May 11, 1998
Ligand Pharmaceuticals Incorporated
00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Xxx Xxxxx and Company
Lilly Corporate Center
Indianapolis, IN 46285
To Whom It May Concern:
This letter agreement will confirm the following matters in connection
with the execution as of the date hereof (i) by Ligand Pharmaceuticals
Incorporated, a Delaware corporation ("Ligand"), Seragen, Inc., a Delaware
corporation ("Seragen"), and Knight Acquisition Corp., a Delaware corporation
and wholly owned subsidiary of Ligand ("Knight Acquisition"), of that certain
Agreement and Plan of Reorganization (the "Reorganization Agreement"), (ii) by
Ligand, Marathon Biopharmaceuticals, LLC, a Massachusetts limited liability
company ("Marathon"), and each of the members of Marathon (the "Members") of
that certain Option and Asset Purchase Agreement, (iii) by Ligand, Marathon,
the Members and Seragen of that certain Extension Option Agreement, and (iv)
by Ligand and Xxx Xxxxx and Company (and, as of the effective time of the
proposed merger of Knight Acquisition and Seragen ("Merger"), Seragen) of that
certain Agreement (the "Lilly Agreement"). Xxxxxxx acknowledges that the
execution of this letter agreement is a material inducement to Ligand and
Xxxxx to enter into the Lilly Agreement and a material inducement to Ligand to
enter into the Reorganization Agreement.
1. (a) (i) Lilly and Seragen are parties to the Sales and
Distribution Agreement (as amended through the date hereof, the "Sales
Agreement") dated as of August 3, 1994, as previously amended by an Amendment
to Sales and Distribution Agreement dated May 28, 1996, and to the Development
Agreement dated as of August 3, 1994 (as amended through the date hereof, the
"Development Agreement"), each of the Sales Agreement and the Development
Agreement having been amended by an Amendment dated December 16, 1994, an
Amendment re: Steering Committee effective June 30, 1995, an Amendment to
Sales and Distribution Agreement and Development Agreement dated April 7,
1997, a certain letter agreement dated June 5, 1997, and this letter
agreement, in each case between Xxxxx and Seragen (collectively, the Sales
Agreement and the Development Agreement shall be known as the "Seragen
Agreements").
(ii) Lilly and Ligand are parties to that certain
Option and Wholesale Purchase Agreement dated November 25, 1997 (the
"Wholesale Purchase Agreement").
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(b) Seragen hereby consents, pursuant to Section 14.7 of the
Sales Agreement and Section 10.7 of the Development Agreement, to the
assignment of the Seragen Agreements by Xxxxx to Ligand, in the following
circumstances:
(i) in the event the closing ("Closing") of the proposed
merger of Seragen with and into Knight Acquisition under the Reorganization
Agreement occurs prior to receipt of all authorizations by the appropriate
governmental entity or entities necessary for commercial sale of the Product
(including exports) in a jurisdiction, including, without limitation, approval
of labeling, price, reimbursement and manufacturing ("Regulatory Approval");
or
(ii) in the event (A) Regulatory Approval is received
prior to the Closing and (B) Ligand is in compliance with Section 5.9 of the
Reorganization Agreement through the date of Regulatory Approval.
In the event of assignment under Section 1(b)(ii) above, Seragen shall,
within two (2) business days of receipt of Regulatory Approval, notify Ligand
and Lilly in the event that Ligand is not in compliance with Section 5.9 of
the Reorganization Agreement. Ligand shall be deemed to be in compliance with
Section 5.9 of the Reorganization Agreement if Seragen fails to so notify
Ligand and Lilly.
Xxxxxxx hereby agrees that the Seragen Agreements are amended as they
relate to the milestone payment upon U.S. regulatory approval as provided in
Section 5 of the Lilly Agreements, which amendment shall be effective as to
Xxxxx and Xxxxxxx as of the date of this letter agreement. Ligand and Xxxxx
represent and warrant to Seragen that the definitions of the terms "Closing"
and "Sales Agreement" in the Lilly Agreement conform to the definitions of
such terms herein and that "Product" is defined in the Lilly Agreement to mean
the finished, salable pharmaceutical form of DAB389IL-2.
3. In the event of assignment under Section 1(b)(ii) above, effective
upon such assignment,
(a) Xxxxxxx, on behalf of itself and its affiliates, hereby
releases Lilly and its affiliates and their respective directors, officers,
employees and agents from any and all liabilities and obligations of any
nature whatsoever under or pursuant to the Seragen Agreements to the extent
such liabilities and obligations arise from and after the effective date of
such assignment (inclusive of such date), including, without limitation,
product liability claims arising from the sale or use of the Product after the
effective date of assignment, regardless of the theory under which such claims
are brought.
(b) Xxxxxx, agrees to assume and fully and faithfully perform each
and every obligation of Xxxxx under the Seragen Agreements from and after the
effective date of such assignment (inclusive of such date), including, without
limitation, product liability claims arising from the sale or use of the
Product after the effective date of assignment, regardless of the theory under
which such claims are brought.
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(c) Seragen, on behalf of itself and its affiliates, hereby
releases Lilly and Ligand, their respective affiliates and directors,
officers, employees and agents from any and all liabilities and obligations of
any nature whatsoever to the extent such liabilities and obligations arise
from the execution and delivery by Xxxxx and/or Ligand of the Wholesale
Purchase Agreement, which Wholesale Purchase Agreement terminates upon the
assignment under Section 1(b)(ii) above .
4. In the event of assignment under Section 1(b)(i) above, effective
upon such assignment, Seragen, on behalf of itself and its affiliates, hereby
releases Lilly and Ligand, their respective affiliates and officers,
directors, employees and agents from any and all liabilities and/or
obligations of any nature whatsoever Lilly has or may have under the Seragen
Agreements other than obligations to Ligand (and Seragen in the event the
Closing occurs) set forth in the Lilly Agreement; and from any other claims,
demands, causes of action, damages or liabilities or costs, known or unknown,
suspected or unsuspected, in law or equity, that Seragen or any of its
affiliates, predecessors or successors and assigns ever had, now has or
hereafter can, shall or may have relating in any way to any conduct prior to
the date hereof, including, without limitation, claims related in any way to
the Seragen Agreements.
5. This letter agreement may be executed in one or more counterparts,
each of which shall be an original and all of which shall constitute together
the same document. Each party agrees to execute, acknowledge, and deliver
such further instruments, and to do all such other acts, as may be necessary
or appropriate to carry out
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the purposes and intent of this letter agreement. The parties hereto have
duly executed this letter agreement as of the date first written above.
XXX XXXXX AND COMPANY
By: /s/ Xxxxxx Xxxxxx
--------------------
Title: President and Chief Operating Officer
LIGAND PHARMACEUTICALS INCORPORATED
By: /s/ Xxxxx X. Xxxxxxxx
---------------------
Xxxxx X. Xxxxxxxx
President and Chief Executive Officer
SERAGEN, INC.
By: /s/ Xxxx X. Xxxxx
---------------------
Xxxx X. Xxxxx
Chairman of the Board and Chief Executive
Officer
[SIGNATURE PAGE TO LETTER AGREEMENT]
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