SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
|X| Preliminary Information Statement
| | Confidential, For Use of the Commission Only (as Permitted by Rule
14c-5(d)(2))
| | Definitive Information Statement
RJV NETWORK, INC.
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(Name of Company as Specified in Its Charter)
Payment of filing fee (Check the appropriate box):
| | No fee required.
| | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction apply:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction: $
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(5) Total fee paid: $
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|X| Fee paid previously with preliminary materials:
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|X| Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
Fee was paid previously. Identify the previous filing by
Registration statement number, or the form or schedule and the date
of its filing.
(1) Amount previously paid: $155.33
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(2) Form, schedule or registration statement no.: Schedule 14A -
Amendment #2
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(3) Filing party: Registrant
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(4) Date filed: March 19, 2003
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RJV NETWORK, INC.
10655 NE 4th Street, Suite 300
Bellevue, Washington 98004
April 30, 2003
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND
US A PROXY. THE ACTION, DEFINED BELOW, HAS ALREADY BEEN APPROVED BY
WRITTEN CONSENT OF HOLDERS OF A MAJORITY OF THE OUTSTANDING COMMON
STOCK OF THE COMPANY. A VOTE OF THE REMAINING STOCKHOLDERS IS NOT
NECESSARY.
Dear Shareholders:
This Information Statement is first being furnished on or about May
1, 2003 to Stockholders of record as of the close of business on April 23,
2003 (the "Record Date") of the common stock, $0.000013 par value per share
(the "Common Stock") of RJV Network, Inc.("RJV" or the "Company") in
connection with the following (the "Actions"). On April 28, 2003, the
following Actions were approved by way of written consent by holders of a
majority of RJV's outstanding voting stock. Written consent was provided in
lieu of a meeting of the stockholders, therefore no meeting to vote on these
Actions will be held.
1. Approval of the Acquisition Agreement and Plan of Reorganization
dated January 1, 2003 by and among RJV, on the one hand, and Bio Kinetix
Research, Inc. an Alberta corporation ("BIO KIN"), and the shareholders of
BIO KIN, on the other hand (the "Acquisition Agreement") and each of the
related transactions, whereby RJV will acquire, and hold as a wholly owned
subsidiary, BIO KIN (the "Acquisition") on the terms and conditions set forth
in the Acquisition Agreement, a copy of which is attached to this Information
Statement as Exhibit A. The Acquisition Agreement calls for the issuance of
one share of RJV common stock, par value $0.000013 per share in exchange for
each one share of the issued and outstanding common stock, no par value, of
BIO KIN;
2. Approval of the change in the name ("Name Change") of the Company
to "ProtoKinetix, Inc." The name change will provide association of the post-
merger company with the name of its primary business subsidiary. The Name
Change will require an amendment to the Company's Articles of Incorporation;
3. The election of Dr. John Todd, Mike Muzylowski, R. L. (Dick)
Richards, and Fred Whittaker as the new directors of the Company; and
4. Approval of a covenant not to perform a reverse stock split of
the Company's stock without 100% shareholder approval for a period of two
years from the date of the Acquisition (the "Two Year Covenant").
The Board of Directors has previously unanimously approved, and a
majority of the Stockholders (the "Consenting Stockholders") representing not
less than 9,375,000 shares or 62.1% of the 15,093,750 shares outstanding of
the Common Stock as of the Record Date have consented in writing to the
Actions. Such approval and consent constitute the approval and consent of a
majority of the total number of shares of outstanding of Common Stock and are
sufficient under the Nevada Revised Statutes and RJV's By-Laws to approve the
Action. Accordingly, the Action will not be submitted to the other
Stockholders of RJV for a vote and this Information Statement is being
furnished to Stockholders to provide them with certain information concerning
the Action in accordance with the requirements of the Securities Exchange Act
of 1934, as amended (the "Exchange Act") and the regulations promulgated
thereunder, including Regulation 14C.
RJV will pay all costs associated with the distribution of the
Information Statement, including the costs of printing and mailing. RJV will
reimburse brokerage firms and other custodians, nominees and fiduciaries for
reasonable expenses incurred by them in sending this Information Statement to
the beneficial owners of RJV's Common Stock.
The principal executive office of RJV is 10655 NE 4th Street, Suite
300, Bellevue, WA 98004.
This information statement is being furnished to all holders of the common
stock of the Company in connection with the Actions by Written Consent and to
amend the Company's Articles of Incorporation.
By Order of the Board of Directors
/s/ Edward Velton
-----------------
Edward Velton, President, Chairman
Bellevue, Washington
April 30, 2003
ITEM 1.
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INFORMATION STATEMENT
---------------------
This information statement is being furnished to all holders of the common
stock of RJV Network, Inc., Inc., a Nevada Corporation ("RJV" or "Company"),
in connection with resolutions of the Board of Directors and the written
consent of stockholders of in excess of 62% of the common stock of RJV
providing approval of the Actions listed above as related to the acquisition
of BioKinetix, Inc. and the resultant amendment to RJV's Articles of
Incorporation to change the name of the Company to "ProtoKinetix, Inc." These
actions are being taken to facilitate and reflect a change in the business
operations of the Company.
The Board of Directors and a person owning the majority of the outstanding
voting securities of the Company have unanimously adopted, ratified and
approved the resolution to effect the Actions set forth above. No other votes
are required or necessary. See the caption "Vote Required for Approval,"
below. The Acquisition will become effective and the Amendment to the
Articles of Incorporation will be filed and are expected to become effective
on or about May 21, 2003, or a date at least 20 days after mailing of this
Information Statement to the stockholders as of the Record Date.
The Company's periodic and other filings with the Securities and Exchange
Commission may be viewed on the Securities and Exchange Commission's web-site
at www.sec.gov in the Edgar Archives. RJV is presently "current" in the
filing of all reports required to be filed by it.
DISSENTER'S RIGHTS OF APPRAISAL
-------------------------------
The Nevada Revised Statutes ("the Nevada Law") do not provide for dissenter's
rights of appraisal in connection with the Actions.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
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The Board of Directors has fixed the close of business on April 23, 2003 as
the record date for the determination of the common shareholders entitled to
notice of proposed Actions by written consent.
At the record date, the Company had outstanding 15,093,750 shares of
$0.000013 par value common stock. The Company's President and principal
shareholder, Edward Velton, owns or controls in the aggregate greater than
62% of the issued and outstanding shares of Common Stock on the Record Date,
Edward Velton has signed a Consent to the taking of these Actions. This
consent will be sufficient, without any further action, to provide the
necessary stockholder approval of the action.
SECURITY OWNERSHIP OF EXECUTIVE OFFICERS, DIRECTORS
AND FIVE PERCENT STOCKHOLDERS
-----------------------------
The following table sets forth information about the beneficial ownership of
the Company's Common Stock, as of April 28, 2003 by (i) each person who is
known by the Company to own beneficially more than five percent (5%) of the
outstanding shares of Common Stock; (ii) each of the Company's named
Executive Officers and Directors; and (iii) all Directors and Executive
Officers as a group:
Common Stock
Name and Position Shares Percent Security
----------------- ------ ------- --------
Edward Velton 9,375,000 62.1% Common
15147 SE 46th Way
Bellevue, WA 98006
Rune Harkestad 0 0.0% N/A
10655 NE 4th Street
Bellevue, WA 98004
Michael McKinistry 0 0.0% N/A
9106 NE 141st Place
Bothell, WA 98001
Total held by officers and
Directors as a group
(3 individuals) 9,375,000 62.1%
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As previously stated, the Acquisition provides for the cancellation of
certain shares held by the founder of RJV and the issuance of 16,000,000 new
shares to be issued in exchange for the issued and outstanding shares of BIO
KIN. The following table shows the number of common shares that will be
issued and outstanding subsequent to the completion of the Acquisition.
Shareholder # of Shares
Post-Acquisition
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Edward Velton 20,000
(Former President)
Other Shareholders (1) 5,718,750
BioCurex Inc. (4) 600,000
InNexus Corp. (2) 1,600,000
Beglend Corp. (5) 10,800,000
Dr. John Todd (3) 1,000,000
Susan Minchin 1,000,000
Linda Young 1,000,000
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Total 21,738,750
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1. Approximately 60 "non-affiliate" shareholders.
2. The President of InNexus, Dr. A. Charles Morgan, is a BIO KIN Consultant.
3. Dr. Todd is a proposed Director.
4. BioCurex is controlled by Dr. Ricardo Moro.
5. Beglend Corporation is controlled by Dr. Werner Keicher, Avenida Rivera
6329, Office 205, Carrasca, 11500 Montevideo, Uruguay.
VOTE REQUIRED FOR APPROVAL
--------------------------
The affirmative vote of the holders of a majority of RJV's outstanding common
stock is required to approve the Actions and Amendment to the Articles of
Incorporation, which vote was obtained by a majority written consent dated
April 28, 2003.
Section 78.385 of the Nevada Revised Statutes provides an outline of the
scope of the amendments of the Articles of Incorporation allowed a Nevada
Corporation. This includes the amendment discussed herein. The procedure and
requirements to effect an amendment to the Articles of Incorporation of a
Nevada corporation are set forth in Section 78.390. Section 78.390 provides
that proposed amendments must first be adopted by the Board of Directors and
then submitted to shareholders for their consideration at an annual or
special meeting and must be approved by a majority of the outstanding voting
securities.
Section 78.320 of the Nevada Revised Statutes provides that any action
required to be taken at a special or annual meeting of the stockholders of a
Nevada corporation may be taken by written consent, in lieu of a meeting, if
the consent is signed by stockholders owning at least a majority of the
voting power.
The Board of Directors of RJV, by unanimous decision, and a person owning and
having voting power in excess of 62% of the outstanding voting securities of
RJV have adopted, ratified and approved the Actions by written consent and
the change in the name of RJV. (see the heading "Voting Securities and
Principal Holders Thereof" above). No further votes are required or necessary
to effect the Actions or Amendment.
The securities that would have been entitled to vote if a meeting was
required to be held to amend the Company's Articles of Incorporation consist
of 15,093,750 shares of issued and outstanding shares of the Company's
$0.000013 par value common voting stock outstanding on April 23, 2003, the
record date for determining shareholders who would have been entitled to
notice of and to vote on the proposed Actions and Amendment.
DIRECTORS AND EXECUTIVE OFFICERS
(ACTION NUMBER THREE)
---------------------
As part of the approved Actions, Dr. John Todd, Mike Muzylowski, Dick
Richards, and Fred Whitaker will be the new directors of RJV.
Each of the current directors of the Company will resign upon the effective
date of the Acquisition and have no further involvement, in any capacity,
with the new Company. None of the officers or directors of RJV will receive
any finder's fees or other payments as a result of the Acquisition.
The backgrounds of the new directors are as follows:
Dr. John Todd is a specialist in General Surgery with experience in
pharmaceutical drug development. He has participated in cancer research and
the clinical development of antibodies from natural sources. Dr. Todd
graduated from the University of Calgary and performed General Surgery
Residency at Foothills Hospital, Holy Cross Hospital and Calgary General
Hospital, Calgary, Alberta. Since 1974, he has maintained an active General
Surgical practice at Peace Arch Hospital in White Rock, B.C. and is a
Consultant Surgeon to the Breast Health Program at the B.C. Women's Hospital.
Mr. Mike Muzylowski has been involved in the management and directorship of
many public companies in multiple industries since 1955. He brings management
and international finance experience to the BIO KIN Board. Mr. Muzylowski
graduated from the University of Manitoba and started his career with Hudson
Bay Exploration. Mr. Muzylowski was the President and CEO of Granges
Exploration, Ltd. and CEO of Hyeroft Resource, Ltd., both of which were
involved in mining and related exploration, where he was awarded the Mine
Developer of the Year in 1988. Since then, he has been and is presently the
President and CEO of Callanin Mines Ltd., a mining and resource exploration
company.
Mr. C. Fred Whittaker, C.A. is a self-employed Chartered Accountant and the
Senior Partner of Whittaker and Associates, a firm of Chartered Accountants.
Mr. Whittaker specializes in Taxation and Corporate Management Consulting. In
addition to his duties as a Chartered Accountant, Mr. Whittaker and was VP
Administration and Controller of Larson Distributors, Ltd. from early 1997
through 2000, and has since been employed within his own firm.
Mr. R. L. (Dick) Richards worked as a Chartered Accountant after graduating
from the University of British Columbia and has primarily been involved
managing companies in commercial real estate field. Mr. Richards managed
Mackenzie Management, a full service commercial real estate company, which he
sold to Colliers International in 1992. He then served as Senior Vice
President of Colliers through 2000, at which time he retired from active
employment. Colliers is a multi-national full commercial real estate sales,
leasing, and management company. Mr. Richards joined the Board of World
Vision Canada in 1998 and has recently completed a three-year term as the
World Vision Canada Board Chair. Mr. Richards has served on numerous
corporate and industry boards as both a member and an officer. These include
a national trust company, the local, provincial and national Real Estate
Boards and the Vancouver Club.
Each of the above directors will hold office until the next annual meeting of
stockholders and/or until their successors have been duly elected and
qualified. There are no agreements with respect to the election of the
directors. The Company has not compensated its directors for service on the
Board of Directors, nor is any due them.
None of the above referenced individuals has filed any bankruptcy petition,
been convicted in or been the subject of any pending criminal proceedings, or
is any such person the subject or any order, judgment, or decree involving
the violation of any state or federal securities law. Nor have any of them
been convicted in any criminal proceeding (excluding traffic violations) or
is the subject of a criminal proceeding, which is currently pending.
There are no material proceedings to which any director, officer or affiliate
of RJV or BIO KIN, or any associate of any director, officer, affiliate of
RJV or BIO KIN, is a party or has a material interest adverse to the Company.
There has been no transaction, or series of similar transactions, since the
beginning of RJV's or BIO KIN's last fiscal year, or any currently proposed
transaction, or series of similar transactions, to which RJV or BIO KIN was
or is to be a party, in which the amount involved exceeds $60,000 and in
which any officer, director, nominee for election as a director, security
holder known to own of record or beneficially more than five percent of any
class of RJV's or BIO KIN's voting securities; or member of the immediate
family of any of the foregoing persons.
The only person who, at any time during the fiscal year, was a director,
officer, or beneficial owner of more than ten percent of any class of equity
securities of RJV was Edward Velton, and thus subject to section 16 of the
Exchange Act. Mr. Velton has filed no Form 3, or Form 5, with respect to such
holdings, and has made no sales or transfers of such holdings since the
inception of RJV.
The Company has no standing audit, nominating, and/or compensation committees
of the Board or any committees performing any similar functions.
The Company has held three meetings of its Board of Directors during its last
fiscal year. No director attended less than 75% of the aggregate number of
meetings.
No directors of RJV or BIO KIN have resigned or declined to stand for re-
election to the Board of Directors.
Management after the acquisition will be as follows:
Name Age Position
---- --- --------
Dr. John Todd 47 Director, President and Chief
Medical Officer
Mike Muzylowski 63 Director and Chief Financial
Officer
C. Fred Whittaker 61 Director
Dick Richards 60 Director
RJV currently has zero employees. Immediately after the close of the
acquisition, the Company will have two employees, Dr. John Todd and Mike
Muzylowski.
RJV currently leases no office space. Upon the close of the acquisition, the
Company expects to utilize shared office space with The Brown Capital Group,
comprising approximately 1,500 square feet, located at Suite 1500 - 885 West
Georgia St., Vancouver, Canada V6C 3E8. There is no present or past
relationship between them and RJV or BIO KIN, or any present or proposed
officers and/or directors thereof. The phone number for the principal
executive office will be (604) 687-9887. The monthly lease cost is estimated
to be approximately $500. The space, as proposed, will be provided on a
month-to-month basis.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
------------------------------------------------
None of RJV's or BIO KIN's executive officers have received any compensation,
including cash or non-cash items, annual or long term in nature, other than
the initial issuances of shares of stock in the respective company, shown
elsewhere in this Information Statement as being held by such officer.
THE ACQUISITION
(ACTION NUMBER ONE)
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SUMMARY TERM SHEET
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The following summary briefly describes the material terms of the
Acquisition by RJV Network Inc. of Bio Kinetix Inc. While this summary
describes the material terms of the Acquisition, this Information Statement
contains more detailed descriptions of such terms. We encourage you to read
this summary together with the enclosed Information Statement in its
entirety. We have included in this summary section references in the
Information Statement to direct you to a more complete description of the
topics described in this summary.
RJV Network Inc. was established to bring to application an interactive
internet-based commercial real estate listing service that was to be used for
the buying, selling, and leasing of commercial real estate. RJV has been
unsuccessful to date in its ability to raise sufficient additional capital to
fulfill the complete development and implementation of its web-based listing
service. Please read "Background of the Acquisition."
Upon the effective date of the Acquisition:
Bio Kinetix will be acquired by RJV and will thus become wholly
owned by RJV;
RJV will abandon its original business plan, and will immediately
pursue the business plan of BioKinetix; and
You will receive no additional stock shares of common stock.
Please read "Questions and Answers about the Acquisition," "The
Acquisition and The Acquisition Agreement."
The Acquisition and related Actions have been approved by a majority
vote provided by written consent, taken in lieu of a special meeting of the
shareholders. Please read "Required Approvals" for more information.
QUESTIONS AND ANSWERS ABOUT THE ACQUISITION AND ACTIONS
-------------------------------------------------------
Q: Will there be a special meeting to vote on such matters?
A: There will be no special meeting of the shareholders. A vote in favor
of the Acquisition and Actions has already been taken by way of a
written majority consent on April 28, 2003 at which time all Actions
were approved.
Q: Who is eligible to receive this Information Statement?
A: All shareholders of record on the close of business on April 23,
2003 will receive a copy of this Information Statement.
Q: What has been approved by way of the majority written consent?
A: The majority written consent approved the Acquisition Agreement and
Plan of Reorganization by and among RJV, Bio Kinetix Research Inc., and
the shareholders of Bio Kinetix pursuant to which RJV will acquire all
of the outstanding shares of Bio Kinetix by way of the issuance of
16,000,000 additional shares of common stock. Bio Kinetix will then be
a wholly-owned subsidiary of RJV and RJV will immediately begin
pursuing the Bio Kinetix business plan upon the close of the
Acquisition.
In addition, the consent approved 1) a name change for the Company,
from RJV Network, Inc. to ProtoKinetix, Inc., to more closely
align the Company with its new business purpose; 2) elected new
directors for the Company; and 3) approved a provision that there will
be no "roll-back" or reverse-split of the outstanding shares for a
period of 2 years from closing without 100% approval by the
shareholders.
Q: What vote was required to approve the Acquisition and the other
Actions?
A: Approval of the Acquisition and other Actions each required the
vote of a majority of the votes by the holders, as of the record date,
of the outstanding shares of RJV's common stock.
Q: What will I receive in the Acquisition?
A: Upon completion of the Acquisition, you will still retain the same
number of shares that you held immediately prior to the Acquisition.
Q: Why did RJV's board of directors recommend the vote "FOR" the
Acquisition?
A: The board of directors evaluated the Acquisition Agreement and the
terms and conditions thereof, and determined it to be advisable, in the
best interests of and fair to the shareholders of the Company, and
approved the Acquisition Agreement. The board of directors considered
numerous factors in making those determinations including various
alternatives to the Acquisition. A more complete description of the
reasons for the Acquisition can be found in "Background of the
Acquisition" within the Information Statement.
Q: Are RJV shareholders entitled to dissenters' or appraisal rights?
A: No. Under Nevada law, there are no appraisal or dissenters' rights
applicable to the Acquisition or Actions.
Q: Is there a deadline for closing the Acquisition?
A: There is no "deadline" per se, but the parties to the acquisition are
targeting a closing date of May 20, 2003 as their intended closing
date.
Q: Will I have to and how do I exchange my stock certificates for ones
evidencing the new name of the Company?
A: You are not required to exchange your certificates for ones in the new
name of the Company. Once the Acquisition is closed, you will receive
written instructions on how, if you should so desire, to exchange your
stock certificates for new ones. In either case, you should not
surrender your stock certificates prior to receiving those
instructions. Please do not send your stock certificates at this time.
Q: Will I owe taxes as a result of the Acquisition?
A: There will be no United States federal income tax "event" for you as a
result of the Acquisition. You will still own the same amount of shares
that you held immediately prior to the Acquisition. Your adjusted tax
basis will remain the same. You should also not be taxed under
applicable foreign, state, local and other tax laws as a result of the
Acquisition.
All information contained in this Information Statement pertaining to RJV has
been supplied by RJV. All information contained herein pertaining to BIO KIN
has been supplied by BIO KIN. No person is authorized to give any information
or to make any representations other than those contained herein and, if
given or made, such information or representations must not be relied upon as
having been authorized. The delivery of this document shall under no
circumstances create an implication that there has been no change in the
affairs of RJV or BIO KIN since the date hereof or that the information
herein is correct as of any time subsequent to its date.
BACKGROUND OF THE ACQUISITION
-----------------------------
RJV was organized under the laws of the State of Nevada on December 23, 1999.
Other than a Registered Offering within the State of Washington, the Company
has not conducted any material operations or generated any revenues to date.
Since inception, the Company has been in the process of developing its
business plan and raising capital. The plan includes bringing to application
an interactive commercial real estate Internet web site that will provide
users with sophisticated value-added information relating to the buying,
leasing, and selling of commercial real estate properties.
Management has assessed the on-line commercial real estate marketplace,
including but not limited to, the competition, current market trends, and
current niches that the Company may capitalize upon. It has been felt the key
to the Company's success will be to take management's assessment of the
marketplace and develop sophisticated software that can be readily accessed
over the Internet and thereby provide customers commercial real estate
solutions.
The Company remains in the development stage and has neither the necessary
funds nor the technology to execute its full business plan. The Company's
software is written in outline form only and no computer code has been
written. The Company's business strategy requires it to raise substantial
additional funding through a private placement(s), debt, or some combination
thereof to make significant further inroads towards the completion of its
plan. Efforts to date have proven unsuccessful. Without additional funding,
RJV will likely fail or remain only as a start-up company with no material
operations, revenues, or profits.
During April, 2002, RJV was contacted by management of BIO KIN regarding a
proposed acquisition whereby the shareholders of BIO KIN would effectively
take control of RJV. BIO KIN had acquired rights to potential methods for
treating certain malignancies and wished to merge with a publicly traded
entity to provide a public valuation and increased exposure.
In the RJV Board's view, the proposed Acquisition of BIO KIN would allow RJV
to divest itself of plans for developing its commercial real estate portal,
which it has been unable to fund, and to acquire another company that has a
more substantial management team and may be better able to obtain preliminary
funding commitments for further developing its business.
This Acquisition is meant to provide RJV's stockholders with the potential
for, although not the assurance of, an increase in the value of their shares
at some time in the future without additional investment on their part.
THE ACQUISITION AGREEMENT
-------------------------
The following is a summary of the material terms of the Acquisition Agreement
and Plan of Reorganization between RJV Network, Inc. ("RJV") the acquiring
entity, and Bio Kinetix Research, Inc. ("BIO-KIN"), the entity being
acquired, and all the shareholders of BIO-KIN. This summary is qualified in
its entirety by the actual agreement which has been attached as Exhibit A to
this Information Statement and incorporated by reference.
The following description may not contain all the information that is
important to you. You are encouraged to read the actual agreement in detail.
The agreement provides that, after all of the conditions to the agreement
have been satisfied or waived, RJV will acquire all of the outstanding shares
of BIO-KIN in exchange for 16,000,000 shares of RJV common stock. In doing
so, BIO-KIN will become a wholly-owned subsidiary of RJV. RJV will then
abandon its original business plan and immediately adopt that of BIO-KIN.
Closing
Closing shall be held on or before May 31, 2003, and may be extended or
accelerated by agreement of the parties.
Directors and Officers
Upon completion of the acquisition, the current President, Edward Velton, and
Board of Directors shall resign. The new Directors shall be Dr. John Todd,
Mike Muzylowski, Dick Edwards, and Fred Whittaker.
No Roll-Back of Shares
After closing, RJV shall not roll-back or reverse-split its shares for a
period two years without the approval of shareholders representing 100% of
the then issued and outstanding shares.
No Registration of Shares for Sale.
For a period of one year from the date of Closing, RJV shall not register, or
have registered on its behalf, with the SEC, any shares of RJV (or the
surviving entity) common stock for public sale.
Representations and Warranties
RJV and BIO-KIN have made a number of reciprocal representations and
warranties to each other as to, among other things, due incorporation and
good standing, corporate authority to enter into the acquisition and consents
and approvals, providing each other with audited financial statements and
other items with respect to financial disclosure, no current or pending
litigation, reasonable access to the books and records and other information
concerning the businesses of RJV and BIO-KIN has been provided, and
confidentiality.
Representations and warranties made solely by BIO-KIN include the following
items: filing of, disclosure, and compliance with all Federal and State
securities laws (including financial statements' compliance with generally
accepted accounting principles) and filings with the United States Securities
and Exchange Commission and securities exchanges.
Representations and warranties made solely by BIO-KIN shareholders include
the following items: shares are owned free of any liens and encumbrances, the
new shares are being acquired for investment and not speculation or with an
eye for resale, an understanding of the speculative nature and inherent risks
of their investment(s), and that they have been provided with all information
they needed to make an informed decision on the acquisition.
Representations and warranties made solely by RJV include the following
items: filing of, disclosure, and compliance with all Federal and State
securities laws (including financial statements' compliance with generally
accepted accounting principles) and filings with the United States Securities
and Exchange Commission and securities exchanges, and all disclosures have
been made in the attachments to the agreement.
Conduct Pending the Closing
The parties have agreed that there will be no change in the corporate
documents or business practices, etc. prior to closing.
No BIO-KIN shareholder will transfer, assign, or otherwise dispose of or
encumber their shares.
Conditions Precedent
RJV has several conditions precedent to closing. These include those that
have already been met, such as: receipt of corporate and supporting
documentation, the agreement shall be approved by the board of directors and
RJV shall have instituted a 2.5:1 forward stock split, the agreement,
including the election of the new directors and officers designated therein
and approval of the prohibition against a reverse-split of shares and
registration of shares for public sale for a period of one year, shall have
been approved and adopted by the affirmative vote of a majority of the
outstanding shares of RJV Common Shares, and a majority of the shareholders
of RJV will have elected to change the name of RJV to ProtoKinetix, Inc.; and
those still outstanding, namely: having received regulatory approvals
required to complete the transaction; the officers and directors of RJV shall
have resigned any and all their positions as officers, directors, and
employees of RJV and signed an agreement canceling all but 20,000 of the RJV
shares, in aggregate, held by such officers and directors
BIO-KIN and its Shareholders also had several conditions precedent to
closing, which have been met, including: the agreement shall have been
approved by the board of directors and shareholders of BIO-KIN; a shareholder
approval and investor qualification shall have been executed by each and
every shareholder of BIO-KIN; receipt of corporate and supporting
documentation; BIO-KIN shall have received all Federal and state regulatory
approvals required to complete the transactions contemplated by this
agreement; and any and all loans made to BIO-KIN by management will be paid
in full or converted to shares of BIO-KIN.
Indemnification
BIO-KIN agrees to indemnify RJV against any loss, damage, or expense suffered
from (1) any breach by BIO-KIN or the Shareholder; or (2) any inaccuracy in
or breach of any of the representations, warranties, or covenants; provided,
however, that RJV shall be entitled to assert rights of indemnification
hereunder only if and to the extent that it suffers losses exceeding $5,000.
RJV agrees to indemnify BIO-KIN and the BIO-KIN Shareholders against any
loss, damage, or expense suffered by BIO-KIN or by any BIO-KIN Shareholder
from (1) any breach by RJV of this Agreement; or (2) any inaccuracy in or
breach of any of RJV's representations, warranties, or covenants.
Termination
The agreement may be terminated: (1) by mutual consent in writing; or (2) by
BIO-KIN, the BIO-KIN Shareholder, or RJV if there has been a material
misrepresentation or material breach of any warranty or covenant by any other
party.
Additional Discussions Regarding the Acquisition
The following table shows the number of issued and outstanding shares of
common stock, $0.000013 par value, of RJV Pre-Acquisition and Post-
Acquisition.
Shareholder # of Shares # of Shares
Pre-Acquisition Post-Acquisition
----------- --------------- ----------------
Edward Velton 9,375,000 20,000
President
Other Shareholders (1) 5,718,750 5,718,750
--------------- ----------------
Subtotal 15,093,750 5,738,750
--------------- ----------------
BioCurex Inc. (4) 0 600,000
InNexus Corp. (2) 0 1,600,000
Beglend Corp. (5) 0 10,800,000
Dr. John Todd (3) 0 1,000,000
Susan Minchin 0 1,000,000
Linda Young 0 1,000,000
---------- ----------
Total 15,093,750 21,738,750
---------- ----------
1. Approximately 50 "non-affiliate" shareholders.
2. The President of InNexus, Dr. A. Charles Morgan, is a BIO KIN Consultant.
3. Dr. Todd is a proposed Director.
4. BioCurex is controlled by Dr. Ricardo Moro.
5. Beglend Corporation is controlled by Dr. Werner Keicher, Avenida Rivera
6329, Office 205, Carrasca, 11500 Montevideo, Uruguay.
The issuance of shares to acquire BIO KIN will have an immediate and
substantial dilution effect to the shareholdings and rights of the present
shareholders of RJV. Excluding Mr. Velton's interest in RJV, the present RJV
shareholders own approximately 37.9% of the Company. Subsequent to successful
completion of the Acquisition, these same shareholders will own only 26.3% of
the Company.
In the share exchange with the shareholders of BIO-KIN (with the exception of
those issued to InNexus, see below), the Company will rely on the exemption
from registration provided pursuant to Regulation S. This exemption provides
a safe harbor from the registration requirements of the Securities Act of
1933 since the securities are being exchanged with entities that are
"foreign" entities or citizens.
In the share exchange with InNexus, as a shareholder of BIO-KIN, the Company
will rely on the exemption from registration provided pursuant to Section
4(2) of Securities Act of 1933, which exempts from registration those
transactions by an issuer not involving the public offering of shares.
Additional terms and conditions of the Acquisition are set forth below and in
the Acquisition Agreement, which is attached as Exhibit A. Shareholders are
urged to review these items carefully.
There are certain conditions to the closing of the Acquisition that must be
met before the Acquisition will be consummated, namely filing the Amendment
to the Articles of Incorporation and the delivery of this Information
Statement. Even with only those conditions, the transaction is not free from
risk. There can be no assurances that the Acquisition will be closed.
As a result of the majority written consent, RJV will need to amend its
articles of incorporation to change its name to ProtoKinetix, Inc., and
remain a Nevada corporation. If the Acquisition is not closed for whatever
reason, RJV will likely continue with its current business plan.
Other Disclosure Items
The transaction will be accounted for using the "purchase method" of
accounting.
This transaction is meant to qualify as a "tax-free" reorganization under
section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended. As
such, the Company does not expect there to be any tax consequences to it, its
U.S. shareholders, or the U.S. shareholders, if any, of BIO KIN. The Company
has not, however, obtained a tax opinion with respect to the transaction and
has made no representations or warranties to BIO KIN with respect to the tax
consequences of this transaction.
There are no dividends or defaults in principal or interest in respect of any
securities of RJV or BIO KIN.
RJV is not aware of any federal or state regulatory requirements that must be
complied with or approvals that must be obtained in connection with the
transaction.
The principal accountants for the current year are most likely to be retained
beyond the close of the Acquisition.
Neither RJV nor BIO KIN is a party to any existing or pending legal
proceeding.
SELECTED FINANCIAL DATA
-----------------------
The following tables present selected historical financial data of RJV. This
information is based on the audited yearend 2002 financial statements of RJV,
which have also been included within this Proxy Statement.
RJV Selected Historical Financial Data:
Year Ended Year Ended Year Ended
12/31/2002 12/31/2001 12/31/2000
Statement of Operations Data -
Interest income $ 0 $ 124 $ 0
General and administrative expenses 14,878 17,026 35
Net loss for period (14,878) (16,902) (35)
Balance Sheet Data
Total assets $ 579 $ 3,513 $ 5,165
Total liabilities 12,144 200 200
Total stockholders' equity (11,565) 3,313 4,965
Total liabilities and stockholders'
equity $ 579 $ 3,513 $ 5,165
Book value per share $ 0.00 $ 0.00 $ 0.00
BIO KIN Selected Historical Financial Data:
The following table presents selected historical financial data of BIO KIN.
This information is based on the audited financial statements of BIO KIN, as
of December 31, 2002, which have been also been included within this Proxy
Statement.
BIO KIN Selected Historical Financial Data:
Year ended Inception (10/24/01)
12/31/2002 to 12/31/2001
Statement of Operations Data -
Revenues $ 0 $ 0
Expenses 26,991 0
Net loss for the period (26,991) 0
Balance Sheet Data -
Total assets $ 1,031 $ 1,050
Total liabilities 28,003 1,050
Total stockholders' equity (26,972) 0
Total liabilities and stockholders'
Equity 1,031 1,050
Book value per share $ 0.00 $ 0.00
FINANCIAL STATEMENTS
--------------------
Audited and other Financial Statements, and related financial disclosure
information, for each of RJV and BIO KIN have been included within this Proxy
Statement, as follows:
RJV:
Audited Financial Statements as of December 31, 2002 and 2001, and the
related statements of operations, shareholders' equity, and cash flows for
the year ended December 31, 2002, the period from December 23, 1999 (date of
inception) to December 31, 2001, and for the period from December 23, 1999 to
December 31, 2002.
Management's Discussion and Analysis of Financial Condition and results of
Operations.
Changes In and Disagreements with Accountant's on accounting and financial
disclosure.
BIO KIN:
Audited Financial Statements as of December 31, 2002 and 2001, and the
related statements of operations, shareholders' equity, and cash flows for
the period from incorporation on October 24, 2001 through December 31, 2002.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
and Shareholders
RJV Network, Inc.
We have audited the accompanying balance sheets of RJV Network, Inc. (a
development stage company) as of December 31, 2002, and the related
statements of operations, shareholders' equity, and cash flows for the years
ended December 31, 2002 and 2001, the period from December 23, 1999 (date of
inception) to December 31, 2002, and for the period from December 23, 1999 to
December 31, 2002. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of RJV Network, Inc. (a
development stage company) as of December 31, 2002, and the results of its
operations and its cash flows for the years ended December 31, 2001 and 2002,
and for the period from December 23, 1999 (date of inception) to December 31,
2002, in conformity with accounting principles generally accepted in the
United States.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 1 to the financial
statements, the Company has not generated revenue to date and has an
accumulated deficit of $31,815 at December 31, 2002. These conditions raise
substantial doubt about its ability to continue as a going concern.
Management's plans regarding those matters are described in Note 1. The
financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
/s/ Peterson Sullivan PLLC
----------------------------
Peterson Sullivan PLLC
Seattle, Washington
March 19, 2003
RJV NETWORK, INC.
(A Development Stage Company)
BALANCE SHEETS
December 31, 2002 and 2001
ASSETS 2002 2001
---- ----
Current Asset
Cash $ 579 $ 3,513
------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liability
Due to shareholder 5,155 200
Accounts payable 6,989 0
Shareholders' equity
Common stock, $0.000013 par value, 25,000,000
Common shares authorized, 15,093,750 shares
issued and outstanding 80 80
Additional paid-in capital 20,170 20,170
Deficit accumulated during the
development stage (31,815) (16,937)
------ -----
(11,565) 3,313
------ ------
$ 579 $ 3,513
------ ------
See notes to financial statements
RJV NETWORK, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2002 and 2001, and for the
Period from December 23, 1999 (Date of Inception) to December 31,2002
Cumulative
During the
Development
2002 2001 Stage
------- ------- -------
Interest Income $ - $ 124 $ 124
General and administrative expenses
Bank charges 104 130 269
Professional fees 8,701 3,550 12,251
Consulting fees 4,145 9,700 13,845
Organizing expenses 1,899 3,561 5,460
Other 29 85 114
------- ------- -------
14,878 17,026 31,939
------- ------- -------
Net loss for period (14,878) (16,902) (31,815)
======= ======= =======
Basic and diluted loss
per common share $ (0.00) $ (0.00) $ (0.00)
======= ======= =======
Weighted average shares
Outstanding 15,093,750 11,276,077 12,540,551
======= ======= =======
See Notes to Financial Statements
RJV NETWORK, INC.
(A Development Stage Company)
STATEMENTS OF SHAREHOLDERS' EQUITY
For the Years Ended December 31, 2002 and 2001, and for
the Period from December 23, 1999 (Date of Inception) to December 31, 2002
Deficit
Accumulated
Additional During
Common Stock Paid-In Development
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
Issuance of common stock
December 23, 1999 9,375,000 $ 50 $ 4,950 $ - $ 5,000
Net loss for period (35) (35)
------ ------ ------- ----- -----
Balance December 31,
2000 9,375,000 50 4,950 (35) 4,965
Issuance of common stock
April 30, 2001 5,718,750 30 15,220 15,250
Net loss for period (16,902) (16,902)
------ ------ ------- ----- -----
Balance December 31,
2001 15,093,750 80 20,170 (16,937) 3,313
Net loss for year (14,878) (14,878)
------ ------ ------- ----- -----
Balance December 31,
2002 15,093,750 $ 80 $ 20,170 $(31,815) $(11,565)
====== ===== ======= ======= ======
See Notes to Financial Statements
RJV NETWORK, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2002 and 2001, and for
the Period from December 23, 1999 (Date of Inception) to December 31, 2002
Cumulative
During
Development
2002 2001 Stage
---- ---- ----
Cash Flows From Operating
Activities
Net loss for period $(14,878) $(16,902) $(31,815)
Increase in accounts payable 6,989 6,989
---- ---- ----
Net cash flows from
Operating activities (7,889) (16,902) (24,826)
Cash Flows from Financing
Activities
Issuance of common stock 15,250 20,250
Loans from shareholder 4,955 5,515
---- ---- ----
Net cash flows provided by
Financing activities 4,955 15,250 24,405
---- ---- ----
Net change in cash (2,934) (1,652) 579
Cash, beginning of period 3,513 5,165
---- ---- ----
Cash, end of period $ 579 $ 3,513 $ 579
---- ---- ----
See Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS
Note 1. The Company and Summary of Significant Accounting Policies
The Company
-----------
RJV Network, Inc. ("the Company"), a development stage company, was
incorporated under the laws of the State of Nevada on December 23, 1999. The
Company was formed for the purpose of developing an internet-based listing
site that would provide detailed commercial real estate property listings and
related data. Pending the acquisition described in the following paragraph,
the Company has suspended its original business plan.
The Company is seeking approval of a proposed acquisition of Bio Kinetix, an
Alberta, Canada corporation. The proposed Acquisition Agreement provides
that the Company will acquire Bio Kinetix as a wholly-owned subsidiary by
issuing shares of its stock to the shareholders of Bio Kinetix resulting in
the shareholders of Bio Kinetix having a controlling ownership of the
Company. If the acquisition is approved, the Company will change its name to
Bio Kinetix Research, Inc., abandon its planned operations and continue
operations under the business plan of Bio Kinetix. Bio Kinetix has acquired
rights to a new proprietary method for treating breast cancer and has
obtained preliminary financing commitments. The reverse acquisition will be
accounted for by the purchase method.
Going Concern
-------------
The Company has not generated revenues to date and has an accumulated deficit
of $31,815 at December 31, 2002. The Company's ability to continue as a
going concern is in substantial doubt and is dependent upon approval of the
proposed acquisition of Bio Kinetix or upon obtaining additional financing.
The financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
Management of the Company has undertaken steps as part of a plan with the
goal of getting the proposed acquisition of Bio Kinetix approved. These
steps include submitting required documents for approval by the Securities
Exchange Commission and putting the plan before the Company's shareholders
for a vote of approval. There can be no assurance that any of these efforts
will be successful.
Cash
----
Cash consists of funds held in a checking account.
Due to Shareholder
------------------
The shareholder loan is unsecured, bears no interest and is due on demand.
Based on the amount of the loan and its short-term nature, carrying value
approximates fair value.
Taxes on Income
---------------
The Company accounts for income taxes under an asset and liability approach
that requires the recognition of deferred tax assets and liabilities for
expected future tax consequences of events that have been recognized in the
Company's financial statements or tax returns. In estimating future tax
consequences, the Company generally considers all expected future events
other than enactments of changes in the tax laws or rates.
Software and Web Site Development Costs
---------------------------------------
The costs of computer software developed or obtained for internal use, during
the preliminary project phase, as defined under Statement of Position 98-1
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use," will be expensed as incurred. The costs of web site
development, during the planning stage, as defined under Emerging Issues Task
Force No. 00-2 "Accounting for Web Site Development Costs," will also be
expensed as incurred.
Computer software and web site development costs incurred during the
application and infrastructure development stage, including external direct
costs of materials and services consumed in developing the software, creating
graphics and web site content, payroll, and interest costs, will be
capitalized and amortized over the estimated useful life, beginning when the
software is ready for use and after all substantial testing is completed and
the web site is operational.
The Company did not incur any software development costs for the period from
December 23, 1999 (date of inception) to December 31, 2002.
Costs to be incurred when the web site and related software are in the
operating stage will be expensed as incurred.
Earnings per Share
------------------
Basic earnings per share is computed by dividing income available to common
shareholders by the weighted average number of common shares outstanding in
the period. The Company's stock split 1:75 on August 24, 2001. In April
2002, the Board of Directors approved a 2.5 for 1 split of the Company's
stock. The accompanying financial statements are presented on a post-split
basis. The earnings per share for the years ended December 31, 2002 and
2001, and the period cumulative during the development stage have been
adjusted accordingly. Diluted earnings per share takes into consideration
common shares outstanding (computed under basic earnings per share) and
potentially dilutive securities. There were no dilutive securities
outstanding during the period December 23, 1999 to December 31, 2002.
Estimates
---------
The preparation of these financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of these financial statements and the reported amounts of revenues and
expenses during the period. Actual results could differ from these
estimates.
Note 2. Income Taxes
The Company is liable for taxes in the United States. As of December 31,
2002, the Company did not have any income for tax purposes and, therefore, no
tax liability or expense has been recorded in these financial statements.
The Company has tax losses of approximately $30,000 available to reduce
future taxable income. The tax loss expires in 2022.
The deferred tax asset associated with the tax loss carryforward is
approximately $10,800. The Company has provided a full valuation allowance
against the deferred tax asset. The valuation allowance increased by $8,300
from December 31, 2001.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Since its inception, RJV has been in the process of developing its business
plan and raising capital. This plan included bringing to application an
interactive commercial real estate Internet web site that would provide users
with sophisticated value-added information relating to the buying, leasing,
and selling of commercial real estate properties.
The Company has spent a great deal of effort in its research of existing
internet-based listings for commercial real estate that had developed a
presence in recent years. These consisted of many local, regional, national,
and global sites that provided a great variety of "search" capabilities. The
Company has also met with various web-page designers and computer software
programmers to gain a better understanding of how the Company might select
the appropriate design team and how to best lay out and set up its web-site,
listing of properties, and the related links between various internet-search
vehicles. The Company has performed preliminary design work on its web-site
and assembled the "search" capabilities and input parameters that its
customers would use. Many contacts were made and discussions held with
prospective users of the Company's product. However, no contracts, or
agreements, have been made with any suppliers, customers, or other parties.
In its effort to raise its initial operating capital, the Company
successfully raised just over $20,000 in funding. However, efforts to raise
the additional capital needed to fully design and implement the Company's
web-site and related business plan, which have been estimated to be as much
as $750,000, have been unsuccessful to date. The Company has found the
existing venture capital markets and other funding sources, primarily private
investors, to be reluctant to provide funding to another internet-based
start-up company given the state of the economy over the past couple of
years.
The Company has also expended time and resources towards the Company's
becoming an SEC reporting company and the required periodic filings
necessitated thereby. It has also become accepted by the NASD as a publicly
traded company on the OTC-BB exchange.
RJV received an offer, as set forth herein, and has recently received
approval by majority written consent for the acquisition of Bio Kinetix, an
Alberta (Canada) corporation. The Acquisition Agreement provides that the
Company will acquire Bio Kinetix as a wholly owned subsidiary by issuing
shares of the stock to the shareholders of Bio Kinetix resulting in the
shareholders of Bio Kinetix having a controlling ownership of the Company.
If the proposed acquisition described above is not successful, RJV Network,
Inc. will continue its efforts to fulfill its original business intent of
developing an online real estate listing service. However, in order to
proceed further with the development of its original business plan, the
Company will be required to find some form of additional financing, of which
to date it has been unsuccessful. As previously stated, the Company has been
unsuccessful in its effort to raise the large amount of capital need to
complete its business plan, and there can be no guarantee or assurance that
the Company would be successful in raising these, or possibly any additional
funds. If additional funding cannot be secured, RJV Network, Inc. will be in
a position whereby it must substantially slow and/or even curtail the
continued development of its proposed business plan.
As of December 31, 2002, RJV had $579 cash on hand and in the bank. This
amount will not be able to satisfy the current cash requirements of RJV (note
that the payables at year end are approximately $7,500), nor will it provide
for foreseeable expenses over the next twelve months. The Company will
require additional funds to cover administrative costs. The Company's
President has made loans, totaling $5,155 to date, to the Company to cover
certain costs, but there is no commitment(s) or agreement(s) from him to
continue providing such funds. Representatives of the acquisition candidate,
Bio Kinetix, have provided verbal assurances to the Company's President that
all amounts will be brought current if, and when, the acquisition is
completed. If the acquisition is not completed and these amounts are not paid
by way of a loan(s) or some other means, none of which are in place or under
contract at present, the Company could very possibly become insolvent and
cease to exist.
RJV does not anticipate any further research of any products. RJV does not
expect the purchase or sale of plant or any significant equipment, and does
not anticipate any change in the number of our employees. RJV has no current
material commitments and has generated no revenue since its inception.
Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure
Not Applicable. There have been none.
BIOKINETIX RESEARCH INC.
(Formerly 957614 Alberta Ltd.)
FINANCIAL STATEMENTS
December 31, 2002
INDEX TO FINANCIAL STATEMENTS
I. Auditor's Report
II. Balance Sheet
III. Statement of Operations and Retained Earnings (Deficit)
IV. Statement of Cash Flows
V. Notes to Financial Statements
AUDITOR'S REPORT
To the Shareholders of BIOKINETIX RESEARCH INC.,
I have audited the balance sheet of BIOKINETIX RESEARCH INC. as at December
31, 2002 and the statements of operations and retained earnings (deficit) and
cash flows for the year then ended. These financial statements are the
responsibility of the company's management. My responsibility is to express
an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform an audit to
obtain reasonable assurance whether the financial statements are free of
material misstatement. An audit included examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that the audit provided a
reasonable basis for my opinion.
In my opinion, these financial statements present fairly, in all material
respects, the financial position of the company as at December 31, 2002 and
the results of its operations and its cash flows for the year then ended in
accordance with generally accepted accounting principles.
North Vancouver, BC /s/ C. Fred Whittaker
January 15, 2003 ---------------------
C. Fred Whittaker
Chartered Accountant
BIOKINETIX RESEARCH INC.
(Formerly 957614 Alberta Ltd.)
BALANCE SHEET
December 31, 2002
US Funds US Funds
Dec 31 Dec 31
2002 2001
ASSETS
Capital ASSETS
Incorporation costs $ 1,031 $ 1,050
LIABILITIES
CURRENT LIABILITIES
Accrued liabilities $ 28,003 $ 1,050
SHAREHOLDERS' EQUITY
SHARE CAPITAL (Note 3) 19 --
RETAINED EARNINGS (DEFICIT) (26,991) --
(26,972) --
$ 1,031 $ 1,050
The accompanying notes form an integral part of these financial statements.
BIOKINETIX RESEARCH INC.
(Formerly 957614 Alberta Ltd.)
STATEMENT OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
For the Year Ended December 31, 2002,
With comparative figures for the Two Months ended December 31, 2001
US Funds US Funds
Dec 31 Dec 31
2002 2001
EXPENSES
Legal and filing fees $ 13,958 $ --
Office expenses 11,777 --
Accounting fees 1,256 --
26,991 --
NET LOSS, for the year (26,991) --
RETAINED EARNINGS (DEFICIT), beginning of year -- --
RETAINED EARNINGS (DEFICIT), end of year $ (26,991) $ --
EARNINGS (Loss) PER SHARE $ (0.009) $ --
The accompanying notes form an integral part of these financial statements.
BIOKINETIX RESEARCH INC.
(Formerly 957614 Alberta Ltd.)
STATEMENT OF CASH FLOWS
For the Year Ended December 31, 2002
With comparative figures for The Two Months ended December 31, 2001
US Funds US Funds
Dec 31 Dec 31
2002 2001
OPERATING ACTIVITIES
Net loss for the year $ (26,911) $ --
CHANGES IN NON-CASH WORKING CAPITAL
Increase in accounts payable 26,911 1,050
Cash flows by operating activities -- 1,050
CASH FLOWS FROM FINANCING ACTIVITIES -- --
CASH FLOWS from issue of shares AND INVESTING ACTIVITIES
Incorporation costs -- (1,050)
Issuing Shares -- --
-- --
INCREASE (DECREASE) IN CASH -- --
CASH POSITION, beginning of year -- --
CASH POSITION, end of year $ -- $ --
The accompanying notes form an integral part of these financial statements.
BIOKINETIX RESEARCH INC.
(Formerly 957614 Alberta Ltd.)
Notes to Financial Statements
December 31, 2002
1. INCORPORATION
The company was incorporated as 957614 Alberta Ltd. on October 24, 2001 under
the Business Corporation Act of Alberta, Canada. On November 14, 2001, the
company changed its name to BIOKINETIX RESEARCH INC.
2. NATURE OF OPERATIONS
This financial statement has been prepared in accordance with generally
accepted accounting principles. The corporation has not yet commenced
operations. It will carry on research, development, manufacture,
distribution, and sale of products with application to cancer antibodies.
3. Share Capital
The authorized Share Capital is:
Common shares voting, unlimited number
Common shares non-voting, unlimited number
The issued share capital is 3,000,000 common shares for $19.
4. Significant Events
(a) On March 25, 2002, common voting share subscriptions were received for
3,000,000 shares for a combined subscription price of $1,050.
(b) On November 22, 2002, a license agreement between BioCurex Inc. and
Beglend Corporation S.A was signed regarding the RECAF antibodies and their
potential applications to cancer.
Beglend Corporation S.A. has assigned these agreements with BioCurex Inc. to
BioKinetix Research Inc. to have BioKinetix carry on research and development
work which is intended to result in a Super Antibody having characteristics
of RECAF Antibodies and ultimately the manufacture, production, distribution
and sale of products.
These agreements were to become effective November 22, 2002. 13,000,000
common voting shares of the company will be issued as payment for these
agreements. In addition, as consideration for the BioCurex License,
BioKinetix will pay $60,000 on the execution of the agreement, a further
$200,000 for performance by BioCurex and royalties on revenue generated in
the future. At December 31, 2002, the terms of the agreements have not yet
been completed.
5. SUBSEQUENT EVENT
On January 7, 2003 a Development and License Agreement was signed between
InNexus Corporation and Beglend Corporation S.A., regarding monoclonal
antibodies development, production and commercialisation.
Beglend Corporation S.A., has assigned its rights under this agreement to
Biokinetix Research Inc. to have Biokinetix carry out its rights and
obligations under the contract for 1,600,000 common shares, a 2% Royalty on
future sales and certain milestone payments as follows:
Initiation of Phase I Clinical Trial $ 60,000
Initiation of Phase II Clinical Trial $ 250,000
Initiation of Phase III Clinical Trial $ 500,000
Approval of a BLA $ 1,000,000
6. GOING CONCERN
The Company's ability to discharge its liabilities, generate sufficient funds
to complete the terms of the agreement dated November 22, 2002, and to
provide the necessary working capital is dependant on private offerings, the
directors, and licensing arrangements.
OVERVIEW OF BIO KINETIX RESEARCH, INC.
NOTE: The information provided and set forth below includes many industry-
specific and other technical/scientific terms that have been further defined
and described in more detail in the Technical Glossary which has been
included as Exhibit B to this proxy statement. Readers are encouraged to
utilize this Glossary to assist in their reading and understanding of the
business of BIO-KIN.
Mission
Bio Kinetix Research Inc.'s mission is to develop a new generation of
medicines and diagnostics for the treatment of malignancies. The Company will
be focused on the anti-cancer applications of certain monoclonal antibodies,
termed "Superantibodies," that may improve medicinal and treatment potencies
and increase sensitivity in use as diagnostics. Bio Kinetix hopes to use this
technology to create new antibodies and diagnostic assays that will be able
to be used to treat and detect certain cancers.
In particular, Bio Kinetex will attempt to create a Superantibody that will
attach to RECAF molecules. The RECAF molecules with the Superantibody
attached are theoretically expected to then attach to cancer cells, with
minimal or no harm to non-cancerous cells, so that the Superantibody can
destroy the cancer cells.
Definitions of the terms used above are as follows:
"SuperAntibody" is an industry-adopted term used to describe genetically-
engineered antibodies, isolated from a single blood cell, which have been
expanded in the laboratory to attack or have a desired effect on certain
targeted antigens, such as cancer cells.
"RECAF" - Receptor Alpha Fetaprotein. This is a carbohydrate molecule that is
located on the surface of cancer cells.
"Receptor" - A structure exposed on the cell surface used for signaling or
transport of molecules into the cell.
Company Summary
Bio Kinetix Corp., (the "Company," "Bio Kinetix," or "BIO KIN") is a
biotechnology research and development company focused on the application of
SuperAntibody-based products for the treatment and diagnosis of certain
cancers.
BIO KIN is a private company whose stock is not publicly traded. Its common
shares are held by six shareholders. The Company has never declared any
dividends on its common shares.
The Bio Kinetix business plan is based primarily on the furtherance of
certain intellectual property rights that it has obtained by way of contracts
with two companies, namely BioCurex Inc. and InNexus Corporation. Both
contracts were negotiated at arms length. At present, BIO KIN has no product
or products, and has received no patents or FDA approval for any product or
diagnostic procedures.
The agreements with both BioCurex and InNexus each call for the payment of
$60,000. Neither of these payments has yet been made by, or on behalf of, the
Company.
The BioCurex agreement calls for payment of the $60,000 on or before 90 days
of the signing of the agreement. The BioCurex agreement was signed as of
December 9, 2002. The agreement requires written notice of any material
breach and allows 60 days from receipt of the notice for the Licensee to cure
such breach before the agreement is terminated. The Company has not yet
received a written notice of a breach from BioCurex.
The InNexus agreement calls for payment of the $60,000 within 3 days of the
signing of the agreement. This agreement was signed effective January 7,
2003. The granted License is not effective until the $60,000 is paid. The
failure to pay this fee is not listed as a material breach in the wording of
the agreement. The Company has not yet received any written notice of a
breach or demand for payment of these funds from InNexus.
The patented BioCurex technology, known and referred to as "RECAF"
technology, has been shown to be able to locate certain molecules ("markers")
that are present on all cancer cells, but not on healthy cells. BIO KIN's
rights to this technology will allow them the right to develop antibodies
that attach to or bind with the RECAF cells. The theory and hope is that the
RECAF cells will then deliver or attach the antibody to the cancer cells
allowing the antibody to destroy the cancer cells with minimal or no harm to
non-cancerous cells.
The InNexus patented technology consists of certain procedures and related
technologies that allow and/or facilitate the development of SuperAntibodies.
BIO KIN hopes to utilize this technology to develop SuperAntibodies that will
then attach to and work in conjunction with the RECAF technology being
provided by way of the agreement with BioCurex.
The rights of the respective parties are included in written agreements with
BioCurex and InNexus, which are included in their entirety as Exhibits C and
D hereto, respectively. The license rights are made by and between Beglend
Corporation S.A. and BioCurex Inc. (see Exhibit C), and Beglend Corporation
S.A. and InNexus (see Exhibit D). The Beglend Corporation rights were
thereafter assigned to Bio Kinetix.
Please note that there are no relationships between the officers, directors,
and/or affiliates of RJV, BIO KIN, Beglend, BioCurex, or InNexus that need
further disclosure or discussion beyond what has been set forth herein. All
contracts and agreements were negotiated at arm's length between the
unrelated parties thereto.
BIO KIN Plan of Operation
During the next twelve months, BIO KIN will be seeking to create new
antibodies to attach to REFCAF cells using the InNexus and BioCurex
technologies obtained by way of the agreements with the two parties. The
Company's research milestones for the next twelve months are (1) to create
monoclonal antibodies that are conducive for combining with the RECAF
receptor, and (2) to then create SuperAntibody technology forms of these
antibodies for possible vaccine development in animals. Please note that
there are a multitude of steps in the creation of even a "potential" product
and many more steps thereafter to get a viable "product" that can then be
tested or used on humans. It is very unlikely that the Company will have
developed any true "product" until well after its first year of research and
development.
The Company anticipates that its total costs for the next twelve months will
be in the range of about $500,000, which represents funds that they do not
currently have on hand. They anticipate that these funds will be made
available through biomedical funds, institutions, research grants through
various foundations, and possible private placements with high net worth
individuals. Please be advised that BIO KIN has no agreements in place with
anyone to provide additional funding at this time and there is no assurance
that such funding will ultimately become available.
The 12-month requirement of $500,000 is expected to cover the costs of
contracting with key personnel (est. $200,000), the initial payments to
BioCurex and InNexus ($120,000), the costs of licensing (est. $30,000), and
bioactivity tests and research (est. $150,000).
BIO KIN will face intense business competition in its efforts to create
treatments and diagnostics for various cancers. These competitors include
everything from multi-national pharmaceutical companies, universities,
hospitals, research and development labs and institutes, to one or two person
laboratories. Many such competitors have multi-million dollar annual budgets
for such research and development. Although several competitors have already
developed diagnostic and therapeutic products for the detection and treatment
of different cancers, most products have been proven effective in treating
only a small percentage of the different forms of cancers, and even those
that are effective in treating a specific malignancy generally do not work in
the entire population of those affected by such malignancy. In summary, while
there may be many opportunities for potential new products, there are also
many competitors seeking the same.
If, and when, BIO KIN is successful in the creation and/or development of any
new diagnostic or therapeutic products, the Company will be subject to FDA
regulation before entry into testing and further clinical development,
licensing for product approvals, and manufacturing under good manufacturing
practices and conditions. The path to any commercially available product is
filled with many levels of governmental approvals and, even if a product is
developed, it will likely take several years to reach the marketplace.
Discussion of the BioCurex Agreement
Under the terms of the agreement with BioCurex, BioCurex is providing Bio
Kinetix a license for the "SuperAntibody" ("SAT") rights to monoclonal
antibodies pertaining to the BioCurex RECAF receptor technology. RECAF
technology, as patented by BioCurex, attempts to effectively locate molecules
(as "markers") that are present on all cancer cells, but not on healthy
cells.
The BioCurex intellectual property applicable to the license is listed in
Schedule "B" to the BioCurex Agreement, which is attached hereto as Exhibit
C. This list is described in the agreement as a complete list, as of the
Effective Date, of all intellectual Property Rights pertaining to the
Licensed Technology which are owned or controlled by BioCurex (together with
a complete description of any material limitations, rights of third parties,
restrictions on use or ownership by BioCurex, or encumbrances on such rights)
and all other intellectual property including any Patent Rights, license
rights or trade marks, materials, property or assets which form part of the
Licensed Technology or which are necessary or desirable for the development
and commercial exploitation of the Licensed Technology and are in BioCurex's
possession and control.
The following is a summary of the material terms of the "License - SAT
Therapeutic Rights for RECAF" between BioCurex Inc. and Beglend Corporation
S.A. and is qualified in its entirety by the actual agreement which has been
attached as Exhibit C. The following description may not contain all the
information about it that is important to you. You are encouraged to read the
actual agreement, which is attached in its entirety as Exhibit C to this
proxy agreement and incorporated by reference.
The agreement provides that, after all of the conditions to the agreement
have been satisfied or waived, BioCurex will grant Beglend an exclusive
world-wide license to use the Licensed Technology.
This Licensed Technology means the intellectual property rights, patents, and
all other proprietary information and intellectual property of BioCurex only
for the use of RECAF in conjunction with Super Antibody Technology ("SAT").
Assignment of Rights
Set forth in the agreement is language that Beglend has arranged to assign
its rights under the agreement to Bio Kinetix with the understanding that Bio
Kinetix will conduct research and development to produce a series of super
antibodies expressed against the RECAF molecules.
Terms of License
The License is subject to the following terms and conditions:
(a) Beglend shall have an exclusive world-wide license to use the Licensed
Technology in any human or humanized forms, including genetically engineered
or fully human antibodies in conjunction with SAT;
(b) The License shall commence upon and be effective as of the receipt of
$60,000, on or before 90 days from the signature of this agreement;
(c) Beglend retains, for a period of 180 days, the right to buy or arrange
for the investment in BioCurex of a total $1,000,000 U.S.D in terms to be
agreed upon by Biocurex Inc.;
(d) Beglend shall, in order to maintain this License in good standing, have
documented expenses, relevant to the Licensed Technology, of $50,000, the
second and $100,000 the 3rd year from the anniversary date;
(e) All costs related to patents emerging from this agreement on the
combination of anti-RECAF super antibodies, will be the responsibility of
Beglend;
(f) Beglend is required to pay royalties to BioCurex at the rate of 5% for a
Therapeutic Licensed Product based upon monoclonal antibody to RECAF that
fulfils the criteria described under the licensed antibody definition.
Beglend will also issue 600,000 shares of Bio Kinetix Research Inc. BioCurex
will have the right to appoint one member to the Board of BioKinetix;
(g) Beglend shall provide BioCurex with reports and other information with
respect to its use of the Licensed Technology as well as all documents
related to sublicensing, sales or technology transfer agreements related to
RECAF technology;
(i) BioCurex shall keep the intellectual property in good standing and advise
Beglend of any breach or pending breach in its obligations thereunder. In the
event of bankruptcy, insolvency, appointment of a receiver by BioCurex or
similar action which would threaten the assignment of this license, BioCurex
shall be deemed to have assigned all of the rights or pending rights under
the agreement immediately prior to such action without the payment of any
additional consideration or without the need for any further action of the
parties and Beglend shall be authorized, for on behalf of BioCurex, to
maintain the intellectual property in good standing;
(j) After payment of $60,000 and completion of this agreement, Beglend has
the right to fund further development of monoclonal antibodies to RECAF. Such
further development will be carried out in laboratories appointed by BioCurex
and be funded through a research and development contract to be negotiated
between the parties. During the course of this research, improvements may be
discovered in the underlying RECAF technology or new antibodies developed
with superior therapeutic properties. It is the responsibility of the party
responsible for the improvement to notify the other party of such
improvements. BioCurex shall retain all rights to such improvements as
pertains to diagnostic uses except that rights pertaining to therapeutic uses
with SAT technology shall accrue to Beglend. Should BioCurex find new
antibodies that all parties deem as superior for use in conjunction with SAT,
then BioCurex will have the choice to include them into this agreement or
refrain from using them in any shape or form related to SAT, while retaining
the right to use them in other diagnostic as well as therapeutic applications
related to SAT. Should BioCurex choose to use them for SAT, the new
antibodies will be incorporated into this agreement without any further
consideration than the one specified in this agreement unless the funds
required to produce them exceeded the prepaid sum of $60,000. In such case,
Beglend will compensate Biocurex for the difference;
(k) If BioCurex deliver antibodies that are considered as adequate for use
with SAT using less than the advanced $60,000, BioCurex will retain the
unused funds as a performance bonus;
(l) Any new inventions discoveries or intellectual property owned, purchased
or acquired by Beglend which are not deemed improvements or which are
patentably distinct from the RECAF rights shall not form part of BioCurex's
intellectual property, and shall be the sole and exclusive property of
Beglend; and
(m) Unless previously terminated, this Agreement and this License granted
hereunder shall continue in full force until the date of the last to expire
of the Patent Rights or the expiration of any other rights with respect to
this license or until superceded by a formal license agreement.
Representations and Warranties
BioCurex and Beglend have made a number of reciprocal representations and
warranties to each other as to, among other things, due incorporation and
good standing, corporate authority to enter into the agreement and consents
and approvals.
Representations and warranties made solely by BioCurex include the following
items: ownership and rights to the intellectual property rights are owned
fully by BioCurex and no one else has any claim or right to them, the rights
are free and clear of any liens and/or encumbrances, the patents were
properly obtained through the relevant governmental granting authority, and
each patent is valid and fully enforceable, and BioCurex is not a party to or
threatened with any litigation.
Termination
Beglend may terminate the agreement upon 30 days notice to BioCurex, at which
time all advances, etc., generated during such period of the agreement will
become the property of BioCurex.
BioCurex may terminate the agreement due to Beglend's failure to perform any
material obligation under the agreement that is not cured within 60 days of
notice thereof.
Assignment and Novation
Beglend may assign any of its rights to a subsidiary or affiliate of Beglend
or InNexus Corporation, Ltd., and BioCurex may transfer the licensed
technology and assign the license agreement together with any of its rights
or obligations hereunder to a subsidiary or affiliate of Biocurex, provided
such subsidiary or Affiliate enters into and becomes bound by the License
Agreement and/or this License Agreement to the same extent as if it had
executed same at the time of execution by the parties hereto.
Discussion of the InNexus Agreement
The agreement with InNexus provides Bio Kinetix an exclusive license for the
use of InNexus' patented SuperAntibody technology in the generation of up to
three antibody-based drugs and/or diagnostics related to the technology,
including relevant sub-licenses for any other intellectual property that may
be required to commercialize the therapeutics and diagnostics. In addition,
InNexus will perform the research and development work for the related
therapeutics and diagnostics on behalf of Bio Kinetix. In return, Bio Kinetix
has issued 10% share ownership of Bio Kinetix to InNexus and will provide
corporate infrastructure and financing of the research and development
efforts. In addition, Bio Kinetix will make certain progress payments and pay
royalties to InNexus.
The BioCurex intellectual property applicable to the license is listed in
Schedule "A" to the InNexus Agreement, which is attached hereto as Exhibit D.
This list is described in the agreement as a complete list of the InNexus
Intellectual Property Rights and all other intellectual property including
any Patent Rights, license rights or trade marks, materials, property or
assets which form part of the Licensed Technology or which are necessary or
desirable for the development and commercial exploitation of the Licensed
Technology.
The following is a summary of the material terms of the Development and
License Agreement between InNexus Corporation and Beglend Corporation S.A.
and is qualified in its entirety by the actual agreement, which has been
attached as Exhibit D. The following description may not contain all the
information about it that is important to you. You are encouraged to read the
actual agreement, which is attached in its entirety as Exhibit D to this
proxy agreement and incorporated by reference.
The agreement provides that, after all of the conditions to the agreement
have been satisfied or waived, InNexus will grant Beglend the sole, exclusive
and perpetual right and license to use the Licensed Technology to:
(a) conduct research and development activities intended to result in the
development of products involving up to three Beglend antibodies and SAT;
(b) develop compounds and products based on the foregoing research and
development activities;
(c) make and have made, register, use, offer for sale, market, distribute,
export, import and/or sell any of the foregoing compounds and products
throughout the world; and
(d) sublicense the rights granted thereunder.
The licensed technology means "the InNexus intellectual property rights,
patents, rights and under any joint patents, all rights held by InNexus under
license, and all other proprietary information and intellectual property of
InNexus related to Super Antibody Technology ("SAT").
Assignment of Rights
Set forth in the agreement, is language that Beglend has arranged to assign
its rights under the agreement to Bio Kinetix. It also acknowledges that
InNexus will become a shareholder in Bio Kinetix and will assist Bio Kinetix
in carrying on research and development work intended to result in the
development, production and commercialization of monoclonal antibody based
pharmaceuticals known generally as "SuperAntibodies."
Grant of Rights
License Grant. InNexus grants Beglend, subject to the terms and conditions of
the agreement and payment of US $60,OOO, the sole, exclusive and perpetual
right and license to use the licensed technology to: (a) conduct research and
development activities intended to result in the development of products
involving up to three Beglend Antibodies and SAT; (b) develop compounds and
products based on the foregoing research and development activities; make and
have made, register, use, offer for sale, market, distribute, export, import
and/or sell any of the foregoing Compounds and Products throughout the world;
and (d) sublicense the rights hereby granted in accordance with the
provisions of the agreement. InNexus will provide to Beglend all licensed
technology to permit Beglend to fully exercise the rights and license and
obtain the full benefit therefrom.
Limitations on License. The License granted to Beglend under the agreement is
limited to the development and application of compounds and products for
diagnostic, preventative, treatment and/or therapeutic purposes, and the use
of SAT to develop compounds and products based on up to three Beglend
Antibodies, but not more than three.
Evaluation, Research, and Development
Delivery, Acceptance, and Evaluation of Conjugates. As soon as practical,
InNexus shall prepare immunoconjugates based on the conjugation of SAT and
the initial Beglend antibody (the first antibody licensed to Beglend by
BioCurex). Beglend shall then conduct such tests and examinations to
determine acceptability of the immunoconjugates and provide InNexus with
either acceptance or non-acceptance thereof. After acceptance, Beglend shall
conduct such additional tests, examination, and research for the purpose of
determining whether to proceed with further development with a view to
developing one or more products utilizing the technology. InNexus shall
cooperate and facilitate the research and development thereof, with payment
for the services being the responsibility of Beglend.
Product Sales and Marketing. Upon obtaining the required regulatory approval
for a product, Beglend shall thereafter have the right to develop and
implement a plan to market and sell or otherwise commercially exploit the
product(s).
Additional InNexus Activities. InNexus shall, during the term of the
agreement: (a) provide such information, documentation and advice respecting
SAT and the initial immunoconjugates which are in its possession and control
as may be reasonably necessary to enable Beglend to use and exploit the
licensed technology, to evaluate the immunoconjugates and proceed with
research and development programs of Beglend to develop one or more Products
(to a maximum of three Products), participate in research and development
activities of Beglend, provided that all costs of such research and
development activities will be borne by Beglend; (b) prepare a full business
plan which describes the research and development, analyzes and assesses the
technical viability and feasibility of the proposed research and development
work, and describes the technical and other risk factors related thereto, all
in form and substance sufficient in all respects to address technical
concerns which could be asked by technical advisors to raise funds to finance
the development of Beglend's business; (c) prepare comprehensive, multi-year
financial plans and budgets for the research and development contemplated
hereby, including time estimates for completion of each phase or "milestone"
of such, and an assessment of available government grant and loan programs,
in sufficient detail to address technical questions which could reasonably be
expected to be asked by technical advisors to Beglend; (d) identify potential
third party service providers having technical expertise in areas identified
by Beglend for the conduct of the research and development contemplated by
this Agreement and assist Beglend in negotiating service contracts with such
service providers; (e) identify potential business, strategic alliance and
joint venture partners, and assist Beglend in negotiations with such persons;
(f) liaising with current and prospective business, strategic alliance, and
joint venture partners; (g) liaising with governmental, regulatory and health
authorities and agencies on matters relating to the subject matter of this
Agreement; and (h) the delivery of regular progress reports to and meetings
with Beglend, and presentations and technical reports on the research and
development work conducted by InNexus and subcontractors of Beglend, and the
results thereof, in such form and detail to ensure the full exploitation of
the license to which Beglend has acquired and hereafter acquires rights to
Beglend Antibodies, and to develop compounds and products to maintain,
promote, enhance and expand the business and opportunities of Beglend and in
that regard InNexus will provide (and paid for by Beglend), the services of
employees or approved contractors and the services of Dr. A. Charles Morgan
to ensure the overall quality of and results from such services.
Information Exchange. Beglend will keep InNexus informed of its ongoing
research and development activities including: any development plans and
related budgets for the development of Products and its progress in the areas
of applied research and development of products, manufacturing of SAT
immunoconjugates, and the conduct of clinical trials and interactions with
the United States FDA. InNexus will keep Beglend informed of its progress
with licensing SAT technology to other companies and InNexus' other
activities and improvements or new technology developed or licensed by
InNexus that, though not covered by the License, might be useful to Beglend
in its own Product development.
Due Diligence. Beglend shall use reasonable efforts to develop the SAT
versions of the Beglend antibody or any other products the parties agree
shall be developed and to obtain and maintain governmental approval to market
these products; and InNexus shall use reasonable efforts to perform the
research and development activities agreed to be performed by InNexus
hereunder; provided that Beglend shall have full and final control over all
aspects of all services provided by InNexus.
Participation at FDA. Beglend shall forward to InNexus copies of all material
correspondence with the FDA and shall advise InNexus of prospective meetings
with the FDA related to products developed by Beglend using SAT, and InNexus
shall have the right to be present at and participate in any such meetings.
Title. All rights, title, and interest in and to all compounds, products,
data, and all governmental and other grants and loans shall be wholly and
solely owned by Beglend and all filings for Regulatory Approval shall be made
by or on behalf of and in the name of Beglend.
Supply and Manufacturing
InNexus grants Beglend access to facilities for production of intermediates
involved in the modification of monoclonal antibodies using SAT technology.
InNexus will provide assistance, information and advice to enable Beglend to
negotiate contracts with contractors at or near the prices charged to InNexus
by such contractors.
Commercialization
Beglend shall use reasonable efforts to market and sell products it
determines to commercialize hereunder in all major countries of the world.
InNexus shall use reasonable efforts to assist Beglend on an "as needed"
basis, for such compensation and on such terms and conditions as the parties
may reasonably agree, during the commercialization phase of each Product in
the USA and Canada. Beglend shall retain sole responsibility and right to
make all decisions relating to the marketing and promotion of products.
Beglend shall own the trade names and trademarks for all products and shall
bear the cost of obtaining and maintaining them. InNexus shall own all
trademarks pertaining to SAT and other intellectual property included in the
licensed technology. The packaging and promotional materials for the Products
marketed by Beglend shall identify InNexus as licensor of the InNexus
intellectual property rights, provided that if only one name is allowed, then
Beglend may use its name alone on such item, without identifying InNexus as
licensor.
Consideration
There are several forms of consideration that Beglend is required to pay to
InNexus per the agreement, as follow:
Cash Consideration. Beglend is to pay a total of $60,000 to InNexus within 3
days of the effective date of the agreement. The License is not effective
until fee is paid.
Share Consideration. InNexus shall receive a total of 1,600,000 shares in Bio
Kinetix.
Royalty. Beglend shall pay royalties to InNexus equal to 3% of Net Sales
Revenue.
Milestone Payments. Upon initiation of various levels of clinical trials in
respect of any product developed per the agreement, Beglend is required to
make the following payments to InNexus:
(a) initiation of a Phase I clinical trial - $60,000;
(b) initiation of a Phase II clinical trial - $250,000;
(c) initiation of a multi-center Phase III clinical trial - $500,000; and
(d) approval of a Biologics License Application - $1,000,000.
Information
Exchange. The parties will exchange all information as may be necessary for
the parties to meet their obligations under the agreement. InNexus shall make
available to Beglend all information respecting the intellectual property
rights which has not been previously disclosed to Beglend. The parties shall
exchange all information relating to formulation, manufacture, improvement
use and sale of product and permit the other party to observe, review, make
copies of, and/or discuss with the party supervising or conducting research
related to Product, the results of studies and/or submissions to governmental
agencies concerning products, and permit the other party to observe, review,
make copies of, and/or discuss with its scientists supervising or conducting
manufacture of product.
Confidentiality. During the Term of the Agreement and for five years after
termination, the parties shall treat all information as it would treat its
own information of a similar nature and take all precautions not to disclose
such information to third parties and not use such information for any
purpose other than the purpose of exercising its rights and fulfilling its
obligations under the agreement.
Remedies on Breach of Confidentiality. Each party acknowledges that the other
party may suffer irreparable harm in the event that it breaches any of its
confidentiality obligations under the Agreement and that monetary damages may
be inadequate to compensate it for such a breach. Accordingly, each party
agrees that in the event of a breach by a party of any the confidentiality
provisions, the other party, in addition to and not in limitation of any
other rights, remedies or damages, shall be entitled to an apply for an
injunction to prevent or to restrain any such breach by such party, and the
parties agree that other remedies are inadequate to fully protect the rights
of the party not in breach.
Publications. The following restrictions apply with respect to disclosure by
any party of information in any publication or presentation: (a) a party
shall provide the other party any proposed Publication prior to submission
for publication so as to provide an opportunity to recommend any changes
necessary to continue to maintain the information in accordance with the
requirements of the agreement; and (b) if such party notifies the publishing
party that such publication (i) contains an invention conceived and/or
reduced to practice by the other party, for which the other party desires to
obtain patent protection, or (ii) could be expected to have a material
adverse effect on the commercial value of any information disclosed, the
Publishing party shall prevent such publication or delay such publication for
a mutually agreeable period of time.
Adverse Events. Beglend is responsible for reporting to the appropriate
regulatory authorities all adverse events related to the use of the products
worldwide. Adverse events shall be recorded in Beglend's standard database
and during the period of research into and development of products, the
parties will coordinate their efforts to assure that all adverse events are
reported properly.
Patents
Ownership of Technology. Ownership of the InNexus intellectual property
rights and other intellectual property owned or controlled by InNexus shall
remain vested at all times in InNexus, ownership of joint patents shall be
vested jointly in InNexus and Beglend, and all other intellectual property
rights and other rights and work product comprised in or developed or
produced pursuant to or in connection with the use of the licensed technology
or otherwise pursuant to the provision of services by InNexus to Beglend
shall be owned by InNexus and Beglend.
Term and Termination
Term. The term of the agreement shall commence upon the effective date and,
unless sooner terminated by the parties, expire on a country-by-country basis
as the patent lives for the products within those countries expire.
Termination. If Beglend fails to remedy any four specific defaults under the
agreement within 30 days, InNexus may at its option, to be exercised
reasonably and subject always to the right of arbitration on the part of
Beglend, terminate the license agreement. The four specific defaults fall
within two general categories: (1) insolvency or bankruptcy and (2) failure
to pay royalties to InNexus.
Suspension. Beglend shall have the right to terminate the agreement if
InNexus is in material breach of its obligations or does not provide the
services to be provided per the agreement.
Warranties and Indemnities
InNexus and Beglend have made a number of reciprocal representations and
warranties to each other as to, among other things, due incorporation and
good standing, corporate authority to enter into the agreement and consents
and approvals.
Representations and warranties made solely by InNexus include the following
items: ownership and rights to the intellectual property rights are owned
fully by InNexus and no one else has any claim or right to them, the rights
are free and clear of any liens and/or encumbrances, there will be no patent
infringements upon any other intellectual property through the proposed
commercial use of the InNexus technology, the patents were properly obtained
through the relevant governmental granting authorities, the technology is not
in the public domain and each patent is valid and fully enforceable, and
InNexus is not a party to or threatened with any litigation.
Representations and warranties made solely by Beglend include the following
items: ownership and/or rights to the intellectual property rights pertaining
to the Beglend Antibody are owned exclusively by Beglend and no one else has
any claim or right to them, the rights are free and clear of any liens and/or
encumbrances, there will be no patent infringements upon any other
intellectual property through the proposed commercial use of the Beglend
technology, and Beglend is not a party to or threatened with any litigation.
The parties have provided indemnifications to each other agrees to defend,
indemnify and hold their directors, officers, employees and agents harmless
from and against any losses, costs and damages, including reasonable costs
and expenses arising out of the development, manufacture, use, sale or other
disposition of any Product by development, manufacture, use, sale or other
disposition of any Product by the parties, their Affiliates, sub licensees,
distributors, or representatives, except to the extent that such losses,
costs and damages are due to the negligence or wrongful acts or failures to
act.
Dispute Resolution
All disputes under the agreement that cannot be resolved shall be submitted
to arbitration.
The Bio Kinetix Business Model
Bio Kinetix will attempt to create Super Antibody forms of "RECAF" antibodies
to be used in the treatment and detection of cancer by combining the two
technologies received by way of the agreements with BioCurex and InNexus.
This is expected to be accomplished by managing a network of contracts for
specific areas of the ongoing research and development. BioKinetix plans to
utilize several parties to provide such services, including, but not limited
to, companies such as Neugenesis for the humanization of the antibody,
ImmPheron Inc. for the Super Antibody modification, and BioCurex for further
RECAF receptor antibody generation and testing of the antibodies for their
anti-receptor activity.
The Company plans to use various current antibodies with an aim at creating
more specific (and thus more specifically targeted) reagents and will also
screen for and hopefully detect those antibodies that are conducive for use
with the RECAF receptor technology.
The Bio Kinetix team includes, as a Consultant, a pioneer in the monoclonal
antibody industry, Dr. A. Charles Morgan. Dr. Morgan has held leadership
positions in academia and government research, and has founded three
companies, two of which became publicly traded, NeoRx Corporation and
Receptagen Corporation.
BIO KIN has acquired rights from its agreement with InNexus to the use of
certain SuperAntibody technology for the development of its antibody-based
products while also acquiring commercial rights, from BioCurex, to pursue the
therapeutic applications of RECAF technology in connection with such
SuperAntibody technology. By partnering with these two companies, BIO KIN has
its source of initial technology and has in place experienced lead partners
for a research network to attempt to develop and commercialize Super
Antibody-based products.
BIO KIN has signed no management or consulting agreements with any parties;
however, the Company has been in discussion with several individuals that it
expects to be able to hire or provide such services on a contract basis.
These possible management personnel and consultants have relevant experience
as discussed below.
Dr. John Todd, M.D., F.R.C.S., President & Chief Medical Officer
Dr. Todd is a specialist in General Surgery with experience in pharmaceutical
drug development. He has participated in mammastatin research and the
clinical development of mammastatin from natural sources. Dr. Todd graduated
from the University of Calgary and performed General Surgery Residency at
Foothills Hospital, Holy Cross Hospital and Calgary General Hospital,
Calgary, Alberta. He has an active General Surgical practice at Peace Arch
Hospital in White Rock, B.C. and is a Consultant Surgeon to the Breast Health
Program at the B.C. Women's Hospital.
Dr. A. Charles Morgan, President of InNexus Corp., Consultant to BIO KIN
Dr. Morgan has founded three biotechnology companies, two successfully
transitioning to publicly traded biotechnology companies, namely NeoRx and
Receptagen, and InNexus Corporation, with completed integration of research
and development, clinical development, GMP manufacturing, marketing and
sales, and distribution functions for ethical and over the counter
pharmaceuticals. Dr. Morgan has also held positions at research organizations
such as the Scripp's Research Institute in La Jolla, CA, the National Cancer
Institute in Frederick, MD, and is on the faculty at the University of
Washington in Seattle, WA. Dr. Morgan has over 100 peer-reviewed publications
and is named as an inventor on over 60 patents and patent applications.
Dr. Heinz Kohler, M.D., Ph.D., President of Immpheron, Consultant to BIO KIN
Dr. Kohler has long-standing experience in the development of antibodies,
documented in over 200 peer-reviewed publications. He has been a former
Professor at the University of Chicago, the University of SUNNY at Buffalo
and the University of California, San Diego, and the Director of Molecular
Immunology at the Roswell Park Cancer Center. He was instrumental in the
early start-up phase IDEC Pharmaceuticals as Director of Research and is co-
founder of Immpheron Inc.
Dr. Sybille Muller, Ph.D., Vice President at Immpheron, Consultant to BIO KIN
Dr. Muller has developed antibodies against HIV-1 infection and demonstrated
their therapeutic potential in non-human primate studies. She has 60
publications in the fields of Immunology and Cell Biology, and has held
positions as Staff Scientist and at Assistant or Associate Professor level,
respectively, at the Robert Koch - Institute, Berlin, Germany, the Roswell
Park Cancer Center, Buffalo, New York, Sidney Kimmel Cancer Center, San
Diego, California and at the University of Kentucky, Lexington, Kentucky. She
has also served as a Consultant at IDEC Pharmaceuticals, San Diego, CA and as
a Director and Consultant of Immune Network Research, Ltd., Vancouver, BC.
Industry Partnerships and Research Collaborations:
By way of the previously discussed agreements, BIO KIN has effectively
partnered with InNexus and BioCurex to provide ongoing support through
research and development efforts focused on the related technologies.
InNexus will invest its time, capital and management expertise to achieve
proof of principle milestones and provide a means for its own investors to
hopefully realize the gain from an increase in its technology value. InNexus
already has two antibody products in development: one for the treatment of
the HIV virus and the other used to overcome deficits of the immune system
typical of chronic viral diseases.
To date, InNexus has spent in excess of $2 million (Canadian) on the research
and development of the SAT technology to which BIO KIN has acquired rights.
BioCurex Inc. is a biotechnology company with proprietary and patented
technologies in the area of cancer detection. Their RECAF technology "stains"
cancer cells to facilitate the locating and imaging of cancerous tumors.
Rather than building its own staff, BioKinetix plans to utilize independent
companies with specialized expertise to provide additional services,
including, but not limited to, companies such as Neugenesis for the
humanization of the antibody, ImmPheron Inc. for the Super Antibody
modification, and BioCurex for further RECAF receptor antibody generation and
testing of the antibodies for their anti-receptor activity. BIO KIN does not
currently have any agreements in place with these companies and use of these
or any other companies is subject to future developments and negotiations, if
any.
Research and Development Plan
Operational Model
Bio Kinetix will function as a virtual research and development company,
utilizing various subcontractors with specialized skills with technologies in
selected areas. The contracts, their overview, and project management will be
carried out through InNexus, who will act as BIO KIN's primary contractor for
its research and development.
Product Development
InNexus and its President, Dr. A. Charles Morgan, will serve a founding role
in BIO KIN. InNexus has developed the partnering relationships and will
manage the research and development process. The product related goals of
this research include generating:
- Monoclonal antibodies to RECAF molecules.
- Anti-idiotypic antibody that binds to the RECAF molecule and destroys the
tumor cell.
If, and only if, BIO KIN can successfully achieve these goals, can the
Company then enter into the formal regulatory and clinical development of an
antibody therapeutic for a variety of malignancies. At this stage, InNexus
would then look to employ other companies with the necessary expertise to
further develop the products and gain FDA product approvals.
THE NAME CHANGE
(ACTION NUMBER TWO)
-------------------
The Acquisition, among other things, provides for a change in the Company's
name, from RJV Network Inc. to "ProtoKinetix, Inc." The Company feels that
this Name Change will provide a better association of the post-acquisition
Company with its primary business subsidiary.
The Name Change will require an amendment to the Company's Articles of
Incorporation, which must be filed with the Secretary of State of Nevada to
take effect.
The Company will also seek to change its stock ticker symbol from "RJVN" to a
symbol more in line with its new name. The Company will most likely initiate
this symbol change after the successful close of the Acquisition, and notice
thereof will be provided to the shareholders, as appropriate.
COVENANT NOT TO PERFORM A REVERSE STOCK SPLIT
(ACTION NUMBER FOUR)
--------------------
Also approved by way of the majority written consent was a covenant that once
the Acquisition is closed, the Company cannot reverse-split its common stock
for a period of two years without 100% shareholder approval.
Although the Company has no plans to make any such reverse-split of its
shares, this feature was added to the Acquisition to protect current RJV
shareholders from a reverse-split that might drastically reduce the number of
shares held by each shareholder.
A reverse-split of stock effectively reduces the number of issued and
outstanding shares and immediately reduce the number of shares held by each
shareholder. In many instances, this procedure is used by a company as a
means to increase the price per share for its stock without any corresponding
increase in the market value of the company. Most often it is taken as a sign
of a company that is "struggling" to keep its per share stock price up
without necessarily making improvements in operations and/or the value of the
company, which is the preferred means.
OTHER MATTERS
-------------
The Company and its board of directors do not know of any other matters that
were recently approved or considered by the holders of a majority of the
Company's outstanding stock, acting by majority written consent.
ADDITIONAL INFORMATION
----------------------
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith files reports,
proxy statements, and other information including annual and quarterly
reports on Form 10-KSB and 10-QSB with the Securities and Exchange
Commission. Reports and information filed by the Company may be inspected and
copied at the public reference facilities maintained at the Securities and
Exchange Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549. Copies of such materials can be obtained upon written request
addressed to the Securities and Exchange Commission, Public Reference
Section, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
The Securities and Exchange Commission also maintains a web site on the
Internet (http://www.sec.gov) where reports, proxy and other information
statements and other information regarding issuers that file electronically
with the Securities and Exchange Commission through the Electronic Data
Gathering, Analysis and Retrieval System may be obtained free of charge.
RISK FACTORS
------------
Although the Acquisition and related Actions have been approved by way of
majority written consent, there are many inherent risks associated with the
Acquisition and related business plan of the new company, including those set
forth below.
The new Company will be a newly formed venture that will be dependent on a
new business strategy. The company's success will depend in part on its
ability to deal with the many problems, expenses, and delays frequently
associated with establishing a new business venture and developing new
technology and strategy. BIO KIN has made no sales to date. Losses are likely
before the BIO KIN's operations will become profitable. There can be no
assurance that the BIO KIN's operations will ever prove profitable.
There is no assurance that the current funding needs will be fulfilled and
additional sources of funding will be required in the future. There can be no
assurance that such financing will be available to BIO KIN on attractive
terms or at all.
ADDITIONAL RISKS OF ACQUISITION / BIO KIN'S BUSINESS
----------------------------------------------------
RISKS OF ACQUISITION. An Agreement has been signed between RJV and BIO KIN
and approved by way of majority written consent. The Acquisition has not yet
closed, and until such time as the Acquisition is completed, there is always
some risk that it may not close. Accordingly, there can be no assurances that
the Acquisition will in fact be consummated.
EARLY STAGE BUSINESS. Once the Acquisition is consummated, RJV will own the
BIO KIN business and assets. The BIO KIN business is an early stage business.
BIO KIN has only two product bases to develop, both of which are still in
early stage testing. Nothing is yet ready for commercial sale.
DEPENDENCE ON KEY PERSONNEL. RJV will, after closing the Acquisition and
thereafter for the foreseeable future, be dependent on the skills of its
management team. The loss of key personnel or an inability to attract, retain
and motivate key personnel could adversely affect the business.
LACK OF ACTIVE PUBLIC MARKET. RJV Common Stock is currently listed for
trading on the OTC Bulletin Board, but there has been limited trading. There
is currently limited public trading market for RJV Common Stock, and there
can be no assurance that the public market will continue or develop. Holders
of RJV Common Stock may therefore have difficulty selling their stock. The
OTC Bulletin Board is generally considered to be less efficient than
securities markets such as or other national exchanges. Any market price for
RJV Common Stock may not necessarily bear any relationship to its book value,
assets, past operating results, financial condition or any other established
criterion of value, and may not be indicative of the market price in the
future. The market price may be volatile depending on business performance,
industry dynamics, news announcements, changes in general economic conditions
and other factors.
CONTROL BY PRINCIPAL STOCKHOLDERS. Once the transactions set forth within
this Information Statement are completed, the surviving corporation's new
directors, officers, and affiliates will own in the aggregate approximately
74% of the Company Common Stock outstanding. As a result of such ownership,
the post-transaction directors, officers, and affiliates will be able to, and
intend to, exercise substantially complete control of the surviving
corporation's affairs, including electing additional directors of the
surviving corporation. As a result of such control, a potential buyer may be
deterred from trying to acquire the Company without consent of the surviving
corporation officers and directors.
ACQUISITION; DILUTION. The trade price of the RJV/BIO KIN stock in the
Acquisition was reached by negotiation between the parties. These prices or
values are not necessarily based on any market price, appraised value, book
value, or other objective measure of value. The existing shareholders of RJV
will suffer dilution of voting power and of economic percentage ownership
upon closing of the Acquisition and will experience further dilution with any
other share issuance, including, but not limited to management option plans,
that may be instituted by management.
ISSUANCE OF ADDITIONAL SHARES; SHARES ELIGIBLE FOR FUTURE SALE. It is likely
that future financing of the BIO KIN business will be required, which will in
turn require additional share issuance. Future issuance of stock for
financing or other purposes could adversely affect any prevailing market
price of the surviving corporation stock. The issuance of such securities
will result in the dilution of the voting power and other rights of existing
stockholders. After the close of the Acquisition, approximately 5,718,750
shares of RJV common stock will be unrestricted, and the 16,000,000 shares
issued in exchange for the BIO KIN shares will be restricted securities that
will be available for resale later, subject to Rule 144. As restricted
securities become available for resale into the public market, it may be
anticipated that the surviving corporation common stock will experience
selling pressure, which may have the effect of depressing or reducing,
perhaps significantly, the RJV common stock price in the market.
LACK OF DIVIDENDS. RJV/BIO KIN has not paid any dividends on their Common
Stock to date and there are no plans for paying dividends on the common stock
of the corporation in the foreseeable future.
MANY OF THE FOLLOWING RISKS REFER TO BIO KIN'S "PRODUCT" OR "PRODUCTS" BUT IT
IS IMPORTANT TO AGAIN POINT OUT THAT BIO KIN HAS YET TO DEVELOP ANY
"PRODUCT." RATHER, THE COMPANY HAS OBTAINED THE RIGHTS TO USE TWO
TECHNOLOGIES, GRANTED BY WAY OF THE AGREEMENTS WITH BIOCUREX AND INNEXUS, AS
A FOUNDATION FROM WHICH TO DEVELOP POTENTIAL THE THERAPEUTICS AND DIAGNOSTICS
WHICH ARE CRITICAL TO THE SUCCESS OF BIO KIN.
ADDITIONAL RISKS OF BIO KIN AS BIOTECHNOLOGY COMPANY
IF A PRODUCT IS DEVELOPED, IT WILL HAVE TO RECEIVE REGULATORY APPROVAL PRIOR
TO GOING TO MARKET; IF WE DO NOT RECEIVE REGULATORY APPROVAL, WE WILL NOT BE
ABLE TO MANUFACTURE AND MARKET OUR PRODUCTS
We have no current product(s) and no product has yet entered beginning or
final clinical testing. We will be unable to manufacture and market our
products without required regulatory approvals in the United States and other
countries. The United States government and governments of other countries
will extensively regulate many aspects of our products, including:
- testing
- manufacturing
- promotion and marketing, and
- exporting.
In the United States, the Food and Drug Administration regulates
pharmaceutical products under the Federal Food, Drug, and Cosmetic Act and
other laws, including, in the case of biologics, the Public Health Service
Act. State regulations may also affect our proposed products.
EVEN IF WE ARE ABLE TO SUCCESSFULLY DEVEOP A POTENTIAL PRODUCT OR PRODUCTS,
OUR PRODUCTS WILL REQUIRE SIGNIFICANT ADDITIONAL DEVELOPMENT, INCLUDING
EXTENSIVE PRECLINICAL AND CLINICAL TESTING.
The FDA has substantial discretion in both the product approval process and
manufacturing facility approval process and we cannot predict at what point,
or whether, the FDA will be satisfied with any submissions we may have or
whether the FDA will raise questions which may be material and delay or
preclude product approval or manufacturing facility approval.
Given that regulatory review is an interactive and continuous process, BIO
KIN may adopt a policy of limiting announcements and comments upon the
specific details of the ongoing regulatory review of its products, subject to
its obligations under the securities laws, until definitive action is taken.
BECAUSE WE HAVE YET TO DEVELOP OUR PRODUCTS AND THEY ARE STILL IN DEVELOPMENT
AND WE HAVE LIMITED CASH AND INVESTMENT BALANCES, WE WILL REQUIRE SUBSTANTIAL
ADDITIONAL FUNDS; WE CANNOT BE CERTAIN THAT FUNDS WILL BE AVAILABLE AND, IF
NOT AVAILABLE, WE MAY HAVE TO TAKE ACTIONS WHICH COULD ADVERSELY AFFECT YOUR
RIGHTS.
If adequate funds are not available, we may have to dilute or otherwise
adversely affect the rights of existing shareholders, curtail or cease
operations or, in extreme circumstances, file for bankruptcy protection. We
expect to spend substantial funds in connection with:
- research and development relating to our products and production
technologies;
- scale-up of our production capabilities;
- extensive human clinical trials; and
- protection of our intellectual property.
We continue to evaluate strategic alliances, potential partnerships and
financing arrangements which would further strengthen our competitive
position and provide additional funding. However, we cannot assure you that:
- operations will generate meaningful funds;
- additional agreements for product development funding can be reached;
- strategic alliances can be negotiated; or
- adequate additional financing will be available for us to finance our own
development on acceptable terms, if at all.
BECAUSE ALL OF OUR PRODUCTS HAVE YET TO BE DEVELOPED, WE EXPECT TO SUSTAIN
LOSSES IN THE FUTURE.
Because all of our products are yet to be developed, our marketing experience
and expertise are limited. Consequently, we may be dependent to a large
extent upon the marketing capabilities of partners we have yet to find. As of
the date of this prospectus, we have not entered into any marketing
agreements regarding our products. Although we continue to evaluate strategic
alliances and potential partnerships, we cannot predict whether or when any
such alliances or partnerships will be entered into.
IF WE DO BUSINESS INTERNATIONALLY, WE WILL BE SUBJECT TO ADDITIONAL
POLITICAL, ECONOMIC AND REGULATORY UNCERTAINTIES.
We cannot assure you that we will be able to successfully operate in any
foreign market. We believe that, because the pharmaceutical industry is
global in nature, international activities will be a significant part of our
future business activities and that, when and if we are able to generate
income, a substantial portion of that income will be derived from product
sales and other activities outside the United States. Foreign regulatory
agencies often establish standards different from those in the United States,
and an inability to obtain foreign regulatory approvals on a timely basis
could have an adverse effect on our business. International operations may be
limited or disrupted by:
- imposition of government controls;
- export license requirements;
- political or economic instability;
- trade restrictions;
- changes in tariffs;
- restrictions on repatriating profits;
- taxation; and
- difficulties in staffing and managing international operations.
Also, our business may be adversely affected by fluctuations in currency
exchange rates.
BECAUSE WE MAY ENGAGE IN HUMAN TESTING, WE MAY BE EXPOSED TO AN INCREASED
RISK OF PRODUCT LIABILITY CLAIMS, WHICH WOULD HAVE AN ADVERSE EFFECT ON OUR
BUSINESS.
The testing and marketing of medical products entails an inherent risk of
allegations of product liability. We currently have no insurance for our
clinical trials. We may seek to obtain insurance, if needed, if and when our
products warrant; however, we cannot assure you that adequate insurance
coverage will be available or be available at acceptable costs or that a
product liability claim would not materially adversely affect our business.
BECAUSE WE HAVE NO HISTORY OF PROFITABILITY AND BECAUSE THE BIOTECHNOLOGY
SECTOR HAS BEEN CHARACTERIZED BY HIGHLY VOLATILE STOCK PRICES, ANNOUNCEMENTS
WE MAKE AND GENERAL MARKET CONDITIONS FOR BIOTECHNOLOGY STOCKS COULD RESULT
IN A SUDDEN CHANGE IN THE VALUE OF OUR STOCK.
As a biopharmaceutical company, we will likely experience significant
volatility in our common shares. Fluctuations in our operating results and
general market conditions for biotechnology stocks could have a significant
impact on the volatility of our common share price. Factors contributing to
such volatility include:
- results of preclinical studies and clinical trials;
- evidence of the safety or effectiveness of our products;
- announcements of new collaborations;
- failure to enter into collaborations;
- our funding requirements and the terms of our financing arrangements;
- announcements of technological innovations or new indications for our
products;
- government regulations;
- developments in patent or other proprietary rights; and
- developments regarding other participants in the biotechnology and
pharmaceutical industries.
OUR BUSINESS IS AT AN EARLY STAGE OF DEVELOPMENT AND SUBJECT TO MANY RISKS
AND COSTS.
Our business is at an early stage of development. Our ability to produce any
products that progress to and through clinical trials is subject to our
ability to, among other things:
- to have success with our research and development efforts;
- select therapeutic compounds for development;
- obtain the required regulatory approvals; and
- manufacture and market resulting products.
Our products will require significant preclinical and clinical testing prior
to regulatory approval in the United States and elsewhere. Our efforts may
not result in a product that can be marketed. Because of the significant
scientific, regulatory and commercial milestones that must be reached for any
of our research programs to be successful, any program may be abandoned, even
after significant resources have been expended.
We may never receive material revenues from product sales or if we do receive
revenues, such revenues may not be sufficient to continue or expand our
research activities and otherwise sustain our operations.
WE WILL NEED ADDITIONAL CAPITAL TO CONDUCT OUR OPERATIONS AND DEVELOP OUR
PRODUCTS, AND OUR ABILITY TO OBTAIN THE NECESSARY FUNDING IS UNCERTAIN.
We intend to acquire additional funding through strategic collaborations,
public or private equity financings, capital lease transactions or other
financing sources that may be available. Additional financing may not be
available on acceptable terms, or at all. Additional equity financings could
result in significant dilution to stockholders. Further, in the event that
additional funds are obtained through arrangements with collaborative
partners, these arrangements may require us to relinquish rights to some of
our technologies, product candidates or products that we would otherwise seek
to develop and commercialize ourselves. If sufficient capital is not
available, we may be required to delay, reduce the scope of or eliminate one
or more of our research or development programs, each of which could have a
material adverse effect on our business.
ANY PRODUCTS THAT MAY BE DEVELOPED MAY HAVE SERIOUS SIDE EFFECTS.
Compounds that we may identify and develop for use as therapeutics may prove
to have undesirable and unintended side effects or other characteristics
adversely affecting its safety or efficacy that would likely prevent or limit
its commercial use. Accordingly, it may not be appropriate for us to proceed
with clinical development, to obtain regulatory approval, or to market
therapeutics and diagnostics for the treatment of cancer. If we abandon our
research for cancer treatment for any of these reasons, or for other reasons,
our business prospects would be materially and adversely affected.
THE PHARMACEUTICAL AND BIOTECHNOLOGY INDUSTRIES ARE INTENSELY COMPETITIVE.
We believe that other pharmaceutical and biotechnology companies and research
organizations currently engage in or have in the past engaged in efforts
related to protein-based therapeutics for cancer. In addition, other products
and therapies that could compete directly with the products that we are
seeking to develop and market currently exist or are being developed by
pharmaceutical and biopharmaceutical companies and by academic and other
research organizations.
Many companies are also developing alternative therapies to treat cancer and,
in this regard, are competitors of ours. Many of the pharmaceutical companies
developing and marketing these competing products have significantly greater
financial resources and expertise than we do in:
- research and development;
- manufacturing;
- preclinical and clinical testing;
- obtaining regulatory approvals; and
- marketing.
Smaller companies may also prove to be significant competitors, particularly
through collaborative arrangements with large and established companies.
Academic institutions, government agencies and other public and private
research organizations may also conduct research, seek patent protection and
establish collaborative arrangements for research, clinical development and
marketing of products similar to ours. These companies and institutions
compete with us in recruiting and retaining qualified scientific and
management personnel as well as in acquiring technologies complementary to
our programs. There is also competition for access to libraries of compounds
to use for screening. Should we fail to secure and maintain access to
sufficiently broad libraries of compounds for screening potential targets,
our business would be materially harmed.
In addition to the above factors, we expect to face competition in the
following areas:
- product efficacy and safety;
- the timing and scope of regulatory consents;
- availability of resources, including personnel;
- reimbursement coverage;
- price; and
- patent position, including potentially dominant patent positions of
others.
As a result of the foregoing, our competitors may develop more effective or
more affordable products, or achieve earlier patent protection or product
commercialization than we do. Most significantly, competitive products may
render the products that we develop obsolete.
ENTRY INTO CLINICAL TRIALS WITH ONE OR MORE PRODUCTS MAY NOT RESULT IN ANY
COMMERCIALLY VIABLE PRODUCTS.
We may not generate any significant revenues from product sales for a period
of several years. We may never generate revenues from product sales or become
profitable because of a variety of risks inherent in our business, including
risks that:
- clinical trials may not demonstrate the safety and efficacy of our
products;
- completion of clinical trials may be delayed, or costs of clinical trials
may exceed anticipated amounts;
- we may not be able to obtain regulatory approval of our products, or may
experience delays in obtaining such approvals;
- we may not be able to manufacture our drugs economically on a commercial
scale;
- we and our licensees may not be able to successfully market our products;
- physicians may not prescribe our products, or patients may not accept such
products; and
- others may have proprietary rights which prevent us from marketing our
products.
IMPAIRMENT OF OUR INTELLECTUAL PROPERTY RIGHTS MAY LIMIT OUR ABILITY TO
PURSUE THE DEVELOPMENT OF OUR INTENDED TECHNOLOGIES AND PRODUCTS.
Our success will depend on our ability to obtain and enforce patents for our
discoveries and licenses; however, legal principles for biotechnology patents
in the United States and in other countries are not firmly established and
the extent to which we will be able to obtain patent coverage is uncertain.
Protection of our proprietary compounds and technology is critically
important to our business. Our success will depend in part on our ability to
obtain and enforce our patents and maintain trade secrets, both in the United
States and in other countries. The patent positions of pharmaceutical and
biopharmaceutical companies, including ours, are highly uncertain and involve
complex legal and technical questions. We may not continue to develop
products or processes that are patentable, and it is possible that patents
will not issue from any of our pending applications, including allowed patent
applications. Further, our current patents, or patents that issue on pending
applications, may be challenged, invalidated or circumvented, and our current
or future patent rights may not provide proprietary protection or other
advantages to us. In the event that we are unsuccessful in obtaining and
enforcing patents, our business would be negatively impacted.
Patent applications in the United States are maintained in secrecy until
patents issue. Publication of discoveries in the scientific or patent
literature tends to lag behind actual discoveries by at least several months
and sometimes several years. Therefore, the persons or entities that we or
our licensors name as inventors in our patents and patent applications may
not have been the first to invent the inventions disclosed in the patent
applications or patents, or file patent applications for these inventions. As
a result, we may not be able to obtain patents from discoveries that we
otherwise would consider patentable and that we consider to be extremely
significant to our future success.
Patent prosecution or litigation may also be necessary to obtain patents,
enforce any patents issued or licensed to us or to determine the scope and
validity of our proprietary rights or the proprietary rights of another. We
may not be successful in any patent prosecution or litigation. Patent
prosecution and litigation in general can be extremely expensive and time
consuming, even if the outcome is favorable to us. An adverse outcome in a
patent prosecution, litigation or any other proceeding in a court or patent
office could subject our business to significant liabilities to other
parties, require disputed rights to be licensed from other parties or require
us to cease using the disputed technology.
IF WE FAIL TO MEET OUR OBLIGATIONS UNDER LICENSE AGREEMENTS, WE MAY FACE LOSS
OF OUR RIGHTS TO KEY TECHNOLOGIES ON WHICH OUR BUSINESS DEPENDS.
Our business depends on our core technologies, each of which is based on
patents and/or technologies licensed from third parties. Those third-party
license agreements impose obligations on us, such as payment obligations and
obligations to diligently pursue development of commercial products under the
licensed patents. If a licensor believes that we have failed to meet our
obligations under a license agreement, the licensor could seek to limit or
terminate our license rights, which would most likely lead to costly and
time-consuming litigation. During the period of any such litigation our
ability to carry out the development and commercialization of potential
products could be significantly and negatively affected. If our license
rights were ultimately lost, our ability to carry on our business based on
the affected technology platform would be severely affected.
WE MAY BE SUBJECT TO LITIGATION THAT WILL BE COSTLY TO DEFEND OR PURSUE AND
UNCERTAIN IN ITS OUTCOME.
Our business may bring us into conflict with our licensees, licensors, or
others with whom we have contractual or other business relationships, or with
others whose interests differ from ours. If we are unable to resolve those
conflicts on terms that are satisfactory to all parties, we may become
involved in litigation brought by or against us. That litigation is likely to
be expensive and may require a significant amount of our time and attention,
at the expense of other aspects of our business. The outcome of litigation is
always uncertain, and in some cases could include judgments against us that
require us to pay damages, enjoin us from certain activities, or otherwise
affect our legal or contractual rights, which could have a significant effect
on our business.
Our commercial success depends significantly on our ability to operate
without infringing patents and proprietary rights of others. Our technologies
may infringe the patents or proprietary rights of others. In addition, we may
become aware of discoveries and technology controlled by third parties that
are advantageous to our research programs. In the event our technologies do
infringe on the rights of others or we require the use of discoveries and
technology controlled by third parties, we may be prevented from pursuing
research, development or commercialization of potential products or may be
required to obtain licenses to these patents or other proprietary rights or
develop or obtain alternative technologies. We may not be able to obtain
alternative technologies or any required license on commercially favorable
terms, if at all. If we do not obtain the necessary licenses or alternative
technologies, we may be delayed or prevented from pursuing the development of
some potential products. Our failure to obtain alternative technologies or a
license to any technology that we may require to develop or commercialize our
products will significantly and negatively affect our business.
Patent law relating to the scope and enforceability of claims in the
technology fields in which we operate is still evolving, and the degree of
future protection for any of cur proprietary rights is highly uncertain. In
this regard, patents may not issue from any of our patent applications or
patents may be found to be invalid by a court. In addition, our success may
become dependent on our ability to obtain licenses for using the patented
discoveries of others. Furthermore, others may independently develop similar
or alternative technologies, duplicate cur technologies or design around the
patented technologies we have developed. In the event that we are unable to
acquire licenses to critical technologies that we cannot patent ourselves, we
may be required to expend significant time and resources to develop
alternative technology, and we may not be successful in this regard. If we
cannot acquire or develop the necessary technology, we may be prevented from
pursuing some of our business objectives. Any of these events could
materially harm our business.
MUCH OF THE INFORMATION AND KNOW-HOW THAT IS CRITICAL TO OUR BUSINESS MAY NOT
BE PATENTABLE AND WE MAY NOT BE ABLE TO PREVENT OTHERS FROM OBTAINING THIS
INFORMATION AND ESTABLISHING SIMILAR ENTERPRISES.
We may sometimes rely on trade secrets to protect our proprietary technology,
especially in circumstances in which patent protection is not believed to be
appropriate or obtainable. We attempt to protect our proprietary technology
in part by confidentiality agreements with our employees, consultants,
collaborators and contractors. We cannot assure you that these agreements
will not be breached, that we would have adequate remedies for any breach, or
that our trade secrets will not otherwise become known or be independently
discovered, any of which would harm our business significantly.
WE DEPEND ON OUR COLLABORATORS TO HELP US COMPLETE THE PROCESS OF DEVELOPING
AND TESTING OUR PRODUCTS AND OUR ABILITY TO DEVELOP AND COMMERCIALIZE
PRODUCTS MAY BE IMPAIRED OR DELAYED IF OUR COLLABORATIVE PARTNERSHIPS ARE
UNSUCCESSFUL.
Our strategy for the development, clinical testing and commercialization of
our products requires entering into collaborations with corporate partners,
licensors, licensees and others. We are dependent upon the subsequent success
of these other parties in performing their respective responsibilities and
the continued cooperation of our partners. Our collaborators may not
cooperate with us or perform their obligations under our agreements with
them. We cannot control the amount and timing of our collaborators~ resources
that will be devoted to our research activities related to our collaborative
agreements with them. Our collaborators may choose to pursue existing or
alternative technologies in preference to those being developed in
collaboration with us.
We rely extensively and have relationships with scientific advisors at
academic and other institutions, some of whom conduct research at our
request. These scientific advisors are not our employees and may have
commitments to, or consulting or advisory contracts with, other entities that
may limit their availability to us. We have limited control over the
activities of these advisors and, except as otherwise required by our
collaboration and consulting agreements, can expect only limited amounts of
their time to be dedicated to our activities. If our scientific advisors are
unable or refuse to contribute to the development of any of our potential
discoveries, our ability to generate significant advances in our technologies
will be significantly harmed.
THE LOSS OF KEY PERSONNEL COULD SLOW OUR ABILITY TO CONDUCT RESEARCH AND
DEVELOP PRODUCTS.
Our future success depends to a significant extent on the skills, experience
and efforts of our executive officers and key members of our partners and
scientific staff. We, or our partners, may be unable to retain our current
personnel or attract or assimilate other highly qualified management and
scientific personnel in the future. The loss of any or all of these
individuals could harm our business and might significantly delay or prevent
the achievement of research, development or business objectives.
We also rely on consultants and advisors, including the members of our
Scientific Advisory Board, who assist us in formulating our research and
development strategy. We may not be able to attract and retain these
individuals on acceptable terms. Failure to do so would materially harm our
business.
WE MAY NOT BE ABLE TO OBTAIN OR MAINTAIN SUFFICIENT INSURANCE ON COMMERCIALLY
REASONABLE TERMS OR WITH ADEQUATE COVERAGE AGAINST POTENTIAL LIABILITIES IN
ORDER TO PROTECT OURSELVES AGAINST PRODUCT LIABILITY CLAIMS.
Our business exposes us to potential product liability risks that are
inherent in the testing, manufacturing and marketing of human therapeutic and
diagnostic products. We may become subject to product liability claims if the
use of our products is alleged to have injured subjects or patients. This
risk exists for products tested in human clinical trials as well as products
that are sold commercially. We currently have no clinical trial liability
insurance and we may not be able to obtain and maintain this type of
insurance for any of our clinical trials. In addition, product liability
insurance is becoming increasingly expensive. As a result, we may not be able
to obtain or maintain product liability insurance in the future on acceptable
terms or with adequate coverage against potential liabilities which could
have a material adverse effect on us.
BECAUSE WE, OR OUR COLLABORATORS, MUST OBTAIN REGULATORY APPROVAL TO MARKET
OUR PRODUCTS IN THE UNITED STATES AND FOREIGN JURISDICTIONS, WE CANNOT
PREDICT WHETHER OR WHEN WE WILL BE PERMITTED TO COMMERCIALIZE OUR PRODUCTS.
Federal, state and local governments in the United States and governments in
other countries have significant regulations in place that govern many of our
activities. The preclinical testing and clinical trials of the products that
we develop ourselves or that our collaborators develop are subject to
extensive government regulation and may prevent us from creating commercially
viable products from our discoveries. In addition, the sale by us, or our
collaborators, of any commercially viable product will be subject to
government regulation from several standpoints, including the processes of:
- manufacturing;
- advertising and promoting;
- selling and marketing;
- labeling; and
- distributing.
WE MAY NOT OBTAIN REGULATORY APPROVAL FOR THE PRODUCTS WE DEVELOP AND OUR
COLLABORATORS MAY NOT OBTAIN REGULATORY APPROVAL FOR THE PRODUCTS THEY
DEVELOP. REGULATORY APPROVAL MAY ALSO ENTAIL LIMITATIONS ON THE INDICATED
USES OF A PROPOSED PRODUCT. BECAUSE CERTAIN OF OUR PRODUCT CANDIDATES INVOLVE
THE APPLICATION OF NEW TECHNOLOGIES AND MAY BE BASED UPON A NEW THERAPEUTIC
APPROACH, SUCH PRODUCTS MAY BE SUBJECT TO SUBSTANTIAL ADDITIONAL REVIEW BY
VARIOUS GOVERNMENT REGULATORY AUTHORITIES, AND, AS A RESULT, WE MAY OBTAIN
REGULATORY APPROVALS FOR SUCH PRODUCTS MORE SLOWLY THAN FOR PRODUCTS BASED
UPON MORE CONVENTIONAL TECHNOLOGIES. IF, AND TO THE EXTENT THAT, WE ARE
UNABLE TO COMPLY WITH THESE REGULATIONS, OUR ABILITY TO EARN REVENUES WILL BE
MATERIALLY AND NEGATIVELY IMPACTED.
The regulatory process, particularly for biopharmaceutical products like
ours, is uncertain, can take many years and requires the expenditure of
substantial resources. Any product that we, or our collaborative partners,
develop must receive all relevant regulatory agency approvals or clearances,
if any, before it may be marketed in the United States or other countries.
Generally, biological drugs and non-biological drugs are regulated more
rigorously than medical devices. In particular, human pharmaceutical
therapeutic products are subject to rigorous preclinical and clinical testing
and other requirements by the Food and Drug Administration in the United
States and similar health authorities in foreign countries. The regulatory
process, which includes extensive preclinical testing and clinical trials of
each product in order to establish its safety and efficacy, is uncertain, can
take many years and requires the expenditure of substantial resources.
Data obtained from preclinical and clinical activities is susceptible to
varying interpretations t at could delay, limit or prevent regulatory agency
approvals or clearances. In addition, delays or rejections may be encountered
as a result of changes in regulatory agency policy during the period of
product development and/or the period of review of any application for
regulatory agency approval or clearance for a product. Delays in obtaining
regulatory agency approvals or clearances could:
- significantly harm the marketing of any products that we or our
collaborators develop;
- impose costly procedures upon our activities or the activities of our
collaborators;
- diminish any critical advantages that we or our collaborative partners
may attain; or
- adversely affect our ability to receive royalties and generate revenues
and profits.
Even if we commit the necessary time and resources, economic and otherwise,
the required regulatory agency approvals or clearances may not be obtained
for any products developed by or in collaboration with us. If regulatory
agency approval or clearance for a new product is obtained, this approval or
clearance may entail limitations on the indicated uses for which it may be
marketed that could limit the potential commercial use of the product.
Furthermore, approved products and their manufacturers are subject to
continual review, and discovery of previously unknown problems with a product
or its manufacturer may result in restrictions on the product or
manufacturer, including withdrawal of the product from the market. Failure to
comply with regulatory requirements can result in severe civil and criminal
penalties, including but not limited to:
- recall or seizure of products;
- injunction against manufacture, distribution, sales and marketing; and
- criminal prosecution.
The imposition of any of these penalties could significantly impair our
business, financial condition and results of operations.
TO BE SUCCESSFUL, OUR PRODUCTS MUST BE ACCEPTED BY THE HEALTH CARE COMMUNITY,
WHICH CAN BE VERY SLOW TO ADOPT OR UNRECEPTIVE TO NEW TECHNOLOGIES AND
PRODUCTS.
Our products and those developed by our collaborative partners, if approved
for marketing, may not achieve market acceptance since physicians, patients
or the medical community in general may decide to not accept and utilize
these products. The products that we are attempting to develop may represent
substantial departures from established treatment methods, drugs, and
therapies manufactured and marketed by major pharmaceutical companies. The
degree of market acceptance of any of our developed products will depend on a
number of factors, including:
- our establishment and demonstration to the medical community of the
clinical efficacy and safety of our product candidates;
- our ability to create products that are superior to alternatives
currently on the market;
- our ability to establish in the medical community the potential advantage
of our treatments over alternative treatment methods; and
- reimbursement policies of government and third-party payors.
If the health care community does not accept our products for any of the
foregoing reasons, or for any other reason, our business would be materially
harmed.
THE REIMBURSEMENT STATUS OF NEWLY-APPROVED HEALTH CARE PRODUCTS IS UNCERTAIN
AND FAILURE TO OBTAIN REIMBURSEMENT APPROVAL COULD SEVERELY LIMIT THE USE OF
OUR PRODUCTS.
Significant uncertainty exists as to the reimbursement status of newly
approved health care products, including pharmaceuticals. If we fail to
generate adequate third party reimbursement for the users of our potential
products and treatments, then we may be unable to maintain price levels
sufficient to realize an appropriate return on our investment in product
development.
In both domestic and foreign markets, sales of our products, if any, will
depend in part on the availability of reimbursement from third-party payors,
examples of which include:
- government health administration authorities;
- private health insurers;
- health maintenance organizations; and
- pharmacy benefit management companies.
Both federal and state governments in the United States and foreign
governments continue to propose and pass legislation designed to contain or
reduce the cost of health care through various means. Legislation and
regulations affecting the pricing of pharmaceuticals and other medical
products may change or be adopted before any of our potential products are
approved for marketing. Cost control initiatives could decrease the price
that we receive for any product we may develop in the future. In addition,
third-party payors are increasingly challenging the price and cost-
effectiveness of medical products and services and any of our potential
products and treatments may ultimately not be considered cost effective by
these third parties. Any of these initiatives or developments could
materially harm our business.
ITEM 2.
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STATEMENT THAT PROXIES ARE NOT SOLICITED
----------------------------------------
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY
ITEM 3.
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INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
No director, executive officer, associate of any director, executive officer
or nominee or any other person has any substantial interest, direct or
indirect, by security holdings or otherwise, in the Actions by Written
Consent and the proposed amendment to RJV's Articles of Incorporation or in
any action covered by the related resolutions adopted by the Board of
Directors, which is not shared by all other stockholders.
ITEM 4.
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PROPOSALS BY SECURITY HOLDERS
Under the SEC's proxy statement rules, shareholder proposals that meet
specified conditions may be included in our proxy statement and proxy for our
2004 annual meeting. Shareholders intending to present a proposal at our 2004
annual meeting must submit the proposal no later than December 20, 2003 for
the proposal to be considered for inclusion in our proxy materials for that
meeting. In addition, shareholders desiring to bring proposals before the
annual meeting that will not be included in the proxy materials must do so in
accordance with the advance notice provisions and other applicable provisions
set forth in our bylaws. Our bylaws provide, among other things, that notice
of the proposed business must be received by the Company at least 90 days and
not more than 120 days prior to the anniversary date of the prior year's
annual meeting. Accordingly, shareholders who intend to present proposals at
the 2004 annual meeting that will not be included in our proxy materials must
provide to the Company written notice of the business they wish to propose no
later than February 2004 and no sooner than January 2004, assuming the annual
meeting is held in May 2004. However, our timely receipt of a proposal by a
qualified shareholder will not guarantee the proposal's inclusion in our
proxy materials or presentation at the 2004 annual meeting, because there are
other requirements in the proxy rules. We reserve the right to reject, rule
out of order, or take other appropriate action with respect to any proposal
that does not comply with all applicable requirements of the SEC's proxy
statements rules, state law, and or bylaws.
Shareholder proposals should be directed to our President, RJV Network, Inc.,
10655 NE 4th Street, Suite 300, Bellevue, WA 98004.
ITEM 5.
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DELIVERY OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESS
Be advised that only one Information Statement will be delivered to any
security holders sharing an address unless RJV has received contrary
instructions from one or more of those security holders.
Should any security holder sharing an address desire to receive a separate
copy of this Information Statement, the Company will deliver a separate copy
promptly upon written or oral request by the security holder. Any such
requests should be directed to our President at RJV Network, Inc., 10655 NE
4th Street, Suite 300, Bellevue, WA 98004, or by way of a phone call to (425)
267-1194 requesting such mailing.
In addition, if security holders sharing an address are receiving multiple
copies of the materials and desire to receive only one copy thereof, they
should also notify the Company, per the above instructions, and request that
only one copy be provided.
ADDITIONAL INFORMATION
----------------------
Additional information concerning RJV, including its Form 10-KSB statement
and previously filed information regarding the Action as filed with the
Company's PRE14A filings , which have been filed with the Securities and
Exchange Commission, may be accessed through the EDGAR archives, at
www.sec.gov and are incorporated herein by reference.
EXHIBIT A
---------
ACQUISITION AGREEMENT AND PLAN OF REORGANIZATION
This Acquisition Agreement ("Agreement"), effective as of January 1, 2003, is
made by and between RJV Network, Inc. ("RJV" or "BUYER"), the acquiring
entity, on the one hand, and Bio Kinetix Research, Inc. ("BIO-KIN"), the
entity being acquired, and all the shareholders of BIO-KIN (the "SELLERS" or
"BIO-KIN Shareholder(s)"), as listed on attached Exhibit A, on the other
hand.
Recitals
WHEREAS, BIO-KIN has developed certain business plans, strategies, and
strategic business relationships (the "BIO-KIN Business Plan"); and WHEREAS,
BIO-KIN and the SELLERS are desirous to merge BIO-KIN (the "Merger") with a
company that is listed on the OTC Bulletin Board ("OTC-BB") and is
established as a public reporting company with the United States Securities
and Exchange Commission ("SEC") in a transaction meant to qualify as a "tax-
free" reorganization under section 368 (a) (1) (A) of the Internal Revenue
Code of 1986, as amended; and,
WHEREAS, RJV is a publicly traded company listed on the OTC-BB that has
established itself as a reporting company with the SEC; and,
WHEREAS, RJV is desirous of entering into a reverse acquisition of BIO-KIN in
order to pursue the BIO-KIN Business Plan thus far established; and,
WHEREAS, the parties hereto desire to make certain representations,
warranties, covenants, and agreements in connection with the Merger and also
to prescribed conditions to the Merger.
Agreement
NOW, WHEREFORE, in consideration of the representations, warranties,
agreements, and mutual covenants set forth below, and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties
hereto agree as follows.
1. EXCHANGE OF STOCK
1.1 Number of Shares. Each BIO-KIN Shareholder agrees to transfer to RJV at
the Closing (defined below), the number of shares of common stock of BIO-KIN,
no par value per share, shown opposite his or her name in Exhibit A in
exchange for the number of common stock of RJV (RJV Shares), $0.0000l3 par
value, as shown against his name in Exhibit A. The aggregate number of
shares in BIO-KIN (BIO-KIN Shares) to be transferred to RJV shall be
16,000,000 and the aggregate number of RJV Shares to be issued to BIO-KIN
Shareholders in exchange for the BIO-KIN Shares shall be 16,000,000 RJV
Shares, $0.0000l3 par value, as provided in paragraph 1.5 below.
1.2 Exchange of Certificates. Each and every holder of an outstanding
certificate or certificates theretofore representing shares of BIO-KIN common
stock shall surrender such certificate(s) for cancellation to RJV, and shall
receive in exchange a certificate or certificates representing the number of
full shares of RJV Shares into which the shares of BIO-KIN common stock
represented by the certificate or certificates so surrendered shall have been
converted. The transfer of BIO-KIN shares by the BIO-KIN Shareholder(s) shall
be effected by the delivery to RJV at the Closing of certificates
representing the transferred shares endorsed in blank or accompanied by stock
powers executed in blank. The BIO-KIN Shares transferred herein shall
represent all the issued and outstanding shares of BIO-KIN, including all
warrants, options, stock rights and all other securities of BIO-KIN owned by
the Shareholder, if any.
1.3 Fractional Shares. Fractional shares of RJV Shares shall not be issued,
but in lieu thereof RJV shall round up fractional shares to the next highest
whole number.
1.4 Further Assurances. At the Closing and from time to time thereafter, the
BIO-KIN Shareholders shall execute such additional instruments and take such
other action as may be required to sell, transfer, and assign the transferred
stock to RJV and to confirm RJV' title thereto.
1.5 Securities Exchanged. The securities of BIO-KIN owned by each BIO-KIN
Shareholder, and the relative securities of RJV for which they will be
exchanged, as at the date hereof, are set out in Exhibit A
1.6 Shares Cancelled. All but 20,000 shares, in aggregate, of the total RJV
common shares held by the current officers and directors of RJV shall be
cancelled at the Closing.
1.7 Securities Outstanding After Closing. Immediately following the Closing,
there will be issued and outstanding in RJV, 21,738,750 common shares, par
value $0.00013. The respective shareholdings of the directors, shareholders
each holding more than 10% of the total issued and paid-up share capital of
RJV (Affiliate), and the key management employees of BIO-KIN at Closing will
be as set out in Exhibit 3.
2. EXCHANGE OF OTHER SECURITIES.
2.1 Save in respect of the BIO-KIN Shares, there are no outstanding warrants,
options, stock rights, or other securities of BIO-KIN that are subject to
exchange under Sections 1.1 and 1.5.
3. CLOSING.
3.1 The closing contemplated herein (Closing) shall be held on such date
falling on or before April 30, 2003 as the parties may agree at the offices
of BIO-KIN at Suite 1500-885 West Georgia Street, Vancouver, BC V6C 3E8,
unless another place or time is agreed upon in writing by the parties without
requiring the meeting of the parties hereof. All proceedings to be taken and
all documents to be executed at the Closing shall be deemed to have been
taken, delivered and executed simultaneously, and no proceeding shall be
deemed taken nor documents deemed executed or delivered until all have been
taken, delivered and executed. The date of Closing may be accelerated or
extended by agreement of the parties.
3.2 Any copy, facsimile telecommunication or other reliable reproduction of
the writing or transmission required by this Agreement or any signature
required thereon may be used in lieu of an original writing or transmission
or signature for any and all purposes for which the original could be used,
provided that such copy, facsimile telecommunication or other reproduction
shall be a complete reproduction of the entire original writing or
transmission or original signature.
3.3 The Merger. Subject to the terms and conditions of this Agreement, upon
the Closing BIC-KIN shall be acquired by and become a wholly owned subsidiary
of RJV in accordance with the General Corporate Law of the State of Nevada.
3.4 Filings. Upon the Closing, RJV will file, or caused to be filed, if and
where necessary, articles of merger and make and/or cause to be made all
other filings or recordings required by Nevada Law in connection with the
Merger with the Secretary of State of Nevada, which articles of merger and
other filings and recordings shall be in the form required by and executed in
accordance with the applicable provisions of Nevada Law. The Merger shall
become effective at the time the articles of merger for such Merger are duly
filed with the Secretary of State of Nevada or at such later time as may be
designated in the articles of merger, if any
3.5 Directors and Officers. From and after the Closing, until successors are
duly elected or appointed and qualified in accordance with applicable law,
Dr. John Todd, Mike Muzylowski, Dick Richards, and Fred Whitaker shall be the
elected directors of RJV.
3.6 No Roll-Back of Shares. From and after Closing, RJV shall not roll-back
or reverse-split its shares for a period two years without the approval of
shareholders representing 100% of the then issued and outstanding shares.
3.7 No Registration of Shares for Sale. For a period of one year from the
date of Closing, RJV shall not register, or have registered on its behalf,
with the SEC, any shares of RJV (or the Surviving Entity) common stock for
public sale.
4. UNEXCHANGED CERTIFICATES.
Until surrendered, each outstanding certificate that prior to the Closing
represented BIO-KIN common stock shall be deemed for all purposes, other than
the payment of dividends or other distributions, to evidence ownership of the
number of shares of RJV common stock into which it was converted. No dividend
or other distribution shall be paid to the holders of certificates of BIO-KIN
common stock until presented for exchange at which time any outstanding
dividends or other distributions shall be paid.
5. REPRESENTATIONS AND WARRANTIES OF BIO-KIN BIO-KIN represents and warrants
the following:
5.1 Corporate Status. BIO-KIN is a corporation duly organized, validly
existing, and in good standing under the laws of the Province of Alberta,
Canada and is licensed or qualified as a foreign corporation in all
jurisdictions in which it carries on business and in which the nature of its
business or the character or ownership of its properties makes such licensing
or qualification necessary
5.2 Capitalization. The authorized capital stock of BIO-KIN consists of an
unlimited number of shares of common stock, no par value, of which 16,000,000
shares are issued and outstanding, all duly authorized, validly issued, fully
paid and non-assessable. BIO-KIN has not issued or granted, or agreed to
issue or grant, any warrants, options, stock rights or other securities.
5.3 Subsidiaries. BIO-KIN holds interest in no subsidiaries.
5.4 Financial Statements. All financial statements of BIO-KIN from its
inception to and including the close as of December 31, 2002, and including
audited financial statements if available, were, or will be by the Close,
furnished to RJV and such statements accurately and fairly present the
financial position of BIO-KIN as of the respective dates of such financial
statements, and the results of its operations for the respective periods
indicated computed on the basis used for filing BIO-KIN's federal tax
returns, consistently applied. BIO-KIN will deliver to RJV, within 45 days
following the Closing, audited financial statements for the period from
inception through December 31, 2002.
5.5 Undisclosed Liabilities. BIO-KIN has no liabilities of any nature, except
to the extent indicated on Exhibit C, whether accrued, absolute, contingent,
or otherwise, including, without limitation, tax liabilities and interest due
or to become due.
5. Litigation. There is no litigation or proceeding pending, or to BIO-KIN's
knowledge threatened, against or relating to BIO-KIN, its properties or
business.
5.7 Contracts. BIO-KIN is not a party to any material contracts other than
those listed on Exhibit B.
5.8 No Violation. Execution of this Agreement and performance by BIO-KIN
hereunder will have been duly authorized by all requisite corporate action on
the part of BIO-KIN, and this Agreement constitutes a valid and binding
obligation of BIO-KIN, performance hereunder will not violate any provision
of any charter, bylaw, indenture, mortgage, lease, or agreement, or any
order, judgment, decree, law, or regulation to which any property of BIO-KIN
is subject or by which BIO-KIN is bound.
5.9 Taxes. BIO-KIN has filed in correct form all federal, state, and other
tax returns of every nature required to be filed by it and has paid all taxes
as shown on such returns and all assessments, fees and charges received by it
to the extent that such taxes, assessments, fees and charges have become due.
BIO-KIN has also paid all taxes which do not require the filing of returns
and which are required to be paid by it. To the extent that tax liabilities
have accrued, but have not become payable, they have been adequately
reflected as liabilities on the books of BIO-KIN and are reflected in the
financial statements furnished hereto.
5.10 Corporate Authority. BIO-KIN has full corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder, and
will deliver at the Closing a certified copy of resolutions of its board of
directors authorizing execution of this Agreement by its officers and
performance thereunder
5.11 Access to Records. From the date of this Agreement to the Closing, BIO-
KIN will, subject to the obligation of RJV in paragraph 7.15 below, (1) give
to RJV and its representatives full access during normal business hours to
all of its offices, books, records, contracts, and other corporate documents
and properties so that RJV may inspect and audit them and (2) furnish such
information concerning BIO-KIN's properties and affairs as RJV may reasonably
request.
5.12 Confidentiality. Until the Closing (and permanently if there is no
Closing), BIO-KIN and the BIO-KIN Shareholder(s) will keep confidential any
information that they obtain from RJV concerning its properties, assets, and
business. If the transactions contemplated by this Agreement are not
consummated, BIO-KIN and the BIO-KIN Shareholder will return to RJV all
written matter with respect to RJV obtained by them in connection with the
negotiation or consummation of this Agreement
5.13 Compliance with Securities Laws. Now and following the Business
Combination, as applicable, BIO-KIN represents and warrants that:
A. BIO-KIN and its affiliates will at all times observe and comply with
Federal and State securities laws, rules and regulations incident to the
issuance and trading of the securities of RJV and will take all steps
reasonably required within its control to prohibit any persons, whether or
not affiliated with BIO-KIN, from engaging in any transactions in
contravention of such laws, rules and regulations.
B. BIO-KIN and its affiliates will furnish all information and documents
concerning it and its affiliates required for the preparation and filing of a
Form 8-K and Form 10Q by RJV and will assure that such information is
complete and accurate and does not contain any material misstatement or omit
any material information. Toward that end, BIO-KIN and its affiliates will
timely provide all requested information and documents, including officers'
and directors' questionnaires.
C. BIO-KIN and its affiliates will not at any time knowingly engage in any
activity which would constitute a prohibited market manipulation of the
securities of RJV and will take all steps reasonably required within its
control to prohibit any officer, director, other affiliate, agent or employee
from engaging in such conduct.
D. For not less than 36 months following the Close, RJV will timely make all
required Federal, state and other filings necessary to allow the public
trading of the Company's securities and, if the Company's securities are then
quoted on the Stock Market or listed on any regional or national exchange,
will take all actions necessary to maintain such status for the Company's
securities.
6. REPRESENTATIONS AND WARRANTIES OF THE BIO-KIN SHAREHOLDERS.
The BIO-KIN Shareholders, represent and warrant as follows:
6.1 Title to Shares. Each BIO-KIN Shareholder is the owner, free and clear of
any liens and encumbrances, of the number of BIO-KIN shares which are listed
in Exhibit A and which he has contracted to exchange and which together
represent all the issued and outstanding shares of BIO-KIN.
6.2 Litigation. There is no litigation or proceeding pending, or to the BIO-
KIN Shareholder's knowledge threatened, against or relating to shares of BIO-
KIN held by the BIO-KIN Shareholder.
6.3 No Approval. The BIO-KIN Shareholders understand that the shares to be
received from RJV have not been approved or disapproved by the SEC or any
state securities agencies.
6.4 Investment Intent. BIO-KIN Shareholders are acquiring the RJV common
shares solely for investment for his or her own account and not with a view
to, or for, resale in connection with any distribution within the meaning of
the Securities Act, the Exchange Act, or any other applicable state
securities acts.
6.5 Speculative Nature. BIO-KIN Shareholders understand the speculative
nature and risks associated with RJV and confirm that RJV Shares are suitable
and consistent with his or her investment program and that his or her
financial position enables him or her to bear the risks of this investment
and that there may not be any public market for RJV Shares.
6.6 Information. BIO-KIN Shareholders have been provided with all the
information requested of RJV and with all information needed by them to make
an informed decision with respect to the RJV Common Shares.
7. REPRESENTATIONS AND WARRANTIES OF RJV.
RJV represents and warrants as follows:
7.l Corporate Status. RJV is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Nevada and is licensed or
qualified as a foreign corporation in all states in which the nature of its
business or the character or ownership of its properties makes such licensing
or qualification necessary.
7.2 Capitalization. The authorized capital stock of RJV consists of
75,000,000 shares of common stock, $0.000013 par value per share, of which
15,093,750 shares are issued and outstanding, all fully paid and non-
assessable.
7.3 Subsidiaries. RJV has no subsidiaries.
7.4 Public Company. RJV filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, a registration statement on
Form 10-SB and received clearance from the SEC on its FORM 10-SB during
August, 2001, voluntarily registering as a publicly reporting company.
7.5 Public Filings. RJV has timely filed all reports required to be filed by
it under Section 13 of the Securities Exchange Act of 1934.
7.6 Financial Statements. The unaudited financial statements of RJV as of
September 30, 2002 and the audited financial statements of RJV as of December
31, 2001, or such other period as are acceptable to BIO-KIN ("RJV's Financial
Statements"), and furnished to BIO-KIN are correct and fairly present the
financial condition of RJV as of the dates and for the periods involved, and
such statements were prepared in accordance with generally accepted
accounting principles consistently applied.
7.7 Undisclosed Liabilities. RJV had no liabilities of any nature except to
the extent reflected or reserved against in RJV's Financial Statements,
whether accrued, absolute, contingent, or otherwise, including, without
limitation, tax liabilities and interest due or to become due, and R3\7's
accounts receivable, if any, are collectible in accordance with the terms of
such accounts, except to the extent of the reserve therefore in RJV's
Financial Statements.
7.8 Absence of Material Changes. Between the date of RJV's Financial
Statements and the date of Closing, there have not been, except as set forth
in a list certified by the president of RJV and delivered to BIO-KIN, (1) any
changes in RJV's financial condition, assets, liabilities, or business which,
in the aggregate, have been materially adverse; (2) any damage, destruction,
or loss of or to RJV's property, whether or not covered by insurance; (3) any
declaration or payment of any dividend or other distribution in respect of
RJV's capital stock, or any direct or indirect redemption, purchase, or other
acquisition of any such stock; (4) any increase paid or agreed to in the
compensation, retirement benefits, or other commitments to employees; or (5)
any other changes which may have a material adverse effect on RJV's financial
position, condition, business or operations.
7.9 Litigation. There is no litigation or proceeding pending, or to RJV's
knowledge threatened, against or relating to RJV, its properties or business,
except as set forth in a list certified by the president of RJV and delivered
to BIO-KIN.
7.10 Contracts. RJV is not a party to any material contract other than those
listed on Exhibit D attached hereto.
7.11 No Violation. Execution of this Agreement and performance by RJV
hereunder has been, or will be by Closing, duly authorized by all requisite
corporate action on the part of RJV, and this Agreement constitutes a valid
an~ binding obligation of RJV, performance hereunder will not violate any
provision of any charter, bylaw, indenture, mortgage, lease, or agreement, or
any order, judgment, decree, law, or regulation to which any property of RJV
is subject or by which RJV is bound.
7.12 Taxes. RJV has filed in correct form all federal, state, and other tax
returns of every nature required to be filed by it and has paid all taxes as
shown on such returns and all assessments, fees and charges received by it to
the extent that such taxes, assessments, fees and charges have become due.
RJV has also paid all taxes which do not require the filing of returns and
which are required to be paid by it. To the extent that tax liabilities have
accrued, but have not become payable, they have been adequately reflected as
liabilities on the books of RJV and are reflected in the financial statements
furnished hereto. There is no action, suit, proceeding, investigation, audit
or claim now proposed or pending against or threatened, with respect to RJV
in respect of any tax obligation, there are no liens for taxes upon the
assets of RJV and RJV has not requested any extension of time within which to
file any return.
7.13 Title to Property. RJV has good and marketable title to all properties
and assets, real and personal, reflected in RJV's Financial Statements,
except as since sold or otherwise disposed of in the ordinary course of
business, and RJV's properties and assets are subject to no mortgage, pledge,
lien, or encumbrance, except for liens shown therein, with respect to which
no default exists. The properties and assets of RJV described in RJV's
Financial Statements are the only properties or assets required for RJV to
carry on its business, as such business has been represented to BIO-KIN and
the BIO-KIN Shareholders.
7.14 Corporate Authority. RJV has full corporate power and authority to enter
into this Agreement and to carry out its obligations hereunder, and will
deliver at the Closing a certified copy of resolutions of its board of
directors authorizing execution of this Agreement by its officers and
performance thereunder.
7.15 Confidentiality. Until the Closing (and permanently if there is no
Closing), RJV and its representatives will keep confidential any information,
except that information needed to be filed in 14A filings with the SEC, they
obtain from BIO-KIN concerning its properties, assets, and business. If the
transactions contemplated by this Agreement are not consummated, RJV will
return to BIO-KIN all written matter with respect to BIO-KIN obtained by it
in connection with the negotiation or consummation of this Agreement.
7.16 Investment Intent. RJV is acquiring the BIO-KIN shares to be transferred
to it under this Agreement for investment and not with a view to the sale or
distribution thereof, and RJV has no commitment or present intention to sell
or otherwise dispose of its stock.
7.17 No Approval and Access to Information. RJV understands that the shares
to be received from BIO-KIN Shareholders have not been registered with or
reviewed and approved or disapproved by the SEC or any state securities
agencies, and no federal or state securities law administrator has reviewed
or approved any disclosure or other material concerning BIO-KIN or BIO-KIN
Shares. Buyer has been provided with and reviewed all information concerning
BIO-KIN and the BIO-KIN Shares as it has deemed necessary or appropriate as a
prudent and knowledgeable investor to enable it to make an informed
investment decision concerning the BIO-KIN Shares.
7.19 Suppliers and Customers. Save as disclosed in Exhibit E, there are no
suppliers and the customers that are material to the business of RJV. The
Merger will not affect the relationship of RJV with any supplier or customer.
7.19 Insurance. Exhibit F sets forth a list of all insurance policies held by
or on behalf of RJV. Such policies are valid and binding in accordance with
their terms, are in full force and effect, and insure against risks and
liabilities to an extent and in a manner customary in the industry in which
RJV operates. All premiums have been paid in full. RJV has not received any
notice from any of its insurance carriers that any insurance premiums will be
materially increased in the future or that any insurance coverage listed in
Exhibit F will not be available in the future on substantially the same terms
as now in effect
7.20 Key Management Employees. Exhibit G sets forth (a) the name and total
compensation of each key management employee of the RJV and (b) the name and
total compensation of each other employee, consultant, agent or other
representative of RJV. Save as disclosed in Exhibit G, there is no accrual
for, or any commitment or agreement by RJV to pay wage and salary and any
other direct or indirect compensation increases, bonuses or pay.
7.21 Receivables. All accounts and notes receivable are reflected on RJV's
Financial Statements, and all accounts and notes receivable arising
subsequent to the date of RJV's Financial Statements: (a) have arisen in
RJV1s ordinary course of business; and (b) subject only to a reserve for bad
debts computed in a manner consistent with past practice and reasonably
estimated to reflect the probable results of collection, have been collected
or are collectible in RJV's ordinary course of business in the aggregate
recorded amounts thereof in accordance with their terms.
7.22 Intangible Property. Save as disclosed in Exhibit H, RJV does not own
any patents, trademarks, copyrights, service marks and trade names or has
made any applications for any of the foregoing. There are no other patents,
trademarks, copyrights, service marks or trade names that are material to
RJV's business as presently conducted or as being developed. RJV owns, or is
licensed or otherwise has the full right to use, all patents, trademarks,
trade names, service names, copyrights, technology, know-how and processes
("Intellectual Property Rights") used in or necessary for the conduct of its
business and which are material thereto. The business conducted by RJV does
not conflict with or infringe any valid Intellectual Property Rights of any
third party in any way. RJV has not received notice and is not aware of any
of its Intellectual Property Rights being infringed upon or appropriated by
third parties.
8. CONDUCT PENDING THE CLOSING.
RJV, BIO-KIN and the BIO-KIN Shareholders covenant that between the date of
this Agreement and the Closing as to each of them:
8.1 No change will be made in the charter documents, by-laws, or other
corporate documents of RJV or BIO-KIN unless the party making any such change
notifies the other in writing.
8.2 No BIO-KIN Shareholder will transfer, assign, hypothecate, lien, or
otherwise dispose or encumber the BIO-KIN shares of common stock owned by
him.
8.3 Each of R~V and BIO-KIN shall not (a) declare or pay any dividends or
declare or make any other distributions of any kind to its shareholders, or
make any direct or indirect redemption, retirement, purchase or other
acquisition of any of its respective shares; (b) incur any indebtedness for
borrowed money; (c) reduce its cash or short-term investments or their
equivalent, other than to meet cash needs arising in the ordinary course of
business, consistent with past practices; (d) waive any material right under
any material contract or other agreement of the type required to be
disclosed; (e) make any change in its accounting methods or practices or made
any change in depreciation or amortization policies or rates adopted by it;
(f) materially change any of its business policies, including, without
limitation, advertising, investment, marketing, pricing, purchasing,
production, personnel, sales, returns, budget or product acquisition
policies; (g) make any loan or advance to any of its shareholders, officers,
directors, employees, consultants, agents or other representatives, or make
any other loan or advance otherwise than in the ordinary course of business;
(h) except for inventory or equipment in the ordinary course of business,
sell, abandon or make any other disposition of any of its properties or make
any acquisition of all or any part of the properties, share capital or
business of any other person; (i) pay, directly or indirectly, any of its
material liabilities before the same becomes due in accordance with its terms
or otherwise than in the ordinary course of business; (j) terminate or fail
to renew, or receive any written threat (that was not subsequently withdrawn)
to terminate or fail to renew, any contract or other agreement that is or was
material to its condition, financial or otherwise; (k) amend its Memorandum
and Articles of Association (or other constitutional documents) or merge with
or into or consolidate with any other person, subdivide or in any way
reclassify any shares of its share capital or change or agree to change in
any manner the rights of its outstanding share capital or the character of
its business; or (1) engage in any other material transaction other than in
the ordinary course of business.
9. CONDITIONS PRECEDENT TO OBLIGATION OF BIO-KIN AND THE SHAREHOLDERS.
BIO-KIN's and the BIO-KIN Shareholders' obligation to consummate this
exchange shall be Subject to fulfillment on or before the Closing of each of
the following conditions, unless waived in writing by BIO-KIN or the
Shareholders as appropriate:
9.1 RJV's Representations and Warranties. The representations and warranties
of RJV set forth herein shall be true and correct at the Closing as though
made at and as of that date, except as affected by transactions contemplated
hereby.
9.2 RJV's Covenants. RJV shall have performed all covenants required to be
performed by it on or before the Closing by this Agreement.
9.3 Board of Director Approval. This Agreement shall have been approved by
the board of directors of RJV.
9.4 Regulatory Approvals. RJV shall have received all Federal and state
regulatory approvals required of them to complete the transactions
contemplated by this Agreement.
9.5 Supporting Documents of R~V. RJV shall have delivered to BIO-KIN and the
Shareholder(s) supporting documents in form and substance reasonably
satisfactory to BIO-KIN and the Shareholder(s), to the effect that: (a) RJV
is a corporation duly organized, validly existing, and in good standing; (b)
RJV's authorized capital stock is as set forth herein; (c) Certified copies
of the resolutions of the board of directors of RJV authorizing the execution
of this Agreement and the consummation hereof; (d) Secretary1s certificate of
incumbency of the officers and directors of RJV; (e) RJV's unaudited
financial statement to close of most recent fiscal quarter; and (f) Any
document as may be specified herein or required to satisfy the conditions,
representations and warranties enumerated elsewhere herein.
9.6 Shareholder Approval of Merger, Directors, Other. This Acquisition
Agreement and Plan of Reorganization, including the election of the new
Directors and Officers designated in paragraph 3.5 and approval of the
prohibition against (1) a reverse-split of shares discussed in paragraph 3.6
and (2) registration of shares for public sale for a period of one year,
shall have been approved and adopted by the affirmative vote of a majority of
the outstanding shares of RJV Common Shares entitled to vote thereon based on
a properly prepared proxy statement
9.7 Resignation Officers and Directors/Cancel Shares. The officers and
directors of RJV shall have resigned any and all their positions as officers,
directors, and employees of RJV and signed an agreement, acceptable to the
BIO-KIN, canceling all but 20,000 of the RJV shares, in aggregate, held by
such officers and directors.
9.8 Shareholder Approval of Name Change. A majority of the Shareholders of
RJV will have elected to change the name of RJV to Bio Kinetix Research, Inc.
10 CONDITIONS PRECEDENT TO OBLIGATION OF RJV.
RJV's obligation to consummate this merger shall be Subject to fulfillment on
or before the Closing of each of the following conditions, unless waived in
writing by RJV:
10.1 BIO-KIN's and the Shareholder's Representations and Warranties. The
representations and warranties of BIO-KIN and the Shareholder set forth
herein shall be true and correct at the Closing as though made at and as of
that date, except as affected by transactions contemplated hereby.
10.2 BIO-KIN's and the Shareholder's Covenants. BIO-KIN and the Shareholder
shall have performed all covenants required by this Agreement to be performed
by them on or before the Closing.
10.3 Board of Director Approval. This Agreement shall have been approved by
the board of directors of BIO-KIN
10.4 Shareholder Execution. Exhibit I, BIO-KIN Shareholder Approval and
Investor Qualification, substantially in the form attached hereto and
incorporated herein by this reference shall have been executed by each and
every shareholder of BIO-KIN.
10.5 Supporting Documents of BIO-KIN. BIO-KIN shall have delivered to RJV
supporting documents in form and substance reasonably satisfactory to RJV to
the effect that: (a) BIO-KIN is a corporation duly organized, validly
existing, and in good standing; (b) BIO-KIN's capital stock is as set forth
herein; (c) Certified copies of the resolutions of the board of directors of
BIO-KIN authorizing the execution of this Agreement and the consummation
hereof; (d) Secretary's certificate of incumbency of the officers and
directors of BIO-KIN; (e) All financial statements of BIO-KIN from its
inception to and including the close of the most recent fiscal quarter,
including audited financial statements if available; and (f) Any document as
may be specified herein or required to satisfy the conditions,
representations and warranties enumerated elsewhere herein.
10.6 Regulatory Approvals. BIO-KIN shall have received all Federal and state
regulatory approvals required of them to complete the transactions
contemplated by this Agreement.
10.7 Agreement Acknowledging Shares. BIO-KIN shall have signed an agreement
acknowledging the cancellation of all but 20,000 of the RJV shares held, in
aggregate, by the current RJV Officers and Directors and the anticipated
lapse of "restrictions" on these shares under Rule 144.
10.8 Conversion/Payment of All Management Loans to BIO-KIN. Prior to the
Closing, any and all loans made to BIO-KIN by BIO-KIN management will be paid
in full or converted to shares of BIO-KIN, which shares, if any, shall be
exchanged as BIO-KIN Shares under this Agreement and included in Exhibit A
hereto. BIO-KIN shall supply evidence to this effect under section 10.5
above.
11 INDEMNIFICATION.
11.1 Indemnification of RJV. BIO-KIN agrees to indemnify RJV against any
loss, damage, or expense (including reasonable attorney fees) suffered by RJV
from (1) any breach by BIO-KIN or the Shareholder of this Agreement or (2)
any inaccuracy in or breach of any of the representations, warranties, or
covenants by BIO-KIN or the BIO-KIN Shareholders herein; provided, however,
that (a) RJV shall be entitled to assert rights of indemnification hereunder
only if and to the extent that it suffers losses, damages, and expenses
(including reasonable attorney fees) exceeding $5,000 in the aggregate and
(b) RJV shall give notice of any claims hereunder within twelve months
beginning on the date of the Closing. No loss, damage, or expense shall be
deemed to have been sustained by RJV to the extent of insurance proceeds paid
to, or tax benefits realizable by, RJV as a result of the event giving rise
to such right to indemnification.
11.2 Indemnification of BIO-KIN and the BIO-KIN Shareholders. RJV agrees to
indemnify BIO-KIN and the BIO-KIN Shareholders against any loss, damage, or
expense (including reasonable attorney fees) suffered by BIO-KIN or by any
BIO-KIN Shareholder from (1) any breach by RJV of this Agreement or (2) any
inaccuracy in or breach of any of RJV's representations, warranties, or
covenants herein.
11.3 Defense of Claims. Upon obtaining knowledge thereof, the indemnified
party shall promptly notify the indemnifying party of any claim that has
given or could give rise to a right of indemnification under this Agreement.
If the right of indemnification relates to a claim asserted by a third party
against the indemnified party, the indemnifying party shall have the right to
employ counsel acceptable to the indemnified party to cooperate in the
defense of any such claim. As long as the indemnifying party is defending any
such claim in good faith, the indemnified party will not settle such claim.
If the indemnifying party does not elect to defend any such claim, the
indemnified party shall have no obligation to do so.
12 TERMINATION.
This Agreement may be terminated: (1) by mutual consent in writing; or (2) by
BIO-KIN, the BIO-KIN Shareholder or RJV if there has been a material
misrepresentation or material breach of any warranty or covenant by any other
party.
13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
Subject to Paragraph 11 hereof, the representations and warranties of BIO-
KIN, the BIO-KIN Shareholders and RJV set out herein shall survive the
Closing.
14 ARBITRATION SCOPE.
The parties hereby agree that any and all claims (except only for requests
for injunctive or other equitable relief) whether existing now, in the past
or in the future as to which the parties or any affiliates may be adverse
parties, and whether arising out of this agreement or from any other cause,
will be resolved by arbitration before the American Arbitration Association.
SITUS. The situs of arbitration shall be chosen by the party against whom
arbitration is sought, provided only that arbitration shall be held at a
place in the reasonable vicinity of such party's place of business or primary
residence and shall be within the United States. The situs of counterclaims
will be the same as the situs of the original arbitration. Any disputes
concerning situs will be decided by the American Arbitration Association.
APPLICABLE LAW. The law applicable to the arbitration and this agreement
shall be that of the State of Nevada, determined without regard to its
provisions which would otherwise apply to a question of conflict of laws. Any
dispute as to the applicable law shall be decided by the arbitrator.
DISCLOSURE AND DISCOVERY. The arbitrator may, in its discretion, allow the
parties to make reasonable disclosure and discovery in regard to any matters
that are the Subject of the arbitration and to compel compliance with such
disclosure and discovery order. The arbitrator may order the parties to
comply with all or any of the disclosure and discovery provisions of the
Federal Rules of Civil Procedure, as they then exist, as may be modified by
the arbitrator consistent with the desire to simplify the conduct and
minimize the expense of the arbitration. Any award or decision by the
American Arbitration Association shall be final, binding and non-appealable
except as to errors of law. The prevailing party in any such arbitration
shall be entitled to the payment by the losing party of its reasonable costs
and attorneys' fees. MEASURE OF DAMAGES. In any adverse action, the parties
shall restrict themselves to claims for compensatory damages and no claims
shall be made by any party or affiliate for lost profits, punitive or
multiple damages. COVENANT NOT TO SUE. The parties covenant that under no
conditions will any party or any affiliate file any action against the other
(except only requests for injunctive or other equitable relief) in any forum
other than before the American Arbitration Association, and the parties agree
that any such action, if filed, shall be dismissed upon application and shall
be referred for arbitration hereunder with costs and attorney's fees to the
prevailing party. INTENTION. It is the intention of the parties and their
affiliates that all disputes of any nature between them, whenever arising,
from whatever cause, based on whatever law, rule or regulation, whether
statutory or common law, and however characterized, be decided by arbitration
as provided herein and that no party or affiliate be required to litigate in
any other forum any disputes or other matters except for requests for
injunctive or equitable relief. This agreement shall be interpreted in
conformance with this stated intent of the parties and their affiliates.
15 GENERAL PROVISIONS.
15.1 Further Assurances. From time to time, each party will execute such
additional instruments and take such actions as may be reasonably required to
carry out the intent and purposes of this Agreement.
15.2 Waiver. Any failure on the part of either party hereto to comply with
any of its obligations, agreements, or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
15.3 Brokers. Each party agrees to indemnify and hold harmless the other
party against any fee, loss, or expense arising out of claims by brokers or
finders employed or alleged to have been employed by the indemnifying party.
15.4 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered in person or sent
by prepaid first-class certified mail, return receipt requested, or
recognized commercial courier service, as follows: If to RJV, to: Edward
Velton, 10655 NE 4th Street, Suite 300, Bellevue, WA 98004. If to BIO-KIN, to
Dr. John Todd, Bio Kinetix Research, Inc., Suite 1500-885 West Georgia
Street, Vancouver, BC V6C 3E8.
15.5 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Nevada.
15.6 Assignment. This Agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their successors and assigns; provided, however,
that any assignment by either party of its rights under this Agreement
without the written consent of the other party shall be void.
15.7 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Signatures sent
by facsimile transmission shall be deemed to be evidence of the original
execution thereof.
15.8 Entire Agreement. This Agreement (including its Exhibits) constitutes
the entire agreement between the parties with respect to the subject matter
and supersedes all previous agreements, whether oral or written, and this
Agreement can only be changed or modified by written agreement of the
parties.
15.9 Effective Date. The effective date of this Agreement shall be January 1,
2003.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
effective date stated above.
RJV BIO-KIN
--- -------
By /s/Edward Velton By: /s/John Todd
------------------- ----------------
Edward Velton, President John Todd, President
BIO-KIN Shareholders:
---------------------
/s/ BioCurex Inc. /s/ Dr. John Todd
---------------------- -----------------
BioCurex Inc. Dr. John Todd
/s/ Innexus Corp. /s/ Susan Minchin
----------------- -----------------
Innexus Corp. Susan Minchin
/s/ Beglend Corp. SA /s/ Linda Young
-------------------- ---------------
Beglend Corp. SA Linda Young
List of Exhibits:
A. List of BIO-KIN Shareholders, BIO-KIN Common Shares owned, and RJV Common
Shares to be Exchanged
B. List of all Material Contracts of BIO-KIN
C. List of all Material Liabilities of BIO-KIN
D. List of Material Contracts of RJV
E. List of Material Suppliers and Customers of RJV
F. List of Insurance Held by RJV
G. List of Key Management and Employees of RJV
H. List of Intangible Property Owned by RJV
I. BIO-KIN Shareholder Approval and Investor Qualification
J. List of Post-Acquisition, Surviving Entity Shareholdings of Officers an
Directors, Shareholders holding more than 5% of issued and outstanding
shares, and Key Management Employees.
EXHIBIT B
---------
GLOSSARY OF TECHNICAL TERMS
Antibodies - Natural protein molecules that are able to target and bind to
other molecules, cells, viruses and bacteria and in certain cases kill or
eliminate the target entity.
Antigen - A molecule, cell, virus, bacteria or other target of an immunogenic
response which is recognized and bound by an antibody.
Biologic - Any naturally occurring or synthetically derived analogue of a
naturally occurring virus, therapeutic, serum, toxin, antitoxin, or analogous
product applied to the prevention, treatment or cure of diseases or injuries.
It is often used in the biotechnology industry to refer to peptides and
proteins produced from cell lines.
BLA - "Biologic License Application" - a license application which, when
approved by the FDA, allows for the manufacture and sale of a biologic drug.
Chemotherapy - Treatment using chemical drugs
CIP - "Continuation-in-part" patent filing disclosing additional claims or
other material pertinent to an existing patent or patent application.
FDA - "Food and Drug Administration" - the U.S. government agency which
regulates the manufacture, use and sale of human drugs and diagnostic
products in the United States.
Genetically-engineered - Isolation of the genes for antibodies and proteins,
their alteration and expression in microorganisms.
Immunogenic - The ability to elicit or initiate an immune response.
IND- Investigational New Drug Application.
Mammastatin- A protein that is produced by the epithelial cells which line
the ducts of breast tissue. This protein functions as a tissue specific
growth inhibitor of breast tissue cells when it is present in concentrations
greater than 25 nanograms per ml of serum.
Monoclonal Antibody - An antibody, isolated from a single B-cell and expanded
in the laboratory and having a defined specificity for a target antigen
Phase 1 clinical study - Earliest stage of human clinical trials, usually
used to test a drug for maximum tolerated dose, toxicity and other safety
related purposes.
Phase 2 clinical study - Patient trial usually used to assess the early
effectiveness or to define a patient population that could benefit from the
drug.
Phase 3 clinical study - Controlled patient trial used to assess safety and
effectiveness of a drug at several independent sites in a large number of
patients against a placebo or standard therapy control.
RECAF - Receptor Alpha Fetaprotein. This is a carbohydrate molecule that is
located on the surface of cancer cells.
Receptor - A structure exposed on the cell surface used for signaling or
transport of molecules into the cell.
Superantibodies - a new generation of engineered monoclonal antibodies that
have significantly improved therapeutic potency as therapeutics and increased
sensitivity as diagnostics.
Therapeutic (noun) - A medicine for treating disease.
Therapeutic (adjective) - Capable of treating disease.
Toxicity - The quality of being poisonous or harmful.
EXHIBIT C
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BEGLEND CORPORATION S.A.
Misiones 1372, Office 602
1000 Montevideo, Uruguay
Date: November 22, 2002
BIOCUREX INC.
215-7080 River Road,
Richmond, BC V6V 6X5
Fax: (866)437-2277
Attention: Dr. Ricardo Moro
Dear Sirs:
Re: License - SAT Therapeutic Rights for RECAF
We are writing to formalize certain proposed transactions relating to a
License for the "SuperAntibody" ("SAT") rights to monoclonal antibodies
targeted to the RECAF receptor as arise from previous discussions between
Beglend Corporaton ("Beglend") and its Research and Development entity,
BioKinetix Inc. and BioCurex Inc. ("BioCurex").
Upon acceptance, this letter shall supercede and replace any previous
understandings, proposals or discussions between the Parties (which shall
thereby be extinguished) and shall constitute the agreement among the
undersigned with respect to the licensing by BioCurex of all of the
intellectual property rights pertaining to the RECAF receptor currently held
by Biocurex, including any of its rights in or to the Patent Rights and other
Intellectual Property Rights set out in Schedule "B" hereto (the "Licensed
Technology") only to be used in conjunction with SuperAntibody Technology in
consideration for the payment of the sum of $60,000, all on the following
terms and conditions:
1. Definitions
Any terms used herein and not otherwise expressly defined shall have the
meanings set out in the attached Schedule "A".
2. Grant of License
In consideration of payment of the sum of $6O,000 by Beglend to BioCurex, on
or before 90 days from the signature of this agreement, Biocurex hereby
grants to Beglend Corporation an exclusive world-wide license (the "License")
to use the Licensed Technology on and subject to the terms and conditions set
out herein.
Beglend has agreed to assign its rights under this and the InNexus Agreement
to BioKinetix Research Inc. with the understanding that BioKinetix will
conduct research and development to produce a series of super antibodies
expressed against the RECAF molecules,
3. Terms of License
This License shall be subject to the following terms and conditions:
(a) The Licensee shall have an exclusive world-wide license to use the
Licensed Technology in any human or humanized forms, including genetically
engineered or fully human antibodies in conjunction with SAT;
(b) The License shall commence upon and be effective as of the receipt of
$60,000, on or before 90 days from the signature of this agreement (the
"Effective Date");
(c) Payment to Biocurex by Beglend, directly or by a third party introduced
by Beglend, shall constitute fulfillment in all or part of this License
Agreement's Payment Terms;
(d) Beglend will retain, for a period of 180 days, the right to buy or
arrange for the investment in BioCurex of a total $1,000,000 U.S.D in terms
to be agreed upon by Biocurex Inc. Biocurex will retain the right to cancel
this clause should it decide to accept an alternative offer from another
party requiring exclusive rights for financing the company;
(e) in addition to 3(b), the Licensee or its contractors shall, in order to
maintain this License in good standing, have documented expenses, relevant to
the Licensed Technology, of $50,000, the second and $100,000 the 3rd year
from the anniversary date;
(f) All costs related to patents emerging from this agreement on the
combination of anti-RECAF super antibodies, will be the responsibility of
Beglend;
(g) The Licensee shall be required to pay royalties, as and when provided
under a formal License Agreement, to BioCurex at the rate of 5% for a
Therapeutic Licensed Product based upon monoclonal antibody to RECAF that
fulfils the criteria described under the "Licensed Antibody" definition in
Schedule A. In addition to the royalty the Licensee will issue 6O0,000 shares
of Bio Kinetix Research Inc. which will be freely exchangeable to RJVN upon
completion of the merger agreement between BioKinetix and RJVN. Further,
BioCurex will have the right to appoint one member to the Board of
BioKinetix/RJVN;
(h) The Licensee shall provide BioCurex or its designee with such reports and
other information with respect to its use of the Licensed Technology as well
as all documents related to sublicensing, sales or technology transfer
agreements related to RECAF technology;
(h) BioCurex shall, as soon as practicable after the Effective Date, deliver
to the Licensee all documents, biological materials and information
pertaining to the Licensed Technology as the Licensee may reasonably require;
(i) BioCurex shall do all things necessary to keep the Intellectual Property,
in Schedule B, in good standing and shall promptly advise the Licensee of any
breach or pending breach in its obligations thereunder (a "Breach") and shall
provide copies of any written communication respecting the intellectual
Property which allege any such existing, pending or threatened Breach,
provided that the Licensee may take such steps as it considers reasonably
necessary to cure any such existing Breach or to avoid the occurrence of a
pending or threatened Breach due to the action or inaction of BioCurex. In
the event of bankruptcy, insolvency, appointment of a receiver by BioCurex or
similar action which would threaten the Assignment of this License, BioCurex
shall be deemed to have assigned all of the rights or pending rights under
this Agreement immediately prior to such action without tile payment of any
additional consideration or without the need for any further action of the
parties and the Licensee shall be authorized, for on behalf of BioCurex, to
maintain the Intellectual Property in good standing;
(j) After the Payment of $60,000 and completion of this Agreement, Beglend
shall have the right to fund further development of monoclonal antibodies to
RECAF. Such further development, if possible, will be carried out in
laboratories appointed by Biocurex and will be funded through a Research and
Development Contract to be negotiated between the Parties and to be based
upon reasonable costs and overhead associated with early stage research and
development During the course of this Research, Improvements may be in the
underlying RECAF technology or new antibodies developed with superior
therapeutic properties., It is the responsibility of the Party, responsible
for the Improvement to notify the other party of such improvements. BioCurex
shall retain all rights to such Improvements as pertains to Diagnostic uses
and rights required for therapeutic uses with SAT technology shall accrue to
Beglend. Should BioCurex find new antibodies that all parties deem as
superior for use in conjunction with SAT as defined in this agreement, then
BioCurex will have the choice to include them into this agreement or refrain
from using them in any shape or form related to SAT, while retaining the
right to use them in other diagnostic as well as therapeutic applications
related to SAT. Should BioCurex choose to use them for SAT, the new
antibodies will be incorporated into this agreement without any further
consideration than the one specified in this agreement unless the funds
required to produce them exceeded the prepaid stun of $60,000. In such case,
Beglend will compensate Biocurex for the difference;
(k) Should BioCurex deliver antibodies that are considered as adequate for
use with SAT by the other Parties using less than the advanced $60,000,
BioCurex will retain the unused funds as a performance bonus and use them as
it solely deems adequate;
(k) Any new inventions discoveries or intellectual property owned, purchased
or acquired by Licensee or made or developed by the Licensee's employees or
those of its Affiliates or subsequent to the execution of this Agreement
which are not deemed Improvements or which are patentably distinct from the
Patent Rights, including, without limitation, any new chemical entities
derived through use of the intellectual Property Rights and SAT ("Licensee's
New Intellectual Property") shall not form part of BioCurex's Intellectual
Property, and shall be the sole and exclusive property of The Licensee; and
(l) Unless previously terminated in accordance with sections 6.1 or 6.2, this
Agreement and this License granted hereunder shall continue in full force
until the date of the last to expire of the Patent Rights or the expiration
of any other rights with respect to this License or until superceded by a
formal License Agreement or by the terms defined under 6) Termination.
4. Representations And Warranties
4.1 BioCurex hereby represents, warrants and covenants as follows:
(a) Note: This Section was struck and eliminated by agreement of the parties.
(b) the Intellectual Property Rights set out in Schedule "B" is a complete
list, as of the Effective Date, of all intellectual Property Rights
pertaining to the Licensed Technology which are owned or controlled by
BioCurex (together with a complete description of any material limitations,
rights of third parties, restrictions on use or ownership by BioCurex, or
encumbrances on such rights) and all other intellectual property including
any Patent Rights, license rights or trade marks, materials, property or
assets which form part of the Licensed Technology or which are necessary or
desirable for the development and commercial exploitation of the Licensed
Technology and are in BioCurex's possession and control;
(c) Note: This Section was struck and eliminated by agreement of the parties
(d) Biocurex is not now in default of any of its obligations for retention of
its Intellectual Property or any circumstances exist which, to the knowledge
of BioCurex, may result in any such default and, without limiting the
generality of the foregoing, the execution, delivery and performance by
BioCurex of this Agreement;
(e) The Intellectual Property Rights included in the Licensed Technology are
validly and beneficially owned by BioCurex or the person specified in
Schedule "B" free and clear of all Liens, charges and encumbrances
whatsoever, with the sole and exclusive right to use and to license the use
of the same, subject only to the limitations under this License Agreement or,
where so specified in Schedule "B" under the specified terms of the
Intellectual Property Agreement pursuant to which such rights are held;
(f) to the best of BioCurex's knowledge, none of the Patent Rights included
as part of the Licensed Technology was fraudulently procured from the
relevant governmental patent granting authority, and that each such Patent
Right is, or will be, valid and enforceable;
(g) BioCurex is not a party to or threatened with any litigation action, suit
or proceeding in any court or before any administrative tribunal which
affects or may affect the Licensed Technology or Biocurex's ability to duly
complete the transactions contemplated herein nor, to the knowledge of
BioCurex after due inquiry, is any such action, suit or proceeding pending or
threatened nor is there any basis therefore;
The representations, warranties, covenants and agreements by BioCurex set
forth in section 4.1 or contained elsewhere in this Agreement or any
certificates or other documents delivered to Beglend or the Licensee pursuant
to the provisions hereof or in connection with the transactions contemplated
hereby, are. except where otherwise expressly stated, true as of the date and
time of execution hereof and shall be true at and as of time of execution on
the Effective Date and, notwithstanding any investigations or enquiries made
by Beglend or the Licensee prior to execution hereof, the representations,
warranties, covenants and agreements of BioCurex shall survive the execution
and delivery hereof and shall continue in full force and effect throughout
the term of this License Agreement.
4.2 Beglend and the Licensee represent, warrant and covenant to BioCurex as
follows:
(h) Beglend is duly incorporated and subsisting as a corporation under the
laws of Uruguay and has full right, authority and capacity to enter into and
fully perform this License Agreement; and
(i) The Licensee is duly incorporated and subsisting as a corporation under
the laws of the jurisdiction in which it is incorporated and has full right
authority and capacity to enter into and fully perform this License
Agreement;
6.2 The representations, warranties, covenants and agreements by Beglend or
the Licensee in section 4.3 or contained elsewhere in this Agreement or any
certificates or other documents delivered to BioCurex pursuant to the
provisions hereof or in connection with the transactions contemplated hereby,
are, except where otherwise expressly stated, true as of the date and time of
execution hereof by Beglend or the Licensee and shall be true at and as of
time of execution on the Effective Date, and, notwithstanding any
investigations or enquiries made by BioCurex prior to execution hereof, the
representations, warranties, c0vennants and agreements of Beglend and the
Licensee shall survive the execution and delivery hereof and shall continue
in full force and effect throughout the term of this License Agreement.
5. Notice
Any notice or other communication between either party under this Agreement
will be deemed to be properly given when in writing and delivered by hand or
mailed, postage prepaid, or sent by telefax, teletype or other means of
electronic communication producing a printed copy but for greater clarity,
excluding communication by e-mail unless the other party acknowledges receipt
of same in writing ("Electronic Communication") on any business day to the
intended recipient at its address first written above or to such other
address or person as the other patty may from time to time designate by
notice or if sent by Electronic Communication to such telecommunication
address as the respective pates may specify. Any notice delivered on a
business day will be deemed conclusively to have been effectively given on
the date notice was delivered. Any notice sent by prepaid registered mail
will be deemed conclusively to have been effectively given on the third
business day after posting; but if at the time of posting or between the time
of posting and the third business day thereafter there is a strike, lockout
or other labour disturbance affecting postal service, then the notice will
not be effectively given unless delivered by hand or sent by Electronic
Communication.
6 Termination
6.1 The Licensee, in its sole discretion, may terminate this License
Agreement with respect to the Patent Rights upon thirty (30) days' prior
written notice to BioCurex. In this case, any funds, products, materials,
patents or technical advances generated under this Agreement will remain the
exclusive property of BioCurex which will be entitled to use them in any way,
shape or form it might deem adequate at its sole discretion and without any
consideration to be paid to the Licensee or any other party. Termination
pursuant to this section 6.l shall not relieve Licensee or BioCurex of any
obligation or liability arising from any act or omissions committed by either
party, incurred prior to the effective date of such termination.
6.2 BioCurex may terminate this License Agreement due to the Licensee's
failure to perform any material obligation herein, unless such breach shall
be cured within sixty (60) calendar days following Licensee's receipt of
written notice of such default from BioCurex.
6.3 Upon the termination or expiration of this License Agreement, all right,
title and interest in and to any of Licensee's Improvement's and Licensee's
New Intellectual Property', shall -remain with Licensee and all right, title
and interest in and to any of Biocurex's Improvements and BioCurex's New
Intellectual Property shall remain with BioCurex and neither party shall be
required to sell, transfer, assign or otherwise convey such improvements or
New Intellectual Property or any interest therein to the other party.
6.4 Should BioCurex not receive a minimum licensing fee of US$96,000 per year
on monthly payments of US$8,000 starting on the 3rd anniversary of the
signature of this agreement, this Agreement will be automatically terminated,
with BioCurex regaining full use of the Licensed Technology without any
obligation to the other parties. This clause will automatically come into
effect after default of two consecutive monthly payments.
7. Assignment and Novation
7.1 Except as provided herein, this Agreement may not be assigned, in whole
or in part, without the prior written consent of the other parties hereto.
7.2 Notwithstanding the foregoing, Beglend or the Licensee may assign any of
its rights hereunder to a subsidiary or Affiliate of Beglend or InNexus
Corporation,Ltd. and BioCurex may transfer the Licensed Technology and assign
the License Agreement together with any of its rights of obligations
hereunder to a. subsidiary or Affiliate of Biocurex, provided such subsidiary
or Affiliate enters into and becomes bound by the License Agreement and/or
this License Agreement to the same extent as if it had executed same at the
time of execution by the parties hereto. Beglend and/or the Licensee may
assign or transfer any rights now held by it or hereafter acquired under this
License Agreement to CUSIL or a subsidiary or Affiliate of CUSIL and it is
hereby acknowledged that Beglend and the Licensee will be required to do so
under the terms of the RTO, as now contemplated.
8. General Provisions
8.1 Time is of the essence hereof.
8.2 Any reference to a monetary amount, "Cash", dollars or "$" (other than a
specific reference to United States dollars or "US$") shall be deemed to
refer to the lawful currency of the Canada (or, for greater clarity; "CDN").
8.3 The parties hereto shall execute such other documents and do such other
things as may be reasonably necessary to give full effect to the transactions
contemplated hereby.
8.4 This Agreement contains the entire agreement between the parties relating
to the subject matter or this Agreement and supersedes any and all prior
agreements, understandings, negotiations and discussions, whether oral or
written, between the parties hereto and may be modified only by an instrument
in writing signed by all parties hereto.
8.5 Notwithstanding anything herein to the contrary, neither party hereto
shall be deemed to be in default with respect to the performance of the
terms, covenants and conditions of this Agreement if the same shall be due to
any strike, lockout, civil commotion, invasion, rebellion, hostilities,
sabotage, governmental regulations or controls or acts of God.
8.6 This Agreement will be governed by and interpreted according to the laws
of the province of British Columbia, Canada, and the parties hereby
irrevocably agree to submit to the jurisdiction of the Courts thereof in
connection with any disputes arising hereunder and irrevocably select
Vancouver, British Columbia as the proper venue for any such disputes.
8.7 The waiver by any parry a breach of any provisions of this Agreement by
the other party to this Agreement shall not operate or be construed as a
waiver of any subsequent breach by that party.
8.8 This Agreement may be executed in as many counterparts as may be
necessary, each of which so executed shall be deemed to be an original and
such counterparts together shall constitute one and the same instrument.
If you wish to accept the terms and conditions set out herein, please execute
the enclosed copy of this letter and return same to use by no later than
4:00p.m., Vancouver time, on November 12, 2002. We hereby acknowledge and
accept return of the enclosed copy of this Agreement by Electronic
Communication, subject to delivery of the original of the document to us
within one week of delivery of the copies sent via the Electronic
Communication.
Yours truly,
/s/ John Todd
-------------
Dr. John Todd
President, BioKinetx Inc.
Acknowledged and agreed to by BioKinetix Inc., this 9th day of December 2002.
BioKinetix Inc.
by:
/s/ John Todd
-------------
Dr. John Todd
Acknowledged and agreed to by the License, Beglend Corporation, this ninth
day of December, 2002
Beglend Corporation
by:
/s/ W.A. Keicher
----------------
Dr. W.A. Keicher
Authorized Signatory
Acknowledged and agreed to by BioCurex Inc., this 22nd day of November, 2002.
by:
/s/ Ricardo Moro
----------------
Dr. Ricardo Moro
Schedule "A" to License Agreement Among BioKinetix Inc., BioCurex Inc.
and Beglend Corporation
1. Definitions
1 .1 Where used herein, the following terms shall have the meanings set out
below:
(a) "Affiliate" means, with respect to a particular party hereto, a
corporation which is a subsidiary of, is controlled by (through the majority
ownership of its voting shares held by one or more persons acting jointly or
in concert) or is under common control with that party, whether directly or
indirectly;
(b) "Agreement" or "License Agreement" means the agreement formed by
acceptance of this letter agreement;
(c) "Court" means the Supreme Court of British Columbia;
(d) "Electronic Communication" means telefax, teletype or other means of
electronic communication producing a printed copy but, for greater clarity,
shall not include e-mail unless the other party acknowledges receipt of same
in writing;
(e) "Improvements" means, collectively, versions, releases, enhancements,
modifications, alterations, updates, corrections, processes, systems, or
fixes to any of the Intellectual Property Rights (including without
limitation the filing of any patent, copyright, trademark, trade name, or
service mark application), which are developed by or on behalf of BioCurex or
Licensee for use in conjunction with the Intellectual Property Rights, in
whole or in part, and any and all partial or intermediate versions thereof,
and any and all derivative works thereof, and any and all know-how, trade
secrets and other proprietary information thereof.
(f) "Indebtedness" means any and all advances, debts, duties, endorsements,
guarantees, liabilities, obligations, responsibilities and undertakings of a
person assumed, created, incurred or made, whether voluntary or involuntary,
however incurred or made, whether voluntary or involuntary, however arising,
whether due or not due, absolute, inchoate or contingent, liquidated or
unliquidated, determined or undetermined, direct or indirect, express or
implied, and whether such persons may be liable individually or jointly with
others;
(g) "Intellectual Property Rights" means any right, title and interest of
BioCurex, whether held directly, indirectly, whether under the SDC License
Agreement or otherwise, in to or respecting the Patent Rights, together with
patented or unpatented discoveries, inventions, confidential information,
data, methods, procedures, results of experimentation, know-how or other
tangible or intangible rights and any other intellectual property rights
pertaining to the Licensed Antibody, including any improvement to or an
application of the aforementioned inventions, Patent Rights, or discoveries,
which are held by BioCurex or in which BioCurex has a right to acquire any
interest or which held for the benefit of BioCurex as of the date of
execution hereof or which maybe acquired by BioCurex prior to the Effective
Date, including the Intellectual Property Rights set forth in Schedule "B";
(h) "Intellectual Property Agreements" means the SDC License Agreement and
any other agreement entered into by Biocurex which may give rise to, limit or
restrict or otherwise materially affect the Intellectual Property Rights,
particulars of which are set forth in Schedule "B".
(i) "Letter Agreement" has the meaning set out on page 1 of this Agreement;
(j) "Lien" means any mortgage, debenture, charge, hypothecation, pledge,
lien, or other security interest or encumbrance of whatever kind or nature,
regardless of form and whether consensual or arising by law, statutory or
otherwise, that secures the payment of any indebtedness or the performance of
any obligation or creates in favour of or grants to any person any
proprietary right;
(k) "Patent Rights" means collectively, the patents, including any division,
continuation or continuation-in-part thereof and any patent issuing thereon,
and including any reexaminations or reissues thereof; and other pending
applications, and any process or component thereof falling within the scope
of any claim or claims thereof applicable to the Intellectual Property Rights
including the patents and patent applications set forth in Schedule "B", as
may he amended from time to time in accordance with the provisions of this
Agreement;
(l) "RTO" has the meaning set out on page 1 of this Agreement;
(m) "SAT" means the anti-body enhancement and modification technology
platform which is the subject of US patent # 6,238,667 and other pending
applications and which is commonly known as Super-antibody technology.
(n) "Licensed Antibody" means the monoclonal antibody/ies mutually agreed
upon for licensing under the terms of this Agreement upon fulfillment of two
criteria (a) The antibody has to recognize one or more of the bands
recognized by labeled AFP on a Western blot of RECAF containing material and
(b) The antibody has to recognize a surface antigen (defined as positive
labeling of the cell membrane after incubation of live cells with the
antibody at 4oC).
(o) "Licensed Technology" means all of BioCurex's Intellectual Property
Rights with respect to the Licensed Anntibody to be granted to the Licensee
pursuant to this License Agreement;
Schedule "B" To Letter Agreement Among BioCurex Inc., Beglend Inc. and
BioCurex Inc.
Licensed Technology
Intellectual Property Rights (including Patent Rights) and other rights or
assets pertaining to RECAF Held by BioCurex Inc.
Patent Rights
USA 08/920,654 Allowance on
Div. Serial # not
Received yet.
Russia 2161042 Patent Issued December 27, 2000
Finland 970990 Pending
Canada 2,197,490 Pending
South Korea 701773/1997 Pending
Norway 971256 Pending
EPO 95940906.1 European Patent Office (all
Europe (EU) Countries Pending
China 95195125.4 Pending
Japan HEI.8-510734 Pending
Brazil Pl 9508959-4 Pending
Australia 714966 Patent Granted June 4, 2000
(Div) 27654/00
All rights and assignee = BioCurex Inc. with the exception of Canada.
Canada is assigned to Pacific Biosciences Research Centre Inc.
EXHIBIT D
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DEVELOPMENT AND LICENSE AGREEMENT
This Development and License Agreement made as of and dated for reference
January 7, 2003.
BETWEEN:
INNEXUS CORPORATION, a company incorporated under the laws of Washington
State arid having an office at 3405 172nd Street, Arlington (Seattle),
Washington. U.S.A.
("InNexus")
BEGLEND CORPORATION S.A., a corporation incorporated under the laws of
Uruguay and having and office at Misiones 1372, Office 602, 11000 Montevideo,
Uruguay
("Beglend")
WITNESSES THAT WHEREAS:
A. InNexus holds the patent for the next-generation technology platform for
enhancement of monoclonal antibodies known as SuperAntibody Technology - or
"SAT";
B. Beglend proposes to engage in the development production and
commercialization of monoclonal antibody based pharmaceuticals;
C. InNexus and Beglend desire to enter into a development and licensing
arrangement for the worldwide development and marketing of certain monoclonal
antibody products, modified by SAT, for human use on the terms and conditions
set out herein; and
D. Beglend has arranged to assign its rights under this Agreement to Bio
Kinetix, Beglend's research and development company, with a view to InNexus
becoming a shareholder of Bio Kinetix and having InNexus assist Bio Kinetix
in carrying on research and development work intended to result in the
development, production and commercialization of monoclonal antibody based
pharmaceuticals known generally as "SuperAntibodies";
NOW THEREFORE, in consideration of the premises and the mutual covenants and
obligations set forth in this Agreement, the payment of $10.00 by Beglend to
InNexus and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by InNexus, InNexus covenants and
agrees with Beglend as follows.
1. DEFINITIONS
1.1 Where used herein:
"Affiliate" means:
(a) an organization fifty percent (50%) or more of the voting stock of which
is owned arnd/or controlled directly or indirectly by a party to this
Agreement;
(b) an organization which directly or indirectly owns and/or controls fifty
percent (50%) or more of the voting stock of a party to this Agreement; or
(c) an organization, which is directly or indirectly under common control
with a party to this Agreement through common share holdings;
"associate" means, where used to indicate a relationship with a corporation,
another corporation of which the first corporation owns shares carrying more
than 20% of the voting rights attached to all shares of that second
corporation for the time being outstanding, and, where used to indicate a
relationship with an individual, has the meaning assigned to it by the
Securities Act (Alberta);
"Beglend Antibody" means any monoclonal antibody now owned by Beglend or to
which Beglend currently holds or hereafter acquires rights by way of
purchase, license or otherwise, or which is hereafter developed by Beglend
and includes without limitation all SAT rights to those certain monoclonal
antibodies targeted to the RECAF receptor held by Beglend from time to time
pursuant to that certain agreement made as of November 22, 2002 between
BioCurex Inc. and Beglend;
"Bio Kinetix" means Bio Kinetix Research Inc., a corporation incorporated
under the laws of Alberta and having an office at 1500, 885 West Georgia
Street, Vancouver, British Columbia;
"Bulk Product" means all bulk forms of the active ingredient of a Product;
"Business Day" means any day other than a Sunday, a Saturday or a day
recognized by statute as a holiday in the State of Washington, the Province
of British Columbia or Alberta, Uruguay or Barbados;
"Compound" means any bio-chemical compound which is produced utilizing any
form of a Beglend Antibody and the Licensed Technology;
"Drug Master File" means a drug master file maintained by the FDA with
respect to a prospective product for which Regulatory Approval is sought;
"Effective Date" means the date on which the License and Beglend's rights and
obligations under this Agreement are assigned to Bio Kinetix,
"Electronic Communication" means telefax, teletype or other means of
electronic communication producing a printed copy but, for greater clarity,
shall not include e-mail unless the other party acknowledges receipt of same
in writing;
"FDA" means the United States Food and Drug Administration and equivalent
governmental agencies outside the United States;
"Field of Use" means the development and application of Compounds and
Products for diagnostic, preventative, treatment and/or therapeutic purposes
- including without limitation such applications as blood serum assays and
other diagnosis screening and detection processes;
"Finished Product" means all finished, packaged final dosage units of
Product;
"GAAP" means generally accepted United States accounting principles
consistently applied
"Immunoconjugates" means any joining of a monoclonal antibody, including
those created will the use of hetero-bifunctional crosslinking agents or
through genetic engineering of fusion proteins, with a protein or organic
compound intended for inhibiting a metabolic process within targeted cells;
"Information' means any and all secret or proprietary materials, trade
secrets or other information related to developing, making, having made,
using, offering for sale, selling or importing Product (including, without
limitation, Technical Information and business information or objectives)
which is disclosed by one party to the other party;
"Improvements" means, collectively, new versions., releases, enhancements,
modifications, alterations, updates, corrections, processes, systems or fixes
to any of the InNexus Intellectual Property Rights (including without
limitation the filing of any patent, copyright, trademark: trade name, or
service mark application), which are developed by or on behalf of InNexus or
a sublicensee for use in conjunction with the InNexus Intellectual Property
Rights, in whole or in part, and any and all partial or intermediate versions
thereof, and any and all derivative works thereof, and any and all related
know-how, show-how, trade secrets and other proprietary, information, and
"Improvement" means any one of them;
"Indebtedness" means any and all advances, debts, duties, endorsements,
guarantees, liabilities, obligations, responsibilities and undertakings of a
person, individually or jointly with others, whether voluntary or
involuntary, however incurred, made or arising, whether due or accruing due,
absolute inchoate or contingent, liquidated or unliquidated, determined or
undetermined, direct or indirect, express or implied;
"InNexus Intellectual Property Rights" means any and all of InNexus current
and future patented, patentable and non-patentable intellectual property
(including without limitation the subject matter of the InNexus Patents and
that certain InNexus document entitled "SuperAntibody Technology Platform"),
trade secrets, proprietary information, formulae, specifications, designs,
regulatory filings and registrations, processes (including without limitation
diagnosis, screening and detection measures, systems, processes and
techniques) procedures, codes technical data. (including test results) and
materials, knowledge. know-how (including InNexus Know-how), show-how and
techniques relating to the subject matter of the InNexus Patents or otherwise
relating to InNexus' SAT technology platform (as developed by InNexus in part
alone and in part jointly with others), and any and all improvements
variations, updates, upgrades, modifications and enhancements thereto now or
in the future, and whether in written and electronic format;
"InNexus Know-how" means all know-how (including Technical Information) owned
by or licensed (with the right to grant sublicenses) to InNexus at any time
during the Tern of this Agreement and relating to making, having made, using,
offering for sale, selling and importing of any Compound or Product;
"InNexus Patents" means:
(a) all Patents (including any patent applications and provisional
applications) owned by or licensed (with the right to grant sublicenses) to
InNexus as of the Effective Date (including without limitation United Stares
patents numbered 5,596,081, 5,693,764, 5,800,991 and 6,238,667, and all
filings related to "Fusion Proteins with Constrained Peptides" and "Novel,
Bi-specific-like Conjugates Optimized for In Vivo Targeting", "Method of
affinity cross-linking biologically active immunogenic peptides to
antibodies", Fusion Proteins of Biologically Active Peptides and Antibodies"
and "Therapeutic Application of Dimerizing Non-Covalent Antibodies", and
other patents and patent rights set out in Appendix A) and any division,
continuation or continuation-in-part thereof, any patent issuing thereon and
any re-examinations or re-issues thereof, and other pending applications, and
any process or component thereof falling within the scope of any claim or
claims thereof applicable to InNexus' SAT technology platform; and
(b) all Patents acquired by or licensed to InNexus after the Effective Date
and related to InNexus' SAT technology platform;
"Joint Invention" means any invention (whether or not patentable) resulting
from-activities arising under this Agreement and which constitutes an
Improvement which is (a) conceived and reduced to practice by both parties
during the Term of this Agreement or (1)) conceived by both patties during
the Term of this Agreement and reduced to practice, by either or both
parties, during or within 24 months of the expiration or termination of this
Agreement, but specifically excludes all Compounds and Products;
"Joint Patents" means all Patents claiming Joint Inventions, and all Patents
claimed by Beglend or InNexus which relate to Joint Inventions, the practice
of which would infringe a valid claim of an InNexus Patent;
"Launch of Product" means the first dale upon which a Product is shipped
commercially by Beglend to an arm's length third party in a country for
valuable consideration which is actually received, after formal marketing
approval in that country, including any, required price approval, has been
granted from the relevant authority in that country for that Product:
"License" means the rights and license granted to Beglend under section 2 1
hereof;
"Licensed Technology" means the InNexus Intellectual Property Rights, the
InNexus Patents, InNexus' rights in and under any Joint Patents, all rights
held by InNexus under license if InNexus has the right to sublicense such
rights and all other proprietary information and intellectual property of
InNexus related to SAT;
"Lien" means any mortgage, debenture, charge, hypothecation, pledge, lien, or
other security interest or encumbrance of whatever kind or nature, regardless
of form and whether consensual or arising by law, statutory or otherwise that
secures the payment of any Indebtedness or the performance of any obligation
or creates in favour of or grants to any person any proprietary right;
"Net Sales Revenue" means all revenue (without duplication) received by
Beglend and its Affiliates:
(i) from sales of Products by Beglend and its Affiliates; and
(ii) from Beglend's sub-licensees in the form of royalties received from such
Affiliates and sub-licensees in respect of their sales of Compounds and
Products, and from such Affiliates and sub-licensees in the form of license
or sublicense fees, milestone payments and the like insofar as they relate to
Compounds and Products;
in each case after deduction of all costs directly related to any licensing
or sub-licensing transaction, as well as sales taxes, value added taxes,
customs and excise taxes and duties payable and actually paid by Beglend and
its Affiliates in connection with such sales (without reimbursement from
customers), and after deduction of any collection costs and any bona fide
cash or trade discounts, volume (quantity) discounts, rebates, allowances or
refunds paid, given or made by Beglend and its Affiliates in connection with
such sales or returns, or in connection with such licenses and sub-licenses,
and any shipping and handling charges actually paid by Beglend and its
Affiliates, calculated in accordance with GAAP;
"Patents" means:
(a) all patents and the patent applications relating in any way to the
subject matter of this Agreement;
(b) all patents arising from said applications and all patents and patent
applications based upon or claiming the priority date(s) of any of the
foregoing;
(c) any additions, divisions continuations, continuations-in-part,
amendments, amalgamations, reissues and re-examinations of such applications
or parents;
(d) any confirmation, importation and registration patents thereof or
therefore; and
(e) any extensions and renewals of all such patents and patent applications
in whatever legal form and by whatever legal title they are granted (e.g.
supplementary protection certificates);
"Product" means any recombinant form of protein, drug, pharmaceutical
formulation or other thing that contains any form of a Beglend Antibody
modified by use of the Licensed Technology or that may be manufactured,
produced or otherwise derived using the Licensed Technology and any form of a
Beglend Antibody now or in the future, whether for research, testing,
diagnostic, therapeutic and/or immunization/prevention applications or
purposes, and includes Bulk Products, Semi-Finished Products and Finished
Products;
"Royalty" means the royalty granted to InNexus pursuant to section 6.5;
"Regulatory Approval" means the approval, license, registration or other
authorization (including price approval) of the FDA in the United States or
similar regulatory authority within any other country necessary for the
commercial sale of a Product in such country;
"SAT" means the antibody enhancement and modification technology platform
which is the subject of US patent # 6,238,667 and other patents and pending
applications and which is commonly known as InNexus' SuperAntibody
Technology;
"Semi-finished Product" means all forms of the Product which are filled but
not packaged;
"Technical Information" means any and all technical data, information,
materials including samples of Product, chemical manufacturing data,
toxicological data and pharmacological data, clinical data, medical uses,
formulations, specifications, quality control testing data, and all
submissions and correspondence to and from the FDA with regard to Product
made by or on behalf of InNexus or its Affiliates, which is reasonably useful
to enable Beglend to make, have made, use, offer for sale, sell, export or
import Product or to obtain Regulatory Approval for the same;
"Term of the Agreement" means the time period set forth in Section 9.1 of
this Agreement;
"Valid Claim" means a claim made in any InNexus Patent that has not been
disclaimed, revoked or held invalid by a final unappealable decision of a
court of competent jurisdiction, and which claim, if issued, is otherwise
enforceable;
1.2 In this Agreement, except as otherwise expressly provided:
(a) "Agreement" means this agreement, including the preamble and the
schedules hereto, as it may from time to time be supplemented or amended and
in effect;
(b) all references in this Agreement to a designated "Section" or other
subdivision or to an appendix is to the designated Section or other
subdivision of, or appendix to, this Agreement;
(c) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular Section
or other subdivision or Schedule:
(d) the headings are for convenience only and do not form a part of this
Agreement;
(e) the singular of any term includes the plural, and vice versa, the use of
any term is equally applicable to any gender and where applicable, a body
corporate, the word "or" is not exclusive and the word "including" is not
limiting (whether or not non-limiting language, such as "without limitation"
or "but not limited to" or words of similar import, is used with reference
thereto);
(f) any accounting term not otherwise defined has the meanings assigned to it
in accordance with generally accepted accounting principles applicable in the
United States;
(g) any reference to a statute includes and is a reference to that statute
and to the regulations made pursuant thereto, with all amendments made
thereto and in force from tine to time, and. to any statute or regulations
that may be passed which has the effect of supplementing or superseding that
statute or regulations;
(h) where any representation or warranty is made "to the knowledge of" any
party, such party will not be liable for a misrepresentation or breach of
warranty by reason of the fact, state of facts, or circumstances in respect
of which the representation or warranty is given being untrue if such party
proves:
(i) that such party conducted a reasonable investigation so as to provide
reasonable grounds for a belief that there had been no
misrepresentation
or breach of warranty; and
(ii) that fact, state of facts, or circumstances could not reasonably be
expected to have been determined as a result of that reasonable
investigation, irrespective of the actual investigation conducted by
such party;
(i) except as otherwise provided, any dollar amount referred to in this
Agreement is in the lawful currency of the United States; and
(j) any other term defined within the text of this Agreement has the meaning
so ascribed.
2 GRANT OF RIGHTS
2.1 License Grant. InNexus grants Beglend, subject to the terms and
conditions of this Agreement and payment of US $60,OOO pursuant to section
6.1, the sole, exclusive and perpetual right and license to use the Licensed
Technology to:
(a) conduct research and development activities intended to result in the
development of Products involving up to three Beglend Antibodies and SAT;
(b) develop Compounds and Products based on the foregoing research and
development activities;
(c) make and have made, register, use, offer for sale, market, distribute,
export, import and/or sell any of the foregoing Compounds and Products
throughout the world; and
(d) sublicense the rights hereby granted in accordance with the provisions of
Sections 2.2 and 2.3;
and InNexus will provide to or to the order of Beglend all Licensed
Technology as may be required to permit Beglend to fully exercise the rights
and license hereby granted and to obtain the full benefit therefrom.
2.2 Limitations on License Notwithstanding any other provision herein:
(a) the License shall be limited to the Field of Use;
(b) Beglend shall be entitled to use SAT to develop Compounds and Products
based on up to three Beglend Antibodies, but not more than three Beglend
Antibodies; and
(c) InNexus shall not be restricted in any manner from using the Licensed
Technology for any use outside the Field of Use and without limiting the
generality of the foregoing, shall have the right to grant license to third
parties to use SAT in conjunction with other monoclonal antibodies not owned
by or under license to Beglend on such terms and conditions as InNexus may
consider advisable for its own exclusive right and benefit, so long as such
third parties are not carrying on business in competition with Beglend.
2.3 Sublicenses. Except as otherwise provided below, Beglend shall have the
right to sublicense its rights under the License to any person on and subject
to the following terms and conditions:
(a) if Beglend grants a sublicense, all of the terms and conditions of this
Agreement shall apply to the sublicensee to the same extent as they apply to
Beglend for all purposes other than the payment of Royalties. and Beglend
assumes full responsibility for the performance of all obligations so imposed
on such sublicensee and will, itself; pay and account to InNexus for all
payments due under this Agreement by reason of the operation of any such
sublicensees;
(b) Beglend shall provide a copy of each sub-license agreement to InNexus
within sixty days after execution and delivery of same;
(c) any invention discovered by a sublicensee as a result of research and
development activities using SAT and which constitute an improvement to SAT
shall be deemed to be held exclusively for the benefit of InNexus (and
Beglend under the License) and any patent or other intellectual property
right therein shall be assigned and transferred to InNexus promptly upon
written demand, subject to the right of Beglend to be paid a royalty by
InNexus equal to 1.5% of any revenue received by InNexus therefrom (including
sales revenue received by InNexus from sales of Products by InNexus and from
InNexus' Affiliates and sub-licensees in the form of royalties, license or
sublicense fees, milestone payments and the like received from such
Affiliates and sub-licensees), to a maximum of 150% of tile total amount of
all of Beglend's research and development costs (without any additional
allocation for overhead or other expenses not directly related thereto)
reasonably attributable to such invention; and
(d) InNexus shall have, without the requirement for further action of the
parties, an exclusive worldwide right and license to the unrestricted use of
any Joint Invention (other than use of such Invention in connection with any
Beglend Antibody or for the development of any Compound or Product, which use
is exclusively reserved to Beglend) and, to the extent claimed or covered
thereby, any Joint Patent hereafter granted which covers an improvement which
is or may be competitive with SAT (a "Joint SAT Invention"), subject to its
obligation to pay Beglend the royalty on revenue therefrom as set out in
section 2.3(c) above, and shall execute and deliver such further agreements
and instruments as may be reasonably necessary to give effect to such
provisions as and when required by either party from time to time.
3 EVALUATION, RESEARCH AND DEVELOPMENT
3.1 Delivery of Conjugates: As soon as practicable after execution hereof,
InNexus shall prepare Immunoconjugates based on the conjugation of SAT and
the initial Beglend Antibody (i.e. the first antibody licensed to Beglend by
BioCurex) (each an "SAT Conjugate") and deliver same, together with
corresponding research data with respect to the criteria set out in
subsection 3.2 to Beglend ("Initial Deliveries").
3.2 Acceptance of Conjugates: Beglend shall conduct such tests and
examinations as it may consider reasonably necessary to determine
acceptability of the Immunoconjugates in accordance with the criteria set out
below and will provide written confirmation of same to InNexus ("Conjugate
Acceptance") or written notice that the Immunoconjugates are not acceptable,
specifying the reasons for such rejection ("Conjugate Rejection").
3.3 Evaluation. Commencing after the date of any Conjugate Acceptance,
Beglend shall conduct such additional tests, examinations and research as it
may deem necessary or desirable for the purpose of determining whether to
proceed with further research and development with a view to developing one
or more Products utilizing the Licensed Technology and assuming that Beglend
determines to proceed, InNexus shall co-operate to the extent Beglend may
reasonably require to carry out such research and development as Beglend
considers necessary or desirable to develop one or more Compounds and/or
Products and to obtain Regulatory Approval therefor in the United States,
Canada and such other jurisdictions as Beglend may determine; provided that
all costs of such research and development will be borne by Beglend and for
greater certainty, InNexus shall not be obligated to provide services to
Beglend in respect of such research and development work unless and until
arrangements are made to compensate InNexus on terms satisfactory to InNexus.
3.4 Product Sales and Marketing: Upon obtaining the required Regulatory
Approval for a Product, Beglend shall notify InNexus in writing of same and
shall thereafter have the right to develop and implement (with such
assistance and co-operation of InNexus as Beglend may reasonably require) a
plan to market and sell or otherwise commercially exploit the Products
(whether directly, by sub-license, joint venture or otherwise) in such manner
as Beglend determines (in its sole discretion) to be commercially feasible
and expedient having regard to Beglend's financial circumstances from time to
time.
3.5 Additional InNexus Activities: InNexus shall, during the term hereof:
(a) provide such information, documentation and advice respecting SAT and the
initial Immunoconjugates delivered under section 3.1 which are in its
possession and control as may be reasonably necessary to enable Beglend to
use and exploit the Licensed Technology, to evaluate the Immunoconjugates and
to proceed with such research and development programs (each an "R&D
Program") as Beglend determines to be necessary or desirable to develop one
or more Products, to a maximum of three Products; and
(b) participate in such research and development and other activities of
Begiend as Beglend may from time to time reasonably request, including
provision of such of the following services as may be requested by Beglend
from time to time, all on such terms and conditions and in consideration of
such payments as may from time to time be agreed upon by Beglend and InNexus;
provided that all costs of such research and development activities will be
borne by Beglend and, for greater certainty, InNexus shall not be obligated
to provide any services to Beglend in respect of such research and
development work unless and until arrangements are made to compensate InNexus
on terms satisfactory to InNexus:
(i) preparation of a full and comprehensive business plan which describes the
research and development work contemplated hereby, analyzes and assesses the
technical viability and feasibility of the proposed research and development
work, and describes the technical and other risk factors related thereto, all
in form and substance sufficient in all respects to address technical
concerns relating to same which could reasonably be expected to be asked by
technical advisors to Beglend and those persons to whom Beglend and Bio
Kinetix, and their agents and representatives, now intend or may hereafter
desire to make presentations to raise finds to finance the development of
Beglend's business, including without limitation venture capitalists,
registered representatives and securities dealers in Canada, Europe, Asia and
the United Stares ("Financiers");
(ii) preparation of a comprehensive, multi-year financial plan and budget for
the research and development work contemplated hereby, including without
limitation a time estimates for completion of each phase or "milestone" of
such work and a budget for any required equipment and any required support
services from third parties, and an assessment of available government grant
and loan programs, all in form and substance and in sufficient detail to
address technical questions which could reasonably be expected to be asked by
technical advisors to Beglend and Financiers;
(iii) preparation of a description of the types, numbers and required skills
of personnel anticipated to be required by IiNexus to successfully complete
the research and development work contemplated hereby, together with job
descriptions for each of them and the duration of their expected service
having regard to the development schedule included in the budget provided for
herein;
(iv) identification of potential third party service providers having
technical expertise in areas identified by Beglend from time to time as
necessary or desirable for the conduct of the research and development
contemplated by this Agreement, and assisting Beglend in negotiating service
contracts with such service providers;
(v) identification of potential business, strategic alliance and joint
venture partners, and assisting Beglend in negotiations with such persons;
(vi) liaising with current and prospective business, strategic alliance and
joint venture partners and with prospective Financiers;
(vii) liaising with various governmental, regulatory and health authorities
and agencies, including in particular the British Columbia Cancer Control
Agency and Health Canada, and similar organizations in the United States,
including the FDA, on matters relating to the subject matter of this
Agreement; and
(viii) the delivery of regular progress reports to and the holding of regular
meetings with designated Beglend representatives, and production of such
presentations and written technical reports on the research and development
work conducted by InNexus and subcontractors of Beglend, and the results
thereof, in such form and detail as Beglend may reasonably require to ensure
the full exploitation of the License and all licenses pursuant to which
Beglend has acquired and hereafter acquires rights to Beglend Antibodies, and
to ultimately develop Compounds and Products; all as may be necessary or
desirable to maintain, promote, enhance and expand the business and
opportunities of Beglend and in that regard InNexus will provide, subject to
satisfactory arrangements being made for compensation therefore;
(ix) the services of employees or approved contractors, each of whom is duly
qualified, experienced and competent or has been approved by Beglend; and
(x) sufficient of the services of Dr. A. Charles Morgan to ensure the
overall quality of and results from such services-
3.6 Information Exchange. Beglend and InNexus will from time to time meet to
exchange information and progress on activities covered by or reasonably
pertinent to this Agreement as follows;
(a Beglend will inform InNexus of its ongoing R&D Programs and other
activities hereunder including: (i) any development plans and related budgets
for the development of Products hereunder; and (if) its progress in the areas
of applied research and development of Products, manufacturing of SAT
Immunoconjugates, the conduct of clinical trials and interactions 'with the
United States FDA;
(b) InNexus will inform. Beglend of: (i) progress with licensing SAT
technology to other companies and InNexus' other activities, particularly as
the same directly relates to the rights granted to Beglend hereunder; and
(ii) improvements or new technology developed or licensed by InNexus that,
though not covered by the License, which might be useful to Beglend in its
own Product development; and
(c) the information exchanged by both parties will be governed and limited by
the provisions herein respecting the use and disclosure of Information and,
where required or the disclosing party considers appropriate, third party
confidentiality agreements.
3.7 Due Diligence. Beglend shall use reasonable efforts consistent with
prudent business practices to develop the SAT versions of the Beglend
Antibody or any other Products the parties agree shall be developed hereunder
and to obtain and maintain necessary governmental approval to market these
Products, having regard to its financial and manpower resources from time to
time; and InNexus shall use reasonable efforts consistent with prudent
business practices to perform the research and development activities agreed
to be performed by Beglend hereunder; provided that Beglend shall have full
and final control over all aspects of all services provided by InNexus.
3.8 Participation at FDA. Beglend shall promptly forward to InNexus copies of
all material correspondence with the FDA and shall promptly advise InNexus of
all prospective meetings with the FDA related to Products developed by
Beglend using SAT, and InNexus shall have the right to be present at and
participate in any such meetings.
3.9 Title. All rights, title and interest in and to all Compounds and
Products shall be wholly and solely owned by Beglend and all filings for
Regulatory Approval shall be made by or on behalf of and in the name of
Beglend.
3.10 Data. All data generated on account of any Development Program shall be
owned by Beglend and shall not be provided by InNexus to any third party
without the consent of Beglend.
3.11 Government Grants and Loans. All governmental and other grants and loans
sought and obtained in connection with the License and any services provided
hereunder or in respect hereof shall be sought and obtained in the name of
Beglend.
4 SUPPLY AND MANUFACTURING
4.1 Access. InNexus will grant Beglend reasonable access at all reasonable
times to its facilities or contractors for production of intermediates
involved in the modification of monoclonal antibodies using SAT technology
and will advise and instruct its staff and contractors accordingly.
4.2 Introductions. InNexus will provide assistance, information and advice as
may be reasonably necessary to enable Beglend to negotiate contracts with
contractors at or near the prices charged to InNexus by such contractors.
5 COMMERCIALIZATION
5.1 Due Diligence. Beglend shall use reasonable efforts consistent with
prudent business practices to market and sell Products it determines to
commercialize hereunder in all major countries of the world (i.e., USA, Japan
Germany, France, Italy, United Kingdom, Canada and Brazil); having regard to
its financial and manpower resources from time to time.
5.2 Assistance by InNexus. InNexus shall use reasonable efforts consistent
with prudent business practices to assist Beglend on an "as needed" basis and
at the request of Beglend, for such compensation and on such terms and
conditions as the parties may reasonably agree, during the commercialization
phase of each Product in the USA and Canada.
5.3 Marketing and Promotion. Beglend shall retain sole responsibility and
right to make all decisions relating to the marketing and promotion of
Products,
5.4 Trademarks. Beglend shall own the trade names and trademarks for all
Products and Beglend shall bear the cost of obtaining and maintaining such
trademarks; and InNexus shall own all trademarks pertaining to SAT and other
intellectual property included in the Licensed Technology.
5.5 Use of the InNexus Name. The packaging and promotional materials for the
Products marketed by Beglend and/or Beglend's sub-licensees shall identify
InNexus as licensor of the InNexus Intellectual Property Rights; provided
that if only one name is allowed to be in any specific item of packaging of
promotional material pursuant to governmental laws or regulations, then
Beglend may use its name alone on such item, without identifying InNexus as
licensor.
6 CONSIDERATION
6.1 Cash Consideration: As consideration for the License and The performance
of InNexus' obligations under this Agreement, Beglend will pay InNexus
$60,000 (U.S. funds) within three business days next following the Effective
Date; and for greater certainty, the License will not become effective until
such payment is made.
6.2 Share Consideration: As additional consideration for the License and the
performance of InNexus' obligations under this Agreement, upon performance by
InNexus of its obligations under section 3.1 of this Agreement, Beglend will
issue to InNexus, as fully-paid and non-assessable, 1,600,000 common shares
without nominal or par value in the capital of Beglend (the "Beglend License
Shares"); provided that if by such time Beglend has completed the
contemplated assignment of the License and Beglend's rights and obligations
under this Agreement to Bio Kinetix, Beglend (or Bio Kinetix, as the case may
be) will have the right to substitute (or, if the Beglend License Shares have
already been issued, arrange for the exchange of the Beglend License Shares
for) 1,600,000 common shares without nominal or par value in the capital of
Bio Kinetix (the "Bio Kinetix License Shares"), all with the intent and
result that upon completion of such assignment (or share exchange) (i) the
following numbers of shares of Bio Kinetix will be owned by the following
persons; (ii) Bio Kinetix will have assumed all of Beglend's rights and
obligations hereunder as if Bio Kinetix were the original licensee hereunder;
(iii) Beglend will have no further obligations to InNexus pursuant to this
Agreement; and (iv) InNexus will not own any shares of Beglend:
Name Number of Bio Kinetix Shares Percentage
---- ---------------------------- ----------
InNexus 1,600,000 10.00%
John Todd 1,000,000 6.25%
Linda Young 1,000,000 6.25%
Susan Minchin 1,000,000 6.25%
Beglend 9,800,000 71.25%
and it is hereby acknowledged and agreed that:
(a) all Beglend License Shares and all Bio Kinetix License Shares will be
subject to such restrictions on transfer and resale as may be prescribed by
applicable laws and regulatory agencies, and will be legended accordingly;
(b) Beglend is hereby irrevocably nominated, constituted and appointed as the
lawful owner of InNexus for the sole and limited purpose of doing such acts
and things and executing and delivering such documents and instruments as may
be required a effect any exchange of Beglend License Shares for Bio Kinetix
License Shares pursuant to this section; and
(c) Beglend and/or BioKinetix shall have the right to raise money through the
issue of debt and/or equity securities to arm's length third parties for
valuable consideration without the consent of InNexus so long as ail of the
aforementioned persons are diluted ratably; and InNexus hereby irrevocably
waives any and all pre-emptive rights it might otherwise have at law or in
equity respecting the issue of any such securities to a maximum aggregate
issue price of US $5,000,000
6.3 Royalty. Beglend shall pay royalties to InNexus equal to 3% of Net Sales
Revenue, calculated and payable as follows:
(a) any Royalty payable hereunder shall be calculated on a Product by Product
basis for each jurisdiction (each a "Market Area")in which any such Product
is sold;
(b) the period for which Beglend is required to pay a Royalty hereunder shall
commence upon the first Launch of Product in a particular Market Area, and
shall continue for the patent life of any Patents comprising the Licensed
Technology or any Joint Patents which may hereafter be filed with respect to
such Product or upon which such Product is based in that Market Area (the
"Royalty Payment Period");
(c) the first Royalty payment shall be calculated for the broken period
commencing from the date of the first Launch of Product to and including the
last day of Beglend's fiscal year in which the Launch of Product took place;
and any succeeding Royalty payments shall be calculated from the first day
until the last day of the corresponding fiscal year; and all Royalty payments
shall be payable by cheque, cash, or bank draft, to InNexus' order, and shall
be paid within 180 days of the completion of Beglend's fiscal year
corresponding to that payment; provided that, notwithstanding the foregoing,
Beglend shall pay quarterly installments of the estimated amount of Royalty
payments due for each fiscal quarter completed after the date of Launch of
Product, which shall be payable within 90 days after the end of each such
quarter, and shall, when calculating the amount of Royalty due for that
fiscal year in accordance with sub-section 6.5(c), adjust the installment
payable for the final quarter in each fiscal year to reflect Beglend's
estimate of the actual amount payable, after accounting for each of the prior
payments made in that fiscal year; and Beglend shall pay all royalties in the
currencies in which the revenues giving rise to such payment obligation are
received by Beglend unless otherwise agreed in writing between the parties;
(d) On or before 180 days following the end of each fiscal year of Beglend
after the first Launch of Product, Beglend shall deliver to InNexus a
statement indicating, in reasonable detail as of the last day of the
immediately preceding fiscal year, the calculation of Net Sales Revenue for
each Product sold in each Market Area and the aggregate of the Royalty
payable with respect to each such Product and each such Market Area for such
year:
(e) Beglend will maintain up to date and complete records for the production
and sale of Products in each Market Area including accounts, records,
statements, the amount of free Products and sample Products distributed,
Product returns relating to sales and marketing of the Product, and InNexus
or its agent shall have the right at all reasonable times, including for a
period of 12 months following the expiration or termination of this
Agreement, to inspect such accounts records and statements and make copies
thereof at their own expense for the purpose of verifying the amount of
Royalty payments to be made by Beglend to InNexus pursuant hereto; and
InNexus shall have the right at its own expense to have such accounts audited
by independent auditors once each year;
(f) Beglend shall have an audited statement prepared by its auditors (which
shall be qualified certified public accountants or chartered accountants) for
each year with respect to the Royalty payable to InNexus hereunder by 180
days following the end of each fiscal year, and Beglend shall forthwith
deliver a copy of such statement to InNexus;
(g) All Royalty payments shall be considered full and final satisfaction of
all obligations of Beglend making the same in respect thereof if such
payments or the calculations in respect thereof are not disputed by InNexus
within 180 days after receipt by InNexus of the audited statement referred to
in subsection 6.5(f) hereof; and any disputes under this subsection shall be
decided by arbitration as herein provided;
(h) for the purpose of calculating Royalties, revenue shall be deemed to have
been received when it has actually been received in the form of cash or
credit or by way of any measurable benefit, advantage or concession; and in
the event of any partial payment, the Royalty otherwise payable shall be pro-
rated accordingly; in no event will Beglend be obligated to pay Royalties
more than once in respect of any revenue received by it or its associates,
affiliates, licensees or sub-licensees in connection with any single
transaction (i.e. no "double" Royalties); and
(i) for any product containing both a pharmaceutically active agent which
causes it to be considered a Product and one or more other pharmaceutically
active agents which are not Products (each a "Combination Product"), the
parties shall in good faith negotiate and agree to an appropriate adjustment
'0 the Net Sales Revenue to reflect the relative contribution of each Product
and each other pharmaceutically active agent which is not a Product to the
Combination Product; and if after good faith negotiations (not to exceed
ninety (90) days in duration unless extended by mutual agreement), the
parties can not agree to an appropriate adjustment, Net Sales Revenue shall
be equal to Net Sales of the Combination Product multiplied by a fraction,
the numerator of which is the reasonable fair market value of the Compounds
contained in the Combination Product and the denominator of which is the
reasonable fair market value of the pharmaceutically active agents contained
in the Combination Product, as determined by arbitration.
6.4 Milestone Payments. Promptly upon initiation of a Phase 1 clinical trial
in respect of any Product developed hereunder and continuing during until
approval of a Biologics License Application therefore (a "BLA") Beglend
shall, for each Product developed hereunder, make the following non-
refundable payment(s) to InNexus within (30) days after occurrence of the
event(s) set forth below:
(a) initiation of a Phase I Clinical Trial $60,000 (Sixty Thousand Dollars);
(b) initiation of a Phase II clinical Trial or a Phase II portion of a Phase
I/II Clinical Trial - $250,000 (Two Hundred and Fifty Thousand Dollars);
(c) initiation of a multi-center Phase III Clinical Trial - $500,000 (Five
Hundred Thousand Dollars); and
(d) approval of a BLA - $l,000,000 (One Million Dollars).
6.5 Withholding Tax. All payments under Sections 6.2 and 6.3 shall be made in
full without deduction of taxes, charges and any other duties (collectively
"Taxes") that may be imposed, provided however, that Beglend shall to the
extent required under the tax law of a given country, withhold such Taxes
from any such sum and forthwith upon paying such sum to the given countries'
tax authorities promptly furnish InNexus with the receipt thereof in respect
of the same; and the parties agree to cooperate in all respects necessary to
(a) take advantage of reduced ~withholding tax rates available under any
applicable tax treaties, and (b) assist InNexus to obtain, at inNexus' cost,
any refunds for InNexus of amounts withheld and paid to tax authorities, at
the cost of InNexus.
6.6 Third Party Payments. InNexus shall be solely responsible for all
royalties and other payments that may be due or payable by it to a third
party with respect to the Licensed Technology or otherwise during the Term of
this Agreement, including any payments that may become due under agreements
entered into subsequent to the date of this Agreement.
7 INFORMATION
7.1 Exchange. During the Term of the Agreement, the parties will, free of
charge, exchange all Information in their possession and control which they
are legally permitted to disclose as may be reasonably necessary for the
parties to meet their obligations under this Agreement and shall do such
things as may be reasonably necessary to give effect to his provision
including, in particular, the following:
(a) the parties will use their best commercial efforts to establish a
mechanism by which the parties will share Information under this section.
(b) InNexus shall make available to Beglend all Information respecting the
Intellectual Property Rights in its possession or control which has not been
previously disclosed to Beglend;
(c) without limiting the generality of the forgoing, a party shall, to the
extent it is legally permitted to do so: (i) exchange all information coming
into its possession or control, or its representatives' or Affiliates
possession or control, relating to formulation, manufacture, improvement use
and sale of Product, including any such information consisting of technical,
pharmacological, preclinical, clinical, biochemical, toxicological and
pharmacokinetic experimental data and results related to Product; (ii) permit
a reasonable number of representatives of the other party or its Affiliates,
at reasonable time and upon reasonable notice, to observe, review, make
copies of, and/or discuss with the party or its Affiliate's scientists and/or
clinicians supervising or conducting research related to Product, the results
of studies and/or submissions to governmental agencies concerning Products,
at mutually agreeable times and locations; and (iii) permit a reasonable
number of representatives of the other party or its Affiliates, at reasonable
time and upon reasonable notice, to observe, review, make copies of, and/or
discuss wit its or its Affiliate's scientists supervising or conducting
manufacture of Product or third patty scientists supervising or conducting
manufacture on behalf of it, at mutually agreeable times and locations.
7.2 Confidentiality. During the Term of the Agreement and for five (5) years
after termination, a receiving party shall a) treat Information provided by a
disclosing party as it would treat its own information of a similar nature
and take all reasonable precautions not to disclose such Information to third
parties except Affiliates or actual or potential sub-licensees or sub-
contractors who agree to be bound by the same terms and conditions as found
in this Article 7, without the other party's prior written authorization and
b) not use such Information for any purpose other than the purpose of
exercising its rights and fulfilling its obligations under this Agreement.
7.3 Exceptions to Confidentiality Provisions. The provisions of this Section
7.2 shall not apply to such information which:
(a) was known or used by the receiving patty or its Affiliates prior to its
date of disclosure to the receiving party or its Affiliates by the disclosing
party or its Affiliates, as evidenced by the prior written records of the
receiving party or its Affiliates; or
(b) either before or after the date of the disclosure to the receiving party
or its Affiliates, is lawfully disclosed to the receiving party or its
Affiliates by a third party rightfully in possession of such information; or
(c) either before or after the date of the disclosure to the receiving party
or Affiliates, becomes published or generally known to the public through no
fault or omission on the part of the receiving party or its Affiliates, but
such inapplicability applies only after such information is published or
becomes generally known; or
(d) is independently developed by the receiving party or its Affiliates
without reference to or reliance upon any such information of the disclosing
party or its Affiliates; or
(e) is required to be disclosed by the receiving party or its Affiliates to
comply with applicable laws. to defend or prosecute litigation or to comply
with governmental regulations, or to make filings for Regulatory Approval in
any jurisdiction; provided that the receiving party or its Affiliates
provides prior written notice of such disclosure to the disclosing party or
its Affiliates and, to the extent practicable, takes reasonable and lawful
actions to avoid anct1or minimize the degree of such disclosure.
7.4 Remedies on Breach. Each of the parties hereby acknowledges that it
understands and agrees that the other parry may suffer irreparable harm in
the event that it breaches any of its obligations under Sub-section 7.2 of
this Agreement and that monetary damages may be inadequate to compensate it
for such a breach. Accordingly, each of the parties agrees that in the event
of a breach or threatened breach by a party of any the provisions in Sub-
section 7.2, the other party, in addition to and not in limitation of any
other rights, remedies or damages available to it at law or in equity, shall
be entitled to an apply for an interim injunction, interlocutory injunction
and permanent injunction in order to prevent or to restrain any such alleged
breach by such party, or by any or all of its partners, co-venturers,
employers, employees, servants, agents, representatives and any and all
persons, directly or indirectly, acting for, on behalf of, or with such
Party,, and the parties hereby agree that other remedies are inadequate to
fully protect the rights of the party not in breach.
7.5 Publications. During the Term of the Agreement, the following
restrictions shall apply with respect to disclosure by any party of
Information in any publication or presentation (collectively "Publications"):
(a) a party ("Publishing party") shall provide the other party with a copy of
any proposed Publication at least forty-five (45) days or less if agreed by
both parties prior to submission for publication so as to provide such other
party with an opportunity to recommend any changes it reasonably believes are
necessary to continue to maintain the Information disclosed by the other
party to the Publishing party in accordance with the requirements of this
Agreement and the incorporation of such recommended changes shall not be
unreasonably refused; and
(b) if such other party notifies ("Publication Notice") the Publishing party
in writing within forty-five (45) days of receipt of the copy of the proposed
Publication, that such Publication in its reasonable judgment (i) contains an
invention, solely or jointly conceived and/or reduced to practice by the
other party, for which the other party reasonably desires to obtain patent
protection, or (ii) could be expected to have a material adverse effect on
the commercial value of any Information disclosed by the other parry to the
Publishing party, the Publishing party shall prevent such publication or
delay such publication for a mutually agreeable period of time;
(c) In the case of inventions, a delay shall be for a period reasonably
sufficient to permit the timely preparation and filing of a patent
applications on the Invention, and in no event less than one hundred and
eighty (180) days from the date of Publication Notice; and in the event the
parties do not agree as to whether such Publication (i) contains an
invention, solely or jointly conceived and/or reduced to practice by the
other party, or (ii) could be expected to have a material adverse effect on
the commercial value of any Information disclosed by the other party to the
Publishing party, either party may submit the matter to arbitration generally
in accordance with the procedures set forth in Article 11 of this Agreement.
7.6 Exceptions. The restrictions set forth in this Article 7 shall not
prevent either party from (i) preparing, filing, prosecuting or maintaining a
patent application or its resulting patents related to the making, having
made, using, offering for sale, selling or importing of Product, (ii)
disclosing Information provided by the Disclosing party to persons working on
behalf of the Receiving party or to governmental agencies, to the extent the
Receiving party reasonably believes is required or desirable to secure
Regulatory Approval or any other government approval for the development,
manufacture, marketing or sale of Product, or (iii) upon imminent approval or
actual approval for Regulatory Approval by a governmental agency in a country
of a drug application on Product, disclosing Information to the extent
reasonably necessary to promote the use and sale of Product in the country.
7.7 Adverse Events. Beglend shall be responsible for reporting to the
appropriate regulatory authorities all adverse events related to the use of
the Products worldwide. Adverse events related to the use of the Products
worldwide shall be recorded in Beglend's standard database and during the
period of research into and development of Products, the parties will
coordinate their efforts to assure that all adverse events are reported
properly.
8 PATENTS
8.1 Ownership of Technology. Subject to Section 8.2, ownership of the InNexus
Intellectual Property Rights and other intellectual property owned or
controlled by InNexus shall remain vested at all times in InNexus, Ownership
of Joint Patents shall be vested jointly in InNexus and Beglend, and all
other intellectual property rights and other rights and work product
comprised in or developed or produced pursuant to or in connection with the
use of the Licensed Technology or otherwise pursuant to the provision of
services by InNexus to Beglend shall vest in and be legally and beneficially
owned by Beglend and InNexus, for itself and its directors, officers,
employees, contractors, Affiliates and associates, hereby waives and all so-
called "moral rights" of creation, invention or authorship to same and
agrees, for itself and its directors, officers, employees, contractors,
Affiliates and associates never to assert any claim to any "moral rights".
8.2 Patent Filing, Prosecution and Maintenance. InNexus will (i) prepare
file, prosecute and maintain all InNexus Patents in such countries as may be
determined by the parties (ii) consult with Beglend as to the preparing,
filing, prosecuting and maintaining of such patent applications and patents,
and (iii) furnish to Beglend copies of all significant documents relevant to
any such preparation, filing, prosecution or maintenance; and
(a) InNexus shall furnish such documents and consult with Beglend in
sufficient time before any action by InNexus is due to allow Beglend to
provide comments thereon, which comments InNexus shall consider;
(b) InNexus shall bear all costs and expenses for preparing, filing,
prosecuting and maintaining such patents and patent applications;
(c) Beglend shall cooperate, in all reasonable ways and at InNexus' cost, in
connection with the preparing, filing, prosecuting and maintaining InNexus
Patents;
(d) should InNexus decide that it does not desire to file, maintain or
prosecute any InNexus Patent in one or more countries. it shall promptly
advise Beglend thereof and, at the request of Beglend, InNexus shall (i) in
the case of InNexus patents which are owned by InNexus, assign to Beglend its
rights in and to such patent or patent application in such country or
countries, or (ii) in the case of InNexus patents which are licensed, provide
Beglend with such fights to prosecute and maintain such patent or patent
application as may be permitted, and Beglend will thereafter file, prosecute
and/or maintain the same at Beglend's own cost, to the extent that Beglend
desires to do so.
8.3 Joint Patent Applications. As soon as a party concludes that it wishes to
file an application to obtain a Joint Patent or a patent application claiming
a Joint Invention, it shall immediately inform the other party and;
(a) the party also will provide the other party with the determination of
inventors and a copy of a draft specification, if any, and the scope of
claims as early as possible. Unless otherwise agreed, Beglend agrees to (1)
prepare, file, prosecute and maintain such priority patent application,
corresponding foreign patents, and resulting patents, (ii) consult with
InNexus as to the preparing, filing, prosecuting and maintaining of such
patent applications and resulting patents, and (iii) furnish InNexus with
copies of all documents relevant to any such preparation, filing, prosecution
or maintenance;
(b) unless agreed otherwise, the filing party shall furnish such documents
and consult with the other party in sufficient time before any action by the
filing party is due to allow the other party to provide comments thereon,
which comments the filing party shall consider;
(c) all external costs and expenses for preparing, filing, prosecuting and
maintaining such patent applications and resulting patents in the USA and
Canada shall be equally shared by the parties;
(d) all external costs and expenses for preparing, filing, prosecuting and
maintaining such patent applications and resulting patents in the countries
other than the USA and Canada shall be borne by Beglend;
(e) each party shall bear its internal costs, and on request of the party
performing the filing, the other party will cooperate, in all reasonable
ways, in connection with the preparing, filing, prosecuting and maintaining
of such patent applications and resulting patents; and
(f) should the filing party decide that it does not desire to file, maintain
or prosecute a patent or patent application for a Joint Patent or claiming a
Joint Invention in one or more countries, it shall promptly advise the other
party thereof and, at the request of the other party, the filing party shall
assign to the other party, its rights in and to such patent or patent
application in such country or countries, and the other party will thereafter
file, prosecute and/or maintain the same at the other party's own cost, to
the extent that the other party desires to do so.
8.4 Infringement by Third parties. Each party shall promptly notify the other
in writing of any alleged or threatened infringement of the InNexus Patent
and Joint Patents, of which it becomes aware, and;
(a) InNexus shall have the right, but not the obligation, to bring, at
InNexus' expense and in its sole control, an appropriate action against any
person or entity infringing an InNexus Patent directly or contributorily; and
if InNexus does not bring such action within ninety (90) days of notification
thereof (or such sooner period of time as may be required pursuant to any
applicable legislation necessary to preserve its rights in within a
particular jurisdiction) to or by Beglend, Beglend shall have the right, but
not the obligation, to undertake, at Beglend's expense and in its sole
control, such action; and the party not bringing an action under this
paragraph shall be entitled to separate representation in such matter by
counsel of its own choice and at its own expense, but such party shall
cooperate fully with the party bringing such action;
(b) with respect to third party infringement of Joint Patents, the parties
shall confer and take such action, and allocate expenses and recoveries in
such manner, as they may agree; and in the absence of agreement within ninety
(90) days of notification thereof, Beglend shall have the right, but not the
obligation, to bring, at Beglend's expense and in its sole control, an action
against any person or entity infringing a Joint Patent directly or
contributorily and InNexus shall have the right to be fully informed
regarding any litigation brought thereunder by Beglend, including the status
of any settlement activity;
(c) notwithstanding anything herein to the contrary, should a party receive
notice with respect to a Product under any applicable legislation which, if
applicable to that Product, would have the effect of restricting the price,
marketability, or the ability of such product to be sold on normal commercial
terms notwithstanding Regulatory Approval ("Statutory Notice"), then such
party shall immediately provide the other party with a copy of such Statutory
Notice and (i) InNexus shall have thirty (30) days from date on which it
receives or provides a copy of such Statutory Notice (or such lesser time as
may be required under applicable legislation to respond to or contest the
application thereof to the Product) to provide written notice to Beglend
whether InNexus will bring suit at its expense within a forty-five (45) day
period from the date of such Statutory Notice (or such lesser time as may be
required under applicable legislation); and (ii) should such thirty (30) day
period (or shorter period, where required under applicable legislation)
expire without InNexus bringing suit or providing such notice of its
intention to proceed, then Beglend shall be free to immediately bring suit in
its name.
(d) the party which is not in control of any action brought pursuant to any
of sections (a), (b) or (c) may elect to contribute fifty-percent (50%) of
the costs of litigation against such third party infringer, by providing
written notice to the controlling party within ninety (90) days after such
action is first brought; and (i) if the non-controlling party elects to bear
50 percent (50%) of such litigation costs, it shall receive fifty percent
(50%) of any damage award or settlement resulting from such action; (ii) if
the non-controlling party does not elect to share such litigation costs, it
shall not participate in any damage award or settlement resulting from such
action;
(e) neither party shall settle a claim brought under this Section 8.4 without
the consent of the other party, and (i) in the event of any recovery of
monetary damages from the third party, whether such damages result from the
infringement of InNexus Patents or Joint Patents, such recovery shall be
allocated first to the reimbursement of any expenses incurred by the parties
in the litigation under this section (including, for the purpose, a
reasonable allocation of internal counsel and other expenses), and thereafter
as provided in Section 8.4(d); and (ii) if the amount recovered from the
third party is less than the aggregate expenses of the parties incurred in
connection with such litigation, the recovery shall be shared pro rata
between InNexus and Beglend in proportion to their respective expenses.
8.5 Infringement of Third Party Rights. In the event that a third party at
any time provides notice to, or commences an action, suit or proceeding
against a party or such party's Affiliates, sub licensees or distributors,
claiming infringement of the third party's patent rights or copyrights or
unauthorized use or misappropriation of its technology, based upon an
assertion or claim arising out of the making, having made, using, offering
for sale, selling or importing of a Product such party shall promptly notify
the other party and (i) neither party may settle such claim or action without
the consent of the other party; (ii) the parties shall also discuss how the
expenses and any recoveries from such action should be treated: and (ii) if
the parties do not reach agreement, InNexus shall make the final decision at
its own discretion and expense.
9 TERM AND TERMINATION
9.1 Term. The Term of the Agreement shall commence on the Effective Date and
unless sooner terminated as provided in this Article, expire on a country-by-
country basis on the expiration of the applicable Royalty Payment Period, as
set forth in sub-section 6.3(b).
9.2 Termination. If Beglend fails to remedy any one of the following defaults
within 30 days after written notice from InNexus to remedy such default,
InNexus may at its option, to be exercised reasonably and subject always to
the right of arbitration on the part of Beglend terminate the License hereby
granted forthwith by delivering notice in writing confirming the continuing
default and giving notice of termination therefore to Beglend;
(a) if Beglend is declared insolvent by a Court of competent jurisdiction or
makes an assignment for the benefit of its creditors, is declared bankrupt,
makes or files a notice of intention to make a proposal or otherwise takes
advantage of provisions for relief under the Companies Creditors Arrangement
Act (Canada), the Bankruptcy and Insolvency Act (Canada) or similar
legislation in any jurisdiction and the proposal or application is defeated;
or
(b) if any resolution is passed or order made or other steps taken for the
winding up, dissolution, liquidation or other termination of the existence of
Beglend and Beglend acts on such resolution; or
(c) if a receiver, receiver-manager or trustee in bankruptcy or similar
officer is appointed to take charge of the affairs of Beglend and such
appointment is not set aside within 90 days; or
(d) Beglend fails to pay Royalties when due and fails to pay such overdue
Royalties within 30 days of receiving written notice from InNexus specifying
the nature and amount of the unpaid Royalties and demanding payment.
9.3 Suspension. Beglend shall have the right to terminate this Agreement by
written notice to InNexus if InNexus is in material breach of its obligations
hereunder or does not provide the services to be produced by it pursuant to
this Agreement or any other agreement, written or oral, substantially in
accordance with the terms of this Agreement or such other agreement, or may,
at Beglend's option, suspend payment of Royalties and/or service fees until
such time as such breach is cured and/or such services are recommended or
properly provided.
9.4 Material Breach. Termination of this Agreement shall not relieve either
party of the performance of any obligations incurred or payments required to
be made prior to the effective date of termination.
9.5 Survival. Notwithstanding any termination of this Agreement, the
obligations of the parties with respect to audit under Section 6.5 and
Information under Article 7, as well as any other provisions, which by their
nature are intended to survive any such termination, shall survive and
continue to be enforceable.
10 WARRANTIES AND INDEMNITIES
10.1 InNexus Warranties. InNexus hereby represents and warrants to Beglend as
follows:
(a) InNexus has right, authority and capacity to enter into and fully perform
this Agreement and to grant the Licenser free and clear of all Liens and
rights of third parties;
(b) Schedule "A" is a complete list of the InNexus Intellectual Property
Rights and all other intellectual property including any Patent Rights,
license rights or trade marks, materials, property or assets which form part
of the Licensed Technology or which are necessary or desirable for the
development and commercial exploitation of the Licensed Technology;
(c) InNexus beneficially owns the InNexus Intellectual Property Rights, and
no person, firm or corporation has any written or oral agreement, option,
understanding or commitment, or any right or privilege capable of becoming an
agreement, for the purchase or license from InNexus of any of the Licensed
Technology which would prevent the granting of this license or limit the
rights granted hereunder;
(d) the InNexus Intellectual Property Rights included in the Licensed
Technology are validly and beneficially owned by InNexus or the person
specified in Schedule and are free and clear of all Liens, charges and
encumbrances whatsoever, with the sole and exclusive right to use and to
license the use of the same, subject only to the limitations under this
Agreement or, where so specified in Schedule "A" under the specified terms of
the agreement pursuant to which such rights are held;
(e) to the best of InNexus' knowledge, the proposed commercial use of the
Licensed Technology contemplated hereunder does not infringe upon the
intellectual property, patents, trademarks, trade names or copyrights,
domestic or foreign, of any other person, firm or corporation and the use of
the Patents by Beglend in accordance with this Agreement will not infringe
any Patents or breach any agreements to which InNexus is a party or by which
it is bound;
(f) to the best of InNexus' knowledge, none of the InNexus Patents included
as part of the Licensed Technology was fraudulently procured front the
relevant governmental patent granting authority;
(g) to the best of InNexus' knowledge, information and belief, the Licensed
Technology is not in the public domain, there are no lawful grounds for any
Patents and each InNexus Patent is, or will be valid and enforceable;
(h) InNexus is not a party to or threatened with any litigation action, suit
or proceeding in any court or before any administrative tribunal which
affects or may affect the Licensed Technology or InNexus' ability to duly
complete the transactions contemplated herein nor, to the knowledge of
InNexus after due inquiry, is any such action, suit or proceeding pending or
threatened nor is there any basis therefore.
10.2 Effect of InNexus Warranties. The representations, warranties, covenants
and agreements by InNexus set forth in Section 10.1 or contained elsewhere in
this Agreement or any certificates or other documents delivered to Beglend
pursuant to the provisions hereof or in connection with the transactions
contemplated hereby, are, except where otherwise expressly stated, true as of
the date and time of execution hereof and shall be true at and as of the
Effective Date and, notwithstanding any investigations or inquiries made by
Beglend prior to execution hereof, the representations: warranties, covenants
and agreements of InNexus shall survive the execution and delivery hereof and
shall continue in full force and effect throughout the term of this
Agreement.
10.3 Beglend Warranties. Beglend hereby represents and warrants as follows:
(a) Beglend has full right, authority and capacity to enter into and fully
perform this Agreement;
(b) All Patents and other intellectual property rights pertaining the Beglend
Antibody and all other intellectual property including any Patents, license
rights or trade marks; materials, property or assets which are necessary or
desirable for the development and commercial exploitation of at least one
Beglend Antibody in conjunction with the Licensed Technology in the manner
contemplated herein are in Beglend's possession and control;
(c) Beglend beneficial]y owns or holds under license the rights to all
Patents and other intellectual property rights pertaining to at least one
Beglend Antibody, free and clear of all Liens, charges and encumbrances
whatsoever, with the sole and exclusive right to use and to license the use
of the same, subject only to such limitations as may be disclosed to in
writing to InNexus, and no person, firm or corporation has any written or
oral agreement, option, understanding or commitment, or any right or
privilege capable of becoming an agreement, for the purchase or license from
Beglend of any of such rights which would prevent the development of Products
under this License or limit the rights granted hereunder;
(d) to the best of Beglend's knowledge, the proposed commercial use of
Beglend Antibody in the manner contemplated hereunder does not infringe upon
the names or copyrights, domestic or foreign, of any other person, firm or
corporation.
(e) Beglend is not a party to or threatened with any litigation action, suit
or proceeding in any court or before any administrative tribunal which
affects or may affect any Beglend Antibody or Beglend's ability to duly
complete the transactions contemplated herein nor, to the knowledge of
Beglend after due inquiry, is any such action, suit or proceeding pending or
threatened nor is there any basis therefore.
1O.4 Eflect of Beglend Warranties. The representations, warranties, covenants
and agreements by Beglend set forth in section 10.3 or contained elsewhere in
this Agreement or any certificates or other documents delivered to InNexus
pursuant to the provisions hereof or in connection with the transactions
contemplated hereby, arc, except where otherwise expressly stated, true as of
the date and tiny of execution hereof and shall be true at and as of time of
execution on the Effective Date and, not withstanding any investigations or
enquiries made by Beglend prior to execution hereof, the representations,
warranties covenants and agreements of Beglend shall survive the execution
and delivery hereof and shall continue in full force and effect throughout
the term of this Agreement.
1O.5 Warranties of Both Parties. Each party warrants that, as of the date it
signs this Agreement, it has the full right and authority to enter into this
Agreement, and that it is not aware of any impediment that would inhibit its
ability to perform its obligations hereunder; and each party warrants and
represents to the other that, as of the date it signs this Agreement to the
best of its knowledge, it or its Affiliates has disclosed all information in
possession or control of it or its Affiliates which, in the opinion of it or
its Affiliates, would be material to the other party entering into this
Agreement and such information does not contain any untrue statement of
material fact or omit to state a material fact.
10.6 DISCLAIMER THE FOREGOING REPRESENTATIONS AND WARRANTIES ARE IN LIEU OF
ALL OTHER REPRESENTATIONS AND WARRANTIES NOT EXPRESSLY SET FORTH HEREIN.
INNEXUS AND BEGLEND DISCLMM ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED,
WITH RESPECT TO EACH OF THEIR RESEARCH, DEVELOPMENT AND COMMERCIALIZATION
EFFORTS HEREUNDER, INCLUDING, WITHQUT LIMITATION, WHETHER THE PRODUCTS CAN BE
SUCCESSFULLY DEVELOPED OR MARKETED. THE ACCURACY, PERFORMNCE, UTILITY,
RELIABILITY, TECHNOLOGICAL OR COMMERCIAL VALUE, COMPREHENSIVENESS,
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WHATSOEVER OF ANY
PRODUCTS. IN NO EVENT SHALL EITHER INNEXUS OR BEGLEND TO BE LIABLE FOR
SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS
AGREEMENT BASED ON CONTRACT, TORT OR ANY OTHER LEGAL THEORY.
10.7 Indemnification by Beglend. Beglend agrees to defend, indemnify and hold
InNexus and its directors, officers, employees and agents (the "InNexus
Indemnified parties") harmless from and against any losses, costs, and
damages, including reasonable costs and expenses arising out of the
10.7 Indemnification by Beglend. Beglend agrees to defend, indemnify and hold
InNexus and its directors, officers, employees and agents (the "InNexus
Indemnified parties") harmless from and against any losses, costs and
damages, including reasonable costs and expenses arising out of the
development, manufacture, use, sale or other disposition of any Product by
development, manufacture, use, sale or other disposition of any Product by
Beglend, its Affiliates, its sub licensees, its distributors, or
representatives, except to the extent that such losses, costs and damages are
due to the negligence or wrongful acts or failures to act of InNexus and;
(a) in the event of any such claim against the InNexus Indemnified parties by
a third party, InNexus shall promptly notify Beglend in writing of the claim
and Beglend shall undertake and shall solely manage and control, at its sole
expense the defense of the claim and its settlement;
(b) the InNexus Indemnified parties shall cooperate with Beglend and may, at
their option and expense, be represented in any such action or proceeding;
(c) Beglend shall not be liable for any litigation costs or expenses incurred
by the InNexus Indemnified parties without Beglend's written authorization;
and
(d) Beglend shall not settle any such claim against InNexus unless such
settlement fully and unconditionally releases InNexus from all liability
relating thereto unless InNexus otherwise agrees in writing.
10.8 Indemnification by InNexus. InNexus agrees to defend, indemnify and hold
Beglend and its directors, officers, employees and agents (the "Beglend
Indemnified parties") harmless from and against any losses, costs and
damages, including reasonable costs and expenses arising out of the
development, manufacture, use, sale or other disposition of any Product by
InNexus, its Affiliates, licensees (other than Beglend), distributors, or
representatives (if applicable), except to the extent that such losses, costs
and damages are due to the negligence or wrongful acts or failures to act of
Beglend, and
(a) in the event of any such claim against the Beglend Indemnified parties by
a third party, Beglend shall promptly notify InNexus in writing of the claim
and InNexus shall undertake and shall solely manage and control, at its sole
expense, the defense of the claim and its settlement;
(b) the Beglend Indemnified parties shall cooperate with InNexus and may, at
Their option and expense, be represented in any such action or proceeding;
(c) InNexus shall not be liable for any litigation costs or expenses incurred
by the Beglend Indemnified parties without InNexus' written authorization;
and
(d) InNexus shall not settle any such claim against Beglend unless such
settlement fully and unconditionally releases Beglend from all liability
relating thereto, unless Beglend otherwise agrees in writing.
11 DISPUTE RESOLUTION
11 1 Arbitration Procedures. The parties agree that all questions or matters
in dispute with respect to any matter under this Agreement, including without
limitation the accounting of moneys expended by Beglend as provided herein,
or wit respect to the calculation of Royalties or amounts taken into account
in the determination of Net Sales Revenue, the time and date for doing
anything hereunder which cannot be resolved by good faith discussions between
officers or the parties or in respect to any other dispute which the parties
agree shall be settled by arbitration shall be submitted to arbitration
pursuant to the following terms:
(a) any party intending to refer to any matter to arbitration shall have not
less than 60 days' prior written notice of its intention to do so to the
other parties together with particulars of the matter in dispute. On the
expiration of such 60 days, the party who gave such notice may proceed to
refer the dispute to arbitration as provided in subsection 11.1(b);
(b) The parties shall appoint a suitably qualified person acceptable to all
parties acting reasonably as arbitrator or, should the parties be unable to
agree on such appointment, the arbitrator shall be appointed under the
provisions of the international Commercial Arbitration Act of British
Columbia (the "Act"). Except as specifically otherwise provided in this
Section, the arbitration herein provided for shall be conducted in accordance
with such Act. The arbitrator shall fix a time and place in Vancouver,
British Columbia, for the purpose of hearing the evidence and representations
of the parties, and he shall preside over the arbitration and determine all
questions of procedure not provided for under such Act or this Section. After
hearing any evidence and representations that the parties may submit, the
arbitrator, or the arbitrators, as the case may be, shall make an award and
reduce the same to writing, and deliver one copy thereof to each of the
parties. The expense of the arbitration shall be paid as specified in the
award; and
(c) the parties agree that the award of the arbitrator shall be final and
binding upon each of them.
12 MISCELLANEOUS
12.1 Disclosure of Agreement and Press Releases and Technical Information.
Neither party will disclose the existence, terms or conditions of this
Agreement to any third party or issue any press release relating to the
existence, terms and conditions of this Agreement for any purpose without the
prior written consent of the other party, except as required by law
(including without limitation any regulatory agency or commission of
competent jurisdiction).
12.2 Force Majeure. If either party shall be delayed, interrupted or
prevented with respect to the performance of any obligation hereunder by
reason of an act of God, fire, flood, war (declared or undeclared), public
disaster, strike, or labor dispute, governmental enactment, rule or
regulation, or any similar cause beyond such parties control, such party
shall not be liable to the other therefore; and the time for performance of
such obligation shall be extended for a period equal to the duration of the
contingency which occasioned the delay, interruption or prevention; and
within fifteen (15) days after the beginning of the force majeure, the party
invoking its force majeure rights must notify the other party of this fact in
accordance with Section 12.5; and the other party must also be notified of
the termination of the force majeure within fifteen (15) days after such
termination: and if the force majeure renders either of the required
notifications impossible, notification must be given as soon as possible.
12.3 Waiver. The waiver by a party of a breach or a default of any provision
of this Agreement by the other party shall not be construed as a waiver of
any succeeding breach of the same or any other provision, nor shall any delay
or omission on the part of a party to exercise or avail itself of any right,
power or privilege that it has or may have hereunder operate as a waiver of
any right, power or privilege by such party.
12.4 Notices. Each notice, demand or other communication required or
permitted to be given under the Agreement (in this section 12.4 only, a
"Notice") shall be given in accordance with the following provisions:
(a) each Notice shall be in writing and shall be sent by prepaid registered
mail addressed to the party entitled to receive the same, or delivered to
such party personally or by Electronic Communication at the address or
telecopier number for such party specified below:
(i) If to Beglend:
Beglend Corporation S.A.
Fourteenth Floor, Commerce Building, Box 41
400 Burrard Street
Vancouver, B.C.
Canada, V6C 3G2
Telecopier No.:
with a copy to:
Holmes & King
Barristers & Solicitors
1300 - lll1 West Georgia Street
Vancouver, B.C. V6E 4M3
Attention: Terrence E. King
Telecopier No.: (604)681-1307
(ii) If to InNexus:
InNexus Corporation
3405 172nd Street, #196
Arlington (Seattle), Washington
USA 98223
Attn: Dr. A. Charles Morgan
Telecopier No.: (425) 696-0068
with a copy to:
Leschert & Company Law Corporation
Barristers and Solicitors
500 - 999 West Hastings Street
Vancouver, British Columbia V6C 2W2
Attention: Allen D. Leschert
Telecopier No.: (604) 687-0043
(b) the date of receipt of a Notice shall be the date of delivery thereof if
delivered personally or by electronic Communication or, if given by
registered mail as aforesaid, shall be deemed conclusively to be the 7th day
after the same shall have been so mailed except in he case of interruption of
services for any reason whatever, in which case the date of receipt shall be
the date the Notice is actually received by the addressee; and
(c) either party may at any time and from time to time notify the other party
in writing of a change of address and the new address to which Notice shall
be given to it thereafter until further change.
12.5 No Agency. Nothing herein shall be deemed to constitute either party as
the agent or representative of the other party and (i) each party shall be an
independent contractor, not an employee or partner of the other party; (ii)
each party shall be responsible for the conduct of activities at its own
facilities and for any liabilities resulting there from; and (iii) neither
party shall be responsible for the acts or omissions of the other party, and
neither party will have authority to speak for, represent or obligate the
other party in any way without prior written authority from the other party.
12.6 Entire Agreement This Agreement (including its Appendices) constitutes
the entire agreement between the parties with respect to the subject matter
and supersedes all previous agreements, whether oral or written; and this
Agreement can only be changed or modified by written agreement of the
parties.
12.7 Captions. The captions herein are for convenience only and shall not be
interpreted as having any substantive meaning.
12.8 Severability. In the event that any provision of this Agreement is held
by a court of competent jurisdiction to be unenforceable because it is
invalid or in conflict with any law of any relevant jurisdiction, the
validity of the remaining provisions shall not be affected, and the parties
shall negotiate a substitute provision that, to the extent possible,
accomplishes the original business purpose
12.9 Assignment. This Agreement shall be binding upon and shall inure to the
benefit of successors of the parties hereto and to the assigns of all good
will and entire business and assets of a party hereto, but shall otherwise
not be assignable without prior written consent of the other party; provided
that, not withstanding the above, without notice to InNexus, Beglend may at
any time and for any reason assign all of its rights and obligations to Bio
Kinetix or one of Beglend's Affiliates who agree to be bound by the terms and
obligations of this Agreement; and such assignment shall be considered as
effective on the date specified by Beglend in its notice, even if
retroactive; and if Bio Kinetix is the assignee it shall have the continuing
right to assign any or all of its rights and obligations hereunder to one or
more of its Affiliates who agree to be bound by the terms and obligations of
this Agreement~
12.10 Law This Agreement will be governed by and interpreted according to the
laws of the province of British Columbia, Canada, and the parties hereby
irrevocably agree (subject to the provisions herein with respect to
arbitration of disputes) to submit to the jurisdiction of the Courts thereof
in connection with any disputes arising hereunder and irrevocably select
Vancouver, British Columbia as the proper venue for any such disputes.
12.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of such
together shall constitute one and the same instrument.
IN WITNESS WHEREOF InNexus and Beglend have caused this Agreement to be duly
executed by their authorized representatives as of the date first set forth
above
SIGNED, SEALED AND DELIVERED
By BEGLEND CORPORATION S.A.
In the presence of:
BEGLEND CORPORATION
/s/ Johanna Niegel Per: /s/ Dr. W.A. Keicher
------------------ -------------------------
Name of Witness gez. Dr. W.A. Keicher
Lawyer (Name of Signatory and Office Held)
----------
Occupation of Witness
Aeulestrasse 5
9490 Vadur
Liechtenstein
SIGNED, SEALED AND DELIVERED
By INNEXUS CORPORATION
In the presence of:
INNEXUS CORPORATION
/s/ John Prissard Per: /s/ Alton C. Morgan
----------------- -------------------------
Name of Witness Alton C. Morgan
President and CEO
V.P. Corporate Development (Name of Signatory and Office Held)
--------------------------
Occupation of Witness
5567 Deerhorn Lane
North Vancouver, BC
Appendix "A" To License Agreement Between Beglend Corporation S.A and InNexus
Corporation
Intellectual Property Rights (including Patent Rights) and other rights or
assets pertaining to SAT held by InNexus
Patent Rights
-------------
United States Patent 6,238,667
Kohler May 29, 2001
Method of cross-linking biologically
Active immunogenic peptides to antibodies
USPTO - Continuation in part 09/865,201
Kohler, Morgan August 15, 2002
Fusion Proteins of Biologically Active
Peptides and Antibodies
USPTO - Provisional
Kohler, Morgan September, 2002
Therapeutic Application of Dimerizing,
Non-Covalent Antibodies
RELEVANT INTELLECTUAL PROPERTY AGREEMENTS
-----------------------------------------
NONE
OTHER INTELLECTUAL PROPERTY RIGHTS
----------------------------------
NONE
EXHIBIT E
---------
Nevada Corporate Code
Chapter 92A - Mergers and Exchanges of Interest
RIGHTS OF DISSENTING OWNERS
NRS 92A.300 Definitions. As used in NRS 92A.300 to 92A.500, inclusive, unless
the context otherwise requires, the words and terms defined in NRS 92A.305 to
92A.335, inclusive, have the meanings ascribed to them in those sections.
(Added to NRS by 1995, 2086)
NRS 92A.305 "Beneficial stockholder" defined. "Beneficial stockholder" means
a person who is a beneficial owner of shares held in a voting trust or by a
nominee as the stockholder of record.
(Added to NRS by 1995, 2087)
NRS 92A.310 "Corporate action" defined. "Corporate action" means the action
of a domestic corporation.
(Added to NRS by 1995, 2087)
NRS 92A.315 "Dissenter" defined. "Dissenter" means a stockholder who is
entitled to dissent from a domestic corporation's action under NRS 92A.380
and who exercises that right when and in the manner required by NRS 92A.400
to 92A.480, inclusive.
(Added to NRS by 1995, 2087; A 1999, 1631)
NRS 92A.320 "Fair value" defined. "Fair value," with respect to a dissenter's
shares, means the value of the shares immediately before the effectuation of
the corporate action to which he objects, excluding any appreciation or
depreciation in anticipation of the corporate action unless exclusion would
be inequitable.
(Added to NRS by 1995, 2087)
NRS 92A.325 "Stockholder" defined. "Stockholder" means a stockholder of
record or a beneficial stockholder of a domestic corporation.
(Added to NRS by 1995, 2087)
NRS 92A.330 "Stockholder of record" defined. "Stockholder of record" means
the person in whose name shares are registered in the records of a domestic
corporation or the beneficial owner of shares to the extent of the rights
granted by a nominee's certificate on file with the domestic corporation.
(Added to NRS by 1995, 2087)
NRS 92A.335 "Subject corporation" defined. "Subject corporation" means the
domestic corporation which is the issuer of the shares held by a dissenter
before the corporate action creating the dissenter's rights becomes effective
or the surviving or acquiring entity of that issuer after the corporate
action becomes effective.
(Added to NRS by 1995, 2087)
NRS 92A.340 Computation of interest. Interest payable pursuant to NRS 92A.300
to 92A.500, inclusive, must be computed from the effective date of the action
until the date of payment, at the average rate currently paid by the entity
on its principal bank loans or, if it has no bank loans, at a rate that is
fair and equitable under all of the circumstances.
(Added to NRS by 1995, 2087)
NRS 92A.350 Rights of dissenting partner of domestic limited partnership. A
partnership agreement of a domestic limited partnership or, unless otherwise
provided in the partnership agreement, an agreement of merger or exchange,
may provide that contractual rights with respect to the partnership interest
of a dissenting general or limited partner of a domestic limited partnership
are available for any class or group of partnership interests in connection
with any merger or exchange in which the domestic limited partnership is a
constituent entity.
(Added to NRS by 1995, 2088)
NRS 92A.360 Rights of dissenting member of domestic limited-liability
company. The articles of organization or operating agreement of a domestic
limited-liability company or, unless otherwise provided in the articles of
organization or operating agreement, an agreement of merger or exchange, may
provide that contractual rights with respect to the interest of a dissenting
member are available in connection with any merger or exchange in which the
domestic limited-liability company is a constituent entity.
(Added to NRS by 1995, 2088)
NRS 92A.370 Rights of dissenting member of domestic nonprofit corporation.
1. Except as otherwise provided in subsection 2, and unless otherwise
provided in the articles or bylaws, any member of any constituent domestic
nonprofit corporation who voted against the merger may, without prior notice,
but within 30 days after the effective date of the merger, resign from
membership and is thereby excused from all contractual obligations to the
constituent or surviving corporations which did not occur before his
resignation and is thereby entitled to those rights, if any, which would have
existed if there had been no merger and the membership had been terminated or
the member had been expelled.
2. Unless otherwise provided in its articles of incorporation or bylaws, no
member of a domestic nonprofit corporation, including, but not limited to, a
cooperative corporation, which supplies services described in chapter 704 of
NRS to its members only, and no person who is a member of a domestic
nonprofit corporation as a condition of or by reason of the ownership of an
interest in real property, may resign and dissent pursuant to subsection 1.
(Added to NRS by 1995, 2088)
NRS 92A.380 Right of stockholder to dissent from certain corporate actions
and to obtain payment for shares.
1. Except as otherwise provided in NRS 92A.370 and 92A.390, a stockholder is
entitled to dissent from, and obtain payment of the fair value of his shares
in the event of any of the following corporate actions:
(a) Consummation of a plan of merger to which the domestic corporation is a
party:
(1) If approval by the stockholders is required for the merger by NRS 92A.120
to 92A.160, inclusive, or the articles of incorporation and he is entitled to
vote on the merger; or
(2) If the domestic corporation is a subsidiary and is merged with its parent
under NRS 92A.180.
(b) Consummation of a plan of exchange to which the domestic corporation is a
party as the corporation whose subject owner's interests will be acquired, if
he is entitled to vote on the plan.
(c) Any corporate action taken pursuant to a vote of the stockholders to the
event that the articles of incorporation, bylaws or a resolution of the board
of directors provides that voting or nonvoting stockholders are entitled to
dissent and obtain payment for their shares.
2. A stockholder who is entitled to dissent and obtain payment under NRS
92A.300 to 92A.500, inclusive, may not challenge the corporate action
creating his entitlement unless the action is unlawful or fraudulent with
respect to him or the domestic corporation.
(Added to NRS by 1995, 2087)
NRS 92A.390 Limitations on right of dissent: Stockholders of certain classes
or series; action of stockholders not required for plan of merger.
1. There is no right of dissent with respect to a plan of merger or exchange
in favor of stockholders of any class or series which, at the record date
fixed to determine the stockholders entitled to receive notice of and to vote
at the meeting at which the plan of merger or exchange is to be acted on,
were either listed on a national securities exchange, included in the
national market system by the National Association of Securities Dealers,
Inc., or held by at least 2,000 stockholders of record, unless:
(a) The articles of incorporation of the corporation issuing the shares
provide otherwise; or
(b) The holders of the class or series are required under the plan of merger
or exchange to accept for the shares anything except:
(1) Cash, owner's interests or owner's interests and cash in lieu of
fractional owner's interests of:
(I) The surviving or acquiring entity; or
(II) Any other entity which, at the effective date of the plan of merger or
exchange, were either listed on a national securities exchange, included in
the national market system by the National Association of Securities Dealers,
Inc., or held of record by a least 2,000 holders of owner's interests of
record; or
(2) A combination of cash and owner's interests of the kind described in sub-
subparagraphs (I) and (II) of subparagraph (1) of paragraph (b).
2. There is no right of dissent for any holders of stock of the surviving
domestic corporation if the plan of merger does not require action of the
stockholders of the surviving domestic corporation under NRS 92A.130.
(Added to NRS by 1995, 2088)
NRS 92A.400 Limitations on right of dissent: Assertion as to portions only to
shares registered to stockholder; assertion by beneficial stockholder.
1. A stockholder of record may assert dissenter's rights as to fewer than all
of the shares registered in his name only if he dissents with respect to all
shares beneficially owned by any one person and notifies the subject
corporation in writing of the name and address of each person on whose behalf
he asserts dissenter's rights. The rights of a partial dissenter under this
subsection are determined as if the shares as to which he dissents and his
other shares were registered in the names of different stockholders.
2. A beneficial stockholder may assert dissenter's rights as to shares held
on his behalf only if:
(a) He submits to the subject corporation the written consent of the
stockholder of record to the dissent not later than the time the beneficial
stockholder asserts dissenter's rights; and
(b) He does so with respect to all shares of which he is the beneficial
stockholder or over which he has power to direct the vote.
(Added to NRS by 1995, 2089)
NRS 92A.410 Notification of stockholders regarding right of dissent.
1. If a proposed corporate action creating dissenters' rights is submitted to
a vote at a stockholders' meeting, the notice of the meeting must state that
stockholders are or may be entitled to assert dissenters' rights under NRS
92A.300 to 92A.500, inclusive, and be accompanied by a copy of those
sections.
2. If the corporate action creating dissenters' rights is taken by written
consent of the stockholders or without a vote of the stockholders, the
domestic corporation shall notify in writing all stockholders entitled to
assert dissenters' rights that the action was taken and send them the
dissenter's notice described in NRS 92A.430.
(Added to NRS by 1995, 2089; A 1997, 730)
NRS 92A.420 Prerequisites to demand for payment for shares.
1. If a proposed corporate action creating dissenters' rights is submitted to
a vote at a stockholders' meeting, a stockholder who wishes to assert
dissenter's rights:
(a) Must deliver to the subject corporation, before the vote is taken,
written notice of his intent to demand payment for his shares if the proposed
action is effectuated; and
(b) Must not vote his shares in favor of the proposed action.
2. A stockholder who does not satisfy the requirements of subsection 1 and
NRS 92A.400 is not entitled to payment for his shares under this chapter.
(Added to NRS by 1995, 2089; 1999, 1631)
NRS 92A.430 Dissenter's notice: Delivery to stockholders entitled to assert
rights; contents.
1. If a proposed corporate action creating dissenters' rights is authorized
at a stockholders' meeting, the subject corporation shall deliver a written
dissenter's notice to all stockholders who satisfied the requirements to
assert those rights.
2. The dissenter's notice must be sent no later than 10 days after the
effectuation of the corporate action, and must:
(a) State where the demand for payment must be sent and where and when
certificates, if any, for shares must be deposited;
(b) Inform the holders of shares not represented by certificates to what
extent the transfer of the shares will be restricted after the demand for
payment is received;
(c) Supply a form for demanding payment that includes the date of the first
announcement to the news media or to the stockholders of the terms of the
proposed action and requires that the person asserting dissenter's rights
certify whether or not he acquired beneficial ownership of the shares before
that date;
(d) Set a date by which the subject corporation must receive the demand for
payment, which may not be less than 30 nor more than 60 days after the date
the notice is delivered; and
(e) Be accompanied by a copy of NRS 92A.300 to 92A.500, inclusive.
(Added to NRS by 1995, 2089)
NRS 92A.440 Demand for payment and deposit of certificates; retention of
rights of stockholder.
1. A stockholder to whom a dissenter's notice is sent must:
(a) Demand payment;
(b) Certify whether he acquired beneficial ownership of the shares before the
date required to be set forth in the dissenter's notice for this
certification; and
(c) Deposit his certificates, if any, in accordance with the terms of the
notice.
2. The stockholder who demands payment and deposits his certificates, if any,
before the proposed corporate action is taken retains all other rights of a
stockholder until those rights are canceled or modified by the taking of the
proposed corporate action.
3. The stockholder who does not demand payment or deposit his certificates
where required, each by the date set forth in the dissenter's notice, is not
entitled to payment for his shares under this chapter.
(Added to NRS by 1995, 2090; A 1997, 730)
NRS 92A.450 Uncertificated shares: Authority to restrict transfer after
demand for payment; retention of rights of stockholder.
1. The subject corporation may restrict the transfer of shares not
represented by a certificate from the date the demand for their payment is
received.
2. The person for whom dissenter's rights are asserted as to shares not
represented by a certificate retains all other rights of a stockholder until
those rights are canceled or modified by the taking of the proposed corporate
action.
(Added to NRS by 1995, 2090)
NRS 92A.460 Payment for shares: General requirements.
1. Except as otherwise provided in NRS 92A.470, within 30 days after receipt
of a demand for payment, the subject corporation shall pay each dissenter who
complied with NRS 92A.440 the amount the subject corporation estimates to be
the fair value of his shares, plus accrued interest. The obligation of the
subject corporation under this subsection may be enforced by the district
court:
(a) Of the county where the corporation's registered office is located; or
(b) At the election of any dissenter residing or having its registered office
in this state, of the county where the dissenter resides or has its
registered office. The court shall dispose of the complaint promptly.
2. The payment must be accompanied by:
(a) The subject corporation's balance sheet as of the end of a fiscal year
ending not more than 16 months before the date of payment, a statement of
income for that year, a statement of changes in the stockholders' equity for
that year and the latest available interim financial statements, if any;
(b) A statement of the subject corporation's estimate of the fair value of
the shares;
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenter's rights to demand payment under NRS
92A.480; and
(e) A copy of NRS 92A.300 to 92A.500, inclusive.
(Added to NRS by 1995, 2090)
NRS 92A.470 Payment for shares: Shares acquired on or after date of
dissenter's notice.
1. A subject corporation may elect to withhold payment from a dissenter
unless he was the beneficial owner of the shares before the date set forth in
the dissenter's notice as the date of the first announcement to the news
media or to the stockholders of the terms of the proposed action.
2. To the extent the subject corporation elects to withhold payment, after
taking the proposed action, it shall estimate the fair value of the shares,
plus accrued interest, and shall offer to pay this amount to each dissenter
who agrees to accept it in full satisfaction of his demand. The subject
corporation shall send with its offer a statement of its estimate of the fair
value of the shares, an explanation of how the interest was calculated, and a
statement of the dissenters' right to demand payment pursuant to NRS 92A.480.
(Added to NRS by 1995, 2091)
NRS 92A.480 Dissenter's estimate of fair value: Notification of subject
corporation; demand for payment of estimate.
1. A dissenter may notify the subject corporation in writing of his own
estimate of the fair value of his shares and the amount of interest due, and
demand payment of his estimate, less any payment pursuant to NRS 92A.460, or
reject the offer pursuant to NRS 92A.470 and demand payment of the fair value
of his shares and interest due, if he believes that the amount paid pursuant
to NRS 92A.460 or offered pursuant to NRS 92A.470 is less than the fair value
of his shares or that the interest due is incorrectly calculated.
2. A dissenter waives his right to demand payment pursuant to this section
unless he notifies the subject corporation of his demand in writing within 30
days after the subject corporation made or offered payment for his shares.
(Added to NRS by 1995, 2091)
NRS 92A.490 Legal proceeding to determine fair value: Duties of subject
corporation; powers of court; rights of dissenter.
1. If a demand for payment remains unsettled, the subject corporation shall
commence a proceeding within 60 days after receiving the demand and petition
the court to determine the fair value of the shares and accrued interest. If
the subject corporation does not commence the proceeding within the 60-day
period, it shall pay each dissenter whose demand remains unsettled the amount
demanded.
2. A subject corporation shall commence the proceeding in the district court
of the county where its registered office is located. If the subject
corporation is a foreign entity without a resident agent in the state, it
shall commence the proceeding in the county where the registered office of
the domestic corporation merged with or whose shares were acquired by the
foreign entity was located.
3. The subject corporation shall make all dissenters, whether or not
residents of Nevada, whose demands remain unsettled, parties to the
proceeding as in an action against their shares. All parties must be served
with a copy of the petition. Nonresidents may be served by registered or
certified mail or by publication as provided by law.
4. The jurisdiction of the court in which the proceeding is commenced under
subsection 2 is plenary and exclusive. The court may appoint one or more
persons as appraisers to receive evidence and recommend a decision on the
question of fair
value. The appraisers have the powers described in the order appointing them,
or any amendment thereto. The dissenters are entitled to the same discovery
rights as parties in other civil proceedings.
5. Each dissenter who is made a party to the proceeding is entitled to a
judgment:
(a) For the amount, if any, by which the court finds the fair value of his
shares, plus interest, exceeds the amount paid by the subject corporation; or
(b) For the fair value, plus accrued interest, of his after-acquired shares
for which the subject corporation elected to withhold payment pursuant to NRS
92A.470.
(Added to NRS by 1995, 2091)
NRS 92A.500 Legal proceeding to determine fair value: Assessment of costs and
fees.
1. The court in a proceeding to determine fair value shall determine all of
the costs of the proceeding, including the reasonable compensation and
expenses of any appraisers appointed by the court. The court shall assess the
costs against the subject corporation, except that the court may assess costs
against all or some of the dissenters, in amounts the court finds equitable,
to the extent the court finds the dissenters acted arbitrarily, vexatiously
or not in good faith in demanding payment.
2. The court may also assess the fees and expenses of the counsel and experts
for the respective parties, in amounts the court finds equitable:
(a) Against the subject corporation and in favor of all dissenters if the
court finds the subject corporation did not substantially comply with the
requirements of NRS 92A.300 to 92A.500, inclusive; or
(b) Against either the subject corporation or a dissenter in favor of any
other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously or not in good faith
with respect to the rights provided by NRS 92A.300 to 92A.500, inclusive.
3. If the court finds that the services of counsel for any dissenter were of
substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the subject corporation,
the court may award to those counsel reasonable fees to be paid out of the
amounts awarded to the dissenters who were benefited.
4. In a proceeding commenced pursuant to NRS 92A.460, the court may assess
the costs against the subject corporation, except that the court may assess
costs against all or some of the dissenters who are parties to the
proceeding, in amounts the court finds equitable, to the extent the court
finds that such parties did not act in good faith in instituting the
proceeding.
5. This section does not preclude any party in a proceeding commenced
pursuant to NRS 92A.460 or 92A.490 from applying the provisions of N.R.C.P.
68 or NRS 17.115.
(Added to NRS by 1995, 2092)
EXHIBIT "F"
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ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION OF
RJV NETWORK, INC.
Pursuant to Section 78.320 of the Nevada Revised Statutes, the undersigned
persons, desiring to amend the Articles of Incorporation of RJV Network,
Inc., under the laws of the State of Nevada, do hereby sign, verify, and
deliver to the Office of the Secretary of State of the State of Nevada this
Amendment to the Articles of Incorporation for the above-named company
(hereinafter referred to as the "Corporation"):
Pursuant to the provisions of Section 78.320, the amendment
contained herein was duly approved and adopted by a majority of shareholders
and by the board of directors of the Company.
FIRST: The Articles of Incorporation of the Corporation were first
filed and approved by the Office of the Secretary of State of the State of
Nevada on December 23, 1999.
SECOND: The following amendment to change the name of the
Corporation to ProtoKinetix, Inc., was adopted by 9,375,000 shares, or 62.1%,
of the 15,093,750 issued and outstanding shares of common stock entitled to
approve such amendment.
THIRD: Article First of the Articles of Incorporation of the
Corporation is amended and stated in its entirety to read as follows:
"FIRST: The name of the Company shall be ProtoKinetix, Inc."
DATED this 30th day of April, 2003.
/s/ Edward Velton
------------------------------------------
Edward Velton, President, and Director
EXHIBIT "G"
MAJORITY WRITTEN CONSENT
OF
THE STOCKHOLDERS
OF
RJV NETWORK, INC.
The undersigned, being the holder of a majority of the outstanding voting
stock of RJV Network, Inc., a Nevada corporation (the "Corporation"), in
accordance with Section 78.320 of the Nevada Revised Statutes of the State of
Nevada, do hereby consent to and adopt the following resolutions with the
same force and effect as if presented to and adopted at a meeting of the
stockholders:
WHEREAS, the Board of Directors has determined that it is advisable and in
the best interest of the Corporation to approve the Acquisition Agreement and
Plan of Reorganization dated January 1, 2003 by and among RJV Network, Inc.,
on the one hand, and Bio Kinetix Research, Inc. and the shareholders of Bio
Kinetix Research, Inc. on the other hand, which calls for certain items to be
voted upon and approved by a majority of the Corporation's shareholders and
amend the Articles of Incorporation of the Corporation in order to change the
Corporation's name from RJV Network, Inc. to "ProtoKinetix, Inc."
NOW, THEREFORE, BE IT RESOLVED, that I hereby:
1. Approve the Acquisition Agreement and Plan of Reorganization
dated January 1, 2003 by and among RJV, on the one hand, and Bio Kinetix
Research, Inc. an Alberta corporation ("BIO KIN"), and the shareholders of
BIO KIN, on the other hand (the "Acquisition Agreement") and each of the
related transactions, whereby RJV will acquire, and hold as a wholly owned
subsidiary, BIO KIN (the "Acquisition") on the terms and conditions set forth
in the Acquisition Agreement, a copy of which is attached to this Information
Statement as Exhibit A. The Acquisition Agreement calls for the issuance of
one share of RJV common stock, par value $0.000013 per share in exchange for
each one share of the issued and outstanding common stock, no par value, of
BIO KIN;
2. Approve the change in the name ("Name Change") of the Company to
"ProtoKinetix, Inc." The name change will provide association of the post-
merger company with the name of its primary business subsidiary. The Name
Change will require an amendment to the Company's Articles of Incorporation;
3. Elect Dr. John Todd, Mike Muzylowski, R. L. (Dick) Richards, and
Fred Whittaker as the new directors of the Company; and
4. Approve the covenant not to perform a reverse stock split of the
Company's stock without 100% shareholder approval for a period of two years
from the date of the Acquisition.
RESOLVED, that the officers of the Corporation be, and they hereby are,
authorized and directed to take any and all such further action and to
execute and deliver any and all such further instruments and documents and
take any other steps that they deem are reasonable and appropriate to give
effect to the foregoing resolutions and to pay all resulting or related
expenses, including, without limitation, legal and other professional fees
and expenses and filing fees, in such case as in their judgment shall be
necessary and desirable, in order to fully carry out the intent and
accomplish the purposes of such resolutions.
IN WITNESS WHEREOF, the undersigned, being the holder of a majority of the
outstanding voting stock of the Corporation, have executed this Consent as of
this 28th day of April, 2003.
By: /s/ Edward Velton
---------------------
Edward Velton