain the sole property of
AVAX Technologies (or one or more of its Related Bodies Corporate), and
NIHL Sub will not in any way question, dispute or infringe them.
20. PUBLICITY
20.1 No announcements without consent
Each Shareholder will not and, will procure that no member of its Group
will, issue, give or make any announcement or other publicity concerning
the making or the contents of this Agreement without the prior written
consent of each other
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Shareholder save as required by any statutory or regulatory authority,
including the Securities Exchange Commission and the Australian Stock
Exchange Limited.
20.2 Procedure for approving announcements
In the case of written announcements or other written publicity to be
issued, given or made concerning the business of the Companies by a
Shareholder, the Shareholder intending to make the announcement or to give
or issue the publicity will:
(a) deliver a copy of the proposed announcement or publicity to each
other Shareholder;
(b) give each other Shareholder a reasonable opportunity to see and
comment on the same before issue; and
(c) promptly after making the announcement or issuing the publicity give
a copy of the final version to each other Shareholder.
Each other Shareholder's consent to the issue of a proposed announcement
or other publicity will not be unreasonably withheld.
21. GUARANTEE AND INDEMNITY
21.1 Guarantee
NIHL irrevocably and unconditionally guarantees to AVAX Holdings the due
and punctual performance by NIHL Sub and NIHL ServiceCo of the
Obligations.
21.2 Indemnity
NIHL as a separate, additional and primary liability hereby irrevocably
and unconditionally agrees to indemnify AVAX Holdings and at all times
hereafter to keep AVAX Holdings indemnified against any loss or damage
suffered by AVAX Holdings arising out of:
(a) any failure by NIHL Sub or NIHL ServiceCo to duly and punctually
perform the Obligations; or
(b) any obligation or liability that would otherwise form part of the
Obligations of NIHL Sub or NIHL ServiceCo being void, voidable or
enforceable against or irrevocable from NIHL Sub or NIHL ServiceCo
by AVAX Holdings in full for any reason.
21.3 Principal obligation
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NIHL acknowledges that this guarantee and indemnity is a continuing
security and principal obligation between NIHL and AVAX Holdings and will
not be affected by:
(a) any claim which NIHL Sub or NIHL ServiceCo may have or claim to have
against AVAX Holdings on any account; or
(b) any termination by NIHL, settlement of account, intervening payment,
express or implied revocation or any other matter or thing,
until a final discharge thereof has been given to NIHL.
21.4 Liability of NIHL absolute
The liability of NIHL under this Agreement is absolute. It is not subject
to the execution of any other instrument or document by any person and is
not subject to the performance of any condition precedent or subsequent
between or amongst any person or persons.
21.5 Payable on demand
Unless otherwise provided, all money payable under this Agreement by NIHL
will be paid on demand from AVAX Holdings in immediately available funds
to the account and in the manner notified from time to time by AVAX
Holdings to NIHL. All money received or recovered by AVAX Holdings on
account of the Obligations of NIHL Sub or NIHL ServiceCo will be treated
as payments in gross and may be appropriated in such manner and at such
times as AVAX Holdings determines in its absolute discretion.
21.6 Reimbursement of expenses
NIHL will on demand reimburse AVAX Holdings for, and keep AVAX Holdings
indemnified against, all expenses (including legal fees, costs and
disbursements on a solicitor/own client basis) incurred by AVAX Holdings
in connection with the enforcement, attempted enforcement or preservation
of any rights under this guarantee.
21.7 No prior demand on NIHL Sub or NIHL ServiceCo
AVAX Holdings will not be required to make any claim or demand on NIHL Sub
or NIHL ServiceCo or to enforce any right, power or remedy against NIHL
Sub or NIHL ServiceCo before making any demand or claim upon NIHL under
this Agreement.
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21.8 NIHL's further acknowledgements
NIHL further acknowledges that its liability will not be impaired by:
(a) AVAX Holdings granting time or other indulgence to or making any
composition with NIHL Sub, NIHL ServiceCo or any other guarantor;
(b) NIHL Sub, NIHL ServiceCo or any other guarantor being a corporate
body being wound up or passing a resolution for its liquidation, or
by the appointment of a receiver, provisional liquidator or official
manager thereof;
(c) AVAX Holdings having previously obtained, or at any time after the
date of this Agreement obtaining, any further or other covenant or
security or guarantee in respect of the Obligations of NIHL Sub or
NIHL ServiceCo from NIHL Sub, NIHL ServiceCo or from any other
person or corporation;
(d) AVAX Holdings forbearing or neglecting to exercise any remedy or
right it may have at any time in the future for the enforcement of
the Obligations of NIHL Sub or NIHL ServiceCo or this guarantee and
indemnity;
(e) the promises, undertakings or agreements of NIHL Sub or NIHL
ServiceCo in this Agreement, or by any other instrument or
transaction being or becoming illegal, invalid, void or
unenforceable by reason of any past, present or future statute,
matter, act, or omission by any person;
(f) the absence of any notice to NIHL of default by NIHL Sub or NIHL
ServiceCo, or by any other guarantor;
(g) the existence now, or at any future time, of any legal disability in
NIHL Sub or NIHL ServiceCo or NIHL;
(h) AVAX Holdings waiving any breach or default by NIHL Sub or NIHL
ServiceCo or NIHL; or
(i) NIHL Sub, NIHL ServiceCo, NIHL or any other guarantor, being a
natural person, becoming bankrupt, or entering into any composition
or arrangement with his creditors, or assigning his estate or any
part thereof for the benefit of creditors, or becoming of unsound
mind, or dying.
21.9 NIHL's consent etc. unnecessary
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NIHL acknowledges that nothing in this Agreement will be construed as a
requirement that NIHL consent to, or be made aware of, any transaction
between AVAX Holdings and NIHL Sub or NIHL ServiceCo, including any
variation, release or compromise of the Obligations of NIHL Sub or NIHL
ServiceCo, or any document in which they are set forth.
21.10 No reduction if payment is a voidable preference
NIHL acknowledges that no payment will operate to discharge or reduce
NIHL's liability if such payment is voidable as a preference under any law
relating to bankruptcy or the winding up of companies, and no grant of
discharge or release consequent upon such a payment will discharge the
liability of NIHL hereunder.
22. TERM
This Agreement will terminate automatically if one Shareholder acquires
all of those Shares held by all other Shareholders pursuant to this
Agreement.
23. NOTICES
Any communication under or in connection with this Agreement:
(a) must be in writing;
(b) must be addressed as shown below:
To AVAX Holdings
4520 Main Street
Suite 930
Kansas City, Missouri 64111
United States of America
Fax number: (816) 960 1334
Attention: Mr David Tousley
with a copy to:
Clayton Utz
Levels 27-35
No. 1 O'Connell Street
Sydney NSW 2000
Australia
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Fax number: 61 2 9251 7832
Attention: Graham Taylor
and
Shook, Hardy & Bacon LLP
1200 Main Street
Kansas City, Missouri 64105
United States of America
Fax number: (816) 421 5547
Attention: Kevin R Sweeney
To NIHL Sub
Richard Hill & Associates
Level 8
157-159 Walker Street
North Sydney NSW 2060
Australia
Fax number: 61 2 9957 5948
Attention: Richard Hill
with a copy to:
Herbert Geer & Rundle
Level 21
385 Bourke Street
Melbourne VIC 3000
Australia
Fax number: 61 3 9641 8700
Attention: Ian McCubbin
To NIHL ServiceCo
Richard Hill & Associates
Level 8
157-159 Walker Street
North Sydney NSW 2060
Australia
Fax number: 61 2 9957 5948
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Attention: Richard Hill
with a copy to:
Herbert Geer & Rundle
Level 21
385 Bourke Street
Melbourne VIC 3000
Australia
Fax number: 61 3 9641 8700
Attention: Ian McCubbin
To NIHL
Richard Hill & Associates
Level 8
157-159 Walker Street
North Sydney NSW 2060
Australia
Fax number: 61 2 9957 5948
Attention: Richard Hill
with a copy to:
Herbert Geer & Rundle
Level 21
385 Bourke Street
Melbourne VIC 3000
Australia
Fax number: 61 3 9641 8700
Attention: Ian McCubbin
(or as otherwise notified by that party to the other parties from
time to time);
(c) must be signed by the party making the communication or (on its
behalf) by the solicitor for, or by any attorney, director,
secretary, or authorised agent of, that party;
(d) must be delivered or posted by prepaid post to the address, or sent
by fax to the number, of the addressee, in accordance with clause
23(b); and
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(e) will be deemed to be received by the addressee:
(i) (in the case of prepaid post) on the third Business Day
after the date of posting to an address within
Australia, and on the fifth Business Day after the date
of posting to an address outside Australia;
(ii) (in the case of fax) at the local time (in the place of
receipt of that fax) which then equates to the time at
which that fax is sent as shown on the transmission
report which is produced by the machine from which that
fax is sent and which confirms transmission of that fax
in its entirety, unless that local time is a non
Business Day, or is after 5.00 pm on a Business Day,
when that communication will be deemed to be received at
9.00 am on the next Business Day; and
(iii) (in the case of delivery by hand) on delivery at the
address of the addressee as provided in clause 23(b),
unless that delivery is made on a non Business Day, or
after 5.00 pm on a Business Day, when that communication
will be deemed to be received at 9.00 am on the next
Business Day.
24. GOVERNING LAW AND JURISDICTION
24.1 This Agreement will be construed in accordance with and will be governed
by the laws in force in the State of Missouri in the United States of
America without giving effect to the choice-of-law rules thereof.
24.2 This Agreement will be deemed to have been made and executed in Kansas
City, Missouri, United States of America.
25. ARBITRATION
25.1 Any dispute, controversy or claim arising out of or relating to this
Agreement or a breach hereof will be exclusively and finally resolved by
arbitration in accordance with the International Arbitration Rules of the
American Arbitration Association. Unless otherwise agreed in writing by
the parties hereto, the arbitral panel will consist of one (1) arbitrator
to be appointed by the American Arbitration Association within sixty (60)
calendar days after any such dispute, controversy or claim has been
referred to arbitration hereunder.
25.2 The arbitration proceedings will be in the English language and will be
held in Kansas City, Missouri, United States of America. The arbitral
award will be in writing in English, will not be contrary to the governing
law of this Agreement, will not award punitive, consequential or exemplary
damages, will provide reasons for the award, and will be final and binding
upon the parties hereto.
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25.3 Each party waives any right it may have by statute, treaty or law to
contest the jurisdiction or venue of any court or service made pursuant to
clause 23 hereof in an action or proceeding to enforce an arbitral award,
including without limitation any right under the Foreign Sovereign
Immunities Act of the United States, the Hague Convention on the Service
Abroad of Judicial and Extrajudicial Documents in Civil or Commercial
Matters and the Hague Convention on the Taking of Evidence Abroad in Civil
or Commercial Matters, and each party agrees that the validity of arbitral
awards will only be challenged in accordance with Article V of the United
Nations Convention on the Recognition and Enforcement of Foreign Arbitral
Awards.
25.4 The provisions of this clause 25 will survive any expiration or
termination of this Agreement, and will be severable and binding on the
parties hereto, notwithstanding that any other provision of this Agreement
may be held or declared to be invalid, illegal or unenforceable.
26. MISCELLANEOUS
26.1 Entire agreement
To the extent permitted by law, in relation to the subject matter of this
Agreement, this Agreement:
(a) embodies the entire understanding of the parties, and constitutes
the entire terms agreed on between the parties; and
(b) supersedes any prior written or other agreement between the parties.
26.2 Amendments
This Agreement may only be varied by a document signed by or on behalf of
each of the parties.
26.3 Assignment
A party cannot assign, novate or otherwise transfer any of its rights or
obligations under this Agreement without the prior written consent of each
other party.
26.4 Counterparts
This Agreement may be executed in any number of counterparts and by the
parties on separate counterparts. Each counterpart constitutes an original
of this Agreement, all of which together constitute one agreement.
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26.5 No representation or reliance
(a) Each party acknowledges that no party (nor any person acting on its
behalf) has made any representation or other inducement to it to
enter into this Agreement, except for representations or inducements
expressly set out in this Agreement.
(b) Each party acknowledges and confirms that it does not enter into
this Agreement in reliance on any representation or other inducement
by or on behalf of any other party, except for any representation or
inducement expressly set out in this Agreement.
26.6 Waiver
(a) Failure to exercise or enforce or a delay in exercising or enforcing
or the partial exercise or enforcement of any right, power or remedy
provided by law or under this Agreement by any party will not in any
way preclude, or operate as a waiver of, any exercise or
enforcement, or further exercise or enforcement of that or any other
right, power or remedy provided by law or under this Agreement.
(b) Any waiver or consent given by any party under this Agreement will
only be effective and binding on that party if it is given or
confirmed in writing by that party.
(c) No waiver of a breach of any term of this Agreement will operate as
a waiver of another breach of that term or of a breach of any other
term of this Agreement.
26.7 Further acts
Each party will promptly do and perform all further acts and execute and
deliver all further documents (in form and content reasonably satisfactory
to that party) required by law or reasonably requested by any other party
to give effect to this Agreement.
26.8 Indemnities
Each indemnity in this Agreement, if any, is a continuing obligation,
separate and independent from the other obligations of the parties, and
survives termination, completion or expiration of this Agreement.
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It is not necessary for a party to incur expense or to make any payment
before enforcing a right of indemnity conferred by this Agreement.
26.9 No partnership or agency
Nothing in this Agreement will create or constitute or be deemed to create
or constitute a partnership between the Shareholders for the purposes of
the Partnership Act 1892 (NSW), the Income Tax Assessment Act or any other
law of any jurisdiction and except as specifically provided herein neither
Shareholder will act or represent or hold itself out as having authority
to act as agent of or in any way bind or commit the other Shareholder to
any obligation.
26.10 Rights and obligations are several
The rights, duties, obligations and liabilities of the Shareholders will
be several and not joint or collective and nothing herein contained will
be construed as creating a partnership of any kind or an association or a
trust each Shareholder being individually responsible for only its own
obligations as set out in this Agreement.
26.11 Severance
If any provision of this Agreement or part thereof is held illegal,
unenforceable or otherwise invalid that provision or part will be deemed
to be severed from this Agreement and the remainder of this Agreement will
continue in effect.
26.12 Costs and Stamp Duty
Each of the parties to this Agreement will be responsible for its own
costs and expenses of and in connection with the negotiation, preparation,
execution, stamping, registration and completion of this Agreement and of
any document contemplated by this Agreement. Any stamp duty payable on
this Agreement will be borne in equal proportions by AVAX Holdings and
NIHL Sub.
26.13 Force majeure
No failure or omission to carry out or observe any term of this Agreement
will give rise to a claim by any party against another or result in a
breach of this Agreement if such failure or omission arises by reason of
delay or inability to perform caused by war, whether declared or not,
civil rebellion, strike, fire, storm or other severe action of the
elements, accident, government or statutory restriction or from other
similar causes which are unavoidable or beyond the reasonable control of
the defaulting party.
26.14 No exclusion of rights
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Except as expressly provided herein, the rights, powers or remedies
provided in this Agreement are cumulative with and not exclusive of any
rights, powers or remedies provided independently of this Agreement.
26.15 Application of legislation
Unless application is mandatory by law, no legislation, proclamation,
order, regulation or moratorium whether present or future shall apply to
this Agreement so as to extinguish, impair, delay or otherwise alter the
rights, powers or remedies of any of the parties.
26.16 Powers of attorney
In the event that this Agreement is executed under power of attorney, each
of the Attorneys executing this Agreement hereby warrants that he has at
the time of executing this Agreement no notice of revocation of the power
of attorney under the authority of which he executes this Agreement.
26.17 Withholding of moneys
The parties acknowledge that AVAX Australia and AVAX Manufacturing are
entitled to withhold from any Shareholder any moneys they are required to
withhold under Australian law and to remit those moneys to the appropriate
authority.
SIGNED as an agreement.
EXECUTED by AVAX AUSTRALIA HOLDINGS )
PTY LIMITED, ACN 089 164 090 by or )
in the presence of: )
/s/ Jeff Jonas /s/ David L. Tousley
- ------------------------------------ ------------------------------------
(Signature of Secretary/Director) (Signature of Director)
Jeff Jonas David L. Tousley
- ------------------------------------ ------------------------------------
(Name of Secretary/Director in Full) (Name of Director in Full)
THE COMMON SEAL of EASTPAC INC. was )
affixed by the authority of the )
Board of Directors in the presence of:)
)
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<PAGE>
/s/ Richard Langley Stewart Hill /s/ Hudson Hak Fun Chen
- ------------------------------------- ------------------------------------
Authorised Signatory (Signature of Director)
(Secretary/Director)
Richard Langley Stewart Hill Hudson Hak Fun Chen
- ------------------------------------- ------------------------------------
(Name of Secretary/Director in Full) (Name of Director in Full)
EXECUTED by JETONA PTY LTD, )
ACN 089 914 152 by or in the presence of:)
)
)
/s/ Richard Langley Stewart Hill /s/ Hudson Hak Fun Chen
- ------------------------------------- ------------------------------------
(Signature of Secretary/Director) (Signature of Director)
Richard Langley Stewart Hill Hudson Hak Fun Chen
- ------------------------------------- ------------------------------------
(Name of Secretary/Director in Full) (Name of Director in Full)
50
<PAGE>
THE COMMON SEAL of NEPTUNUS )
INTERNATIONAL HOLDINGS LIMITED, )
ARBN 065 824 302 was affixed by the )
authority of the Board of Directors
in the presence of:
/s/ Richard Langley Stewart Hill /s/ Hudson Hak Fun Chen
- ------------------------------------- ------------------------------------
Authorised Signatory (Secretary/Director) Authorised Signatory (Director)
Richard Langley Stewart Hill Hudson Hak Fun Chen
- ------------------------------------- ------------------------------------
(Name of Secretary/Director in Full) (Name of Director in Full)
51
