EXHIBIT 10.58
Amendment to Joint Venture
Agreement
This
Amendment to Joint Venture Agreement (this “Amendment”)
is entered into as of July 14, 2004, by and among VAXGEN, INC.
(“VaxGen”) , a Delaware corporation, NEXOL
BIOTECH CO., LTD. (“Nexol”) , a Korean
corporation, NEXOL CO., LTD. (“Nexol Co”), a
Korean corporation, KT&G CORPORATION
(“KT&G”) , a Korean corporation whose name
was changed from KOREA TOBACCO & GINSENG CORPORATION, and J.
STEPHEN & COMPANY VENTURES LTD. (“JS”) , a
Korean corporation, with reference to the following
facts:
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A.
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The parties have previously
entered into a certain Joint Venture Agreement dated February 25,
2002 (the “Agreement” or “JVA”).
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B.
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The parties now desire to amend
certain provisions of the JVA in accordance with Section 23.3
thereof, to be effective as of the date hereof.
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NOW,
THEREFORE, in consideration of the mutual promises and agreements
contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree to amend the JVA as follows:
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1.
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Section 4.2 (f) shall be newly
inserted in its entirety to read:
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Notwithstanding Section 4.1, the
Parties hereby authorize the JVC to issue (a) up to 20,000,000,000
Won of Preferred Shares having a par value of 5,000 Won per share
and an issue price of 5,000 Won per share (the “ First
Tranche ”); provided that such Preferred Shares shall not
be issued after December 31, 2004, and (b) up to an additional
10,000,000,000 Won of Preferred Shares having a par value of 5,000
Won per share and an issue price of 5,000 Won per share (the
“ Second Tranche ”); provided, that such
Preferred Shares shall not be issued prior to January 1, 2005, nor
after December 31, 2005.
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If there are Preferred Shares
which the then-existing shareholders of the JVC do not subscribe
for in the First Tranche (the “ Unsubscribed Shares
”), the Board of Directors (the “ Board ”)
shall dispose of such Unsubscribed Shares as follows: (i) the
shareholders of JS and/or the members of the investment association
of JS shall be allowed to subscribe, with priority, for up to the
number of Unsubscribed Shares that JS was authorized to subscribe
for in the First Tranche; and (ii) the investors designated by
Nexol and/or Nexol Co shall be allowed to subscribe for the
remaining number of Unsubscribed Shares.
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JS shall take all actions
necessary to ensure that the offer and sale of any of the Preferred
Shares to any shareholders of JS and/or members of the investment
association of JS do not violate Korean or other applicable
securities laws, and Nexol and Nexol Co shall take all actions to
ensure that the offer and sale of any of the
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Preferred Shares to investors
designated by Nexol and/or Nexol Co do not violate Korean or other
applicable securities laws.
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VaxGen, KT&G and JS
(including the investment associations of JS) shall not subscribe
for the Preferred Shares in the Second Tranche (the “
Standstill Agreement ”). Any unsubscribed shares in
the Second Tranche shall be sold to Nexol, Nexol Co and/or
investors who participate in the Second Tranche through the
recommendation of Nexol or Nexol Co ; provided , that
the Standstill Agreement shall expire if the Second Tranche is not
completed on or prior to December 31, 2005. The Standstill
Agreement shall only come into force when Nexol and Nexol Co
including investors designated by Nexol and/or Nexol Co fully and
precisely complete the First Tranche by subscribing for the
remaining number of unsubscribed shares as prescribed in the first
and second paragraph of this section 4.2(f).
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2.
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Section 4.2 (g) shall be newly
inserted in its entirety to read:
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Since damages arising from a
breach of the Standstill Agreement by VaxGen, KT&G, or JS
(including the investment associations of JS) may be difficult to
compute with precision, the Parties agree that any Party that
violates the Standstill Agreement shall pay to Nexol or Nexol Co
the greater of (i) the market price or (ii) the appraised value (as
appraised by a licensed appraisal company) of the Preferred Shares
that were subscribed for in violation of the Standstill Agreement.
The Parties agree that such computation of damages is fair and
reasonable. Application of this provis
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