LICENSE AGREEMENT
This Agreement (the "AGREEMENT") is effective January 18, 2002 ("the
EFFECTIVE DATE") by and between, on the one hand, ALLERGAN SALES, INC., a
California corporation, located at 0000 Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx
00000-0000, and ALLERGAN PHARMACEUTICALS HOLDINGS (IRELAND) LIMITED, a
non-resident Irish corporation, located at Xxxxxxxxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxx 0, Xxxxxxx (ALLERGAN SALES, INC., and ALLERGAN PHARMACEUTICALS HOLDINGS
(IRELAND) LIMITED are together referred to as "ALLERGAN"), and on the other
hand, ENTREMED, INC., a Delaware corporation, located at 0000 Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000 ("ENTREMED").
WHEREAS, ALLERGAN develops, manufactures, markets and sells
ophthalmologic products for human use throughout the world; and
WHEREAS, ENTREMED is the owner or exclusive licensee of certain
technology related to 2-methoxyestradiol (a small molecule also known under the
trademark PANZEM) and other proprietary know-how related to the use of small
molecules for inhibition of angiogenesis, as hereinafter defined; and
WHEREAS, ALLERGAN desires to obtain an exclusive right and license in
and to such technology and proprietary know-how in the TERRITORY as hereinafter
defined; and
WHEREAS, ENTREMED is willing to grant the exclusive right and licenses
desired by ALLERGAN;
NOW, THEREFORE, in consideration of the mutual promises and other good
and valuable consideration, the parties agree as follows:
SECTION 1 - DEFINITIONS.
The terms used in this AGREEMENT have the following meaning:
1.1 The term "ACTUAL COST" means ENTREMED's cost of raw materials
and direct labor to manufacture, test and ship a given material, plus an
allocable share of manufacturing overhead costs determined in accordance with
generally accepted accounting principles (provided however that such allocable
share shall not exceed * percent (*%) of the cost of the applicable raw
materials), and ENTREMED shall provide to ALLERGAN, at ALLERGAN's request, such
accounting records and documents that are in ALLERGAN's reasonable determination
suitable and sufficient to document said ACTUAL COST and allocable share of
manufacturing overhead costs.
1.2 The term "ADDITIONAL FILING COUNTRIES" shall have the meaning
set forth in Section 8.1.
[*] = CERTAIN INFORMATION CONTAINED IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS. OMITTED TEXT IS INDICATED BY A "*".
1.3 The term "AFFILIATE" as applied to either party shall mean any
company or other legal entity other than the party in question in whatever
country organized, controlling, controlled by or under common control with that
party. The term "control" means the ownership or control, directly or
indirectly, of at least 50% of the outstanding securities, voting rights, right
to elect or appoint directors, or other ownership interest of any company or
other legal entity, or the ability to otherwise direct the affairs of any
company or other legal entity.
1.4 The term "ALLERGAN DESIGNATED COMMERCIAL COMPOUND" shall mean
any LEAD COMPOUND designated by ALLERGAN pursuant to Section 3.9 hereof as being
intended for further development and commercialization by ALLERGAN, subject to
the limitations set forth in Section 3.9, or any compound with which ALLERGAN
desires to develop a PRODUCT (and all enantiomers and mixtures of enantiomers
thereof, and pharmaceutically acceptable salts and esters thereof, with respect
to the foregoing).
1.5 The term "ALLERGAN PATENTS" shall mean any United States
patent application including any division, continuation, or continuation-in-part
thereof and any foreign patent application or equivalent corresponding thereto
and any Letters Patent or the equivalent thereof issuing thereon or reissue,
reexamination or extension thereof; which is owned by or licensed to ALLERGAN
and in and to which ALLERGAN has a transferable interest during the
COLLABORATION TERM insofar as it contains one or more claims to ALLERGAN
TECHNOLOGY.
1.6 The term "ALLERGAN TECHNOLOGY" shall mean information and
materials, including, but not limited to, pharmaceutical, chemical and
biological products, technical and non-technical data and information (including
process information and know-how) relating to the results of tests, assays,
methods, and processes, and drawings, plans, diagrams and specifications and/or
other documents containing such information and data owned by ALLERGAN or to
which ALLERGAN has a transferable interest during the COLLABORATION TERM and
which are necessary or useful for the manufacture, use or sale of a PRODUCT.
1.7 The term "CALENDAR QUARTER" shall mean the period of three (3)
consecutive calendar months ending on March 31, June 30, September 30 or
December 31, as the case may be.
1.8 The term "CALENDAR YEAR" shall mean each twelve (12) month
period ending on December 31.
1.9 The term "CMCC AGREEMENT" shall mean that certain agreement
between ENTREMED and The Children's Medical Center Corporation ("CMCC") dated as
of September 29, 1993, as amended to the date hereof, pursuant to which ENTREMED
has acquired a license to 2-METHOXYESTRADIOL from CMCC. A copy of the CMCC
AGREEMENT, with financial terms redacted, is attached hereto as Appendix A.
1.10 The term "COLLABORATION TERM" shall mean 5 years from the
EFFECTIVE DATE.
1.11 The term "EU" shall mean the countries of the European Union
as presently constituted.
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1.12 The term "EUROPE" shall mean Germany, France, Great Britain,
Spain, Italy, Switzerland and the Netherlands.
1.13 The term "FIELD" shall mean the treatment and prevention of
diseases and conditions of the eye by local delivery of a non-peptide,
non-protein inhibitor of angiogenesis. "Local delivery" shall include topical
application to the eye or surrounding tissue, or implantation or injection of or
within the orbit, subconjunctiva, choroid, sclera, anterior chamber or posterior
chamber of the eye.
1.14 The term "FIRST COMMERCIAL SALE" shall mean in each country of
the TERRITORY, the first sale to a THIRD PARTY in connection with the nationwide
introduction of any PRODUCT by ALLERGAN, its AFFILIATES or SUBLICENSEES
following marketing and pricing approval by the appropriate governmental agency
for the country in which the sale is to be made and, when governmental approval
is not required, the first sale in that country in connection with the
nationwide introduction of a PRODUCT in that country.
1.15 The term "IND" shall mean an Investigational New Drug
application filed with the United States Food and Drug Administration ("FDA").
1.16 The term "KNOW-HOW" shall mean all data, formulas, process
information and other information useful in the FIELD owned by ENTREMED or to
which ENTREMED has transferable rights during the COLLABORATION TERM and which
are necessary or useful for the manufacture, use or sale of PRODUCTS. The term
"KNOW-HOW" does not include any ALLERGAN TECHNOLOGY.
1.17 The term "LEAD COMPOUND" shall mean any non-peptide,
non-protein inhibitor of angiogenesis (and all enantiomers and mixtures of
enantiomers thereof, and pharmaceutically acceptable salts and esters thereof)
that has been selected for evaluation and potential development by ALLERGAN
during the COLLABORATION TERM under Section 3 herein.
1.18 The term "2-METHOXYESTRADIOL" shall mean a compound with the
chemical structure under CAS registry number 362-07-2, all enantiomers and
mixtures of enantiomers thereof, and pharmaceutically acceptable salts and
esters thereof.
1.19 The term "MAJOR MARKET(S)" shall mean Australia, NORTH
AMERICA, EUROPE, and Japan.
1.20 The term "MANDATORY FILING COUNTRIES" shall have the meaning
set forth in Section 8.1.
1.21 The term "NDA" shall mean a New Drug Application filed with
the FDA in the United States.
1.22 The term "NET SALES" shall mean the gross amount invoiced by
ALLERGAN or its AFFILIATES or SUBLICENSEES for sale or distribution of PRODUCT
to THIRD PARTIES, less:
(a) cost of freight and freight insurance;
(b) returns, recalls, rebates and repayments-in-kind;
(c) accruals for contract rebates, bid rebates, Medicaid
rebates and any other similar rebates as ALLERGAN
may be required to pay from time to time, all of
which shall be determined in accordance with
ALLERGAN's standard accounting methods;
(d) accruals for uncollectible receivables in accordance
with generally accepted accounting principles;
(e) sales, use and other similar taxes, value-added
taxes, excise taxes, duties; and
(f) allowances actually paid or allowed, including cash
and trade discounts;
provided, however, that a sale or transfer to an AFFILIATE or SUBLICENSEE of
ALLERGAN for resale by such AFFILIATE or SUBLICENSEE shall not be considered a
sale for the purpose of this provision, but the resale by such AFFILIATE or
SUBLICENSEE shall be a sale for such purposes. A "sale" shall also include a
transfer or other disposition for consideration, but not such transfers or
dispositions for preclinical, clinical, regulatory, or governmental purposes
except to the extent ALLERGAN receives payment therefor. Reasonable quantities
of PRODUCT distributed as samples shall not be considered sold. In the event
that any payment received by ALLERGAN or its AFFILIATES or SUBLICENSEES for the
sales of PRODUCT is in any form other than monetary consideration, such payment
shall be added to NET SALES. PRODUCT shall be considered "sold" at the earlier
of (i) the transfer of title in such PRODUCT to a person other than an
AFFILIATE or SUBLICENSEE of ALLERGAN; or (ii) the shipment of such PRODUCT from
the manufacturing or warehouse facilities of ALLERGAN or its AFFILIATE OR
SUBLICENSEE to a customer. Where such deductions or costs designated as
adjustments as described in this Section 1.22 are not directly attributable to
PRODUCTS, ALLERGAN shall employ generally accepted accounting principles to
fairly allocate such aggregate deductions or costs to the PRODUCTS.
1.23 The term "NORTH AMERICA" shall mean the United States and
Canada.
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1.24 The term "PRODUCT(S)" shall mean any article of manufacture,
substance, material, chemical, formulation or composition for use in the FIELD
(i) which is or includes 2-METHOXYESTRADIOL and/or any other LEAD COMPOUND as an
active ingredient, or (ii) whose use would otherwise infringe upon the PATENT
RIGHTS.
1.25 The term "PROOF OF PRINCIPAL PERIOD" shall mean the six month
period beginning with the EFFECTIVE DATE.
1.26 The term "PATENT RIGHT(S)" shall mean (i) any United States
patent application useful in the FIELD, including any division, continuation, or
continuation-in-part thereof and (ii) any foreign patent application or
equivalent corresponding thereto and (iii) any Letters Patent or the equivalent
thereof issuing thereon or reissue, reexamination or extension thereof; with
respect to any of which ENTREMED has rights to license hereunder during the
COLLABORATION TERM or which are set forth in Appendix B, attached hereto and
made a part hereof and which shall be updated by ENTREMED at least semi-annually
during the COLLABORATION TERM.
1.27 The term "ROW" shall mean the TERRITORY, excluding NORTH
AMERICA, EUROPE, Japan and Australia.
1.28 The term "SUBLICENSEE" shall mean any non-AFFILIATE THIRD
PARTY licensed by ALLERGAN to make, have made, import, use or sell any PRODUCT.
1.29 The term "TERRITORY" shall mean all countries of the world.
1.30 The term "THIRD PARTY(IES)" shall mean a person or entity who
or which is neither a party hereto nor an AFFILIATE of a party hereto.
1.31 The term "VALID CLAIM" shall mean (i) a claim of a pending
patent application or (ii) a claim of an issued patent which has not lapsed or
become abandoned or been declared invalid or unenforceable by a court of
competent jurisdiction or an administrative agency from which no appeal can be
or is taken, and which has not been admitted to be invalid or unenforceable
through reexamination, reissue or disclaimer or otherwise, which would be
infringed by the manufacture, use or sale of a PRODUCT by an unlicensed THIRD
PARTY. A pending patent application which has not been granted within seven (7)
years of filing or at any time during such seven (7) year period is not being
diligently prosecuted, shall not be considered to contain a VALID CLAIM until
granted.
SECTION 2 - GRANT.
2.1 License Grants. ENTREMED hereby grants to ALLERGAN and
ALLERGAN hereby accepts from ENTREMED, the following licenses:
(a) Research License. During the COLLABORATION TERM, with
respect to the LEAD COMPOUNDS and ALLERGAN DESIGNATED COMMERCIAL COMPOUNDS,
ENTREMED grants to ALLERGAN an exclusive, worldwide, royalty-free license, with
the right to sublicense, under the PATENT RIGHTS and KNOW-HOW, to use such
PATENT RIGHTS and technology and information provided to ALLERGAN by ENTREMED
hereunder, to the extent necessary or appropriate to carry out research and
development activities in the FIELD.
(b) Development and Commercial Licenses.
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(i) An exclusive, worldwide, royalty-free
license, with the right to sublicense, under the PATENT RIGHTS and KNOW-HOW, to
use ALLERGAN DESIGNATED COMMERCIAL COMPOUNDS and to make and have made PRODUCTS
in order to conduct necessary preclinical, clinical and other development
activities on such ALLERGAN DESIGNATED COMMERCIAL COMPOUNDS to obtain applicable
regulatory approval for use in the FIELD as PRODUCTS; and
(ii) An exclusive, worldwide, royalty-bearing
right and license for the TERRITORY, with the right to sublicense, under the
PATENT RIGHTS and KNOW-HOW, to make, have made, use, import, export, offer to
sell and sell PRODUCTS and use the ALLERGAN DESIGNATED COMMERCIAL COMPOUNDS for
such purpose in the FIELD.
2.2 Right to Sublicense.
(a) Subject to Section 2.2(b), ALLERGAN shall be entitled
to extend the licenses granted herein to AFFILIATES and to sublicense to THIRD
PARTIES. In case of a license which has been extended to AFFILIATES or
sublicensed to SUBLICENSEES, such AFFILIATES and SUBLICENSEES shall be bound by
all terms and conditions of this AGREEMENT. ALLERGAN shall advise ENTREMED of
any such extension to AFFILIATES or sublicenses to SUBLICENSEES and provide
ENTREMED with a copy of any such sublicense (redacted as to financial and other
confidential terms which ALLERGAN shall in its reasonable discretion determine)
within sixty (60) days of execution of such sublicense.
(b) ALLERGAN shall guarantee and be responsible for the
payment of all royalties and other compensation due and the making of reports
under this AGREEMENT by reason of sales of any PRODUCTS by its AFFILIATES and
SUBLICENSEES and their compliance with all applicable terms of this AGREEMENT.
Performance or satisfaction of any obligations of ALLERGAN under this AGREEMENT
by any of its AFFILIATES or SUBLICENSEES shall be deemed performance or
satisfaction of such obligations by ALLERGAN.
2.3 Rights under License Agreements with CMCC. To the extent
KNOW-HOW and/or PATENT RIGHTS licensed to ALLERGAN under this AGREEMENT are
rights which ENTREMED has licensed from CMCC, under any agreement with CMCC,
including the CMCC AGREEMENT attached hereto as Appendix A, ALLERGAN understands
and agrees as follows:
(a) The rights licensed to ALLERGAN by ENTREMED are
subject to the terms, limitations, restrictions and obligations of the CMCC
AGREEMENT(s).
(b) ALLERGAN will comply with the terms, obligations,
limitations and restrictions of the CMCC AGREEMENT(s) to the extent ALLERGAN has
been permitted to review such terms, obligations, limitations and restrictions.
2.4 Right of Notification and First Negotiation.
(a) In the event that ENTREMED, during the COLLABORATION
TERM, considers licensing to any THIRD PARTY its peptide and/or protein
angiogenesis inhibitors ("LARGE MOLECULES") for the treatment and prevention of
diseases and conditions of the eye by local delivery of such LARGE MOLECULES,
ALLERGAN shall be so notified by ENTREMED within thirty (30) days of such
determination, and for a period of nine (9) months following such
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notice (the "ELECTION PERIOD"), ALLERGAN shall be permitted to study ENTREMED's
library of LARGE MOLECULES and perform such investigations as ALLERGAN deems
appropriate to evaluate LARGE MOLECULES for further research and development.
During the ELECTION PERIOD and for a period of thirty (30) days following the
end of the ELECTION PERIOD, ALLERGAN shall have the exclusive right to enter
into negotiations with ENTREMED or the appropriate ENTREMED AFFILIATE to acquire
an exclusive license to the LARGE MOLECULES with respect to applications for the
treatment and prevention of diseases and conditions of the eye by local
delivery, and if ALLERGAN notifies ENTREMED, in writing, that it wishes to enter
into negotiations with respect to such license, the parties shall have thirty
(30) additional days to enter into a final, definitive agreement. If ENTREMED
rejects the terms of an offer by ALLERGAN to enter into such final definitive
agreement and ENTREMED subsequently offers the right to commercialize the LARGE
MOLECULES under such a license to any THIRD PARTY on terms and conditions as
favorable or more favorable to such THIRD PARTY than those terms last offered by
ALLERGAN to ENTREMED during the negotiation period described above, it shall
offer such equally favorable or more favorable terms to ALLERGAN and ALLERGAN
shall have thirty (30) days to accept or reject such more favorable terms and
conditions, and if ALLERGAN accepts such terms, ENTREMED shall enter into a
definitive agreement with ALLERGAN on such terms and conditions.
(b) ENTREMED shall supply such amount of each LARGE
MOLECULE as is reasonable and sufficient for ALLERGAN to perform the evaluations
of each such LARGE MOLECULE described in this Section 2.4, at its expense during
the ELECTION PERIOD to the extent ENTREMED is capable of providing such amount,
provided that if ENTREMED has developed a clone of any such LARGE MOLECULE,
ENTREMED shall be deemed to be capable of providing such amounts. To the extent
ALLERGAN requires additional amounts of LARGE MOLECULES, ENTREMED shall use
commercially reasonable efforts to supply them and ALLERGAN shall reimburse
ENTREMED * percent (*%) of ENTREMED's ACTUAL COST of manufacture thereof.
2.5 Notification of CMCC. ENTREMED shall promptly notify CMCC,
pursuant to the terms of the CMCC AGREEMENT, that ALLERGAN is a sublicensee of
certain rights granted to ENTREMED under the CMCC AGREEMENT, and take such other
steps as are necessary pursuant to the terms thereof to ensure that ALLERGAN
retains the rights granted it hereunder in the event of the termination of the
CMCC AGREEMENT, such steps being consistent with ENTREMED's obligations under
the CMCC AGREEMENT.
SECTION 3 - COLLABORATION.
3.1 Collaboration. The parties will enter into a collaboration for
the COLLABORATION TERM unless terminated under Section 15.
3.2 Information. Promptly after the EFFECTIVE DATE, ENTREMED will
disclose to ALLERGAN (i) all relevant information (including chemical structure
and properties) on antiangiogenesis small molecule compounds which ENTREMED owns
or otherwise controls (with the right to license in the FIELD) and (ii) all
other KNOW-HOW related to the use of antiangiogenesis small molecule compounds.
From time to time during the COLLABORATION TERM (but not less often than twice a
year), ENTREMED shall update such information to the extent it has additional
information on such compounds or owns or otherwise controls additional compounds
or has such additional KNOW-HOW which can be disclosed and transferred to
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ALLERGAN, and ENTREMED shall use its reasonable efforts to make such information
capable of disclosure and transfer, and to so disclose and transfer such
information to ALLERGAN. During the COLLABORATION TERM, ENTREMED will provide
ALLERGAN with reasonable technical assistance relating to the use of such
KNOW-HOW and the practice of the PATENT RIGHTS in the FIELD.
3.3 Research Liaison Committee. Within 10 days of the execution of
this AGREEMENT, the parties will set up a research liaison committee (the
"RESEARCH LIAISON COMMITTEE") to monitor the progress and results of the
research during the COLLABORATION TERM. The RESEARCH LIAISON COMMITTEE shall be
comprised of three members from ENTREMED and three members from ALLERGAN. The
RESEARCH LIAISON COMMITTEE shall not have the power to direct the research and
development efforts of ALLERGAN.
3.4 Proof of Principal Period. Promptly after the EFFECTIVE DATE,
ENTREMED shall provide to ALLERGAN samples of 2-METHOXYESTRADIOL for testing by
ALLERGAN. ALLERGAN shall use commercially reasonable efforts to determine
whether 2-METHOXYESTRADIOL is a candidate for ophthalmic use during the PROOF OF
PRINCIPAL PERIOD.
3.5 Selection of LEAD COMPOUNDS. During the COLLABORATION TERM,
and for a period of * following the termination thereof, ALLERGAN shall have
the right to select up to * compounds (one of which shall initially be
2-METHOXYESTRADIOL) from ENTREMED's library of compounds disclosed under
Section 3.2 above, that appear promising for pre-clinical evaluation by
ALLERGAN for use in the FIELD for designation as LEAD COMPOUNDS. From time to
time thereafter, ALLERGAN may designate additional compounds as LEAD COMPOUNDS
or remove the designation from previously designated LEAD COMPOUNDS so long as
the total number of LEAD COMPOUNDS shall not exceed * at any time. A LEAD
COMPOUND shall cease to be a LEAD COMPOUND, if it has not been designated as an
ALLERGAN DESIGNATED COMMERCIAL COMPOUND in accordance with Section 3.9, within
one (1) year following the termination of the COLLABORATION TERM.
3.6 Further Evaluation of LEAD COMPOUNDS. ALLERGAN shall use
commercially reasonable efforts to conduct, at its own expense, such
pre-clinical testing and investigations as ALLERGAN deems appropriate to
evaluate LEAD COMPOUNDS for further development. Such further development may
include, at ALLERGAN's reasonable discretion, but not be limited to, GLP
toxicology studies, formulation and process development, animal testing and
other pre-clinical pharmaceutical development necessary to prepare and file an
IND and all additional animal testing and human clinical testing necessary to
file a NDA.
3.7 Supply of LEAD COMPOUNDS. ALLERGAN may request that ENTREMED
supply ALLERGAN with sufficient quantities of LEAD COMPOUNDS for evaluation.
ENTREMED shall supply, at its expense, such amount of each LEAD COMPOUND as is
reasonable and sufficient for ALLERGAN to perform the evaluations of each LEAD
COMPOUND described in this Section 3, to the extent ENTREMED is capable of
providing such amount, or else arrange to manufacture or have manufactured such
amount at its own expense. To the extent ALLERGAN requires additional amounts of
LEAD COMPOUNDS for research and development, ENTREMED shall use commercially
reasonable efforts to supply such LEAD COMPOUNDS and ALLERGAN shall reimburse
ENTREMED * percent (*%) of ENTREMED's ACTUAL COST of manufacture thereof.
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3.8 No Impairment of Rights in LEAD COMPOUNDS. During the
COLLABORATION TERM and for a period of * following the termination thereof,
ENTREMED will not transfer or license rights to any THIRD PARTY with respect to
any LEAD COMPOUND which would impair ALLERGAN's rights to continue to develop
and commercialize such LEAD COMPOUND in the FIELD.
3.9 Selection of ALLERGAN DESIGNATED COMMERCIAL COMPOUND. During
the COLLABORATION TERM, ALLERGAN may designate any LEAD COMPOUND as an ALLERGAN
DESIGNATED COMMERCIAL COMPOUND. In addition, any LEAD COMPOUND shall
automatically be categorized as an ALLERGAN DESIGNATED COMMERCIAL COMPOUND upon
the filing by ALLERGAN of an IND with respect to such LEAD COMPOUND. Any
ALLERGAN DESIGNATED COMMERCIAL COMPOUND shall cease to be an ALLERGAN DESIGNATED
COMMERCIAL COMPOUND if ALLERGAN has not filed an IND with respect to such
ALLERGAN DESIGNATED COMMERCIAL COMPOUND within one (1) year following the
termination of the COLLABORATION TERM, unless ALLERGAN has presented ENTREMED
with a detailed plan with respect to the timeline for ALLERGAN's intended filing
of such IND, in which case such compound shall continue to be an ALLERGAN
DESIGNATED COMMERCIAL COMPOUND so long as ALLERGAN continues to use its
reasonable efforts to pursue such plan in accordance with such timeline in good
faith.
3.10 Exclusivity. During the COLLABORATION TERM and following the
COLLABORATION TERM, ENTREMED will not transfer or license rights to any THIRD
PARTY with respect to any ALLERGAN DESIGNATED COMMERCIAL COMPOUND, which would
impair ALLERGAN's rights to continue to develop and commercialize such ALLERGAN
DESIGNATED COMMERCIAL COMPOUND in the FIELD. During the COLLABORATION TERM,
ENTREMED shall not, directly or indirectly, collaborate with, provide
information to, or otherwise assist, any THIRD PARTY to discover, research or
develop antiangiogenesis compounds in the FIELD.
3.11 Termination of COLLABORATION TERM. Following the COLLABORATION
TERM, ENTREMED will have no obligation to provide the information or compounds
pursuant to the terms of Sections 3.2, 3.4 and 3.7, provided, however that such
obligations as they may relate to ALLERGAN DESIGNATED COMMERCIAL COMPOUNDS and
as elsewhere described in this AGREEMENT shall survive the termination of the
COLLABORATION TERM.
SECTION 4 - DUE DILIGENCE.
4.1 Due Diligence Obligations.
(a) ALLERGAN shall use commercially reasonable efforts
consistent with its reasonable business judgement to research, develop,
manufacture in finished form, and register PRODUCTS and market and sell PRODUCTS
in each country of the TERRITORY.
(b) ALLERGAN shall provide written summaries to ENTREMED
within thirty (30) days after December 31st of each calendar year concerning the
status of PRODUCTS in each country of the TERRITORY. ALLERGAN shall provide
ENTREMED with any additional information reasonably requested by ENTREMED in
this respect to the degree practicable, as determined by ALLERGAN.
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4.2 Reversion of License to ENTREMED. With respect to any country
in the TERRITORY as to which ALLERGAN's license with respect to a PRODUCT under
this AGREEMENT has been terminated, all KNOW-HOW and PATENT RIGHTS and all
licenses and rights with respect to such PRODUCT shall revert to ENTREMED. Such
reversion shall be with respect to the KNOW-HOW and PATENT RIGHTS only, and
ENTREMED shall obtain no right or license in, to, or under any ALLERGAN
TECHNOLOGY or any ALLERGAN PATENTS.
SECTION 5 - CONFIDENTIALITY AND ADVERSE EXPERIENCES.
5.1 Confidentiality. During the term of this AGREEMENT, it is
contemplated that each party may disclose to the other proprietary and
confidential technology, inventions, technical information, material, reagents,
biological materials and the like which are owned or controlled by the
disclosing party or which the disclosing party is obligated to maintain in
confidence and which is designated by the disclosing party as confidential
("Confidential Information"). Each party shall have the right to refuse to
accept the other party's Confidential Information. During the term of this
AGREEMENT and for a period of five (5) years thereafter, the receiving party
agrees not to disclose and to maintain the Confidential Information in strict
confidence, to cause all of its agents, representatives, and employees to
maintain the disclosing party's Confidential Information in confidence, and not
to disclose any such Confidential Information to a third party without the prior
written consent of the disclosing party, and not to use such Confidential
Information for any purpose other than as licensed under this AGREEMENT. Each
party will use at least the same standard of care as it uses to protect
Confidential Information of its own.
5.2 Exceptions. The obligations of confidentiality will not apply
to information which:
(a) was known to the receiving party, or generally known
to the public prior to its disclosure hereunder through no fault of the
receiving party or any agent, representative or employee thereof;
(b) subsequently becomes known to the public by some
means other than a breach of this AGREEMENT, including publication and/or laying
open to inspection of any patent applications or patents;
(c) is subsequently disclosed to the receiving party by a
third party having a lawful right to make such disclosure and who is not under
an obligation of confidentiality to the disclosing party;
(d) is required by law, rule, regulation or bona fide
legal process to be disclosed, provided that the receiving party takes all
reasonable steps to restrict and maintain confidentiality of such disclosure and
provides reasonable notice to the disclosing party;
(e) is approved for release by the disclosing party; or
(f) is independently developed by the receiving party.
5.3 Permitted Disclosures. The obligations of Section 5.1
notwithstanding, ALLERGAN or ENTREMED, as the case may be, may disclose the
Confidential Information licensed hereunder, to THIRD PARTIES who (i) need to
know the same in order to secure regulatory approval for the sale of PRODUCT,
(ii) who need to know the same in order to work towards the commercial
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development of PRODUCT, or (iii) who are approved by ENTREMED or ALLERGAN, as
the case may be, provided that such parties are bound by obligations of
confidentiality and non-use at least as stringent as set forth herein.
5.4 Adverse Experience Reporting. Each party, including such
party's respective AFFILIATES and SUBLICENSEES, that is marketing a PRODUCT, or
another product with the same active ingredient as a PRODUCT, will comply with
all applicable law and regulations regarding reporting of adverse experiences
("AEs"), and promptly inform the other party of such reports.
SECTION 6 - BULK MATERIAL.
6.1 Bulk Material. ENTREMED will provide 2-METHOXYESTRADIOL or
other ALLERGAN DESIGNATED COMMERCIAL COMPOUNDS, in bulk to ALLERGAN, if ENTREMED
is capable and qualified of manufacturing. ENTREMED shall provide such bulk
material to ALLERGAN, and ALLERGAN will reimburse ENTREMED, at * percent (*%) of
ENTREMED's ACTUAL COST for such materials. In such event, the parties will
negotiate in good faith an active ingredient supply agreement which shall
contain terms and provisions customary for such agreements including: (i)
forecasting and ordering, (ii) qualification of second sources, (iii) inspection
rights and (iv) indemnification. ALLERGAN will manufacture final product in
finished form.
SECTION 7 - RESEARCH AND DEVELOPMENT.
7.1 Research and Development. At the request of ALLERGAN, ENTREMED
will conduct, at the expense of ALLERGAN, certain mutually agreed upon research
for ALLERGAN, subject to a mutually satisfactory agreement to be entered into by
the parties hereto setting forth specific terms for such research.
7.2 Pre-Clinical and Clinical Research. ALLERGAN shall be
primarily responsible for the conduct of pre-clinical and clinical research and
development for PRODUCTS.
7.3 Reports. At least once every twelve (12) months from the date
upon which ALLERGAN designates a LEAD COMPOUND, ALLERGAN shall provide to
ENTREMED a written summary of the activities that relate to development efforts
conducted by or on behalf of ALLERGAN or its AFFILIATES with respect to such
LEAD COMPOUND(s), and if there are any material deviations in the plan outlined
in such summary during the interim period between summaries, ALLERGAN will so
inform ENTREMED within a reasonable period of time. In each such summary,
ALLERGAN shall describe the progress made during the prior year towards
development of such LEAD COMPOUND and the plans for the next year. ALLERGAN
shall have the right to modify the development plan in the event that
commercial, scientific or competitive conditions or regulatory requirements
change during the course of the development and/or there are unanticipated
results obtained in pre-clinical or clinical studies.
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SECTION 8 - PATENTS.
8.1 Patent Prosecution. ENTREMED shall file, prosecute and
maintain patent applications and patents included in PATENT RIGHTS through
patent counsel selected by ENTREMED, in (i) the United States, and (ii) such
other countries named by ALLERGAN and set forth on Appendix D hereto (the
"MANDATORY FILING COUNTRIES"). ALLERGAN may from time to time request that
ENTREMED file, prosecute and maintain patent applications and patents included
in PATENT RIGHTS through patent counsel selected by ENTREMED in additional
countries (the "ADDITIONAL FILING COUNTRIES"), which request ENTREMED may deny
in its reasonable discretion. In the event ENTREMED determines not to file,
prosecute or maintain any patent included in the PATENT RIGHTS or covering any
KNOW-HOW, in any country or countries, ENTREMED shall notify ALLERGAN of such
determination the sooner to occur of ninety (90) days prior to any applicable
deadline, or sixty (60) days following a request by ALLERGAN that ENTREMED file,
prosecute or maintain any patent included in the PATENT RIGHTS or covering any
KNOW-HOW in any country (such date of request with respect to the MANDATORY
FILING COUNTRIES being deemed to have occurred as of the EFFECTIVE DATE). In
such event, ALLERGAN may elect to file, prosecute or maintain any such patent in
such jurisdiction (at ALLERGAN's own expense with respect to such filings in the
ADDITIONAL FILING COUNTRIES, and in the case of any MANDATORY FILING COUNTRY,
ALLERGAN may off-set all of such expenses against any payments or royalties due
to ENTREMED hereunder), and ENTREMED shall provide reasonable assistance and
cooperation, and all right, title and interest in such patent shall reside in
ALLERGAN. Such cooperation includes, but is not limited to executing all papers
and instruments, or requiring its employees or agents, to execute such papers
and instruments, so as to effectuate the ownership of patent rights set forth
herein and to enable ALLERGAN to apply for and to prosecute patent applications
in any such country; and promptly informing ALLERGAN of any matters coming to
ENTREMED's attention that may affect the preparation, filing, or prosecution of
any such patent applications.
8.2 Continuing Application: No later than thirty (30) days
following the EFFECTIVE DATE, ENTREMED shall file, in the United States and any
other country or region possible, a continuing patent application claiming
priority to the United States Patent Application 08/102,767 (filed August 6,
1993) claiming the use of derivatives of 2-methoxyestradiol as anti-angiogenesis
agents for conditions including ocular neovascularization, wherein the molecule
is substituted at the 2 position of the estradiol ring with a) alkoxy groups and
b) alkyl esters. ENTREMED shall file a petition to make special pursuant to 37
CFR 1.102 (d) with the United States Patent and Trademark Office in reference to
such continuing application, and shall take all reasonable action to accelerate
the prosecution of such application(s). ENTREMED shall also submit an
Information Disclosure Statement at the time of United States filing of such
continuing application which shall inform the Patent Examiner of the existence
of U.S. Patent No 6,011,023 (Xxxxx et al.) and U.S. Patent No. 5,643,900 (Fotsis
et al.) and all other references which are required to be disclosed pursuant to
37 CFR Section 1.56. ALLERGAN shall pay ENTREMED * Dollars ($*) upon issue of a
U.S. patent containing claims substantially as described in this Section 8.2.
8.3 Patent Enforcement. If any of the PATENT RIGHTS under which
ALLERGAN is licensed hereunder is infringed by a THIRD PARTY, ENTREMED shall
have the right and option but not the obligation, to bring an action for
infringement, at its sole expense, against such THIRD PARTY in the name of
ENTREMED and/or in the name of ALLERGAN, and to join ALLERGAN as a party
plaintiff if required. Each party shall promptly notify the other of any such
infringement and ENTREMED shall keep ALLERGAN informed as to the prosecution of
any action for such
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infringement. If ENTREMED fails to bring an action or proceeding with respect
PATENT RIGHTS under which ALLERGAN is licensed hereunder within: (a) sixty (60)
business days following the notice of alleged infringement or (b) ten (10) days
before the time limit, if any, set forth in the appropriate laws and regulations
for the filing of such actions, whichever comes first, ALLERGAN shall have the
right to bring and control any such action, by counsel of its own choice, and
ALLERGAN may off-set all of such expenses against any payments or royalties due
to ENTREMED hereunder, and ENTREMED shall have the right, at its own expense, to
be represented in any such action, by counsel of its own choice. In the event a
party brings an infringement action, the other party shall cooperate fully,
including if required to bring such action, the furnishing of a power of
attorney. No settlement, consent judgment or other voluntary final disposition
of the suit which adversely affects PATENT RIGHTS shall be entered into without
the consent of the parties hereto, such consent not to be unreasonably withheld.
Except as otherwise agreed to by the parties as part of a cost sharing
arrangement, any recovery realized as a result of such litigation, shall belong
to ALLERGAN if ALLERGAN brought the action, or, to ENTREMED, if ENTREMED brought
the action.
8.4 Infringement of THIRD PARTY Rights. Each party shall promptly
notify the other in writing of any allegation by a THIRD PARTY that the activity
of either of the parties hereunder infringes or may infringe the intellectual
property rights of such THIRD PARTY. ALLERGAN shall have the first right to
control any defense of any such claim involving alleged infringement of THIRD
PARTY rights by ALLERGAN's activities under this AGREEMENT by counsel of its own
choice, and ALLERGAN may off-set * percent (*%) of such expenses against any
payments or royalties due to ENTREMED hereunder, and ENTREMED shall have the
right, at its own expense, to be represented in any such action by counsel of
its own choice. If ALLERGAN fails to proceed in a timely fashion with regard to
such defense, ENTREMED shall have the right to control any such defense of such
claim at its own expense and by counsel of its own choice, and ALLERGAN shall
have the right to be represented in any such action by counsel of its own
choice at its own expense. Neither party shall have the right to settle any
patent infringement litigation under this Section 8.4 in a manner that
diminishes the rights or interests of the other party without the consent of
such party, such consent not to be unreasonably withheld.
SECTION 9 - ROYALTIES AND OTHER COMPENSATION.
9.1 Royalties.
(a) ALLERGAN shall pay to ENTREMED on the NET SALES of
PRODUCTS sold by ALLERGAN, its AFFILIATES and SUBLICENSEES in the TERRITORY as
follows: a royalty of * percent (*%) of such NET SALES on sales in NORTH
AMERICA; a royalty of * percent (*%) of such NET SALES in EUROPE, Australia and
Japan and a royalty of * percent (*%) of such NET SALES in ROW. In the event
that there is no VALID CLAIM with respect to a PRODUCT in a particular country
of sale in the TERRITORY, then the foregoing royalty rates with respect to such
country shall be *.
(b) In the event that any of ALLERGAN or its AFFILIATES
to whom this license has been extended hereunder is required to pay any
royalties to any THIRD PARTY as a result of a granted patent with respect to a
PRODUCT in any country in the TERRITORY, ALLERGAN shall be entitled to a credit
against royalties due to ENTREMED for such PRODUCT under this AGREEMENT in each
CALENDAR QUARTER in an amount equal to * percent (*%) of such royalties paid to
such THIRD PARTIES for such PRODUCT in such country for such CALENDAR QUARTER,
but in no event shall such credit exceed a percentage of NET SALES of
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such PRODUCT in such country for such CALENDAR QUARTER, as follows: * percent
(*%) of such NET SALES on sales in NORTH AMERICA; * percent (*%) of such NET
SALES in EUROPE, Australia and Japan and * percent (*%) of such NET SALES in
ROW.
(c) Such royalties shall be paid as set forth in Sections
9.1(a) and 9.1(b) above by ALLERGAN, on a country by country, PRODUCT by
PRODUCT, basis for a period of ten (10) years in each country of the TERRITORY
from the date of FIRST COMMERCIAL SALE of such PRODUCT in each such country and
if thereafter such PRODUCT is covered by a VALID CLAIM of a PATENT RIGHT, such
royalties shall be payable until the last to expire PATENT RIGHT in such
country; provided that if thereafter such PRODUCT is covered by the claims of an
ALLERGAN PATENT the royalties set forth herein shall continue to be payable
until the last to expire applicable ALLERGAN PATENT, but the royalty rate during
this period shall be reduced to * percent (*%) of the royalty rate set forth
herein. Upon termination of any such period ALLERGAN shall have a perpetual,
irrevocable, fully-paid license to use the KNOW-HOW with respect to PRODUCTS
sold in such country. Upon the expiration of the last to expire PATENT RIGHT in
the TERRITORY which is a VALID CLAIM, ALLERGAN shall have a perpetual,
irrevocable, fully-paid license to use the KNOW-HOW in every country in the
TERRITORY.
9.2 Upfront and Success Payments.
(a) ALLERGAN shall pay to ENTREMED a nonrefundable and
noncreditable upfront technology access fee of * dollars ($*), payable within *
of the EFFECTIVE DATE.
(b) ALLERGAN shall pay to ENTREMED, as partial
reimbursement for prior research and development costs incurred by ENTREMED, a
nonrefundable and noncreditable fee of * dollars ($*) payable as follows:
*
The foregoing reimbursement for prior research and development costs
shall be paid one time only, regardless of how many ALLERGAN DESIGNATED
COMMERCIAL COMPOUNDS enter the development process.
(c) ALLERGAN shall pay to ENTREMED, as a success payment,
* dollars ($*) in the event of an * of PRODUCTS containing an ALLERGAN
DESIGNATED COMMERCIAL COMPOUND by *. The foregoing payment shall be paid one
time only, regardless of how many ALLERGAN DESIGNATED COMMERCIAL COMPOUNDS *.
(d) As set forth in Section 8.2, ALLERGAN shall pay
ENTREMED * Dollars ($*) upon *, subject to the conditions set forth therein.
9.3 Milestone Payments.
(a) For each ALLERGAN DESIGNATED COMMERCIAL COMPOUND
qualifying for payment under subsections (b) and (c) below, ALLERGAN shall pay
the following amounts upon the occurrence of the following milestone events.
*
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(b) The milestone payments under items numbered 1 through
3 in subsection (a) above shall be payable with respect to each ALLERGAN
DESIGNATED COMMERCIAL COMPOUND with respect to which such milestone is achieved.
The milestone payments numbered 4 through 6 in subsection (a) above shall be
paid with respect to the first ALLERGAN DESIGNATED COMMERCIAL COMPOUND which
achieves such milestones, and any subsequent payments for any additional
ALLERGAN DESIGNATED COMMERCIAL COMPOUND achieving any such milestone shall be *.
Notwithstanding any of the foregoing, in the event that any ALLERGAN DESIGNATED
COMMERCIAL COMPOUND is a replacement for an ALLERGAN DESIGNATED COMMERCIAL
COMPOUND which has been abandoned by ALLERGAN during the pre-clinical or
clinical study process, no payments shall be due in the event that such
replacement compound meets a milestone for which a payment has already been made
with respect to the replaced ALLERGAN DESIGNATED COMMERCIAL COMPOUND.
(c) Milestone payments for the first ALLERGAN DESIGNATED
COMMERCIAL COMPOUND to achieve each of the milestones numbered 1 through 6 in
subsection (a) above shall be as set forth above, provided however that with
respect to any subsequent ALLERGAN DESIGNATED COMMERCIAL COMPOUNDS achieving
such milestones and qualifying for payment pursuant to the terms of Section
9.3(b) above, the payments set forth in numbers 1 through 6 in subsection (a),
as adjusted pursuant to Section 9.3(b) above, will be * by * percent (*%) per
annum during the period beginning with the first milestone payment under
milestone 1 of subsection (a) above and ending upon the termination of the
COLLABORATION TERM (such adjustment percentage shall remain fixed with respect
additional milestones for the same ALLERGAN DESIGNATED COMMERCIAL COMPOUND). For
example, if the first ALLERGAN DESIGNATED COMMERCIAL COMPOUND meets milestone 1
in * of *, and a second ALLERGAN DESIGNATED COMMERCIAL COMPOUND that is not a
REPLACEMENT COMPOUND meets milestone 1 in * of *, the adjustment percentage is
*%, and therefore the milestone payment for the second ALLERGAN DESIGNATED
COMMERCIAL COMPOUND would be $*. If the same ALLERGAN DESIGNATED COMMERCIAL
COMPOUND meets milestone 2 in * of *, the adjustment percentage would continue
to be fixed at *%, and therefore the milestone payment would be $* (whereas a
third ALLERGAN DESIGNATED COMMERCIAL COMPOUND that is not a REPLACEMENT COMPOUND
achieving milestone 1 in * of *would have its adjustment percentage fixed at *%,
assuming that the first ALLERGAN DESIGNATED COMMERCIAL COMPOUND met milestone 1
as indicated above).
(d) * percent (*%) of the milestone payments paid by
ALLERGAN to ENTREMED hereunder shall be creditable against the royalties due to
ENTREMED under this AGREEMENT in each CALENDAR YEAR until such credit has been
fully exhausted; provided that no royalty payment due hereunder for any CALENDAR
QUARTER shall be reduced by more than * percent (*%). Milestone payments paid by
ALLERGAN to ENTREMED hereunder shall NOT be creditable against the royalties due
to ENTREMED under this AGREEMENT if such milestone payments have already been
subjected to a *% reduction pursuant to subsection (b) above.
9.4 Stock Purchase Agreement. The parties hereto have
contemporaneously with this AGREEMENT executed a Restricted Stock Purchase
Agreement in the form of Appendix C attached hereto, under which ALLERGAN will
purchase Five Million Dollars ($5,000,000) of ENTREMED Common Stock, and receive
a warrant to purchase additional ENTREMED Common Stock, upon the terms set forth
therein.
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9.5 Books and Records: Audit. ALLERGAN shall keep, and shall cause
each of its AFFILIATES and SUBLICENSEES to keep, full and accurate books of
account containing all particulars relevant to its sales of PRODUCTS that may be
necessary for the purpose of calculating all royalties payable to ENTREMED. Such
books of account shall be kept at their principal place of business and, with
all necessary supporting data shall, for the three (3) years next following the
end of the CALENDAR YEAR to which each shall pertain, be open for inspection by
an independent certified public accountant reasonably acceptable to ALLERGAN,
upon reasonable notice during normal business hours at ENTREMED's expense for
the sole purpose of verifying royalty statements or compliance with this
AGREEMENT. In the event the inspection determines that royalties due ENTREMED
for any period have been underpaid by five percent (5%) or more, then ALLERGAN
shall pay for *. In either case, ALLERGAN shall pay to ENTREMED any underpaid
royalties promptly and with interest at the prime rate available to ENTREMED.
All information and data reviewed in the inspection shall be used only for the
purpose of verifying royalties and all such information disclosed to ENTREMED
shall be treated as ALLERGAN Confidential Information subject to the obligations
of this AGREEMENT. No audit by an agent of ENTREMED shall occur more frequently
than once during any twelve (12) month period.
9.6 Payment of Royalties. In each CALENDAR YEAR, the amount of
royalty due shall be calculated quarterly as of the end of each CALENDAR QUARTER
and shall be paid quarterly within the forty-five (45) days next following such
date. Every such payment shall be supported by the accounting prescribed in
Section 9.7 and shall be made in United States currency. Whenever for the
purpose of calculating royalties, conversion from any foreign currency shall be
required, such conversion shall be at the rate of exchange published in The Wall
Street Journal on a daily basis.
9.7 Accounting. With each quarterly payment, ALLERGAN shall
deliver to ENTREMED a full and accurate accounting to include at least the
following information:
(a) Quantity of PRODUCT subject to royalty sold (by
country) by ALLERGAN, its AFFILIATES and SUBLICENSEES;
(b) Gross amount invoiced for each PRODUCT subject to
royalty (by country);
(c) Adjustments to royalties pursuant to Sections 9.1(b)
and 9.3(d);
(d) NET SALES and total royalties payable to ENTREMED.
9.8 Taxes. Any withholding of taxes levied by tax authorities
outside the United States on the payments hereunder shall be borne by the party
receiving such payment and deducted by the party making such payment from the
sums otherwise payable by it hereunder for payment to the proper tax
authorities. The parties agrees to cooperate with each other, in the event a
party claims exemption from such withholding or seeks deductions under any
double taxation or other similar treaty or agreement from time to time in force,
such cooperation to consist of providing receipts of payment of such withheld
tax or other documents reasonably available.
9.9 Restrictions. If at any time conditions or legal restrictions
exist in any country where PRODUCTS are sold by ALLERGAN or its AFFILIATES or
SUBLICENSEES that prevent the prompt remittance of all or a portion of the
royalties due ENTREMED, then ALLERGAN, its AFFILIATES or SUBLICENSEES shall have
the right to make such payments by depositing the amount thereof in local
currency to ENTREMED's account in a bank or other depository selected by
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ENTREMED in that country. When in any country the law or regulations prohibit
both the transmittal and deposit of royalties on sales in such a country,
royalty payments shall be suspended for as long as such prohibition is in
effect, and as soon as such prohibition ceases to be in effect, all royalties
that would have been obligated to be transmitted or deposited, but for the
prohibition, shall forthwith be deposited or transmitted promptly to the extent
allowable, as the case may be. If any royalty rate specified in this AGREEMENT
should exceed the permissible rate established in any country, the royalty rate
for sales in such country shall be adjusted to the highest legally permissible
or government-approved rate.
SECTION 10 - REPRESENTATIONS AND WARRANTIES.
10.1 Representations and Warranties of Both Parties. Each party
represents and warrants to the other party that (i) it is free to enter into
this AGREEMENT; (ii) in so doing, it will not violate any other agreement to
which it is a party; and (iii) it has taken all corporate action necessary to
authorize the execution and delivery of this AGREEMENT and the performance of
its obligations under this AGREEMENT.
10.2 Representations and Warranties of ENTREMED. ENTREMED hereby
represents and warrants to ALLERGAN that:
(a) CMCC has, by agreement with ENTREMED, granted to
ENTREMED exclusive rights to all of the PATENT RIGHTS listed on Exhibit A to the
CMCC AGREEMENT attached hereto as Appendix A (including all originals,
provisionals, divisionals, continuations or continuations-in-part thereof);
(b) The redacted copy of the CMCC AGREEMENT attached
hereto as Appendix A, is a true, correct and complete copy of such CMCC
AGREEMENT except for the redaction of the financial terms thereof; the CMCC
AGREEMENT is in full force and effect, and ENTREMED is not in breach thereof,
and accordingly ENTREMED has the right to grant sublicenses therefor;
(c) ENTREMED has met all milestones required to be met by
ENTREMED under the CMCC AGREEMENT, and ENTREMED anticipates in good faith that
it shall meet all future milestones in accordance with the terms of the CMCC
AGREEMENT;
(d) It is the sole and exclusive owner of the PATENT
RIGHTS, or is the exclusive licensee of all right, title and interest of CMCC in
and to the PATENT RIGHTS, and that it has the right to license and sublicense
the same to ALLERGAN in the FIELD under this AGREEMENT without conflict with the
rights of, or any agreement, instrument or understanding, oral or written with,
any THIRD PARTY; and to the best of the knowledge of ENTREMED, it is the sole
and exclusive owner of the KNOW-HOW, or that it is the exclusive licensee of all
right, title and interest of CMCC in and to the KNOW-HOW, and that it has the
right to license and sublicense the same to ALLERGAN in the FIELD under this
AGREEMENT without conflict with the rights of, or any agreement, instrument or
understanding, oral or written with, any THIRD PARTY;
(e) The PATENT RIGHTS granted to ENTREMED under license
are, to the best knowledge of ENTREMED, free of any claims, encumbrances, liens,
licenses, judgments and/or security interests that would affect their use in the
FIELD, and to the best knowledge of ENTREMED, none of such PATENT RIGHTS are the
current subject of any litigation, interference or opposition proceeding; all
other PATENT RIGHTS are free of any claims, encumbrances, liens,
- 16 -
licenses, judgments and/or security interests that would affect their use in the
FIELD, and none of such PATENT RIGHTS are the current subject of any litigation,
interference or opposition proceeding; and to the best of the knowledge of
ENTREMED, the KNOW-HOW is free of any claims, encumbrances, liens, licenses,
judgments and/or security interests that would affect their use in the FIELD;
(f) The practice by ALLERGAN of the rights granted under
PATENT RIGHTS hereunder with respect to 2-METHOXYESTRADIOL, and to the best of
the knowledge of ENTREMED, under the KNOW-HOW or with respect to any of the LEAD
COMPOUNDS, will not infringe or violate the proprietary rights of any THIRD
PARTY; it does not have any outstanding and unresolved claim or accusation that
any compounds or products manufactured, used or sold by ENTREMED or any methods
or process practiced by ENTREMED which are included in the rights granted to
ALLERGAN in this AGREEMENT infringes or may infringe any THIRD PARTY patent(s)
or other intellectual property rights, and it has disclosed to ALLERGAN any
THIRD PARTY patent(s) of which it is aware that might be infringed by the
manufacture, use or sale of PRODUCTS or the practice of any methods or processes
covered by the PATENT RIGHTS or, to the best of the knowledge of ENTREMED,
included in the KNOW-HOW, by ALLERGAN, its AFFILIATES or SUBLICENSEES;
(g) It does not own or license any patents or patent
applications not included in the PATENT RIGHTS which would be infringed by the
manufacture, use or sale of any PRODUCTS or the practice of any methods or
processes covered by the PATENT RIGHTS or, to the best of the knowledge of
ENTREMED, included in the KNOW-HOW, by ALLERGAN, its AFFILIATES or SUBLICENSEES;
(h) To the best of the knowledge of the officers of
ENTREMED, all of the patents and patent applications included in the PATENT
RIGHTS are valid and in full force and effect, and are not the current subject
of any interference or opposition proceeding, and it is unaware of any
publications or activities, including, without limitation, patents, articles,
and public uses or sales, by it or others, which would or might invalidate any
claim(s) of any patent or patent application included in the PATENT RIGHTS;
(i) It has not conducted, nor has it commissioned the
conducting of, any written infringement or validity studies regarding any patent
or patent application included in the PATENT RIGHTS that it has not disclosed in
writing to ALLERGAN prior to the EFFECTIVE DATE;
(j) It has not granted any THIRD PARTY any license for
PATENT RIGHTS or KNOW-HOW for use in the FIELD;
(k) It has full power and authority to execute and
deliver this AGREEMENT and to consummate the transactions contemplated herein,
and this AGREEMENT and the provisions hereof constitute valid and legally
binding obligations upon ENTREMED, and do not require the consent, approval or
authorization of any person, public or governmental authority or other entity
except as specified herein;
(l) It knows of no adverse effects or other properties
that may raise objections from the FDA or other health registration authorities
or may affect the use, effectiveness or merchantability of 2-METHOXYESTRADIOL;
- 17 -
(m) As of the EFFECTIVE DATE there is no pending, or to
its knowledge threatened, litigation that would or might adversely affect its
right and ability to perform its obligations under this AGREEMENT.
10.3 LIMITATION ON WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY SET
FORTH IN THIS AGREEMENT, ENTREMED MAKES NO REPRESENTATIONS AND EXTENDS NO
WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED
TO, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
SECTION 11 - INDEMNIFICATION AND INSURANCE.
11.1 Indemnification by ALLERGAN. ALLERGAN will defend, indemnify
and hold harmless ENTREMED, its AFFILIATES and licensors, and their employees,
agents, officers, shareholders and directors and each of them (the "ENTREMED
Indemnified Parties"), from and against any and all THIRD PARTY claims, causes
of action and costs (including reasonable attorney's fees), of any nature made,
or lawsuits or other proceedings filed or otherwise instituted against the
ENTREMED Indemnified Parties, resulting from or arising out of this AGREEMENT,
or out of the research, development, testing, manufacture, sale or use of any
PRODUCT by ALLERGAN, its AFFILIATES or its SUBLICENSEES (other than those claims
which result from the gross negligence or willful misconduct of an ENTREMED
Indemnified Party or claims involving the income tax liability of any ENTREMED
Indemnified Party).
11.2 Indemnification by ENTREMED. ENTREMED will defend, indemnify
and hold harmless ALLERGAN, its AFFILIATES and SUBLICENSEES, and their
employees, agents, officers, shareholders and directors and each of them (the
"ALLERGAN Indemnified Parties"), from and against any and all THIRD PARTY
claims, causes of action, liabilities and costs (including reasonable attorney's
fees), of any nature made, or lawsuits or other proceedings filed or otherwise
instituted against the ALLERGAN Indemnified Parties, resulting from or arising
out of:
(a) any research by ENTREMED or its AFFILIATES (other
than those claims which result from the gross negligence or willful misconduct
of an ALLERGAN Indemnified Party); or
(b) any breach of or inaccuracy with respect to
ENTREMED's representations and warranties herein, or the non-performance of any
covenant or obligation of ENTREMED hereunder.
11.3 Conditions to Indemnification. A person or entity that intends
to claim indemnification under this Section 11 (the "Indemnitee") shall promptly
notify the other party (the "Indemnitor") of any loss, claim, damage, liability
or action in respect of which the Indemnitee intends to claim such
indemnification, and the Indemnitor shall assume the defense thereof, with
counsel mutually satisfactory to the Indemnitee, whether or not such claim is
rightfully brought; provided, however, that an Indemnitee shall have the right
to retain its own counsel, with the fees and expenses to be paid by the
Indemnitor if Indemnitor does not assume the defense, or if representation of
such Indemnitee by the counsel retained by the Indemnitor would be inappropriate
due to actual or potential differing interests between such Indemnitee and any
other person represented by such counsel in such proceedings. The indemnity
agreement in this Section 11 shall not apply to amounts paid in settlement of
any loss, claim, damage, liability or action if such settlement is effected
without
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the consent of the Indemnitor, which consent shall not be withheld or delayed
unreasonably. The failure to deliver notice to the Indemnitor within a
reasonable time after the commencement of any such action, only if prejudicial
to its ability to defend such action, shall relieve such Indemnitor of any
liability to the Indemnitee under this Section 11, but the omission so to
deliver notice to the Indemnitor will not relieve it of any liability that it
may have to any Indemnitee otherwise than under this Section 11. The Indemnitee
under this Section 11, its employees and agents, shall cooperate fully with the
Indemnitor and its legal representatives in the investigations of any action,
claim or liability covered by this indemnification.
11.4 Insurance. To the extent that ENTREMED is insured for any
matter which is covered by the indemnities of Section 11.1, ALLERGAN shall be
named as additional insureds under any and all insurance policies and ENTREMED
will provide evidence of such insurance upon the request of ALLERGAN.
SECTION 12 - ASSIGNMENT; SUCCESSORS.
12.1 Assignment. This AGREEMENT shall not be assignable by either
party hereto without the prior written consent of the other, which consent shall
not be unreasonably withheld, except that either party hereto may, without the
consent of the other, assign this AGREEMENT to a successor in interest or
transferee of all or substantially all of the portion of the business to which
this AGREEMENT relates, and ALLERGAN may, without the consent of ENTREMED,
assign this AGREEMENT to any of its AFFILIATES.
SECTION 13 - CO-PROMOTION.
13.1 Co-Promotion. The parties agree to those co-promotion
provisions set forth on Appendix E hereto.
SECTION 14 - FORCE MAJEURE.
14.1 Force Majeure. Neither party shall be liable to the other
party for damages or loss (other than with respect to payments due ENTREMED
hereunder) occasioned by failure of performance by the defaulting party if the
failure is occasioned by war, fire, explosion, flood, strike or lockout,
embargo, or similar cause beyond the control of the defaulting party, provided
that the party claiming this exception has exerted all reasonable efforts to
avoid or remedy such event, and provided such event does not extend for more
than six (6) months.
SECTION 15 - TERM AND TERMINATION.
15.1 Term.
(a) Except as otherwise specifically provided herein and
unless sooner terminated pursuant to Section 15.2 or 15.3 of this AGREEMENT,
this AGREEMENT and the licenses and rights granted hereunder shall remain in
full force and effect until ALLERGAN's obligations to pay royalties hereunder
terminate.
(b) Upon termination of ALLERGAN's obligations to pay
royalties hereunder with respect to a specific country as to which ALLERGAN's
license is then in effect, the license granted to ALLERGAN with respect to such
country shall be deemed to be fully paid and
- 19 -
ALLERGAN shall thereafter have a royalty free right to use the KNOW-HOW and
PATENT RIGHTS, to make, have made, use, and sell PRODUCTS in such country.
15.2 Breach. In the event of a breach of any material provision of
this AGREEMENT by either party hereto which is not cured within sixty (60) days
after written notice to the breaching party by the other party, in addition to
any other remedy it may have, the other party at its sole option may terminate
this AGREEMENT, provided that such other party is not then in breach of this
AGREEMENT.
15.3 Insolvency or Bankruptcy. Either party to this AGREEMENT may,
upon giving notice of termination, immediately terminate this AGREEMENT upon
receipt of notice that the other party has become insolvent or has suspended
business in all material respects hereof, or has consented to an involuntary
petition purporting to be pursuant to any reorganization or insolvency law of
any jurisdiction, or has made an assignment for the benefit of creditors or has
applied for or consented to the appointment of a receiver or trustee for a
substantial part of its property. All rights and licenses granted under this
AGREEMENT will be considered for purposes of Section 365(n) of the Bankruptcy
Code, licenses of rights to "intellectual property" as defined under Section
101(56) of the Bankruptcy Code so long as it complies with its obligations
thereunder. The parties agree that a licensee of such rights under this
AGREEMENT will retain and may fully exercise all of its rights and elections
under the Bankruptcy Code. In the event that a licensor seeks or is
involuntarily placed under the protection of the Bankruptcy Code, and the
trustee in bankruptcy rejects this AGREEMENT, the licensee hereby elects,
pursuant to Section 365(n), to retain all rights granted to it under this
AGREEMENT to the extent permitted by the law.
15.4 Right to Sell Stock on Hand. Upon any termination of this
AGREEMENT, ALLERGAN shall be entitled to, but shall not be obligated to, finish
any work in progress for which ALLERGAN has received firm purchase orders and to
sell any completed inventory of a PRODUCT covered by this AGREEMENT which
remains on hand as of the date of the termination, so long as ALLERGAN pays to
ENTREMED the royalties applicable to said subsequent sales in accordance with
the same terms and conditions as set forth in this AGREEMENT.
15.5 Surviving Rights. The rights and obligations of the parties in
Sections 8, 9.5, 10, 11, 15.1, 15.4, 15.5, 15.6, 15.7, 15.8, 16.3, and 16.7, and
those provisions which by their terms survive, shall survive any termination of
this AGREEMENT.
15.6 Restrictions upon Termination. Upon termination of this
AGREEMENT or of the rights and licenses granted to ALLERGAN in any country,
ALLERGAN agrees not to use the KNOW-HOW or PATENT RIGHTS or information or
technology derived therefrom for the manufacture, use or sale of PRODUCTS in any
country other than those countries in which ALLERGAN retains a license under
this AGREEMENT.
15.7 Limitation on ALLERGAN's Rights. ALLERGAN agrees to use
KNOW-HOW and PATENT RIGHTS only for the manufacture, use or sale of PRODUCTS and
only and to the extent licensed under this AGREEMENT.
15.8 ALLERGAN's Right to Terminate; Effect of Termination. ALLERGAN
may terminate this AGREEMENT in its entirety at any time after the EFFECTIVE
DATE for any reason, upon thirty (30) days prior notice to ENTREMED, in which
case all of the rights and obligations of the parties shall terminate, except
those specifically designated to survive termination. Additionally,
- 20 -
ALLERGAN may terminate this AGREEMENT on a country by country basis at any time
after the EFFECTIVE DATE, if in ALLERGAN's sole reasonable determination, due to
competitive, regulatory, reimbursement, practice of medicine or similar issues,
ALLERGAN's performance under this AGREEMENT in such country or countries would
not be in ALLERGAN's best business interests, then ALLERGAN so shall notify
ENTREMED (through the RESEARCH LIAISON COMMITTEE if during the COLLABORATION
TERM, or in accordance with Section 16.7 following the COLLABORATION TERM), and
thirty (30) days following such notice, all of the rights and obligations of the
parties with respect to such country or countries shall terminate, except those
specifically designated to survive termination. In the event of said termination
or in the event ENTREMED terminates this AGREEMENT pursuant to Sections 15.2 and
15.3; all licenses and rights granted to ALLERGAN shall terminate forthwith,
ALLERGAN shall return to ENTREMED all relevant data provided by ENTREMED to
ALLERGAN hereunder relating to the PRODUCTS in the possession or control of
ALLERGAN.
SECTION 16 - GENERAL PROVISIONS.
16.1 Relationship of Parties. The relationship between ENTREMED and
ALLERGAN is that of independent contractors. ENTREMED and ALLERGAN are not joint
venturers, partners, principal and agent, master and servant, employer or
employee, and have no relationship other than as independent contracting
parties.
16.2 Entire Agreement: Amendments. This AGREEMENT and the
Restricted Stock Purchase Agreement, of even date herewith, set forth the entire
agreement and understanding between the parties as to the subject matter thereof
and supersede all prior agreements in this respect. There shall be no amendments
or modifications to these agreements, except by a written document which is
signed by both parties.
16.3 Contract Disputes; Arbitration; Governing Law and
Jurisdiction.
(a) In the event of any controversy or claim arising from
or relating to any provision of this AGREEMENT, or any term or condition hereof,
or the performance by a party of its obligations hereunder, or its construction
or its actual or alleged breach, the parties will try to settle their
differences amicably between themselves in negotiations between ENTREMED's Chief
Executive Officer and a designated member of ALLERGAN's executive committee.
(b) Either party may provide written notice of a dispute
to the other party, and the designated officers of each party will thereafter
promptly meet to attempt to resolve that dispute. If the dispute has not been
resolved to the mutual satisfaction of the parties within sixty (60) days after
delivery of the written notice, either party may proceed as provided in Section
16.3(c).
(c) Any controversy or claim (whether such claim sounds
in contract, tort, or otherwise) arising out of or relating to this AGREEMENT,
or the breach thereof, which is not resolved as provided in subsection (a) and
(b) above, will be settled by final and binding arbitration before a single
arbitrator at JAMS/Endispute, located in Orange County, California, and such
arbitration will be conducted pursuant to then current rules for arbitration of
commercial disputes at JAMS/Endispute. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. In no event
will the arbitrator have any right or power to award punitive or exemplary
damages.
- 21 -
(d) This AGREEMENT shall be construed and enforced in
accordance with the laws of the State of Delaware, without reference to its
choice of law principles.
16.4 Headings; Language. The headings in this AGREEMENT have been
inserted for the convenience of reference only and are not intended to limit or
expand on the meaning of the language contained in the particular or section or
paragraph. The use herein of the plural shall include the singular, and the use
of the masculine shall include the feminine.
16.5 Waiver. Any delay in enforcing a party's rights under this
AGREEMENT, or any waiver as to a particular default or other matter, shall not
constitute a waiver of a party's right to the future enforcement of its rights
under this AGREEMENT, excepting only as to an expressed written and signed
waiver as to a particular matter for a particular period of time.
16.6 Compliance with Law. In conducting any activities under this
AGREEMENT or in connection with the manufacture use or sale of PRODUCT, both
parties hereto shall comply with all applicable laws and regulations including,
but not limited to, all Export Administration Regulations of the United States
Department of Commerce.
16.7 Notices. Any notices given pursuant to this AGREEMENT shall be
in writing and shall be deemed delivered upon the earlier of (i) when received
at the address set forth below, or (ii) three (3) business days after mailed by
certified or registered mail, postage prepaid and properly addressed, with
return receipt requested, or (iii) when sent, if sent, by facsimile, as
confirmed by certified or registered mail. Notices shall be delivered to the
respective parties as indicated:
If to ENTREMED:
EntreMed, Inc.
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: General Counsel
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to ALLERGAN:
Attn: General Counsel
ALLERGAN, Inc.
0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000-0000
Telephone: 000-000 0000
Facsimile: 000-000-0000
16.8 Further Actions. Each party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
AGREEMENT.
16.9 Use of Name. Except as otherwise provided herein, neither
party shall have any right, express or implied, to use in any manner the name or
other designation of the other party or any other trade name or trademark of the
other party for any purpose in connection with the performance of this
AGREEMENT.
- 22 -
16.10 Public Announcements. Except as required by law, neither party
shall make any public announcement concerning this AGREEMENT or the subject
matter hereof without the prior written consent of the other, which shall not be
unreasonably withheld. In the event of a required public announcement, the party
making such announcement shall provide the other party with a copy of the
proposed text prior to such announcement. The parties agree that if either is
required to file this AGREEMENT with any governmental agency, such party will
redact the financial terms of this AGREEMENT to the extent possible in order to
keep the terms of this AGREEMENT confidential.
16.11 Counterparts. This AGREEMENT may be executed in any number of
separate counterparts, each of which shall be deemed to be an original, but
which together shall constitute one and the same instrument.
- 23 -
IN WITNESS WHEREOF, the parties have executed this AGREEMENT as of the
date set forth above.
ENTREMED, INC.
By:
--------------------------------
Xxxx X. Xxxxxxx, Ph.D.
Chief Executive Officer
ALLERGAN SALES, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
ALLERGAN PHARMACEUTICALS HOLDINGS
(IRELAND) LIMITED
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
- 24 -
APPENDIX A
CMCC AGREEMENT
[Previously filed with the Securities and Exchange Commission with the
Company's Registration Statement on Form S-1 (333-3536) declared
effective on June 11, 1996.]
APPENDIX B
PATENT RIGHTS
See attached.
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
-----------------------------------------------------------------------------------------------------------------------------------
FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
-----------------------------------------------------------------------------------------------------------------------------------
1 05213-0190 US Estrogenic Compounds as Issued 8/6/1993 08/102,767 4/2/96 5,504,074
Anti-Mitotic Agents
2-methoxyestradiol
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2 [*]
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3 [*]
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4 [*]
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5 [*]
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6 [*]
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7 05213-0191 US Estrogenic Compounds as Issued 12/12/1995 08/571,265 8/26/97 5,661,143
Anti-Mitotic Agents
2-methoxyestradiol
-----------------------------------------------------------------------------------------------------------------------------------
1
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
-----------------------------------------------------------------------------------------------------------------------------------
FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
-----------------------------------------------------------------------------------------------------------------------------------
8 05213-0192 US Estrogenic Compounds as Issued 4/25/1997 08,838,699 4/5/99 5,892,069
Anti-Mitotic Agents
2-methoxyestradiol
-----------------------------------------------------------------------------------------------------------------------------------
9 [*]
-----------------------------------------------------------------------------------------------------------------------------------
10 05213-0411 US Use of Estrogenic Compound as Issued 8/10/1999 09/371,585 5/29/01 6,239,123
Anti-Fungal Agents
2-methoxyestradiol
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11 [*]
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12 [*]
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13 [*]
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14 [*]
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2
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
-----------------------------------------------------------------------------------------------------------------------------------
FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
-----------------------------------------------------------------------------------------------------------------------------------
15 [*]
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16 [*]
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17 [*]
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18 [*]
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19 [*]
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20 [*]
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21 [*]
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3
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DECEMBER 11, 2001
-----------------------------------------------------------------------------------------------------------------------------------
FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
-----------------------------------------------------------------------------------------------------------------------------------
22 [*]
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23 [*]
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24 [*]
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25 05213-0860 US Method for Treatment of Issued 3/17/1995 08/405,776 7/1/97 5,643,900
Pathological Conditions
2-methoxyestradiol Associated with Angiogenesis
and Preparation Therefor
-----------------------------------------------------------------------------------------------------------------------------------
26 [*]
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27 05213-0120 US Angiostatin and Method of Use Issued 4/26/1994 08/243,629 6/17/97 5,639,725
Angiostatin
-----------------------------------------------------------------------------------------------------------------------------------
28 05213-0121 US Angiostatin and Method of Use Issued 10/20/1994 08/326,785 8/11/98 5,792,845
Angiostatin
-----------------------------------------------------------------------------------------------------------------------------------
4
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
-----------------------------------------------------------------------------------------------------------------------------------
FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
-----------------------------------------------------------------------------------------------------------------------------------
29 [*]
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30 [*]
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31 [*]
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32 [*]
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00 00000-0000XX Xxxxx Xxxxxx Angiostatin and Method of Use Issued 4/26/1995 95/3419 3/27/96 95/3419
Angiostatin
-----------------------------------------------------------------------------------------------------------------------------------
34 05213-0122 US Methods of Expressing Issued 4/26/1995 08/429,743 3/23/99 5,885,795
Angiostatin Protein
Angiostatin
-----------------------------------------------------------------------------------------------------------------------------------
35 05213-0122AU Australia Angiostatin and Method of Use Issued 4/26/1995 24617/95 11/5/98 692865
for Inhibition of Angiogenesis
Angiostatin
-----------------------------------------------------------------------------------------------------------------------------------
5
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
-----------------------------------------------------------------------------------------------------------------------------------
FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
-----------------------------------------------------------------------------------------------------------------------------------
36 [*]
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37 [*]
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38 [*]
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39 [*]
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40 [*]
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41 [*]
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42 [*]
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6
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
-----------------------------------------------------------------------------------------------------------------------------------
FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
-----------------------------------------------------------------------------------------------------------------------------------
43 [*]
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44 [*]
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45 [*]
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46 05213-0122NZ New Zealand Angiostatin and Method of Use Issued 10/8/1996 285501 6/15/98 285501
for Inhibition of Angiogenesis
Angiostatin
-----------------------------------------------------------------------------------------------------------------------------------
47 05213-0122SG Singapore Angiostatin and Method of Use Granted 4/26/1995 9611759-3 12/21/98 34773
for Inhibition of Angiogenesis
Angiostatin
-----------------------------------------------------------------------------------------------------------------------------------
48 05213-0123 US Method of Inhibiting Issued 5/26/1995 08/451,932 3/31/98 5,733,876
Angiogenesis
Angiostatin
------------------------------------------------------------------------------------------------------------------------------------
49 05213-0124 US Method of Detecting Angiogenic Issued 5/26/1995 08/452,260 7/7/98 5,776,704
Protein
Angiostatin
-----------------------------------------------------------------------------------------------------------------------------------
7
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
-----------------------------------------------------------------------------------------------------------------------------------
FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
-----------------------------------------------------------------------------------------------------------------------------------
50 [*]
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51 [*]
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52 [*]
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53 [*]
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54 [*]
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55 [*]
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56 [*]
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8
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
-----------------------------------------------------------------------------------------------------------------------------------
FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
-----------------------------------------------------------------------------------------------------------------------------------
57 [*]
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58 05940-0129 US Angiostatin Fragments and Issued 5/30/1997 08/866,735 8/31/99 5,945,403
Method of Use
Angiostatin
-----------------------------------------------------------------------------------------------------------------------------------
59 [*]
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60 [*]
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61 05940-0126 US Angiostatin Fragments and Issued 3/8/1996 08/612,788 11/17/98 5,837,682
Method of Use
Angiostatin Fragments
-----------------------------------------------------------------------------------------------------------------------------------
62 05940-0126AU Australia Angiostatin Fragments and Issued 4/26/1996 55795/96 12/16/99 709633
Aggregate-Angiostatin and
Methods of Use
Angiostatin Fragments
-----------------------------------------------------------------------------------------------------------------------------------
63 [*]
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9
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
-----------------------------------------------------------------------------------------------------------------------------------
FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
-----------------------------------------------------------------------------------------------------------------------------------
64 [*]
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65 [*]
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66 [*]
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67 [*]
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68 [*]
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69 [*]
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70 [*]
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10
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
-----------------------------------------------------------------------------------------------------------------------------------
FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
-----------------------------------------------------------------------------------------------------------------------------------
71 [*]
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72 [*]
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73 [*]
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74 [*]
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75 [*]
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76 05940-0126NZ2 New Zealand Angiostatin Fragments and Granted 4/26/1996 332,903 8/18/00 332,903
Aggregate Angiostatin and
Methods of Use
Angiostatin Fragments
-----------------------------------------------------------------------------------------------------------------------------------
77 [*]
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11
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
-----------------------------------------------------------------------------------------------------------------------------------
FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
-----------------------------------------------------------------------------------------------------------------------------------
78 [*]
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79 [*]
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80 05940-0126SG Singapore Angiostatin Fragments and Issued 4/26/1996 9705416-7 6/22/99 48613
Aggregate Angiostatin
Methods of Use
Angiostatin Fragments
-----------------------------------------------------------------------------------------------------------------------------------
81 05940-0127 US Aggregate Angiostatin and Issued 2/22/1996 08/605,598 1/19/99 5,861,372
Methods of Use
Angiostatin Fragments
-----------------------------------------------------------------------------------------------------------------------------------
82 05940-0130 US Methods of Treating Issued 4/24/1998 09/066,028 2/15/00 6,024,688
Angiogenesis with
Angiostatin/Plasminogen
Fragments
Angiostatin Fragments
-----------------------------------------------------------------------------------------------------------------------------------
83 05213-0010AU Australia A Vaccine Against Cholesterol Issued 12/10/1991 91556/91 6/4/96 666473
to Prevent Hypercholesterolemia
Anti-Cholesterol and Atherosclerosis
Vaccines
-----------------------------------------------------------------------------------------------------------------------------------
84 [*]
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12
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
-----------------------------------------------------------------------------------------------------------------------------------
FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
-----------------------------------------------------------------------------------------------------------------------------------
85 [*]
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86 [*]
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87 00000-0000XX Xxxxx A Vaccine Against Cholesterol Issued 12/10/1991 503695/92 4/27/01 3183665
to Prevent Hypercholesterolemia
and Atherosclerosis
Anti-Cholesterol
Vaccines
-----------------------------------------------------------------------------------------------------------------------------------
88 05213-0241AU Australia Method of Diagnosis and Issued 12/5/1996 14097/97 3/16/00 713531
Treatment of Atherosclerosis
Atherosclerosis Using Anti-Cholesterol
Antibodies
-----------------------------------------------------------------------------------------------------------------------------------
89 [*]
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90 [*]
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91 [*]
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13
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
-----------------------------------------------------------------------------------------------------------------------------------
FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
-----------------------------------------------------------------------------------------------------------------------------------
92 [*]
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93 [*]
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94 05213-0061 US CD4 Coated Vesicles and Issued 3/16/1994 08/209,261 8/4/98 5,789,152
Diagnostic Assay for HIV
Cd4 Coated Vesicles Employing Them
-----------------------------------------------------------------------------------------------------------------------------------
95 [*]
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96 [*]
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97 [*]
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98 05213-0301 US Cytochalasin and Isoindolinone Issued 3/17/1998 09/042,760 11/30/99 5,994,388
Derivatives as Inhibitors of
Cytoxan Angiogenesis
-----------------------------------------------------------------------------------------------------------------------------------
14
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
-----------------------------------------------------------------------------------------------------------------------------------
FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
-----------------------------------------------------------------------------------------------------------------------------------
99 05213-0302 US Methods of Inhibiton of Issue Fee 9/28/1999 09/407,834 6/5/01 6,242,481
Angiogenesis With Argiabin (as Paid
Cytoxan Amended)
-----------------------------------------------------------------------------------------------------------------------------------
100 05123-0223 US Therapeutic Antiangiogenic Issued 10/22/1996 08/740,168 12/29/98 5,854,205
Compositions and Methods
Endostatin
-----------------------------------------------------------------------------------------------------------------------------------
101 05213-0223AU Australia Therapeutic Antiangiogenic Issued 10/23/1996 74666/96 7/6/00 717277
Compositions and Methods
Endostatin
-----------------------------------------------------------------------------------------------------------------------------------
102 [*]
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103 [*]
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104 [*]
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105 [*]
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15
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
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FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
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106 [*]
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107 [*]
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108 [*]
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109 [*]
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110 [*]
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111 [*]
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112 [*]
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16
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
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FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
-----------------------------------------------------------------------------------------------------------------------------------
113 05213-0223NZ New Zealand Therapeutic Antiangiogenic Issued 10/23/1996 321356 3/19/99 321356
Compositions and Methods
Endostatin
-----------------------------------------------------------------------------------------------------------------------------------
114 [*]
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115 [*]
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116 [8]
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117 [*]
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118 [*]
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119 [*]
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17
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
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FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
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120 [*]
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121 [*]
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122 [*]
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123 [*]
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125 [*]
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126 [*]
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18
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
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FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
-----------------------------------------------------------------------------------------------------------------------------------
127 [*]
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128 05213-0620 US Methods of Inhibiting Issued 7/7/1999 09/349,429 1/16/01 6,174,861
Angiogenesis Via Increasing In
Endostatin Vivo Concentrations of
Endostatin Protein
-----------------------------------------------------------------------------------------------------------------------------------
129 [*]
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130 [*]
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131 [*]
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132 [*]
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133 [*]
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19
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
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FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
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134 [*]
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135 [*]
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136 [*]
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137 [*]
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138 05940-0251 US Endothelial Cell-Proliferation Issued 12/12/1996 08/763,528 12/29/98 5,854,221
Inhibitor and Method of Use
Kringle 5
-----------------------------------------------------------------------------------------------------------------------------------
139 05940-0251AU Australia Endothelial Cell-Proliferation Issued 12/13/1996 16870/97 1/20/00 710612
Inhibitor and Method of Use
Kringle-5
-----------------------------------------------------------------------------------------------------------------------------------
140 [*]
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20
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
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NO. DATE NO. DATE NO.
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141 [*]
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143 [*]
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144 [*]
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147 [*]
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21
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
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FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
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148 [*]
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149 [*]
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150 [*]
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151 [*]
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153 [*]
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154 [*]
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22
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DECEMBER 11, 2001
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NO. DATE NO. DATE NO.
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155 [*]
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156 [*]
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157 [*]
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158 [*]
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161 [*]
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23
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
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NO. DATE NO. DATE NO.
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163 [*]
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164 [*]
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DECEMBER 11, 2001
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NO. DATE NO. DATE NO.
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25
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DECEMBER 11, 2001
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NO. DATE NO. DATE NO.
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26
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DECEMBER 11, 2001
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NO. DATE NO. DATE NO.
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27
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DECEMBER 11, 2001
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FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
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190 [*]
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191 [*]
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192 05213-0370 US Angiogenesis-Inhibiting Protein Issued 12/4/1998 08/206,059 3/13/01 6,201.104
Binding Peptides and Proteins
Phage Display and Methods of Use
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193 [*]
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194 [*]
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195 [*]
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196 [*]
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28
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
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FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
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197 [*]
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198 [*]
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199 [*]
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200 [*]
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201 [*]
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202 [*]
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203 [*]
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ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
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NO. DATE NO. DATE NO.
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204 [*]
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205 [*]
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206 [*]
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207 [*]
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208 [*]
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209 [*]
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210 [*]
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ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
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FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
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211 [*]
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212 [*]
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213 [*]
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214 [*]
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215 [*]
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216 [*]
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217 05213-0013 US Vaccines Against Sterols Issued 4/14/1995 08/422,633 5/19/98 5,753,260
Sterol Vaccines
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31
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
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FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
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218 05213-0014 US Vaccines Against Sterols Issued 2/13/1998 09/023,256 5/1/01 6,224,902
Sterol Vaccines
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219 [*]
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220 05213-0290 US Compositions and Methods for Issued 2/6/1997 08/796,850 11/9/99 5,981,471
Inhibiting Cellular Proliferation
TFPI (Serine
Protease Inhibitors
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221 [*]
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222 [*]
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223 [*]
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224 [*]
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32
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
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FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
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225 [*]
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226 05213-0110AU Australia Methods and Compositions for Issued 2/24/1994 62486/94 7/10/97 676,722
Inhibition of Angiogenesis
Thalidomide AND
Derivatives
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227 00000-0000XX Xxxxx Methods and Compositions for Issued 2/28/1994 289-94 6/6/00 40,533
Inhibition of Angiogenesis
Thalidomide AND
Derivatives
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228 [*]
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229 [*]
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230 [*]
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231 05213-0110NZ New Zealand Methods and Compositions for Issued 9/22/1995 262676 1/12/00 262676
Inhibition of Angiogenesis
Thalidomide AND
Derivatives
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33
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
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FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
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232 [*]
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233 [*]
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234 [*]
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235 [*]
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236 05213-0113 US Methods and Compositions for Issued 6/6/1995 08/468,792 1/27/98 5,712,291
Inhibition of Angiogenesis
Thalidomide
Derivatives
Only
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237 05213-0115 US Methods and Compositions for Issued 10/16/1997 08/950,673 6/6/00 6,071,948
Inhibition of Angiogenesis
Thalidomide
Derivatives
Only
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238 [*]
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34
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
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NO. DATE NO. DATE NO.
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239 [*]
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240 [*]
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241 [*]
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242 [*]
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243 [*]
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244 05213-0404 US Methods of Compositions for Issued 3/26/1999 09/277,402 5/8/01 6,299,879
Inhibition of Angiogenesis
Thalidomide (EM138 as Inhibitor of
Derivatives Angtogenesis)
Only
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245 [*]
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35
ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
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NO. DATE NO. DATE NO.
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DECEMBER 11, 2001
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NO. DATE NO. DATE NO.
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253 [*]
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255 [*]
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256 [*]
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257 [*]
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258 [*]
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259 [*]
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ENTREMED, INC.- PENDING PATENT APPLICATIONS AND ISSUED PATENTS
DECEMBER 11, 2001
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FILE COUNTRY TITLE STATUS FILING SERIAL ISSUE PATENT
NO. DATE NO. DATE NO.
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260 [*]
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261 05213-0072 US Compositions and Methods for Issued 6/6/1995 08/467,101 7/6/99 5,919,459
Treating Cancer and
Treating Cancer Hyperproliferative Disorders
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262 [*]
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263 [*]
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38
APPENDIX C
STOCK PURCHASE AGREEMENT
RESTRICTED SECURITIES PURCHASE AGREEMENT
This RESTRICTED SECURITIES PURCHASE AGREEMENT (the "Agreement") is made
as of the 18th day of January, 2002 by and among EntreMed, Inc., a Delaware
corporation, with its principal office at 0000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxx 00000 (the "Company") and Allergan Inc., a Delaware corporation, with
its principal office at 0000 Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000 ("the
Purchaser").
RECITALS
WHEREAS, the Company and the Purchaser have entered into a License
Agreement of even date herewith, (the "License Agreement") pursuant to which the
Company will grant to the Purchaser a license to certain of the Company's
intellectual property rights as further defined and described therein.
WHEREAS, in furtherance of and in partial consideration for the
execution and delivery of the License Agreement the Company has agreed to sell
to the Purchaser and the Purchaser has agreed to purchase (i) a certain number
of shares of the Company's common stock ("Common Stock"), $.01 par value (the
"Shares"), and (ii) warrants in substantially the same format attached hereto as
Exhibit A (the "Warrants") to acquire shares of Common Stock (as exercised,
collectively, the "Warrant Shares"), for the aggregate purchase price and on the
terms set forth herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:
AGREEMENT
1. AUTHORIZATION AND SALE OF THE COMMON STOCK.
1.1. AUTHORIZATION. Subject to the terms and conditions of this
Agreement, the Company has authorized the issuance and sale to Purchaser of such
number of shares of the Company's Common Stock and Warrants (and any Warrant
Shares subsequently purchased), as determined pursuant to Section 1.2 below.
1.2. ISSUANCE AND SALE. Subject to the terms and conditions of this
Agreement, at the Closing (as defined in Section 2 below) the Company shall
issue and sell to the Purchaser Seven Hundred and Twenty Eight Thousand, Eight
Hundred and Sixty Three (728,863) Units at a per Unit price of $6.86, for a
total of $5,000,000 (the "Purchase Price"), which was determined by dividing (i)
$5,000,000 by (ii) the volume weighted average price at which the shares of
Common Stock were traded three (3) trading days immediately preceding the date
of this Agreement on the Nasdaq Stock Market. A "Unit" shall consist of one (1)
share of Common Stock and a warrant to acquire 0.15 (15/100) shares of Common
Stock. Each Warrant shall have a term of five (5) years, and an exercise price
per share equal to $12.15.
2. CLOSING.
2.1. CLOSING. Subject to Section 2.3 below, the closing (the
"Closing") of the sale and purchase of the Shares and Warrants under this
Agreement shall take place at the offices of the Company at 0000 Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, at 10:00 a.m. Eastern Standard Time on January
22, 2002, or at such other time, date and place as are mutually agreeable to the
Company and to the Purchaser. The date of the Closing is hereinafter referred to
as the "Closing Date."
2.2. DELIVERIES. Subject to Section 2.3 below, at the Closing the
Company will deliver to the Purchaser (i) certificate(s) representing the
aggregate number of Shares issued and sold by the Company to the Purchaser (the
"Stock Certificate(s)") and (ii) the Warrants, all of which shall be registered
in the Purchaser's name, or in such nominee name(s) as designated in writing by
Purchaser, and the Purchaser will deliver to the Company the Purchase Price by
wire transfer thereof to an account designated by the Company.
2.3. CONDITIONS TO CLOSING.
(a) CONDITIONS TO THE COMPANY'S OBLIGATIONS. The
Company's obligation to complete the purchase and sale of the Shares and
Warrants and to deliver the Stock Certificate(s) and Warrants to the Purchaser
at the Closing shall be subject to the following conditions, any one or more of
which may be waived by the Company: (i) receipt by the Company of the Purchase
Price, and (ii) the accuracy in all material respects of the representations and
warranties made by the Purchaser herein, both on the date hereof and on the
Closing Date, and the fulfillment in all material respects of those undertakings
of the Purchaser to be fulfilled prior to the Closing.
(b) CONDITIONS TO PURCHASER'S OBLIGATIONS. The
Purchaser's obligation to accept delivery of such Stock Certificate(s) and
Warrants and to pay the Purchase Price to the Company shall be subject the
following conditions, any one or more of which may be waived by the Purchaser:
(i) the accuracy in all material respects of the representations and warranties
made by the Company herein, both on the date hereof and on the Closing Date, and
the fulfillment in all material respects of those undertakings of the Company to
be fulfilled prior to the Closing, and (ii) there shall have been no Material
Adverse Effect prior to the Closing Date.
As used herein, Material Adverse Effect shall mean any material adverse
change in or effect on the business, assets, or financial condition of the
Company.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to the Purchaser as set forth below.
3.1. ORGANIZATION AND GOOD STANDING. The Company is a corporation
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to conduct its business as
currently conducted. The Company holds all licenses and permits required for the
conduct of its business as now conducted, which, if not obtained, would have a
Material Adverse Effect. The Company is qualified as a foreign corporation and
is in good standing in all states where the conduct of its business or its
ownership or leasing of property requires such qualification, except where the
failure to so qualify would not have a Material Adverse Effect.
-2-
3.2. AUTHORIZATION; NON-CONTRAVENTION. The Company's execution,
delivery and performance of this Agreement (a) has been duly authorized under
Delaware law by all requisite corporate action by Company, (b) will not violate
any law or the Certificate of Incorporation or By-laws of Company or any
subsidiary or any provision of any material indenture, mortgage, agreement,
contract or other material instrument to which Company or any subsidiary is a
party or by which Company or any of their respective properties or assets is
bound as of the date hereof, or result in a breach of or constitute (upon notice
or lapse of time or both) a default under any such indenture, mortgage,
agreement, contract or other material instrument or result in the creation or
imposition of any lien, security interest, mortgage, pledge, charge or other
encumbrance, of any material nature whatsoever, upon any properties or assets of
Company or any subsidiary, (c) will not require any action by or in respect of,
or filing with, any governmental body, agency or official, and (d) will not
contravene or constitute a default under any judgment, order or decree binding
on or applicable to the Company.
3.3. BINDING EFFECT. Except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the enforcement of creditors' rights generally, this Agreement has been duly
executed by the Company and constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.
3.4. AUTHORIZED STOCK. As of the Closing Date, the authorized
capital stock of the Company consists of (a) ___________ shares of Common Stock,
$.01 par value per share, __________ shares of which are validly issued and
outstanding, fully paid and non-assessable as of the date of this Agreement and
(b) 5,000,000 shares of undesignated preferred stock, $.01 par value per share,
of which none are issued and outstanding.
3.5. ISSUANCE, SALE AND DELIVERY OF THE SHARES. When issued and
paid for, the Shares and Warrants to be sold hereunder by the Company, and any
Warrant Shares subsequently purchased, will be validly issued and outstanding,
fully paid and non-assessable.
3.6. SEC FILINGS. It has filed all reports required to be filed by
the Company with the Securities and Exchange Commission (the "Commission")
pursuant to the reporting requirements of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). Such reports, including the financial
statements therein, complied in all material respects with the Commission's
rules and, when filed, did not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading.
3.7. NO MATERIAL CHANGES. The representations and warranties of the
Company contained in this Section 3 and elsewhere in this Agreement will be true
and correct in all material respects on the Closing Date as though then made. As
of the date hereof, there has been no material adverse change in the financial
condition or results of operations of the Company since the filing date of the
Company's last report with the Commission pursuant to the reporting requirements
of the Exchange Act.
3.8. SECURITIES LAW COMPLIANCE. Assuming the accuracy of the
representations and warranties of the Purchaser contained in Section 4, the
offer, issuance, sale and delivery of the Shares and Warrants hereunder, will
not require registration under the Securities Act.
-3-
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
4.1. ORGANIZATION AND GOOD STANDING. The Purchaser is a corporation
validly existing and in good standing under the laws of the State of Delaware.
4.2. AUTHORIZATION; NON-CONTRAVENTION. The execution, delivery and
performance by the Purchaser of this Agreement are within the Purchaser's
corporate powers, have been duly authorized by all necessary corporate action,
require no action by or in respect of, or filing with, any governmental body,
agency or official and do not (i) contravene or constitute a default under any
provision of applicable law or regulation, judgment injunction, order, decree,
agreement or other instrument binding upon or applicable to the Purchaser, or
(ii) contravene or constitute a default under the Purchaser's charter or bylaws.
4.3. BINDING EFFECT. Except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting the
enforcement of creditors' rights generally, this Agreement has been duly
executed by the Purchaser and constitutes a valid and binding agreement of the
Purchaser, enforceable against the Purchaser in accordance with its terms.
4.4. INVESTMENT REPRESENTATION.
(a) The Purchaser is acquiring the Shares and Warrants, and
any Warrant Shares subsequently purchased, for its own account for investment
and not with a view to, or for sale in connection with, any distribution thereof
nor with any present intention of selling or distributing the same and the
Purchaser has no present or contemplated agreement, undertaking, arrangement,
obligation, indebtedness or commitment providing for the distribution thereof.
(b) The Purchaser is an "Accredited Investor" as that term is
defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
Such Purchaser is able to bear the economic risk of the purchase of the Shares
and Warrants pursuant to the terms of this Agreement, and any Warrant Shares
subsequently purchased, including a complete loss of such Purchaser's investment
therein.
(c) The Purchaser understands that (i) the Shares, Warrants
and any Warrant Shares subsequently purchased have not been registered under the
Securities Act and are "restricted securities" within the meaning of Rule 144
under the Securities Act and (ii) the Shares, Warrants and any Warrant Shares
subsequently purchased cannot be sold, transferred or otherwise disposed of
unless they are subsequently registered under the Securities Act or an exemption
from registration is then available.
(d) The Purchaser will not attempt to sell, transfer, assign,
exchange or otherwise dispose of all or any portion of the Shares, Warrants and
any Warrant Shares subsequently purchased in the absence of an effective
registration statement under the Securities Act or an exemption from
registration thereunder.
(e) LEGEND. Each certificate representing the Shares, as
well as the Warrant and Warrant Shares, as applicable, shall be endorsed with
the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
-4-
AND ARE "RESTRICTED SECURITIES" AS DEFINED IN RULE 144 PROMULGATED
UNDER THE ACT. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE ACT.
4.5. NO BROKER OR FINDERS. No person has or will have, as a result
of the transactions contemplated by this Agreement, any right, interest or valid
claim against or upon the Purchaser for any commission, fee or other
compensation as a finder or broker because of any act by the Purchaser or of any
agent of the Purchaser. The Purchaser will pay, and hold the Company harmless
against, any liability, loss or expense (including, without limitation,
reasonable attorneys' fees and out-of-pocket expenses) arising in connection
with any such claim.
4.6. CLOSING DATE. The representations and warranties of the
Purchaser contained in this Section 4 and elsewhere in this Agreement will be
true and correct in all material respects on the date of the Closing Date as
though then made.
4.7. NO HEDGING. Purchaser represents that as of the date of this
Agreement it does not have any existing short position in the Common Stock nor
has it executed any derivative instruments with any third party, with respect to
the Common Stock.
5. REGISTRATION RIGHTS. The Company covenants and agrees as follows:
5.1. REQUESTED REGISTRATIONS. On or after the first anniversary of
the Closing Date, the Purchaser shall have the right to require the Company to
effect the registration of the Registrable Securities (as defined below) on a
registration statement on Form S-3 (or any successor form relating to secondary
offerings), or Form X-0, Xxxx X-0 or Form SB-2 if the Company is then ineligible
to use Form S-3 under the Securities Act, by giving the Company written notice
requesting such registration and specifying the proposed plan for distribution
of such Registrable Securities. The Purchaser shall be entitled to one requested
registration under this Section 5.1. The Company shall maintain the
effectiveness of such registration statement until the earlier of (i) such time
as the Purchaser has sold all of the Registrable Securities covered by the
registration statement, or (ii) such time as the Purchaser is able to sell the
Registrable Securities pursuant to SEC Rule 144(k). If and when the Company
shall be required by the provisions of this Section 5.1 to effect the
registration of any Registrable Securities hereunder, the Company will, as
expeditiously as possible:
(a) use its reasonable best efforts to prepare and file a
registration statement on Form S-3, or other form if the Company is ineligible
to use Form S-3, giving effect to the plan of distribution of the Registrable
Securities proposed to be sold, and use its best efforts to cause such
registration statement to become effective in order that the Purchaser may sell
its Registrable Securities in accordance with the proposed plan of distribution;
(b) furnish the Purchaser such number of copies of such
prospectus as it may reasonably request in order to facilitate the sale of the
Registrable Securities;
(c) file documents required of the Company for blue sky
clearance in states specified in writing by the Purchaser; provided, however,
that the Company shall not be required to qualify to do business or consent to
service of process in any jurisdiction in which it is now not so qualified or
has not so consented; and
-5-
(d) bear all expenses in connection with the procedures set
forth in paragraphs (a) through (c) of this Section 5.1 and the registration of
the Shares pursuant to the registration statement, other than fees and expenses,
if any, of counsel or other advisors to the Purchaser and any underwriting or
brokerage discounts, fees or commissions.
If at the time of any request to register Registrable Securities
pursuant to this Section 5.1 the Company is engaged or has fixed plans to engage
within 60 days of the date of receipt of the request in a registered public
offering, or is engaged in any other activity which, in the good faith
determination of the Company's Board of Directors, would be adversely affected
by the demand registration, then the Company may at its option direct that such
request be delayed for a period not in excess of 90 days from the closing of
such offering (but in no event more than 180 days from the date of request) or
the date of the Company's Board of Directors' determination, as the case may be.
The Company may direct such delay not more than once in any twelve month period.
As used herein, "Registrable Securities" means (i) the Shares purchased
by the Purchaser pursuant to this Agreement, (ii) the Warrant Shares issued or
issuable upon exercise of the Warrants and (iii) any shares of capital stock
issued or issuable with respect to the Shares, Warrants or Warrant Shares as a
result of any stock split, stock dividend, recapitalization, exchange or similar
event or otherwise, without regard to any limitation on the exercise of the
Warrants.
5.2. INDEMNIFICATION. For the purpose of this Section 5.2,
(a) the term "Selling Stockholder" shall mean the Purchaser
and any officer, director, employee, agent, affiliate, subsidiary or person
deemed to be in control of such Purchaser within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act;
(b) the term "Registration Statement" shall mean any final
prospectus, exhibit, supplement or amendment included in or relating to the
registration statement referred to in Section 5.1; and
(c) the term "untrue statement" shall mean any untrue
statement or alleged untrue statement of, or any omission or alleged omission to
state, in the Registration Statement a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
The Company agrees to indemnify and hold harmless each Selling
Stockholder from and against any losses, claims, damages or liabilities to which
such Selling Stockholder may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any untrue
statement of a material fact contained in the Registration Statement on the
effective date thereof, or arise out of any failure by the Company to fulfill
any undertaking included in the Registration Statement and the Company will
reimburse such Selling Stockholder for any reasonable legal or other expenses
reasonably incurred in investigating, defending or preparing to defend any such
action, proceeding or claim; provided, however, that the Company shall not be
liable in any such case to the extent that such loss, claim, damage or liability
arises out of, or is based upon, an untrue statement made in such Registration
Statement in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such Selling Stockholder specifically for use
in preparation of the Registration Statement, or any statement or omission in
any Prospectus that is corrected in any
-6-
subsequent Prospectus that was delivered to the Purchaser prior to the pertinent
sale or sales by the Purchaser.
The Purchaser agrees to indemnify and hold harmless the Company (and
each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act, each officer of the Company who signs the Registration
Statement and each director of the Company) from and against any losses, claims,
damages or liabilities to which the Company (or any such officer, director or
controlling person) may become subject (under the Securities Act or otherwise),
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any untrue
statement of a material fact contained in the Registration Statement on the
effective date thereof if such untrue statement was made in reliance upon and in
conformity with written information furnished by or on behalf of the Purchaser
specifically for use in preparation of the Registration Statement, and the
Purchaser will reimburse the Company (or such officer, director or controlling
person, as the case may be), for any legal or other expenses reasonably incurred
in investigating, defending, or preparing to defend any such action, proceeding
or claim.
Promptly after receipt by any indemnified person of a notice of a claim
or the commencement of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant to this Section 5.2, such indemnified
person shall notify the indemnifying person in writing of such claim or of the
commencement of such action, and, subject to the provisions hereinafter stated,
in case any such action shall be brought against an indemnified person and such
indemnifying person shall have been notified thereof, such indemnifying person
shall be entitled to participate therein, and, to the extent it shall wish, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified person. After notice from the indemnifying person to such
indemnified persons of its election to assume the defense thereof, such
indemnifying person shall not be liable to such indemnified person for any legal
expenses subsequently incurred by such indemnified person in connection with the
defense thereof; provided, however, that if there exists or may exist differing
or conflicting defenses that would make it inappropriate, in the opinion of
counsel to the indemnified person, for the same counsel to represent both the
indemnified person and such indemnifying person or any officer, director,
employee, agent, affiliate or person deemed to be in control of such
indemnifying person within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, the indemnified person shall be entitled
to retain its own counsel at the expense of such indemnifying person. It is
understood, however, that the Company shall, in connection with any one such
action, suit or proceeding or separate but substantially similar or related
actions, suits, or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for all such indemnified parties not having actual or
potential differing interests with the Company or among themselves.
5.3. TRANSFERABILITY OF REGISTRATION RIGHTS. The rights conferred
upon the Purchaser under this Section 5 may be assigned by the Purchaser to any
permitted transferee of the Registrable Securities.
5.4. COVENANT TO KEEP PUBLIC INFORMATION AVAILABLE. The Company
covenants and agrees that it will file the reports required to be filed by it
under the Securities Act of 1933, as amended (the "Securities Act") and the
Exchange Act and the rules and regulations adopted by the Commission thereunder
as such may be amended from time to time (the "Rules"), and will take such
further actions as the Purchaser may reasonably request, all to the extent
required from time to time to enable the Purchaser to sell Registrable
Securities at such times as are permitted by this
-7-
Agreement without registration under the Securities Act within the limitations
of Rule 144 of the Rules or any similar rule or regulation hereafter adopted by
the Commission. Upon the request of the Purchaser, the Company will supply the
Purchaser with a certificate certifying compliance with this provision.
5.5. EXPIRATION OF REGISTRATION RIGHTS. The Company's obligations
under this Section 5 shall expire at such time as the Purchaser is able to sell
the Registrable Securities in a single transaction pursuant to SEC Rule 144.
6. ADDITIONAL COVENANTS.
6.1. LISTING. The Company shall promptly secure the listing of all
of the Registrable Securities on Nasdaq and shall maintain, so long as any other
shares of Common Stock shall be so listed, such listing of all Registrable
Securities from time to time issuable. Neither the Company nor any of its
Subsidiaries shall take any action which would be reasonably expected to result
in the delisting or suspension of the Common Stock on Nasdaq. The Company shall
pay all fees and expenses in connection with satisfying its obligations under
this Section 6.1.
6.2. RESERVATION OF SHARES. The Company shall take all action
necessary to at all times have authorized, and reserved for the purpose of
issuance, no less than 100% of the number of shares of Common Stock needed to
provide for the issuance of the shares of Common Stock upon exercise of all
outstanding Warrants.
6.3. ISSUANCE OF WARRANT SHARES. The issuance of the Warrant Shares
shall be duly authorized, and when issued in accordance with the Warrants, the
Warrant Shares will be validly issued, fully paid and non-assessable and free of
all taxes, liens, charges and preemptive rights with respect to the issue
thereof.
7. NOTICES. Any notices or other communications required or
permitted hereunder shall be sufficiently given if delivered personally or sent
by telex, nationally recognized overnight delivery service, facsimile (receipt
confirmed), registered or certified mail, postage prepaid, addressed as follows
or to such other address of which the parties may have given notice:
(i) if to the Purchaser, to:
Allergan, Inc.
0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Legal Department
(ii) if to the Company, to:
EntreMed, Inc.
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Fax No: (000) 000-0000
-8-
Unless otherwise specified herein, such notices or other communications shall be
deemed delivered (a) on the date delivered, if delivered by facsimile or
personally; (b) on the day after the notice is delivered into the possession and
control of a nationally recognized overnight delivery services, duly marked for
delivery to the receiving party; or (c) three business days after being sent, if
sent by registered or certified mail.
8. MISCELLANEOUS.
8.1. SUCCESSORS AND ASSIGNMENTS. This Agreement shall bind and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that the Purchaser, on the one hand, and the Company, on the
other hand, may not assign their respective obligations hereunder without the
prior written consent of the other party; provided, however, that the Purchaser
shall be permitted to assign its rights and obligations under this Agreement to
any subsidiary or affiliate, or in any transaction in which all or substantially
all of the Purchaser's assets are sold or in which the Purchaser is not the
surviving entity or under Section 5.3 hereof, without the Company's prior
written consent. Any assignment in contravention of this Section 8.1 shall be
void. No assignment shall release the Purchaser or the Company from any
obligation or liability under this Agreement unless expressly agreed to by the
non-assigning party.
8.2. REMEDIES. The parties acknowledge that a breach of this
Agreement will cause them irreparable harm which will be difficult to quantify
and for which money damages would be inadequate. Therefore, in the event of such
a breach or threat of such a breach, in addition to any other legal or equitable
remedies it may have, each party shall be entitled to obtain specific
performance of the other party's obligations and to obtain immediate injunctive
relief, in each case without the necessity of posting a bond.
8.3. GOVERNING LAW, ATTORNEYS FEES. This Agreement shall be
governed in all respects by the laws of the State of Delaware without regards to
the principles of conflicts of laws thereof. In the event of any dispute with
respect to this Agreement, the prevailing party shall be entitled to recover its
reasonable expenses (including attorneys' fees) from the other party.
8.4. ENTIRE AGREEMENT. This Agreement and other exhibits to this
Agreement and the other documents delivered pursuant hereto constitute the full
and entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.
8.5. SEVERABILITY. In case any provision of this Agreement shall be
declared invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
8.6. EXPENSES. Except as otherwise expressly provided herein, the
Purchaser, on the one hand, and the Company, on the other hand, will pay all
fees and expenses (including, without limitation, legal and accounting fees and
expenses) incurred by each of them in connection with the transactions
contemplated hereby.
8.7. TITLES AND SUBTITLES. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
-9-
8.8. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument. This Agreement, the agreements referred to
herein, and each other agreement or instrument entered into in connection
herewith or therewith or contemplated hereby or thereby, and any amendments
hereto or thereto, to the extent signed and delivered by means of a facsimile
machine, shall be treated in all manner and respects as an original agreement or
instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person. At the request
of any party hereto or to any such agreement or instrument, each other party
hereto or thereto shall re-execute original forms thereof and deliver them to
all other parties. No party hereto or to any such agreement or instrument shall
raise the use of a facsimile machine to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of a facsimile machine as a defense to the formation or enforceability of a
contract and each such party forever waives any such defense.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first indicated above.
ENTREMED, INC.
By:
Name:
---------------------------------
Title:
---------------------------------
ALLERGAN, INC.
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
-10-
EXHIBIT A
FORM OF WARRANT
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT.
January __, 2002
WARRANT
TO SUBSCRIBE FOR AND PURCHASE COMMON STOCK OF
ENTREMED, INC.
No. W-__
THIS CERTIFIES that, for good and valuable consideration, Allergan,
Inc. or registered assigns (the "Warrantholder"), is entitled to subscribe for
and purchase from ENTREMED, INC., a Delaware corporation (the "Company"), at a
price of $12.15 per share (such price, as from time to time to be adjusted as
hereinafter provided, being hereinafter called the "Warrant Price"), at any time
and from time to time prior to the Expiration Date (as defined below), up to One
Hundred and Nine Thousand, Three Hundred and Sixty-Three (109,363) fully paid,
nonassessable shares of Common Stock, par value $0.01 per share, of the Company
("Common Stock"), subject, however, to the provisions and upon the terms and
conditions hereinafter set forth, including without limitation the provisions of
Section 2 hereof. "Expiration Date" shall mean 5:00 P.M., New York time, on
January __, 2007, which is five (5) years from the date hereof, or if not a
Business Day, as defined herein, at 5:00 P.M., New York time, on the immediately
preceding business day. "Business Day" shall mean a day other than a Saturday,
Sunday or other day on which banks in the State of New York are required or
authorized by law to remain closed.This Warrant is issued pursuant to a
Restricted Stock Purchase Agreement between the Company and initial
Warrantholder dated January 18, 2002 (the "Purchase Agreement"), which contains
additional rights of the Warrantholder.
SECTION 1. EXERCISE OF WARRANT
(a) EXERCISE
This Warrant may be exercised, at any time and from time to time prior
to the Expiration Date, by the Warrantholder, in whole or in part (but not as to
a fractional share of Common Stock), by the completion of the subscription form
attached hereto and by the surrender of this Warrant (properly endorsed) at the
Company's principal offices at 0000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx
00000 (or at such other location in the United States as the Company may
designate by notice in writing to the Warrantholder at the address of the
Warrantholder appearing on the books of the
Company), and by payment to the Company of the Warrant Price, in cash or by
check or wire transfer, for each share being purchased.
(b) PROCEDURE FOR EXERCISE
In the event of any exercise of the rights represented by this Warrant,
a certificate or certificates for the total number of whole shares of Common
Stock so purchased, registered in the name of the Warrantholder, shall be
delivered to the Warrantholder within a reasonable time, not exceeding three
Business Days, after the rights represented by this Warrant shall have been so
exercised, and, unless this Warrant has expired, a new Warrant representing the
number of shares (except a remaining fractional share), if any, with respect to
which this Warrant shall not then have been exercised shall also be issued to
the Warrantholder within such time. With respect to any such exercise, the
Warrantholder shall for all purposes be deemed to have become the holder of
record of the number of shares of Common Stock evidenced by such certificate or
certificates from the date on which this Warrant was surrendered and if such
exercise is pursuant to Section 1(a), from the date on which payment of the
Warrant Price was made, irrespective of the date of delivery of such
certificate, except that, if the date of such surrender and payment is a date on
which the stock transfer books of the Company are closed, such person shall be
deemed to have become the holder of such shares at the close of business on the
next succeeding date on which the stock transfer books are open. No fractional
shares shall be issued upon exercise of this Warrant and no payment or
adjustment shall be made upon any exercise on account of any cash dividends on
the Common Stock issued upon such exercise. If any fractional interest in a
share of Common Stock would, except for the provisions of this Section 1, be
delivered upon any such exercise, the Company, in lieu of delivering the
fractional share thereof, shall pay to the Warrantholder an amount in cash equal
to the Current Market Price of such fractional interest, as determined below.
(c) CURRENT MARKET PRICE
For any computation hereunder, the "Current Market Price" per share of
Common Stock on any date shall be deemed to be the Market Price per share on the
date preceding the date in question. "Market Price" is defined as the closing
sale price of such security on the principal United States securities exchange
or trading market on which such security is listed or traded as reported by the
Nasdaq National Market (or a comparable reporting service of national
reputation), or if the foregoing does not apply, the last reported sale price of
such security in the over-the-counter market on the electronic bulletin board
for such security as reported by Nasdaq, or, if no sale price is reported for
such security by Nasdaq, the average of the bid prices of any market makers for
such security as reported in the "pink sheets" by the National Quotation Bureau,
Inc. If Market Price cannot be established as described above, Market Price
shall be the fair market value of the Common Stock as determined in good faith
by the Board of Directors. The term "Trading Day" shall mean a day on which
Nasdaq or the principal national securities exchange on which the Common Stock
is listed or admitted to trading is open for the transaction of business.
SECTION 2. ADJUSTMENTS
The Warrant Price and the number and kind of shares issuable
hereunder shall be subject to adjustment from time to time upon the happening of
certain events as provided in this Section 2.
(a) ADJUSTMENTS
(1) If at any time prior to the exercise of this Warrant
in full, the Company shall (A) declare a dividend or make a distribution on the
Common Stock payable in shares of its capital stock (whether shares of Common
Stock or of capital stock of any other class); (B) subdivide, reclassify or
recapitalize its outstanding Common Stock into a greater number of shares; (C)
combine, reclassify or recapitalize its outstanding Common Stock into a smaller
number of shares; or (D) issue any shares of its capital stock by
reclassification of its Common Stock (excluding any such reclassification in
connection with a consolidation or a merger), the Warrant Price in effect at the
time of the record date of such dividend, distribution, subdivision,
combination, reclassification or recapitalization shall be adjusted so that the
Warrant Price shall be equal to the price determined by multiplying the Warrant
Price in effect immediately prior to such event by a fraction, the numerator of
which shall be (x) the total number of outstanding shares of Common Stock of the
Company immediately prior to such event; and the denominator of which shall be
(y) the total number of outstanding shares of Common Stock of the Company
immediately after such event and, as so adjusted or readjusted, the Warrant
Price shall remain in effect until a further adjustment or readjustment is
required by this Section 2. Whenever the Warrant Price is adjusted pursuant to
this Section 2(a)(1), the shares issuable hereunder shall simultaneously be
adjusted by multiplying the number of shares issuable upon exercise of the
Warrant immediately prior to such event by the Warrant Price in effect on the
date thereof and dividing the product so obtained by the Warrant Price resulting
from such adjustment. Any adjustment required by this Section 2(a)(1) shall be
made successively immediately after the record date, in the case of a dividend
or distribution, or the effective date, in the case of a subdivision,
combination, reclassification or recapitalization, to allow the purchase of such
aggregate number and kind of shares.
(2) If at any time prior to the exercise of this Warrant
in full, the Company shall make a distribution to all holders of the Common
Stock of stock of a subsidiary or securities convertible into or exercisable for
such stock, then in lieu of an adjustment in the Warrant Price or the number of
shares of Common Stock purchasable upon the exercise of this Warrant, the
Warrantholder, upon the exercise hereof at any time after such distribution,
shall be entitled to receive from the Company the stock or other securities to
which the Warrantholder would have been entitled if the Warrantholder had
exercised this Warrant immediately prior thereto, all subject to further
adjustment as provided in this Section 2, and the Company shall reserve, for the
life of the Warrant, such securities of such subsidiary; provided, however, that
no
adjustment in respect of dividends or interest on such stock or other securities
shall be made during the term of this Warrant or upon its exercise.
(3) If at any time prior to the exercise of this Warrant
in full, the Company shall distribute to all holders of its Common Stock assets
of the Company (excluding cash dividends or distributions out of earned
surplus), then the Warrant Price shall be adjusted to a price determined by
multiplying the Warrant Price in effect immediately prior to such distribution
by a fraction, the numerator of which shall be (x) the then Current Market Price
per share of Common Stock on the record date for determination of stockholders
entitled to receive such distribution, less the then fair value (as reasonably
determined by the Board of Directors of the Company, whose determination shall
be conclusive) of the portion of the assets so distributed, and the denominator
of which shall be (y) the Current Market Price per share of Common Stock;
provided, however, that if the then Current Market Price per share of Common
Stock on the record date for determination of stockholders entitled to receive
such distribution is less than the then fair value of the portion of the assets
so distributed, the foregoing adjustment of the Warrant Price shall not be made
and in lieu thereof the number of shares purchasable upon exercise of each
Warrant immediately prior to such distribution shall be adjusted so that the
holder of such Warrant shall be entitled to receive upon exercise of such
Warrant the kind and number of assets that such Warrantholder would have owned
or have been entitled to receive in such distribution had such Warrant been
exercised immediately prior to the record date of such distribution.
(4) For purposes of any computation under this Section
2(a), the Current Market Price per share of Common Stock on any date shall be
deemed calculated as provided in Section 1(c).
(5) No adjustment in the Warrant Price shall be required
unless such adjustment would require an increase or decrease of at least 1% of
such price; provided, however, that any adjustments which by reason of this
Section 2(a)(5) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
2(a) shall be made to the nearest cent or to the nearest one hundredth of a
share, as the case may be. Notwithstanding anything in this Section 2(a) to the
contrary, the Warrant Price shall not be reduced to less than the then existing
par value of the Common Stock as a result of any adjustment made hereunder.
(6) In the event that at any time, as the result of any
adjustment made pursuant to this Section 2(a), the Warrantholder thereafter
shall become entitled to receive any securities other than Common Stock,
thereafter the number of such other securities so receivable upon exercise of
this Warrant shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Common Stock contained in Section 2(a).
(b) NO ADJUSTMENT FOR DIVIDENDS
Except as provided in Section 2(a) of this Agreement, no adjustment in
respect of any cash dividends shall be made during the term of this Warrant or
upon the exercise of this Warrant.
(c) PRESERVATION OF PURCHASE RIGHTS IN CERTAIN TRANSACTIONS
In case of any consolidation of the Company with or merger of the
Company into another corporation or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, then adequate provision will be made whereby the Warrantholder shall
have the right thereafter upon payment of the Warrant Price in effect
immediately prior to such action to purchase upon exercise of the Warrant the
kind and amount of shares and other securities and property which the
Warrantholder would have owned or have been entitled to receive after the
happening of such consolidation, merger, sale or conveyance had the Warrant been
exercised immediately prior to such action. The provisions of this Section 2
shall similarly apply to successive consolidations, mergers, sales or
conveyances.
(d) FORM OF WARRANT AFTER ADJUSTMENTS
The form of this Warrant need not be changed because of any adjustments
in the Warrant Price or the number or kind of the shares purchasable pursuant to
this Warrant, and Warrants theretofore or thereafter issued may continue to
express the same price and number and kind of shares as are stated in this
Warrant, as initially issued; provided, however, that the Company may, at any
time in its sole discretion (which shall be conclusive), make any change in the
form of Warrant certificate that it may deem appropriate and that does not
affect the substance thereof. Any Warrant certificate thereafter issued, whether
upon registration of transfer of, or in exchange or substitution for, an
outstanding Warrant certificate may be in the form so changed.
(e) TREATMENT OF WARRANTHOLDER
Prior to due presentment for registration of transfer of this Warrant,
the Company may deem and treat the Warrantholder as the absolute owner of this
Warrant (notwithstanding any notation of ownership or other writing hereon) for
all purposes and shall not be affected by any notice to the contrary.
(f) NOTICE OF ADJUSTMENT
Upon any adjustment under this Section 2, then and in each such case
the Company shall give written notice thereof, by first-class mail, postage
prepaid, addressed to the Warrantholder at the address of such holder as shown
on the books of the Company, which notice shall state the Warrant Price and the
number or kind of the shares purchasable pursuant to this Warrant resulting from
such adjustment, setting
forth in reasonable detail the method of calculation and the facts upon which
such calculation is based.
(g) STOCK TO BE RESERVED
The Company will at all times reserve and keep available out of its
authorized Common Stock, solely for the purpose of issuance upon the exercise of
this Warrant as herein provided, such number of shares of Common Stock as shall
then be issuable upon the exercise of this Warrant. The Company covenants that
all shares of Common Stock which shall be so issued, upon full payment of the
Warrant Price therefore or as otherwise set forth herein, shall be duly and
validly issued and fully paid and nonassessable and free from all taxes, liens
and charges with respect to the issue thereof, and, without limiting the
generality of the foregoing, the Company covenants that it will from time to
time take all such action as may be required to ensure that the par value per
share, if any, of the Common Stock is at all times equal to or less than the
effective Warrant Price. The Company will take all such action as may be
necessary to ensure that all such shares of Common Stock may be so issued
without violation of any applicable law or regulation, or of any requirement of
any national securities exchange or automated quotation system upon which the
Common Stock of the Company may be listed. The Company will not take any action
that results in any adjustment under this Section 2, if the total number of
shares of Common Stock issued and issuable after such action upon exercise of
this Warrant would exceed the total number of shares of Common Stock then
authorized by the Company's Certificate of Incorporation.
(h) ISSUE TAX
The issuance of certificates for shares of Common Stock upon exercise
of any Warrant shall be made without a charge to the Warrantholder for any
issuance tax in respect thereof, provided that the Company shall not be required
to pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the
Warrantholder.
(i) CLOSING OF BOOKS
The Company will at no time close its transfer books against the
transfer of the shares of Common Stock issued or issuable upon the exercise of
this Warrant in any manner that interferes with the timely exercise of this
Warrant.
SECTION 3. NOTICES OF RECORD DATES
In the event of:
(a) any taking by the Company of a record of the holders
of any class of securities for the purpose of
determining the holders thereof who are entitled to
receive any dividend or other distribution (other
than cash dividends out of earned surplus), or any
right to subscribe for,
purchase or otherwise acquire any shares of stock of
any class or any other securities or property, or to
receive any right to sell shares of stock of any
class or any other right, or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the capital
stock of the Company or any transfer of all or
substantially all the assets of the Company to or
consolidation or merger of the Company with or into
any other corporation or entity, or
(c) any voluntary or involuntary dissolution, liquidation
or winding-up of the Company,
then and in each such event the Company will give notice to the Warrantholder
specifying (1) the date on which any such record is to be taken for the purpose
of such dividend, distribution or right and stating the amount and character of
such dividend, distribution or right, and (2) the date on which any such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding-up is to take place, and the time,
if any is to be fixed, as of which the holders of record of Common Stock will be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be given at least 20 days and not more than 90
days prior to the date therein specified, and such notice shall state that the
action in question or the record date is subject to the effectiveness of a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act") or to a favorable vote of stockholders, if either is required.
Failure to mail or receive such notice or any defect therein shall not affect
the validity of any action with respect thereto.
SECTION 4. REPRESENTATIONS OF WARRANTHOLDER
(a) Warrantholder is acquiring this Warrant for Warrantholder's
own account and not with a view toward distribution. Warrantholder is an
"accredited investor" within the meaning of Rule 501 of Regulation D under the
Securities Act and has such knowledge and experience in financial or business
matters as to be capable of evaluating the merits and risks of this investment.
(b) Warrantholder understands that this Warrant and any shares of
Common Stock issuable upon exercise are characterized as "restricted securities"
under the Securities Act and that the Warrant and shares of Common Stock
issuable on exercise may be resold or transferred without registration under the
Securities Act only in limited circumstances.
SECTION 5. NO STOCKHOLDERS RIGHTS OR LIABILITIES
This Warrant shall not entitle the Warrantholder to any voting rights
or other rights as a stockholder of the Company. No provision hereof, in the
absence of affirmative action by the Warrantholder to purchase shares of Common
Stock, and no mere enumeration herein of the rights or privileges of the
Warrantholder shall give rise to any liability of such Warrantholder for the
Warrant Price or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.
SECTION 6. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT
In case the certificate or certificates evidencing the Warrants shall
be mutilated, lost, stolen or destroyed, the Company shall, at the request of
the Warrantholder, issue and deliver in exchange and substitution for and upon
cancellation of the mutilated certificate or certificates, or in lieu of and
substitution for the certificate or certificates lost, stolen or destroyed, a
new Warrant certificate or certificates of like tenor and representing an
equivalent right or interest, but only upon receipt of evidence satisfactory to
the Company of such loss, theft or destruction of such Warrant and an agreement
of indemnity, if requested.
SECTION 7. NOTICES
All notices, requests and other communications required or permitted to
be given or delivered hereunder shall be in writing, and shall be delivered, or
shall be sent by certified or registered mail or overnight courier, postage
prepaid, or by facsimile, and if to the Warrantholder to such address or
facsimile number as shall have been furnished to the Company by notice from such
Warrantholder and if to the Company, at 0000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxx 00000; Attention: President, facsimile number (000) 000-0000, or at
such other address or facsimile number as shall have been furnished to the
Warrantholder by notice from the Company.
SECTION 8. TRANSFER AND EXERCISE, REGISTRATION
(a) RESTRICTIONS ON TRANSFER. This Warrant and the rights granted
to the Warrantholder are transferable in whole or in parts of not less than ten
thousand (10,000) Warrant Shares,, at any one time, upon surrender of this
Warrant, together with a properly executed assignment in the form attached
hereto, at the Company's principal offices referred to in Section 1(a) hereof.
Any transfer or assignment of this Warrant shall be subject to applicable laws
and to the conditions set forth in Section 8(b). Until due presentment for
registration of transfer on the books of the Company, the Company may treat the
registered holder hereof as the owner and holder hereof for all purposes, and
the Company shall not be affected by any notice to the contrary. In the event of
a transfer in part, the Company shall issue to the transferring Warrantholder a
Warrant for the balance not transferred. Each transferee which is an affiliate
of Allergan Inc. shall be entitled to the rights granted in, and be a
beneficiary of the obligations of the Company under, the Purchase Agreement.
Each transferee which is an not an affiliate of Allergan Inc. shall be entitled
to the registration rights granted in the Purchase Agreement.
(b) EXERCISE OR TRANSFER WITHOUT REGISTRATION. If, at the time of
the surrender of this Warrant in connection with any exercise, transfer, or
exchange of this Warrant, this Warrant (or, in the case of any exercise, the
shares issuable hereunder upon such exercise), shall not be registered under the
Securities Act and under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such exercise, transfer, or
exchange, (i) that the Warrantholder or transferee of this Warrant, as the case
may be, furnish to the Company a written opinion of counsel (which opinion shall
be in form, substance and scope customary for opinions of counsel in comparable
transactions) to the effect that such exercise, transfer, or exchange may be
made without registration under the Securities Act and under applicable state
securities or blue sky laws, (ii) that the Warrantholder execute and deliver to
the Company an investment letter in form and substance reasonably acceptable to
the Company and (iii) that the Warrantholder or transferee be an "ACCREDITED
INVESTOR" as defined in Rule 501(a) promulgated under the Securities Act;
provided that no such opinion, letter, or status as an "accredited investor"
shall be required in connection with a transfer pursuant to Rule 144 under the
Securities Act.
(c) LEGEND. This Warrant and the shares of Common Stock issued
hereunder shall bear a legend setting forth the foregoing restrictions, if
appropriate.
(d) REGISTRATION. The shares of Common Stock issuable upon
exercise of this Warrant are "Registrable Securities" as defined in Section 5.1
of the Purchase Agreement and the Warrantholder is entitled to require the
Company register such shares as set forth therein.
SECTION 9. AMENDMENTS AND WAIVERS
This Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought.
SECTION 10. SEVERABILITY
If one or more provisions of this Warrant are held to be unenforceable
under applicable law, such provisions shall be excluded from this Warrant, and
the balance of this Warrant shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
SECTION 11. GOVERNING LAW
THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE
STATE OF DELAWARE WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.. In any suit or
action to enforce the provisions of this Warrant, the prevailing party shall be
entitled to be reimbursed for all reasonable legal fees and expenses incurred by
such party in connection with such suit or action.
SECTION 12. HEADINGS
The headings in this Warrant are for purposes of reference only and
shall not limit or otherwise affect any of the terms hereof.
SECTION 13. COUNTERPARTS
This Warrant may be executed in any number of counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the Company and Allergan, Inc. have executed this
Warrant on and as of the day and year first above written.
ENTREMED, INC.,
A DELAWARE CORPORATION
------------------------------------
Name: Xxxx X. Xxxxxxx, Ph.D.
Title: Chairman of the Board and
Chief Executive Officer
Attest:
-----------------------
WARRANTHOLDER
ALLERGAN, INC.
------------------------------------
Name:
Title:
SUBSCRIPTION FORM
(To be executed upon exercise of this Warrant)
:
-----------------------
The undersigned hereby irrevocably elects to exercise the right of
purchaser represented by the within Warrant for, and to purchase thereunder,
______________ shares of Common Stock, as provided for therein, and either
tenders herewith payment of the purchase price in full in the form of cash, wire
transfer or check in the amount of $_____________.
Please issue a certificate or certificates for such Common Stock in the
name of, and pay any cash for any fractional share to:
Name:
-------------------------------
Address:
Social
Security No:
If said number of shares shall not be all the shares purchasable under
the within Warrant, a new Warrant is to be issued in the name of said
undersigned for the balance remaining of the shares purchasable thereunder
rounded up to the next higher number of shares.
Name
--------------------------------
Signature
---------------------------
Note: The above signature must
correspond exactly with the
name on the first page of this
Warrant or with the name of
the assignee appearing in the
assignment form below.
ASSIGNMENT
(To be executed only upon assignment of Warrant)
For value received, _______________________________ hereby sells,
assigns and transfers unto _______________________ the within Warrant
Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint ____________________ attorney, to
transfer said Warrant on the books of the within-named Company with respect to
the number of Warrants set forth below, with full power of substitution in the
premises:
Name(s) of
Assignee(s)/Address No. of Warrants No. of Shares
And if said number of Warrants shall not be all the Warrants represented by the
Warrant, a new Warrant is to be issued in the name of said undersigned for the
balance remaining of the Warrants registered by said Warrant.
Name
-----------------------
Dated: Signature
------------------- --------------------
Note: The above signature must correspond
exactly with the name on the face of
this Warrant.
APPENDIX D
MANDATORY FILING COUNTRIES
A. Canada
B. Australia
C. Japan
D. Brazil
E. Mexico
F. China
G. Argentina
H. The countries signatory to the European Patent Convention (EPC)
APPENDIX E
CO-PROMOTION PROVISIONS
A. ENTREMED shall have the option (the "OPTION") to co-promote in NORTH
AMERICA the first PRODUCT commercialized by ALLERGAN under this AGREEMENT for a
period of * following the date of such PRODUCT's FIRST COMMERCIAL SALE (the
"PROMOTION TERM"). The OPTION shall expire unless exercised in writing within
the first * after the approval of the NDA for such PRODUCT in the United States.
Upon notification by ENTREMED of its intent to exercise the OPTION, such PRODUCT
shall be deemed an "OPTIONED PRODUCT," provided, however, that ENTREMED may not
begin its co-promotion activities until * following such notification.
B. In the event that ENTREMED exercises the OPTION, ENTREMED shall be
entitled to provide, at its sole expense, up to such number of ENTREMED sales
representatives equal to * percent (* %) of the budgeted ALLERGAN sales force
for such PRODUCT (based on the number of full-time equivalent sales
representatives performing first or second priority details of the product on a
quarterly basis) in the United States (it being understood that if ENTREMED
builds sales capacity within the * percent (* %) range and ALLERGAN'S sales
effort decreases, ENTREMED shall be entitled to maintain the previously set
level of co-promotion effort, subject to the other provisions of this
AGREEMENT). In such event, ALLERGAN and ENTREMED shall mutually determine the
size, structure and configuration of the sales force(s) that will be responsible
for such OPTIONED PRODUCT, and the roles and assignments of ENTREMED's sales
representatives within such selling effort.
C. Should ENTREMED exercise the OPTION, it is understood that ALLERGAN
will retain the exclusive rights to sell and distribute the PRODUCTS in the
applicable territory, so that ENTREMED's right to promote would be in the nature
of a co-promotion arrangement in which ENTREMED and/or its designee promotes
such OPTIONED PRODUCT, but all sales of the OPTIONED PRODUCT shall continue to
be made by ALLERGAN.
D. ALLERGAN shall at its expense provide reasonable amounts of promotional
materials, samples, and training to the ENTREMED sales force. The ENTREMED sales
force will, at ENTREMED's expense, participate in all ALLERGAN sales training
activities and be subject to the same sales management requirements as the
ALLERGAN sales force, including, but not limited to call reporting, sample
tracking, and competitive activity reporting.
E. In the event that ENTREMED fails, in ALLERGAN's reasonable
determination, to competently co-promote the OPTIONED PRODUCT(s), or fails to
promote the OPTIONED PRODUCT(s) consistent with the direction provided by
ALLERGAN, ALLERGAN shall be entitled to terminate ENTREMED's right to co-promote
the OPTIONED PRODUCT following * prior written notice to ENTREMED, and in the
event that ENTREMED violates any law or regulation in connection with such
co-promotion, ALLERGAN shall be entitled to terminate ENTREMED's right to
co-promote the OPTIONED PRODUCT immediately upon written notice to ENTREMED.
F. In the event that ENTREMED wishes to terminate co-promotion activities,
ENTREMED must provide ALLERGAN notice in writing at least * prior to the
intended date of
termination. In the event that ENTREMED terminates co-promotion activities, the
OPTION for such co-promotion will expire and ENTREMED will have no further
rights to co-promote PRODUCTS hereunder.
G. Upon the termination of co-promotion activities by ENTREMED, either by
expiration of the PROMOTION TERM, early termination by ENTREMED, or termination
by ALLERGAN as provided herein or in Section 15.8 of this AGREEMENT, ENTREMED
shall return to ALLERGAN all materials and information in the possession of
ENTREMED or its ENTREMED sales force relating to the subject matter hereof
within thirty (30) days of the date of such termination.
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