SETTLEMENT AND RELEASE AGREEMENT
EXHIBIT
10.1
SETTLEMENT
AND RELEASE AGREEMENT
THIS
SETTLEMENT AND RELEASE AGREEMENT (the “Settlement Agreement”), made and entered
into this 15th day of February, 2007, is by and between Cytogen Corporation
(“Cytogen”) and Advanced Magnetics, Inc. (“AMI”)(collectively, the
“Parties”).
RECITALS
WHEREAS,
Cytogen and AMI currently are engaged in a dispute, and are parties to a
certain
civil action pending in the Superior Court Department of the Trial Court
of the
Commonwealth of Massachusetts (the “Court”), entitled Cytogen
Corporation v. Advanced Magnetics, Inc.,
Civil
Action No. 06-0313-BLS2 (hereinafter the “Lawsuit”);
WHEREAS,
in the Lawsuit, the Parties have asserted various claims and counterclaims
against each other;
WHEREAS,
the Parties deny the allegations set forth by the other in the
Lawsuit;
WHEREAS,
the Parties to this Settlement Agreement recognize that in order to avoid
further costs and uncertainty in connection with the Lawsuit, it is in their
respective best interests to compromise and thereby terminate and conclude
the
Lawsuit and all disputes between them.
NOW,
THEREFORE, in consideration of the mutual covenants expressed herein and
other
good and valuable consideration, the receipt and sufficiency of which is
hereby
acknowledged, the undersigned parties to this Settlement Agreement mutually
agree and contract with each other, as follows:
|
1.
|
SETTLEMENT
PAYMENT.
|
By
no
later than three (3) business days following the full execution of this
Settlement Agreement, AMI shall pay to Cytogen a sum total of four million
U.S.
dollars (USD$4,000,000.00) by certified check or wire transfer (the “Settlement
Amount”).
|
2.
|
RELEASE
OF ESCROWED SHARES.
|
By
no
later than ten (10) business days following the full execution of this
Settlement Agreement, the Parties shall jointly and in writing inform
ChaseMellon Shareholder Services, L.L.C. (the “Escrow
Agent”)
that the License Agreement has been mutually terminated by the Parties and
instruct the Escrow Agent to release and transfer to Cytogen the 50,000 shares
(formerly 500,000 shares) of Cytogen stock (the "Escrow Shares"), and any
dividends or other distributions comprising the Additional Escrow Fund currently
being held by the Escrow Agent pursuant to the Escrow Agreement by and among
Cytogen and AMI and the Escrow Agent, dated as of August 25, 2000 (the “Escrow
Agreement”). If required by the Escrow Agent, Cytogen and AMI shall also execute
and provide any further instructions reasonably necessary to enable Cytogen's
Transfer Agent to reissue the Escrow Shares in the name of Cytogen. AMI shall
also be responsible for its share of any fees previously incurred by the
Escrow
Agent pursuant to Section 5 of the Escrow Agreement. The Escrow Agreement
shall
terminate upon the transfer of the 50,000 shares of Cytogen stock to Cytogen
as
provided herein. Notwithstanding the preceding sentence, and subject only
to
this Section 2, AMI is no longer subject to any obligations under the Escrow
Agreement.
|
3.
|
STIPULATION
OF DISMISSAL.
|
Immediately
following Cytogen’s receipt of the Settlement Amount, the Parties shall file
with the Court a Stipulation of Dismissal with Prejudice in the form attached
hereto as Exhibit A.
|
4.
|
MUTUAL
RELEASES.
|
Effective
as of the full execution of this Settlement Agreement and payment to Cytogen
of
the Settlement Amount pursuant to Section 1, above, in consideration of the
settlement of the Lawsuit and other good and valuable consideration, the
receipt
and sufficiency of which are hereby acknowledged, and subject only to the
proviso contained in the second sentence of this Release, the Parties, on
behalf
of themselves and their parents, subsidiaries, affiliates, predecessors,
successors and assigns, and all past and present officers, directors, employees,
shareholders, agents, servants, attorneys and other representatives of any
of
the foregoing (including persons or entities controlling, controlled by or
under
common control with Cytogen or AMI), fully, finally, unconditionally,
irrevocably and forever release and discharge each other, and each other’s past
and present officers, directors, employees, agents, servants, attorneys,
insurers, and other representatives (including but not limited to Xxxxxx
Xxxxxxxxx and Xxxxxxx Xxxxxx),
-2-
and
all
heirs, executors, administrators, predecessors, successors, affiliates and
assigns of any of the foregoing (the “Released Parties”), from any and all
claims, liabilities, causes of action, rights of action and actions, demands,
suits, proceedings, damages, costs, fees and expenses, and any and all claims,
demands and liabilities whatsoever, of every name and nature, both at law
and in
equity, whether known or unknown, suspected or unsuspected (collectively,
“Claims”), including, without limiting the generality of the foregoing, any and
all Claims which Cytogen or AMI now has or ever had against the other, including
but not limited to Claims arising from or relating, directly or indirectly,
to
any of the allegations contained in the Complaint and/or Counterclaims filed
in
the Lawsuit. Notwithstanding anything to the contrary in the preceding sentence,
nothing in this Release shall release Cytogen or AMI, or any of the Released
Parties, for any Claim which one party may have against the other for breach
of
this Settlement Agreement or for any wrong or breach arising out of any act,
omission or conduct which occurs after the date of this Settlement
Agreement.
|
5.
|
REPRESENTATION
BY AMI.
|
The
monthly reports dated September 2006, November 14, 2006, December 19, 2006,
January 10, 2007, and February 14, 2007 delivered by AMI to Cytogen in
accordance with the terms of the License Agreement accurately reflected the
status of the Combidex® Project in all material respects as of the date of such
reports.
|
6.
|
STATUS
OF THE PARTIES’ VARIOUS AGREEMENTS.
|
Effective
immediately upon complete execution of this Settlement Agreement, the License
and Marketing Agreement by and between Cytogen Corporation and Advanced
Magnetics, Inc., dated August 25, 2000 (the “License Agreement”) and the Supply
Agreement by and between Cytogen Corporation and Advanced Magnetics, Inc.,
dated
as of August 25, 2000 (the “Supply Agreement”) are hereby terminated and are no
longer in force or effect, and Cytogen no longer has any license, supply,
marketing, sales or other rights whatsoever to or in Combidex® or ferumoxytol
(formerly referred to as Code 7228). Notwithstanding the foregoing, Section
7 of
the License Agreement and Section 7 of the Supply Agreement continue and
survive
pursuant to their terms.
-3-
|
7.
|
PROVISION
AND RETURN OF MATERIALS.
|
By
no
later than twenty-one (21) days following the full execution of this Settlement
Agreement, Cytogen: (i) shall provide to AMI all market analyses or reports,
if
any, in Cytogen’s possession, custody, or control for or relating to Combidex®
or magnetic resonance imaging contrast agents; and (ii) shall return to AMI
(a)
the Agent Technology (as defined in the License Agreement), (b) the
Manufacturing Technology (as defined in the License Agreement), if any, in
its
possession, and (c) Project Information (as defined in the License Agreement)
not developed by Cytogen, or otherwise destroy such Agent Technology,
Manufacturing Technology and Project Information, and certify in writing
and
under oath that such Agent Technology, Manufacturing Technology and Project
Information has been destroyed.
|
8.
|
CONFIDENTIALITY.
|
The
Parties agree not to disclose the contents of this Settlement Agreement,
including, but not limited to, the settlement amount or any matters pertaining
to this Agreement and the facts and circumstances of their respective claims,
counterclaims or allegations to any third party unless such disclosure is:
(i)
lawfully required by any governmental agency; (ii) otherwise required to
be
disclosed by law; (iii) necessary in any legal proceeding in order to enforce
any provisions of this Settlement Agreement or to claim damages as a result
of
an alleged breach of this Settlement Agreement by the other Party; (iv)
necessary for accounting or tax purposes, or (v) made to legal, accounting
or
tax professionals or to any other person or entity under an obligation to
preserve the confidentiality of such information. To the extent permitted
by
law, each Party agrees that it will notify the other affected Party in writing
within five (5) calendar days of the receipt of any subpoena, court order,
or
administrative order requiring disclosure of information subject to this
nondisclosure provision. Notwithstanding the foregoing, the Parties agree
that
they may issue the press releases in the forms attached hereto as Exhibit
B (AMI
press release) and Exhibit C (Cytogen press release), and any future disclosure
of the specific terms set forth in such press releases shall not be a violation
of this Section 8.
-4-
|
9.
|
NON-DISPARAGEMENT.
|
The
Parties agree and covenant to refrain from making any statements or references,
either directly in the form of oral or written statements or indirectly,
to any
third party that disparages, depreciates, ridicules, deprecates, condemns,
criticizes, or maligns Cytogen, AMI, any of Cytogen’s or AMI’s respective
Released Parties, Combidex®, ferumoxytol, Quadramet®, ProstaScint®, Caphosol®,
Soltamox™ or CYT-500. A violation of this non-disparagement obligation may be
remedied by injunctive relief and an award of damages and costs.
|
10.
|
PURPOSE
AND EFFECT OF SETTLEMENT.
|
10.01.
Each party to this Settlement Agreement represents that this is a full, complete
and mutual settlement and is predicated solely upon each party’s desire to avoid
the further legal expense that would be entailed in any further discovery,
pretrial motions, trial, and appellate proceedings in the Lawsuit.
10.02.
The Parties each warrant and represent that this Settlement Agreement is
the
result of a compromise. While this Settlement Agreement resolves the issues
between the parties, it does not constitute an admission by any party of
any
liability whatsoever. Neither this Settlement Agreement nor anything in the
Settlement Agreement shall be construed to be or shall be admissible in any
proceeding as evidence of liability by any of the Parties.
|
11.
|
CONSTRUCTION
AND AUTHORITY.
|
11.01.
Construction as Contract. It is expressly understood and agreed that the
terms
hereof are contractual and not merely recitals and that the agreement contained
herein, the Settlement Amount and consideration to be transferred are to
compromise disputed claims and to avoid litigation. It is also expressly
understood and agreed that this Settlement Agreement has been prepared jointly
by the parties hereto. Each Party has cooperated in the drafting and preparation
of this Settlement Agreement. Hence, in any construction to be made of this
-5-
Settlement
Agreement, the same shall not be construed against any Party on the basis
that
the Party was the drafter. Rather, the language of this Settlement Agreement
shall in all instances be construed as a whole, according to its fair meaning
and not strictly for or against any of the Parties.
11.02.
Warranty. All parties hereto warrant that they have read this Settlement
Agreement and fully understand it to be a compromise and settlement and release
of all claims as described in the releases above. Each party further warrants
and represents that they have not heretofore assigned or transferred to any
person not a party to this Settlement Agreement any released claim or any
part
or portion thereof and each shall defend, indemnify and hold harmless the
other
from or against any claim (including payment of attorneys’ fees and costs
actually incurred whether or not litigation is commenced) based on or in
connection with or arising out of such transfer made, purported or
claimed.
11.03.
Authority. Each party hereto, and the person executing the Settlement Agreement
for each party, warrants and represents that this Settlement Agreement is
being
executed by and for each of said parties by duly-authorized representatives.
This Settlement Agreement binds and benefits Cytogen and AMI, their successors,
assigns, parents, subsidiaries, divisions, affiliates, and controlled companies,
whether corporations, partnerships, trusts, joint ventures or others, and
their
past, present and future representatives, attorneys, consultants, directors,
officers, employees, shareholders, trustees, agents and advisors.
11.04.
Representation by Counsel. The Parties represent and warrant that each was
represented by an attorney employed to represent said party with respect
to this
Settlement Agreement and all matters covered herein; that each party hereto
has
been fully advised by its attorney concerning its rights with respect to
the
execution of this Settlement Agreement; and
-6-
that
its
attorney is authorized and directed to execute all documents and to take
all
necessary action to effectuate the terms of this Settlement Agreement and
terminate the Lawsuit.
|
12.
|
RULES
OF CONSTRUCTION: ENFORCEMENT.
|
12.01.
Headings. The paragraph and section headings are for convenience only and
will
not be deemed to affect in any way the language of the provision to which
they
refer.
12.02.
Governing Law and Choice of Forum. This Settlement Agreement shall be
interpreted, construed and enforced in accordance with the substantive laws
of
the Commonwealth of Massachusetts, without regard to its principles of conflict
of laws. The Parties further consent to the exclusive jurisdiction of the
federal and state courts in Massachusetts with respect to the interpretation,
construction or enforcement of this Settlement Agreement or anything relating
thereto. In any action arising under or to enforce, construe or interpret
this
Settlement Agreement, the prevailing party shall recover its reasonable costs,
expenses and attorneys’ fees from the other party.
12.03.
Entire Agreement. This Settlement Agreement contains the entire understanding
of
the Parties relating to the matters referred to herein, and may only be amended
by a written document, duly executed on behalf of the respective parties.
There
are no understandings, agreements, representations, warranties, expressed
or
implied, not specified herein regarding this Settlement Agreement or the
subject
matter hereof. No waiver of any of the provisions of this Settlement Agreement
shall constitute a waiver of any other provision (whether or not similar),
nor
shall such waiver constitute a continuing waiver unless otherwise expressly
provided.
|
13.
|
COUNTERPARTS.
|
This
Settlement Agreement may be executed in separate counterparts, each of which
shall be considered an original but all of which shall constitute one
agreement.
-7-
IN
WITNESS WHEREOF, each of the Parties has caused three (3) original copies
of
this Settlement Agreement to be executed on their behalf by their duly
authorized representative as of the day and year aforesaid.
|
CYTOGEN
CORPORATION
|
ADVANCED
MAGNETICS, INC.
|
|
By:
/s/ Xxxxxxx X. Xxxxxx
|
By:
/s/
Xxxxx X.X. Xxxxxxx
|
|
Duly
Authorized
|
Duly
Authorized
|
|
Name:
Xxxxxxx
X. Xxxxxx
|
Name:
Xxxxx
X.X. Xxxxxxx
|
|
Title:
President
& CEO
|
Title:
President
& CEO
|
|
Date:
February 15, 2007
|
Date:
February 15, 2007
|
-8-
