EXHIBIT 99.2
EVALUATION LICENSE AND OPTION AGREEMENT
This Agreement, dated as of July 31, 1997, made by and between
Seragen, Inc., a corporation organized under the laws of the State of
Delaware, and having principal offices at 00 Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx 00000 (hereinafter referred to as "Seragen") and United States
Surgical Corporation, a corporation organized and existing under the laws of
the State of Delaware and having principal offices at 000 Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxxx 00000 (hereinafter referred to as "USSC").
NOW THEREFORE, in consideration of the mutual promises, agreements,
covenants, undertakings and obligations set forth herein and for other good
and valuable consideration, the parties hereto agree as follows:
ARTICLE 1 - DEFINITIONS
1.1 For the purposes of this Agreement, the definitions set forth
below shall be applicable.
Action - The term "Action" shall mean an action, suit or proceeding,
whether civil or criminal or in law or in equity.
Technology - The term "Technology" means technology or products
incorporating a fusion protein consisting of a diphtheria-based toxin and an
EGF targeting moiety ("EGF Fusion Protein") which Seragen has or, during the
term of this Agreement, acquires any right, title or interest, including
without limitation under the Existing Licenses (defined below) (i) every part,
subassembly, component or accessory of, and addition or improvement to, the
Technology and (ii) Know-How (defined below).
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Know-How - The term "Know-How" means any and all secret or
confidential information, trade secrets, specifications, test results,
analyses and data, inventions, methods, processes, formulae, mixtures,
compositions, delivery systems, designs, techniques, applications, ideas or
concepts, whether or not reduced to practice, relating directly or indirectly
to the Technology in the USSC Field (as hereunder deferred), including, but
not limited to, technology that is or could be the subject matter of a foreign
or domestic patent or patent application, whether or not reduced to writing in
a patent application.
Person - The term "Person" shall mean any individual, corporation,
partnership, association, trust or other entity or organization, including a
governmental or political subdivision or any agency or instrumentality
thereof.
ARTICLE 2 - EVALUATION LICENSE
2.1 Seragen hereby grants to USSC, and USSC hereby accepts, an
exclusive worldwide right and license to all of the rights of Seragen in and
to the Technology (the "Evaluation License") during the Due Diligence Period
(defined in Section 6.1) for restenosis in cardiovascular applications (the
"USSC Field"), (i) to make, have made, use, practice and have manufactured
products incorporating the Technology in the USSC Field in connection with its
evaluation of the Technology, (ii) to evaluate the Technology in the USSC
Field, and (iii) to practice and use Know-How for the purposes of evaluating,
developing, testing, conducting clinical trials or obtaining governmental
approvals with respect to the Technology in the USSC Field during the Due
Diligence Period.
ARTICLE 3 - INFORMATION AND IMPROVEMENTS
3.1 Promptly following the date hereof, Seragen shall provide to
USSC all conceptual, technical and design information, specifications, test
results, analyses and data, prototypes, drawings, formulae, mixtures,
compositions, delivery systems and other useful information (collectively,
"Information") now in its possession or control with respect to the Technology
or Know-How. During the term of this Agreement, Seragen shall promptly
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provide to USSC all Information which may come into its possession or control
from time to time during the term of this Agreement with respect to the
Technology or Know-How.
3.2 If, during the term of this Agreement, any new invention,
method, process, formula, mixture, composition, delivery system, modification
or improvement relating to the Technology in or relating to the USSC Field, or
the use or manufacture thereof (collectively, "Inventions") is conceived or
developed by Seragen, Seragen shall furnish full details thereof to USSC,
including all Information. Such Inventions shall be deemed included in the
Evaluation License except insofar as USSC, upon request by Seragen, agrees in
writing to exclude from the Evaluation License all or any portion of such
Inventions.
3.3 Seragen agrees for as long as this Agreement shall be and
remain in effect, that it shall not grant to any other or different Person,
anywhere in the world, any other right, option or license (i) to evaluate,
develop, test, conduct clinical trials, obtain governmental approvals, make,
have made, use, practice, manufacture, have manufactured, sell, transfer or
commercialize the Technology in the USSC Field or any new Inventions or (ii)
to practice or use Know-How, in the USSC Field.
ARTICLE 4 - CONSIDERATION
4.1 The total consideration to be paid by USSC for the Evaluation
License and the Option (as hereinafter defined) hereunder shall be Five
Million Dollars ($5,000,000), of which Four Million, Seven Hundred Fifty
Thousand Dollars ($4,750,000) (the "Payment") will be payable by wire transfer
to Seragen upon execution of this Agreement and Two Hundred Fifty Thousand
Dollars ($250,000) shall be payable to Xxxxx & Company in connection with
their rendering an opinion to USSC concerning this transaction.
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ARTICLE 5 - OPTION
5.1 Seragen hereby grants to USSC, and USSC hereby accepts, an
exclusive option (the "Option") exercisable in USSC's sole and absolute
discretion to acquire the exclusive worldwide right and license to the
Technology in the USSC Field on the terms set forth in Exhibit A (the
"Permanent License"). Promptly following the execution of this Agreement the
parties shall use their best efforts to finalize the Permanent License
including the terms set forth in Exhibit A. The Option shall be subject to
exercise no later than five (5) business days following the end of the Due
Diligence Period. The Option may be exercised by USSC by delivery to Seragen
of a written notice indicating that USSC is exercising the Option together
with payment in the aggregate amount of Five Million Dollars ($5,000,000).
Such payment shall be made by check or bank transfer payable to Seragen. Upon
exercise of the Option in accordance with the provisions of this Article 5,
the Evaluation License shall terminate in favor of the Permanent License.
Seragen hereby grants and conveys to USSC the registration rights in respect
of the Non Exercise Equity (defined below) and the Warrant (defined below) set
forth in Exhibit B hereto, which rights shall survive termination of this
Agreement.
5.2 In the event at any time and for any reason, USSC chooses not
to exercise the Option, the Evaluation License shall terminate and USSC shall
return all Information to Seragen. Seragen shall also receive any pre-
clinical and clinical data relating to any testing of the Technology by USSC
for any indication. In exchange, USSC shall receive Five Million Dollars
($5,000,000) in Seragen common stock ("Non Exercise Equity") valued at the
average of the closing prices of Seragen common stock (i) for the ten trading
days preceding the date of this Agreement or (ii) for the ten trading days
preceding the date on which USSC chooses not to exercise the Option, whichever
is lower.
5.3 As part of the consideration, Seragen is simultaneously with
the execution of this Agreement issuing and delivering to USSC a warrant for
the purchase of 500,000 shares of Seragen common stock at a purchase price of
$.5625 per share (the "Warrant").
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ARTICLE 6 - DUE DILIGENCE PERIOD AND TESTING
6.1 For a period commencing on the date of execution of this
Agreement and ending on the earlier of (i) November 2, 1998, (ii) the date on
which USSC commences any preclinical or clinical trial with respect to the
Technology in the USSC Field or (iii) the date on which USSC notifies Seragen
that it will exercise the Option (the "the Due Diligence Period"), USSC shall
have the right to conduct "due diligence" as USSC deems appropriate in its
sole and reasonable discretion. During the Due Diligence Period, Seragen
shall permit USSC and its representatives to evaluate the Technology in the
USSC Field. A restenosis study (the "Study") in pigs, which, shall not be
deemed a human clinical trial, to determine the efficacy of the Technology in
preventing restenosis in cardiovascular applications will be conducted during
the Due Diligence Period, which will be initiated by USSC with appropriate
Seragen assistance. During the term of this agreement, USSC shall fund all
preclinical studies, clinical trials, expenses for the preparation of
regulatory filings and related expenses with respect to the Technology in the
USSC Field, provided USSC shall have approved such costs and expenses in its
discretion. The respective responsibilities and other details of the Study
will be mutually agreed by USSC and Seragen promptly following the execution
of this Agreement. During the Due Diligence Period, Seragen shall permit USSC
and their representatives full and complete access during reasonable business
hours to Seragen's premises, books and records, and directors, officers and
employees, in each case involving or relating to the Technology in the USSC
Field, and shall with Seragen's prior written approval, which shall not be
unreasonably withheld, permit and assist USSC to contact and confer with other
individuals and entities with whom Seragen has any business dealings involving
or relating to the Technology in the USSC Field that USSC deems necessary or
relevant to its due diligence review. All of the expenses of the USSC du
diligence review will be borne by USSC. Notwithstanding anything in this
Agreement to the contrary, it shall be a condition to the exercise of the
Option that the results of USSC's due diligence review are satisfactory to
USSC in its sole and absolute discretion.
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ARTICLE 7 - DUE DILIGENCE PERIOD COVENANTS AND RESTRICTIONS
7.1 From the execution of this Agreement until the end of the Due
Diligence Period, Seragen's use of the Payment shall be subject to the
following restrictions:
(i) Seragen shall use the Payment only in the ordinary course of
business consistent with its past practice;
(ii) Seragen shall be restricted from using the Payment to pay any
dividends, payments or other distributions to any Person who is as of
the date hereof a holder of Seragen's preferred stock, any Person which
is a direct or indirect affiliate of any such holder (each a "Related
Person"), or any Person which is a direct or indirect affiliate of a
Related Person; or any other payments, directly or indirectly, to any of
such Persons under any agreement; provided, however, that this Section
7.1 (ii) shall not prevent Seragen from paying Seragen directors' fees
and reimbursement of directors' expenses consistent with past practice;
and
(iii) Seragen shall not use the Payment to make any payment currently
in arrears on any agreement, contract, royalty agreement or other
similar instrument (excepting those incurred in the ordinary course of
business, but this exception shall in any event not include or cover any
payment currently in arrears to any Persons covered by the restrictions
set forth in Section 7.1 (ii) above).
7.2 From the date of execution of this Agreement until the end of
the Due Diligence Period, Seragen shall be subject to certain other operating
restrictions; provided, however, the following provisions of this Section 7.2
or anything else in this Agreement shall not prevent Seragen from effecting
any equity financing or the merger or consolidation of Seragen or the sale of
all or substantially all of its assets;
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(i) Seragen shall not transfer, assign or otherwise convey any
rights, title or interest in or to the Technology involving the
USSC Field to any Person;
(ii) Seragen shall operate in the normal course of business
consistent with its past practice;
(iii) Seragen shall not change the rights and/or preferences of
Seragen common stock in a manner that would adversely affect the
rights and/or preferences of the shares of Seragen common stock
that USSC would receive pursuant to Section 5.2 if the Option is
not exercised;
(iv) Seragen shall preserve intact its business and assets free
of any liens and claims without prior USSC approval (excluding
liens incurred in the ordinary course of business); and
(v) Seragen shall provide USSC with a copy of its quarterly
financial reports and allow USSC and its representatives full
access to its books and records.
ARTICLE 8 - SERAGEN-LICENSED PATENTS
8.1 Seragen shall cooperate and use commercially reasonable efforts
to amend the License Agreement with Harvard University, dated November 29,
1983, and the Royalty and License Agreement with University Hospital, dated
November 18, 1992 (the "Existing Licenses"), to permit and encourage direct,
exclusive worldwide licenses to USSC of the Technology in the USSC Field on
substantially the same terms and conditions provided herein with respect to
the Evaluation License, and upon exercise of the Option, as to be provided
with respect to the Permanent License.
ARTICLE 9 - XXX XXXXX AGREEMENT
9.1 Seragen represents and warrants that it has amended the
agreement between Xxx Lilly and Seragen such that Xxx Xxxxx has no rights to
any EGF Fusion Protein fusion toxins in the USSC Field nor any marketing
authorizations for EGF Fusion Protein in the USSC Field.
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ARTICLE 10 - NO SHOP
10.1 During the Due Diligence Period, unless such period is
terminated earlier by the parties' mutual written consent, Seragen shall not,
directly or indirectly, (i) discuss, continue to discuss, negotiate, continue
to negotiate, solicit or entertain any proposals or offers, or enter into any
contract, agreement or understanding of any kind, whether oral or written,
with any other person or entity other than USSC which would involve, in whole
or in part, the purchase, sale, transfer, assignment, conveyance, disposition,
license or sublicense of any rights, title or interest in or to any of the
Technology in the USSC Field; or (ii) take any action, or omit to take any
action, which would contravene or be in derogation of any of the rights of
USSC under this Agreement or be inconsistent with the rights USSC would obtain
under the Permanent License.
ARTICLE 11 - PROPRIETARY INFORMATION
11.1 USSC represents and warrants that it has not, directly or
indirectly, disclosed and agrees that it will not, directly or indirectly,
disclose, either during or for five (5) years subsequent to the term of this
Agreement, any Confidential Information (defined below) of Seragen to any
other Person, except to its attorneys and accountants as required in
connection with this Agreement who have been and will be instructed to
maintain its confidentiality. Notwithstanding the foregoing, USSC shall have
the right to use the Confidential Information without obtaining such written
agreements in connection with any regulatory and patent filings involving or
relating to matters covered by this Agreement.
11.2 Seragen represents and warrants that it has not directly or
indirectly, disclosed and agrees that it will not, directly or indirectly,
disclose during or for five (5) years subsequent to the term of this
Agreement, any Confidential Information of USSC to any other Person, except to
Seragen's attorneys and accountants as required in connection with this
Agreement who have been and will be instructed to maintain its
confidentiality.
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11.3 It is not intended by this Article 11 that either Seragen or
USSC shall be required to obtain specific written commitments in relation to
this Agreement from materials and/or component suppliers where only
specifications are disclosed to said materials and/or component suppliers by
Seragen or USSC.
11.4 For purposes of this Agreement, "Confidential Information"
shall mean verbal and written disclosures from Seragen, on the one hand, or
USSC, on the other hand, (the "Discloser") to the other party (the
"Disclosee"), which concern the Discloser, including without limitation
information which concerns the Discloser's business, operations, products or
research and development efforts, or which concern the Technology, Know-How,
Invention or Information, but shall not include information which: (a) is or
becomes publicly available through no fault of Disclosee (but only after, and
only to the extent that, it becomes publicly available); (b) Disclosee can
show was known to it at the time of disclosure, free of restriction; (c) has
been or hereafter is disclosed to Disclosee without any obligation of
confidentiality by a third party who has the right to disclose it to
Disclosee; (d) has been disclosed by Discloser to a third Person free of any
obligations of confidentiality; or (e) is disclosed by Disclosee pursuant to
the order or requirement of a court, administrative agency or other
governmental body, provided that the Disclosee promptly informs the Discloser
of its intent to make such disclosure, takes all reasonable steps to limit
such disclosure and does not inhibit the Discloser in taking whatever lawful
steps the Discloser considers necessary to attempt to preserve the
confidentiality of such information. Disclosures made to Disclosee by
Discloser which are specific shall not be deemed to be within the foregoing
exceptions merely because they are embraced by general disclosures in the
public domain or in the possession of Disclosee.
11.5 The parties agree and acknowledge that any breach of this
Article 11 by Seragen, on the one hand, or USSC, on the other hand, would
likely cause irreparable injury to the other party and that such other party's
remedy at law for any such breach would be inadequate. Accordingly, the
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parties agree that, in addition to any other remedies provided for herein or
otherwise available at law, temporary and permanent injunctive relief and
other equitable relief may be granted in any Action brought by either party to
enforce the provisions of this Article 11 without the necessity of proof of
actual damage. Each party agrees promptly to seek temporary and permanent
injunctive relief against any of its directors, officers, employees,
consultants or agents who breach the aforesaid obligations with respect to any
matter relating to this Agreement.
11.6 The provisions of this Article 11 shall survive termination of
this Agreement.
ARTICLE 12 - INDEMNIFICATION
12.1 Except as otherwise provided in Section 12.3, USSC shall
defend, indemnify and hold harmless Seragen and its affiliates, and their
respective partners, agents, incorporators, stockholders, employees, officers,
directors, and the heirs, successors and assigns of each of them, from and
against, and shall on demand of Seragen reimburse Seragen or such persons for,
any claims, demands, judgments, executions, awards, damages, fines, penalties
and interest, including reasonable attorney's fees, expenses and disbursements
("Damages") with respect to any Action arising out of or based upon (a) a
breach by USSC of a representation, warranty or covenant hereunder and (b) the
design, manufacture, sale or other exploitation of the Technology by USSC, its
subsidiaries, affiliates, sublicensees or assignees. In satisfaction of the
foregoing indemnification and hold harmless agreement, USSC may pay directly
to the claimant or plaintiff in any such claim or Action, the amount of any
award, judgment, settlement or recovery, or execution rendered thereon, and
may pay to Seragen, any other Damages sustained by it in defending any such
claim or Action. USSC shall have the right to compromise or settle any claim
or Action on demand without the prior approval of Seragen, provided that such
compromise or settlement shall not admit the invalidity of any Seragen patent
or any patent to which the Evaluation or Permanent Licenses pertains, or
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require the payment of any amount by Seragen, without the prior approval of
Seragen, which approval shall not be unreasonably delayed, withheld or
conditioned.
12.2 In the event that any claim is asserted against Seragen, or is
made a party defendant in any Action, involving a matter which is the subject
of USSC's indemnification and hold harmless agreement as set forth above, then
within thirty (30) days of the receipt by any of such Persons of notice of
such event and within seven (7) days of receipt of a complaint or other formal
pleading regarding such event, Seragen shall give written notice of such claim
or Action to USSC, and USSC shall be given an opportunity to assume the
defense and control any settlement on behalf of such defendant. Seragen shall
provide its full cooperation to USSC in connection with the defense of such
claim or Action.
12.3 In the event that any claim is asserted against USSC, or is
made a party defendant in any Action, involving a matter which is the subject
of Seragen's indemnification and hold harmless agreement as set forth above,
then within thirty (30) days of the receipt by any of such Persons of notice
of such event and within seven (7) days of receipt of a complaint or other
formal pleading regarding such event, USSC shall give written notice of such
claim or Action to Seragen, and Seragen shall be given an opportunity to
assume the defense and control any settlement on behalf of such defendant.
USSC shall provide its full cooperation to Seragen in connection with the
defense of such claim or Action. Seragen shall have the right to compromise
or settle any such claim or Action on demand without the prior approval of
USSC, provided that such compromise or settlement shall not require the
payment of any amount by USSC, without the prior approval of USSC, which
approval shall not be unreasonably delayed, withheld or conditioned.
12.4 The provisions of this Article 12 shall survive termination of
this Agreement.
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ARTICLE 13 - FDA INTERACTION
13.1 Interaction with the regulatory agencies in any country
including, but not limited to, the U.S. Food and Drug Administration
(collectively, "FDA") concerning the Technology in the USSC Field shall be
conducted by USSC, and for purposes of any filings with the FDA concerning the
Technology in the USSC Field, USSC shall be the official company sponsor,
provided that USSC shall provide Seragen with copies of all written
communication with the FDA and shall keep Seragen reasonably apprised as to
the status of all matters or proceedings before the FDA. USSC acknowledges
that Seragen will interact directly, and at its expense, with the FDA
regarding the manufacturing of EGF Fusion Protein as required. In the event
of a dispute between USSC and Seragen concerning any matter relating to
interaction with the FDA in connection with the Technology in the USSC Field,
USSC shall have the right to resolve the matter in dispute.
13.2 During the term of this Agreement, Seragen, at USSC's request,
shall assist USSC during FDA interaction concerning the Technology in the USSC
Field; provided that USSC shall reimburse Seragen for all out-of-pocket
expenses, other than attorneys or consultant fees and expenses (unless such
fees and expenses are approved by USSC in its discretion), incurred by Seragen
in providing such assistance.
ARTICLE 14 - PATENT PROSECUTION OF INVENTIONS
14.1 Subject to the last sentence of this Section 14.1, during the
term of this Agreement, USSC shall have the sole right, at its own expense to
obtain and maintain patents based on the Inventions during the Due Diligence
Period ("Invention Patents"). If USSC exercises such right with respect to an
Invention, then in such event, USSC shall assume prosecution, and, during the
term of this Agreement in connection with prosecution of such Invention
Patents, Seragen agrees to fully cooperate with USSC in the preparation,
filing and prosecution of all applications for letters patent which USSC may
file and prosecute in the United States and foreign countries in accordance
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with this Section 14.1, and in the prosecution of the Invention Patents, and,
in connection with such applications and the Invention Patents, Seragen
further agrees to execute and deliver all documents that are reasonably
necessary therefor. USSC shall provide to Seragen copies of all materials
filed by USSC in connection with the Invention Patents or otherwise received
by USSC with respect thereto. Notwithstanding the foregoing, in the event
USSC decides (i) not to exercise its right to obtain or maintain one or more
Invention Patents, or (ii) to take steps which would result in the abandonment
of an Invention Patent, it shall give notice of such decision to Seragen
within forty five (45) days of such decision and shall provide Seragen an
opportunity to assume responsibility for such Patent Inventions and future
prosecution costs related thereto.
14.2 In the event that this Agreement terminates for any reason
other than exercise by USSC of the Option, USSC shall deliver to Seragen
copies of all Patent Inventions along with all related non-privileged
documents and correspondence which have been prepared or filed and that relate
to the Patent Inventions, except documents and correspondence relating to
patents or inventions owned by USSC. USSC further agrees to execute any
powers of attorney, assignments or other documents that may be necessary to
allow Seragen to continue to prosecute such Patent Invention.
ARTICLE 15 - RIGHT OF FIRST REFUSAL
15.1 Except as otherwise provided in the last sentence hereof,
Seragen hereby agrees not to grant to any other person the right to
manufacture, or to enter into any agreement for the manufacture of any
intravenous infusion pumps and lines to be used in conjunction with a second
fusion protein consisting of a diphtheria-based toxin and IL-2 targeting
moiety ("IL-2" Fusion Protein"), except pursuant to this Article 15. Prior to
any such grant or agreement Seragen shall obtain a bona fide, written offer
(the "Outside Offer") from such third Person describing the terms and
conditions therefor. After obtaining the Outside Offer, Seragen shall
promptly, and before accepting the Outside Offer, deliver to USSC an offer,
irrevocable for thirty (30) days from its receipt, to enter into an agreement
with USSC having the same terms and conditions as contained in the Outside
Offer. A copy of the Outside Offer shall accompany the offer by Seragen to
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USSC. If USSC accepts such offer within said thirty (30) days, Seragen shall
enter into an agreement with USSC pursuant to the terms and conditions of such
offer. Otherwise, Seragen may enter into such agreement with the third party
who made the Outside Offer in accordance with its terms and conditions during
the sixty (60) days immediately following expiration of the aforesaid thirty
(30) day period. Notwithstanding anything contained herein to the contrary,
the right of first refusal granted to USSC under this Article 15 shall be
expressly subject to, and conditioned upon, the rights granted to Xxx Xxxxx
and Company ("Xxx Lilly") under that certain Sales and Distribution Agreement,
dated as of August 3, 1994, by and between Seragen and Xxx Xxxxx, as amended,
and that certain Development Agreement, dated as of August 3, 1994, by and
between Seragen and Xxx Lilly, as amended, and the performance of Seragen's
obligations thereunder. This Section 15.1 shall not apply to any merger,
consolidation or sale of all or substantially all of the assets of Seragen.
15.2 The parties agree and acknowledge that any breach of this
Article 15 by Seragen would likely cause irreparable injury to USSC and that
USSC's remedy at law for any such breach would be inadequate. Accordingly,
the parties agree that in addition to any other remedies provided for herein
or otherwise available at law, temporary and permanent injunctive relief and
other equitable relief may be granted in any Action which may be brought by
USSC to enforce any provision of this Article 15 without the necessity of
proof of actual damages.
ARTICLE 16 - REPRESENTATIONS AND WARRANTIES
16.1 Each of the parties hereby represents and warrants that (a) it
has full right, power and authority to enter into and be bound by the terms
and conditions of this Agreement, to transfer the rights and to carry out
their respective obligations under this Agreement, without the approval or
consent of any other Person, (b) the entering into of this Agreement, the
transfer of rights and the carrying out of their respective obligations under
this Agreement is not prohibited, restricted or otherwise limited by any
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contract, agreement or understanding entered into by them, or by which any of
them is bound, with any other Person or any governmental entity, (c) there is
no contract, agreement or understanding entered into by them, or by which any
of them is bound, which if enforced, terminated or modified, would be in
derogation of, contrary to, or adversely affect the rights acquired or to be
acquired hereunder by USSC, and (d) there is no claim, Action or investigation
pending or currently threatened against it which, if adversely determined,
would restrict or limit their right to enter into this Agreement, transfer the
rights or carry out their respective obligations under this Agreement.
Seragen further represents and warrants that: (a) it has not granted, assigned
or otherwise transferred, it is not obligated to grant, assign, or otherwise
transfer, and it shall not during the term of this Agreement grant, assign or
otherwise transfer any right, title, interest, license or option in, to, or
under, any Technology or Know-How to any other Person or any governmental
entity in the USSC Field, (b) no other Person has, or during the term of this
Agreement shall be granted, the right to acquire any right, title, interest,
license or option in, to or under the Technology or Know-How in the USSC
Field, (c) it has not filed any patent application or been issued or assigned
any patent on or prior to the date of this Agreement with respect to the
Technology. All representations, warranties and covenants made by the parties
shall be considered to have been relied upon by the other parties hereto
regardless of any discussion, review, or investigation made by, or on behalf
of, the other party, and shall survive termination of this Agreement.
16.2 No representation or warranty of Seragen or USSC made in this
Agreement and no document furnished or to be furnished by Seragen or USSC
pursuant to this Agreement or in connection with the transactions contemplated
hereby contains or will contain any untrue statement of a material fact or
omits to state a material fact necessary to make the statements contained
herein or therein not misleading.
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16.3 The representations and warranties contained in this Article
16 shall survive termination of this Agreement.
ARTICLE 17 - TERM AND TERMINATION
17.1 The term of this Agreement shall commence upon the date hereof
and shall terminate upon the earliest of the following:
(a) November 2, 1998;
(b) If at any time Seragen or USSC shall fail to comply with any of
its obligations under the Agreement, or commit any fraud upon the other in
connection with this Agreement or have misrepresented any matter which is the
subject of its representations and warranties of Seragen contained herein, the
other party may terminate this Agreement upon the signing of written notice
thereof, provided, however, that the party receiving such notice shall have
thirty (30) days after receiving notice to cure such failure, refusal or
breach (but not fraud). In the event such failure, refusal or breach is cured
within such period, the notice shall be of no effect. In the event such
failure, refusal or breach is not cured, this Agreement shall terminate at the
end of such period. The remedies provided in this Section 17.1(b) shall be in
addition to any other remedies available at law or in equity;
(c) Notwithstanding any other provision of this Agreement, USSC at
all times shall have the right for any or no reason to terminate this
Agreement upon ten (10) days prior written notice to Seragen. In the event
USSC effects termination in accordance with this Section 17.1(c), there shall
not be due to Seragen any termination penalty or other payment, except under
any provision that by its terms shall survive the termination of this
Agreement; and
(d) Upon exercise of the Option hereof.
ARTICLE 18 - RIGHTS AFTER TERMINATION
18.1 (a) All rights and obligations of the parties which accrue on
or before the effective termination date shall be fully enforceable by either
party after termination.
(b) All Know-How, inventions, developments and improvements,
whether patentable or not, are and, after termination of this Agreement, shall
remain (i) the property of the USSC insofar as the same were conceived, made
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and developed solely by USSC prior to, or in performance of, this Agreement;
and (ii) the property of Seragen insofar as the same were conceived, made and
developed solely by Seragen prior to, or in performance of, this Agreement and
(iii) the property of Seragen and USSC insofar as the same were conceived,
made and developed jointly by Seragen and USSC in the performance of this
Agreement.
18.2 The provisions of this Article 18 shall survive termination of
this Agreement.
ARTICLE 19 - PUBLICITY
19.1 Neither party shall issue any press release or make any public
disclosure, announcement, comment or statement concerning the existence or the
terms and conditions of this Agreement or the transactions contemplated hereby
without the prior written consent of the other, except as may be necessary in
the opinion of counsel to a party that such public disclosure, announcement,
comment or statement is reasonably required to be made in accordance with
applicable law or the rules of a national securities exchange, or the National
Association of Securities Dealers, Inc. on which its stock is traded. Seragen
shall cooperate with USSC in issuing any communications to customers,
distributors and vendors.
19.2 The provisions of this Article 19 shall survive termination of
this Agreement.
ARTICLE 20 - WAIVER
20.1 No waiver by either party, express or implied, or any breach
of any term, condition, or obligation of this Agreement by the other party
shall be construed as a waiver of any subsequent breach of any term,
condition, or obligation of this Agreement, whether of the same or different
nature.
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ARTICLE 21 - NOTICES
21.1 Any notice required or permitted to be given hereunder shall
be in writing and shall be mailed by certified mail, return receipt requested,
or delivered by messenger or air courier, and all payments shall be delivered,
to the party to whom such notice or payment is required or permitted to be
given at its address set forth as follows: if given to Seragen, to: Attn.:
Mr. Xxxxxx Xxxxx, 00 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000; or, if
given to USSC, to: Attn.: Xxxxxx X. Xxxxxx, Senior Vice President and
General Counsel, United States Surgical Corporation, 000 Xxxxxx Xxxxxx,
Xxxxxxx, XX 00000. Any such notice shall be considered given when delivered,
as indicated by signed receipt or other written delivery record. A party may
change that address to which notice to it is to be given by notice as provided
herein.
ARTICLE 22 - ASSIGNMENTS
22.1 Neither this Agreement nor the performance of any part hereof
may be assigned or transferred by either party hereto without the prior
written consent of the other party except that (i) USSC may assign this
Agreement to an affiliate or subsidiary of USSC provided that USSC guarantees
the full performance by such affiliate or subsidiary of this Agreement, (ii)
either party may assign this Agreement to any successor by purchase, merger or
otherwise, of all or substantially all of its assets or business, provided
that in the event of such assignment such assignee shall agree to assume all
of such party's obligations and liabilities hereunder, and (iii) USSC may
enter into a sublicense with any third Person (not an affiliate or subsidiary
of USSC) on terms and conditions as it shall determine in its sole and
absolute discretion provided, however, that such sublicense is not
inconsistent with the terms and conditions of this Agreement. Any assignment
or transfer or attempt thereat other than as permitted by this Section 22.1
and in compliance with the provisions hereof will be null and void.
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ARTICLE 23 - CONSTRUCTION; ADJUDICATION
23.1 This Agreement, the validity, construction, performance and
interpretation thereof, and all issues and controversies arising therefrom
shall be construed and enforced in accordance with the internal laws of the
State of Delaware, U.S.A. applicable to contracts made and to be performed
entirely within the State of Delaware, U.S.A. without reference to its
conflicts of law provisions.
23.2 Any Action under this Agreement by either party shall be
brought only in, and the parties hereby consent to the exclusive venue and
jurisdiction of, the federal and state courts located in the State of
Delaware, U.S.A. The parties further consent that any process or notice of
motion or other application to any such court, and any papers in connection
therewith, may be served by certified mail, return receipt requested or by
personal service or in such other manner a s may be permissible under the
rules of the applicable court.
23.3 The provisions of this Article 23 shall survive termination of
this Agreement.
ARTICLE 24 - ENTIRE UNDERSTANDING/AMENDMENT
24.1 This Agreement constitutes the entire understanding and
agreement between the parties, and supersedes all previous agreements (whether
written or oral) concerning the subject matter hereof. This Agreement shall
not be modified, amended, or supplemented except by a written document
executed by both parties.
ARTICLE 25 - HEADINGS
25.1 The headings in this document are for information purposes
only and are not meant to have any legal effect in interpreting this document.
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ARTICLE 26 - SEVERABILITY; FURTHER ASSURANCES
26.1 The invalidity or unenforceability of any paragraph or
provision of this document shall not affect the validity or enforceability of
any of the other paragraphs or provisions.
26.2 The parties hereto will execute any further instruments or
perform any acts which are or may be necessary to effectuate each of the terms
and provisions of this Agreement.
ARTICLE 27 - COUNTERPARTS
27.1 This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original but all of which together
shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
SERAGEN, INC.
By: /S/Reed R. Prior
________________
Reed R. Prior
Chairman of the Board and
Chief Executive Officer
UNITED STATES SURGICAL CORPORATION
By: /s/Xxxxxx X. Xxxxxxxxxxx
________________________
Xxxxxx X. Xxxxxxxxxxx
Chief Operating Officer
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EXHIBIT A
Terms of the Permanent License
The Permanent License shall include, without limitation, the following
terms and conditions:
1. The grant to USSC by Seragen of the exclusive worldwide right and
license to the Technology in the USSC Field, including Seragen's rights
thereto under (a) the License Agreement, dated November 29, 1983, by and
between the President and Fellows of Harvard College and Seragen and (b) the
License and Royalty Agreement, dated November 10, 1992, by and between The
University Hospital and Seragen.
2. USSC shall pay Seragen (a) a royalty in an amount equal to five
percent (5%) of USSC's net sales on the sale of products that incorporate the
Technology and (b) a royalty in an amount equal to twenty-five percent (25%)
of all royalties received by USSC in connection with the sublicensing of its
rights in and to the Technology.
3. USSC shall be obligated to pay Seragen up to an aggregate of $22.5
million, contingent upon USSC's achieving during the term of the Permanent
License certain milestones set forth below related to the commercialization of
the Technology in the USSC Field. Promptly upon completion of the following
milestones for the commercialization of the Technology in the USSC Field, USSC
shall make the corresponding payment to Seragen:
Milestone Payment
First IND approval in the United States,
and equivalent approval in Europe or
Asia for phase I/II clinical trials (provided
that, if the trials are conducted simultaneously
in the United States and Europe/Asia, then such
payment shall be made upon receipt of both the IND
approvals for both trials; and provided further that if a
clinical trial is commenced in only the United
States or only in Europe or only in Asia, then such
payment shall be made upon receipt of the first
of such IND approvals). $ 2,500,000
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Initiation of first phase III clinical trial
in the United States, or any equivalent
trial in Europe or Asia. $ 5,000,000
First Filing of a BLA with the FDA in
the United States, or any equivalent
filing in Europe or Asia, for EGF Fusion Protein. $ 5,000,000
Receipt of first approval letter from
FDA in the United States, or the equivalent
thereof in Europe or Asia, for EGF Fusion Protein. $ 10,000,000
4. USSC will use its reasonable commercial efforts to develop the
Technology for commercial applications in the USSC Field. Seragen shall have
the right to terminate the Permanent License in the event that USSC does not
use reasonable commercial efforts to develop the Technology in the USSC Field.
5. Seragen will, if mutually agreed to by USSC and Seragen,
manufacture or have manufactured for and on behalf of USSC the Technology for
the USSC Field for a price equal to Seragen's fully absorbed manufacturing
costs plus 50%.
6. The term of the Permanent License shall be for a period of the
greater of twenty years or the last to expire of the patents pertaining to the
Technology.
7. USSC shall fund all preclinical studies, clinical trials, expenses
for the preparation of regulatory filings and related expenses with respect to
the Technology in the USSC Field, provided that USSC shall have approved such
costs and expenses in its discretion.
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8. The Permanent License shall contain such other commercially
reasonable terms and conditions as may be customary for an agreement
evidencing the rights and obligations of the parties contemplated hereby.
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EXHIBIT B
REGISTRATION RIGHTS
1. Seragen shall prepare and file with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "1933 Act"), a registration statement for the resale by USSC of
the Non Exercise Equity as soon as practicable after the date that it is first
eligible to register such shares for resale on a Form S-3. Seragen shall use
commercially reasonable efforts to cause such registration statement to be
declared effective by the Commission and to keep such registration statement
effective until the earlier of (i) the resale of the Non Exercise Equity by
USSC or (ii) the date on which USSC is entitled to resell the Non Exercise
Equity pursuant to Rule 144(k) under the 0000 Xxx.
2. If at any time Seragen intends to file a registration
statement with the Commission under the 1933 Act relating in whole or in part
to the primary offer and sale of shares of its common stock (other than a
registration statement that relates exclusively to the registration of
securities under an employee stock option, bonus, retirement or other
compensation plan or solely to the issuance of securities in connection with a
business acquisition or combination), Seragen shall so notify USSC in writing
of its intention to do so at least 30 days prior to the filing of such
registration statement. If, within 15 days after such notice has been given
to USSC, USSC gives written notice to Seragen of USSC's desire to have
included in such registration statement for resale any shares of Seragen's
common stock that have been purchased by USSC pursuant to the exercise of its
rights under that certain Stock Purchase Warrant (Certificate No. W-US1)
granted to USSC by Seragen on July 31, 1997 (the "Warrant Shares"), such
Warrant Shares shall be so included in such registration statement.
3. Notwithstanding the provisions of the immediately preceding
Section 2, if the underwriter of any such offering determines that the number
of shares of Seragen's common stock proposed to be sold by Seragen and by all
persons who are eligible to have shares of Seragen common stock included in
such registration statement (and who have elected to do so) is greater than
the number of shares of Seragen common stock that the underwriter believes
feasible to sell at that time, and at the price and upon the terms approved by
Seragen, then the number of shares of Seragen common stock that the
underwriter believes may be sold shall be allocated in the following order:
(i) primary shares of Seragen common stock being offered by Seragen; and (ii)
pro rata among all Persons having registration rights with respect to the
shares of Seragen common stock.
4. Seragen shall bear all expenses in connection with the
registration statement and the sale of the Non Exercise Equity and the Warrant
Shares (the "Seragen Shares"), except that USSC shall bear (i) the fees and
disbursements of any counsel that USSC may retain in connection with the
registration of the Seragen Shares; (ii) transfer taxes payable on account of
the transfer of the Seragen Shares; and (iii) any underwriter's commission,
discounts and expenses attributable to the Seragen Shares and a pro rata
portion of the SEC registration fee and any Blue Sky fees.
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5. Each of USSC and Seragen shall enter into customary
indemnification arrangements with the other regarding information supplied by
such party for inclusion in any such registration statement or other related
public filing.
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