SETTLEMENT AND RELEASE AGREEMENT
THIS
SETTLEMENT AND RELEASE AGREEMENT (the “Settlement Agreement”), made and entered
into this 15th day of February, 2007, is by and between Cytogen Corporation
(“Cytogen”) and Advanced Magnetics, Inc. (“AMI”)(collectively, the
“Parties”).
RECITALS
WHEREAS,
Cytogen and AMI currently are engaged in a dispute, and are parties to a certain
civil action pending in the Superior Court Department of the Trial Court of
the
Commonwealth of Massachusetts (the “Court”), entitled Cytogen Corporation v.
Advanced Magnetics, Inc., Civil Action No. 06-0313-BLS2 (hereinafter the
“Lawsuit”);
WHEREAS,
in the Lawsuit, the Parties have asserted various claims and counterclaims
against each other;
WHEREAS,
the Parties deny the allegations set forth by the other in the
Lawsuit;
WHEREAS,
the Parties to this Settlement Agreement recognize that in order to avoid
further costs and uncertainty in connection with the Lawsuit, it is in their
respective best interests to compromise and thereby terminate and conclude
the
Lawsuit and all disputes between them.
NOW,
THEREFORE, in consideration of the mutual covenants expressed herein and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the undersigned parties to this Settlement Agreement mutually
agree and contract with each other, as follows:
|
1.
|
SETTLEMENT
PAYMENT.
|
By
no
later than three (3) business days following the full execution of this
Settlement Agreement, AMI shall pay to Cytogen a sum total of four million
U.S.
dollars (USD$4,000,000.00) by certified check or wire transfer (the “Settlement
Amount”).
2. RELEASE
OF ESCROWED SHARES.
By
no
later than ten (10) business days following the full execution of this
Settlement Agreement, the Parties shall jointly and in writing inform
ChaseMellon Shareholder Services, L.L.C. (the “Escrow Agent”) that the License
Agreement has been mutually terminated by the Parties and instruct the Escrow
Agent to release and transfer to Cytogen the 50,000 shares (formerly 500,000
shares) of Cytogen stock (the "Escrow Shares"), and any dividends or other
distributions comprising the Additional Escrow Fund currently being held by
the
Escrow Agent pursuant to the Escrow Agreement by and among Cytogen and AMI
and
the Escrow Agent, dated as of August 25, 2000 (the “Escrow
Agreement”). If required by the Escrow Agent, Cytogen and AMI shall
also execute and provide any further instructions reasonably necessary to enable
Cytogen's Transfer Agent to reissue the Escrow Shares in the name of
Cytogen. AMI shall also be responsible for its share of any fees
previously incurred by the Escrow Agent pursuant to Section 5 of the Escrow
Agreement. The Escrow Agreement shall terminate upon the transfer of
the 50,000 shares of Cytogen stock to Cytogen as provided
herein. Notwithstanding the preceding sentence, and subject only to
this Section 2, AMI is no longer subject to any obligations under the Escrow
Agreement.
|
3.
|
STIPULATION
OF DISMISSAL.
|
Immediately
following Cytogen’s receipt of the Settlement Amount, the Parties shall file
with the Court a Stipulation of Dismissal with Prejudice in the form attached
hereto as Exhibit A.
|
4.
|
MUTUAL
RELEASES.
|
Effective
as of the full execution of this Settlement Agreement and payment to Cytogen
of
the Settlement Amount pursuant to Section 1, above, in consideration of the
settlement of the Lawsuit and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, and subject only to the
proviso contained in the second sentence of this
-
2 -
Release,
the Parties, on behalf of themselves and their parents, subsidiaries,
affiliates, predecessors, successors and assigns, and all past and present
officers, directors, employees, shareholders, agents, servants, attorneys and
other representatives of any of the foregoing (including persons or entities
controlling, controlled by or under common control with Cytogen or AMI), fully,
finally, unconditionally, irrevocably and forever release and discharge each
other, and each other’s past and present officers, directors, employees, agents,
servants, attorneys, insurers, and other representatives (including but not
limited to Xxxxxx Xxxxxxxxx and Xxxxxxx Xxxxxx), and all heirs, executors,
administrators, predecessors, successors, affiliates and assigns of any of
the
foregoing (the “Released Parties”), from any and all claims, liabilities, causes
of action, rights of action and actions, demands, suits, proceedings, damages,
costs, fees and expenses, and any and all claims, demands and liabilities
whatsoever, of every name and nature, both at law and in equity, whether known
or unknown, suspected or unsuspected (collectively, “Claims”), including,
without limiting the generality of the foregoing, any and all Claims which
Cytogen or AMI now has or ever had against the other, including but not limited
to Claims arising from or relating, directly or indirectly, to any of the
allegations contained in the Complaint and/or Counterclaims filed in the
Lawsuit. Notwithstanding anything to the contrary in the preceding
sentence, nothing in this Release shall release Cytogen or AMI, or any of the
Released Parties, for any Claim which one party may have against the other
for
breach of this Settlement Agreement or for any wrong or breach arising out
of
any act, omission or conduct which occurs after the date of this Settlement
Agreement.
|
5.
|
REPRESENTATION
BY AMI.
|
The
monthly reports dated September 2006, November 14, 2006, December 19, 2006,
January 10, 2007, and February 14, 2007 delivered by AMI to Cytogen in
accordance with the
-
3 -
terms
of
the License Agreement accurately reflected the status of the Combidex® Project
in all material respects as of the date of such reports.
|
6.
|
STATUS
OF THE PARTIES’ VARIOUS
AGREEMENTS.
|
Effective
immediately upon complete execution of this Settlement Agreement, the License
and Marketing Agreement by and between Cytogen Corporation and Advanced
Magnetics, Inc., dated August 25, 2000 (the “License Agreement”) and the Supply
Agreement by and between Cytogen Corporation and Advanced Magnetics, Inc.,
dated
as of August 25, 2000 (the “Supply Agreement”) are hereby terminated and are no
longer in force or effect, and Cytogen no longer has any license, supply,
marketing, sales or other rights whatsoever to or in Combidex® or ferumoxytol
(formerly referred to as Code 7228). Notwithstanding the foregoing,
Section 7 of the License Agreement and Section 7 of the Supply Agreement
continue and survive pursuant to their terms.
|
7.
|
PROVISION
AND RETURN OF MATERIALS.
|
By
no
later than twenty-one (21) days following the full execution of this Settlement
Agreement, Cytogen: (i) shall provide to AMI all market analyses or reports,
if
any, in Cytogen’s possession, custody, or control for or relating to Combidex®
or magnetic resonance imaging contrast agents; and (ii) shall return to AMI
(a)
the Agent Technology (as defined in the License Agreement), (b) the
Manufacturing Technology (as defined in the License Agreement), if any, in
its
possession, and (c) Project Information (as defined in the License Agreement)
not developed by Cytogen, or otherwise destroy such Agent Technology,
Manufacturing Technology and Project Information, and certify in writing and
under oath that such Agent Technology, Manufacturing Technology and Project
Information has been destroyed.
-
4 -
|
8.
|
CONFIDENTIALITY.
|
The
Parties agree not to disclose the contents of this Settlement Agreement,
including, but not limited to, the settlement amount or any matters pertaining
to this Agreement and the facts and circumstances of their respective claims,
counterclaims or allegations to any third party unless such disclosure is:
(i)
lawfully required by any governmental agency; (ii) otherwise required to be
disclosed by law; (iii) necessary in any legal proceeding in order to enforce
any provisions of this Settlement Agreement or to claim damages as a result
of
an alleged breach of this Settlement Agreement by the other Party; (iv)
necessary for accounting or tax purposes, or (v) made to legal, accounting
or
tax professionals or to any other person or entity under an obligation to
preserve the confidentiality of such information. To the extent
permitted by law, each Party agrees that it will notify the other affected
Party
in writing within five (5) calendar days of the receipt of any subpoena, court
order, or administrative order requiring disclosure of information subject
to
this nondisclosure provision. Notwithstanding the foregoing, the
Parties agree that they may issue the press releases in the forms attached
hereto as Exhibit B (AMI press release) and Exhibit C (Cytogen press release),
and any future disclosure of the specific terms set forth in such press releases
shall not be a violation of this Section 8.
|
9.
|
NON-DISPARAGEMENT.
|
The
Parties agree and covenant to refrain from making any statements or references,
either directly in the form of oral or written statements or indirectly, to
any
third party that disparages, depreciates, ridicules, deprecates, condemns,
criticizes, or maligns Cytogen, AMI, any of Cytogen’s or AMI’s respective
Released Parties, Combidex®, ferumoxytol, Quadramet®, ProstaScint®, Caphosol®,
Soltamox™ or CYT-500. A violation of this non-disparagement
obligation may be remedied by injunctive relief and an award of damages and
costs.
-
5 -
|
10.
|
PURPOSE
AND EFFECT OF SETTLEMENT.
|
10.01. Each
party to this Settlement Agreement represents that this is a full, complete
and
mutual settlement and is predicated solely upon each party’s desire to avoid the
further legal expense that would be entailed in any further discovery, pretrial
motions, trial, and appellate proceedings in the Lawsuit.
10.02. The
Parties each warrant and represent that this Settlement Agreement is the result
of a compromise. While this Settlement Agreement resolves the issues
between the parties, it does not constitute an admission by any party of any
liability whatsoever. Neither this Settlement Agreement nor anything
in the Settlement Agreement shall be construed to be or shall be admissible
in
any proceeding as evidence of liability by any of the Parties.
|
11.
|
CONSTRUCTION
AND AUTHORITY.
|
11.01. Construction
as Contract. It is expressly understood and agreed that the terms
hereof are contractual and not merely recitals and that the agreement contained
herein, the Settlement Amount and consideration to be transferred are to
compromise disputed claims and to avoid litigation. It is also
expressly understood and agreed that this Settlement Agreement has been prepared
jointly by the parties hereto. Each Party has cooperated in the
drafting and preparation of this Settlement Agreement. Hence, in any
construction to be made of this Settlement Agreement, the same shall not be
construed against any Party on the basis that the Party was the
drafter. Rather, the language of this Settlement Agreement shall in
all instances be construed as a whole, according to its fair meaning and not
strictly for or against any of the Parties.
11.02. Warranty. All
parties hereto warrant that they have read this Settlement Agreement and fully
understand it to be a compromise and settlement and release of all claims as
described in the releases above. Each party further warrants and
represents that they have not
-
6 -
heretofore
assigned or transferred to any person not a party to this Settlement Agreement
any released claim or any part or portion thereof and each shall defend,
indemnify and hold harmless the other from or against any claim (including
payment of attorneys’ fees and costs actually incurred whether or not litigation
is commenced) based on or in connection with or arising out of such transfer
made, purported or claimed.
11.03. Authority. Each
party hereto, and the person executing the Settlement Agreement for each party,
warrants and represents that this Settlement Agreement is being executed by
and
for each of said parties by duly-authorized representatives. This
Settlement Agreement binds and benefits Cytogen and AMI, their successors,
assigns, parents, subsidiaries, divisions, affiliates, and controlled companies,
whether corporations, partnerships, trusts, joint ventures or others, and their
past, present and future representatives, attorneys, consultants, directors,
officers, employees, shareholders, trustees, agents and advisors.
11.04. Representation
by Counsel. The Parties represent and warrant that each was
represented by an attorney employed to represent said party with respect to
this
Settlement Agreement and all matters covered herein; that each party hereto
has
been fully advised by its attorney concerning its rights with respect to the
execution of this Settlement Agreement; and that its attorney is authorized
and
directed to execute all documents and to take all necessary action to effectuate
the terms of this Settlement Agreement and terminate the Lawsuit.
|
12.
|
RULES
OF
CONSTRUCTION: ENFORCEMENT.
|
12.01. Headings. The
paragraph and section headings are for convenience only and will not be deemed
to affect in any way the language of the provision to which they
refer.
12.02. Governing
Law and Choice of Forum. This Settlement Agreement shall be
interpreted, construed and enforced in accordance with the substantive laws
of
the Commonwealth of Massachusetts, without regard to its principles of conflict
of laws. The
-
7 -
Parties
further consent to the exclusive jurisdiction of the federal and state courts
in
Massachusetts with respect to the interpretation, construction or enforcement
of
this Settlement Agreement or anything relating thereto. In any action
arising under or to enforce, construe or interpret this Settlement Agreement,
the prevailing party shall recover its reasonable costs, expenses and attorneys’
fees from the other party.
12.03. Entire
Agreement. This Settlement Agreement contains the entire
understanding of the Parties relating to the matters referred to herein, and
may
only be amended by a written document, duly executed on behalf of the respective
parties. There are no understandings, agreements, representations,
warranties, expressed or implied, not specified herein regarding this Settlement
Agreement or the subject matter hereof. No waiver of any of the
provisions of this Settlement Agreement shall constitute a waiver of any other
provision (whether or not similar), nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided.
|
13.
|
COUNTERPARTS.
|
This
Settlement Agreement may be executed in separate counterparts, each of which
shall be considered an original but all of which shall constitute one
agreement.
IN
WITNESS WHEREOF, each of the Parties has caused three (3) original copies of
this Settlement Agreement to be executed on their behalf by their duly
authorized representative as of the day and year aforesaid.
|
CYTOGEN
CORPORATION
|
ADVANCED
MAGNETICS, INC.
|
|
|
By:
/s/ Xxxxxxx X. Xxxxxx
|
By:
/s/ Xxxxx X. X. Xxxxxxx
|
|
|
Duly Authorized
|
Duly Authorized
|
|
|
Name:
Xxxxxxx X. Xxxxxx
|
Name:
Xxxxx X. X. Xxxxxxx
|
|
|
Title:
President & CEO
|
Title:
President & CEO
|
|
|
Date:
February 15, 2007
|
Date:
February 15, 2007
|
- 8
-
