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ALPHA RIGHTS ACQUISITION AGREEMENT
Alpha 1 Biomedicals, Inc. as Seller
and
SciClone Pharmaceuticals, Inc.
as Buyer
Dated: December 17, 1997
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TABLE OF CONTENTS
RECITALS..........................................................................................................1
1. Purchase and Sale............................................................................................2
2. Purchase Price and...........................................................................................2
3. Loan Advances................................................................................................4
4. Representations and Warranties by Alpha......................................................................4
5. Representations and Warranties by SciClone...................................................................4
6. Pre-Closing Matters..........................................................................................5
7. CLOSING......................................................................................................5
8. COVENANTS....................................................................................................7
8.1 Assumed and Retained Liabilities....................................................................7
8.2 Confidentiality.....................................................................................8
8.3 Cooperation and Additional Documents; Omitted Items.................................................9
8.4 Access and Full Disclosure..........................................................................9
8.5 Normal Course of Business..........................................................................10
8.6 Covenant Not to Compete............................................................................10
8.7 Bankruptcy.........................................................................................11
9. TERMINATION AND DEFAULT.....................................................................................11
9.1 Termination........................................................................................11
9.2 Default............................................................................................11
9.3 Effect of Termination..............................................................................11
10. SURVIVAL OF REPRESENTATION AND WARRANTIES...................................................................11
11. INDEMNIFICATION BY ALPHA....................................................................................11
12. INDEMNIFICATION BY SCICLONE.................................................................................12
13. TERMINATION OF 1994 AGREEMENT...............................................................................13
14. GENERAL PROVISIONS..........................................................................................14
14.1 Expenses..........................................................................................14
14.2 Brokers...........................................................................................14
14.3 Entire Agreement..................................................................................14
14.4 Assignment........................................................................................14
14.5 Notices...........................................................................................15
14.6 Governing Law.....................................................................................15
14.7 Amendment.........................................................................................15
14.8 Counterparts......................................................................................15
14.9 Public Disclosure.................................................................................16
14.10 Further Assurances................................................................................16
14.11 Headings..........................................................................................16
14.12 Waiver............................................................................................16
14.13 Parties in Interest...............................................................................16
14.14 Recovery of Litigation or Arbitration Costs.......................................................17
14.15 Severability......................................................................................17
14.16 Time of Essence...................................................................................17
14.17 Arbitration
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ALPHA RIGHTS ACQUISITION AGREEMENT
This Agreement is entered into as of December 17, 1997 (the "Effective
Date") by and among SciClone Pharmaceuticals, Inc., a California corporation,
located in San Mateo, California ("SciClone"), and Alpha 1 Biomedicals, Inc., a
Delaware corporation, located in Bethesda, Maryland ("Alpha").
Recitals
A. Alpha owns or holds a license to certain technology related to
the development, manufacture, use and sale of Thymosin Alpha 1 (or "TA-1").
B. Alpha and SciClone previously have entered into that certain
Thymosin Alpha 1 License Agreement dated as of August 19, 1994 (the "1994
Agreement"), whereunder Alpha has licensed to SciClone all of its rights with
respect to the development, manufacture, use, sale and distribution of TA-1. The
1994 Agreement has been amended or supplemented by that certain Amendment No. 1
dated as of June 7, 1995, and that certain Amendment No. Two dated as of April
7, 1997, and that certain Prepaid Royalty Agreement dated as of August 5, 1996
(the "1996 Prepaid Royalty Agreement"), and that certain Prepaid Royalty
Agreement dated as of September 3, 1997 (the "1997 Prepaid Royalty Agreement").
All references herein to the 1994 Agreement shall be deemed to include said
Amendments and said Prepaid Royalty Agreements.
C. Pursuant to the 1994 Agreement, SciClone is obligated to pay
certain royalties to Alpha based upon the Net Sales Revenues (as defined by the
1994 Agreement).
D. Pursuant to the 1994 Agreement, rights licensed by Alpha to
SciClone include specified patent rights owned by Alpha, including issued
patents and pending patent applications (collectively referred to as the "Alpha
Owned Patent Rights"), as described on Exhibit A attached hereto, together with
certain patent rights which are owned by third parties and licensed to Alpha,
including both issued patents and pending patent applications (collectively
referred to as the "Alpha Licensed Patent Rights"), as described on Exhibit B
attached hereto. The term "Alpha Patent Rights" shall include both the Alpha
Owned Patent Rights and the Alpha Licensed Patent Rights.
E. The Alpha Licensed Patent Rights are granted to Alpha pursuant
to certain agreements which are described on Exhibit C attached hereto, which
agreements as amended are hereinafter referred to as the "Alpha IP Rights
Agreements". As further noted on Exhibit C, the Alpha Licensed Patent Rights
granted pursuant to the Alpha IP Rights Agreements are granted from (i) X.
Xxxxxxxx-XxXxxxx Ltd., a Switzerland corporation, located in Basle, Switzerland
("Roche-Basle"), and (ii) Xxxxxxxx-XxXxxxx, Inc., a New Jersey corporation,
located in Nutley, New Jersey ("Roche-US"). Roche-Basle and Roche-US each are
referred to as a "Third Party Licensor."
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F. Alpha is in need of accelerating the timing for Alpha to
realize economic benefits from the future royalty income stream which Alpha
contemplates receiving from SciClone pursuant to the 1994 Agreement, as Net
Sales Revenues are earned by SciClone in the future under the 1994 Agreement.
Accordingly, Alpha and SciClone have negotiated for Alpha to sell to SciClone,
and for SciClone to purchase from Alpha, all of the Alpha Patent Rights, which
sale and purchase shall be affected by means of a modification of the rights and
obligations of Alpha and SciClone under the 1994 Agreement as follows: (i) Alpha
will sell, assign and convey to SciClone all right, title and interest in and to
the Alpha Owned Patent Rights, (ii) the rights and obligations of Alpha with
respect to TA-1 under the Alpha Licensed Patent Rights will be assigned to
SciClone (with the consent of the Third Party Licensor, as necessary ), (iii)
SciClone will be released from its royalty obligations under the 1994 Agreement,
all in consideration for which SciClone will make payments to Alpha provided for
in this Agreement. Said Alpha Patent Rights and Alpha's rights with respect to
TA-1 under Alpha IP Rights Agreements are collectively called the "Alpha
Rights."
G. SciClone believes there is value to SciClone to acquire fully
paid up rights to utilize the Alpha Rights, rather than to be obligated to pay
future royalties on future Net Sales Revenues.
H. Pursuant to the terms of this Agreement, the 1994 Agreement is
to be terminated except as otherwise provided herein.
WHEREFORE, the parties hereto mutually agree as follows:
1. Purchase and Sale. For and in consideration of the cash to be
paid and loaned and the stock to be issued by SciClone to Alpha pursuant to
Section 2 hereof, and the other provisions of this Agreement, and subject to the
conditions and provisions of this Agreement, (i) Alpha hereby agrees to sell,
assign, transfer, convey, quitclaim and deliver to SciClone all of Alpha's
rights, title and interests in and to the Alpha Rights; (ii) SciClone hereby
agrees to purchase and acquire said Alpha Rights from Alpha; and (iii) the
parties agree to terminate the 1994 Agreement, except as otherwise provided in
Section 13 of this Agreement.
2. Purchase Price and Payment The purchase price payable by
SciClone to Alpha for the Alpha Rights shall be as follows:
(a) $130,000 in cash (the "Cash Consideration") payable
as follows:
(1) $65,000 immediately on the Effective
Date; and
(2) $65,000 on the business day which is
30 days after the Effective Date.
(b) A number of shares of SciClone common stock
("SciClone Common Stock") equal to $1,800,000 divided by the "Initial Average
Price." For purposes of this Agreement, "Initial Average Price" shall mean the
average
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of the closing sales price per share of SciClone Common Stock, as reported on
the Nasdaq National Market, for the 20 trading days immediately preceding the
date that is three trading days prior to the Effective Date; provided, however,
if the Initial Average Price is less than $3.00, the Initial Average Price shall
be deemed to be $3.00. The shares of SciClone Common Stock issued pursuant to
this Section 2(b) shall be referred to as the "Initial Shares."
(c) SciClone shall issue additional shares of
SciClone Common Stock (the "Additional Shares") on each Lock-up Release Date (as
defined in Section 5 of the form of Stock Rights Agreement attached hereto as
Exhibit D), the number of such Additional Shares, if any, issued on such date
being equal to:
($150,000 x A) - (A x (the Initial Shares divided by 12) x B) - C
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B
Where: A = the number of Lock-up Release Dates that have transpired,
including the then-current Lock-up Release Date.
B = the sum of the "Average Prices" for the then-current
Lock-up Release Date and each prior Lock-up Release Date
divided by the number of such Lock-up Release Dates.
C = the aggregate number of Additional Shares previously
issued.
However, in no event shall the sum of the Initial Shares and the
Additional Shares exceed 600,000 shares.
The Initial Shares and the Additional Shares are referred to
collectively as the "Shares." "Average Price" shall mean the average of the
closing sales price per share of SciClone Common Stock, as reported by the
Nasdaq National Market, for the 20 trading days preceding the date that is three
trading days prior to the applicable Lock-up Release Date.
(d) In the event that SciClone effects any
consolidation, combination, stock distribution, stock dividend, stock split,
reverse stock split recapitalization or similar transaction, the provisions of
paragraphs (b) and (c) shall be correspondingly adjusted.
(e) The Shares shall have such registration
rights, and shall be subject to such resale limitations, as are set forth in a
Stock Rights Agreement to be entered into between Alpha and SciClone at the
Closing, the form of which is attached hereto as Exhibit D.
(f) In the event that the Closing does not occur
for any reason, then the 1994 Agreement shall remain in full force and effect,
and all of the Cash Consideration (up to $130,000, less any deduction pursuant
to Section 6.3 hereof), paid to Alpha under Section 2(a) hereof shall be treated
as a prepayment of royalties to Alpha under the same terms as the 1997 Prepaid
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Royalty Agreement, with the result that the amount of such Cash Consideration
shall be credited at the rate of ten dollars ($10.00) of royalties for each one
dollar ($1.00) of the Cash Consideration paid. These credits against future
royalties will take effect after SciClone or its affiliate have made royalty
payments to Alpha totaling $1,750,000.
3. Loan Advances
3.1 SciClone agrees that, on the sixty-first calendar day
following the Effective Date, SciClone shall make a $70,000 loan advance to
Alpha. Upon the Closing, said loan advance shall be treated as a loan advance
made pursuant to, evidenced by, and repayable in accordance with, the Promissory
Note and Security Agreement, in the form attached hereto as Exhibit E, which
Alpha shall execute and deliver to SciClone at the Closing. If for any reason
the Closing does not occur, then said loan advance shall be treated as a
prepayment of royalties to Alpha under the same terms as the 1997 Prepaid
Royalty Agreement, with the result that the amount of such loan advance shall be
credited at the rate of ten dollars ($10.00) of royalties for each one dollar
($1.00) of the loan advance. This credit shall be taken only after the credits
referenced in Section 2(f) hereof are first utilized and exhausted.
3.2 SciClone agrees, that on the latter to occur of (i)
30 days after the $70,000 loan advance made pursuant to Section 3.1 hereof, or
(ii) the first business day following the Closing, and on the same business day
of each of the next two (2) months thereafter that is prior to the effective
date of the registration statement contemplated by the Stock Rights Agreement
(the "S-3 Effective Date"), SciClone shall make a loan advance of $70,000 per
month (each an "Advance") to Alpha (provided Alpha is not in material breach of
this Agreement) for up to an aggregate of $210,000 of Advances pursuant to this
Section 3.2, which when combined with the $70,000 loan advance made pursuant to
Section 3.1 aggregates to $280,000 of Advances.
3.3 The Advances shall be repaid in accordance with the
terms of the Promissory Note and Security Agreement, in the form attached hereto
as Exhibit E, which Alpha shall execute and deliver to SciClone at the Closing.
4. Representations and Warranties by Alpha In order to induce
SciClone to enter into and perform this Agreement, Alpha hereby makes the
representations and warranties set forth in Exhibit F attached hereto, subject
to the exceptions set forth on the Schedule of Exceptions attached hereto as
Exhibit G.
5. Representations and Warranties by SciClone In order to induce
Alpha to enter into and perform this Agreement, SciClone hereby make the
representations and warranties set forth in Exhibit H attached hereto, subject
to the exceptions set forth on the Schedule of Exceptions attached hereto as
Exhibit I.
6. Pre-Closing Matters
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6.1 Alpha shall use its Best Efforts to file, within
twenty (20) business days after the Effective Date, with the United States
Securities and Exchange Commission ("SEC"), Alpha's proxy statement for a
stockholders meeting, at which meeting Alpha's stockholders will be asked to
approve the transactions contemplated by this Agreement (the "Stockholders
Meeting"). Alpha shall use its Best Efforts to obtain SEC clearance for said
proxy statement, and upon obtaining such clearance, Alpha shall promptly mail
said proxy statement to its stockholders and schedule and hold a stockholders
meeting.
6.2 In the proxy statement and at the Stockholders
Meeting, Alpha's Board of Directors shall recommend, to the extent consistent
with its fiduciary duty, that the Alpha stockholders approve the transactions
contemplated by this Agreement, and Alpha shall use its Best Efforts to obtain
such approval. Alpha shall notify SciClone in writing upon obtaining said
stockholders approval.
6.3 For the Net Sales (as defined in the 1994 Agreement)
under the 1994 Agreement made from and after the Effective Date, no royalties
shall be earned or payable to Alpha (other than those payable to Third Party
Licensors), so long as the Closing ultimately occurs. If for any reason the
Closing does not occur, then any and all royalties as specified in the 1994
Agreement shall become earned and payable on the Net Sales which occurred from
and after the Effective Date, and said earned royalties shall be deducted from
the Cash Consideration paid by SciClone to Alpha pursuant to Section 2(a)
hereof.
6.4 Alpha and SciClone have mutually approved a press
release in the form attached hereto as Exhibit K, which press release shall be
issued promptly after the Effective Date.
7. Closing
7.1 A closing (the "Closing") at which the transactions
specified in this Agreement as occurring at the Closing shall be held at the
offices of Xxxx, Xxxx, Xxxx & Freidenrich, Palo Alto, California, on a date that
is mutually agreed to by Alpha and SciClone that is within five (5) business
days after all of the conditions to the Closing have been satisfied or waived
(the "Closing Date"), or on such other date or at such other location as may be
mutually agreed to by the parties. The Closing conditions and procedure shall be
as set forth in Section 7.2 hereof.
7.2 Closing Conditions and Procedures. Each of the
following items shall be a precondition to the Closing, unless waived by both
parties (except for the conditions of Sections 7.2(d) and 7.2(e) which shall be
a condition to the obligation of only the party that is the beneficiary
thereof), and the following procedures shall be followed to accomplish the
Closing:
(a) Consent from Third Party Licensors. Prior
to the Closing, Alpha shall obtain and furnish to SciClone (i) all agreements
and
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consents from each Third Party Licensor, in form and substance reasonably
satisfactory to SciClone, necessary to effect the assignment of the Alpha
Licensed Patent Rights to SciClone, and (ii) an acknowledgment from each Third
Party Licensor, in form and substance reasonably satisfactory to SciClone, that
upon such assignment the Alpha Licensed Patent Rights will remain in full force
and effect, and there are no outstanding defaults by Alpha with respect to the
Alpha Licensed Patent Rights.
(b) Assignments. At the Closing, Alpha shall
deliver to SciClone assignments of the Alpha Rights, in form and substance
reasonably satisfactory to SciClone.
(c) Government Filings. At the Closing, Alpha
shall deliver to SciClone short form assignments of the Alpha Owned Patent
Rights appropriate for SciClone to file with the United States Patent and
Trademark Office, and for SciClone to file with foreign governmental offices
that are identified by SciClone, in a form and substance reasonably satisfactory
to SciClone. Alpha shall also deliver to SciClone any other appropriate
assignments and documents for filing with governmental regulatory bodies as
SciClone reasonably may request to effect the assignment of Alpha Rights
contemplated by this Agreement. All expenses for filing fees and legal fees to
effect the conveyance of the Alpha Rights to SciClone shall be borne by
SciClone, excluding any fees of Alpha's attorneys (other than if SciClone
specially engages Alpha's attorney for certain specified services).
(d) Representations and Warranties Remain True
and Correct. As of the Closing Date, all of the representations and warranties
by Alpha and SciClone contained in this Agreement shall be deemed to be restated
as of the Closing, and all of said representations and warranties shall be true
and correct in all material respects as of the Closing Date, and SciClone shall
deliver to Alpha, and Alpha shall deliver to SciClone, a closing certificate
confirming the same.
(e) Compliance with Covenants. As of the
Closing Date, each party shall in all material respects have performed and
complied with the covenants that are to be performed and complied with as of the
Closing Date, and SciClone shall deliver to Alpha, and Alpha shall deliver to
SciClone, a closing certificate confirming the same.
(f) Absence of Adverse Events. Prior to the
Closing Date, there shall not have occurred any material adverse event
applicable to the Alpha Rights that is outside of the control of SciClone.
Without limiting the generality of the foregoing, there shall not be any
material claim of any invalidity or infringement with respect to the Alpha
Rights, and there shall not be any claim of any material default relating to
TA-1 under the Alpha IP Rights Agreements, and no creditors of Alpha shall have
commenced or threatened to commence any bankruptcy proceedings or creditor
collection proceeding against Alpha that could have a material adverse effect on
the Alpha Rights or on SciClone's rights under this Agreement. Alpha shall
deliver to SciClone a closing certificate confirming the same.
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(g) No Action Commitment from Creditors. Alpha
shall cause to be delivered to SciClone from Alpha's creditors who hold at least
90% of the aggregate dollar value of Alpha's outstanding financial obligations,
a "No Action Commitment," substantially in the form attached hereto as Exhibit
J, or such other form as may be mutually approved by Alpha and SciClone.
(h) Stock Issuance. At the Closing, SciClone
shall issue to Alpha stock certificates evidencing the Shares specified in
Section 2(b) hereof; and SciClone shall retain custody of said stock
certificates to the extent provided in the Promissory Note and Security
Agreement, in order to perfect SciClone's security interest therein.
(i) Stock Rights Agreement. At the Closing,
SciClone and Alpha shall execute and deliver the Stock Rights Agreement, in the
form attached hereto as Exhibit D.
(j) Stockholder Approval. At the Closing, Alpha
shall furnish to SciClone a certificate of its corporate secretary certifying
that Alpha's stockholders have duly approved the transactions contemplated by
this Agreement.
(k) Promissory Note and Security Agreement. At
the Closing, Alpha shall execute and deliver to SciClone the Promissory Note and
Security Agreement, in the form attached hereto as Exhibit E.
(l) License From Alpha. Prior to the Closing,
Alpha shall execute and deliver to SciClone an assignment of all license
agreements, if any, not previously assigned to SciClone pursuant to which Alpha
has granted any rights to a third party with respect to the Alpha Rights, and
Alpha shall provide such notice of assignment to, or obtain such consent of, any
such third party licensee as is necessary to effect such assignment. Without
limiting the generality of the foregoing, and for avoidance of doubt, the
parties hereby acknowledge and agree that upon the Closing, Alpha shall not be
entitled to any further payments applicable to any agreements with respect to
Sclavo, including the April 7, 1997 Amendment No. Two to the 1994 Agreement,
except as otherwise provided in Section 13 hereof.
8. Covenants
8.1 Assumed and Retained Liabilities. From and
after the Closing, SciClone hereby assumes all of the liabilities of Alpha, and
agrees to perform all of the covenants and agreements of Alpha, in respect of
the Alpha Rights that accrue as of and after the Closing (the "Assumed
Liabilities"). From and after the Closing, Alpha shall continue to be
responsible for all of the liabilities of Alpha, and shall perform all of the
covenants and agreements of Alpha in respect of, the Alpha Rights accrued as of
the Closing, but excluding all of the liabilities, covenants and agreements of
Alpha that SciClone agreed to assume or perform under the 1994 Agreement
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(the "Retained Liabilities"). Notwithstanding the foregoing, and in addition to
the foregoing, SciClone and Alpha shall each continue to have and perform the
obligations under the 1994 Agreement that are to survive as specified in Section
13 hereof. Alpha shall indemnify, defend and hold harmless SciClone from and
against (i) any and all liabilities, obligations, and claims arising prior to
the Closing Date with respect to the Retained Liabilities, and (ii) any claims
made against SciClone by creditors of Alpha by reason of the transactions
contemplated by this Agreement (excluding the Assumed Liabilities and excluding
any surviving obligations of SciClone under the 1994 Agreement). SciClone shall
indemnify, defend and hold harmless Alpha from and against any and all
liabilities, obligations and claims arising from and after the Closing Date with
respect to the Assumed Liabilities.
8.2 Confidentiality.
(a) Each party agrees that for a period of ten
(10) years after the date of expiration of the last patent included in the Alpha
Rights, it will maintain in confidence, and will not use or disclose, any
Confidential Information disclosed to it by the other party, except that either
party may use and disclose Confidential Information to the extent such
disclosure is reasonably necessary to comply with applicable governmental laws
and regulations (including without limitation the federal securities laws), and
SciClone may use all Confidential Information of Alpha with respect to the Alpha
Rights.
(b) "Confidential Information" shall mean, with
respect to either party, any confidential information or data, and any other
information relating to any research project, work in process, future
development, scientific, engineering, manufacturing, marketing, business plan,
financial or personnel matter of such party, its present or future products,
sales, suppliers, customers, employees, investors or businesses whether in oral,
written, graphic or electronic form, that is identified as Confidential
Information under this Agreement in a writing delivered by the disclosing party
to the receiving party contemporaneously with the transfer of the information
or, if disclosed orally, is identified a Confidential Information in a writing
delivered by the disclosing party to the receiving party within twenty (20)
business days following such oral disclosure; provided, however, Confidential
Information shall not include any information that:
(i) was already known to the receiving
party, other than under an obligation of confidentiality to the disclosing
party, at the time of disclosure to the receiving party;
(ii) was generally available to the
public or otherwise part of the public domain at the time of its disclosure to
the receiving party;
(iii) becomes generally available to the
public or otherwise becomes part of the public domain after its disclosure to
the receiving party, other than through any act or omission of the receiving
party in breach of this Agreement;
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(iv) was disclosed to the receiving
party, other than under an obligation of confidentiality, by a third party who
had no obligation to the disclosing party not to disclose such information to
others; or
(v) was independently developed by the
receiving party, without use of Confidential Information of the disclosing
party.
(c) Alpha agrees that for a period of ten (10)
years after the date of expiration of the last patent included in the Alpha
Rights, it will maintain in confidence and not use or disclose the Alpha
Technical Information (as defined by the 1994 Agreement) except that Alpha may
disclose Alpha Technical Information (i) to the extent that the disclosure of
such Alpha Technical Information does not relate to the Alpha Rights, (ii) the
disclosure of which is required by governmental laws or regulations (including
without limitation the federal securities laws), or (iii) the disclosure of
which is required to prosecute or defend any litigation. In the case of any
disclosure permitted by subparagraphs (ii) or (iii) above, before any such
disclosure is made, Alpha shall use its best efforts to give SciClone written
notice at least ten (10) business days in advance of the disclosure, together
with a legal opinion that the exception in subparagraph (ii) or (iii) is
satisfied. In any event, any such disclosure shall be only that limited
information which is required to be disclosed, and no more.
8.3 Cooperation and Additional Documents;
Omitted Items. Each party hereby agrees to cooperate with the other party and to
execute and deliver any and all documents and to take any and all actions as
might be reasonably required to carry out the purposes and intentions of this
Agreement. Without limiting the generality of the foregoing, in the event there
is any subsequently discovered or identified TA-1 patent right or agreement
owned by or licensed by or to Alpha which is within the intended scope of the
Alpha Rights as identified on Exhibits A, B, and C attached hereto, but which
has inadvertently been omitted from said exhibits, then said omitted rights or
agreements shall automatically be deemed to be added to said exhibits, and the
parties shall execute and deliver appropriate documentation to so identify said
omitted rights or agreements.
8.4 Access and Full Disclosure.
(a) From and after the date of this Agreement,
and continuing for a period of three (3) years after the Closing, (i) Alpha
shall cooperate fully with SciClone to provide to SciClone copies of and/or
access to all relevant information, files, documents, reports and materials
applicable to the Alpha Patent Rights and the Alpha IP Rights Agreements, and
(ii) Alpha shall fully disclose to SciClone any new information or newly
identified information which comes to the attention of Alpha concerning the
Alpha Rights.
(b) From and after the date of this Agreement
and prior to the Closing (i) Alpha shall fully disclose to SciClone any new
information or newly identified information concerning any material adverse
change in the factual representations made by Alpha pursuant to this Agreement,
and
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(ii) SciClone shall fully disclose to Alpha any new information or newly
identified information which comes to the attention of SciClone concerning any
material adverse change in the factual representations made by SciClone pursuant
to this Agreement.
8.5 Normal Course of Business. From the date of this
Agreement until the Closing Date, Alpha shall continue to conduct its business
and affairs related to the Alpha Rights in the normal and ordinary course of
business. Without the prior written consent of SciClone, Alpha shall not take
any action, omit to take any required action, or execute or deliver any
agreement with respect to the Alpha Rights which is not in the ordinary course
of business of Alpha.
8.6 Covenant Not to Compete.
(a) For so long as any patent included in the
Alpha Rights remains in effect in some country, Alpha agrees that it will not,
directly or indirectly, make, have made, use, or sell TA-1 anywhere in the
world.
(b) Alpha acknowledges that a remedy at law for
any breach or attempted breach of this Section 8.6 will be inadequate and
further agrees that any breach of this Section 8.6 will result in irreparable
harm to SciClone; and Alpha covenants and agrees not to oppose any demand for
specific performance and injunctive and other equitable relief in case of any
such breach or attempted breach. Alpha acknowledges that this Section 8.6
contains reasonable limitations as to time, geographical area and scope of
activity to be restrained that do not impose a greater restraint than is
necessary to protect the rights of SciClone purchased from Alpha pursuant to
this Agreement. Whenever possible, each provision of this Section 8.6 shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Section 8.6 shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
whether remaining provisions of this Section 8.6. If any provision of this
Section 8.6 shall, for any reason, be judged by any court of competent
jurisdiction to be invalid or unenforceable, such judgment shall not affect,
impair or invalidate the remainder of this Section, but shall be confined in its
operation to the provision of this Section 8.6 directly involved in the
controversy in which such judgment shall have been rendered. In the event that
the provisions of this Section 8.6 should ever be deemed to exceed the time or
geographic limitations permitted by applicable laws, then such provision shall
be reformed to a maximum time or geographic limitations permitted by applicable
law.
8.7 Bankruptcy. Alpha agrees that it will not, within
180 days after the Closing Date, file for any federal bankruptcy proceeding or
any similar state law proceeding without first giving to SciClone at least
thirty (30) days prior written notice. In the event any federal or state
bankruptcy proceeding is filed against Alpha within such period, Alpha hereby
agrees to so notify SciClone in writing within three (3) business days after
Alpha receives notice thereof.
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9. Termination and Default
9.1 Termination. If (i) the Closing has not occurred by
April 30, 1998, or (ii) the stockholders of Alpha fail to approve the
transactions contemplated by this Agreement at the Stockholders Meeting, then
either Alpha or SciClone, if it is not then in default of its obligations under
this Agreement, may terminate this Agreement any time thereafter upon delivering
to the other party a written notice of termination. Until any such notice of
termination is given, the parties shall continue to use their reasonable,
diligent and good faith efforts to cause the closing conditions to be satisfied
and the Closing to occur as soon as practical.
9.2 Default. If prior to the Closing any party is in
default of its obligations under this Agreement, and such default is not cured
within thirty (30) days after written notice of default is given to the
defaulting party by the other party to this Agreement, then the non-defaulting
party shall be entitled to terminate this Agreement by delivering to the
defaulting party a written notice of termination.
9.3 Effect of Termination. In the event of any
termination of this Agreement pursuant to Section 9.2, the non-defaulting party
shall be entitled to pursue any and all remedies at law or equity available
against the defaulting party. If this Agreement is terminated pursuant to
Section 9.1, then neither party shall have any further rights or obligations
under this Agreement, except that the provisions in Sections 2(f), 6.3, 8.2, 9.3
and 14 hereof shall survive such termination of this Agreement and remain in
effect as applicable. The provisions in Section 2(f) shall survive and remain in
effect after any termination of this Agreement for any reason.
10. Survival of Representation and Warranties The representations
and warranties made by the parties in this Agreement shall survive the Closing
and shall in no manner be limited by any investigation of the subject matter
thereof made by or on behalf of either party or by the satisfaction of any
condition to the Closing.
11. Indemnification by Alpha
11.1 Provided the Closing occurs, Alpha shall indemnify
and save harmless SciClone, its stockholders, directors, officers and agents
from and against any and all losses, liabilities, expenses (including, without
limitation, fees and disbursements of counsel and expenses of investigation),
claims, liens or other obligations whatsoever (hereinafter individually a
"Claim" or collectively "Claims") incurred by any such indemnified party as a
result of (i) the breach of any representation or warranty made by Alpha in this
Agreement or otherwise made in writing and delivered by Alpha to SciClone in
connection with the transactions contemplated hereby; and/or (ii) any failure of
Alpha to perform or comply with any of its covenants and agreements set forth
herein or in any other document executed in connection with the transactions
contemplated hereby. No indemnification obligation shall arise hereunder unless
and until the aggregate amount of Claims hereunder exceeds $50,000 (the
"Basket"). In the event that the amount of all Claims exceeds
11
14
the Basket, SciClone shall be entitled to collect the full amount of all Claims
(including the Basket Claims).
11.2 The following are conditions precedent to any
liability of Alpha under Section 11.1:
(a) SciClone shall give Alpha prompt written
notice of any event or assertion of which it has knowledge concerning any Claims
and as to which it may request indemnification.
(b) SciClone shall cooperate with and assist
Alpha in defending or settling the Claims.
(c) SciClone shall permit Alpha to control the
defense or settlement of the Claims, including selection of counsel to represent
SciClone (so long as such counsel shall be reasonably satisfactory to SciClone
and that such counsel shall diligently and effectively defend the Claim).
SciClone may maintain separate counsel at its own cost and expense in connection
with any Claim.
(d) In no event shall SciClone settle a Claim
without the prior written approval of Alpha, which approval shall not be
unreasonably withheld.
11.3 The indemnification obligations of Alpha under
Section 11.1 shall apply to any Claim as to which notice has been given pursuant
to Section 11.2(a) prior to the third anniversary of the Closing Date, and shall
continue in full force and effect as to any such Claim until such Claim has been
settled by mutual agreement of the parties concerned, by arbitration in
accordance with the provisions of this Agreement or, in the event of a Claim
resulting from legal action by a third party, by the final order, decree or
judgment of a court of competent jurisdiction in the United States of America
(the time for appeal having expired with no appeal having been taken).
12. Indemnification by SciClone
12.1 Provided the Closing occurs, SciClone shall indemnify
and save harmless Alpha, it stockholders, directors, officers and agent from and
against any and all losses, liabilities, expenses (including, without
limitation, fees and disbursements of counsel and expenses of investigation),
claims, liens or other obligations whatsoever (hereinafter individually a
"Claim" or collectively "Claims") incurred by any such indemnified party as the
result of (i) the breach of any representation or warranty made by SciClone in
this Agreement or otherwise made in writing and delivered by SciClone to Alpha
in connection with the transactions contemplated hereby; and/or (ii) any failure
of SciClone to perform or comply with any of its covenants and agreements set
forth herein or in any other document executed in connection with the
transactions contemplated hereby. No indemnification obligation shall arise
hereunder unless and until the aggregate amount of Claims hereunder exceeds
$50,000 (the "Basket"). In the event that the amount
12
15
of all Claims exceeds the Basket, Alpha shall be entitled to collect the full
amount of all Claims (including the Basket Claims).
12.2 The following are conditions precedent to any
liability of SciClone under Section 12.1:
(a) Alpha shall give SciClone prompt written
notice of any event or assertion of which it has knowledge concerning any Claims
and as to which it may request indemnification.
(b) Alpha shall cooperate with and assist
SciClone in defending or settling the Claims.
(c) Alpha shall permit SciClone to control the
defense or settlement of the Claims, including selection of counsel to represent
Alpha (so long as such counsel shall be reasonably satisfactory to Alpha and
that counsel shall diligently and effectively defend the Claim). Alpha may
maintain separate counsel at its own cost and expense in connection with any
Claim.
(d) In no event shall Alpha settle a Claim
without the prior written approval of SciClone, which approval shall not be
unreasonably withheld.
12.3 The indemnification obligations of SciClone under
Section 12.1 shall apply to any Claim as to which notice has been given pursuant
to Section 12.2(a) prior to the third anniversary of the Closing Date, and shall
continue in full force and effect as to any such Claim until such Claim has been
settled by mutual agreement of the parties concerned, by arbitration in
accordance with the provisions of this Agreement or, in the event of a Claim
resulting from legal action by a third party, by the final order, decree or
judgment of a court of competent jurisdiction in the United States of America
(the time for appeal having expired with no appeal having been taken).
13. Termination of 1994 Agreement. Effective as of the time of
the Closing of this Agreement, the 1994 Agreement shall terminate, except that
the following provisions of, or obligations under, the 1994 Agreement shall
remain in full force and effect in accordance with their terms under the 1994
Agreement (except as otherwise provided in this Article 13) notwithstanding the
execution, delivery and performance of this Agreement.
13.1 Article 1 (Definitions) insofar as such definitions
relate to any of the other surviving provisions of the 1994 Agreement.
13.2 All obligations of SciClone to the extent still
applicable, under Sections 2.5.3, 4.1, 4.2, 4.3, 4.4, 5.3 and 5.4.
13
16
13.3 Article 6 (Standstill Agreements), except that Alpha
Owned Shares (as defined by Section 6.3.1 of the 1994 Agreement) shall not
include the Initial Shares or any Additional Shares.
13.4 Article 7 (Mutual Release).
13.5 Article 8 (Confidentiality).
13.6 Section 11.1.1 (Termination).
13.7 Sections 13.3, 13.4, and 13.6 (Indemnification).
13.8 Article 14 (Audit).
13.9 Article 16 (Miscellaneous).
14. General Provisions.
14.1 Expenses. Except as otherwise provided in this
Agreement and the Ancillary Documents, the parties will each pay their own
legal, accounting and other professional expenses incurred in connection with
the transactions contemplated hereby.
14.2 Brokers. Each party represents and warrants to the
other that no person has acted as a broker, a finder or in any similar capacity
in connection with the transactions contemplated by this Agreement and the
Ancillary Documents. Each party shall indemnify the other against, and agrees to
hold the other harmless from, all liabilities and expenses (including reasonable
attorneys' fees and expenses) in connection with any claim by anyone against the
other for compensation as a broker, a finder or in any similar capacity, by
reason of services allegedly rendered to the indemnifying party in connection
with the transactions contemplated hereby.
14.3 Entire Agreement. This Agreement (including the
Exhibits hereto) and the Ancillary Documents contain the entire agreement
between the parties with respect to the matters contemplated hereby, and all
prior negotiations, understandings and agreements between them are superseded by
this Agreement (except to the extent otherwise provided herein) and the
Ancillary Documents.
14.4 Assignment. Neither this Agreement nor the Ancillary
Documents or any right of any party hereunder or thereunder may be assigned
without the prior written consent of the other party, which consent shall not be
unreasonably withheld; provided, however, that either party may assign its
rights under this Agreement or the Ancillary Documents, without the consent of
the other party, to any entity that acquires such party through a merger,
consolidation, or purchase of all or substantially all of its stock or assets.
This Agreement and the Ancillary Documents bind and inure to the benefit of each
party's successors and permitted assigns.
14
17
14.5 Notices. Any notice or other communication required
or permitted to be given under this Agreement or the Ancillary Documents shall
be in writing and will be deemed effective (i) when delivered in person, or (ii)
when sent by confirmed facsimile, or (iii) on the fifth day after the day on
which mailed by first class mail from within the United States of America, and
addressed as provided herein, or (iv) on the first business day following
delivery to a national overnight courier service and addressed as provided
herein. Any such notice or other communication sent by mail, courier or
facsimile shall be addressed as follows, unless and until a different address is
designated by the party by notice as provided herein:
If to SciClone SciClone Pharmaceuticals, Inc.
000 Xxxxxxxx Xxxxxx Xxxx. #000
Xxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxx
Facsimile No.: (000) 000-0000
With a copy to: Xxxx Xxxx Xxxx & Freidenrich
0000 Xxxxxxxxx Xx., Xxxxx 0000
Xxx Xxxxx, XX 00000
Attn: Xxxx Xxxx, Esq.
Facsimile No.: (000) 000-0000
If to Alpha: Alpha 1 Biomedicals, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxxx, Ph.D.
Facsimile No.: (000) 000-0000
With a copy to: Xxxxxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: D. Xxxxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
14.6 Governing Law. This Agreement and the Ancillary
Documents will be governed by, and construed under, the laws of the State of
California.
14.7 Amendment. This Agreement and the Ancillary
Documents may be amended only by a document in writing signed by the parties
hereto or thereto.
14.8 Counterparts. This Agreement or any Ancillary
Documents may be executed in two counterparts, each of which will be deemed an
original, but all of which together will constitute one and the same agreement.
Signatures may be transmitted by facsimile, and this Agreement or any Ancillary
Documents will be fully binding once the signatures of both parties have been so
transmitted.
15
18
14.9 Public Disclosure. No party shall disclose the terms
of this Agreement or any Ancillary Documents without the written consent of the
other party, except as required by law or pursuant to the disclosure obligations
under the rules and regulations of the SEC. SciClone shall file with the SEC a
request for confidential treatment as to various confidential provisions in this
Agreement, and Alpha shall file with the SEC a request for the same confidential
treatment, except to the extent that Alpha's legal counsel opines in writing
that it is legally improper for Alpha to make such a request that such
provisions be given confidential treatment, but subject to any ultimate final
decision made by the SEC as to confidentiality and disclosure. The parties
hereby consent to the disclosure as set forth in the press release attached
hereto as Exhibit L.
14.10 Further Assurances. Each party agrees to execute
such further instruments and documents and to do such further acts as may be
reasonably requested by any other party to carry out the transactions
contemplated by this Agreement and such Ancillary Document.
14.11 Headings. Captions and headings used herein are for
convenience of reference only and are not a part of this Agreement or any
Ancillary Documents and shall not be used in constructing this Agreement or any
Ancillary Documents.
14.12 Waiver. No waiver of any provision of this Agreement
or any Ancillary Documents shall be binding unless executed in writing by the
party making the waiver, and no such waiver shall constitute a waiver of any
other provision of this Agreement or any Ancillary Documents, whether or not
similar, nor shall any waiver constitute a continuing waiver unless so stated in
any such writing.
14.13 Parties in Interest. Nothing in this Agreement or
any Ancillary Document, whether express or implied, is intended to confer any
rights or remedies under or by reason of this Agreement or such Ancillary
Documents on any persons other than the parties hereto and thereto and their
respective successors and permitted assigns (and their affiliates and other
persons as to the indemnification specified in Sections 11 and 12) of this
Agreement and Article 2 of the Stock Rights Agreement. Nothing in this Agreement
or any Ancillary Document is intended to relieve or discharge the obligation or
liability of any third person to either party to this Agreement or any Ancillary
Documents, nor shall any provision give any third person any right of
subrogation or action over against either party to this Agreement or any
Ancillary Documents.
14.14 Recovery of Litigation or Arbitration Costs. If any
legal action, arbitration or other proceeding is brought for the enforcement of
this Agreement or any Ancillary Documents, or because of an alleged dispute,
breach, default, or misrepresentation in connection with any of the provisions
of this Agreement, the successful or prevailing party shall be entitled to
recover from the other party reasonable attorneys' fees and other costs incurred
in that action or proceeding, in addition to any other relief to which it or
they may be entitled, as may be decided by the arbitrators pursuant to Section
14.17 hereof.
16
19
14.15 Severability. Each term, covenant, condition or
provision of this Agreement and each Ancillary Documents shall be viewed as
separate and distinct, and in the event that any such term, covenant, condition
or provision shall be held to be invalid by a proper court or in an arbitration
proceeding, then the remaining provisions shall continue in full force and
effect, so long as the essential benefits of this Agreement and each Ancillary
Documents will still be realized by the parties.
14.16 Time of Essence. Time is of the essence in the
performance of all obligations under this Agreement and each Ancillary
Documents.
14.17 Arbitration. Any controversy or claim arising out of
or relating to this Agreement or any Ancillary Documents, including without
limitation any breach thereof, and the indemnification provisions hereof, shall
be settled by binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association ("AAA"), and the procedures set
forth below. In the event of any inconsistency between the Rules of AAA and the
procedures set forth below, the procedures set forth below shall control.
Judgment upon the award rendered by the arbitrators may be enforced in any court
having jurisdiction thereof.
(a) Location. The location of the arbitration
(i) shall be in the County of Santa Clara, California, if the proceeding is
initiated by Alpha, and (ii) shall be in the County of Xxxxxxxxxx, Maryland, if
the proceeding is initiated by SciClone.
(b) Selection of Arbitrators. The arbitration
shall be conducted by a panel of three neutral arbitrators who are independent
and disinterested with respect to the parties, this Agreement, and the outcome
of the arbitration. Each party shall appoint one neutral arbitrator, and the two
arbitrators so selected shall then select the third arbitrator. If one party has
given written notice to the other party as to the identity of the arbitrator
appointed by the party, and the party thereafter makes a written demand on the
other party to appoint its designated arbitrator within the next ten days, and
the other party fails to appoint its designated arbitrator within ten days after
receiving said written demand, then the arbitrator who has already been
designated shall appoint the other two arbitrators.
(c) Discovery. Unless the parties mutually
agree in writing to additional pre-hearing discovery, the only pre-hearing
discovery shall be (a) reasonably limited production of relevant and
non-privileged documents, and (b) the identification of witnesses to be called
at the hearing, which identification shall give the witness' name, general
qualifications and position, and a brief statement as to the general scope of
the testimony to be given by the witness. The arbitrators shall decide any
disputes and shall control the process concerning these pre-hearing discovery
matters. Pursuant to the Rules of AAA, the parties may subpoena witnesses and
documents for presentation at the hearing.
(d) Case Management. Prompt resolution of any
dispute is important to both parties; and the parties agree that the arbitration
of any
17
20
dispute shall be conducted expeditiously. The arbitrators are instructed and
directed to assume case management initiative and control over the arbitration
process (including scheduling of events, pre-hearing discovery and activities,
and the conduct of the hearing), in order to complete the arbitration as
expeditiously as is reasonably practical for obtaining a just resolution of the
dispute.
(e) Remedies. The arbitrators shall follow and
apply applicable law. The arbitrators shall grant such legal or equitable
remedies and relief in compliance with applicable law that the arbitrators deem
just and equitable, to the same extent that remedies or relief could be granted
by a state or federal court, provided however, that no punitive damages may be
awarded. No court action may be maintained seeking punitive damages. The
decision of any two of the three arbitrators appointed shall be binding upon the
parties and shall be enforceable in any court of competent jurisdiction.
(f) Expenses. The expenses of the arbitration,
including the arbitrators' fees, expert witness fees, and attorney's fees, may
be awarded to the prevailing party, in the discretion of the arbitrators, or may
be apportioned between the parties in any manner deemed appropriate by the
arbitrators. Unless and until the arbitrators decide that one party is to pay
for all (or a share) of such expenses, both parties shall share equally in the
payment of the arbitrators' fees as and when billed by the arbitrators.
(g) Construction. This Agreement and the
Ancillary Documents shall be construed and interpreted in accordance with the
plain meaning of the entirety of the provisions of this Agreement and the
Ancillary Documents, consistent with the overall intent and spirit of the
parties and the entire Agreement and the Ancillary Documents. As both parties
and their legal counsel have participated in the negotiations and the drafting
for this Agreement and the Ancillary Documents, any ambiguity or inconsistency
in any of the provisions of this Agreement and the Ancillary Documents shall not
be construed against either party as the draftsman of this Agreement and the
Ancillary Documents.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date set forth above.
SCICLONE:
SciClone Pharmaceuticals, Inc.,
a California corporation
By:
--------------------------------
ALPHA:
Alpha 1 Biomedicals, Inc.,
a Delaware corporation
By:
--------------------------------
18
21
INDEX TO EXHIBITS
Exhibit Description
------- -----------
A Alpha Owned Patent Rights
A-1 Owned 100% by Alpha
A-2 Owned Jointly with Others
B Alpha Licensed Patent Rights
C Alpha IP Rights Agreements
D Form of Stock Rights Agreement
E Form of Promissory Note and Security Agreement
F Alpha Representations and Warranties
G Schedule of Exceptions to Alpha Representations and Warranties
H SciClone Representations and Warranties
I Schedule of Exceptions to SciClone Representations and Warranties
J No Action Commitments from Alpha's Creditors
K Press Release
19
22
EXHIBIT A
Alpha Owned Patent Rights
1. Patent Rights Owned 100% by Alpha:
See Exhibit A-1
2. Patent Rights Owned by Alpha Jointly with Others:
See Exhibit X-0
00
Xxxxxxx X-0
XXXXX RIGHTS ACQUISITION AGREEMENT
ALPHA OWNED PATENT RIGHTS
(Owned 100% by Alpha)
APPLICATION PATENT
SUBJECT COUNTRY NUMBER NUMBER APPLICANT(S)
-------------------------------------------------------------------------------------------
Solid Phase Austria 86302731 E 91 130 B Alpha
Process for Belgium 86302731 0 200 404 Alpha
Synthesizing Canada 506,495 1,271,300 Alpha
Peptides EPO 86302731.4 0200404 Alpha
Germany 86302731 36 88 632 T2 Xxxxx
Xxxxxx 00000 78479 Xxxxx
Xxxxxx 00000 00000 Xxxxx
Xxxxx 86302731 0 200 404 Alpha
Luxembourg 86302731 0 200 404 Alpha
Sweden 86302731 0 200 404 Alpha
United States 06/849,835 4,855,407 Wang
Switzerland 82302731 0 200 404
Germany 86302731 0 200 404
France 86302731 0 200 404
Great Britain 86302731 0 200 404
Hong Kong 0 200 404 10/1977
Xxxxx 00000/00
Xxxxxxxxxxx 86302731 0 200 404
United States 849,835 4,855,407
Solid Phase Process Taiwan 78103481 44023 Alpha
for Synthesizing
Thymosin Alpha 1 Belgium 89304584.9 0 341 935
Switzerland 89304584.9 0 341 935
Germany 89304584.9 P68926178
European 89304584.9 0 341 935
Great Britain 89304584.9 0 341 935
Xxxxx 000000/00
Xxxxx Xxxxx 00-0000
X.X. 00/000,000 Xxxxxxxxx
Xxxxxx Xxxxxx 07/684,520 5,610,272
United States 08/695,772
Analogs of Taiwan 83100771 Alpha
Thymosin Xxxxx 0 Xxxxxx Xxxxxx 08/188,232 Wang
Argentina 330,747
Canada 2,181,477
Xxxxx 000-00
00
Xxxxxxxx 95.002.305
European 95907463.4
Indonesia P-950140
Xxxxx 000000/0000
Xxxxxxxx PI 9500180
Peru 259687
Philippines 00000
Xxxxxxxx 025289
Taiwan 83100771
Xxxxxxxxx 000-00
XXX XX00/00000
Xxxxx Xxxxxx 95/0669 95/0669
Thymosin Alpha 1 China 93119346 Alpha
derivatives Columbia 94003132 Alpha
Ecuador 94-1031 PI96-918 Alpha
Indonesia P0940180 Alpha
Malaysia PI9400180 Xxxxx
Xxxxxx 000000 Alpha
PCT 94/01249 (Abandoned) Alpha
Xxxx 000000 Xxxxx
Xxxxxxxxxxx 00000 Xxxxx
Xxxxx Xxxxxx 94/0745 94/0745 Alpha
Taiwan 82104001 Xxxxx
Xxxxxxxx 000000 Alpha
United States (FWC) 08/246572 5,512,656 Wang
United States 08/013,087 ABANDONED
Venezuela 000/00 Xxxxx
Xxxxxxxxx xx Xxxxxx Xxxxxx 917,059 4,148,788 Wang
Thymosin Alpha 1
[Asn(2)] Thymosin United States 871,563 4,116,951 Wang
Alpha 1 and
Analogs thereof
25
Exhibit A-2
ALPHA RIGHTS ACQUISITION AGREEMENT
ALPHA OWNED PATENT RIGHTS
(Owned Jointly by Alpha and Others)
APPLICATION PATENT
SUBJECT COUNTRY NUMBER NUMBER APPLICANT(S)
----------------------------------------------------------------------------------
Composition and South Africa 92/6964 92/6964 Xxxxxxxx
Method of Treating Mutchnick
Hepatitis C Xxxxxxx
Argentina 330,747
Indonesia P-004712 Xxxxxxxx
Xxxxxxxxx
Xxxxxxx
Malaysia PI 9201633 Xxxxxxxx
Xxxxxxxxx
Xxxxxxx
Xxxxxx 000000 Xxxxxxxx
Mutchnick
PCT PCT/US92/07556 Alpha
Xxxxxxxxx
Xxxxxxx
PCT-Australia 26447/92 667327 Alpha
Xxxxxxxxx
Xxxxxxx
PCT-Canada 2119006 Alpha
Xxxxxxxxx
Xxxxxxx
PCT-Czechoslovakia PV551-94 Alpha
Xxxxxxxxx
Xxxxxxx
PCT-EPO* 929119977.6 0603305 Alpha
*(Austria, Belgium, Switzerland, Denmark, Germany, Spain, France, Mutchnick
United Kingdom, Greece, Ireland, Italy, Luxemberg, Netherlands Xxxxxxx
and Lichenstein)
26
PCT-Finland 941133 Alpha
Xxxxxxxxx
Xxxxxxx
PCT-Hungary P9400758 Alpha
Xxxxxxxxx
Xxxxxxx
PCT-Japan 506083/1993 Alpha
Mutchnick
PCT-Norway P941310 Alpha
(Abandoned) Xxxxxxxxx
Xxxxxxx
PCT-Romania 94-00409 Alpha
Xxxxxxxxx
Xxxxxxx
PCT-Russia Fed. 94022480.14 Alpha
Xxxxxxxxx
Xxxxxxx
PCT-South Korea 94/0700603 Alpha
Xxxxxxxxx
Xxxxxxx
Philippines 44927 Xxxxxxxx
Singapore 9606295-5 Xxxxxxxxx
Xxxxxxx
Taiwan 81101971 NI66154 Xxxxxxxx
Mutchnick
United States 07/759,544 Xxxxxxxx
ABANDONED Mutchnick
Composition and United States 08/145,660 Xxxxxxxx
Method of treating Mutchnick
Hepatitis C.
(Refiling on 11/4/93
of 07/759,544 filed
on 9/13/91)
27
Method and Composition Indonesia P940716 Alpha
for Treatment of Patients Xxxxx State
Having Decompensated Japan 279386/1993 Xxxxxxxx
Liver Disease Mutchnick
Malaysia PI9401152 Alpha
Xxxxx State
Mexico 943453 Alpha
Xxxxx Xxxxx
XXX XX00/00000 Xxxxx
Xxxxx Xxxxx
Xxxxxxxxxxx 48239 Xxxxx
Xxxxx Xxxxx
Xxxxxxxxx 0000000-0
Xxxxx Xxxxxx 94/3226 Xxxxxxxx
(Abandoned)
Mutchnick
Taiwan 82109337 Xxxxxxxx
Mutchnick
U.S. 08/313,160
Xxxxxxxxx 00000/00
Xxxxxx 2,175,337
Europe 94901265.2 (BE,
DE, DK, ES, Fr,
GB, Gr, It, PT,
SE)
Korea 96-702942
Netherlands 94901265.2
Norway P961775
New Zealand 258326
Method of Treating China 931139345.1 Xxxxxxxx
Hepatitis C in Non- Mutchnick
Responders, to Japan 331601/1993 Alpha
Interferon Treatment Xxxxx State
(CIP of 07/759,544) Malaysia PI9400381 Alpha
Xxxxx State
Mexico 941675 Alpha
Xxxxx Xxxxx
XXX XX00/00000 Xxxxx
Xxxxx Xxxxx
Xxxxxxxxxxx 47868 Alpha
Xxxxx State
South Africa 94/1499 00/0000 Xxxxx
Xxxxx Xxxxx
Xxxxxx Xxxxxx 08/027,500 Xxxxxxxx
Mutchnick
Xxxxxxxxx 00000/00
Xxxxxx 2,157,479
European 94910226.3
Finland 954127
Korea 95-703297
Norway P953473
Singapore 9605604-9
28
Thymosin alpha 1 for the PCT US94/12106
treatment of autoimmune
hepatitis Taiwan 82108901 NI071799 Xxxxxxxx
Mutchnick
United States 08/141,013 5,468,729 Xxxxxxxx
Mutchnick
Indonesia P-941820
Japan
Mexico 9408106
Malaysia PI 9402830
Philippines 49229
Xxxxxxxxx 0000000-0
Xxxxxxxx 024237
South Africa 94/8252 00/0000
Xxxxxxxx Xxxxx 0 Xxx Xxxxxxx 185,519 185,519 Alpha
Texas
South Africa 77/5976 77/5976 Alpha
Texas
29
EXHIBIT B
ALPHA RIGHTS ACQUISITION AGREEMENT
Alpha Licensed Patent Rights
(Patent Rights Licensed to Alpha)
APPLICATION PATENT
SUBJECT COUNTRY NUMBER NUMBER APPLICANT(S)
--------------------------------------------------------------------------------------
Immunoassay of United States Not Known 4,427,783 Xxxxxx
Thymosin Alpha 1 Nishikawa
ABANDONED Spiegel
Xxxxxxxxx
Process for United States 300,324 4,374,197 Horecker
Thymosin Alpha 0
XXXXXXXXX
Xxxxxxxxxxxxxxxx Xxxxxx Xxxxxx Not Known 4,264,571 Xxxxxxxxx
of Thymosin Alpha 1 XxXxxxx
[Improved] Radio- United States 139,944 4,339,427 Xxxxxxxxx
immunoassay of XxXxxxx
Thymosin Alpha 1 Wang
Thymosin Alpha 1 Argentina 269752 214903 Not Known
Australia 296699/77 514,996 Not Known
Austria A 7658/77 362,493 Not Known
Belgium 182108 860169 Not Known
Canada 289510 1,101,842 Not Known
Chile 738/77 30,986 Not Known
Xxxxxxx 0000/00 149,094 Not Known
EPO 84103670.0 Not Known Not Known
EPO 84103671.0 Not Known Not Known
Finland 773221 56317 Not Known
France 7732259 7732259 Not Known
Germany P2748213.9 2748213 Not Known
Federal Republic
Great Britain 45001/77 1,590,457 Not Known
Hungary HO 2021 172,798 Not Known
Iran 23092 21330 Not Known
Ireland 2191/77 45819 Not Known
Israel 53218/77 53218 Not Known
Italy 29020/77 1,195,254 Not Known
Italy Not Known 1113134 Not Known
Japan 127666/77 1,345,074 Not Known
Luxembourg 78395 78395 Not Known
Monaco 1268/77 126878-1167 Not Known
Netherlands 7711814 188,699
New Zealand 185,519 185,519 Not Known
Xxxxxx 0000/00 143,346 Not Known
Xxxx 00000/00 2,001 Not Known
Philippines 20361/77 13,961 Not Known
30
Portugal 67204 67204 Not Known
Singapore Not Known 1220/93 Not Known
South Africa 5976/77 77/5976 Not Known
South Korea 2475/77 12019 Not Known
Spain 463588 463,588 Not Known
Sweden 7712071-5 7712071 Not Known
Xxxxxxxxxxx 00000/00 633,258 Not Known
United States 766,638 4,079,127 Xxxxxxxxx
Low
Xxx
Xxxx
Uruguay 20517 11,714 Not Known
Xxxxxxxxx 0000/00 Not Known Not Known
Yugoslavia P 2573/77 Not Known Not Known
31
EXHIBIT C
Alpha IP Rights Agreements
1. Commercial Text Agreement, dated September 15, 1982, between Roche-US
and Alpha, as amended by an Amendment to Commercial Text Agreement, effective
August 7, 1984, a letter agreement dated September 18, 1986, a letter agreement
dated September 22, 1986, an Agreement effective December 21, 1989, and an
Agreement effective August 6, 1991, as related to all Thymosin Alpha I
technology and rights; but excluding from the assignment to SciClone all
technology and rights related to Thymosin Beta 3, Thymosin Beta 4 and any other
non-Thymosin Alpha I technology.
2. License Agreement, effective as of August 5, 1986, between Roche-Basle
and Alpha, as amended by a letter agreement date March 4, 1991.
3. License Agreement (Japan), effective as of October 21, 1988, between
Roche-Basle and Alpha, as amended by a letter agreement dated March 4, 1991, and
a letter agreement dated March 5, 1982.
4. License Agreement (Other Countries), effective as of October 28, 1988,
between Roche-Basle and Alpha, as amended by a letter agreement dated March 4,
1991, and a letter agreement dated March 5, 1992.
32
EXHIBIT D
Stock Rights Agreement
This Agreement, dated as of _____________________, 1998, is
entered into between Alpha 1 Biomedicals, Inc. ("Alpha") and SciClone
Pharmaceuticals, Inc. ("SciClone"). Certain terms used in this Agreement are
defined in Section 9 hereof. Terms used in this Agreement that are not defined
herein have the same meaning as defined in an Acquisition Agreement, dated as of
December 17, 1997, between Alpha and SciClone.
1. Registration Rights.
1.1 Within 30 days following after the Closing Date,
SciClone shall file with the SEC a registration statement (the "Registration
Statement") on Form S-3 (or any successor form to Form S-3) under the Securities
Act for a public resale by Alpha of the SciClone Common Stock acquired by Alpha
pursuant to Section 2 of the Acquisition Agreement (the "Covered Shares").
SciClone shall use its Best Efforts to cause the Registration Statement to be
declared effective (the "S-3 Effective Date") within 120 days after the Closing
Date and to remain effective for the period (the "Effective Period") ending on
the first to occur of (i) the date the Covered Shares may be sold by Alpha
pursuant to the provisions of paragraph (k) of Rule 144 under the Securities
Act, or (ii) the date Alpha has resold all of the Covered Shares.
1.2 In connection with the registration provided for in
Section 1.1, SciClone shall at its expense:
(a) Furnish to Alpha at least three (3) business
days prior to the filing thereof, a copy of the Registration Statement, any
related prospectus, and any amendments or supplements thereto, that SciClone
proposes to file with the SEC (including copies of all exhibits thereto). If
Alpha shall reasonably object to the form or substance of any such documents,
SciClone shall not file such document until Alpha's objections have been
resolved.
(b) Prepare and file with the SEC such
amendments and supplements to the Registration Statement and each prospectus
used in connection with the Registration Statement, including the filing of all
required reports under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition all of the Covered Shares and to
keep the prospectus continuously current for the entire Effective Period;
(c) Furnish Alpha with a copy of the
Registration Statement, and all amendments thereto, as and when filed by
SciClone with the SEC.
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(d) Furnish to Alpha such number of copies of a
prospectus, including a preliminary prospectus, and any necessary amendments and
supplements thereto, each prepared in conformity with the requirements of the
Securities Act, and such other documents as Alpha may reasonably request in
order to facilitate the disposition of the Covered Shares;
(e) Use Best Efforts to register or otherwise
qualify the Covered Shares for sale under such securities or Blue Sky laws of
such jurisdictions as shall be reasonably requested by Alpha; provided, however,
that SciClone shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such jurisdictions;
(f) Notify Alpha promptly (but in any event
within two business days) (i) when the Registration Statement, or any
post-effective amendment thereto, has been declared effective by the SEC, (ii)
of the issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceeding for such purpose,
(iii) of the receipt by SciClone of any notification with respect to the
suspension of the qualification, or exemption from qualification, of the Covered
Shares for sale in any jurisdiction, and (iv) of the happening of any event, of
the existence of any condition, or of any information becoming known to SciClone
that (A) makes any statement made in the Registration Statement, in any
prospectus or prospectus supplement, or in any document incorporated or deemed
to be incorporated therein by reference, untrue in any material respect or (B)
requires the making of any change in, or amendments or supplements to, the
Registration Statement, any prospectus or prospectus supplement, or any document
incorporated or deemed incorporated therein by reference, so that it will 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
not misleading;
(g) Cause all of the Covered Shares to be listed
on each securities exchange and each quotation system on which securities of the
same class issued by SciClone are then listed;
(h) Use its Best Efforts to prevent the issuance
of any order (i) suspending the effectiveness of the Registration Statement,
(ii) preventing or suspending the use of any related prospectus or prospectus
supplement, or (iii) suspending the qualification (or exemption from
qualification) of any of the Covered Shares for sale in any jurisdiction, and,
if any such order is issued, use its Best Efforts to obtain the withdrawal of
any such order as soon as practicable; and
(i) Upon the occurrence of any event referred to
in Section 1.2(f)(iv), as promptly as practicable (but in no event later than 10
calendar days) prepare and file with the SEC, (A) a post-effective amendment to
the Registration Statement, (B) a supplement or amendment to any related
prospectus or prospectus supplement or any document incorporated or deemed to be
incorporated therein by reference, or (C) any other required document, so that
the prospectus with respect to the Covered Shares will not contain an untrue
statement of a material fact or omit to state any material fact
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required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
1.3 SciClone shall pay all costs, fees and expenses
associated with the SciClone's performance of or compliance with this
Agreement, including without limitation, all registration fees, the costs of
compliance with the state securities or Blue Sky laws, the fees and
disbursements of SciClone's legal counsel and accountants, and all printing
expenses; provided, however, that SciClone shall not be required to pay any
underwriting commissions or similar charges or the legal fees and disbursements
of counsel for Alpha.
2. Indemnification.
2.1 SciClone agrees to indemnify and hold harmless Alpha,
its officers, directors, agents and employees and each Person, if any, who
control any such Person within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act (a "Control Person"), against
all Damages caused by, arising out of, or based upon (i) any failure of SciClone
to comply with any and all securities laws, rules or regulations, (ii) any
breach by SciClone of its obligations under this Agreement, or (iii) any untrue
or alleged untrue statement of material fact contained in the Registration
Statement, any related prospectus or preliminary prospectus or any amendment
thereof or supplement thereto, or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as any such untrue statement or omission was
caused by or contained in any information furnished in writing to SciClone by
Alpha expressly for use therein or by Alpha's failure to deliver a copy of a
current prospectus (as amended or supplemented) after SciClone has furnished
Alpha with a sufficient number of copies for such purpose.
2.2 Alpha shall furnish to SciClone in writing such
information and affidavits as SciClone reasonably requests for use in connection
with the preparation of the Registration Statement and any related prospectus or
preliminary prospectus, or any amendment thereof or supplement thereto, and
agrees to indemnify SciClone, its directors and officers and each Control Person
of SciClone against all Damages resulting from any untrue or alleged untrue
statement of material fact contained in the Registration Statement any related
prospectus or preliminary prospectus, or any amendment thereof or supplement
thereto, or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
only to the extent that such untrue statement or omission is contained in any
information or affidavit so furnished in writing by Alpha expressly for use
therein.
2.3 Any Person entitled to indemnification hereunder
shall (i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification and (ii) unless in such indemnified
Person's reasonable judgment a conflict of interest between such indemnified
Person and indemnifying party exists with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
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satisfactory to the indemnified Person. If such defense is assumed, the
indemnifying party will not be subject to any liability for any consent to the
entry of any judgment or any settlement made by the indemnified Person without
its consent (but such consent will not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel (other than local counsel, as necessary) with respect to such claim for
all indemnified Persons, unless in the reasonable judgment of any indemnified
Person a conflict of interest exists between such indemnified Person and any
other indemnified Person with respect to such claim. The indemnifying party
shall not, without the prior written consent of the indemnified Person, effect
any settlement or compromise of any pending or threatened proceeding in respect
of which such indemnified Person is or could have been a party, and indemnity
could have been sought hereunder by such indemnified Person, unless such
settlement (i) includes an unconditional written release of such indemnified
Person, in form and substance reasonably satisfactory to such indemnified
Person, from all liability on the claims that are the subject matter of such
settlement, (ii) does not include any statement as to an admission of fault,
culpability or failure to act by or on behalf of any indemnified Person, and
(iii) the sole relief provided consists of monetary damages that are paid in
full by the indemnifying party.
2.4 Contribution.
(a) To the extent that the indemnification
provided for in this Section 2 is for any reason unavailable to, or insufficient
to hold harmless, an indemnified Person in respect of any losses, claims,
damages or liabilities, then the indemnifying party, in lieu of indemnifying
such indemnified person hereunder and in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified
Person as a result of such losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative fault of indemnifying party
on the one hand and the indemnified Person on the other hand in connection with
the statements or omissions or alleged statements or omissions that resulted in
such losses, claims, damages or liabilities (or actions in respect thereof). The
relative fault of the indemnifying party and the indemnified Person shall be
determined by reference to, among other things, whether the untrue statement or
a material fact or the omission or alleged omission to state a material fact
relates to information supplied by SciClone on the one hand or Alpha on the
other, their relative intent, knowledge, access to information, and opportunity
to correct or prevent such statement or omission, and any other equitable
considerations appropriate in the circumstances.
(b) The parties agree that it would not be just
and equitable if contribution pursuant to this Section 2 were determined by any
method of allocation that does not take account of the equitable considerations
referred to in paragraph (a). The amount paid or payable by an indemnified
Person as a result of the losses, claims, damages and liabilities referred to in
paragraph (a) shall include all reasonable legal or other expenses actually
incurred by such indemnified Person in connection with investigating and
defending any such action or claim. No Person guilty of
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fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
(c) The indemnity and contribution agreements
contained in this Section 2 are in addition to any liability that an
indemnifying party otherwise may have to the indemnified Person.
2.5 The indemnification provided for under this Section 2
will remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified Person or any officer, director or controlling
person of such indemnified Person and will survive the sale or transfer of the
Covered Shares.
3. Current Public Information. During the Effectiveness Period,
SciClone shall timely file all reports required to be filed by it under the
Securities Exchange Act of 1934, as amended, and the rules and regulations
adopted by the SEC thereunder (the "Exchange Act"), and will take such further
action as Alpha may reasonably request, all to the extent required to enable
Alpha to sell the Covered Shares pursuant to Form S-3 (or similar registration
form hereafter adopted by the SEC). Upon written request, SciClone will deliver
to Alpha a written statement confirming that it is in compliance with such
requirements.
4. No Transferability of Registration Rights. The rights under
this Agreement are not transferable other than to the extent and on the same
terms as an assignment of Alpha's rights and obligations are permitted under
Section 14.4 of the Acquisition Agreement.
5. Lock-up Agreement. Alpha agrees that, during each consecutive
30-calendar day period (the first day of such period being referred to as a
"Lock-up Release Date") commencing on the effective date of the Registration
Statement, Alpha will limit its resale (i) of Initial Shares to a number that is
equal to one-twelfth (1/12) of the total number of the Initial Shares, and (ii)
of Additional Shares to a sum equal to 50,000 shares minus the number of Initial
Shares resold, unless otherwise approved by SciClone's prior written consent,
which consent shall not be unreasonably withheld. A "resale" of shares shall be
deemed to be made as of the day that the buy and sell orders are given and
accepted, notwithstanding the fact that the closing, payment and delivery does
not occur until several days thereafter.
6. No Inconsistent Agreements. SciClone represents and warrants
that as of the date hereof it has not, and covenants that after the date of this
Agreement it will not, enter into any agreement that is inconsistent with the
rights granted to Alpha under this Agreement or otherwise conflicts with the
provisions hereof.
7. Broker. All sales of Covered Shares pursuant to the
Registration Statement shall be made through Everen Securities or, if Everen is
unable for any reason to execute or effect such sales, through such other broker
as shall
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be approved in writing by SciClone, such approval not to be unreasonably
withheld or delayed.
8. Notices. All notices hereunder shall be given in the manner
provided for, and shall be deemed given as provided for in, the Acquisition
Agreement.
9. Definitions.
BEST EFFORTS. "Best Efforts" shall mean the efforts that a
prudent person desirous of achieving a result would use in similar circumstances
to ensure that such result is achieved as expeditiously as is reasonably
feasible.
DAMAGES. "Damages" shall include any loss, damage, injury,
decline in value, lost opportunity, liability, claim, demand, settlement,
judgment, award, fine, penalty, tax, fee (including reasonable attorneys' fees),
charge, costs (including reasonable costs of investigation) and reasonable
expenses of any nature.
PERSON. "Person" shall mean any individual, corporation
(including any non-profit corporation), general partnership, limited
partnership, limited liability partnership, joint venture, estate, trust,
company (including any limited liability company or joint stock company), firm
or other enterprise, association, organization or entity.
SECURITIES ACT. "Securities Act" shall mean the Securities
Act of 1933, as amended, or any substituted federal statute and the rules and
regulations thereunder, all as the same shall be in effect at the time.
Executed and delivered as of ____________1998.
SciClone Pharmaceuticals, Inc.
By:
-----------------------------
Alpha I Biomedicals, Inc.
By:
-----------------------------
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EXHIBIT E
PROMISSORY NOTE
and SECURITY AGREEMENT
$280,000 Maximum Principal ____________________, 1998
Bethesda, Maryland
1. Parties; Promise to Pay. Alpha Biomedicals, Inc., a Delaware
corporation ("Alpha"), hereby promises to pay, as provided for herein, to the
order of SciClone Pharmaceuticals, Inc., a California corporation ("SciClone"),
(i) the principal amounts of the loan advances made to Alpha by SciClone that
are referred to in Section 2 hereof and (ii) interest on such loan advances to
the extent provided in Section 3 hereof.
2. Acquisition Agreement. Pursuant to the terms and conditions
set forth in Article 3 of that certain Alpha Rights Acquisition Agreement of
even date between Alpha and SciClone (the "Acquisition Agreement"), SciClone has
agreed to make loan advances to Alpha of up to $280,000, in increments of up to
$70,000 per month.
3. Interest. No interest shall be payable by Alpha to SciClone
on the outstanding principal owing from time to time on this Note, so long as
installment payments are made as scheduled pursuant to this Note. To the extent
any sum is not paid when due, such delinquent sum shall accrue interest at the
rate of 10% per annum.
4. Repayment. Alpha shall repay the principal balance of this
Note and accrued interest, if any, in monthly installments of $70,000,
commencing on the earlier of (a) the ninth Lock-up Release Date (as defined in a
Stock Rights Agreement of even date between Alpha and SciClone), or (b) the next
Lock-up Release Date following the date when Alpha receives new equity financing
of at least $500,000. In any event, all outstanding principal and accrued
interest, if any, shall become fully due and payable not later than May 31,
1999, if it has not otherwise previously become fully due and payable pursuant
to the foregoing schedule.
5. Default. In the event of any default by Alpha in making any
payment when due under this Note, SciClone may declare all remaining unpaid
balances owing under this Note immediately due and payable. If Alpha does not
pay all sums when due, Alpha shall, to the extent permitted by law, also pay all
costs incurred by SciClone to enforce and collect this Note and enforce this
Agreement, including attorney's fees and litigation costs.
6. General. Payments owing on this Note shall be made in lawful
money of the United States of America. This Note and Agreement have been
executed and delivered by Alpha in the State of Maryland, but shall be governed
by and construed in accordance with the laws of State of California.
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7. Security.
7.1 As security for the obligations of Alpha under this
Note, Alpha hereby grants to SciClone a security interest in the number of
Initial Shares (as defined by the Acquisition Agreement) issued by SciClone to
Alpha pursuant to Section 2(b) of the Acquisition Agreement that is equal to
$280,000 divided by the Initial Average Price (as defined by the Acquisition
Agreement), such shares being referred to herein as the "Collateral Shares." If,
as of the S-3 Effective Date (as defined by the Acquisition Agreement), advances
to Alpha pursuant to Sections 3.1 and 3.2 of the Acquisition Agreement (the
"Actual Loan Amount") are less than $280,000, SciClone's security interest shall
automatically terminate with respect to a percentage of the Collateral Shares
equal to the percentage obtained by dividing the difference between $280,000 and
the Actual Loan Amount by $280,000, such remaining being referred to herein as
the "Remaining Collateral Shares." Upon the payment of a monthly installment as
provided in Section 5 hereof, SciClone's security interest shall automatically
terminate with respect to the percentage of the Remaining Collateral Shares that
is equal to the percentage obtained by dividing the amount of such monthly
installment by the Actual Loan Amount.
7.2 To perfect its security interest in the Collateral
Shares, SciClone shall take possession of the certificates for the Collateral
Shares at the Closing. Upon the release of SciClone's security interest in any
of the Collateral Shares or Remaining Collateral Shares as provided in Section
7.1, SciClone shall deliver such Collateral Shares or Remaining Collateral
Shares to Alpha or to such other Person or entity as it is directed by Alpha.
7.3 The security interest in the Collateral Shares and
the Remaining Collateral Shares created hereby is intended by SciClone and Alpha
to have priority over any other security interest in the Collateral Shares and
the Remaining Collateral Shares, and Alpha agrees to execute such additional
documents as SciClone shall reasonably request to perfect SciClone's security
interest in the Collateral Shares and the Remaining Collateral Shares.
7.4 In the event of any default in the repayment of this
Note, SciClone shall have such rights with respect to the Collateral Shares and
the Remaining Collateral Shares as are granted to a secured party by the
California Commercial Code.
7.5 So long as no default occurs under this Note, Alpha
shall be entitled to receive all dividends paid or other distributions made on
Collateral Shares and the Remaining Collateral Shares and to vote said
Collateral Shares and the Remaining Collateral Shares in all matters.
8. Effectiveness. This Promissory Note and Security Agreement
shall not become effective, and shall not create any liability or obligation on
the part of either party, unless and until the Closing (as defined by the
Acquisition Agreement) shall occur.
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This Note and Agreement has been executed and delivered as of
the date set forth above.
Alpha 1 Biomedicals, Inc.
By:
----------------------------------------
Xxxxxxx Xxxxxx, Ph.D., CEO
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EXHIBIT F
Alpha Representations and Warranties
Subject only to the exceptions specified in Exhibit G attached hereto,
Alpha hereby represents and warrants to SciClone as follows:
1. Organization. Alpha is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
2. Authorization. This Agreement has been duly and validly
executed and delivered by Alpha, and constitutes a valid and binding agreement
of Alpha enforceable against Alpha in accordance with its terms, except as
limited by laws affecting creditors' rights generally and except that equitable
principals may limit the right to obtain specific performance or other equitable
remedies. Each of the Stock Rights Agreement and the Promissory Note and
Security Agreement (collectively, the "Ancillary Documents"), upon execution and
delivery at the Closing, will be duly and validly executed and delivered by
Alpha and will constitute valid and binding agreements of Alpha, enforceable
against Alpha in accordance with their terms, except as limited by laws
affecting creditors' rights generally and except that equitable principles may
limit the right to obtain specific performance or other equitable remedies.
Alpha has all requisite corporate power and authority to execute and deliver
this Agreement. Upon the approval of this Agreement by the stockholders of Alpha
in accordance with the applicable provisions of the Delaware General Corporation
Law and Alpha's Certificate of Incorporation and Bylaws ("Stockholder
Approval"), Alpha will have all requisite corporate power and authority to
execute and deliver the Ancillary Documents, and to carry out the transactions
contemplated by this Agreement and the Ancillary Documents. Except for the
Stockholder Approval, all necessary corporate action on the part of Alpha has
been taken to authorize the execution, delivery and performance of this
Agreement and the Ancillary Documents.
3. No Conflicts; Consents. The execution and the delivery by
Alpha of this Agreement and the Ancillary Documents do not, and, upon
Stockholders Approval, the consummation of the transactions contemplated hereby
will not, result in a breach of, constitute a default (with or without notice or
lapse of time, or both) under or violation of, or result in the creation of any
lien, charge or encumbrance pursuant to any provision of the Certificate of
Incorporation or Bylaws of Alpha, any order, rule, law or regulation of any
court or governmental authority, foreign or domestic, or any provision of any
material agreement, instrument, understanding, order, judgment or decree to
which Alpha is a party or by which Alpha or the Alpha Rights are bound or
affected, nor will such actions give to any other person or entity (other than
SciClone) any interests or rights of any kind, including rights of termination,
acceleration or cancellation, in or with respect to any of the Alpha Rights.
Except as contemplated by this Agreement, no consent of any third party or any
governmental authority is required to be obtained on the part of Alpha to permit
the consummation of the transactions contemplated by this Agreement and the
Ancillary Documents.
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4. Litigation. There is no action, suit, proceeding or
investigation in progress or pending before any court or governmental agency,
against or relating to Alpha or its properties, assets or business or to the
Alpha Rights, nor, to the best knowledge of Alpha, any threat thereof or any
basis therefor. Alpha is not a party to any decree, order or arbitration award
(or agreement entered into in any administrative, judicial or arbitration
proceeding with any governmental authority) with respect to or affecting the
Alpha Rights.
5. Compliance with Laws and Regulations; Governmental Permits,
Etc. To the best of Alpha's knowledge, Alpha is in compliance in all material
respects with all statutes, laws, rules and regulations with respect to or
affecting the Alpha Rights. To the best of Alpha's knowledge, Alpha is not
subject to any order, injunction or decree issued by any governmental body,
agency, authority or court which could impair the ability of Alpha to consummate
the transactions contemplated hereby or which could materially and adversely
affect SciClone's use and enjoyment of the Alpha Rights.
6. Taxes. Alpha has timely filed, within the time period for
filing or any extension granted with respect thereto, all Federal, state, local
and other returns and reports relating to any and all taxes or any other
governmental charges, obligations or fees for taxes and any related interest or
penalties ("Tax" or "Taxes") required to be filed by it with respect to its
business and the Alpha Rights and such returns and reports are in all material
respects true and correct. Alpha has paid all Taxes, if any, shown to be due and
payable on said returns and reports and has withheld with respect to employees
all Federal and state income Taxes, FICA, FUTA and other Taxes required to be
withheld and has timely paid all sales, use and similar Taxes. There are no
pending or, to the best of Alpha's knowledge, threatened audits, examinations,
assessments, asserted deficiencies or claims for additional Taxes. To the best
of Alpha's knowledge, there are no liens or similar encumbrances relating to or
attributable to Taxes on the Alpha Rights.
7. Accuracy of Material Facts; Copies of Materials. No
representation, warranty or covenant of Alpha contained in this Agreement or in
any written statement delivered by Alpha pursuant hereto or in materials
delivered to SciClone in connection with the transactions contemplated hereby
contains any untrue statement of a material fact known to or believed by Alpha
to be untrue when made, or omits to state material facts known to or reasonably
believed by Alpha to be necessary in order to make the statement contained
therein not misleading. Alpha has delivered to SciClone true, complete and
accurate copies of each patent, license, contract, agreement and similar
document referred to in any Exhibit hereunder or included in the Alpha Rights.
8. Financial Statements. Alpha has delivered to SciClone copies
of Alpha's balance sheet as of September 30, 1997 (the "Alpha Balance Sheet")
and statements of income, stockholders' equity and cash flows for the nine-month
period then ended. Such financial statements and Alpha Balance Sheet
(collectively, the "Alpha Financial Statements") are complete and in accordance
with the books and records of Alpha, and present fairly the financial position
of Alpha as of their dates. Alpha Financial Statements
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have been prepared in accordance with generally accepted accounting principles
applied on a basis consistent with prior periods, except as otherwise noted
therein. Since September 30, 1997, there has been no material adverse change in
Alpha's financial condition or in the operations of its business.
9. Proprietary Rights.
(a) Except as set forth on Exhibit C, there are no
agreements pursuant to which Alpha has acquired (and either holds or has
sublicensed) rights with respect to TA-1. Assuming that SciClone is in full
compliance with its obligations with respect to the Alpha IP Rights Agreements
under the 1994 Agreement, (i) Alpha is not in default under or in breach or
violation of the Alpha IP Rights Agreements and (ii) to the knowledge of Alpha,
the Alpha IP Rights Agreements, as they relate to the Alpha Rights, are valid
and enforceable and are in full force and effect.
(b) Except for SciClone, Alpha has not granted to any
third party any right, option, or right of first refusal to use any of the Alpha
Rights other than pursuant to agreements that have been terminated.
(c) No claims have been asserted against Alpha (and Alpha
is not aware of any claims that are likely to be asserted against Alpha) by any
person (i) challenging the Alpha Rights or (ii) challenging or questioning the
validity or effectiveness of any license or agreement to which Alpha is a party
relating to the Alpha Rights.
(d) Taking into consideration that Alpha, in 1994,
licensed to SciClone all of its rights with respect to TA-1 not previously
licensed to SciClone by Alpha, and SciClone assumed all responsibility for the
commercialization of TA-1 worldwide, and that since 1994 Alpha has not been
engaged in any activities whatsoever involving TA-1, Alpha (i) has no knowledge
of any foreign or domestic patent or patent application or other governmentally
conferred right that would restrict SciClone from manufacturing, using or
selling TA-1, and (ii) to Alpha's knowledge, none of the Alpha Patent Rights are
subject of any pending interference, opposition, cancellation or other protest
proceeding.
(e) All Alpha Owned Patent Rights listed on Exhibit A-1
describe inventions that were conceived and reduced to practice solely and
exclusively by employees of Alpha without the assistance of any third party or
entity (other than by third parties who assigned ownership of their rights to
Alpha in valid and enforceable agreements). All Alpha Owned Patent Rights listed
on Exhibit A-2 describe inventions which are owned solely by the parties listed
on Exhibit A-2.
(f) Alpha has at all times used commercially reasonable
efforts to treat the Alpha Rights (other than was disclosed in publicly
available issued patents) as containing trade secrets, and Alpha has not
disclosed or otherwise dealt with such items in such a manner as to cause the
loss of such trade secrets by release into the public domain.
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(g) All employees of and consultants to Alpha employed or
retained after October 1, 1993, have executed written proprietary information
agreements with respect to the non-disclosure and non-use of the Alpha Rights.
To Alpha's knowledge, no past or current employee of Alpha is in violation of
any term of any employment contract, non-disclosure agreement or any other
contract or agreement relating to the confidentiality of any confidential
information relating to the Alpha Rights.
10. No Bulk Sale Notice. The nature of the Alpha Rights and the
nature of the business of Alpha are such that compliance with Article 5 of the
Maryland Commercial Code (the bulk sale notice law) is not required.
11. Solvency. Immediately following the Closing, the fair value
of Alpha's assets will exceed its liabilities and Alpha will be able to satisfy
its financial obligations as they become due.
12. Fair Value. Alpha believes that the consideration payable by
SciClone to Alpha pursuant to this Agreement is fair and adequate consideration
relative to the rights being sold and relinquished by Alpha.
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EXHIBIT G
Schedule of Exceptions to Alpha Representations and Warranties
NONE
46
EXHIBIT H
SciClone Representations and Warranties
Subject only to the exceptions specified in Exhibit I attached hereto,
SciClone hereby represents and warrants to Alpha as follows:
1. Organization. SciClone is a corporation duly organized,
validly existing and in good standing under the laws of the State of California.
2. Authorization This Agreement and the Ancillary Documents have
been duly and validly executed and delivered by SciClone and constitute valid
and binding agreements of SciClone, enforceable against SciClone in accordance
with their terms. SciClone has all requisite corporate power and authority to
execute and deliver this Agreement and the Ancillary Documents and to carry out
the transactions contemplated by this Agreement and the Ancillary Documents. All
necessary corporate action on the part of SciClone has been taken to authorize
the execution, delivery and performance of the Agreement and the Ancillary
Documents.
3. Effect of Agreement; Consents. The execution and delivery of
this Agreement and the Ancillary Documents by SciClone do not, and the
consummation of the transactions contemplated hereby and compliance with the
provisions hereof will not, conflict with, result in a breach of, constitute a
default (with or without notice or lapse of time, or both) under or violation
of, or result in the creation of any lien, charge or encumbrance pursuant to any
provision of the Articles of Incorporation or Bylaws of SciClone, any order,
rule, law or regulation of any court or governmental authority, foreign or
domestic, or any provision of any material agreement, instrument, understanding,
order, judgment or decree to which SciClone is a party or by which SciClone is
bound. No consent of any third party or any governmental authority is required
to be obtained on the part of SciClone to permit the consummation of the
transactions contemplated by this Agreement or the Ancillary Documents.
4. Compliance With Other Instruments. SciClone is not a party
to, or bound by, any written or oral contract, agreement, license, indenture,
mortgage, debenture, note or other instrument under the terms of which
performance by SciClone according to the terms of this Agreement and the
Ancillary Documents will be a default or an event of acceleration, or whereby
timely performance by SciClone according to the terms of this Agreement and the
Ancillary Documents may be prohibited, prevented or delayed.
5. Accuracy of Material Facts; Copies Materials. No
representation, warranty or covenant of SciClone contained in this Agreement or
in any written statement delivered pursuant hereto or in materials delivered to
Alpha in connection with the transactions contemplated hereby contains or shall
contain any untrue statement of a material fact known or believed to be untrue
when made, or omits to state material facts known or reasonably believed to be
necessary in order to make the statement contained therein not misleading
1
47
6. Shares. The Shares to be issued by SciClone to Alpha pursuant
to Section 2 of this Agreement will be, when issued, (i) duly authorized and
validly issued to Alpha and (ii) fully paid for and non-assessable. The
certificates for the Shares when delivered to, or at the direction of Alpha,
will be free and clear of all liens or other encumbrances, other than customary
securities law restrictive legends until the Shares become registered with the
SEC.
7. Condition of SciClone. SciClone has furnished to Alpha copies
of SciClone's most recent filings with the United States Securities and Exchange
Commission ("SEC"), consisting of its Form 10-K for the year ended December 31,
1996, its Form 10-Q for the quarter ended June 30, 1997 and its proxy statement
for the 1997 Annual Meeting, together with SciClone's annual report to
stockholders for the fiscal year ending December 31, 1996. None of said filings
or the annual report contains any untrue statement of material fact or omits to
state a material fact necessary to make the statements contained therein not
misleading and there has not been a material adverse change in the business,
properties, assets, condition (financial or other), results of operations, or
prospects of SciClone since December 31, 1996.
2
48
EXHIBIT I
Schedule of Exceptions to SciClone Representations and Warranties
NONE
49
EXHIBIT J
No Action Commitments from Alpha Creditors
50
EXHIBIT J
No Action Commitments from Alpha Creditors
Form of Letter Agreement
VIA FACSIMILE
December __, 1997
Addressee
Address
Subject: Proposed Amended Agreement
Dear ____________:
Alpha 1 Biomedicals, Inc. ("Alpha") and ______________________________
("______") have previously entered into an agreement, dated ______________,
1996, whereby Alpha and ______ agreed that certain payments due were to be made
from royalty revenues received by Alpha from SciClone Pharmaceuticals, Inc.
("SciClone"). The current amount of Alpha's liability to___________ is
$________________.
Alpha is presently considering a business transaction whereby Alpha would sell
its royalty rights to SciClone in exchange for SciClone common stock (the
"Transaction"). This would have the effect of accelerating the payments received
from SciClone and eliminating the uncertainty as to whether such payments would
ever be earned. Since this would substantially shorten the time for payment of
our obligation to ______, I am proposing the following:
(1) Alpha agrees to make 12 monthly payments of $___________ for 12
consecutive months no later than the last business day of each month,
starting with the first month in which sales are made by Alpha of the
SciClone common stock acquired pursuant to the Alpha Rights
Acquisition Agreement between Alpha and SciClone entered into on
______________. The total amount to be paid is $__________, upon
which Alpha's obligation to __________ would be satisfied in full.
(2) _______ agrees to this new proposal which replaces the letter
agreement dated _____________ 1996.
51
Addressee
December _______, 1997
Page Two
(3) This proposal is null and void and the prior Letter Agreement dated
__________, 1996 will remain in full force if the shareholders of
Alpha do not approve the Transaction.
Please indicate your acceptance of the above terms by signing a copy of this
letter and returning it to me.
Sincerely yours, Accepted and agreed to:
Xxxxxxx X. Xxxxxx, Ph.D. By:
President and --------------------------------
Chief Executive Officer
-----------------------------------
Printed Name
Date:
------------------------------
cc: D. Xxxxxxx Xxxxxxx, Esq.
MLB/IM/CRDIT1-X
52
EXHIBIT K
Press Release
FOR IMMEDIATE RELEASE
CONTACT: X. X. Xxxxxx Xxxxxxx X. Xxxxxx
Vice President President and
Chief Financial Officer Chief Executive Officer
000-000-0000 000-000-0000
ALPHA 1 BIOMEDICALS, INC.
COMPLETES THE SALE OF RIGHTS TO ZADAXIN(R) THYMOSIN ALPHA 1
BETHESDA, MARYLAND, DECEMBER 17, 1997 -- ALPHA 1 BIOMEDICALS, INC. (OTC BULLETIN
BOARD:ALBM) today announced the signing of an agreement whereby the Company's
royalty rights relating to Thymosin alpha 1 will be sold to SciClone
Pharmaceuticals, Inc. (Nasdaq: SCLN). SciClone originally licensed from the
Company the rights to Thymosin alpha 1 in certain territories in 1990, with an
expanded license completed in 1994. SciClone currently markets Thymosin alpha 1
under the trademark ZADAXIN.
The agreement provides for an aggregate purchase price of $1.93 million,
consisting of $130,000 in cash and $1.8 million of SciClone common stock. In
exchange, SciClone will no longer pay royalties to Alpha 1 on future sales of
ZADAXIN. The transaction, which is subject to approval by Alpha 1's shareholders
and certain other conditions, is expected to close in March 1998.
"Importantly, this allows Alpha 1 to realize near term value from its remaining
rights, to effect a substantial reduction in its outstanding liabilities and
pursue the development of Thymosin beta 4 as well as new in-licensing business
opportunities," according to Xxxxxxx Xxxxxx, Alpha 1's President and Chief
Executive Officer. "By transferring to SciClone our remaining rights and
responsibilities for Thymosin alpha 1, it gives SciClone maximum flexibility and
control in the commercialization of its ZADAXIN product."
During 1997, the Company entered into a Material Transfer Agreement-Cooperative
Research and Development Agreement ("MTA-CRADA") with the National Institutes of
Health ("NIH"), whereby the NIH investigator will use Thymosin beta 4 material
provided by the Company in a wound healing study. In exchange, the Company may
license from the NIH any patent rights that might result from the research study
that relate to the use of Thymosin beta 4 as a wound healing treatment. These
studies are continuing.
Any statements which are not actual facts contained in this document are forward
looking statements that involve risks and uncertainties, including but not
limited to, those relating to product demand, pricing, market acceptance, the
effect of economic conditions, intellectual property rights and litigation,
clinical trials, governmental regulations, competitive products, risks in
product and technology development, the results of financing efforts, the
ability to complete transactions and other risks identified in other of the
Company's Securities and Exchange Commission filings.
***/***
53
INDEX TO DEFINITIONS
Term Location
----------------------------------------------------------------------------------------
1994 Agreement Recital B
1996 Prepaid Royalty Agreement Recital B
1997 Prepaid Royalty Agreement Recital B
AAA Section 14.17
Additional Shares Section 2(c)
Advances Section 3.2
Alpha Introduction
Alpha Balance Sheet Exhibit F Section 8
Alpha Financial Statements Exhibit F Section 8
Alpha Licensed Patent Rights Recital D;
Exh. B
Alpha IP Rights Agreements Recital E;
Exh. C
Alpha Owned Patent Rights Recital D;
Exh. A
Alpha Patent Rights Recital D
Alpha Rights Recital F
Ancillary Documents Exhibit F Section 2
Assumed Liabilities Section 8.1
Average Price Section 2(c)
Basket Section 12.1
Best Efforts Exhibit D Section 9
Cash Consideration Section 2(a)
Claim(s) Section 11.1 &
Section 12.1
Closing Section 7.1
Closing Date Section 7.1
Confidential Information Section 8.2(b)
Covered Shares Exhibit D Section 1.1
Damages Exhibit D Section 9
Effective Date Introduction
Effective Period Exhibit D Section 1.1
Exchange Act Exhibit D Section 1.2(b)
Initial Average Price Section 2(b)
Initial Shares Section 2(b)
Lock-up Release Date Exhibit D Section 5
Person Exhibit D Section 9
Registration Statement Exhibit D
Section 1.1
Retained Liabilities Section 8.1
Roche-Basle Recital E
Roche-US Recital E
S-3 Effective Date Section 3.2; Exhibit D Section 1.1
SciClone Introduction
SciClone Common Stock Section 2(b)
Securities Act Exhibit D Section 9
SEC Section 6.1; Exhibit H Section 7
i
54
INDEX TO DEFINITIONS
Term Location
----------------------------------------------------------------------------------------
Shares Section 2(c)
Stockholder Approval Exhibit F Section 2
Stockholders Meeting 6.1
Stock Rights Agreement Exhibit D
TA-1 Recital A
Tax or Taxes Exhibit F Section 6
Third Party Licensor Recital E
ii
