LICENSE AGREEMENT
BY AND BETWEEN
CYTOGEN CORPORATION
AND
BERLEX LABORATORIES, INC.
TABLE OF CONTENTS
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SECTION PAGE
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Recitals 3
Article I - Definitions 4
Article II - Payments 7
Article III - Warrant 8
Article IV - Obligations of the Parties 8
Article V -Manufacture 15
Article VI - Grant of license 15
Article VII - Royalty Payments 16
Article VIII - Indemnification 19
Article IX - Confidentiality 20
Article X - Trademarks 22
Article XI - Inventions and Patents 22
Article XII - Infringement 23
Article XIII - Representations and Warranties 25
Article XIV - Expiration and Termination 27
Article XV - Miscellaneous Provisions 31
Schedule A - Patents and Patent Applications 38
Schedule B - FLUDARA Label 39
Schedule C - FDA Letter 40
Attachment A - Warrant 41
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LICENSE AGREEMENT
-----------------
THIS AGREEMENT (the "Agreement") is made and is effective the
28th day of October, 1998 (the "Effective Date") by and
between CYTOGEN CORPORATION, a Delaware corporation having its
principal place of business at 000 Xxxxxxx Xxxx Xxxx,
Xxxxxxxxx, Xxx Xxxxxx 00000-0000 ("Cytogen"); and BERLEX
LABORATORIES, INC., a Delaware corporation having its
principal place of business at 000 Xxxxxxxxxxxx Xxxx,
Xxxxxxxxx, Xxx Xxxxxx 00000-0000 ("Berlex").
RECITALS
1. Cytogen is engaged in the development and marketing of
products for the targeted delivery of diagnostic and
therapeutic substances directly to the sites of the
disease.
2. Cytogen has acquired from The Dow Chemical Company
("Dow") an exclusive license to make, have made, use,
sell and have sold in the Territory certain samarium-based,
radioactive complexed agents (the "Samarium
Agent"), marketed under the name Quadramet encompassed
by certain patents for both diagnostic and therapeutic
applications.
3. Berlex is engaged in the discovery, development,
marketing, distribution and sale of pharmaceuticals.
4. The Parties wish to enter into this Agreement to: (a)
grant Berlex an exclusive sub-license co-extensive with
Cytogen's license from Dow to make, have made, use and
sell the Product in the Territory, and (b) provide for
the further clinical development of the Samarium Agent as
a radiopharmaceutical for certain therapeutic uses
related to cancers which originate in or metastasize to
the bone; and (c) provide for the further clinical
development of the Samarium Agent as a
radiopharmaceutical for certain therapeutic uses related
to rheumatoid arthritis.
5. The Parties desire to have Dow and Cytogen enter into the
Dow Amendment, and to have Cytogen, Berlex, and DuPont
enter into the Manufacturing Agreement, in each case
promptly following the execution of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations hereinafter set forth the Parties agree to be
legally bound as follows:
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ARTICLE I - DEFINITIONS
1.1 "Additional Indications" shall mean the indications
(other than the Current Indication) for the Product, as
described in Section 4.4.
1.2 "Affiliate" shall mean any corporation or other legal
entity owning, directly or indirectly, fifty percent (50%) or
more of a Party to this Agreement; any corporation or other
legal entity of which fifty percent (50%) or more of the
voting capital shares (or equivalent control) is owned,
directly or indirectly, by a Party to this Agreement; or any
corporation or other legal entity of which fifty percent (50%)
or more of the voting capital shares (or equivalent control)
is owned, directly or indirectly, by a corporation or other
legal entity owning, directly or indirectly, fifty percent
(50%) or more of the voting capital shares of a Party to this
Agreement.
1.3 "Claim" shall mean any suit, claim, action or proceeding,
whether asserted by or required to be paid to any Third Party
or otherwise.
1.4 "Current Indication" shall mean the indication approved
in the NDA as of the Effective Date: the relief of pain in
patients with confirmed osteoblastic metastatic bone lesions
that enhance on radionuclide bone scan.
1.5 "Dow" shall mean The Dow Chemical Company, a corporation
organized and existing under the laws of the State of Delaware
and having a place of business at 2030 Xxxxxxx X. Xxx Center,
Xxxxxx Road, Midland, Michigan.
1.6 "Dow Amendment" shall have the meaning set forth in
Section 15.2 (a).
1.7 "Dow License" shall mean the License Agreement between
Dow and Cytogen relating to the manufacture, use and sale of
the radioactive Samarium Agent in the Field and executed on
March 31, 1993, including amendments thereto and the Dow
Amendment.
1.8 "Dow Licensed Patent" shall mean any present or future
patent encompassed by the Dow License, including, without
limitation, the patents identified on Schedule A attached
hereto.
1.9 "DuPont" shall mean the DuPont Pharmaceuticals Company,
a corporation organized and existing under the Laws of the
State of Delaware and having a place of business at 000 Xxxxxx
Xxxx Xxxx, Xxxxx Xxxxxxxxx, Xxxxxxxxxxxxx.
1.10 "FDA" shall mean the United States Food and Drug
Administration.
1.11 "Field" shall mean (i) the definitions of "Field" and
"Expansion of Licensed Field" in the Dow License as amended by
the Dow Amendment; and (ii) all human therapeutic and
diagnostic uses of the Product which are outside of the scope
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of the intellectual property licensed to Cytogen by Dow in the
Dow License.
1.12 "First Commercial Sale" shall mean the first time sales
are made of Product by Berlex to an unrelated Third Party
after January 1, 1999.
1.13 "GMP" shall mean the Current Good Manufacturing Practices
regulations promulgated by FDA and codified at 21 CFR Parts
210 and 211, as amended.
1.14 "IND" shall mean Investigational New Drug Application #
33,240, as amended or supplemented.
1.15 "Joint Committee" shall have the meaning set forth in
Section 4.8.
1.16 "Licensed Patent" shall mean any present or future patent
or patent applications and substitutions, extensions,
reissues, renewals, divisions, continuations or continuations-in-part
thereof or therefor, which is owned or controlled by or licensed to Cytogen.
1.17 "Manufacturing Agreement" shall mean a contractual
agreement among Berlex, Cytogen and DuPont providing for the
manufacture and distribution of the Product by DuPont in the
Territory.
1.18 "NDA" shall mean New Drug Application # 20-570 approval
by the FDA and held by Cytogen for the Current Indication for
the Product, as it may be supplemented from time to time
during the term of this Agreement.
1.19 "Net Sales" means the amount invoiced by a Party,
its Affiliates or its sublicensees on account of sales of a
Product to Third Parties in the Territory, less reasonable and
customary deductions applicable to the Product for [CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED]
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1.20 "Party" or "Parties" shall refer to Berlex and Cytogen,
as indicated by the context.
1.21 "Product" shall mean any composition or formulation of
radioactive Samarium Agent, in either its complexed or its
finished dosage form, as described in the NDA.
1.22 "Samarium Agent" shall mean Samarium-153 complexed with
ethylene diaminetetramethylene-phosphonic acid ("EDTMP")
1.23 "Sublicensee " shall mean a Third Party other than an
Affiliate granted a sublicense by Berlex under Berlex's
license under Section 6.1(b).
1.24 "Technical Information" shall mean Technology that is
owned, discovered or developed now or in the future by, or
licensed to, Cytogen, and which is involved in the
manufacture, use or sale of the Product.
1.25 "Technology" shall mean a Party's proprietary processes,
instruments, machines, materials, compositions, test
procedures, manufacturing procedures, techniques,
formulations, methodologies, data and information.
1.26 "Territory" shall mean the United States of America,
Canada, and Latin America.
(a) "United States" shall mean the United States of
America, the United States Virgin Islands, the
Commonwealth of Puerto Rico and Guam.
(b) "Canada" shall mean Canada comprising its provinces
of Alberta, British Columbia, Manitoba, New
Brunswick, Nova Scotia, Ontario, Xxxxxx Xxxxxx
Island, Quebec, Saskatchewan and Newfoundland, the
Northwest Territories and the Yukon territory.
(c) "Latin America" shall mean Central America, South
America and the West Indies as follows:
(i) "Central America" shall mean Belize, Costa
Rica, El Salvador, Guatemala, Honduras, Mexico,
Nicaragua and Panama;
(ii) "South America" shall mean Argentina, Bolivia,
Brazil, Chile, Colombia, Ecuador, Guyana,
Paraguay, Peru, Surinam, Uruguay and Venezuela;
and
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(iii) "West Indies" shall mean the Anguilla,
Antigua, Aruba, Bahamas, Barbados, Bermuda,
Cayman Islands, Dominica, Dominican Republic,
Grenada, Guadeloupe, Haiti, Jamaica (including
Turks and Caicos), Martinique, Netherlands
Antilles, St. Xxxxxxxxxxx & Nevis, St. Lucia, St.
Xxxxxxx and the Grenadines, Trinidad & Tobago and
British Virgin Islands. If the embargo by the
United States against Cuba is lifted during the
term of this Agreement, then Cuba shall be
included in the Territory.
1.27 "Third Party" or "Third Parties" shall refer to a Party
other than Cytogen and Berlex, and their respective
Affiliates.
1. 28 "Trademark" shall mean the trademark Quadramet
which is owned by Dow and licensed to Cytogen.
1.29 "Valid Licensed Claim" shall mean a claim of an issued,
unexpired Licensed Patent which has not been abandoned, or
held invalid in an unappealed or unappealable final decision
rendered by a court of competent jurisdiction, which covers
the manufacture, use in the Field or sale of the Product, and
includes, without limitation, any Dow Licensed Patents from
the University of Missouri and The Xxxx Xxxxxxxxxx Cancer
Center and Cytogen patent applications identified in Schedule
A.
ARTICLE II - PAYMENTS
2.1 Initiation Payments. Promptly following the execution
and delivery of all parties named therein of the later to be
both executed and delivered of the Manufacturing Agreement and
the Dow Amendment, each in a form acceptable to Berlex in its
sole discretion, Berlex shall pay to Cytogen $8,000,000 in
cash. Berlex acknowledges that Cytogen expects to utilize
$4,000,000 of such proceeds to secure the Manufacturing
Agreement with DuPont and to acquire from DuPont rights to
certain know-how and proprietary information related to the
manufacturing process.
2.2 Milestone Payments. Berlex shall make the following two
one-time milestone payments to Cytogen in the event that Net
Sales achieve certain levels during a calendar year. The
first time that Net Sales equal $25,000,000 in a calendar
year, Berlex shall pay to Cytogen a cash payment of $2,000,000.
The first time that Net Sales equal $50,000,000 in a calendar year,
Berlex shall pay to Cytogen a cash payment of $3,500,000. In
each case, the payment shall be paid by Berlex to Cytogen within
ten (10) business days of the achievement of the sales milestone.
For purposes of clarity the Parties recognize that the two sales
milestone payments may never become due, the $2,000,000 payment
may become due but not the $3,500,000 payment, or the payments may become due
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and payable in the same calendar year or in different calendar
years, depending on the sales performance of the Product.
ARTICLE III WARRANT
In connection with closing of this Agreement, Cytogen shall
issue to Berlex a Warrant in the form set forth in Attachment
A for the purchase of 1 million (1,000,000) registered shares
of Cytogen common stock $.01 par value (the "Common Stock"),
exercisable on the earlier of one year from the Effective Date
or the first date on which annual sales of the Product equal
or exceed $10,000,000. The warrant shall be exercisable at a
price equal to 125% of the average closing price of the Common
Stock on the Nasdaq national market for the thirty calendar
day trading period to and including October 14, 1998. The
warrant shall expire on the fifth (5th) anniversary of the
Effective Date.
ARTICLE IV - OBLIGATIONS OF THE PARTIES
4.1 Label Statements; FDA Responsibilities; Foreign
Approvals.
(a) Cytogen and Berlex shall promptly take such steps as are
necessary to change the label on primary, secondary and
tertiary packaging for the Product for the United States
and Canada to Berlex's trade dress, and to feature the
"Berlex" logo and Berlex full corporate name and address.
The Berlex trade dress for the Product shall be
substantially the same as that for the label of Berlex's
FLUDARA product. The "Berlex" logo and full corporate
name and address shall be included on the label of the
Product at least as prominently as they are included on
the label for Berlex's FLUDARA product as of the
Effective Date. Schedule B sets forth the label for
Berlex's FLUDARA product as of the Effective Date. For
countries of the Territory other than the United States
and Canada the Parties will attempt to conform the trade
dress and corporate name information to that of the
United States, but using the name of Berlex's Sublicensee
in the applicable country.
(b) [CONFIDENTIAL TREATMENT HAS BEEN REQUESTED]
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(c) [CONFIDENTIAL TREATMENT HAS BEEN REQUESTED]
(d) [CONFIDENTIAL TREATMENT HAS BEEN REQUESTED]
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(e) [CONFIDENTIAL TREATMENT HAS BEEN REQUESTED]
(f) [CONFIDENTIAL TREATMENT HAS BEEN REQUESTED]
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(g) Cytogen shall be responsible for obtaining marketing
approval of the Product in each of the countries of the
Territory. For the countries of Latin America the
Parties shall agree prior to the end of the second
quarter of 1999 as to which countries in which it is
commercially feasible to seek regulatory approval.
Cytogen shall use reasonable commercial efforts to obtain
such approvals, and shall have the right to use data from
the IND and NDA for the purpose of obtaining such
approvals. If local studies or other additional studies
are needed for any such approval, Cytogen shall be
responsible for conducting such study (under a protocol
approved in advance by the Chief Medical Officer of
Berlex) and paying the costs of such study. Cytogen
shall provide to Berlex written status reports on the
progress of approvals outside the United States as may be
reasonably requested by Berlex. Promptly after
regulatory approvals are obtained in each country other
than the United States, Cytogen shall appoint Berlex or
Berlex's designee in the applicable country as Cytogen's
authorized agent for the handling of the NDA equivalent
and IND equivalent in such country. After such
appointment Berlex or its designee, as applicable, shall
be responsible for making submissions to such regulatory
authorities and for handling all interaction with
regulatory authorities in such country.
(h) For so long as Cytogen is the holder of the IND during
the term of this Agreement, Cytogen agrees to use
reasonable commercial efforts to maintain the IND in
force so long as there is a business need to do so. For
so long as Cytogen is the holder of the NDA during the
term of this Agreement, Cytogen agrees to use reasonable
commercial efforts to maintain the NDA in compliance with
applicable laws and FDA regulations.
4.2 Cytogen Phase IV Commitments. Cytogen shall be
responsible for promptly completing all clinical studies
required by FDA as a condition to its approval of the NDA. No
such study after the Effective Date shall be commenced by
Cytogen except under a protocol approved in writing by the
Chief Medical Officer of Berlex. Such studies shall be
undertaken entirely at the expense of Cytogen (including the
costs of Product). Cytogen shall provide to Berlex written
status reports of the progress of the Phase IV studies as may
be reasonably requested by Berlex. Data and final study
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reports shall be turned over to Berlex for submission to FDA.
4.3 Other Cytogen Studies. Except as provided in Section
4.2, no preclinical or clinical studies of the Product shall
be undertaken by Cytogen without the advance written
permission of the Chief Medical Officer of Berlex.
4.4 Berlex Clinical Studies. Berlex shall, on a timely
basis, undertake an evaluation as to expansion of the Current
Indication and Additional Indications, and shall pursue
clinical studies for such expansion of the Current Indication
or Additional Indications unless Berlex concludes, after
consultation with Cytogen, that such expansion of the Current
Indication and/or Additional Indications, are not medically
and commercially viable for Berlex. If Berlex determines that
more than one study is medically and commercially viable for
Berlex, then Berlex shall determine development priorities.
Such studies, if undertaken, shall be undertaken at the sole
expense of Berlex. Berlex, through the Joint Committee, shall
consult with Cytogen concerning the protocols for such
studies. Berlex shall be responsible for the purchase of all
necessary materials for the conduct of such studies, including
Product. Berlex shall provide to Cytogen written status
reports on the progress of such studies as may be reasonably
requested by Cytogen. Berlex shall provide Cytogen with
copies of final study reports promptly following their
preparation. If Berlex determines to undertake any study or
studies described in this Section, then Berlex shall have the
right to conduct such study or studies under the IND, or under
a Berlex investigational new drug application (in which case
Berlex shall have the right to reference the IND and NDA in
such Berlex investigational new drug application), at Berlex's
option. In the event that Berlex determines not to go forward
with clinical studies for the Additional Indication of
rheumatoid arthritis, Berlex agrees to use reasonable
commercial efforts to sublicense such indication to a Third
Party, in which case Cytogen shall have first right to
negotiate for such sublicense.
4.5 Ownership of Data and Reports. All data and reports
resulting from the studies described in Sections 4.2, 4.3 and
4.4 shall be owned by the Party that pays for the study.
4.6 Commercialization; Timing. Berlex shall be
responsible for the commercialization and marketing of the
Product in the Territory. Sales of Product in the Territory
after the Effective Date but prior to January 1, 1999 shall be
credited to Cytogen. Sales of Product in the Territory from
and after January 1, 1999 shall be credited to Berlex.
Berlex's royalty obligations shall commence as set forth in
Section 7.1(b).
4.7 Development Support Payments. Berlex may in its sole
discretion engage Cytogen to provide support for clinical
studies and other Product development for Additional
Indications in the Field, on terms to be negotiated between
the Parties.
4.8 Joint Development and Marketing Committee. Within thirty
(30) days after execution of this Agreement, the Parties shall
establish a Joint Development and Marketing Committee (the
"Joint Committee") having a total membership of six (6), of
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which three (3) members shall be designated by Berlex and
three (3) by Cytogen, or as the Parties may otherwise
determine to be advisable. Berlex shall chair the Joint
Committee. The Joint Committee shall have a purely advisory
role with no decision-making authority, except with regard to
FDA issues. The Joint Committee shall be the forum in which
the Parties will discuss and resolve differences of opinion
concerning FDA issues such as regulatory strategy and
positions to take with FDA. In regard to Joint Committee
decisions concerning such FDA issues each Party shall have one
vote. In the event of a deadlock the position of Berlex shall
be the position of the Joint Committee and the Parties. The
Joint Committee shall advise on protocols submitted by the
Parties relating to the clinical studies described in Sections
4.2, 4.3 and 4.4. Berlex shall report to the Joint Committee
as to its general marketing plan and strategy for the
commercialization of the Product in the following calendar
year. The Joint Committee shall meet at times and places
mutually agreed by the Parties but shall meet at least three
times prior to the end of 1999, and at least twice a year
thereafter. The Joint Committee shall have only the powers
specifically delegated to it pursuant to this Agreement.
Notwithstanding the creation of the Joint Committee, each
Party to this Agreement shall retain the rights, powers, and
discretion granted to it hereunder, and the Joint Committee
shall not be delegated or vested with any rights, powers or
discretion unless such delegation or vesting is expressly
provided for herein, or the Parties expressly so agree in
writing. The Joint Committee shall not have the power to
amend or modify this Agreement, which may be amended or
modified only as provided in Section 15.4.
4.9 Coordination of Safety and Complaint Reporting. The
Parties agree to comply with legal obligations imposed by the
countries of the Territory concerning the collection,
investigation, and governmental reporting of adverse reactions
and complaints relating to the Product, including without
limitation with respect to the United States 21 CFR 312.32 and
21 CFR 314.80 (a). Promptly following the Effective Date the
respective departments of the Parties responsible for handling
adverse reaction monitoring and complaints will jointly
develop a written procedure to govern their communication
concerning such matters, such that each of the Parties will
have the ability to comply with its legal obligations and
contractual undertakings.
4.10 Marketing.
(a) Berlex agrees to use reasonable commercial efforts to
promote the Product in the Territory, and to maximize
sales and market penetration. Berlex shall commence
marketing and selling efforts for the Product in the
United States with reasonable promptness and in no event
later than the end of the first quarter of 1999. Berlex
shall notify Cytogen of the date upon which Berlex
commences its marketing and selling efforts. From the
Effective Date until Berlex commences its marketing and
selling efforts in the United States Berlex will use
reasonable commerical efforts to conduct preliminary
training with respect to the Product of its United States
sales force personnel assigned to oncology-related
products to enable such personnel to respond to basic
prescriber and customer inquiries concerning the Product.
Berlex shall commence marketing and selling efforts for
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the Product in Canada with reasonable promptness and in
no event later than the end of the second quarter of
1999, if permissible from a regulatory standpoint and
within the manufacturing and distribution capabilities of
DuPont; provided that if Berlex is unable to meet this
date for Canada and this results in a material breach of
this Agreement, then Cytogen's sole remedy shall be the
termination of this Agreement as to Canada. The
commencement of Berlex's sales and promotion efforts for
the Product shall occur in Latin America, by country, as
promptly as is reasonably possible following the date on
which regulatory approval is gained by Cytogen in any
particular country. Cytogen and Berlex shall agree
(within the time frame set forth in Section 4.1) on the
countries within Latin America in which the Product will
be marketed, recognizing the Cytogen obligations to
commercialize in Latin America in the Dow License.
Berlex and/or its Affiliates, Sublicensees or agents will
promote and market the Product to such Nuclear Medicine
specialists, Oncology, or other physician specialties
and/or managed care entities and administrators as
reasonably necessary in Berlex's sole discretion to
maximize market penetration in the Field in the
Territory. Berlex will pay all its own expenses in
marketing and promoting the Product and for any contract
selling expenses incurred.
(b) If Berlex desires to have marketing rights to the Product
in any country of the world outside the Territory, it
shall so notify Cytogen. Upon receipt of such notice
Cytogen shall use reasonable commercial efforts to have
such country or countries added to the Territory.
(c) Upon request, Cytogen shall have access to reasonable
quantities of materials produced by Berlex for use by
Berlex in promotion of the Product, in connection with
Cytogen's corporate needs such as investor relations and
other external corporate communications programs as it
might conduct.
(d) All marketing, selling and distribution expenses, except
for such expenses as incurred by Cytogen pursuant to the
co-promotion provisions under Section 6.1 (c), shall be
paid by Berlex.
(e) All order/invoicing, customer service support and
accounts receivable management shall be the
responsibility of Berlex at its sole expense.
(f) Berlex shall: (i) Maintain a sales force devoted to
the sale of oncology-related products, including the
Product, of not less than forty-five (45) competent,
trained sales force personnel not later than the end of
the second quarter of 1999; provided, however, that for
the purpose of determining whether Berlex has materially
breached this covenant, the standards set forth in
Section 14.2 (b) (i) shall control; and (ii) sell the
Product in 1st position during the first eighteen months
following the commencement of Berlex's marketing and
selling efforts (of which date Berlex shall notify
Cytogen), and not less than 2nd position for the eighteen
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months thereafter, and thereafter in such a position as
to actively promote the Product.
ARTICLE V - MANUFACTURE
5.1 DuPont Relationship. The Parties recognize that neither
Berlex nor Cytogen is capable of manufacturing or distributing
the Product, and that such functions must be delegated to one
or more Third Parties. As of the Effective Date these
functions are being performed by DuPont at its North
Bellarica, Massachusetts facility, pursuant to a contractual
agreement between Cytogen and DuPont. The Parties will use
reasonable commercial efforts to enter into the Manufacturing
Agreement with DuPont prior to November 30, 1998. Following
the completion of the Manufacturing Agreement, the Parties
will use reasonable commercial efforts to maintain DuPont as
a qualified manufacturer and distributor of the Product under
the NDA. Cytogen will conduct or arrange to have conducted
such GMP compliance audits of the DuPont manufacturing and
distribution facility as are customary in the pharmaceutical
industry in the United States. The costs of such audits shall
be borne by Cytogen. The results of such audits shall be
transmitted by Cytogen to Berlex.
5.2 Other Manufacturers. Berlex shall have the right to have
more than one vendor qualified as a manufacturer, and/or more
than one vendor qualified as a distributor. At the discretion
of Berlex such additional vendors may be utilized either in
place of or in addition to DuPont. Upon notice from Berlex,
Cytogen agrees to use reasonable commercial efforts to assist
Berlex in the qualification of vendors other than DuPont as
manufacturers and/or distributors of the Product under the
NDA. The GMP compliance audit obligation of Cytogen described
in Section 5.1 shall be applicable to other manufacturers and
distributors of the Product.
5.3 No Breach. The Parties recognize that Third Party
manufacturers and/or distributors of the Product are
independent entities which are not under the control of either
Party. The failure of a Third Party manufacturer or
distributor to perform the functions of manufacture or
distribution as contemplated by the Parties shall not
constitute a breach of this Agreement by either Party.
ARTICLE VI - GRANT OF LICENSE
6.1 Exclusive License.
(a) Cytogen grants to Berlex an exclusive license under
Licensed Patents and Technical Information owned or
developed by Cytogen and an exclusive sub-license under
Licensed Patents and Technical Information controlled by
or licensed to Cytogen to make, have made, use and sell
the Product in the Field in the Territory.
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(b) Berlex shall have the right to grant sublicenses of the
rights granted under Section 6. l (a) to others. The
prior consent of Cytogen, which consent shall not be
unreasonably withheld, shall be required in the event
Berlex desires to grant a sublicense for the United
States or Canada to a non-Affiliate. Other Berlex
sublicenses shall not require the consent of Cytogen.
The Parties contemplate that sublicenses by Berlex would
be granted in connection with selling efforts as to the
Product for indications prescribed by physician audiences
with which it does not have an adequate sales
relationship and/or to Affiliates or other Parties in
countries other than the United States.
(c) Berlex may request that Cytogen provide reasonable
assistance to co-promote the Product or provide
assistance with marketing and development efforts, and
Cytogen may engage in co-promotion efforts in support of
marketing, to the extent coordinated with and approved in
advance by Berlex, such approval not to be unreasonably
withheld.
ARTICLE VII - ROYALTY PAYMENTS
7.1 Royalties
(a) As partial consideration for the rights granted in
Section 6.1, Berlex shall pay to Cytogen a royalty equal
to 25% of Net Sales. In the event that any one or more
of the Additional Indications are approved by FDA for
inclusion in the labeling of the Product in the United
States, then commencing with the first day of the
calendar quarter following the calendar quarter in which
the first such approval of an Additional Indication
occurs, the royalty rate shall increase to 27% of Net
Sales throughout the Territory. Provided, however, that the
27% royalty rate shall be applicable only to the volume of
Net Sales in each calendar quarter in excess of the volume
of Net Sales for the calendar quarter immediately preceding the
calendar quarter in which FDA approval of the first
Additional Indication occurred (the "Excess Net Sales").
The initial 25% royalty rate shall continue to be applicable
to determine the royalty payable by Berlex to Cytogen with
respect to the volume of Net Sales each quarter which is not
Excess Net Sales.
(b) Berlex's obligation to pay royalties under Section 7.1
(a) to Cytogen shall commence in each country of the
Territory upon First Commercial Sale in such country and
shall continue until the expiration of the last-to-expire
Valid Licensed Claim in such country.
(c) Berlex's royalty obligations shall apply to sales to
unrelated Third Parties, excluding transfers among
Berlex, its Affiliates and Sublicensees made for the
purpose of facilitating the sale, development or
promotion of Product. When Berlex, its Affiliates, or
its Sublicensees would be considered end-use consumers by
those in the pharmaceutical industry, and such end use is
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not done in conjunction with commercially reasonable
promotion or development activities, then a royalty shall
be due based on the price normally paid by Third-Party
buyers. Product shall be deemed sold when invoiced.
7.2 Sales Reports.
(a) Within thirty (30) days after the end of each calendar
quarter, Berlex shall provide Cytogen with a written
statement with respect to such period, specifying the Net
Sales of Products during the period, and the amount of
royalty due, if any. For the United States such report
shall contain actual Net Sales figures. For the other
countries of the Territory such report shall contain
Berlex's estimate of Net Sales, with over or
underpayments being corrected in the following quarterly
report and payment. In addition, Berlex shall provide
Cytogen with a written report of monthly sales for the
United States and Canada, in such form as may be agreed,
within 20 days following the end of each month (actual
sales figures for the United States and estimated sales
figures for Canada if actual figures are not available).
(b) No statements or reports shall be required under Section
7.2(a) prior to the date of First Commercial Sale of a
Product by Berlex in the Territory.
(c) Berlex shall give Cytogen prompt written notice of the
First Commercial Sale of a Product in the Territory.
7.3 Records and Audit Rights.
(a) Berlex shall keep complete and accurate records
pertaining to the manufacture, use and sale of Product
appropriate to determine royalties payable under Section
7.1 of this Agreement.
(b) At the request and expense of Cytogen, an independent
auditor, selected by Cytogen and acceptable to Berlex,
shall have access limited to once per calendar year, at
Berlex's principal place of business during ordinary
business hours, to such records maintained by Berlex as
may be necessary to:
(1) determine, with respect to the preceding two years
the correctness of any report or payment made under
this Agreement, or
(2) obtain information with respect to the preceding two
years as to the royalty payable in the case of
Berlex's failure to report or pay such royalty
pursuant to this Agreement. If deemed necessary or
desirable in the sole opinion of the accountant, the
accountant shall at Cytogen's expense be permitted to
consult with and obtain the assistance of consultants
17
selected by the accountant and acceptable to Berlex.
Such acceptance shall not be unreasonably withheld.
Neither the accountant nor the selected consultants
shall disclose to Cytogen or any Third Parties any
information relating to the business of Berlex other
than information relating solely to the accuracy of
the reports and payments under this Agreement.
7.4 Payment of Royalty.
(a) Berlex shall make all royalty payments due under Section
7.1 for sales of Product in each calendar quarter within
thirty (30) days after the end of such quarter. Such
payment shall be based on actual and estimated sales
results as described in Section 7.2.
(b) Payments by Berlex under this Agreement shall be paid to
Cytogen in United States dollars by wire transfer of
immediately available funds to an account at a commercial
bank designed by Cytogen at least ten (10) business days
before payment is due. Where payments are based on Net
Sales in countries other than the United States, the
amount of such Net Sales expressed in the currency of
each country shall be converted first into Deutsche
Marks, or the then applicable legal currency in the
Federal Republic of Germany, and then into United States
dollars at the average exchange rate (calculated at the
average of the "bid" and "asked" exchange rate) for the
applicable quarter; provided, however, that the
conversion of the currency in question into Deutsche
Marks or the then applicable German currency prior to
conversion into United States dollars shall be for
calculation purposes only, and no additional fee or
commission will be incurred as a consequence of the
multiple currency conversions. In determining the
average exchange rate for any quarter, the standard shall
be fifty percent (50%) of the sum of (i) the rate quoted
by Reuters (or a different independent wire service
providing international spot exchange rates as agreed to
by the Parties) in Frankfurt at 1:00 p.m. on the last
Business Day of the applicable quarter (or, in the event
that the German government eliminates the Frankfurt
fixing, the successor currency fixing established by the
German government); plus (ii) the rate quoted by Reuters
(or the approved successor wire service) in Frankfurt at
1:00 p.m. on the last Business Day of the quarter
immediately preceding the applicable quarter.
(c) Any sum required under the laws of any governmental
authority to be withheld by Berlex from payment for the
account of Cytogen under Section 7.1 shall be promptly
paid by Berlex for and on behalf of Cytogen to the
appropriate tax or other governmental authorities and
Berlex shall furnish Cytogen with copies of official tax
receipts or other appropriate evidence issued by the
appropriate tax or other governmental authorities.
(d) All payments due Cytogen under this Agreement which are
received later than the due date, shall be subject to an
additional payment of one percent (1%) per month or
portion thereof as liquidated for payments received later
than the due date.
18
ARTICLE VIII - INDEMNIFICATION
This Article VIII shall not be applicable to patent
infringement claims brought by Third Parties, which shall be
governed by Article XII.
8.1 Indemnification of Cytogen by Berlex. Berlex shall
indemnify and hold Cytogen, its Affiliates and the officers,
directors and employees of each of them, harmless from any and
all liability, including liability for death or personal
injury, and judgments, damages, costs, losses and expenses,
including reasonable attorney's fees and expenses arising from
any Claim that results solely from (i) the material breach by
Berlex of any representation, warranty, or covenant of Berlex
contained in this Agreement; or (ii) the negligent, reckless
or willful misconduct of Berlex in connection with the
manufacture, distribution, marketing or sales of the Product.
8.2 Indemnification of Berlex by Cytogen. Cytogen shall
indemnify and hold Berlex, its Affiliates, and the officers,
directors and employees of each of them, harmless from any and
all liability, including liability for death or personal
injury, and costs, losses and expenses, including reasonable
attorney's fees and expenses arising from any Claim that
results solely from (i) the material breach by Cytogen of any
representation, warranty, or covenant of Cytogen contained in
this Agreement; or (ii) the negligent, reckless or willful
misconduct of Cytogen in connection with the research,
development, labeling, or FDA registration of the Product.
8.3 Shared Liability. In the event that a Claim involves
allegations that the negligent, reckless or willful misconduct
of each of Berlex and Cytogen contribute materially to any
such liability, cost, loss or expense stemming from the
Product, then Cytogen and Berlex each shall be responsible for
that portion of said liability, cost, loss or expense to which
such misconduct contributed.
8.4 Assertion of Claims.
(a) Each indemnified Party agrees to give the indemnifying
Party prompt written notice of any Claim or discovery of
fact upon which such indemnified Party intends to base a
request for indemnification under Sections 8.1, 8.2, or
8.3. Each Party shall furnish promptly to the other,
copies of all papers and official documents received in
respect of any Claim. With respect to any Claim relating
solely to the payment of money damages and which will not
result in the indemnified Party becoming subject to
injunctive or other relief or otherwise adversely
affecting the business of the indemnified Party in any
manner, and as to which the indemnifying Party shall have
acknowledged in writing the obligation to indemnify the
indemnified Party hereunder, the indemnifying Party shall
have the sole right to defend, settle or otherwise dispose
of such Claim, on such terms as the indemnifying Party, in
its sole discretion, shall deem appropriate. The
indemnifying Party shall obtain the written consent of the
indemnified Party, which shall not be unreasonably
withheld, prior to ceasing to defend, settling or
otherwise disposing of any Claim if as a result thereof
19
the indemnified Party would become subject to injunctive
or other equitable relief or any remedy other than the
payment of money, which payment would be the
responsibility of the indemnifying Party. The
indemnifying Party shall not be liable for any settlement
or other disposition of a Claim by the indemnified Party
which is reached without the consent of the indemnifying
Party. Except as provided above, the reasonable costs and
expenses, including reasonable fees and disbursements of
counsel incurred by any indemnified Party in connection
with any Claim, shall be reimbursed on a quarterly basis
by the indemnifying Party, without prejudice to the
indemnifying Party's right to contest the indemnified
Party's right to indemnification and subject to refund in
the event the indemnifying Party is ultimately held not to
be obligated to indemnify the indemnified Party.
(b) In the event that a Claim involves allegations of shared
liability pursuant to Section 8.3, the Parties will
insofar as possible endeavor to coordinate their defense
strategies (including a joint defense agreement if
warranted by the circumstances). Expenses shall be
allocated between the Parties based on the proportion of
the loss attributable to each. If the Parties are unable
to agree on the division of expenses during the pendency
of the Claim, then each Party shall bear its own expenses,
subject to reimbursement by or of the other Party
following the conclusion of the Claim.
ARTICLE IX - CONFIDENTIALITY
9.1 Nondisclosure and Nonuse. Cytogen and Berlex shall
each retain in confidence information obtained from the other
under this Agreement and shall not disclose such information
to any Third Party except:
(i) consultants, Affiliates, Sublicensees, manufacturers
and agents who are obligated to maintain it in
confidence pursuant to written agreements which are
at least as stringent as the terms of this Article
IX.
(ii) as necessary to obtain approval from a governmental
agency in order to market the Product;
(iii) as reasonably may be required in a patent
application covering subject matter which is
encompassed within this Agreement; or
(iv) as otherwise may be required by law, regulation or
judicial order, and shall not use such information
for any purposes other than those contemplated by
this Agreement. Each Party shall take all reasonable
precautions to safeguard the confidentiality of the
information.
9.2 Exceptions.
(a) The obligations of nondisclosure and non-use of this
Article IX shall not apply to information which:
20
(i) is known to the receiving Party, as evidenced by
written records maintained by the receiving Party, or
to the public, or is in the public domain, prior to
its disclosure under this Agreement;
(ii) is hereafter lawfully disclosed to the
receiving Party by a Third Party not under an
obligation of confidence to the other Party; or
(iii) subsequently enters the public domain or
becomes known to the public by some means other than
a breach of this Agreement; or
(iv) is developed by the receiving Party independently of
the disclosure by the disclosing Party, as evidenced
by the records of the receiving Party.
(b) Notwithstanding anything in this Article IX to the
contrary, Berlex shall have the right to disclose
preclinical and clinical data and results relating to the
Product to medical professionals and potential purchasers
of the Product for the purposes of selling, advertising
and promoting the Product and conducting medical
education initiatives relating to the Product.
9.3 Purpose of Article. Each Party acknowledges that the
restrictions contained in this Article IX are necessary and
reasonable to protect the legitimate interests of the Parties
and a violation of this Article by a Party may result in
irreparable harm to the other Party.
9.4 Term. The provisions of this Article IX shall survive the
expiration or termination of this Agreement and continue for
ten (10) years thereafter.
9.5 Other Agreements. Cytogen and Berlex's Affiliate
Schering AG executed a Confidentiality Agreement dated as of
October 5, 1998 (the "Confidentiality Agreement"). The
Parties agree that as to information disclosed to Berlex
pursuant to such confidentiality Agreement this Agreement
supersedes and takes place of the Confidentiality Agreement
and that all confidential information disclosed under the
Confidentiality Agreement shall be governed by this Agreement
instead.
9.6 Publications. Either Party may publish information
pertaining to its technical information provided that prior to
any such publication the proposed publication is first
submitted to the non-disclosing Party for its review and
written consent within thirty (30) days, which may not be
unreasonably withheld.
21
ARTICLE X- TRADEMARKS
The Product will be marketed and sold under the trademark
Quadramet , or such other trademark as to which the Parties
shall agree that shall be either owned by, or licensed
exclusively to, or assigned to Cytogen by Dow and exclusively
sub-licensed or assigned to Berlex. Cytogen will use
commercially reasonable efforts to: (i) provide Berlex with
the opportunity to review and market-test any trademarks other
than Quadramet being considered and provide recommendations to
Cytogen regarding the selection of such trademark for the
Product, and to select a trademark which is agreeable to
Berlex; provided, however, that this agreement is not
unreasonably withheld by Berlex and is not prohibited under
the Dow License. Cytogen grants to Berlex an exclusive
sublicense to use the trademark Quadramet in the Territory in
connection with the promotion and sale of the Product,
reserving to Cytogen the right to use the trademark in its
normal business communications. The trademark rights of
Berlex shall terminate on the same date as this Agreement
shall terminate. Berlex trademark rights on expiration of
this Agreement shall be as provided in Section 14.6. If and
as required or permitted by the rules or regulations of the
FDA or other applicable law or the terms of the Dow License,
the names of Cytogen, Berlex and Dow shall appear on the
product labeling. In addition, promotional, sales and
marketing literature, package inserts, and the like, will
indicate that the Product is licensed from CYTOGEN
Corporation.
ARTICLE XI - INVENTIONS AND PATENTS
11.1 Ownership and Patent Applications.
(a) All inventions made during the term of this Agreement
shall belong to the Party making the invention. Any
resulting patent applications and patents shall belong to
the Party owning the claimed inventions.
(b) In the event that there are joint inventions, Berlex and
Cytogen shall have joint rights to such intellectual
property and any resulting patents shall be jointly
owned. The Parties will consult with each other as to
the filing of patent applications relating to joint
inventions.
(c) Neither Cytogen nor Berlex shall have any right with
respect to the other's Technology, including know-how and
patents, which are not otherwise specifically provided
for in this Agreement.
(d) Solely to the extent necessary for Cytogen to exercise
its rights and perform its obligations under this
Agreement, Berlex hereby grants Cytogen a paid-up,
royalty-free nonexclusive license for any improvements to
the Product, inventions and resulting patent applications
and patents in the Territory contemplated by this Article
XI, made wholly or in part by employees, agents or
22
consultants of Berlex its Affiliates and Sublicensees
which are related to Cytogen's Technology, Technical
Information or Licensed Patents disclosed to Berlex for
as long as this Agreement is in effect. To the extent
such invention, application or patent covers the use or
sale of the Product in the Field in the Territory,
Cytogen shall have a first right to negotiate for a
non-exclusive license from the moment that this Agreement
ceases to be in effect.
(e) As to Cytogen inventions and patents contemplated by this
Article XI, Berlex shall have a first right to negotiate
for a non-exclusive license to said Cytogen patents which
cover the manufacture, use or sale of the Product in the
Field in the Territory from the moment that this
Agreement ceases to be in effect.
ARTICLE XII INFRINGEMENT
12.1 Infringement of Third Party's Patent. In the event
either Party receives a claim or is advised that the
manufacturing, use or sale of the Product in the Territory
infringes a patent owned by a Third Party, not an Affiliate of
Berlex or Cytogen, then:
(a) the Party receiving the claim or advice shall promptly
notify the other Party;
(b) the Parties shall promptly meet to review and confer
regarding the matter;
(c) following such review and conference, Cytogen will notify
Dow and provide Dow with the opportunity to determine
whether it intends to defend such suit or claim at its
sole expense as provided under the Dow License;
(d) if Dow elects not to so defend or dispose such suit or
claim, then:
i) Berlex may obtain a license from the Third Party at
Berlex's expense, with Cytogen's approval; provided,
however, that such approval may not be unreasonably
withheld. In such event Berlex shall be entitled to
deduct any royalties due under the Third-Party
license on the sale of the Product from the royalties
due Cytogen in the affected country or countries;
provided, however, that in no event shall such
deduction exceed fifty percent (50%) of any royalty
otherwise due to Cytogen hereunder on such sale or
cause the royalty due to Cytogen hereunder to be less
than the royalty due from Cytogen to Dow under the
Dow License; or
(ii) Berlex may decide to defend or otherwise dispose of
such suit or claim, in which case Berlex will give
Cytogen the opportunity to participate in such
defense; or
(iii) if Berlex does not obtain a Third Party license
as provided under Section 12.1(d)(i) or defend or
dispose of such suit or claim as provided under
23
Section 12.1(d)(ii), then Cytogen may defend such
suit or claim, in which case Cytogen will give Berlex
the opportunity to participate in such defense.
(e) During the period in which any such litigation is pending
and Berlex is defending against such charge of
infringement as contemplated under Section 12.1(d)(ii),
Berlex shall have the right to apply up to fifty percent
(50%) of the royalties otherwise due Cytogen hereunder in
the affected country or countries against Berlex's
litigation expenses.
(f) In the event litigation, as contemplated under Sections
12.1(d)(ii) and 12.1(d)(iii), results in a final judgment
of infringement due to the manufacture, use or sale of
the Product, Cytogen and Berlex shall each bear a
fractional share of any and all damages and litigation
expenses adjusted for any litigation expenses that Berlex
may have already deducted from royalty payments due to
Cytogen as provided under Section 12.1(e) herein, arising
from or related to such infringement of Third Party
patents by the Product. The fractional share of all such
damages and litigation expenses for each Party shall be
calculated based upon the most recent annualization of
Product revenues of each Party, and if prior to a full
year following commercialization then calculated based
upon the most recent quarter's fraction. For example, if
the royalty payable to Cytogen under Section 7.1 is 25%
in the year prior to the final judgment of a Product
related infringement action, then Cytogen shall be
responsible for payment of 25 % of such damages and
expenses and Berlex shall be responsible for payment of
75% of such damages and expenses. It shall be up to
Berlex to seek a license from the Third Party, if
required to continue manufacturing, marketing and selling
the Product, in which event Berlex shall be entitled to
deduct any royalties due under the license on the sale of
the Product from the royalties due Cytogen in the
affected country or countries; provided, however, that in
no event shall such deduction exceed fifty percent (50%)
of any royalty otherwise due to Cytogen hereunder on such
sale or cause the royalty due to Cytogen hereunder to be
less than the royalty due from Cytogen to Dow under the
Dow License.
(g) In the event that the royalty due from Berlex to a Third
Party pursuant to either Section 12.1 (d), (e), or (f)
exceeds the amount that Berlex is permitted to deduct
from the royalty due to Cytogen, then Berlex may deduct
such excess royalties from the royalty payments due to
Cytogen in future quarters if in such future quarters the
deduction would not exceed the amount which Berlex is
permitted to deduct from its royalty due to Cytogen. For
example, if Berlex takes a license from a Third Party
under a patent having a remaining term of five years, and
the quarterly royalty due to the Third Party for the five
year remaining term of the licensed patent exceeds the
amount which Berlex is permitted to deduct from the
royalty payment to Cytogen, then after the expiration of
the five year remaining term of the Third Party patent,
Berlex may commence deducting the excess royalty paid to
the Third Party from the royalty payment due to Cytogen.
24
12.2 Infringement of Licensed Patents by a Third Party.
(a) If either Berlex or Cytogen learns of an infringement or
threatened infringement of a Licensed Patent, such Party
shall notify the other Party within a reasonable time.
(b) The Parties shall promptly meet to decide on the course
of action to take. If the infringement is of a Dow
Licensed Patent, the Dow License provides that Dow shall
have the first right to enforce such patent. If the
infringement is of a patent that is not a Dow Licensed
Patent, or if Cytogen has the right to prosecute
infringers under the Dow License, then Cytogen may at its
own expense, take steps to prevent or terminate such
infringement, and Berlex may join in such steps at its
own expense. Should both Cytogen and Berlex join in such
steps, neither shall settle the controversy without the
consent of the other.
(c) Cytogen shall retain for itself all recovery from any
action commenced to prevent or terminate the
infringement, unless Berlex shall have joined in the
action at its own expense. Berlex agrees to cooperate
with Cytogen and provide such non-monetary assistance as
Cytogen may reasonably request in connection with such
action. Berlex may join Cytogen in any such action to
prevent or terminate the infringement, in which case any
recoveries shall be equally divided between Cytogen and
Berlex after deduction of litigation expenses not
recoverable from a Third Party such as Dow. Should both
Cytogen and Berlex join in such an action, neither shall
settle the action without the consent of the other.
(d) Should Cytogen have a right, under the Dow License, to
pursue an action as provided in Section 12.2(b) herein,
but elects to not pursue such action to prevent or
terminate an alleged infringement within thirty (30) days
following notification by Dow that Cytogen may exercise
such right, Berlex may then, at its sole expense, pursue
action to prevent or terminate the infringement, and
retain any recoveries which it shall obtain for such
infringement. Cytogen agrees to cooperate with Berlex
and provide such nonmonetary assistance as Berlex may
reasonably request in connection with any such action.
ARTICLE XIII - REPRESENTATIONS AND WARRANTIES
13.1 Berlex's Representations. Berlex hereby represents
and warrants to Cytogen as of the date of execution of this
Agreement as follows:
(a) Berlex is a corporation duly organized, validly existing
and in good standing under the laws of the State of
Delaware. The execution and delivery of this Agreement
by Berlex and the consummation of the transactions
contemplated herein have been duly authorized and
approved by all necessary action.
25
(b) Neither the execution and delivery by Berlex of this
Agreement nor the performance and consummation by Berlex
of the transactions contemplated herein will violate or
conflict with or result in a breach or a default under
any other agreement to which Berlex is a Party.
(c) Berlex represents and warrants to Cytogen that Berlex:
(i) will in the future conduct any preclinical and
clinical studies of the Product in accordance with
applicable United States law, known or published
standards of the FDA, and the scientific standards
applicable to the conduct of studies in the United
States; and (ii) will not employ (or, to the best of its
knowledge, use any contractor or consultant that employs)
any individual or entity debarred by FDA or, to the best
knowledge of Berlex, any individual or entity which is
the subject of an FDA debarment investigation or
proceeding, in the conduct of preclinical or clinical
studies of the Product. This Section 13.1 (c) shall not
be subject to Section 13.3.
13.2 Cytogen's Representations. Cytogen represents and
warrants to Berlex as of the date of execution of this
Agreement as follows:
(a) Cytogen is a corporation duly organized, validly existing
and in good standing under the laws of the State of
Delaware. The execution and delivery of this Agreement
by Cytogen and the consummation by it of the transactions
contemplated herein have been duly authorized and
approved by all necessary action.
(b) Neither the execution and delivery by Cytogen of this
Agreement nor the performance and consummation by Cytogen
of the transactions contemplated herein will violate or
conflict with or result in a breach of or default under
any other agreement to which Cytogen is a Party.
(c) Cytogen has the right to exclusively license or
sublicense the Licensed Patent rights and Technical
Information to Berlex as provided herein, free and clear
of any encumbrances or claims by Third Parties (except as
set forth in the Dow License).
(d) Cytogen represents and warrants that, as of the date of
execution of this Agreement, the Dow License remains in
full force and effect. Cytogen shall exercise
commercially reasonable efforts to maintain the Dow
License in full force and effect through the term of this
Agreement without revision or amendment, except in the
case where prior approval has been obtained from Berlex
to amend the Dow License.
(e) Cytogen represents and warrants, as of the date of
execution of this Agreement, that Cytogen, to the best of
its knowledge, information and belief, is unaware of a
reference that would overcome the presumption of validity
of at least the claims of United States Licensed Patents
that cover the Product or its method of use for the
26
treatment of calcified tumors or bone pain and that
Cytogen has not received any written notice or claim to
the effect that the manufacture, use or sale of the
Product infringes the patent rights or other intellectual
property rights of a Third Party.
(f) Cytogen represents and warrants to Berlex that Cytogen
(i) has informed Berlex of all information in its
possession or control as of the Effective Date
concerning efficacy, side effects, injury, toxicity, or
sensitivity reaction and incidents or severity thereof,
associated with any clinical use, studies,
investigations, or tests with the Product (animal or
human), whether or not determined to be attributable to
the Product; (ii) has conducted or has caused its
contractors or consultants to conduct, and will in the
future conduct, the preclinical and clinical studies of
the Product in accordance with applicable United States
law, known or published standards of the FDA, and the
scientific standards applicable to the conduct of studies
in the United States; (iii) has employed and will in the
future employ individuals of appropriate education,
knowledge, and experience to conduct or oversee the
conduct of Cytogen's clinical and preclinical studies of
the Product; and (iv) has not employed (and, to the best
of its knowledge, has not used a contractor or consultant
that has employed) and in the future will not employ (or,
to the best of its knowledge, use any contractor or
consultant that employs) any individual or entity
debarred by FDA, or, to the best knowledge of Cytogen,
any individual who or entity which is the subject of an
FDA debarment investigation or proceeding, in the conduct
of the preclinical or clinical studies of the Product.
This Section 13.2 (f) shall not be subject to Section
13.3.
13.3 Accuracy and Ownership of Information Disclosed.
Information disclosed by each Party to the other shall be
accurate to the best of the disclosing Party's knowledge, but
neither Party expressly or implicitly warrants as to the
accuracy of such information. Subject to other sections of
this Agreement, all information furnished by a Party pursuant
to this Agreement shall remain the sole and exclusive property
of the disclosing Party. Either Party may refuse to disclose
or defer disclosure of information to the other Party to the
extent such information shall be either unnecessary for the
purposes of this Agreement or shall not be subject to
disclosure under this Agreement.
ARTICLE XIV- EXPIRATION AND TERMINATION
14.1 Term - Expiration. Unless terminated earlier under other
provisions of this Agreement, this Agreement will expire
twenty (20) years from the date of execution hereof, or on the
date of expiration of the last to expire Licensed Patent,
whichever is later.
14.2 Material Defaults.
(a) Cytogen may terminate this Agreement at any time upon
27
Berlex's unexcused failure to make payments due to
Cytogen pursuant to this Agreement, and the continuation
of such failure for more than sixty (60) days after
delivery of written notice to Berlex of such failure. In
the case of Berlex's failure to make payments, this
termination right of Cytogen shall not be applicable if
there exists a legitimate dispute as to whether there is
a payment due form Berlex to Cytogen, or as to the amount
of any such payment (provided, however, that in the case
of a dispute as to the amount of a payment, Berlex shall
pay to Cytogen the amount that Berlex contends that it
owes to Cytogen).
(b) Cytogen may terminate this Agreement at any time upon
Berlex's failure to use reasonable commercial efforts to
commercialize and market the Product under Article IV and
upon the continuation of such failure for more than sixty
(60) days after delivery of written notice to Berlex of
such failure, except where such failure of Berlex is a
result of the failure of Cytogen or a Third Party
manufacturer or distributor to meet its obligations as
defined in this Agreement or due to circumstances beyond
the reasonable control of Berlex pursuant to Section
15.17. The following actions or inaction, without
limitation as to any other material breach, shall be
deemed to constitute failure to use reasonable commercial
efforts to develop, commercialize and market the Product:
(i) Maintaining a sales force of fewer than fourty (40)
competent, trained sales force personnel assigned to
oncology-related products after the date specified in
Section 4.10 (f). This number may include sales support
staff. The Parties recognize that from time to time
there may be temporary reductions in the number of Berlex
sales employees assigned to oncology-related products due
to resignation, reassignment, illness, leave, etc.
Berlex will endeavor to keep such temporary reductions to
a minimum, but such temporary reductions which result in
less than 40 sales employees assigned to the Product
shall not be a breach of this Agreement; (ii) Failure to
position the Product during sales details as required
under Section 4.10 (f), and thereafter, in a position as
to actively promote the Product; and (iii) Marketing in
the United States by Berlex of a pharmaceutical product
that directly competes with the Product on the basis of
FDA approved labeled indications.
(c) Berlex may terminate this Agreement on written notice to
Cytogen if (i) a Manufacturing Agreement with DuPont
acceptable to Berlex in its sole discretion is not
executed and delivered by DuPont, Cytogen and Berlex on
or before November 30, 1998; or (ii) The Dow Amendment in
a form acceptable to Berlex in its sole discretion is not
executed and delivered by both Cytogen and Dow on or
before November 30, 1998.
(d) Berlex may terminate this Agreement effective any time
after twenty-four months following the date upon which
Berlex commences its marketing and selling efforts, upon
nine months prior notice to Cytogen. For example, at the
end of fifteen months following Berlex's commencement of
marketing and selling efforts, Berlex can provide Cytogen
with a notice terminating the Agreement effective twenty-four
months following the commencement of Berlex's marketing and
28
selling efforts.
(e) With respect to countries of the Territory other than the
United States, Berlex shall have the right to terminate
this Agreement on a country-by-country basis, by
providing Cytogen six months advance written notice each
time this Agreement is terminated as to a particular
country.
(f) Either Party may terminate this Agreement upon ninety
(90) days prior written notice in the event of the other
Party's breach of any other material provision of this
Agreement, if such default or breach is not remedied
within ninety (90) days from the date of such notice,
except where such default or breach is due to
circumstances beyond the reasonable control of the other
Party pursuant to Section 15.17.
(g) Any failure to terminate shall not be construed as a
waiver by the aggrieved Party of its right to terminate
for future defaults or breaches.
14.3 Bankruptcy. If, during the term of this Agreement,
either Cytogen or Berlex makes an assignment of this Agreement
or generally, for the benefit of creditors, or becomes
insolvent or seeks protection under any bankruptcy,
receivership, trust deed, creditor's arrangement or
composition, or if any comparable proceeding is instituted
against the other Party and is not dismissed within ninety
(90) days of such institution, then any licenses granted by
such Party under this Agreement shall become irrevocable, and
all right, title and interest in all regulatory filings held
by such Party in the United States relating to the Product
(INDs, NDAs, DMFs, etc.) shall be transferred to the other
Party. In addition, the other Party may terminate this
Agreement immediately upon delivery of written notice thereof.
The Parties acknowledge that certain rights of the Parties may
be determined under certain circumstances by applicable
provisions of the United States Bankruptcy Code (15 USC 101-1330).
14.4 Surviving Rights. The provisions of Article VIII
(Indemnification) Article IX (Confidentiality), Section 11.1
(Ownership and Patent Applications), Section 13.3 (Accuracy
and Ownership of Information Disclosed), and Section 15.7
(Governing Law) of this Agreement shall survive the expiration
or termination of this Agreement.
14.5 Effects of Termination.
(a) Upon termination of this Agreement, each Party shall upon
the request of the other Party return all books, records,
documents and data which it shall have received from the
other Party pursuant to this Agreement; provided,
however, that a single copy may be retained for legal
archival purposes by each Party. If a termination by
Berlex relates only to one or more countries but not the
entire Territory, then this Section shall be applicable
only in the countries so terminated.
(b) Termination of this Agreement by either Party shall not
prejudice the right of Cytogen to recover any royalty or
29
other payments due at the time of termination, or which
become due after termination pursuant to Sections 14.5(c)
and 14.5(d) herein and shall not prejudice any cause of
action or claim of Cytogen or Berlex accruing under this
Agreement prior to termination.
(c) Berlex shall not make, have made, use or sell the Product
following termination of this Agreement where such
manufacture, use or sale would infringe a Valid Licensed
Claim.
(d) Upon termination of this Agreement, Cytogen shall be free
to use the Technical Information and Licensed Patents,
and data, test results and information related or
directed to the Product. All rights to any inventions,
patents and patent applications of Berlex under Section
11.1(a), herein, shall be retained by Berlex upon
termination or expiration of this Agreement. Cytogen
shall retain a first right to negotiate for a non-exclusive
license of any of Berlex patents pursuant to
Section 11.1(d) for a period of ninety (90) days
following termination of this Agreement. Berlex shall
retain no right, title, interest or license to any of
Cytogen's Technical Information or Licensed Patents
following termination of this Agreement.
(e) Upon termination of this Agreement, Berlex, its
Sublicensees and Affiliates may assign or cause to be
assigned for consideration (to be negotiated) to Cytogen
all regulatory applications and approvals that it owns
relating to the marketing, experimental use or sales of
the Product in the Field, including any INDS, NDAs or
filed with the FDA. All records, files, customer lists,
promotional materials or all proprietary information
relating to the Product may also be delivered by Berlex
to Cytogen for consideration following termination of
this Agreement.
(f) Upon termination of this Agreement for any reason, Berlex
shall take such steps, at the option of Cytogen, to
assign any contracts relating to manufacturing solely of
the Product to Cytogen and at the expense of Cytogen to
take such reasonable actions as may be requested by
Cytogen to facilitate a transition and ensure continuity
of manufacture and distribution of the Product for the
benefit of Cytogen.
14.6 Effect of Expiration. In the event that this Agreement
expires by its terms as set forth in Section 14.1, then Berlex
shall thereafter have a fully paid up license under all
Technical Information controlled by or licensed to Cytogen to
make, have made and use the Product anywhere in the world,
and to make, have made, use, and sell the Product anywhere in
the Territory for any indication. Promptly following the
expiration of this Agreement Cytogen shall grant to Berlex a
perpetual license or sublicense, as the case may be, to all of
Cytogen's right, title and interest in and to all trademark
registrations for the trademark "Quadramet" (and any other
trademark owned by Cytogen under which Berlex has marketed the
Product under this Agreement in any country of the Territory)
in all of the countries of the Territory.
30
ARTICLE XV- MISCELLANEOUS PROVISIONS
15.1 Product Patent Markings. The Parties shall agree on a
plan to cause the Product to be marked on some conspicuous
part of a durable label firmly attached to the Product or to
the package for the Product made or sold under this Agreement,
in a manner which is easily seen and read and not easily
defaceable, either:
(i) if a patent shall have been granted, the patent
number applicable to such Licensed Patent; or
(ii) if a patent shall not have been granted, words
indicating that letters patent have been applied for,
if applicable.
15.2 Dow License.
(a) Berlex acknowledges that this Agreement shall be
consistent with the Dow License and subject to the terms
therein. This Agreement is to be interpreted to avoid
material inconsistency with the Dow License wherever
appropriate. As promptly as possible after the Effective
Date, Cytogen will use reasonable commercial efforts to
enter into an amendment to the Dow License with Dow
clarifying and expanding the scope of the definitions of
the terms "Field" and "Expansion of Licensed Field" in
the Dow License (the "Dow Amendment") in a form
acceptable to Berlex in its sole discretion.
(b) Cytogen shall be responsible for any payments due to Dow
under the Dow License.
15.3 Entire Understanding. This Agreement sets forth the
entire understanding between Cytogen and Berlex pertaining to
its subject matter and supersedes and replaces all prior oral
or written agreements between Cytogen and Berlex pertaining to
such subject matter.
15.4 Amendment. This Agreement may not be amended,
supplemented or otherwise modified except by an instrument in
writing signed by both Parties.
15.5 Assignment. Neither Party may assign this Agreement
without the prior written approval of the other Party except
in connection with the sale or merger of the entire business
of such Party. Such approval shall not be unreasonably
withheld. Notwithstanding such approval, the assigning Party
shall be responsible to the other Party jointly or severally,
with the assignee for any obligations under this Agreement.
Notwithstanding the first sentence of this Section, Berlex
shall have the right to assign its rights under this Agreement
and delegate its obligations under this Agreement to one or
more Affiliates without the approval of Cytogen.
31
15.6 Waiver. No provision of this Agreement shall be waived
by any act, omission or knowledge of a Party or its agents or
employees, except by an instrument in writing expressly
waiving such provision and signed by the waiving Party.
15.7 Governing Law. This Agreement shall be governed by and
interpreted under the laws of the State of New Jersey, without
regard to conflict of laws principles.
15.8 Restriction of Distribution of This Agreement. This
Agreement shall not be distributed to persons other than those
personnel of Cytogen and Berlex who shall have a need to know
its contents and to those whose knowledge of its contents will
facilitate performance of the obligations of the Parties under
this Agreement, except as may be required by law, regulation
or judicial order.
15.9 Publicity. Neither Party shall make any press
release or other similar public disclosure or announcement
concerning this Agreement, without the prior written consent
of the non-disclosing Party, except as otherwise required by
law. Consent will be deemed granted if no response is
received from the non-disclosing Party within fifteen (15)
business days of its confirmed written request for approval
from the disclosing Party. Notwithstanding the foregoing, in
the event such disclosure or public announcement is required
to be made on a more immediate basis in order to comply with
applicable state or federal securities laws, then approval
will be deemed granted if no response is received from the
non-disclosing Party within the time frames required by law;
provided, however, that the disclosing Party provides the
non-disclosing Party with notice of the legally required time
frame for approval of the disclosure at the time of providing
a copy of the proposed disclosure or announcement.
15.10 Consents Not Unreasonably Withheld or Delayed.
Whenever provision is made in this Agreement for either Party
to secure the consent or approval of the other, such consent
or approval shall not be unreasonably withheld or delayed.
15.11 Construction. The captions appearing in this
Agreement are for reference purposes only and shall not be
considered for the purposes of interpreting or construing this
Agreement. The plural shall be substituted for singular
numbers in any place in which the context may require such
substitution.
15.12 Severability. If any term, covenant or condition of
this Agreement or the application thereof to any Party or
circumstances shall, to any extent or in any country, be held
to be invalid or unenforceable, then (i) the remainder of this
Agreement, or the application of such term, covenant or
condition to Parties or circumstances other than those as to
which it is held invalid or unenforceable, shall not be
affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent
permitted by law; and (ii) the Parties hereto covenant and
agree to renegotiate any such term, covenant or application
thereof in good faith in order to provide a reasonably
32
acceptable alternative to the term, covenant or condition of
this Agreement or the application thereof that is invalid or
unenforceable, it being the intent of the Parties that the
basic purposes of this Agreement are to be effectuated.
15.13 Affiliates. Each Party shall be responsible for all
actions of its Affiliates and Sublicensees and such actions
shall be deemed actions by each Party, its Sublicensees,
Affiliates and each Party shall be jointly severally liable
for obligations and actions under this Agreement and Party
shall be responsible for the Affiliates' and Sublicensees'
compliance with all terms and conditions of this Agreement.
15.14 Notices. Any notice or report required or permitted
hereunder shall be given in writing by personal delivery or by
registered or certified mail, return receipt requested,
postage prepaid, and shall be effective upon delivery to the
following addresses:
As to Cytogen:
Cytogen Corporation
000 Xxxxxxx Xxxx Xxxx XX 0000
Princeton, New Jersey 08540-5308
Attention: Chief Executive Officer
As to Berlex:
Berlex Laboratories, Inc.
000 Xxxxxxxxxxxx Xxxx
P.O. Box 1000
Montville, New Jersey 07045-1000
(address for courier service:
000 Xxxxxxxxxxxx xxxx
Xxxx Xxxxx, Xxx Xxxxxx 07058-9714)
Attention: Chief Financial Officer
With a copy to:
Berlex Laboratories, Inc.
000 Xxxxxxxxx Xxxx
Xxxxx, Xxx Xxxxxx 00000-0000
Attention: General Counsel
or such other addresses as a Party may designate by prior
written notice to the other Party.
33
15.15 Use of Schering Name. Cytogen agrees not to use the
name "Schering" in reference to Berlex's Affiliate Schering AG
in any public document without the written approval of
Schering AG (such approval not to be unreasonably withheld or
delayed).
15.16 Payment Method. All payments by Berlex to Cytogen
under this Agreement shall be by wire transfer of same day
funds to Cytogen's bank account. Cytogen shall supply Berlex
with the bank, routing and account information needed for such
a wire transfer.
15.17 Force Majeure. Neither Party shall be liable to the
other Party for loss or damages, nor shall either Party have
any right to terminate this Agreement, for any default or
delay attributable to any act of God, flood, fire, explosion,
strike, lockout, labor dispute, shortage of raw materials,
casualty or accident, war, revolution, civil commotion, act of
public enemies, blockage or embargo, injunction, law, order,
proclamation, regulation, ordinance, demand or requirement of
any government or subdivisions, authority or representative of
any such government, or any other cause beyond the reasonable
control of the defaulting Party, if the Party affected shall
give prompt notice of any such cause to the other Party.
15.18 Dispute Resolution. Any claim of material breach of
this Agreement by or between the Parties hereto arising from
or relating to (i) this Agreement or any transaction
contemplated hereby; (ii) the validity, construction, meaning,
enforceability of performance of the Agreement or any of its
provisions; (iii) the validity or infringement of any patents;
or (iv) the coverage of any product made, used or sold
hereunder by any patent licensed hereunder, shall, by notice
as provided for in Section 15.14, be referred first to the
President and Chief Executive Officer of Cytogen and the Chief
Executive Officer of Berlex, for consideration. The Chief
Executive Officers of the Parties shall be required to meet to
discuss such matters no more than twenty (20) days after
receipt of such notice. If such matter is not resolved to the
satisfaction of all Parties within ten (10) business days
after such a meeting, then either Party may, by notice as
provided for in Section 15.14, submit the matter to binding
arbitration in the State of New Jersey under the Commercial
Arbitration Rules of the American Arbitration Association. In
the course of such arbitration the following procedures shall
be observed.
(a) The arbitration panel shall be composed of three
arbitrators, one of whom shall be chosen by Berlex, one
by Cytogen and the third by the two arbitrators so
chosen. If both or either of Cytogen or Berlex fails to
choose an arbitrator or arbitrators within fourteen (14)
days after receiving notice of commencement of
arbitration or if the two arbitrators fail to choose a
third arbitrator within fourteen (14) days after their
appointment, then the President of the New Jersey office
of the American Arbitration Association shall, upon the
request of both or either of the Parties to the
arbitration, appoint the arbitrator or arbitrators
required to complete the board.
(b) Within ten (10) days of the appointment of the full
arbitration panel, the Parties shall exchange documents
34
setting forth their final detailed proposals for
resolution of the matter in dispute, together with a
brief or other written memorandum supporting the merits
of their final proposal. The arbitration panel shall
promptly convene a hearing in New Jersey, at which time
each Party shall have an agreed upon time to argue and
present witnesses in support of its final proposal.
(c) The authority of the arbitration panel shall be limited
to the specific question of determining whether a
material breach shall have occurred or been cured, and
notwithstanding any additional matters that may be set
forth in either Party's proposal, the arbitration panel
shall not be empowered to make any other decision or
award any relief or remedy. In the event that the
arbitration panel shall determine that such material
breach shall have occurred the breaching Party shall be
entitled to cure such material breach within sixty (60)
days following the arbitration panel's decision and if
not so cured within the applicable time period, the
non-breaching Party shall be entitled to terminate this
Agreement.
(d) In the event the arbitrators seek the guidance of the
law, the law of the State of New Jersey shall govern,
without regard to its conflicts of laws provisions.
(e) The arbitrators shall make their decision known to both
Parties as quickly as possible by delivering written
notice of their decision to both Parties. The Parties
shall agree in writing to comply with the proposal
selected by the arbitration panel within five (5) days of
receipt of such selection. The decision of the
arbitrators shall be final and binding on the Parties,
and may be enforced by any court of competent
jurisdiction.
(f) The Parties shall bear their own costs in preparing for
the arbitration. The costs of the arbitrators shall be
equally divided between the Parties.
15.19 Rights and Remedies Cumulative. Except as expressly
provided herein, the rights and remedies provided in this
Agreement shall be cumulative and not exclusive of any other
rights and remedies provided by law or otherwise.
15.20 Counterparts. This Agreement may be executed in
counterparts with the same force and effect as if each of the
signatories had executed the same instrument.
15.21 No Partnership. This Agreement is not intended to
create a partnership between Cytogen and Berlex for Federal
income tax purposes (as defined in Section 761 of the Internal
Revenue Code) or for any state or local jurisdiction.
Therefore, there is no requirement to file Form 0000, Xxxxxx
Xxxxxx Partnership Return of Income, or any similar state or
local income tax return, in regard to the contractual
relationship described in this Agreement.
15.22 No Third Party Beneficiaries. Nothing in this
Agreement is intended to benefit and shall not be deemed to
benefit any person or entity that is not a Party hereto, or
35
create any Third Party beneficiary rights.
15.23 Independent Contractors. The relationship of Cytogen
and Berlex established by this Agreement is that of
independent contractors, and nothing contained in this
Agreement shall be construed to give either Party the power to
direct and control the day-to-day activities of the other or
allow one Party to create or assume any obligation on behalf
of the other for any purpose whatsoever. All financial
obligations associated with Berlex's business are the sole
responsibility of Berlex. All sales and other agreements
between Berlex and Berlex's customers are Berlex's exclusive
responsibility and shall have no effect on Berlex's
obligations under this Agreement. All financial obligations
associated with Cytogen's business are the sole responsibility
of Cytogen. All sales and other agreements between Cytogen
and Cytogen's customers are Cytogen's exclusive responsibility
and shall have no effect on Cytogen's obligations under this
Agreement.
15.24 Ambiguities. Ambiguities, if any, in this Agreement
shall not be construed against any Party, irrespective of
which Party may be deemed to have authored the ambiguous
provision.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
36
IN WITNESS WHEREOF, the Parties have caused this Agreement to
be executed in duplicate by their duly authorized
representatives as of the Effective Date.
BERLEX LABORATORIES, INC. CYTOGEN CORPORATION
By: /s/ Xxxxxxxx Xxxxx By: /s/ H. Xxxxxx Xxxxxx
--------------------- ---------------------
Xxxxxxxx Xxxxx H. Xxxxxx Xxxxxx, Ph.D.
Vice President & CFO President & CEO
37
SCHEDULE A
PATENTS AND PATENT APPLICATIONS
USA Patent-Number Expiration Date* Serial Number Filing Date
----------------- ---------------- ------------- -----------
4,898,724 2/6/07 50,263 5/14/87
N/A N/A 538,871a 6/18/90
N/A N/A 133,806b 10/7/93
N/A N/A 763,849** 9/23/91
4,937,333 6/26/07 389,441 8/4/89
N/A N/A 65,963c 5/6/93
N/A N/A 145,591 11/4/93
*Extension is possible
**Dow/ Xxxx Xxxxxxxxxx Cancer Research Center, now abandoned
Abandoned for 37 CFR 1.62 continuation
Pending, 37 CFR 1.62 continuation
Pending
N/A = Not available
38
SCHEDULE B
FLUDARA LABEL
NDC 00000-000-00
Fludara
(fludarabine phosphate)
For injection
50 mg
Single Dose Vial
For intravenous Use Only
Dosage: See Package insert.
Store under refrigeration, between 2 degrees - 8 degrees C
(36 degrees - 46 degrees F)
Reconstitue with 2 mL Sterile Water for Injeection USP,
resulting in a solution containing 25 mg/mL fludarabine phosphate.
Use within 8 hours of reconstitution. Mfd by Ben Venue Laboratories, Inc.
Xxxxxxx, XX 00000
Mfd for Berlex Laboratories
Xxxxxxxx, XX 00000
Caution: Federal law prohibits dispensing without prescription.
[BERLEX LOGO]
39
SCHEDULE C
FORM OF LETTER TO FDA
As to the NDA:
[Appropriate FDA Address]
Dear:
Reference is made to NDA # 20-570 for Quadramet (generic
name) approved ______________________.
On _____________ the ownership of this NDA and all rights to
this application were transferred to Berlex Laboratories, Inc.
Berlex has been provided with a complete copy of the approved
application.
As to the IND:
[Appropriate FDA Address]
Dear:
Reference is made to IND # _____________ submitted
________________.
Cytogen Corporation transfers all rights and responsibilities
for the referenced IND to Berlex Laboratories, Inc., effective
______________.
Berlex Laboratories has received a complete copy of the IND
and all submissions made by Cytogen Corporation to such IND.
40
ATTACHMENT A
WARRANT
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN
RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND SUCH OTHER SECURITIES LAWS. NEITHER THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED OR OTHERWISE
DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
THIS WARRANT IS VOID AFTER 5:00 PM NEW YORK TIME ON OCTOBER 28, 2003
OCTOBER 28, 1998
Warrant to Purchase up to 1,000,000 Shares of Common Stock of
Cytogen Corporation.
Cytogen Corporation, a Delaware corporation (the "Company"), hereby
agrees that Berlex Laboratories, Inc. ("Berlex") is entitled, on the
terms and conditions set forth below, to purchase from the Company at
any time during the Exercise Period up to 1,000,000 fully paid and
nonassessable shares of Common Stock, par value $.01 per share, of the
Company (the "Common Stock"), at the Exercise Price (hereinafter
defined), all as may be adjusted pursuant to Section 5 hereof.
Section 1. Definitions.
"Agreement" shall mean the License Agreement by and
between the Company and Berlex, dated the date hereof.
"Closing Price" shall mean the closing price of the
Common Stock on any particular day on the Nasdaq National Market or
other principle market on which the Common Stock is traded.
"Exercise Period" shall mean the period beginning on
the date which is the earlier of one year from the date of this Warrant
or the date in any calendar year on which sales of the Product first
equal or exceed $10,000,000, and ending at 5:00 p.m. on the date which
1
is five years from the date of this Warrant.
"Exercise Price" shall mean $1.001625 per share.
"Securities Act" means the Securities Act of 1933, as
amended.
"Holder" or "Warrant Holder" shall mean any holder of
this Warrant and each holder of Warrant Shares.
"Warrant" or "Warrants" shall mean this Warrant and
any and all warrants issued in full or partial substitution of this
Warrant upon any full or partial exercise or transfer of this Warrant.
"Warrant Shares" shall mean the shares of Common Stock
purchased or purchasable by a Holder upon the exercise hereof.
Other capitalized terms used but not defined herein
shall have the meaning set forth in the Agreement.
Section 2. Exercise.
(a) Method of Exercise. This Warrant may be
exercised in whole or in part (but not as to a fractional share of
Common Stock), at any time and from time to time during the Exercise
Period, by the Warrant Holder by surrender of this Warrant, with the
form of exercise attached hereto as Exhibit A duly executed by the
Warrant Holder (the "Exercise Notice"), to the Company at the address
set forth in Section 12 hereof, accompanied by payment of the Exercise
Price multiplied by the number of shares of Common Stock for which this
Warrant is being exercised (the "Aggregate Exercise Price"). Each date
on which an Exercise Notice is received by the Company shall be deemed
an "Exercise Date".
(b) Payment of Aggregate Exercise Price. Payment of
the Aggregate Exercise Price shall be made by check or bank draft
payable to the order of the Company or by wire transfer to an account
designated by the Company. If the amount of the payment received by the
Company is less than the Aggregate Exercise Price, the Warrant Holder
will be notified of the deficiency and shall make payment in that amount
within three (3) business days. In the event the payment exceeds the
Aggregate Exercise Price, the Company will refund the excess to the
Warrant Holder within three (3) business days of receipt.
(c) Replacement Warrant. In the event that the
Warrant is not exercised in full, the number of Warrant Shares shall be
reduced by the number of such Warrant Shares for which this Warrant is
exercised, and the Company, at its expense, shall forthwith issue and
deliver to or upon the order of the Warrant Holder a new Warrant of like
2
tenor in the name of the Warrant Holder or as the Warrant Holder may
request, reflecting such adjusted number of Warrant Shares.
Section 3. Delivery of Stock Certificates.
(a) Subject to the terms and conditions of this Warrant,
as soon as practicable after the exercise of this Warrant in full or in
part, and in any event within three (3) trading days thereafter, the
Company, at its expense, will cause to be issued in the name of and
delivered to the Warrant Holder, or as the Warrant Holder may lawfully
direct, a certificate or certificates for the number of validly issued,
fully paid and non-assessable Warrant Shares to which the Warrant Holder
shall be entitled on such exercise, to which the Warrant Holder is
entitled upon such exercise in accordance with the provisions hereof;
provided, however, that any such delivery to a location outside of the
United States shall be made within five (5) trading days after the
exercise of this Warrant in full or in part.
(b) This Warrant may not be exercised as to fractional
shares of Common Stock. In the event that the exercise of this Warrant,
in full or in part, would result in the issuance of any fractional share
of Common Stock, then in such event the Warrant Holder shall receive in
cash an amount equal to the Closing Price on the Exercise Date of such
fractional share within three (3) trading days therefrom.
Section 4. Character of Warrant Shares. The Warrant
Shares, when issued in accordance with the terms hereof, will be duly
authorized and, when paid for or issued in accordance with the terms
hereof, shall be validly issued, fully paid and non-assessable and free
from all taxes, liens and charges with respect to the issuance thereof.
Section 5. Adjustment of the Exercise Price.
(a) Adjustment for Dividends in Other Stock, Property.
In case at any time or from time to time, the holders of Common Stock
shall have received, or (on or after the record date fixed for the
determination of shareholders eligible to receive) shall have become
entitled to receive, without payment therefor, (i) other or additional
stock or other securities or property (other than cash) by way of
dividend, or (ii) other or additional stock or other securities or
property (including cash) by way of spin-off, split-up,
reclassification, recapitalization, combination of shares or similar
corporate rearrangement, or other or additional stock or (iii) other
securities or property (including cash) by way of spin-off, split-up,
recapitalization, combination of shares or similar corporate
rearrangement, (other than additional shares of Common Stock issued as a
stock dividend or in a stock-split (adjustments in respect of which are
provided for in Section 5(d)), then and in each such case the Holder of
this Warrant, on the exercise hereof as provided in Section 2, shall be
entitled to receive the amount of stock and other securities and
property (including cash in the cases referred to in clauses (ii) and
(iii) of this Section 5(a) which such Holder would hold on the date of
such exercise if on the date immediately prior to such event it had been
the holder of record of the number of shares of Common Stock to which it
3
would be entitled on such date under the terms of this Warrant and had
thereafter, during the period from the date hereof to and including the
date of such exercise, retained such shares and all such other or
additional stock and other securities and property (including cash in
the cases referred to in clauses (ii) and (iii) of this Section 5(a))
receivable by it as aforesaid during such period, giving effect to all
adjustments called for during such period by this Section 5.
(b) Adjustment for Reorganization, Consolidation or
Merger. In case at any time or from time to time, the Company shall (i)
effect a recapitalization, reclassification or reorganization or other
change of outstanding shares of Common Stock, (ii) consolidate with or
merge with or into any other Person and the Company is not the surviving
entity, or (iii) transfer or otherwise convey all or substantially all
of its properties or assets to any other Person or under any plan or
arrangement contemplating the dissolution of the Company, then, in each
such case, except as otherwise provided in Section 5(c), the Holder of
this Warrant, on the exercise hereof as provided in Section 2 at any
time prior to the termination of this Warrant shall receive, in lieu of
the Common Stock issuable on such exercise prior to such consummation or
such effective date, the stock and other securities and property
(including cash) to which such Holder would have been entitled upon such
consummation or in connection with such dissolution, as the case may be,
if such Holder had so exercised this Warrant, immediately prior thereto,
all subject to further adjustment thereafter as provided in this
Sections 5.
(c) Continuation of Terms. Except as otherwise
hereinafter provided, upon any recapitalization, reclassification,
reorganization, consolidation, merger or transfer (and any dissolution
following any transfer or other conveyance) referred to in this Section
5, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the shares of stock and other securities
and property receivable on the exercise of this Warrant after the
consummation of such recapitalization, reclassification, reorganization,
consolidation or merger or the effective date of dissolution following
any such transfer or other conveyance, as the case may be, and shall be
binding upon the issuer of any such stock or other securities,
including, in the case of any such transfer or other conveyance, the
person or entity acquiring all or substantially all of the properties or
assets of the Company, whether or not such person or entity shall have
expressly assumed the terms of this Warrant as provided herein.
(d) Adjustment for Extraordinary Events. In the event
that the Company shall (i) issue additional shares of Common Stock as a
dividend or other distribution on outstanding Common Stock, (ii)
subdivide its outstanding shares of Common Stock, or (iii) combine its
outstanding shares of Common Stock into a smaller number of shares of
Common Stock (each an "Extraordinary Event"), then, in each such
Extraordinary Event, the Exercise Price shall, simultaneously with the
happening of such event, be adjusted by multiplying the then Exercise
Price by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such event and
the denominator of which shall be the number of shares of Common Stock
outstanding immediately after such event, and the product so obtained
shall thereafter be the Exercise Price then in effect. The Exercise
Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive Extraordinary Event(s). The Holder of this
4
Warrant shall thereafter, on the exercise hereof as provided in
Section 2, be entitled to receive that number of shares of Common Stock
determined by multiplying the number of shares of Common Stock which
would otherwise (but for the provisions of this Section 5(d)) be
issuable on such exercise by a fraction of which (A) the numerator is
the Exercise Price which would otherwise (but for the provisions of this
Section 5(d)) be in effect, and (B) the denominator is the Exercise
Price in effect on the date of such exercise.
(e) No Dilution or Impairment; etc. The Company shall
not, by amendment of its charter, by-laws or other governing instrument
or through any recapitalization, reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times
in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to
protect the rights of the Holder of this Warrant against dilution or
other impairment prohibited by this Warrant. Without limiting the
generality of the foregoing, the Company (i) shall not increase the par
value of any shares of stock receivable on the exercise of this Warrant
above the amount payable therefor on such exercise, (ii) shall take all
such action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and non-assessable shares of
stock on the exercise of hereof from time to time outstanding, and (iii)
shall assist and cooperate with the Holder hereof or any permitted
assignee thereof required to make any governmental filings or obtain any
governmental approvals prior to or in connection with any exercise of
this Warrant. Notwithstanding any other provision hereof, if an exercise
of any portion of this Warrant is to be made in connection with a public
offering or sale of the Company, the exercise of any portion of this
Warrant may, at the election of the Holder hereof, be conditioned upon
the consummation of the public offering or sale of the Company in which
case such exercise shall not be deemed to be effective until the
consummation of such transaction.
(f) Certificate as to Adjustments. In each case of any
adjustment or readjustment in the shares of Common Stock issuable on the
exercise of this Warrant, the Company, at its expense, will promptly
cause its Treasurer, Chief Financial Officer, or Chief Accounting
Officer to compute such adjustment or readjustment in accordance with
the terms of this Warrant and prepare a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based, including, among other things,
(i) the consideration received or receivable by the Company for any
additional shares of Common Stock issued or sold or deemed to have been
issued or sold, (ii) the number of shares of Common Stock outstanding or
deemed to be outstanding, and (iii) the Exercise Price and the number of
shares of Common Stock to be received upon exercise of this Warrant, in
effect immediately prior to such issue or sale and as adjusted and
readjusted as provided in this Warrant. The Company will forthwith mail
a copy of each such certificate to the Holder of this Warrant, and will,
on the written request at any time of such Holder, furnish to such
Holder a like certificate setting forth the Exercise Price at the time
in effect and showing how it was calculated.
(g) Notices of Record Date, etc. In the event of:
5
(i) any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend or other
distribution, or any right to subscribe for, purchase or otherwise
acquire any shares of stock of any class or any other securities
or property, or to receive any other right, or
(ii) any recapitalization or reorganization of the Company,
any recapitalization or reorganization of the capital stock of the
Company or any transfer of all or substantially all the assets of
the Company or consolidation or merger of the Company with or into
any other Person, or any voluntary or involuntary dissolution,
liquidation or winding-up of the Company,
then and in each such event the Company will mail or cause to be mailed
to the Holder of this Warrant a notice specifying (A) the date on which
any such record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such
dividend, distribution or right, (B) the date on which any such
recapitalization, reorganization, transfer, conveyance, consolidation,
merger, dissolution, liquidation or winding-up is to take place, and the
date the time, if any, is to be fixed, as of which the holders of record
of Common Stock shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable on such
recapitalization, reorganization, transfer, conveyance, consolidation,
merger, dissolution, liquidation or winding up, and (3) the amount and
character of any stock or other securities, or rights or options with
respect thereto, proposed to be issued or granted, the date of such
proposed issue or grant and the persons or class of persons to whom such
proposed issue or grant is to be offered or made. Such notice shall be
mailed at least twenty (20) days prior to the date specified in such
notice on which any such action is to be taken.
Section 6. Rights As Stockholder. Prior to exercise of
this Warrant, the Warrant Holder shall not be entitled to any rights as
a stockholder of the Company with respect to the Warrant Shares,
including (without limitation) the right to vote such shares, receive
dividends or other distributions thereon or be notified of stockholder
meetings.
Section 7. Replacement of Warrant. Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of the Warrant and, in the case of any such
loss, theft or destruction of the Warrant, upon delivery of an indemnity
agreement or security reasonably satisfactory in form and amount to the
Company or, in the case of any such mutilation, on surrender and
cancellation of such Warrant, the Company at its expense will execute
and deliver, in lieu thereof, a new Warrant of like tenor.
Section 8. Choice of Law. This Warrant shall be construed
under the laws of the State of Delaware.
Section 9. Entire Agreement; Amendments. This Warrant and
the Agreement contain the entire understanding of the parties with
respect to the matters covered hereby and thereby. No provision of this
6
Warrant may be waived or amended other than by a written instrument
signed by the party against whom enforcement of any such amendment or
waiver is sought.
Section 10. Restricted Securities.
(a) Registration or Exemption Required. This Warrant has
been issued in a transaction exempt from the registration requirements
of the Securities Act in reliance upon the provisions of Section 4(2)
promulgated by the U.S. Securities and Exchange Commission under the
Securities Act. This Warrant and the Warrant Shares issuable upon
exercise of this Warrant may not be resold except pursuant to an
effective registration statement or an exemption to the registration
requirements of the Securities Act and applicable state laws.
(b) Legend. Any replacement Warrants issued and any
Warrant Shares issued upon exercise hereof, shall bear the following
legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE BEEN
ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED OR
OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.
Section 11. Transfer and Registration.
(a) Notice of Intention to Exercise; Restrictions on
Transfer. Notwithstanding any provisions contained in this Warrant to the
contrary, no transfer of this Warrant or the related Warrant Shares
shall be made except upon the conditions specified in this Section 11,
which conditions are intended, among other things, to ensure compliance
with the provisions of the Securities Act in respect of the exercise or
transfer of such Warrant or transfer of such Warrant Shares. The Holder
of this Warrant agrees that it will not transfer this Warrant or
transfer any Warrant Shares acquired on any exercise hereof prior to
delivery to the Company of an opinion of counsel reasonably satisfactory
to the Company to the effect that such transfer will not violate the
Securities Act, unless a registration statement under the Securities Act
with respect to the securities to be transferred is in effect at the
time of the transfer.
(b) Defined Terms. As used in this Section 11 the
7
following terms shall have the following respective meanings:
(i) "Commission" shall mean the Securities and
Exchange Commission, or any other federal agency at the time
administering the securities laws;
(ii) "Prospectus" shall mean any preliminary
prospectus and final prospectus (as such may be amended or supplemented)
which constitutes Part I of a Registration Statement filed with the
Commission;
(iii) "Registration Expenses" shall mean all expenses
arising out of or related to the preparation, filing, amendment(s) and
supplementing(s) of a Registration Statement, provided, however, that
Registration Expenses shall not include underwriting commission, fees
and discounts, if any, attributable solely to the inclusion of the
Warrant Holder's shares in such Registration Statement, and any legal
fees and disbursements for counsel to the Warrant Holder;
(iv) "Registration Statement" shall mean a regis-
tration statement filed by the Company with the Commission for a public
offering and sale of securities of the Company.
(c) Initial Registration. The Company agrees that at the
Company's sole expense, the Company shall, (i) use its commercially
reasonably efforts to file, on or prior to nine months from the date of
this Warrant, on its behalf and on behalf of the Warrant Holder with
respect to the Warrant Shares a Registration Statement in accordance
with the Securities Act; and (ii) use its commercially reasonable
efforts to cause such Registration Statement to be declared effective by
the Commission as soon thereafter as reasonably practicable, but in all
events use its commercially reasonable efforts to cause such
Registration Statement to be declared effective not later thanone year
from the date of this Warrant.
(d) Demand Registration. The Company agrees that at the
Company's sole expense, Company shall, (i) no later than thirty (30)
days following a written demand from the Warrant Holder or the holder of
Warrant Shares for registration, file on its behalf and on behalf of the
Warrant Holder or the holder of Warrant Shares with respect to the
Warrant Shares specified in such demand a Registration Statement in
accordance with the Securities Act; and (ii) use its commercially
reasonable efforts to cause such Registration Statement to be declared
effective by the Commission as soon thereafter as reasonably
practicable. The Company shall be obligated to prepare, file and cause
to become effective only one (1) Registration Statement pursuant to this
Section 11(d) (which Registration Statement shall be in addition to any
filed under Section 11(c)). The registration required to be effected by
the Company pursuant to Section 11(c) or this Section 11(d) shall not be
deemed to have been effected even though a Registration Statement with
respect thereto has become effective (1) if, after it has become
effective, such registration is interfered with by any stop order,
injunction, or other order or requirement of the Commission or other
governmental agency or court, for any reason not attributable to the
Warrant Holder with respect to such Registration Statement, and has not
thereafter become effective or (2) if the conditions to closing
specified in the underwriting agreement, if any, entered into in
8
connection with such registration are not satisfied or waived, other
than by reason of a failure on the part of the Warrant Holder with
respect to such Registration Statement; provided, that this the Warrant
Holder or the holder of Warrant Shares may not be able to make a demand
for registration under this Section 5(d) (A) unless and until a
registration statement filed pursuant to Section 5(a) shall have expired
or become ineffective or (B) to the extent that sales may be reasonably
made pursuant to Rule 144 under the Securities Act b the Warrant Holder.
(e) "Black-out Period". Notwithstanding the foregoing,
the Company shall, upon a determination that a material development has
occurred with respect to the Company the disclosure of which is not
otherwise then required the disclosure of which could at such time have
an adverse effect on the Company be permitted to notify the Warrant
Holder or any holders of Warrant Shares that the registration statement
may not be utilized for resale of Warrant Shares at such time. The
Company shall have a reasonable amount of time to make such disclosure,
consistent with significant business needs determined in good faith, but
not longer than ninety (90) days, upon which such Black-out Period shall
conclude.
(f) Registration Procedures. With respect to the Company's
obligations under this Section 11, if the Company is required to use its
commercially reasonable efforts to effect and/or continue the
registration of the Warrant Shares under the Securities Act,the Company
shall:
(i) As expeditiously as possible prepare and file
with the Commission any amendments and supplements to the Registration
Statement and the prospectus included in the Registration Statement as
may be necessary to keep the Registration Statement effective for a
period of not less than (A) the time period until the Warrant Holder
disposes of all of its Warrant Shares, if any, in the case of the
Registration Statement filed pursuant to this Section 5, or (B) two (2)
years plus any delay described in Section 11(e), plus a period equal to
the Delay Period (as herein defined), in the case of any other
Registration Statement.
(ii) As expeditiously as possible furnish to the
Warrant Holder such reasonable numbers of copies of the Prospectus,
including a preliminary prospectus, in conformity with the requirements
of the Securities Act, and such other documents as the Warrant Holder
may reasonably request in order to facilitate the sale or other
disposition of the Warrant Shares owned by the Warrant Holder.
(iii) As expeditiously as possible use its best
efforts to register or qualify the Warrant Shares covered by the
Registration Statement under the securities or Blue Sky laws of such
states or jurisdictions as the Warrant Holder or the managing
underwriter (or sole underwriter, as appropriate) deems appropriate, and
do any and all other acts and things that may be necessary or desirable
to enable the Warrant Holder to consummate the public sale or other
disposition in such jurisdictions of the Warrant Shares owned by the
Warrant Holder (including, without limitation, causing all Warrant
Shares to be listed on NASDAQ or on each securities exchange on which
similar securities issued by the Company are then listed); provided,
9
however, that the Company shall not be required in connection with this
Subsection 11(f)(iii) to qualify as a foreign corporation or execute a
general consent to service of process in any jurisdiction.
(iv) Enter into an underwriting agreement with the
underwriters designated pursuant to this Section 11 containing customary
terms including representations, covenants, indemnifications and
contribution provisions.
If The Company has delivered a Prospectus to the Warrant
Holder and after having done so such Prospectus must be amended or
supplemented to comply with the requirements of the Securities Act, the
Company shall promptly notify the Warrant Holder, and the Warrant Holder
agrees to cease making offers of Warrant Shares immediately upon such
request and to return all copies of such Prospectus in its possession to
the Company. The Company shall promptly provide the Warrant Holder with
a revised Prospectus and, following receipt of the revised Prospectus,
the Warrant Holder shall be free to resume making offers of Warrant
Shares. Prior to the filing of any documents with the Commission from
time to time pursuant to this Section 11 that names the Warrant Holder,
the Warrant Holder shall have the right to review and comment on those
sections of the Registration Statement, Prospectus and other documents
in which the Warrant Holder is named. Except as provided in the next
preceding sentence and except with respect to any written information
furnished to the Company by the Warrant Holder or its underwriter or its
controlling person specifically for use in preparation thereof, the
Company shall cause the Registration Statement, any Prospectuses, all
other documents filed with the Commission relating thereto to or
otherwise in connection therewith, and all amendments and/or supplements
to any of the foregoing to comply with the Securities Act and all other
applicable laws.
(g) Conditions to Registration. The following provisions
shall also apply to the registration of the Warrant Shares:
(i) The Warrant Holder shall select, subject to the
approval of the Company, which approval shall not be unreasonably
withheld or delayed, the underwriter or underwriters, if any, who are to
undertake the sale and distribution of the Warrant Shares to be included
in a Registration Statement filed in connection with any registration
under the provisions of this Section 11.
(ii) In connection with any request for registration
and the filing of a Registration Statement, the Warrant Holder shall be
required to furnish the Company with all relevant information concerning
10
the proposed method of sale or other disposition of the Warrant Shares,
the identity and compensation to be paid to any proposed underwriters,
if any, to be employed at the election of the Warrant Holder in
connection therewith, and such other information as may be reasonably
required by the Company to properly prepare and file such Registration
Statement in accordance with applicable provisions of the Securities Act
(which includes the rules and regulations thereunder). Upon the request
of the Company, such information shall be furnished by the Warrant
Holder in writing.
(h) Expenses. In connection with or otherwise relating to
registrations on behalf of the Warrant Holder of any Warrant Shares
under the Securities Act pursuant to this Section 11, the Company shall
pay all Registration Expenses; provided, however, that the Warrant
Holder shall be required to bear that portion of the underwriting
commissions, fees and discounts, if any, attributable solely to the
inclusion of Warrant Shares in any Registration Statement relating
thereto and the inclusion of Warrant Shares in the related filings under
state securities or Blue Sky laws; and further provided that the Warrant
Holder shall pay the legal fees and disbursements of counsel to the
Warrant Holder in connection therewith.
(i) Indemnification.
(i) In connection with or otherwise relating to the
registration of any Warrant Shares under the Securities Act pursuant to
the provisions of this Section 11, the Company agrees to indemnify and
hold harmless and defend the Warrant Holder, each underwriter, if any,
of such Warrant Shares, each other person who controls the Warrant
Holder or any such underwriter within the meaning of the Securities Act,
and the Warrant Holder's officers, directors and counsel from and
against any and all losses, claims, damages, liabilities, joint or
several, to which the Warrant Holder, such underwriter, such controlling
person or such officers, directors and counsel of the Warrant Holder may
become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration
Statement under which such Warrant Shares were registered under the
Securities Act or any Prospectus contained therein or related thereto,
or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading; and will reimburse the
Warrant Holder, such underwriter, such controlling person or such
officers, directors and counsel of the Warrant Holder for any legal or
any other fees or expenses reasonably incurred by the Warrant such
Holder, underwriter, such controlling person or the Warrant Holder's
officers, directors and counsel in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such Registration Statement or such
Prospectus in reliance upon and in conformity with written information
furnished to the Company by the party seeking indemnification.
11
(ii) In connection with or otherwise relating to the
registration of any Warrant Shares under the Securities Act pursuant to
the provisions hereof, the Warrant Holder agrees to indemnify and hold
harmless the Company, each person who controls the Company within the
meaning of the Securities Act, and each officer and director of the
Company from and against any losses, claims, damages or liabilities,
joint or several, to which the Company, such controlling person or such
officer or director or counsel of the Company may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in any Registration Statement under which such Warrant
Shares were registered under the Securities Act or any Prospectus
contained therein, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
which untrue statement or alleged untrue statement or omission or
alleged omission was made therein in reliance upon and in conformity
with written information furnished to the Company by the Warrant Holder,
any person who controls the Warrant Holder or any officer, director or
counsel of the Warrant Holder specifically for use in connection with
the preparation thereof; and will reimburse the Company, each such
controlling person and each such officer or director for any legal or
any other fees and expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability
or action.
(iii) Each person entitled to indemnification
hereunder (the "Indemnified Party") agrees, as soon as is reasonably
practicable after the receipt of notice of any claim or action against
it, to notify the party from whom indemnity may be sought hereunder (the
"Indemnifying Party") in writing; provided that any failure to promptly
provide such notice shall not excuse the Indemnifying Party from its
obligations hereunder except to the extent the Indemnifying Party is
actually prejudiced thereby. The Indemnifying Party shall assume the
defense of any such claim or action (and the cost thereof) by counsel of
the Indemnifying Party's own choosing, who shall be reasonably
satisfactory to the Indemnified Party. Each Indemnified Party shall
have the right to employ separate counsel in connection with any such
claim or action and to participate in the handling or defense thereof,
but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless the employment of such counsel has been
specifically authorized by the Indemnifying Party or the Indemnifying
Party shall not have employed counsel to have charge of the defense of
such action or claim or such Indemnified Party shall have reasonably
concluded that there may be defenses available to the Indemnified Party
(in which case the Indemnifying Party shall not have the right to direct
the defense of such action on behalf of such Indemnified Party), in any
of which events such fees and expenses shall be borne by the
Indemnifying Party. The Indemnifying Party shall be free to settle any
claims or actions in respect to which indemnity may be sought against it
pursuant to this Section 11(i); provided, however, that the Indemnifying
Party shall not settle any such claim or action if such settlement would
result in the imposition against Indemnified Party of a judgement,
decree or order in the nature of equitable relief or otherwise require
an acknowledgment of wrongdoing unless the Indemnifying Party has
obtained the prior written consent of such Indemnified Party (which
consent shall not be unreasonably withheld).
12
(j) Compliance with Rule 144. The Company shall take such
actions pursuant to or otherwise in connection with Rule 144 as is
necessary to enable the Warrant Holder to sell Warrant Shares pursuant
to that Rule.
(k) Assignment. Notwithstanding the provisions of
Sectioon 14, the Warrant Holder's rights under this Section 11 may be
assigned by the Warrant Holder to a transferee or assignee of any of the
Warrant Shares; provided that the Company is given written notice of
such assignment at the time of or within a reasonable time after the
assignment, stating the name and address of the transferee or assignee
and identifying the number of Warrant Shares with respect to which such
rights of the Warrant Holder are being assigned.
(l) Contribution. If the indemnification provided for in
Section 11(i) from the Indemnifying Party is unavailable to the
Indemnified Party in respect to any losses, claims, damages, liabilities
or expenses referred to herein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid
or payable by such Indemnified Party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party and Indemnified
Parties in connection with the actions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such Indemnifying Party
and Indemnified Parties shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information
supplied by, such Indemnifying Party or Indemnified Parties, and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action. The amount paid or
payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.
The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 11(l) were determined
by pro rata allocation or by any other method of allocation which does
not take into account the equitable considerations referred to in the
immediately preceding paragraph. No Person guilty of 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.
If indemnification is available under Section 11(i), the Indemnifying
Parties shall indemnify each Indemnified Party to the full extent
provided in Section 11(i) without regard to the relative fault of the
Indemnifying Party or Indemnified Party or any other equitable
consideration provided for in this Section 11(l).
13
Section 12. Notices. All notices, demands, requests,
consents, approvals, and other communications required or permitted
hereunder shall be in writing and shall be (i) personally delivered,
(ii) deposited in the mail, registered or certified, return receipt
requested, postage prepaid, (iii) delivered by reputable overnight
courier service with charges prepaid, addressed as set forth below or to
such other address as such party shall have specified most recently by
written notice. Any notice or other communication required or permitted
to be given hereunder shall be deemed effective (a) upon hand delivery
at the address designated below (if delivered on a business day during
normal business hours where such notice is to be received), or the first
business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be
received) or (b) on the second business day following the date of
mailing by registered or certified mail, fully prepaid, addressed to
such address, or upon actual receipt of such mailing, whichever shall
first occur or (c) on the first business day following the date of
delivery to a reputable overnight courier service. The addresses for
such communications shall be:
If to the Company:
Cytogen Corporation
000 Xxxxxxx Xxxx Xxxx XX0000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: H. Xxxxxx Xxxxxx, Ph.D.
Telephone: (000) 000-0000
if to the Warrant Holder:
Berlex Laboratories, Inc.
000 Xxxxxxxx Xxxx
Xxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Either party hereto may from time to time change its address or
facsimile number for notices under this Section 12 by giving at least
ten (10) days' prior written notice of such changed address to the other
party hereto.
Section 13. Miscellaneous. This Warrant and any term hereof
may be changed, waived, discharged or terminated only by an instrument
in writing signed by the party against which enforcement of such change,
waiver, discharge or termination is sought. The headings in this
Warrant are for purposes of reference only, and shall not limit or
otherwise affect any of the terms hereof. The invalidity or
14
unenforceability of any provision hereof shall in no way affect the
validity or enforceability of any other provision.
Section 14. Assignment. This Warrant shall not be
assignable by any Holder without the prior written consent of the
Company, which consent shall be at the reasonable discretion of the
Company; provided, that Berlex may assign this Warrant to its Affiliates
upon notice to the Company.
Section 15. Reservation of Stock Issuable on Exercise of
Warrant. The Company will at all times reserve and keep available,
solely for issuance and delivery on the exercise of this Warrant, all
shares of Common Stock from time to time issuable on the exercise of
this Warrant.
IN WITNESS WHEREOF, this Warrant was duly executed by the
undersigned, thereunto duly authorized, as of the date first set forth
above.
CYTOGEN CORPORATION
By:
H. Xxxxxx Xxxxxx, Ph.D.
President and Chief Executive Officer
Attested:
By:
Xxxxxx X. Xxxxx, Xx., Esq.
Vice President, General Counsel and Secretary
15
EXHIBIT A TO THE WARRANT
EXERCISE FORM
CYTOGEN CORPORATION
The undersigned hereby irrevocably exercises the right to purchase
__________________ shares of Common Stock of Cytogen Corporation, a
Delaware corporation, evidenced by the attached Warrant, and herewith
makes payment of the Exercise Price with respect to such shares in full
in the form of [cash check, bank draft or wire transfer in the amount of
$___________], which represent the amount of Warrant Shares as provided
in the attached Warrant to be canceled in connection with such
exercise], all in accordance with the conditions and provisions of said
Warrant.
The undersigned requests that stock certificates for such Warrant
Shares be issued, and a Warrant representing any unexercised portion
hereof be issued, pursuant to this Warrant in the name set forth below
and delivered to the address set forth below.
Dated:_______________________________________
_____________________________________________
Signature of Registered Holder
Name of Registered Holder (Print)
Name of Holder of Warrant Shares
_____________________________________________
Address of Holder of Warrant Shares
