<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended June 30, 1996 Commission file number 0-19855
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SERAGEN, INC.
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(Exact name of registrant as specified in its charter)
Delaware 04-2662345
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(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
97 South Street, Hopkinton, MA 01748
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(Address of principal executive offices) (Zip Code)
(508) 435-2331
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
16,669,504 shares of Common Stock, par value $.01, were outstanding on
August 9, 1996.
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SERAGEN, INC.
<TABLE>
INDEX
<CAPTION>
Page
----
<S> <C>
PART I - FINANCIAL INFORMATION
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Item 1 - Financial Statements
Balance Sheets -
December 31, 1995, June 30, 1996 and Pro Forma June 30, 1996........................... 3
Statements of Operations
Three and Six Months Ended June 30, 1995 and 1996...................................... 4
Statements of Cash Flows
Six Months Ended June 30, 1995 and 1996................................................ 5
Notes to Financial Statements........................................................... 6
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations.......................................... 8
PART II - OTHER INFORMATION
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Item 1 - Legal Proceedings (None)
Item 2 - Changes in Securities........................................................... 11
Item 3 - Defaults upon Senior Securities (None)
Item 4 - Submission of Matters to a Vote of Security Holders.............................. 12
Item 5 - Other Information ............................................................... 12
Item 6 - Exhibits and Reports on Form 8-K................................................. 13
Signatures ................................................................................ 15
</TABLE>
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<PAGE> 3
SERAGEN,INC.
<TABLE>
BALANCE SHEETS
(UNAUDITED)
<CAPTION>
ASSETS (PROFORMA)
DECEMBER 31, JUNE 30, JUNE 30,
1995 1996 1996
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<S> <C> <C> <C>
Current assets:
Cash and cash equivalents .................................................... $ 435,460 $ 4,889,252 $ 4,889,252
Restricted cash .............................................................. 435,318 435,318 435,318
Contract receivable .......................................................... 686,055 910,214 910,214
Unbilled contract receivable ................................................. 496,147 771,634 771,634
Prepaid expenses and other current assets .................................... 335,238 368,029 288,029
------------- ------------- -------------
Total current assets .......................................... 2,388,218 7,374,447 7,294,447
Property and equipment, net .................................................... 5,198,136 5,030,974 5,030,974
Investment in affiliate ........................................................ 2,599,864 957,895 957,895
Deferred commission ............................................................ 2,060,000 -- --
Prepaid interest ............................................................... 3,528,677 3,008,053 --
Other assets ................................................................... 524,613 504,779 81,592
------------- ------------- -------------
Total assets .................................................. $ 16,299,508 $ 16,876,148 $ 13,364,908
============= ============= =============
LIABILITIES AND STOCKHOLDERS' ( DEFICIT) EQUITY
Current liabilities:
Accounts payable ............................................................ 725,326 595,333 595,333
Current maturities of long-term debt ........................................ 248,494 175,806 175,806
Accrued commission payable .................................................. 300,000 -- --
Accrued expenses ............................................................ 2,413,284 2,539,454 2,539,454
------------- ------------- -------------
Total current liabilities ..................................... 3,687,104 3,310,593 3,310,593
Non-current liabilities:
Long-term debt, less current maturities ..................................... 12,537,417 23,800,000 --
Deferred revenue ............................................................ 5,000,000 -- --
Long-term obligation, less unamortized discount ............................. 3,440,482 3,784,290 3,784,290
Affiliate guarantee ......................................................... 2,076,000 2,076,000 2,076,000
------------- ------------- -------------
Total non-current liabilities ................................. 23,053,899 29,660,290 5,860,290
Stockholders'(deficit) equity:
Preferred stock; $.01 par value; 5,000,000 shares authorized
Convertible preferred stock, Series A, $.01 par value; issued
and outstanding 4,000 shares at June 30, 1996 and Pro Forma
June 30, 1996, respectively ............................................. -- 3,786,667 3,786,667
Convertible preferred stock, Series B, $.01 par value; issued
and outstanding 23,800 shares at June 30, 1996 (Pro Forma) .............. -- -- 23,720,000
Common stock, $.01 par value; 30,000,000 shares authorized;
issued 16,521,212 shares at December 31, 1995, 16,626,737
shares at June 30, 1996 and Pro Forma June 30, 1996, respectively ........ 165,212 166,267 166,267
Additional paid-in capital .................................................. 141,759,580 141,825,370 141,825,370
Accumulated deficit ......................................................... (152,273,333) (161,806,008) (165,237,248)
------------- ------------- -------------
(10,348,541) (16,027,704) 4,261,056
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Less treasury stock (14,632 shares at cost at December 31, 1995, 17,418
shares at cost at June 30, 1996 and June 30, 1996 Pro Forma,
respectively) ............................................................ (92,954) (67,031) (67,031)
------------- ------------- -------------
Total stockholders' (deficit) equity .......................... (10,441,495) (16,094,735) 4,194,025
------------- ------------- -------------
Total liabilities and stockholders' (deficit) equity .......... $ 16,299,508 $ 16,876,148 $ 13,364,908
============= ============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
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<PAGE> 4
SERAGEN, INC.
<TABLE>
STATEMENT OF OPERATIONS
(UNAUDITED)
<CAPTION>
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
---------------------------- ----------------------------
1995 1996 1995 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue:
Contract revenue and license fees . $ 1,061,936 $ 6,247,250 $ 1,382,147 $ 7,746,242
----------- ----------- ----------- -----------
Operating expenses:
Cost of contract revenue .......... 1,061,936 1,194,253 1,382,147 2,593,245
Research and development .......... 2,938,431 3,302,357 6,843,993 6,875,331
General and administrative ........ 1,257,584 3,209,037 2,501,680 4,570,393
----------- ----------- ----------- -----------
5,257,951 7,705,647 10,727,820 14,038,969
----------- ----------- ----------- -----------
Loss from operations (4,196,015) (1,458,397) (9,345,673) (6,292,727)
Equity in loss of affiliate .......... -- 471,561 -- 1,641,969
Interest income ...................... 17,586 25,454 37,233 41,109
Interest expense ..................... 328,677 818,444 517,812 1,612,419
----------- ----------- ----------- -----------
Net loss ........... (4,507,106) (2,722,948) (9,826,252) (9,506,006)
----------- ----------- ----------- -----------
Dividends ............................ -- 26,667 -- 26,667
----------- ----------- ----------- -----------
Net loss applicable to common
stockholders ............... $(4,507,106) $(2,749,615) $(9,826,252) $(9,532,673)
=========== =========== =========== ===========
Net loss per common share ............ $ (0.28) $ (0.17) $ (0.61) $ (0.57)
=========== =========== =========== ===========
Weighted average common shares used in
computing net loss per share ...... 16,265,312 16,607,713 16,244,077 16,582,940
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
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<PAGE> 5
SERAGEN, INC.
<TABLE>
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30,
----------------------------
1995 1996
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<S> <C> <C>
Cash flows from operating activities:
Net loss ........................................ $(9,826,252) $ (9,506,006)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization .............. 473,224 463,651
Equity in loss of affiliate ................ -- 1,641,969
Loss on disposal of property and equipment . 2,178 --
Amortization of discount of long-term debt . 343,807 343,807
Amortization of prepaid interest ........... 115,694 520,625
Amortization of debt issuance costs ........ 12,606 83,045
Changes in operating assets and liabilities:
Contract receivable ........................ 56,728 (224,159)
Unbilled contract receivable ............... (71,880) (275,487)
Prepaid expenses and other current assets .. 205,829 (32,791)
Accounts payable ........................... 35,089 (129,993)
Deferred commission ........................ -- 2,060,000
Accrued commission payable ................. -- (300,000)
Accrued expenses ........................... (52,201) 126,170
Deferred revenue ........................... -- (5,000,000)
----------- ------------
Net cash (used in) operating activities ............ (8,705,178) (10,229,169)
----------- ------------
Cash flows from investing activities:
Proceeds from sales of marketable securities .... 2,034,948 --
Purchases of property and equipment ............. (64,548) (296,489)
Decrease in other assets ........................ 1,944 944
----------- ------------
Net cash provided by (used in) investing activities 1,972,344 (295,545)
----------- ------------
Cash flows from financing activities:
Net proceeds from stock issuances ............... 111,534 3,929,642
Purchases of treasury stock ..................... (39,000) (76,875)
Proceeds from issuance of long-term debt ........ 3,000,000 11,300,000
Repayments of long-term debt .................... (95,115) (110,105)
Debt issuance costs ............................. (453,791) (64,156)
----------- ------------
Net cash (used in) provided by financing activities 2,523,628 14,978,506
----------- ------------
Net (decrease) increase in cash and cash equivalents (4,209,206) 4,453,792
Cash and cash equivalents, beginning of period ..... 5,536,782 435,460
----------- ------------
Cash and cash equivalents, end of period ........... $ 1,327,576 $ 4,889,252
=========== ============
Supplemental disclosure of cash flows information:
Cash payments for interest ...................... $ 57,398 $ 367,495
=========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
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<PAGE> 6
SERAGEN, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
-----------------------
1. BASIS OF PRESENTATION
The accompanying financial statements are unaudited and have been prepared
by the Company in accordance with generally accepted accounting principles.
Certain information and footnote disclosure normally included in the
Company's audited annual financial statements has been condensed or omitted in
the Company's interim financial statements. In the opinion of management, the
interim financial statements reflect all adjustments (consisting of normal
recurring accruals) necessary for a fair representation of the results for the
interim periods presented.
The results of operations for the interim periods may not necessarily be
indicative of the results of operations expected for the full year, although the
Company expects to incur a significant loss for the year ended December 31,
1996. These interim financial statements should be read in conjunction with the
audited financial statements for the year ended December 31, 1995, which are
contained in the Company's most recent Annual Report on Form 10-K.
2. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date(s) of the financial
statements and the report amounts of revenues and expenses during the report
period(s). Actual results could differ from those estimates.
3. AMENDMENT TO LILLY SALES AND DISTRIBUTION AGREEMENT
On May 28, 1996, Eli Lilly and Company ("Lilly") and the Company amended the
Sales and Distribution Agreement relating to the $5.0 million advance paid by
Lilly in August 1994 against Lilly's future purchases of bulk product from the
Company. Associated with the original agreement was $2,060,000 of deferred
commission expense. The amended agreement states that the $5.0 million payment
is non-refundable and Seragen has no obligation to refund the advance should no
bulk purchases be made by Lilly. Accordingly, the Company recorded $5.0 million
in revenue and $2,060,000 in commission expense in the second quarter of 1996.
4. REGULATION S
On May 29, 1996, the Company raised gross proceeds of $4 million
(approximately $3.8 million net of offering fees) through the sale of 4,000
shares of Seragen convertible Series A Preferred Stock to investors outside the
United States. The preferred stock is convertible at the option of the holders,
beginning July 15, 1996, into shares of Seragen's Common Stock at a conversion
price equal to the lesser of $4.125 or 73 percent of the average closing bid
prices for a five day period prior to the conversion date. Terms of the
preferred stock also provide for 8% cumulative dividends payable in shares of
Seragen Common Stock at the time of each conversion. The holders of the Series
A Shares are not entitled to vote separately, as a series or otherwise, on any
matter submitted to a vote of the shareholders of the Company. Each Series A
Share has a liquidation preference equal to the sum of (a) $1,000, plus (b) an
amount equal to any accrued and unpaid dividends from the date of issuance of
the Series A Shares so that such amount must be paid on each Series A Share in
the event of a voluntary or involuntary liquidation, dissolution or winding up
of the Company before any distribution or payment is made to any holders of any
shares of the Common Stock or any other class or series of the Company's
capital stock which is junior to the Series A Shares. Any shares which remain
outstanding on November 29, 1997 will be automatically converted into shares of
Seragen Common Stock. The Company's Series A Preferred Stock was reflected at
$3,786,667 at June 30, 1996 which includes $26,667 accrued dividends payable
from the issuance date through June 30, 1996. As of August 9, 1996, 149 shares
of Series A Preferred Stock were converted into 28,051, 26,739 and 8,395 shares
of Common Stock at $2.245, $2.427 and $2.774, respectively.
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<PAGE> 7
SERAGEN, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
-----------------------
5. SUBSEQUENT EVENT
On July 1, 1996, the Company restructured its arrangement with the
guarantors of the Company's $23.8 million loan financing obtained in June 1995
to release the Company from its liability to the banks involved. The new
agreement replaces the lines of credit with convertible Series B Preferred
Stock. Each share of Series B Preferred Stock is convertible at any time at the
investor's option into a number of shares of Seragen Common Stock determined by
dividing $1,000 by the average of the closing sale prices of the Common Stock as
reported on the Nasdaq Stock Market for the ten consecutive trading days
immediately preceding the conversion date. The holders of Series B Preferred
Stock are entitled to receive a cumulative dividend payable in arrears in cash
quarterly on the last day of March, June, September, and December of each year
commencing on September 30, 1996 at an annual rate equal to the prime rate plus
1 1/2% through June of 1999 and at an increasing percentage rate thereafter up
to a maximum rate of the prime rate plus 5% in 2003. The investors also received
warrants to purchase a total of 5,950,000 shares of Seragen Common Stock
(250,000 warrants for every $1,000,000 of preferred stock purchased) at an
exercise price of $4.00 per share. The warrants are exercisable commencing on
January 1, 1997 and expire on July 1, 2006. The holders of the Series B Shares
are entitled to vote, on any matter submitted to a vote of the shareholders of
the Company, and are entitled to the number of votes equal to the product of (x)
the number of Series B Shares held on the record date for the determination of
the stockholders entitled to vote on such matters or, if no record date is
established, in accordance with applicable provisions of Delaware law, and (y)
$1,000, divided by $4.00. Each Series B Share has a liquidation preference equal
to the sum of (a) $1,000, plus (b) an amount equal to any accrued and unpaid
dividends from the date of issuance of the Series B shares so that such amount
must be paid on each Series B Share in the event of a voluntary or involuntary
liquidation, dissolution or winding up of the Company before any distribution or
payment is made to any holders of any shares of the Common Stock or any other
class or series of the Company's capital stock which is junior to the Series B
Shares. At any time, with the approval of the Company's Board of Directors,
Audit Committee or comparable body, the Company may redeem any or all of the
Series B Shares for cash.
The Company has included in this report a June 30, 1996 Pro Forma Balance
Sheet to show the effect of the loan restructuring. The following pro forma
adjustments were incorporated into the pro forma balance sheet: the conversion
of $23.8 million of long-term debt into Series B convertible preferred stock
(net of estimated restructuring costs of $80,000); and the expensing of $3.0
million of prepaid interest and $400,000 of debt issuance costs associated with
the outstanding loans. The valuation of 5,950,000 warrants is currently being
calculated and was not included in the pro forma balance sheet.
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<PAGE> 8
SERAGEN, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
-----------------------
OVERVIEW
Seragen is engaged in the discovery, research and development of
pharmaceutical products for human therapeutic applications. Since 1985, the
Company has focused substantially all of its efforts and resources on research
and development of its fusion protein technology. The Company's fusion proteins
were developed using proprietary technology and have potential applications in a
wide range of human diseases. To date, the Company has not generated any
revenues from the sale of fusion protein products, and the Company does not
expect to receive any such revenues for several years. The Company has generated
no profit since its inception and expects to incur additional operating losses
over the next several years.
The Company's business is subject to significant risks, including the
uncertainties associated with the regulatory approval process and with obtaining
and enforcing patents important to the Company's business. Seragen expects to
incur substantial operating losses over the next several years due to continuing
expenses associated with its research and development programs, including
pre-clinical testing and clinical trials. Operating losses may also fluctuate
from quarter to quarter as a result of differences in the timing of expenses
incurred.
RESULTS OF OPERATIONS
Three Months Ended June 30, 1996 and 1995. The Company's net loss for the
three-month period ending June 30, 1996 was $2.7 million compared to $4.5
million for the same period in the prior year. The most significant cause for
this $1.8 million decrease in net loss was the recognition of $5.0 million of
revenue for which the cash had been previously paid by Lilly in August 1994.
This revenue was offset by a related $2.1 million charge for commission expense.
(See Note 3 in Notes to Financial Statements)
The Company's revenues for the three months ending June 30, 1996 and 1995
were $6.2 million and $1.1 million, respectively. In the second quarter of 1996,
the Company recognized $5.0 million as revenue due to an amendment to the Sales
and Distribution Agreement between the Company and Lilly. The remaining $1.2
million in revenue in 1996 is associated with contract revenue from Lilly for
certain development costs of IL-2 Fusion Protein for cancer therapy as compared
to $1.1 million in 1995.
Total operating expenses increased $2.4 million to $7.7 million in 1996 from
$5.3 million in 1995. The most significant cause of this increase was the
recognition of a charge of $2.1 million for commission expense related to an
amendment to the Sales and Distribution Agreement between the Company and Lilly.
Fees associated with the cost of contract revenue were substantially unchanged
for the three-month period ending June 30, 1996 as compared to the same period
in the prior year. Research and development expenses increased $400,000 to $3.3
million in the second three months of 1996 from $2.9 million for the same period
of 1995. This increase was primarily due to production and facility validation
fees and general support costs associated with the hiring of clinical and
scientific staff earlier in the year. This increase was partially offset by a
reduction in non-reimbursable research grants. Excluding the charge of $2.1
million for commission expense mentioned above, general and administrative
expenses decreased $200,000 to $1.1 million in the second three months of 1996
as compared to $1.3 million in the second three months of 1995. This decrease
was primarily a result of a reduction in patent fees.
In the second quarter of 1996, a non-cash charge of $472,000 was recorded to
reflect the potential obligation by the Company to the investors in Seragen
Biopharmaceuticals Ltd. ("SBL") in connection with certain put rights. Interest
income increased by $7,000, to $25,000 in the second quarter of 1996 from
$18,000 in the second quarter of 1995 primarily due to higher average balances
of cash equivalents in 1996. Interest expense increased by $489,000 to $818,000
in the second quarter of 1996 from $329,000 in the second quarter of 1995 due to
an increase in borrowings under the lines of credit which commenced in June
1995.
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<PAGE> 9
SERAGEN, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
-----------------------
Six Months ended June 30, 1996 and 1995. The Company's net loss for the
six-month period ending June 30, 1996 was $9.5 million compared to $9.8 million
for the same period in the prior year.
The Company's revenues for the six-month period ending June 30, 1996 were
$7.7 million compared to $1.4 million for the six months ending June 30, 1995.
The primary component of this increase of $6.3 million in the second quarter of
1996 was the recognition of $5.0 million of revenue for which the cash had been
previously paid by Lilly in August 1994. (See Note 3 in Notes to Financial
Statements) The majority of the remaining $1.3 million increase in revenue in
1996 consisted of an increase in payments from Lilly due to the acceleration of
clinical development activity under the Phase III clinical trial for IL-2 Fusion
Protein for cancer therapy.
Total operating expenses increased $3.3 million to $14.0 million in 1996
from $10.7 million in 1995. Fees associated with the cost of contract revenue
were $2.6 million in the six months ending June 30, 1996 compared to $1.4
million for the same period in the prior year. This increase of $1.2 million
reflects the acceleration of clinical development activity under the Phase III
clinical trial for IL-2 Fusion Protein for cancer therapy. Research and
development expenses were substantially unchanged for the six month period
ending June 30, 1996 as compared to the corresponding period in 1995. However,
there were increases in the hiring of additional clinical, scientific and
support staff, which were offset by reductions in external research grants and
pre-clinical testing. General and administrative expenses increased $2.1 million
to $4.6 million in 1996 from $2.5 million in 1995, primarily because the Company
recorded a charge of $2.1 million for commission expense associated with an
amendment to the Sales and Distribution Agreement between the Company and Lilly.
In the six months ending June 30, 1996, a non-cash charge of $1.6 million
was recorded to reflect the potential obligation by the Company to the investors
in SBL in connection with certain put rights. Interest income was substantially
unchanged in 1996 as compared to 1995. Interest expense increased $1.1 million
to $1.6 million in 1996 from $518,000 in 1995 as a result of the borrowings
under the lines of credit which commenced in June 1995.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1996, the Company had approximately $4.9 million in cash and
cash equivalents and $14.3 million invested in property and equipment,
consisting primarily of leasehold improvements to the Company's manufacturing
facility, laboratory facilities and laboratory equipment.
The Company expects to incur further substantial research and development
expenses as it continues development of its fusion proteins. The Company also
expects to incur substantial administrative and commercialization expenses in
the future. The Company's continuing operating losses and requirements for
working capital will depend on many factors, including the progress and costs
associated with its research, pre-clinical and clinical development efforts, and
the level of resources which the Company must devote to obtaining regulatory
approvals to manufacture and sell its products.
The Company anticipates that existing cash, cash equivalents, and the
interest thereon, and reimbursement for clinical costs for the development of
IL-2 Fusion Protein for cancer therapy will be sufficient to fund the Company's
working capital requirements through approximately September 1996. The Report of
Independent Accountants on the Company's Financial Statements for the fiscal
year ended December 31, 1995 includes an explanatory paragraph concerning
uncertainties surrounding the Company's ability to continue as a going concern.
This may adversely affect the Company's ability to raise additional capital.
-9-
<PAGE> 10
SERAGEN, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
-----------------------
The Company's ability to finance its operations beyond September 1996 is
dependent upon its ability to raise additional capital through debt or equity
financings, possible additional payments under the strategic alliance with
Lilly, or such other sources of financing, including partnerships, as may be
required.
Any future equity financings could result in dilution to the Company's then
existing stockholders, and there can be no assurance that future arrangements
with collaborative partners or others will be available to the Company, or, if
available, that such arrangements would not require the Company to relinquish
rights to certain products or markets in exchange for funding. No assurance can
be given that additional debt or equity financings will be available on
acceptable terms, if at all, to fund the Company's future working capital
requirements.
UNCERTAINTIES
To the extent that any of the statements contained herein relating to the
Company's products and its operations are forward looking, such statements are
based on current expectations that involve a number of uncertainties and risks.
Such uncertainties and risks include, but are not limited to, the early stage of
the Company's product development and lack of product revenues; the Company's
history of operating losses and accumulated deficit; the Company's limited
financial resources and uncertainty as to the availability of additional capital
to fund its development on acceptable terms, if at all; Boston University's
control of the Company; the Company's reliance on fusion protein technology; the
potential development of competing fusion proteins, products and technologies;
the Company's dependence on its collaborative partner, Eli Lilly and Company,
and the lack of assurance that the Company will receive further funding under
this partnership or develop and maintain other strategic alliances; the lack of
assurance regarding patent and other protection for the Company's proprietary
technology; governmental regulation of the Company's activities, facilities and
products; the Company's limited manufacturing capabilities; the Company's lack
of commercial sales and marketing capabilities; the dependence on key personnel;
the development of competing technologies; uncertainties as to the extent of
reimbursement for the costs of the Company's potential products and related
treatment by government and private health insurers and other organizations; the
potential adverse impact of government-directed health care reform; the risk of
product liability claims; and general economic conditions. As a result, the
Company's future development efforts involve a high degree of risk. For further
information, refer to the risk factors included in the Company's Registration
Statement on Form S-3, Registration No. 33-93792, relating to the resale of
shares of Common Stock, as filed with the Securities and Exchange Commission.
Actual results may differ materially from such expectations.
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<PAGE> 11
SERAGEN, INC.
PART II
OTHER INFORMATION
-----------------------
ITEM 2. CHANGES IN SECURITIES
On May 28, 1996, the Company filed an Amended Certificate of Designation,
Preferences and Rights of Series A Preferred Stock which amended the Company's
Restated Certificate of Incorporation (which defines the rights of holders
shares of the Company's Common Stock) to add a new series of Preferred Stock
designated as Series A Preferred Stock (the "Series A Shares"). As of August 9,
1996, the Company had issued all 4,000 Series A Shares. Each Series A Share is
convertible into shares of the Company's Common Stock at a conversion price
equal to the lesser of $4.125 or 73 percent of the average closing bid prices
for a five day period prior to the conversion date. The holders of the Series A
Shares also are entitled to receive upon conversion, 8% cumulative dividends
payable in shares of Common Stock. The holders of the Series A Shares are not
entitled to vote separately, as a series or otherwise, on any matter submitted
to a vote of the shareholders of the Company. Each Series A Share has a
liquidation preference equal to the sum of (a) $1,000, plus (b) an amount equal
to any accrued and unpaid dividends from the date of issuance of the Series A
Shares so that such amount must be paid on each Series A Share in the event of
a voluntary or involuntary liquidation, dissolution or winding up of the
Company before any distribution or payment is made to any holders of any shares
of the Common Stock or any other class or series of the Company's capital stock
which is junior to the Series A Shares. As of August 9, 1996, 149 Series A
Shares were converted into 28,051, 26,739 and 8,395 shares of Common Stock at
$2.245, $2.427 and $2.774, respectively.
On June 28, 1996, the Company filed a Certificate of Designation, Preferences
and Rights of Series B Preferred Stock which amended the Company's Restated
Certificate of Incorporation (which defines the rights of holders of the
Company's Common Stock) to add a new series of Preferred Stock designated as
Series B Preferred Stock (the "Series B Shares"). As of August 9, 1996, the
Company had issued all 23,800 of Series B Shares. Each Series B Share is
convertible into shares of the Company's Common Stock at a conversion price
equal to $1,000, divided by the average of the closing sale prices of the Common
Stock as reported by the Nasdaq Stock Market for the ten consecutive trading
days immediately preceding the conversion date. The holders of the Series B
Shares also are entitled to receive a cumulative dividend payable in arrears in
cash on the last day of each March, June, September and December commencing on
September 30, 1996, at an annual rate equal to the prime rate plus 1 1/2%
through June 30, 1999 and at an increasing percentage rate thereafter to a
maximum equal to the prime rate plus 5% in 2003. The holders of the Series B
Shares are entitled to vote, on any matter submitted to a vote of the
shareholders of the Company, and are entitled to the number of votes equal to
the product of (x) the number of Series B Shares held on the record date for the
determination of the stockholders entitled to vote on such matters or, if no
record date is established, in accordance with applicable provisions of Delaware
law, and (y) $1,000, divided by $4.00. Each Series B Share has a liquidation
preference equal to the sum of (a) $1,000, plus (b) an amount equal to any
accrued and unpaid dividends from the date of issuance of the Series B shares so
that such amount must be paid on each Series B Share in the event of a voluntary
or involuntary liquidation, dissolution or winding up of the Company before any
distribution or payment is made to any holders of any shares of the Common Stock
or any other class or series of the Company's capital stock which is junior to
the Series B Shares. At any time, with the approval of the Company's Board of
Directors, Audit Committee or comparable body, the Company may redeem any or all
of the Series B Shares for cash.
-11-
<PAGE> 12
SERAGEN, INC.
PART II
OTHER INFORMATION
-----------------------
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Shareholders of the Company was held on May 13, 1996.
The following matters were voted upon:
<TABLE>
(1) Eight persons were elected to serve as Directors of the Company to hold
office until the next annual meeting of shareholders and until their
successors are chosen and qualified. The following is a table setting
forth the number of votes cast for and withheld for each nominee for
Director:
<CAPTION>
Name Vote For Vote Withheld
---- -------- -------------
<S> <C> <C>
James M. Howell 13,906,350 53,094
George W. Masters 13,908,403 51,041
John E. Bagalay, Jr. 13,907,950 51,494
Gerald S. J. Cassidy 13,908,150 51,294
Kenneth G. Condon 13,909,050 50,394
Norman A. Jacobs 13,909,058 50,386
John R. Murphy 13,909,238 50,206
John R. Silber 13,893,070 66,374
</TABLE>
(2) The shareholders approved an amendment to the Company's Restated
Certificate of Incorporation to increase the number of shares of
authorized common stock from 25,000,000 to 30,000,000. This proposal was
approved with 13,571,916 votes for the proposal, 135,785 votes against
the proposal, 158,721 abstentions and 93,022 broker non-votes.
ITEM 5. OTHER INFORMATION
SUBSEQUENT EVENT
On July 1, 1996, the Company restructured its arrangement with the guarantors
of the Company's $23.8 million loan financing obtained in June 1995 to release
the Company from its liability to the banks involved. The new agreement replaces
the lines of credit with convertible Series B Preferred Stock each share of
Series B Preferred Stock is convertible at the investor's option into a number
of shares of Seragen Common Stock determined by dividing $1,000, by the average
of the closing sale price is of the Common Stock as reported on the Nasdaq Stock
Market for the ten consecutive trading days immediately preceding the conversion
date. The holders of Series B Preferred Stock are entitled to receive a
cumulative dividend payable in arrears in cash quarterly on the last day of
March, June, September, and December of each year commencing on September 30,
1996 at an annual rate equal to the prime rate plus 1 1/2% through June of 1999
and at an increasing percentage rate thereafter up to a maximum rate of the
prime rate plus 5% in 2003. The investors also received warrants to purchase a
total of 5,950,000 shares of Seragen Common Stock (250,000 warrants for every
$1,000,000 of Preferred Stock purchased) at an exercise price of $4.00 per
share. The warrants are exercisable commencing on January 1, 1997 and expire on
July 1, 2006. At any time with the approval of the members of the Board of
Directors not affiliated with Boston University, Audit Committee, or a
comparable body, the Company may redeem any or all of the outstanding shares of
convertible Series B Preferred Stock for cash. The redemption price per share of
Series B Preferred Stock is $1,000, plus an amount equal to any accrued and
unpaid dividends, from the date of issuance of the Series B Preferred Stock.
-12-
<PAGE> 13
SERAGEN, INC.
PART II
OTHER INFORMATION
-----------------------
The Company has included in this report a June 30, 1996 Pro Forma Balance
Sheet to show the effect of the loan restructuring. The following pro forma
adjustments were incorporated into the pro forma balance sheet: the conversion
of $23.8 million of long-term debt into Series B convertible preferred stock net
of estimated restructuring costs of $80,000; and the expensing of $3.0 million
of prepaid interest and $400,000 of debt issuance costs associated with the
outstanding loans. Also the valuation of 5,950,000 warrants is currently being
calculated and was not included in the pro forma balance sheet.
ITEM 6. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON FORM 8-K
(a) Exhibit Index
Exhibit 3.3 - Restated Certificate of Incorporation, as amended, of
the Registrant (filed herewith)
Exhibit 4.5 - Amended Certificate of Designation of Series A
Preferred Stock of the Registrant, dated May 28, 1996 (filed
herewith)
Exhibit 4.6 - Certificate of Designation of Series B Preferred Stock
of the Registrant, dated June 28, 1996 (filed herewith)
Exhibit 4.7 - Certificate of Correction of Amended Certificate of
Designation of Series A Preferred Stock of the Registrant, dated
August 6, 1996 (filed herewith)
Exhibit 10.56 - Amendment dated May 28, 1996 (filed herewith) to
Sales and Distribution Agreement, dated August 3, 1994 (previously
filed as Exhibit 10.50 to the Registrant's Form 10-Q, for the six
months ending June 30, 1994), as amended by Amendment dated June 30,
1995 (previously filed as Exhibit 10.48 to the Registrant's Form
10-Q, for the six months ending June 30, 1995)
Exhibit 10.57 - Subscription and Registration Agreement, dated June
28, 1996, by and between the Registrant, Seragen Technology, Inc.
and the persons listed on Schedule 1 thereto (filed herewith)
Exhibit 10.58 - Form of Warrant due July 1, 2006 (filed herewith)
Exhibit 10.59 - Collateral Assignment of Patents, dated July 1,1996,
by and between Seragen Technology, Inc. and the persons listed on
Schedule A thereto (filed herewith)
Exhibit 10.60 - Reassignment of Patents, dated July 1, 1996, by and
between the Registrant and the persons as listed on Schedule A
thereto (filed herewith)
Exhibit 10.61 - Escrow Agreement, dated July 1, 1996 by and between
Seragen Technology, Inc. and the Investors as defined on Schedule A
thereto (filed herewith)
Exhibit 10.62 - Assignment of Patents, dated June 28, 1996 by and
between the Registrant and Seragen Technology, Inc. (filed herewith)
-13-
<PAGE> 14
SERAGEN, INC.
PART II
OTHER INFORMATION
-----------------------
Exhibit 10.63 - Irrevocable License Agreement, dated June 28, 1996
by and between the Registrant and Seragen Technology, Inc. (filed
herewith)
(b) Reports on Form 8-K
A Current Report on Form 8-K for June 6, 1996 event, relating to the
Registrant's announcement that it had raised gross proceeds of $4
million (approximately $3.8 million net of offering costs) through
the sale of 4,000 shares of Series A convertible preferred stock to
investors outside the United States.
A Current Report on Form 8-K for July 1, 1996 event, relating to the
Registrant's Pro-Forma Balance Sheet as of May 31, 1996 and the
statement of operations for the five month period ended May 31,
1996, demonstrating the Registrant's compliance as of May 31, 1996
on a pro forma basis with the net tangible asset requirement for
continued inclusion on the Nasdaq National Market.
-14-
<PAGE> 15
SERAGEN, INC.
SIGNATURES
-----------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SERAGEN, INC.
Date: August 12, 1996 by: /s/ George W. Masters
--------------------------
George W. Masters
Vice Chairman of the Board
and Chief Executive Officer
Date: August 12, 1996 by: /s/ Thomas N. Konatich
--------------------------
Thomas N. Konatich
Vice President for Finance
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
-15-
<PAGE> 16
SERAGEN, INC.
EXHIBIT INDEX
-----------------------
Exhibit
Number Description Page
- --------------------------------------------------------------------------------
(3.3) Restated Certificate of Incorporation, as amended, of the
Registrant (filed herewith)
(4.5) Amended Certificate of Designation of Series A Preferred Stock
of the Registrant, dated May 28, 1996 (filed herewith)
(4.6) Certificate of Designation of Series B Preferred Stock of the
Registrant, dated June 28, 1996 (filed herewith)
(4.7) Certificate of Correction of Amended Certificate of Designation
of Series A Preferred Stock of the Registrant, dated August 6,
1996 (filed herewith)
(10.56)* Amendment dated May 28, 1996 (filed herewith) to Sales and
Distribution Agreement, dated August 3, 1994 (previously filed
as Exhibit 10.50 to the Registrant's Form 10-Q, for the six
months ending June 30, 1994) as amended by Amendment dated
June 30, 1995 (previously filed as Exhibit 10.48 to the
Registrant's Form 10-Q, for the six months ending June 30,
1995)
(10.57) Subscription and Registration Agreement, dated [June 28, 1996],
by and between the Registrant, Seragen Technology, Inc. and
the persons listed on Schedule 1 thereto (filed herewith)
(10.58) Form of Warrant due July 1, 2006 (filed herewith)
(10.59) Collateral Assignment of Patents, dated July 1, 1996, by and
between Seragen Technology, Inc. and the persons listed on
Schedule A thereto (filed herewith)
(10.60) Reassignment of Patents, dated July 1, 1996, by and between
the Registrant and the persons listed on Schedule A thereto
(filed herewith)
(10.61) Escrow Agreement, dated July 1, 1996, by and between Seragen
Technology, Inc. and the persons listed on Schedule A thereto
(filed herewith)
(10.62) Assignments of Patents, dated June 28, 1996, by and between
the Registrant and Seragen Technology, Inc. (filed herewith)
(10.63) Irrevocable License Agreement, dated June 28, 1996 by and
between the Registrant and Seragen Technology, Inc.
(filed herewith)
================================================================================
NOTES:
(*) All exhibit descriptions followed by (*) indicate documents with respect to
which Confidential Treatment has been requested.
-16-
<PAGE> 1
Exhibit 3.3
RESTATED CERTIFICATE OF INCORPORATION
OF
SERAGEN, INC.
(Originally incorporated on February 2, 1982)
FIRST: The name of the corporation is Seragen, Inc. (hereinafter
referred to as the "Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is located at 1209 Orange Street, County of New Castle,
Wilmington, Delaware. The name of its registered agent at such address is The
Corporation Trust Company.
THIRD: The nature of the business to be conducted or promoted and the
purposes of the Corporation are to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of
Delaware.
FOURTH: A. The total number of shares of all classes of stock which
the Corporation shall have authority to issue is thirty-five million
(35,000,000), consisting of thirty million (30,000,000) shares of common stock,
par value one cent ($.01) per share (the "Common Stock"), and five million
(5,000,000) shares of preferred stock, par value one cent ($.01) per share (the
"Preferred Stock").
<PAGE> 2
B. The following is a statement of the designations, powers,
preferences and rights, and qualifications, limitations or restrictions
thereof, of the Common Stock and the Preferred Stock.
SECTION 1 - Common Stock
--------- ------------
All shares of Common Stock will be identical and will entitle the
holders thereof to the same rights and privileges.
1.1. VOTING RIGHTS. The holders of Common Stock will be entitled to one
vote per share on all matters to be voted on by the Corporation's stockholders,
except as otherwise required by law. There shall be no cumulative voting.
1.2. DIVIDENDS. Dividends may be declared and paid on the Common Stock
from funds lawfully available therefor as and when determined by the board of
directors, subject to any provision of this Restated Certificate of
Incorporation, as amended from time to time, and subject to the relative rights
and preferences of any shares of Preferred Stock authorized and issued
hereunder.
1.3. Liquidation Rights. In the event of any liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary, the holders
of Common Stock shall be entitled, subject to the rights and preferences, if
any, of any shares of Preferred Stock authorized and issued hereunder, to
share, ratably according to the number of shares of Common Stock held by them,
in the
- 2 -
<PAGE> 3
remaining assets of the Corporation available for distribution to its
stockholders.
SECTION 2 - Preferred Stock
--------- ---------------
The board of directors is authorized, subject to any limitations
prescribed by law, to provide for the issuance of shares of Preferred Stock in
series, and by filing a certificate pursuant to the applicable law of the State
of Delaware (such certificate being hereinafter referred to as a "Preferred
Stock Designation"), to establish from time to time the number of shares to be
included in each such series, and to fix the designation, powers, preferences
and rights of the shares of each such series and any qualifications, limitations
or restrictions thereof. The number of authorized shares of Preferred Stock may
be increased or decreased (but not below the number thereof then outstanding) by
the affirmative vote of the holders of a majority of the Common Stock without a
vote of the holders of the Preferred Stock, or of any series thereof, unless a
vote of any such holders is required pursuant to the terms of any Preferred
Stock Designation.
FIFTH: The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
-3-
<PAGE> 4
A. The business and affairs of the Corporation shall be managed by or
under the direction of the board of directors. In addition to the powers and
authority expressly conferred upon them by statute or by this Restated
Certificate of Incorporation or the by-laws of the Corporation, the directors
are hereby empowered to exercise all such powers and do all such acts and
things as may be exercised or done by the Corporation.
B. The directors of the Corporation need not be elected by written
ballot unless the by-laws so provide.
C. Any action required or permitted to be taken by the stockholders of
the Corporation must be effected at a duly called annual or special meeting of
stockholders of the Corporation and may not be effected by any consent in
writing by such stockholders.
D. Special meetings of stockholders of the Corporation may be called
only by the Chairman of the Board or the President of the Corporation or by the
board of directors acting pursuant to a resolution adopted by a majority of the
Whole Board for purposes of this Restated Certificate of Incorporation. For
purposes of this Restated Certificate of Incorporation, the term "Whole Board"
shall mean the total number of authorized directors whether or not there exist
any vacancies in previously authorized directorships.
-4-
<PAGE> 5
SIXTH: A. Subject to the rights of the holders of any series of
Preferred Stock then outstanding to elect additional directors under specified
circumstances, the number of directors shall be fixed from time to time
exclusively by the board of directors pursuant to a resolution adopted by a
majority of the Whole Board.
B. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, newly created directorships resulting from any increase
in the authorized number of directors or any vacancies in the board of
directors resulting from death, resignation, retirement, disqualification,
removal from office or other cause shall, unless otherwise provided by law or
by resolution of the board of directors, be filled only by a majority vote of
the directors then in office, though less than a quorum, and directors so
chosen shall hold office for a term expiring at the next annual meeting of
stockholders and until their successors shall have been duly elected and
qualified. No decrease in the authorized number of directors shall shorten the
term of any incumbent director.
C. Advance notice of stockholder nominations for the election of
directors and of business to be brought by stockholders before any meeting of
the stockholders of the Corporation shall be given in the manner provided in
the by-laws of the Corporation.
D. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, any director, or the entire board of directors, may be
removed from office at any time only by
-5-
<PAGE> 6
the affirmative vote of at least a majority of the voting power of all
of the then outstanding shares of the capital stock of the Corporation entitled
to vote generally in the election of directors, voting together as a single
class.
SEVENTH: The board of directors is expressly empowered to adopt, amend
or repeal by-laws of the Corporation. Any adoption, amendment or repeal of the
by-laws of the Corporation by the board of directors shall require the approval
of a majority of the Whole Board. The stockholders shall also have power to
adopt, amend or repeal the by-laws of the Corporation; PROVIDED, HOWEVER, that,
in addition to any vote of the holders of any class or series of stock of the
Corporation required by law or by this Restated Certificate of Incorporation,
the affirmative vote of the holders of at least a majority of the voting power
of all of the then outstanding shares of the capital stock of the Corporation
entitled to vote generally in the election of directors, voting together as a
single class, shall be required to adopt, amend or repeal any provision of the
by-laws of the Corporation.
EIGHTH: A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
-6-
<PAGE> 7
knowing violation of law, (iii) under Section 174 of the Delaware
General Corporation Law, or (iv) for any transaction from which the director
derived an improper personal benefit. If the Delaware General Corporation Law
is amended to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the Delaware General Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification.
NINTH: The Corporation reserves the right to amend or repeal any
provision contained in this Restated Certificate of Incorporation in the manner
prescribed by the laws of the State of Delaware and all rights conferred upon
stockholders are granted subject to this reservation.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation,
which restates, integrates and amends the provisions of the Certificate of
Incorporation of the Corporation, has been duly adopted in accordance with
Sections 242 and 245 of the General
- 7 -
<PAGE> 8
Corporation Law of Delaware, has been executed by its Chief Executive Officer
and President and attested by its Secretary, this 21st day of May, 1996.
SERAGEN, INC.
By: /s/ George W. Masters
--------------------------
George W. Masters,
Chief Executive Officer
and President
Attest:
/s/ Thomas N. Konatich
- -----------------------------
Thomas N. Konatich, Secretary
- 8 -
<PAGE> 1
Exhibit 4.5
AMENDED CERTIFICATE OF DESIGNATION, NUMBER,
POWERS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL,
AND OTHER SPECIAL RIGHTS AND THE QUALIFICATIONS,
LIMITATIONS, RESTRICTIONS, AND OTHER DISTINGUISHING
CHARACTERISTICS OF SERIES A PREFERRED STOCK
OF
SERAGEN, INC.
Seragen, Inc., a corporation organized and existing under the laws of
the State of Delaware (the "Corporation"), hereby certifies that:
1. The Corporation is validly existing and incorporated under the laws
of the State of Delaware.
2. The Corporation's Restated Certificate of Incorporation, as
amended, authorizes the issuance of 5,000,000 shares of Preferred Stock, par
value $.01 per share, and expressly vests in the Board of Directors the
authority provided therein to issue any or all of such shares in one or more
series, and by resolution or resolutions the designation, number, full or
limited voting powers, preferences and relative, participating, optional and
other special rights, and the qualifications, limitations, restrictions, and
other distinguishing characteristics of each series to be issued. On May 21,
1996, the Company filed an original Certificate of Designation, Number, Powers,
Preferences and Relative, Participating, Option, and Other Special Rights and
the Qualifications, Limitations, Restrictions, and Other Distinguishing
Characteristics of Series A Preferred Stock with respect to the shares of
Series A Convertible Preferred Stock. No shares of Series A Convertible
Preferred Stock have been issued as of the date of this Amended Certificate of
Designation. The rights of the holder of the Series A Convertible Preferred
Stock shall rank pari passu with the rights of the holders of all other series
of Preferred Stock, now existing or hereafter issued by the Corporation, with
respect to all preferences upon liquidation.
3. DESIGNATION OF THE SERIES. The Board of Directors of the
Corporation, pursuant to authority expressly vested in it as aforesaid, has
adopted the following, creating a Series A issue of Preferred Stock:
There shall be a series of convertible Preferred Stock designated as
"Series A Preferred Stock." Each share of such series shall be referred to
herein as a "Series A Share." Upon initial issuance by the Corporation, the
price per share of the Series A Shares shall be $1,000 (the "Purchase Price").
The par value per share is $.01. The authorized number of such Series A Shares
is 4,000. The Series A Shares shall be equal in rank to all other series of
Preferred Stock, now existing or hereafter issued by the Corporation.
A. VOTING RIGHTS. Except as otherwise required by law, the holders of
the Series A Shares shall not be entitled to vote separately, as a series or
otherwise, on any matter submitted to a vote of the shareholders of the
Corporation. Notwithstanding the foregoing, without the prior written consent
of the holders of the Series A Shares:
<PAGE> 2
(i) the Corporation shall not amend, alter, or repeal (whether
by amendment, merger, or otherwise) any of the provisions related to the Series
A Shares of its Restated Certificate of Incorporation, as amended, any
resolutions of the board of directors or any instrument establishing and
designating the Series A Shares in determining the relative rights and
preferences thereof so as to affect any materially adverse change in the rights,
privileges, powers, or preferences of the holders of Series A Shares; or
(ii) the Corporation shall not create or designate any
additional preferred stock senior in right as to dividends, voting rights,
redemptions or liquidation to the Series A Shares.
B. DIVIDENDS. The holders of the Series A Shares shall be entitled to
receive an 8% cumulative dividend payable in Common Stock at the time of each
conversion, but in no event later than eighteen months after the issuance date
of the Series A Shares at which time the Series A Shares shall be automatically
converted into Common Stock. Such dividends shall be payable on each Conversion
Date (as such term is defined in 3.C(iii) below) (the "Dividend Payment Date"),
in preference to dividends on any Common Stock or stock of any class ranking,
as to dividend rights, junior to the Series A Shares. Dividends shall be fully
cumulative and shall accrue (whether or not declared and whether or not there
shall be funds legally available for the payment of dividends), without
interest, and shall be payable on the Dividend Payment Date.
C. Conversion Rights.
-----------------
(i) CONVERSION. The holders of the outstanding Series A shares
shall have the right, at such holders' option, without the payment of any
additional consideration by the holder thereof and at any time after 45 days
from the issuance date, to convert all or any of such Series A Shares into the
number of shares of Common Stock for which such Series A Shares are then
convertible pursuant to Section 3.C(iii) below (after giving effect to any
adjustments provided for under Section 3.C(iv) hereof).
(ii) CONVERSION PRICE. Upon conversion of the Series A Shares
pursuant to 3.C(i) or 3.C(ii) hereof, each Series A Share shall be converted
into the number of shares of Common Stock equal to $1,000 plus the amount of
accrued dividends payable on the Conversion Date, divided by the lesser of (a)
the product of three percent (73%) multiplied by the average of the closing bid
prices of the Common Stock as reported by the Nasdaq National Market for the
five trading days immediately preceding the conversion date, or (b) the closing
bid price for the Common Stock as reported by the Nasdaq National Market for the
date preceding the issuance date of the Series A Shares.
(iii) MECHANICS OF CONVERSION. The holder of any Series A
Shares is entitled, at its option, at any time after the date appearing on the
restrictive legend, to convert any or all of the Series A Shares into Common
Stock of the Corporation, at a conversion price set forth in 3.C(ii). Such
conversion shall be effectuated by surrendering to
2
<PAGE> 3
the Corporation, or its attorney, the original Series A Shares to be converted
together with a written notice stating that the holder elects to convert all or
a portion of the Series A Shares and stating the name or names (with address) in
which the certificate or certificates for the shares of Common Stock are to be
issued and a representation letter signed by the holder in a form to be agreed
upon by the holder and the Corporation at the time the Series A Shares are
purchased. No fractional shares or scrip representing fractions of shares will
be issued on conversion, but the number of shares of Common Stock issuable shall
be rounded down or up, as the case may be, to the nearest whole number of
shares. The date on which notice of conversion is effective ("Conversion Date")
shall be deemed to be the date on which the holder has delivered to the
Corporation the original Series A Shares, a facsimile or original of the signed
notice to convert and a facsimile or original of the signed representation
letter. Within two (2) business days after receipt of the documentation referred
to above, the Corporation shall deliver a certificate, without stop transfer
instructions, for the number of shares of Common Stock issuable upon conversion.
The Corporation shall be responsible for taking all necessary actions and to
bear all such costs to issue the Common Stock as provided herein, including the
delivery of an opinion letter to the transfer agent, if so required. The person
in whose name the certificate of Common Stock is to be registered shall be
treated as a shareholder of record on and after the Conversion Date. No payment
or adjustment shall be made for accrued and unpaid interest until the Conversion
Date. Upon surrender of any Series A Shares that are to be converted in part,
the Corporation shall issue to the holder, if so requested, new Series A Shares
equal to the number of unconverted Series A Shares.
(iv) CERTAIN ADJUSTMENTS. In the event of any change in one or
more classes of capital stock of the Corporation by reason of any stock
dividend, stock split-up, recapitalization, reclassification, or combination,
subdivision or exchange of shares or the like, or in the event of the merger or
consolidation of the Corporation or the sale or transfer by the Corporation of
all or substantially all of its assets, then all liquidation preference,
conversion and other rights and privileges appurtenant to the Series A Shares
shall be promptly and appropriately adjusted by the Board of Directors of the
Corporation so as to fully protect and preserve the same (such preservation and
protection to be the same extent and effect as if the subject event had not
occurred, or the applicable right or privilege had been exercised immediately
prior to the occurrence of the subject event, or otherwise as the case may be),
it being the intention that, following any such adjustment, the holders of the
Series A Shares shall be in the same relative position with respect to their
rights and privileges as they possessed immediately prior to the event that
precipitated the adjustment.
(v) COSTS. The Corporation shall pay all documentary, stamp,
transfer or other transactional taxes attributable to the issuance or delivery
of shares of Common Stock upon conversion of any Series A Shares; provided that
the corporation shall not be required to pay any taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificate
of such shares in a name other than that of the holder of the Series A Shares in
respect of which such shares are being issued.
3
<PAGE> 4
(vi) RESERVATION OF SHARES. The Corporation shall reserve,
free from preemptive rights, out of its authorized but unissued shares of Common
Stock solely for the purpose of effecting the conversion of the Series A Shares,
sufficient shares of Common Stock to provide for the conversion of all
outstanding Series A Shares.
D. Liquidation.
-----------
(i) SERIES A PREFERENCE. Upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the holders of
Series A Shares shall be entitled, before any distribution or payment is made
upon any shares of Common Stock or any Preferred Stock junior in rank to the
Series A Shares, to be paid an amount per share equal to the liquidation value
described in this Section 3.D(i) (the "Liquidation Value"). The per share
Liquidation Value of the Series A Shares on any date is equal to the sum of the
following:
(A) $1,000, plus
(B) an amount equal to any accrued and unpaid
dividends from the date of issuance of the Series A
Shares.
Neither the consolidation nor merger of the Corporation with or into any other
corporation or other entities, nor the sale, transfer or lease of all or
substantially all of the assets of the Corporation shall itself be deemed to be
a liquidation, dissolution or winding-up of the Corporation within the meaning
of this Section 3.D. Notice of liquidation, dissolution, or winding-up of the
Corporation shall be mailed, by first-class mail, postage prepaid, not less than
20 days prior to the date on which such liquidation, dissolution, or winding-up
is expected to take place or become effective, to the holders or record of the
Series A Shares at their respective addresses as the same appear on the books of
the Corporation or are supplied by them in writing to the Corporation for the
purpose of such notice, but no defect in such notice or in mailing thereof shall
affect the validity of the liquidation, dissolution or winding-up.
(ii) General.
-------
(A) All of the preferential amounts to be paid to the
holders of the Series A Shares pursuant to Section 3.D(i) shall be paid or set
apart for payment before the payment or setting apart for payment of any amount
for, or the distribution of any assets of the Corporation to, the holders of
the Common Stock or any preferred stock junior in rank to the Series A Shares
in connection with such liquidation, dissolution or winding-up.
(B) After setting apart or paying in full the preferential
amounts aforesaid to the holders of record of the issued and outstanding Series
A Shares as set forth in Section 3.D(i), the holders of record of Common Stock
and any preferred stock junior in rank to the Series A Shares shall be entitled
to participate in any distribution of any
4
<PAGE> 5
remaining assets of the Corporation, and the holders of record of the Series A
Shares shall not be entitled to participate in such distribution.
E. REACQUIRED SHARES. Any shares of Series A Shares redeemed,
purchased, converted, or otherwise acquired by the Corporation in any manner
whatsoever shall not be reissued as part of such series and shall be retired
promptly after the acquisition thereof. All such shares upon their retirement
and the filing of any certificate required in connection therewith pursuant to
the Delaware General Corporation Law shall become authorized but unissued
shares of Preferred Stock.
F. COPIES OF AGREEMENTS, INSTRUMENTS, AND DOCUMENTS. Copies
of any of the agreements, instruments or other documents referred to in this
Amended Certificate shall be furnished to any stockholder upon written request
to the Corporation at its principal place of business.
4. The statements contained in the foregoing, creating and designating
the said Series A issue of Preferred Stock and fixing the number, powers,
preferences and relative, optional, participating, and other special rights and
the qualifications, limitations, restrictions, and other distinguishing
characteristics thereof shall, upon the effective date of said series, be
deemed to be included in and be a part of the Restated Certificate of
Incorporation, as amended, of the Corporation pursuant to the provisions of
Sections 104 and 151 of the General Corporation Law of the State of Delaware.
5
<PAGE> 6
IN WITNESS WHEREOF, this Amended Certificate of Designation has been executed on
behalf of the Corporation by its Chief Executive Officer and President and
attested by its Secretary this 28th day of May, 1996, and they do hereby affirm,
under penalty of perjury, that the foregoing Amended Certificate of Designation
is the act and deed of the Corporation and that the facts stated therein are
true and accurate.
Signed and attested to on May 28th, 1996.
SERAGEN, INC.
By: /s/ George W. Masters
---------------------------------
George W. Masters,
Chief Executive Officer and President
Attest:
By: /s/ Thomas N. Konatich
------------------------
Thomas N. Konatich
Secretary
6
<PAGE> 1
Exhibit 4.6
CERTIFICATE OF DESIGNATION, NUMBER, POWERS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL,
AND OTHER SPECIAL RIGHTS AND THE QUALIFICATIONS,
LIMITATIONS, RESTRICTIONS, AND OTHER DISTINGUISHING
CHARACTERISTICS OF SERIES B PREFERRED STOCK
OF
SERAGEN, INC.
Seragen, Inc., a corporation organized and existing under the laws of
the State of Delaware (the "Corporation"), hereby certifies that:
1. The Corporation is validly existing and incorporated under the
laws of the State of Delaware.
2. The Corporation's Restated Certificate of Incorporation, as
amended, authorizes the issuance of 5,000,000 shares of Preferred Stock, par
value $.01 per share, and expressly vests in the Board of Directors the
authority provided therein to issue any or all of such shares in one or more
series, and by resolution or resolutions the designation, number, full or
limited voting powers, preferences and relative, participating, optional and
other special rights, and the qualifications, limitations, restrictions, and
other distinguishing characteristics of each series to be issued. Currently,
there are no designated shares of Series B Preferred Stock. The rights of the
holder of the Series B Preferred Stock shall rank pari passu with the rights of
the holders of all other series of Preferred Stock, now existing or hereafter
issued by the Corporation, with respect to all preferences upon liquidation.
3. DESIGNATION OF THE SERIES. The Board of Directors of the
Corporation, pursuant to authority expressly vested in it as aforesaid, has
adopted the following, creating a Series B issue of Preferred Stock:
There shall be a series of convertible Preferred Stock designated as
"Series B Preferred Stock." Each share of such series shall be referred to
herein as a "Series B Share." Upon initial issuance by the Corporation, the
price per share of the Series B Shares shall be $1,000 (the "Purchase Price").
The par value per share is $.01. The authorized number of such Series B Shares
is 23,800. The Series B Shares shall be equal in rank to all other series of
Preferred Stock, now existing or hereafter issued by the Corporation.
A. VOTING RIGHTS. Except as otherwise expressly provided herein or as
otherwise required by law, each holder of Series B Shares shall be entitled to
vote, on any matter submitted to a vote of the shareholders of the Corporation,
and shall be entitled to the number of votes equal to the product of (x) the
number of Series B Shares held by such holder on the record date for the
determination of the stockholders entitled to vote on such matters or, if no
record date is established, in accordance with applicable provisions of
Delaware law, and (y) $1,000, divided by $4.00. Except as otherwise expressly
provided
<PAGE> 2
herein or as otherwise required by law, the holders of Series B Shares and the
holders of Common Stock shall vote together on all matters and not as separate
classes or series. Notwithstanding the foregoing, without the prior written
consent of the holders of the Series B Shares:
(i) the Corporation shall not amend, alter, or repeal (whether by
amendment, merger, or otherwise) any of the provisions related to the Series B
Shares of its Restated Certificate of Incorporation, as amended, any
resolutions of the Board of Directors or any instrument establishing and
designating the Series B Shares in determining the relative rights and
preferences thereof so as to affect any adverse change in the rights,
privileges, powers, or preferences of the holders of Series B Shares; or
(ii) the Corporation shall not create or designate any
additional preferred stock senior in right as to dividends, voting rights,
redemptions or liquidation to the Series B Shares.
B. DIVIDENDS. The holders of the Series B Shares shall be entitled to
receive a cumulative dividend payable in arrears in cash quarterly on the last
day of each March, June, September and December commencing on September 30,
1996 (each, a "Dividend Payment Date"), at a rate per annum equal to (i) from
the date issuance of the Series B Shares through June 30, 1999, the prime rate
as announced by the WALL STREET JOURNAL from time to time, such rate to be
adjusted automatically on the effective date of any change in such rate (the
"Prime Rate"), plus 1-1/2%; (ii) from July 1, 1999 through June 30, 2000, the
Prime Rate plus 2%; (iii) from July 1, 2000 through June 30, 2001, the Prime
Rate plus 3%; (iv) from July 1, 2001 through June 30, 2002, the Prime Rate plus
4%; and (v) from and after July 1, 2003, the Prime Rate plus 5%, in preference
to dividends on any Common Stock or stock of any class ranking, as to dividend
rights, junior to the Series B Shares. Dividends shall be fully cumulative and
shall accrue (whether or not declared and whether or not there shall be funds
legally available for the payment of dividends) without interest, and shall be
payable on the Dividend Payment Date; provided that no dividends shall
accumulate or accrue during any period when royalties are accruing pursuant to
the Irrevocable License Agreement dated June 28, 1996.
C. Conversion Rights.
-----------------
(i) CONVERSION. The holders of the outstanding Series B Shares
shall have the right, at such holders' option, without the payment of any
additional consideration by the holder thereof and at any time from the
issuance date, to convert all or any of such Series B Shares into the number
of shares of Common Stock for which such Series B Shares are then convertible
pursuant to Section 3.C(ii) below (after giving effect to any adjustments
provided for under Section 3.C(iv) hereof).
2
<PAGE> 3
(ii) CONVERSION PRICE. Upon conversion of the Series B Shares
pursuant to Section 3.C hereof, each Series B Share shall be converted into the
number of shares of Common Stock equal to $1,000, divided by the average of the
closing sale prices of the Common Stock as reported by the Nasdaq Stock Market
for the ten consecutive trading days immediately preceding the Conversion Date
(as such term is defined in Section 3.C (iii).
(iii) MECHANICS OF CONVERSION. The holder of any Series B
Shares is entitled, at its option, at any time, to convert any or all of the
Series B Shares into Common Stock of the Corporation, at a conversion price set
forth in 3.C(ii). Such conversion shall be effectuated by surrendering to the
Corporation, or its attorney, the original Series B Shares to be converted
together with a written notice stating that the holder elects to convert all or
a portion of the Series B Shares and stating the name or names (with address) in
which the certificate or certificates for the shares of Common Stock are to be
issued and a representation letter signed by the holder in a form to be agreed
upon by the holder and the Corporation at the time the Series B Shares are
purchased. No fractional shares or scrip representing fractions of shares will
be issued on conversion, but the number of shares of Common Stock issuable shall
be rounded down or up, as the case may be, to the nearest whole number of
shares. The date on which notice of conversion is effective ("Conversion Date")
shall be deemed to be the date on which the holder has delivered to the
Corporation the original Series B Shares, a facsimile or original of the signed
notice to convert and a facsimile or original of the signed representation
letter. Within two (2) business days after receipt of the documentation referred
to above, the Corporation shall deliver a certificate, with the restrictive
legend set forth in Section 3.C (vii) hereof, for the number of shares of Common
Stock issuable upon conversion. The Corporation shall be responsible for taking
all necessary actions and to bear all such costs to issue the Common Stock as
provided herein, including the delivery of an opinion letter to the transfer
agent, if so required. The person in whose name the certificate of Common Stock
is to be registered shall be treated as a shareholder of record on and after the
Conversion Date. Upon surrender of any Series B Shares that are to be converted
in part, the Corporation shall issue to the holder, if so requested, new Series
B Shares equal to the number of unconverted Series B Shares.
(iv) CERTAIN ADJUSTMENTS. In the event of any change in one or
more classes of capital stock of the Corporation by reason of any stock
dividend, stock split-up, recapitalization, reclassification, or combination,
subdivision or exchange of shares or the like, or in the event of the merger or
consolidation of the Corporation or the sale or transfer by the Corporation of
all or substantially all of its assets, then all liquidation preference,
conversion and other rights and privileges appurtenant to the Series B Shares
shall be promptly and appropriately adjusted by the Board of Directors of the
Corporation so as to fully protect and preserve the same (such preservation and
protection to be the same extent and effect as if the subject event had not
occurred, or the applicable right or privilege had been exercised immediately
prior to the occurrence of the subject event, or otherwise as the case may be),
it being the intention that, following any such adjustment, the holders of the
3
<PAGE> 4
Series B Shares shall be in the same relative position with respect to their
rights and privileges as they possessed immediately prior to the event that
precipitated the adjustment.
(v) COSTS. The Corporation shall pay all documentary, stamp,
transfer or other transactional taxes attributable to the issuance or delivery
of shares of Common Stock upon conversion of any Series B Shares; provided that
the Corporation shall not be required to pay any taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificate
of such shares in a name other than that of the holder of the Series B Shares in
respect of which such shares are being issued.
(vi) RESERVATION OF SHARES. The Corporation shall reserve,
free from preemptive rights, out of its authorized but unissued shares of Common
Stock solely for the purpose of effecting the conversion of the Series B Shares,
sufficient shares of Common Stock to provide for the conversion of all
outstanding Series B Shares.
(vii) RESTRICTIVE LEGEND. The Series B Shares and the shares
of Common Stock issuable upon conversion of the Series B Shares have not been
registered under the Securities Act of 1933, as now in force or hereafter
amended, or any successor legislation (the "Act"). The holders of Series B
Shares may not sell, pledge, distribute, offer for sale, transfer or otherwise
dispose of the Series B Shares or any shares of Common Stock issued on
conversion of the Series B Shares in the absence of (a) an effective
registration statement under the Act as to such Series B Shares or Common Stock
issuable upon conversion thereof and registration or qualification of such
Series B Shares or Common Stock issuable upon conversion thereof under any
applicable Blue Sky or state securities law then in effect, or (b) an opinion of
counsel, satisfactory to the Corporation, that such registration and
qualification are not required.
Without limiting the generality of the foregoing, the Corporation shall
be under no obligation to issue the shares covered by such conversion unless and
until the holder of such Series B Shares shall have executed an investment
letter in form and substance satisfactory to the Corporation, including a
warranty at the time of such exercise that it is acquiring such shares for its
own account, for investment and not with a view to, or for sale in connection
with, the distribution of any such shares, in which event the holder of Series B
Shares shall be bound by the provisions of the following legend or a legend in
substantially similar form which shall be endorsed upon the certificate(s)
evidencing the shares issued upon conversion of the Series B Shares:
"The shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by
any person, including a pledgee, in the absence of an effective
registration statement for the shares under the Securities Act of
1933, as amended,
4
<PAGE> 5
or an opinion of counsel satisfactory to the Corporation that an
exemption from registration is then available."
In addition, without limiting the generality of the foregoing, the
Corporation may delay issuance of the shares of Common Stock issuable upon such
conversion until completion of any action or obtaining of any consent, which the
Corporation deems necessary under any applicable law (including without
limitation state securities or "blue sky" laws).
D. Liquidation.
-----------
(i) SERIES B PREFERENCE. Upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the holders of
Series B Shares shall be entitled, before any distribution or payment is made
upon any shares of Common Stock or any Preferred Stock junior in rank to the
Series B Shares, to be paid an amount per share equal to the liquidation value
described in this Section 3.D(i) (the "Liquidation Value"). The per share
Liquidation Value of the Series B Shares on any date is equal to the sum of the
following:
(A) $1,000, plus
(B) an amount equal to any accrued and unpaid dividends from
the date of issuance of the Series B Shares.
Notice of liquidation, dissolution, or winding-up of the Corporation shall be
mailed, by registered mail, postage prepaid, not less than 20 days prior to the
date on which such liquidation, dissolution, or winding-up is expected to take
place or become effective, to the holders or record of the Series B Shares at
their respective addresses as the same appear on the books of the Corporation or
are supplied by them in writing to the Corporation for the purpose of such
notice, but no defect in such notice or in mailing thereof shall affect the
validity of the liquidation, dissolution or winding-up.
(ii) General.
-------
(A) All of the preferential amounts to be paid to the holders
of the Series B Shares pursuant to Section 3.D(i) shall be paid or set apart for
payment before the payment or setting apart for payment of any amount for, or
the distribution of any assets of the Corporation to, the holders of the Common
Stock or any preferred stock junior in rank to the Series B Shares in connection
with such liquidation, dissolution or winding-up.
(B) After setting apart or paying in full the preferential
amounts aforesaid to the holders of record of the issued and outstanding
Series B Shares as set forth
5
<PAGE> 6
in Section 3.D(i), the holders of record of Common Stock and any preferred stock
junior in rank to the Series B Shares shall be entitled to participate in any
distribution of any remaining assets of the Corporation, and the holders of
record of the Series B Shares shall not be entitled to participate in such
distribution.
(iii) Deemed Liquidation.
------------------
(A) For purposes of this Section 3.D, any of the following
transactions shall be deemed to be a liquidation, dissolution or winding up: (1)
a consolidation or merger of the Corporation with or into any other corporation
or corporations, (2) a sale or other disposition of all or substantially all of
the assets of the Corporation, and (3) the issuance and/or sale by the
Corporation of shares of Common Stock (or securities convertible into shares of
Common Stock) in a single or integrated transaction constituting a majority of
the shares of Common Stock outstanding immediately following such issuance
(treating all securities convertible into shares of Common Stock as having been
fully converted and all options and other rights to acquire shares of Common
Stock or securities convertible into shares of Common Stock as having been fully
exercised)2; PROVIDED, HOWEVER, that none of the foregoing transactions shall be
deemed to be a liquidation, dissolution or winding up for purposes of this
Section 3.D(iii) if an election to do so shall have been approved by an
affirmative vote of holders of all of the shares of Series B Preferred Stock
then outstanding.
E. Redemption.
----------
(i) ELECTION OF CORPORATION TO REDEEM. At any time, at the
election of the Corporation with the approval of either (a) the members of the
Corporation's Board of Directors who are not affiliated with Boston University,
(b) the Corporation's Audit Committee or (c) a comparable body for the review of
potential conflict of interest situations, the Corporation may redeem any or all
of the outstanding Series B Shares, upon the terms described in this Section 3.E
out of funds legally available therefor; PROVIDED, HOWEVER, that at any time
when the Corporation's Common Stock is listed on the Nasdaq Stock Market
("Nasdaq"), the Corporation may not elect to redeem any Series B Shares if such
redemption would result in the Corporation failing to comply with the applicable
net tangible asset and capital and surplus criteria for inclusion on Nasdaq.
(ii) REDEMPTION PRICE. The redemption price per Series B Share
shall be $1,000, plus an amount equal to any accrued and unpaid dividends from
the date of issuance of the Series B Shares (the "Series B Redemption Price").
The Series B Redemption Price shall be equitably adjusted whenever there shall
occur a stock split, stock dividend, subdivision of shares, recapitalization,
reclassification or other similar event relating to the Preferred Stock.
6
<PAGE> 7
(iii) REDEMPTION NOTICE. If the Corporation elects to redeem the Series
B Shares, it shall deliver a written notice of redemption to each holder of
record of Series B Shares, at its address as appears on the records of the
Corporation, not less than thirty (30) days prior to the date fixed by the
Corporation for the redemption (the "Redemption Date"). The notice of
redemption shall state:
(A) the total number of Series B Shares to be redeemed on such
Redemption Date and the number of shares of Series B Shares to be redeemed from
the holder to which such notice is addressed;
(B) the date of such Redemption Date and the Series B Redemption
Price; and
(C) that the holder shall surrender to the Corporation on or before
such Redemption Date, at its principal office or such other place as may be
designated in the Redemption Notice, any certificate(s) held by it representing
shares to be redeemed.
(iv) SURRENDER OF CERTIFICATES. Each holder of Series B Shares being
redeemed shall surrender the certificate(s) held by it representing such shares
to the Corporation at its principal office or such other place as may be
designated in the Redemption Notice. Upon such surrender, the Corporation shall
pay to the order of the person whose name appears on such certificate(s) the
Series B Redemption Price for such shares, and each surrendered certificate
shall be cancelled. In the event that, prior to the final Redemption Date, not
all of the Series B Shares represented by a surrendered certificate are being
redeemed, the Corporation shall deliver to the holder, at the expense of the
Corporation, a new certificate representing the number of Series B Shares not
redeemed.
(v) NO DIVIDENDS AND CONVERSION AFTER REDEMPTION. From and after the
later of the last Redemption Date or forty-five (45) days after the date that
the Corporation shall have mailed the last Redemption Notice, no Series B
Shares shall be entitled to any further dividends pursuant to Section 3.B
hereof or to conversion pursuant to Section 3.C hereof.
(vi) If, on or before a Redemption Date, the funds necessary for such
redemption shall have been set aside by the Corporation and deposited with a
bank or trust company, in trust for the benefit of the holders of the Series B
Shares that has been called for redemption, then, notwithstanding that any
certificates for shares that have been called for redemption shall not have
been surrendered for cancellation, the shares represented thereby shall no
longer be deemed outstanding from and after such redemption date, and all
rights of holders of such shares so called for redemption shall forthwith,
after such redemption date, cease and terminate, excepting only the right to
receive the redemption funds therefor to which they are entitled, but without
interest. Any interest accrued on funds so deposited and unclaimed by
stockholders entitled thereto shall be paid to such stockholders at the time
their respective shares are redeemed or to the Corporation at the time
unclaimed
7
<PAGE> 8
amounts are paid to it. In case the holders of Series B Shares which shall have
been called for redemption shall not, within six years after a redemption date,
claim the amounts so deposited with respect to the redemption thereof, any such
bank or trust company shall, upon demand, pay over to the Corporation such
unclaimed amounts and thereupon such bank or trust company shall be relieved of
all responsibility in respect thereof to such holder and such holder shall look
only to the Corporation for the payment thereof. Any funds so deposited with a
bank or trust company which shall not be required for such redemption by reason
of the exercise subsequent to the date of such deposit of the right of
conversion of any Series B Shares, or otherwise, shall be returned to the
Corporation forthwith.
F. REACQUIRED SHARES. Any shares of Series B Shares
redeemed, purchased, converted, or otherwise acquired by the Corporation in any
manner whatsoever shall not be reissued as part of such series and shall be
retired promptly after the acquisition thereof. All such shares upon their
retirement and the filing of any certificate required in connection therewith
pursuant to the Delaware General Corporation Law shall become authorized but
unissued shares of Preferred Stock.
G. COPIES OF AGREEMENTS, INSTRUMENTS, AND DOCUMENTS. Copies
of any of the agreements, instruments or other documents referred to in this
Certificate shall be furnished to any stockholder upon written request to the
Corporation at its principal place of business.
4. The statements contained in the foregoing, creating and designating
the said Series B issue of Preferred Stock and fixing the number, powers,
preferences and relative, optional, participating, and other special rights and
the qualifications, limitations, restrictions, and other distinguishing
characteristics thereof shall, upon the effective date of said series, be deemed
to be included in and be a part of the Restated Certificate of Incorporation, as
amended, of the Corporation pursuant to the provisions of Sections 104 and 151
of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, this Certificate of Designation has been executed on behalf
of the Corporation by its Chief Executive Officer and President this 28th day of
June, 1996, and he does hereby affirm, under penalty of perjury, that the
foregoing Certificate of Designation is the act and deed of the Corporation and
that the facts stated therein are true and accurate.
8
<PAGE> 9
Signed on June 28th, 1996.
SERAGEN, INC.
By: /s/ George W. Masters
-------------------------------------
George W. Masters,
Chief Executive Officer and President
9
<PAGE> 1
Exhibit 4.7
CERTIFICATE OF CORRECTION
OF
CERTIFICATE OF DESIGNATION
OF
SERAGEN, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter the "Corporation") is Seragen, Inc.
2. The Amended Certificate of Designation of the Corporation, which was filed
with the Secretary of State of Delaware on May 29, 1996, is hereby corrected in
accordance with the provisions of Section 103 of the General Corporation Law.
3. The inaccuracy to be corrected in said instrument is as follows:
The formula by which the Conversion Price of the Series A Preferred stock is to
be determined (which is set forth under subparagraph (ii) of paragraph C of the
Amended Certificate of Designation and which appears on page number 2 thereof)
incorrectly reads as follows:
"...three percent (73%)..."
4. The portion of the instrument in corrected form is as follows:
"...seventy-three percent (73%)..."
Signed this 6 day of August, 1996.
/s/ George W. Masters
--------------------------------------
George W. Masters
Vice Chairman, President &
Chief Executive Officer, and
President
<PAGE> 1
EXHIBIT 10.56
SERAGEN, INC. HAS OMITTED FROM THIS EXHIBIT 10.56 PORTIONS OF THE AGREEMENT FOR
WHICH SERAGEN, INC. HAS REQUESTED CONFIDENTIAL TREATMENT FROM THE SECURITIES
AND EXCHANGE COMMISSION. THE PORTIONS OF THE AGREEMENT FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED ARE INDICATED "[ ]" AND SUCH CONFIDENTIAL
PORTIONS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
AMENDMENT TO SALES AND DISTRIBUTION AGREEMENT
This Amendment is entered into effective as of the 28th day of May,
1996 by and between Eli Lilly and Company, an Indiana corporation ("Lilly"), and
Seragen, Inc., a Delaware corporation ("Seragen").
RECITALS
A. Lilly and Seragen are parties to a Sales and Distribution Agreement
dated as of August 3, 1994 (as amended to date, the "Distribution Agreement").
B. Pursuant to the Distribution Agreement, Lilly has paid to Seragen five
million dollars ($5,000,000), which, in accordance with the Distribution
Agreement is to be repaid to Lilly via a credit against Bulk Sales Price due
Seragen by Lilly under the Distribution Agreement.
C. Lilly and Seragen desire to amend the Distribution Agreement in
certain respects relating to Seragen's obligation to repay this five million
dollar ($5,000,000) advance.
AGREEMENT
The parties for good and valuable consideration, the receipt of which
is hereby acknowledged, agree as follows.
1. Section 2.2 of the Distribution Agreement is hereby amended to read
in its entirety as follows:
"Upon execution of this agreement, the Stock Purchase
Agreement and the Development Agreement, Lilly will pay to Seragen five
million dollars ($5,000,000). Commencing with the first purchase of
Bulk Material for Commercial Sale, Seragen shall pay to Lilly (or the
Lilly affiliate purchasing Bulk Material) [ ] for
purchases of Bulk Material, including without limitation Bulk Material
incorporating DAB389IL2, EGF, IL4, IL6, or any other Fusion Toxin.
This royalty shall be payable until Lilly and its affiliates
purchasing Bulk Material have received in the aggregate royalties
totaling five million dollars ($5,000,000), except that
<PAGE> 2
Seragen five million dollars ($5,000,000). Commencing with the first
purchase of Bulk Material for Commercial Sale, Seragen shall pay to
Lilly (or the Lilly affiliate purchasing Bulk Material) [ ]
for purchases of Bulk Material, including without limitation Bulk
Material incorporating DAB389IL2, IL4, IL6, or any other Fusion Toxin.
This royalty shall be payable until Lilly and its affiliates
purchasing Bulk Material have received in the aggregate royalties
totaling five million dollars ($5,000,000), except that
the [ ]
in any twelve (12) month period. Any royalty not paid because of the
above limitation shall be carried forward be and paid in the next
succeeding year subject to the limitation on the amount payable for
that year. This $5,000,000 payment is non-refundable and in the
event of no commercial sales, no refund or future commitment with
respect to this payment is due to Lilly."
2. Capitalized terms used but not defined herein shall have the meanings
set forth in the Distribution Agreement.
3. All other terms and conditions of the Distribution Agreement shall
remain unchanged and in full force and effect.
WITNESS WHEREOF, Seragen and Lilly have caused this Amendment to be
executed by their duly authorized representatives as of the date first written
above.
ELI LILLY AND COMPANY SERAGEN, INC.
/s/ August M. Watanabe, M.D. /s/ Thomas N. Konatich
- ---------------------------- ------------------------
August M. Watanabe, M.D. Thomas N. Konatich
Executive Vice President Vice President for Finance
Science and Technology Chief Financial Officer
<PAGE> 1
Exhibit 10.57
SERAGEN, INC.
SUBSCRIPTION AND REGISTRATION AGREEMENT
This Subscription and Registration Agreement is entered into as of June
28, 1996 by and among Seragen, Inc., a Delaware corporation (the "Company"),
Seragen Technology, Inc., a Delaware corporation (the "Subsidiary"), and the
persons listed on Schedule 1 hereto (collectively, the "Investors").
WHEREAS, the Investors are subscribing to purchase (a) the number of
shares of the Company's Series B convertible preferred stock, $.01 par value,
having the designations, powers, preferences and other terms set forth on
EXHIBIT A hereto (the "Preferred Stock") set forth opposite their respective
names on SCHEDULE 1, (b) common stock purchase warrants in the form of EXHIBIT B
hereto (the "Warrants") to purchase the number of shares of the Company's common
stock, $.01 par value per share (the "Common Stock") set forth opposite their
respective names on SCHEDULE 1 hereto (the "Warrant Shares "); and (c) the
number of shares of Class B Common Stock, $.01 par value, of the Subsidiary set
forth opposite their respective names on SCHEDULE 1 hereto (the "Class B
Shares") owned by the Company.
WHEREAS, the Company has agreed to register the shares of Common Stock
underlying the Preferred Stock (the "Preferred Shares") and the Warrant Shares.
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, the parties agree as follows:
ARTICLE I -- ISSUANCE AND TERMS OF PREFERRED STOCK AND WARRANTS
---------------------------------------------------------------
SECTION 1.1 AUTHORIZATION OF PREFERRED STOCK AND WARRANTS. Subject to
the terms and conditions of this Agreement, the Company has authorized the sale
of the Preferred Stock, Warrants and Class B Shares to the Investors pursuant to
this Agreement.
SECTION 1.2 PURCHASE AND SALE OF PREFERRED STOCK AND WARRANTS. Subject
to the terms and conditions of this Agreement and in reliance upon the
representations and warranties of the Company and the Investors contained
herein, each of the Investors agrees to purchase from the Company and the
Company agrees to sell to each of the Investors on the Closing Date (as
hereinafter defined) (a) the number of shares of Preferred Stock, (b) Warrants
to purchase the number of shares of Common Stock and (c) the number of Class B
Shares set forth opposite such Investor's name on SCHEDULE 1 hereof, for a
purchase price of $1,000 per share of Preferred Stock. The Preferred Stock and
Warrants shall be separately transferable, subject only to such other
restrictions on transfer as shall apply.
<PAGE> 2
SECTION 1.3 COLLATERAL ASSIGNMENT OF PATENTS. The Company shall cause
the Subsidiary to execute and deliver to the Investors, and the Investors shall
execute and deliver to the Subsidiary, a collateral assignment of patents (the
"Collateral Assignment of Patents") and related agreements in the form of
EXHIBIT C hereto to secure payment of dividends on the Class B Shares.
SECTION 1.4 CLOSING. The closing hereunder (the "Closing") shall take
place at a place and time on or before July 1, 1996 (the "Closing Date") agreed
to by the parties. At the Closing, the Company shall deliver to each of the
Investors one or more Preferred Stock, Warrant and Class B Share certificates
registered in the name of such Investor, or in such name or names as may be
designated by such Investor, corresponding to the number of shares of Preferred
Stock, Warrant Shares and Class B Shares, respectively, set forth opposite such
Investor's name on SCHEDULE 1 hereof. The name(s) in which the Preferred Stock,
Warrants and Class B Shares, are to be registered are set forth in the
Questionnaire/Accredited Investor Certifications to be completed and executed by
each Investor, in the form attached hereto as EXHIBIT D. Upon the Closing the
Investors will receive an opinion of Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., counsel for the Company, substantially in the form of EXHIBIT E
hereto.
ARTICLE II -- REPRESENTATIONS AND WARRANTIES OF THE COMPANY
-----------------------------------------------------------
SECTION 2.1 ORGANIZATION AND STANDING OF THE COMPANY. The Company and
the Subsidiary are duly organized, validly existing and in good standing under
the laws of the State of Delaware. The Company and the Subsidiary have the
corporate power and authority to enter into, deliver, and perform their
respective obligations and undertakings under this Agreement.
SECTION 2.2 VALIDITY OF THIS AGREEMENT. The execution, delivery and
performance by the Company and by the Subsidiary of this Agreement have been
duly authorized and approved by all necessary corporate and shareholder action.
Copies of the resolutions adopted by the Board of Directors authorizing the
execution of this Agreement and the issuance of the Preferred Stock and Warrants
and the sale of the Class B Shares hereunder will be furnished to the Investors
on the Closing Date. This Agreement, the Collateral Assignment of Patents, and
the Assignment of Patents and Irrevocable License Agreement attached hereto as
EXHIBIT G (hereinafter referred to collectively as the "Agreement and Related
Documents"), have been duly executed and delivered and constitute valid and
binding obligations of the Company and of the Subsidiary, enforceable in
accordance with their respective terms, subject to laws of general application
from time to time in effect affecting creditors' rights and the exercise of
judicial discretion in accordance with general equitable principles. The
execution, delivery and performance of the Agreement and Related Documents will
not (i) conflict with, or result in a breach of any of
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<PAGE> 3
the terms of, or constitute a default under, the Certificate of Incorporation or
By-laws of the Company or of the Subsidiary, (ii) to the knowledge of the
Company or of the Subsidiary, conflict with or result in a material breach of
any of the terms of, or constitute a material default under, any agreement,
instrument, covenant or other restriction to which the Company or the Subsidiary
is a party or by which it or any of its properties or assets is bound, or (iii)
conflict with any rule, regulation, order or decree of the Nasdaq Stock Market
or any rule or regulation under Delaware General Corporation law.
SECTION 2.3 ACCURACY OF REPORTS AND INFORMATION. The Company's Common
Stock is registered pursuant to Section 12(g) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). All reports (the "SEC Reports") required
to be filed by the Company during the period from April 1, 1992 to the date of
this Agreement pursuant to Section 13(a) or 15(d) of the Exchange Act, have been
duly filed, were in compliance with the requirements of their respective forms
and were complete and correct in all material respects as of the dates at which
the information was furnished. Since March 31, 1996, there has not been any
change in the assets, properties, liabilities, financial condition, operating
results or business of the Company, except for the depletion of cash resources
and changes in the ordinary course of business which have not been, in the
aggregate, materially adverse. Copies of all SEC Reports filed by the Company
during the period from March 1, 1993 to the date of this Agreement have been
furnished to the Investors. The Company is eligible to use a Form S-3
Registration Statement for the re-sale of its Common Stock. The Registration
Statement proposed to be filed under Section 5.2(a), including the documents
incorporated by reference therein, does not, and will not on the effective date
thereof, contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
SECTION 2.4 GOVERNMENTAL CONSENT, ETC. Except for filings, consents,
permits, approvals and authorizations which will be obtained by the Company
prior to Closing, no consent, approval or authorization of any governmental
authority is required under existing law or regulation in connection with the
execution and delivery of the Agreement or the offer, issue, sale or delivery of
the Preferred Stock, Warrants or Class B Shares pursuant to this Agreement or
the consummation of any other transactions contemplated hereby.
SECTION 2.5 COMPLIANCE WITH OTHER AGREEMENTS AND INSTRUMENTS. Neither
the Company nor its Subsidiary is in violation of any provisions of its
Certificate of Incorporation or By-laws, or, to the best of the Company's or the
Subsidiary's knowledge, of any provision of any Federal or state judgment, writ,
decree, order, statute, rule or governmental regulation applicable to the
Company or the Subsidiary, which violation materially and adversely affects the
business or financial condition of the Company or the Subsidiary. Neither the
Company nor the Subsidiary is in material violation or default of
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<PAGE> 4
any agreement, instrument or contract to which it is a party or by which it or
its property is bound, which violation materially and adversely affects the
business or financial condition of the Company or the Subsidiary.
SECTION 2.6 VALID ISSUANCE OF SHARES. When issued and delivered, the
Preferred Stock, the Warrants and the Class B Shares shall be duly authorized,
validly issued fully paid and non-assessable and not subject to any preemptive
rights, liens, claims or encumbrances, or other restriction on transfer, except
as set forth in this Agreement and the Exhibits hereto.
SECTION 2.7 CAPITALIZATION. The Company's entire authorized capital
stock consists of: 30,000,000 shares of Common Stock and 5,000,000 shares of
Preferred Stock, $.01 par value per share of which (a) 4,000 shares have been
designated Series A Preferred Stock and are issued and outstanding and (b)
23,800 shares have been designated Series B Preferred Stock and are issuable
pursuant to this Agreement. Of the authorized shares of Common Stock, 16,609,319
shares were issued and outstanding as of June 28, 1996. As of June 28, 1996,
17,418 shares of Common Stock were held in the Company's treasury. As of June
28, 1996, the Company had outstanding warrants to purchase 3,588,205 shares of
Common Stock. As of June 28, 1996, the Company had 797,089 shares of Common
Stock available for issuance under the Company's 1992 Long Term Incentive Plan,
1981 Stock Option Plan, and 1992 Non-Employee Director Non-Qualified Stock
Option Plan (the "Stock Plans"), and an additional 89,977 shares of Common Stock
were available for issuance under the Company's Employee Stock Purchase Plan. As
of June 28, 1996, the Company had outstanding options to purchase 1,710,417
shares of Common Stock pursuant to the Stock Plans. The Common Stock and the
Preferred Stock have the preferences, voting powers, qualifications, and special
or relative rights or privileges set forth in Article IV of the Company's
Certificate of Incorporation and the respective Certificates of Designation for
the Series A Preferred Stock and the Series B Preferred Stock. As of June 28,
1996, the Subsidiary's authorized capital consists of: 214,200 shares of Class A
Common Stock, $.01 par value, and 23,800 shares of Class B Common Stock, $.01
par value, all of which are held by the Company. The rights and powers of the
Class A Common Stock and the Class B Common Stock are set forth in the
Subsidiary's Certificate of Incorporation in the form of Exhibit F hereto.
ARTICLE III -- REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
--------------------------------------------------------------
Each Investor hereby acknowledges, represents, warrants and agrees as
follows:
SECTION 3.1 AUTHORITY OF THE INVESTOR; VALIDITY OF THIS AGREEMENT. The
Investor has all requisite power and authority to enter into this Agreement and
perform its obligations hereunder. The execution, delivery and performance by
the Investor of this Agreement have been duly authorized and approved by all
necessary corporate or other
4
<PAGE> 5
action. This Agreement has been duly executed and delivered and constitutes a
valid and binding obligation of the Investor, enforceable in accordance with its
terms, subject to laws of general application from time to time in effect
affecting creditors' rights and the exercise of judicial discretion in
accordance with general equitable principles. The execution, delivery and
performance of this Agreement will not conflict with, or result in a material
breach of any of the terms of, or constitute a material default under, any
charter, by-law, agreement, instrument, covenant or other restriction to which
the Investor is a party or by which it or any of its properties or assets is
bound.
ARTICLE IV -- INVESTMENT REPRESENTATIONS OF THE INVESTORS.
----------------------------------------------------------
Each Investor hereby acknowledges, represents, warrants and agrees as
follows:
SECTION 4.1 The Investor has carefully examined the SEC Reports and
the financial statements contained therein. The Investor acknowledges that the
Company has made available to the Investor all documents and information that it
has requested relating to the Company and has provided answers to all of its
questions concerning the Company, the Preferred Stock, the Warrants and the
Class B Shares. In evaluating the suitability of the acquisition of the
Preferred Stock, Warrants and Class B Shares hereunder, the Investor has not
relied upon any representations or other information (whether oral or written)
other than as set forth in the SEC Reports, as contained herein or in written
materials provided by the Company to the Investor.
SECTION 4.2 The Investor meets the requirements of at least one of the
suitability standards for an "accredited investor" as set forth on the form of
Questionnaire/Accredited Investor Certification (the "Certification") attached
hereto as EXHIBIT D.
SECTION 4.3 The Investor understands that neither the offering of the
Preferred Stock, the Warrants, the Class B Shares, the Preferred Shares nor the
Warrant Shares has been registered under the Securities Act or the securities
laws of any state or other jurisdiction and that such Preferred Stock, Warrants,
Class B Shares, Preferred Shares and Warrant Shares must be held indefinitely
unless they are transferred in accordance with the Registration Statement (as
hereinafter defined) or an exemption from registration is available. The
Investor understands that the Preferred Stock, Warrants and Class B Shares will
not be included in such registration statement or otherwise registered for
reoffer or resale. The undersigned understands that the offering and sale of the
Preferred Stock, Warrants and Class B Shares is intended to be exempt from
registration under the Securities Act, by virtue of Section 4(2) and/or Section
4(6) of the Securities Act and the provisions of Regulation D promulgated
thereunder, based, in part, upon the representations, warranties and agreements
contained in this Agreement and the Company may rely on such representations,
warranties and agreements in connection therewith. The Investor will not
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<PAGE> 6
transfer the Preferred Stock, Warrants, Class B Shares, Preferred Shares or
Warrant Shares in violation of the provisions of any applicable Federal or state
securities statute.
SECTION 4.4 The Investor is acquiring the Preferred Stock, Warrants
and Class B Shares for investment, and not with a view to the resale or
distribution thereof, and has no present intention of selling, negotiating, or
otherwise disposing of the Preferred Stock, the Warrants, the Class B Shares,
the Preferred Shares and the Warrant Shares. The Investor's financial condition
and investments are such that it is in a financial position to hold the
Preferred Stock, Warrants and Class B Shares for an indefinite period of time
and to bear the economic risk of, and withstand a complete loss of, such
Preferred Stock, Warrants and Class B Shares. In addition, by virtue of its
expertise, the advice available to it, and its previous investment experience,
the Investor has extensive knowledge and experience in financial and business
matters, investments, securities, and private placements and the capability to
evaluate the merits and risks of the transactions contemplated by this
Agreement.
ARTICLE V -- REGISTRATION STATEMENT
-----------------------------------
SECTION 5.1 Definitions. For the purpose of this Article V:
-----------
(a) the term "Commission" shall mean the United States
Securities and Exchange Commission;
(b) the term "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended;
(c) the term "Holder" or "Holders" shall mean the registered
holder(s) of the Preferred Stock, the Warrants, the Preferred Shares and the
Warrant Shares.
(d) the term "Registration Statement" shall mean the
registration statement required to be filed by Section 5.2 below, and shall
include any preliminary prospectus, supplemental prospectus, final prospectus,
exhibit or amendment included in or relating to such registration statement;
(e) the term "Registrable Shares" shall mean the Preferred
Shares and Warrant Shares;
(f) the term "Securities Act" shall mean the Securities Act
of 1933, as amended; and
(g) the term "untrue statement" shall include any untrue
statement or alleged untrue statement, or any omission or alleged omission to
state in the Registration
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<PAGE> 7
Statement a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
5.2 Registration Procedures and Expenses. The Company shall:
------------------------------------
(a) file with the Commission within four weeks after the date
of this Agreement or as soon as reasonably practicable thereafter a shelf
registration statement under the Securities Act on Form S-3 or on another form
which is appropriate to register the resale of the Registrable Shares pursuant
to Rule 415 under the Securities Act;
(b) use its best efforts, subject to receipt of necessary
information from the Holders, to cause such Registration Statement to become
effective as promptly after filing as practicable;
(c) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the prospectus used in connection
therewith and take such other steps as may be necessary to keep such
Registration Statement continuously effective (and current in all material
respects subject to Section 5.3) until the earlier to occur of (i) such time as
all the Registrable Shares have been sold pursuant thereto or otherwise, or (ii)
the date on which all Holders are permitted to publicly resell such Registrable
Shares under Rule 144(k) under the Securities Act, as the same may be amended
from time to time, or any successor regulation;
(d) prior to the filing with the Commission of a Registration
Statement, including any amendments or supplements thereto, provide each Holder,
the underwriters, if any, and counsel for such Holder or underwriters, the
opportunity to participate in the preparation of such Registration Statement;
(e) furnish to the Holders with respect to the Registrable
Shares registered on the Registration Statement (and to each sales or placement
agent or each underwriter, if any, of such Registrable Shares) copies of the
Registration Statement and any amendments or supplements thereto, and such
number of copies of prospectuses and any amendments or supplements thereto in
conformity with the requirements of the Securities Act as the Holders may
reasonably request, in order to facilitate the public sale or other disposition
of all or any of the Registrable Shares by the Holders; provided, however, that
the obligation of the Company to deliver copies of prospectuses to the Holders
shall be subject to the receipt by the Company of reasonable assurances from the
Holders that the Holders will comply with the applicable provisions of the
Securities Act and of such other securities laws as may be applicable in
connection with any use of such prospectuses;
(f) promptly notify each Holder (A) when such Registration
Statement, any prospectus included therein or any amendment or supplement to
any of the foregoing has
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<PAGE> 8
been filed and, with respect to such Registration Statement or any
post-effective amendment thereto, when the same has become effective, (B) of any
comments by the Commission and by the state securities commissioner or regulator
of any state with respect thereto or any request by the Commission for
amendments or supplements to such Registration Statement or prospectus or for
additional information, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of such Registration Statement or the initiation or
threatening of any proceedings for that purpose, or (D) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose;
(g) cooperate with the Holder to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
sold under the Registration Statement, which certificates shall not bear any
restrictive legends;
(h) provide a CUSIP number for all Registrable Securities;
(i) use its best efforts to list the Registrable Securities
covered by such Registration Statement on any securities exchange on which the
Common Stock is then listed or, if the Common Stock is not then so listed, to
have the Registrable Securities approved for quotation and trading in the Nasdaq
Stock Market (or a comparable interdealer quotation system then in effect);
(j) file such documents as may be required of the Company for
normal securities law clearance for the resale of the Registrable Shares in such
states of the United States as may be reasonably requested by the Holders;
provided, however, that the Company shall not be required in connection with
this paragraph (j) to qualify as a foreign corporation or execute a general
consent to service of process in any jurisdiction;
(k) bear all expenses in connection with the procedures in
paragraphs (a) through (j) of this Section 5.2 and the registration of the
Registrable Shares on such Registration Statement and the satisfaction of the
blue sky laws of such states, but (except as may otherwise be agreed) excluding
the fees and expenses of legal counsel to the Holders in connection with the
procedures in paragraphs (a) through (j) of this Section 5.2 unless otherwise
agreed, and excluding underwriting discounts and selling commissions and
expenses required by law to be borne by the Holders; and
(l) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission.
5.3 TEMPORARY CESSATION OF OFFERS AND SALES BY HOLDERS. The Holders
acknowledge that there may occasionally be times when the Company may be
required to suspend the use of the prospectus forming part of the Registration
Statement until such time
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<PAGE> 9
as an amendment to the Registration Statement has been filed by the Company and
declared effective by the Commission, until the prospectus is supplemented or
amended to comply with the Act, or until such time as the Company has filed an
appropriate report with the Commission pursuant to the Exchange Act, but only if
(i) the filing of a registration statement would require the premature
disclosure of information, the disclosure of which would have a material adverse
effect on the business or operations of the Company, or (ii) the Company then is
unable to comply with the requirements of the Commission relating to such
registration or to resale of the Registrable Shares, provided, however, that the
Company shall use its best efforts to make such disclosure, or remedy such
noncompliance including removal of any stop order, as the case may be, at the
earliest possible date. Notwithstanding the foregoing, the total number of days
during which any or all suspensions are in effect pursuant to this Section 5.3
shall not exceed 90 days during any period of 365 consecutive days. Each of the
Holders hereby covenants that it will not sell any Registrable Shares pursuant
to said prospectus during the period commencing at the time at which the Company
gives the Holders notice of the suspension of the use of said prospectus and
ending at the time the Company gives the Holders notice that the Holders may
thereafter effect sales pursuant to said prospectus, as the same may have been
supplemented or amended.
5.4 INDEMNIFICATION. Upon the registration of the Registrable Shares
pursuant to Section 5.2 of this Agreement, and in consideration of the
agreements of the parties contained herein, and as an inducement to the parties
to enter into various other agreements:
(a) the Company agrees to indemnify and hold harmless each
Holder (and each of its officers, directors and partners, and each person, if
any, who controls such Holder within the meaning of Section 15 of the Securities
Act) from and against any losses, claims, damages or liabilities to which such
Holder (or any such officer, director, partner or controlling person) may become
subject (under the Securities Act or otherwise) insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of, or are based upon, any untrue statement of a material fact contained in the
Registration Statement on the effective date thereof, or arise out of any
failure by the Company to fulfill any undertaking included in the Registration
Statement, and the Company will reimburse such Holder (or such officer,
director, partner or controlling person) for any legal or other expenses
reasonably incurred in investigating, defending or preparing to defend any such
action, proceeding or claim; provided, however, that the Company shall not be
liable in any such case to the extent that such loss, claim, damage or liability
arises out of, or is based upon, an untrue statement made in such Registration
Statement in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such Holder specifically for use in
preparation of the Registration Statement.
(b) Each Holder agrees to indemnify and hold harmless the
Company (and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, each officer of the Company who signs the
Registration Statement and each
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<PAGE> 10
director of the Company), from and against any losses, claims, damages or
liabilities to which the Company (or any such officer, director or controlling
person) may become subject (under the Securities Act or otherwise), insofar as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon, any untrue statement of a
material fact contained in the Registration Statement on the effective date
thereof, if such untrue statement was made in reliance upon and in conformity
with written information furnished by or on behalf of such Holder specifically
for use in preparation of the Registration Statement, and such Holder will
reimburse the Company (or such officer, director or controlling person) for any
legal or other expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim; provided, however,
that the obligations of each Holder hereunder shall be limited to an amount
equal to the proceeds to such Holder of Registrable Shares sold as contemplated
herein.
(c) Promptly after receipt by any indemnified person of a
notice of a claim or the beginning of any action in respect of which indemnity
is to be sought against an indemnifying person pursuant to this section 5.4,
such indemnified person shall notify the indemnifying person in writing of such
claim or of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and such indemnifying person shall have been notified
thereof, such indemnifying person shall be entitled to participate therein, and,
to the extent that it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified person. After notice from the
indemnifying person to such indemnified person of its election to assume the
defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof; provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate in the reasonable judgment of the indemnified person for the same
counsel to represent both the indemnified person and such indemnifying person or
any affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
further, however that if the Company is the indemnifying party, it shall not be
required to pay the fees and expenses of more than one counsel for all of the
Holders.
(d) If for any reason the indemnification provisions of or
contemplated by Section 5.4 (a) or (b) are unavailable to or insufficient to
hold harmless an indemnified party thereunder in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein,
then each indemnifying party thereunder shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages
or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and
indemnified party in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. The
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<PAGE> 11
relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by such indemnifying party or by
such indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5.4(d) were determined by pro rata allocation (even if
Holders or any agents or underwriters or all of them were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in this Section 5.4(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, or liabilities (or actions in respect thereof) referred to
above shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 5.4(d), no
Holder shall be required hereunder to contribute in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) any amount in
excess of the amount by which the dollar amount of the gross proceeds received
by such Holder from the sale of Registrable Securities that are subject of such
matters exceeds the amount of any damages which such Holder has otherwise been
required to pay in respect of such matters by reason of such untrue or alleged
untrue statement or omission or alleged omission. 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.
5.5 INFORMATION AVAILABLE. So long as any registration statement is
effective covering the resale of Registrable Shares, the Company will furnish
to each Holder:
(a) as soon as practicable after available, one copy of (i)
its Annual Report to Stockholders (which Annual Report shall contain financial
statements prepared in accordance with generally accepted accounting principles
in the United States of America and audited by a national firm of certified
public accountants), (ii) if not included in substance in the Annual Report to
stockholders, its annual report on Form 10-K, (iii) each of its Quarterly
Reports to stockholders, and its quarterly reports on Form 10-Q, and (iv) a full
copy of the registration statement covering the Registrable Shares (the
foregoing, in each case, excluding exhibits); and
(b) upon the reasonable request of such Holder, all exhibits
excluded by the parenthetical to subparagraph (a)(iv) of this Section 5.5 and
all other information that is generally available to the public; and the
Company, upon the reasonable request of such Holder, will meet with such Holder
or a representative thereof at the Company's headquarters, at such Holder's
expense, to discuss all information relevant for disclosure in any registration
statement covering the Registrable Shares and will otherwise cooperate with any
Holder conducting an investigation for the purpose of reducing or eliminating
such
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<PAGE> 12
Holder's exposure to liability under the Securities Act, including the
production of information at the Company's headquarters.
5.6 RULE 144 REPORTING. With a view to making available the benefits
of certain rules and regulations of the Commission which may at any time
permit the sale of the Registrable Shares to the public without registration,
the Company agrees to use its best efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Act;
(b) Use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(c) So long as a Holder owns any Registrable Shares, to
furnish to such Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of said Rule 144.
ARTICLE VI -- COVENANTS OF THE COMPANY
--------------------------------------
AND THE SUBSIDIARY
------------------
SECTION 6.1 RESERVATION OF SHARES. The Company shall use its best
efforts at all times to have authorized and reserved for the purpose of
issuance, a sufficient number of shares of Common Stock to provide for the
issuance of shares of Common Stock (a) upon conversion of the Preferred Stock
and (b) upon exercise of the Warrants.
SECTION 6.2 INCREASE AUTHORIZED COMMON STOCK. The Company shall use
its best efforts to obtain stockholder approval of an amendment to its
Certificate of Incorporation, increasing the number of its authorized shares of
Common Stock by 20,000,000 shares within six (6) months after the Closing Date.
SECTION 6.3 REVALUATION OF ASSETS. In the event that the Company is
not permitted to declare and pay out dividends payable on the Preferred Stock
because it does not have surplus for purposes of the Delaware General
Corporation Law ("DGCL") on the basis of its accounting books and records, the
Company shall revalue its assets to create such surplus to the full extent
permitted by Delaware law.
SECTION 6.4 INCREASE IN SUBSIDIARY'S CAPITAL STOCK. The Company
covenants and agrees that it will not vote its shares of the Subsidiary's Class
A Common Stock in favor of an increase in the authorized capital stock of the
subsidiary.
12
<PAGE> 13
SECTION 6.5 ASSIGNMENT OF PATENTS. For so long as any shares of
Preferred Stock remain outstanding, the Subsidiary covenants and agrees that it
will not reassign the Patents (as defined in the Collateral Assignment of
Patents) to the Company without the prior written consent of all of the holders
of the Preferred Stock.
ARTICLE VII -- CONDITIONS TO CLOSING
------------------------------------
SECTION 7.1 CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL. The
obligation of the Company hereunder to issue and sell the Preferred Stock,
Warrants and Class B Shares at the Closing is subject to satisfaction, at or
before the Closing Date, of each of the following conditions thereto, unless
waived by the Company:
(a) The parties shall have executed and delivered this Agreement
and the Collateral Assignment of Patents.
(b) The representations and warranties of the Investors shall
be true and correct in all material respects as of the date when made and as of
the Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date), and the Investors shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Investors at or prior to the Closing Date.
(c) The Company shall have received a written acknowledgment
or a return of its promissory note indicating cancellation of all indebtedness
thereunder from each of the banks who entered loan agreements (the "Loan
Agreements") with the Company dated as of May 22, 1995, stating that the loans
made to the Company pursuant to the Loan Agreements have been repaid in full.
SECTION 7.2 CONDITIONS TO THE INVESTORS' OBLIGATION TO PURCHASE. The
obligations of each of the Investors hereunder to purchase the Preferred Stock,
Warrants and Class B Shares is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, unless waived by such
investor:
(a) The parties shall have executed and delivered this Agreement
and the Collateral Assignment of Patents.
(b) The representations and warranties of the Company shall be true
and correct in all material respects as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date), and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Closing Date. The Investors
13
<PAGE> 14
shall have received a certificate, executed by an officer of the Company, dated
the Closing Date, to the foregoing effect.
(c) The Investors shall have received a letter or letters
from the holders of more than 50% of the outstanding shares of Common Stock of
the Company agreeing to vote the shares held by them in favor of increasing the
Company's authorized Common Stock in accordance with Section 6.2 hereof.
(d) The Certificate of Designation in the form of EXHIBIT A
hereto shall have been filed with the Delaware Secretary of State, and the
Investors shall have received a certified copy thereof.
(e) The Investors shall have received a certificate of the
Secretary of the Company as to by-laws and resolutions.
(f) The Investors shall have made satisfactory arrangements
with their respective banks to secure funds to pay the purchase price for the
Preferred Stock.
ARTICLE VIII -- MISCELLANEOUS
-----------------------------
SECTION 8.1 NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing, shall be addressed to the
receiving party's address set forth below or to such other address as a party
may designate by notice hereunder, and shall be either (i) delivered by hand,
(ii) made by telex, telecopy or facsimile transmission, (iii) sent by overnight
courier, or (iv) sent by registered mail, return receipt requested, postage
prepaid.
If to the Investors: at the addresses set forth on Schedule 1 hereto
----------
If to the Company: Seragen, Inc.
97 South Street
Hopkinton, MA 01748
Attn: President
Fax: (508) 435-9805
With a copy to: Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
Attn: Jeffrey M. Wiesen, Esq.
Fax: (617) 542-2241
14
<PAGE> 15
All notices, requests, consents and other communications hereunder shall be
deemed to have been given either (i) if by hand, at the time of the delivery
thereof to the receiving party at the address of such party set forth above,
(ii) if made by telex, telecopy or facsimile transmission, at the time that
receipt thereof has been acknowledged by electronic confirmation or otherwise,
(iii) if sent by overnight courier, on the next business day following the day
such notice is delivered to the courier service, or (iv) if sent by registered
mail, on the fifth business day following the day such mailing is made.
SECTION 8.2 ENTIRE AGREEMENT. This Agreement embodies the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersedes all prior oral or written agreements and
understandings relating to the subject matter hereof. No statement,
representation, warranty, covenant or agreement of any kind not expressly set
forth in this Agreement shall affect, or be used to interpret, change or
restrict, the express terms and provisions of this Agreement.
SECTION 8.3 AMENDMENTS. The terms and provisions of the Agreement may
be modified, amended or waived, or consent for the departure therefrom granted,
by written consent all of the of the Investors. No such waiver or consent shall
be deemed to be or shall constitute a waiver or consent with respect to any
other terms or provisions of this Agreement, whether or not similar. Each such
waiver or consent shall be effective only in the specific instance and for the
purpose for which it was given, and shall not constitute a continuing waiver or
consent.
SECTION 8.4 ASSIGNMENT. The rights and obligations under this
Agreement may not be assigned by any party hereto without the prior written
consent of the other party.
SECTION 8.5 BENEFIT. All statements, representations, warranties,
covenants and agreements in this Agreement shall be binding on the parties
hereto and shall inure to the benefit of the respective successors and permitted
assigns of each party hereto. Nothing in this Agreement shall be construed to
create any rights or obligations except among the parties hereto, and no person
or entity shall be regarded as a third-party beneficiary of this Agreement.
SECTION 8.6 GOVERNING LAW. This Agreement and the rights and
obligations of the parties hereunder shall be construed in accordance with and
governed by the law of the Commonwealth of Massachusetts, without giving effect
to the conflict of law principles thereof.
SECTION 8.7 SEVERABILITY. In the event that any court of competent
jurisdiction shall determine that any provision, or any portion thereof,
contained in this Agreement shall be unreasonable or unenforceable in any
respect, then such provision shall be deemed limited to the extent that such
court deems it reasonable and enforceable, and as
15
<PAGE> 16
so limited shall remain in full force and effect. In the event that such court
shall deem any such provision, or portion thereof, wholly unenforceable, the
remaining provisions of this Agreement shall nevertheless remain in full force
and effect.
SECTION 8.8 HEADINGS AND CAPTIONS. The headings and captions of the
various subdivisions of this Agreement are for convenience of reference only and
shall in no way modify, or affect the meaning or construction of any of the
terms or provisions hereof.
SECTION 8.9 NO WAIVER OF RIGHTS, POWERS AND REMEDIES. No failure or
delay by a party hereto in exercising any right, power or remedy under this
Agreement, and no course of dealing between the parties hereto, shall operate as
a waiver of any such right, power or remedy of the party. No single or partial
exercise of any right, power or remedy under this Agreement by a party hereto,
nor any abandonment or discontinuance of steps to enforce any such right, power
or remedy, shall preclude such party from any other or further exercise thereof
or the exercise of any other right, power or remedy hereunder. The election of
any remedy by a party hereto shall not constitute a waiver of the right of such
party to pursue other available remedies. No notice to or demand on a party not
expressly required under this Agreement shall entitle the party receiving such
notice or demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such
notice or demand to any other or further action in any circumstances without
such notice or demand.
SECTION 8.10 EXPENSES. The Company shall reimburse each Investor for
its reasonable fees and expenses (including the fees of any attorneys,
accountants, appraisers or others engaged by such party) in connection with this
Agreement and the transactions contemplated hereby whether or not the
transactions contemplated hereby are consummated.
SECTION 8.11 BROKERS. Each of the parties hereto represents and
warrants to the other that no other broker, finder or other financial consultant
has acted on its behalf in connection with this Agreement or the transactions
contemplated hereby in such a way as to create any liability on the other. Each
of the parties hereto agrees to indemnify and save the other harmless from any
claim or demand for commission or other compensation by any other broker,
finder, financial consultant or similar agent claiming to have been employed by
or on behalf of such party and to bear the cost of legal expenses incurred in
defending against any such claim.
SECTION 8.12 PUBLICITY. No party shall issue any press releases or
otherwise make any public statement with respect to the transactions
contemplated by this Agreement without the prior written consent of the other
party, except, with the prior review of the other parties, as may be required by
applicable law or regulation.
16
<PAGE> 17
SECTION 8.13 CONFIDENTIALITY. Each Investor acknowledges and agrees
that any information or data it has acquired from the Company, not otherwise
properly in the public domain, was received in confidence. Each Investor agrees
not to divulge, communicate or disclose, except as may be required by law or for
the performance of this Agreement, or use to the detriment of the Company or for
the benefit of any other person or persons, or misuse in any way, any
confidential information of the Company.
SECTION 8.14 TERMINATION. This Agreement shall terminate and be of no
further force and effect upon the earlier to occur of (i) such time as all of
the Registrable Shares have been sold pursuant to Section 5.2 or otherwise, or
(ii) the date on which all Holders are permitted to publicly resell the
Registrable Shares under Rule 144(k) under the Securities Act, as the same may
be amended from time to time, or any successor regulation; provided, however,
that the indemnification obligations in Section 5.4 hereof, the undertakings in
Section 5.6 hereof, and the confidentiality obligations contained in Section
8.13 hereof, shall survive the termination of this Agreement; and provided
further that the termination of this Agreement shall not discharge any
obligations or liabilities which accrued prior to the date of termination.
SECTION 8.15. SPECIFIC PERFORMANCE. The Company acknowledges that it
would be impossible to determine the amount of damages that would result from
any breach by it of any of the provisions of this Agreement and that the remedy
at law for any breach, or threatened breach, of any of such provisions would
likely be inadequate and, accordingly, agrees that each Holder shall, in
addition to any other rights or remedies which it may have, be entitled to seek
such equitable and injunctive relief as may be available from any court of
competent jurisdiction to compel specific performance of, or restrain the
Company from violating any of, such provisions. In connection with any action or
proceeding for injunctive relief, the Issuer hereby waives the claim or defense
that a remedy at law alone is adequate and agrees, to the extent permitted by
law, to have each provision of this Agreement specifically enforced against it.
17
<PAGE> 18
SECTION 8.16 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, and by different parties hereto on separate counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
18
<PAGE> 19
IN WITNESS WHEREOF, the undersigned has executed this Subscription and
Registration Agreement this 28th day of June, 1996.
INVESTORS:
SERAGEN LLC
By: /s/ George W. Masters
------------------------------
Name:
Title:
By: /s/ Leon C. Hirsch
------------------------------
Leon C. Hirsch
By: /s/ Turi Josefsen
------------------------------
Turi Josefsen
By: /s/ Gerald S.J. Cassidy
------------------------------
Gerald S.J. Cassidy
By: /s/ Loretta P. Cassidy
------------------------------
Loretta P. Cassidy
COMPANY:
SERAGEN, INC.
By: /s/ George W. Masters
---------------------------------
George W. Masters
Vice Chairman, Chief Executive
Officer and President
SERAGEN TECHNOLOGY, INC.
By: /s/ George W. Masters
-----------------------------------------
George W. Masters
Vice Chairman, Chief Executive Officer
and President
19
<PAGE> 20
SCHEDULE 1
----------
<TABLE>
List of Investors, Addresses and Preferred Stock, Warrants/Common Stock and Class B Shares
------------------------------------------------------------------------------------------
<CAPTION>
Number of Preferred Number of Number of Class B
Name, Address and Fax Number of Investor Shares Warrant Shares Shares
- ---------------------------------------- ------------------- -------------- -----------------
<S> <C> <C> <C>
Seragen LLC 11,800 2,950,000 11,800
147 Bay State Road
Boston, MA 02115
Attn: Kenneth G. Condon
Vice President for Financial
Affairs and Treasurer
FAX: (617) 353-5492
Leon C. Hirsch 7,000 1,750,000 7,000
150 Glover Avenue
Norwalk, CT 06856
Fax: (203) 846-5988
Turi Josefsen 3,000 750,000 3,000
150 Glover Avenue
Norwalk, CT 06856
Fax: (203) 846-5988
Gerald S.J. Cassidy and 2,000 500,000 2,000
Loretta P. Cassidy
c/o Cassidy and Associates, Inc.
700 12th St., N.W., Suite 400
Washington, DC 20005
Fax: (202) 347-2708
</TABLE>
<PAGE> 1
Exhibit 10.58
EXHIBIT B
---------
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THESE SECURITIES MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED BY ANY PERSON UNLESS (1) EITHER (A) A REGISTRATION STATEMENT WITH
RESPECT TO SUCH SECURITIES SHALL BE EFFECTIVE UNDER THE SECURITIES ACT OF 1933,
OR (B) THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO IT
THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS THEN AVAILABLE, AND (2)
THERE SHALL HAVE BEEN COMPLIANCE WITH ALL APPLICABLE STATE SECURITIES LAWS.
For the Purchase
of shares of
No. W-96- Common Stock
WARRANT FOR THE PURCHASE OF
SHARES OF COMMON STOCK
OF
SERAGEN, INC.
(A Delaware Corporation)
VOID AFTER 5:00 P.M., EASTERN STANDARD TIME, ON JULY 1, 2006
Seragen, Inc., a Delaware corporation (the "Company"), hereby certifies
that ____________ or his, her or its registered assigns (the "Registered
Holder"), is entitled, subject to the terms set forth below, to purchase from
the Company, commencing on January 1, 1997, at any time or from time to time on
or before the earlier of July 1, 2006 at not later than 5:00 p.m. (Eastern
time) and the termination of this Warrant as provided in Section 9 below,
______________ shares of Common Stock, $.01 par value, of the Company ("Common
Stock"), at a purchase price of $4.00 per share. The number of shares
purchasable upon exercise of this Warrant, and the purchase price per share,
each as adjusted from time to time pursuant to the provisions of this Warrant,
are hereinafter referred to as the "Warrant Shares" and the "Purchase Price,"
respectively.
1. EXERCISE.
(a) This Warrant may be exercised by the Registered Holder, in
whole or in part, by surrendering this Warrant, with the purchase form appended
hereto as Exhibit I duly executed by such Registered Holder, at the principal
office of the Company, or at such other office or agency as the Company may
designate, accompanied by payment in full, in lawful money of the United States,
of the Purchase Price payable in respect of the number of shares of Warrant
Shares purchased upon such exercise.
<PAGE> 2
(b) In lieu of the delivery of the full Purchase Price as described
in subsection 1(a) above, all or part of the payment due upon exercise of this
Warrant may be made in a "cashless exercise", such that the Registered Holder
will receive the full number of shares of Warrant Shares issuable upon exercise
of such Warrant, less that number of shares having a Current Market Price (as
hereinafter defined) on the date of exercise equal to the aggregate Purchase
Price of the shares being purchased. As used herein, "Current Market Price"
shall mean the average of the high and low sales prices of the Common Stock as
reported in the Nasdaq Stock Market ("Nasdaq") or the closing market price of
the Common Stock on a national securities exchange on the relevant trading day,
whichever is applicable, or if neither is applicable, then it shall mean the
market value of the Common Stock as shall be reasonably determined by the Board
of Directors of the Company.
(c) Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which this
Warrant shall have been surrendered to the Company as provided in subsection
1(a) above. At such time, the person or persons in whose name or names any
certificates for Warrant Shares shall be issuable upon such exercise as
provided in subsection 1(d) below shall be deemed to have become the holder or
holders of record of the Warrant Shares represented by such certificates.
(d) As soon as practicable after the exercise of this Warrant in
full or in part, and in any event within 3 days thereafter, the Company at its
expense will cause to be issued in the name of, and delivered to, the
Registered Holder, or, subject to the terms and conditions hereof, as such
Holder (upon payment by such Holder of any applicable transfer taxes) may
direct:
(i) a certificate or certificates for the number of full shares
of Warrant Shares to which such Registered Holder shall be entitled upon such
exercise plus, in lieu of any fractional share to which such Registered Holder
would otherwise be entitled, cash in an amount determined pursuant to Section 3
hereof, and
(ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, calling in the aggregate on the
face or faces thereof for the number of shares equal (without giving effect to
any adjustment therein) to the number of such shares called for on the face of
this Warrant minus the number of such shares purchased (on a pre-adjusted
basis) by the Registered Holder upon such exercise as provided in subsection
1(a) or subsection 1(b) above. It is the intent that any adjustment to the
number of shares issuable upon conversion will be made at the time of such
exercise.
2. ADJUSTMENTS.
(a) If outstanding shares of the Company's Common Stock shall be
subdivided into a greater number of shares or a dividend in Common Stock shall
be paid in respect of Common Stock, the Purchase Price in effect immediately
prior to such subdivision or at the record date of such dividend shall
simultaneously with the effectiveness of such subdivision or immediately after
the record date of such dividend be proportionately reduced. If outstanding
shares of Common Stock shall be combined into a smaller number of shares,
<PAGE> 3
the Purchase Price in effect immediately prior to such combination shall,
simultaneously with the effectiveness of such combination, be proportionately
increased. When any adjustment is required to be made in the Purchase Price, the
number of shares of Warrant Shares purchasable upon the exercise of this Warrant
shall be changed to the number determined by dividing (i) an amount equal to the
number of shares issuable upon the exercise of this Warrant immediately prior to
such adjustment, multiplied by the Purchase Price in effect immediately prior to
such adjustment, by (ii) the Purchase Price in effect immediately after such
adjustment.
(b) If there shall occur any capital reorganization or reclassification
of the Company's Common Stock (other than a change in par value or a
subdivision or combination as provided for in subsection 2(a) above), then, as
part of any such reorganization or reclassification, lawful provision shall be
made so that the Registered Holder of this Warrant shall have the right
thereafter to receive upon the exercise hereof the kind and amount of shares of
stock or other securities or property which such Registered Holder would have
been entitled to receive if, immediately prior to any such reorganization or
reclassification, such Registered Holder had held the number of shares of
Common stock which were then purchasable upon the exercise of this Warrant. In
any such case, appropriate adjustment (as reasonably determined by the Board of
Directors of the Company) shall be made in the application of the provisions
set forth herein with respect to the rights and interests thereafter of the
Registered Holder of this Warrant such that the provisions set forth in this
Section 2 (including provisions with respect to adjustment of the Purchase
Price) shall thereafter be applicable, as nearly as is reasonably practicable,
in relation to any shares of stock or other securities or property thereafter
deliverable upon the exercise of this Warrant.
(c) If the Company shall at any time or from time to time, issue any
additional shares of Common Stock (other than shares of Common Stock excepted
from the provisions of this Section 2 by subsection 2(e)) (i) in an offering of
up to $10,000,000 pursuant to the Company's arrangement with Scharff, Witchell
& Co., or (ii) without consideration or for a net consideration per share less
than (A) the Purchase Price in the case of an offering other than an offering
described in subsection 2(c)(i) or a registered public offering (a "Private
Offering"), or (B) 95% of the Fair Market Value (as hereinafter defined) at the
time of such issuance in the case of a registered public offering (a "Public
Offering"), then, and in each such case the number of shares issuable upon
exercise of this Warrant shall be increased to an amount determined by
multiplying the number of shares issuable upon exercise of this Warrant
immediately prior to such issuance of additional shares by a fraction:
(1) the numerator of which shall be (a) the number of shares of
Common Stock outstanding immediately prior to the issuance of such additional
shares of Common Stock, plus (b) the number of such additional shares of
Common Stock so issued; and
(2) the denominator of which shall be the number of shares of
Common stock outstanding immediately prior to the issuance of such additional
shares of Common Stock.
<PAGE> 4
As used herein, "Fair Market Value" shall mean, as of any date, the average of
the closing sale prices as reported on Nasdaq for the ten consecutive trading
days immediately prior to such date, or the closing market price of the Common
Stock on a national securities exchange for the ten consecutive trading days
immediately prior to such date, whichever is applicable, or if neither is
applicable, then it shall mean the market value of the Common Stock as shall be
reasonably determined by the Board of Directors of the Company.
(d) The issuance of any warrants, options or other subscription or
purchase rights with respect to shares of Common Stock and the issuance of any
securities convertible into or exchangeable for shares of Common Stock, or the
issuance of any warrants, options or any rights with respect to such convertible
or exchangeable securities (other than an issuance of warrants, options or other
subscription or purchase rights excepted from the provisions of this Section 2
by subsection 2(e)), shall be deemed an issuance at such time of such Common
Stock (i) in the case of an offering described in subsection 2(c)(i), (ii) in
the case of a Private Offering, if the Net Consideration Per Share which may be
received by the Company for such Common Stock (as hereinafter determined) shall
be less than the Purchase Price at the time of such issuance, or (iii) in the
case of a Public Offering, if the Net Consideration Per Share which may be
received by the Company for such Common Stock shall be less than 95% of the Fair
Market Value at the time of such issuance, and, except as hereinafter provided,
an adjustment in the number of shares of Common Stock issuable upon exercise of
this Warrant shall be made upon each such issuance in the manner provided in
subsection 2(c). Any obligation, agreement or undertaking to issue warrants,
options, or other subscription or purchase rights at any time in the future
shall be deemed to be an issuance at the time such obligation, agreement or
undertaking is made or arises. No adjustment of the number of shares of Common
Stock issuable upon exercise of this Warrant shall be made under subsection 2(c)
upon the issuance of any shares of Common Stock which are issued pursuant to the
exercise of any warrants, options or other subscription or purchase rights or
pursuant to the exercise of any conversion or exchange rights in any convertible
securities if any adjustment shall previously have been made upon the issuance
of any such warrants, options or other rights or upon the issuance of any
convertible securities (or upon the issuance of any warrants, options or any
rights therefor) as above provided. Any adjustment of the number of shares of
Common Stock issuable upon exercise of this Warrant with respect to this Section
2 which relates to warrants, options or other subscription or purchase rights
with respect to shares of Common Stock shall be disregarded if, as, and when all
of such warrants, options or other subscription or purchase rights expire or are
cancelled without being exercised, so that the number of shares issuable upon
exercise of this Warrant effective immediately upon such cancellation or
expiration shall be equal to the number of shares issuable upon exercise of this
Warrant in effect at the time of the issuance of the expired or cancelled
warrants, options or other subscriptions or purchase rights, with such
additional adjustments as would have been made to that the number of shares
issuable upon exercise of this Warrant had the expired or cancelled warrants,
options or other subscriptions or purchase rights not been issued. For purposes
of this Section 2, (A) the "Net Consideration Per Share" which may be received
by the Company shall mean the amount equal to the total amount of consideration,
if any, received by the Company for the issuance of such warrants, options,
subscriptions, or other purchase rights or convertible or exchangeable
securities, plus the minimum amount of consideration, if any, payable to the
<PAGE> 5
Company upon exercise or conversion thereof, divided by the aggregate number of
shares of Common Stock that would be issued if all such warrants, options,
subscriptions, or other purchase rights or convertible or exchangeable
securities were exercised, exchanged or converted; and (B) if a part or all of
the consideration received by the Company in connection with the issuance of
shares of the Common Stock or the issuance of any of the securities described in
this Section 2, consists of property other than cash, such consideration shall
be deemed to have the same value as reasonably shall be determined in good faith
by the Board of Directors of the Company.
(e) Anything herein notwithstanding, no adjustments in the
number of shares of Common Stock issuable hereunder shall be made by reason of
or in connection with (i) the issuance of shares of Common Stock (including
options to purchase such shares whether such options are issued before, at the
same time as or after the authorization of this Warrant) pursuant to employee
stock option agreements, or employee stock option or stock purchase plans of
like tenor to the Company's existing plans and practices for the issuance of
shares of Common Stock to directors, officers, employees or consultants; (ii)
the issuance of shares of Common Stock upon exercise of certain put rights
pursuant to the shareholders' agreement dated November 22, 1995 among the
Corporation, Seragen Biopharmaceuticals Ltd. and the investors listed therein;
and (iii) the issuance of shares of Common Stock upon exercise of common stock
purchase warrants issued and outstanding on the date of issuance of this
Warrant.
(f) When any adjustment is required to be made in the Purchase
Price or number of shares of Common Stock issuable hereunder, the Company shall
promptly mail to the Registered Holder a certificate setting forth the Purchase
Price or number of shares issuable, as the case may be, after such adjustment
and setting forth a brief statement of the facts requiring such adjustment. Such
certificate shall also set forth the kind and amount of stock or other
securities or property into which this Warrant shall be exercisable following
the occurrence of any of the events specified in subsection 2(a) or (b) above.
3. FRACTIONAL SHARES. The Company shall not be required upon the
exercise of this Warrant to issue any fractional shares, but shall make an
adjustment therefor in cash on the basis of the Current Market Price (as
defined in subsection 1(b) hereof).
4. LIMITATION ON SALES, ETC. Each holder of this Warrant acknowledges
that this Warrant and the Warrant Shares have not been registered under the
Securities Act of 1933, as now in force or hereafter amended, or any successor
legislation (the "Act"), and agrees not to sell, pledge, distribute, offer for
sale, transfer or otherwise dispose of this Warrant or any Warrant Shares
issued upon its exercise in the absence of (a) an effective registration
statement under the Act as to this Warrant or such Warrant Shares and
registration or qualification of this Warrant or such Warrant Shares under any
applicable Blue Sky or state securities law then in effect, or (b) an opinion
of counsel, satisfactory to the Company, that such registration and
qualification are not required.
<PAGE> 6
Without limiting the generality of the foregoing, the Company shall be
under no obligation to issue the shares covered by such exercise unless and
until the Registered Holder shall have executed an investment letter in form and
substance satisfactory to the Company, including a warranty at the time of such
exercise that it is acquiring such shares for its own account, for investment
and not with a view to, or for sale in connection with, the distribution of any
such shares, in which event the Registered Holder shall be bound by the
provisions of the following legend or a legend in substantially similar form
which shall be endorsed upon the certificate(s) evidencing the Warrant Shares
issued pursuant to such exercise:
"The shares represented by this certificate have been taken
for investment and they may not be sold or otherwise
transferred by any person, including a pledgee, in the absence
of an effective registration statement for the shares under
the Securities Act of 1933, as amended, or an opinion of
counsel satisfactory to the Company that an exemption from
registration is then available."
In addition, without limiting the generality of the foregoing, the
Company may delay issuance of the Warrant Shares until completion of any action
or obtaining of any consent, which the Company deems necessary under any
applicable law (including without limitation state securities or "blue sky"
laws).
5. LIQUIDATING DIVIDENDS. If the Company pays a dividend or makes a
distribution on the Common Stock payable otherwise than in cash out of earnings
or earned surplus (determined in accordance with generally accepted accounting
principles) except for a stock dividend payable in shares of Common Stock (a
"Liquidating Dividend"), then the Company will pay or distribute to the
Registered Holder of this Warrant, upon the exercise hereof, in addition to the
Warrant Shares purchased upon such exercise, the Liquidating Dividend which
would have been paid to such Registered Holder if it had been the owner of
record of such shares of Warrant Shares immediately prior to the date on which a
record is taken for such Liquidating Dividend or, if no record is taken, the
date as of which the record holders of Common Stock entitled to such dividends
or distribution are to be determined.
6. NOTICES OF RECORD DATE, ETC. In case:
(a) the Company shall take a record of the holders of its
Common Stock (or other stock or securities at the time deliverable upon the
exercise of this Warrant) for the purpose of entitling or enabling them to
receive any dividend or other distribution, or to receive any right to subscribe
for or purchase any shares of stock of any class or any other securities, or to
receive any other right, or
(b) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the surviving entity), or any
transfer of all or substantially all of the assets of the Company, or
<PAGE> 7
(c) of the voluntary or involuntary dissolution, liquidation
or winding-up of the Company, then, and in each such case, the Company will mail
or cause to be mailed to the Registered Holder of this Warrant a notice
specifying, as the case may be, (i) the date on which a 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, or (ii) the effective
date on which such reorganization, reclassification, consolidation, merger,
transfer, dissolution, liquidation or winding-up is to take place, and the time,
if any is to be fixed, as of which the holders of record of Common Stock (or
such other stock or securities at the time deliverable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Common Stock (or such
other stock or securities) for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, transfer,
dissolution, liquidation or winding-up. Such notice shall be mailed at least ten
(10) days prior to the record date or effective date for the event specified in
such notice.
7. RESERVATION OF STOCK. The Company will at all times reserve and
keep available, solely for issuance and delivery upon the exercise of this
Warrant, such shares of Warrant Shares and other stock, securities and property,
as from time to time shall be issuable upon the exercise of this Warrant.
8. REPLACEMENT OF WARRANTS. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.
9. TERMINATION IN CERTAIN EVENTS
In the event of a sale of substantially all the assets of the Company
or a merger or consolidation of the Company with or into any other entity (other
than a merger the sole purpose of which is to change the state of incorporation
of the Company) or a dissolution or the adoption of a plan of liquidation of the
Company, this Warrant shall terminate on the effective date of such sale,
merger, consolidation, dissolution or adoption (the "Effective Date") and become
null and void, PROVIDED, HOWEVER, that if this Warrant shall not have otherwise
terminated or expired, the Registered Holder hereof shall have the right until
5:00 p.m Eastern Standard time on the day immediately prior to the Effective
Date to exercise its rights hereunder to the extent not previously exercised.
10. TRANSFERS, ETC.
(a) The Company will maintain a register containing the names
and addresses of the Registered Holders of this Warrant. Any Registered Holder
may change its, his or her address as shown on the warrant register by written
notice to the Company requesting such change.
<PAGE> 8
(b) This Warrant shall not be transferable by the Registered
Holder and shall be exercisable only by the Registered Holder. Without the prior
written consent of the Company, the Warrant shall not be assigned, pledged or
hypothecated in any way (whether by operation of law or otherwise) other than by
will or by the laws of descent and distribution and shall not be subject to
execution, attachment or similar process. Any attempted transfer, assignment,
pledge, hypothecation or other disposition of the Warrant or of any rights
granted hereunder contrary to the provisions of this Paragraph, or the levy of
any attachment or similar process upon the Warrant or such rights, shall be null
and void.
(c) Until any transfer of this Warrant is made in the warrant
register, the Company may treat the Registered Holder of this Warrant as the
absolute owner hereof for all purposes; provided, however, that if and when this
Warrant is properly assigned in blank, the Company may (but shall not be
obligated to) treat the bearer hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary.
11. MAILING OF NOTICES, ETC. All notices and other communications
from the Company to the Registered Holder of this Warrant shall be mailed by
first-class certified or registered mail, postage prepaid, to the address
furnished to the Company in writing by the last Registered Holder of this
Warrant who shall have furnished an address to the Company in writing. All
notices and other communications from the Registered Holder of this Warrant or
in connection herewith to the Company shall be mailed by first-class certified
or registered mail, postage prepaid, to the Company at its offices at 97 South
Street, Hopkinton, Massachusetts, Attn: President, or such other address as the
Company shall so notify the Registered Holder.
12. NO RIGHTS AS STOCKHOLDER. Until the exercise of this Warrant,
the Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.
13. CHANGE OR WAIVER. Any term of this Warrant may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of the change or waiver is sought.
14. HEADINGS. The headings in this Warrant are for purposes of
reference only and shall not limit or otherwise affect the meaning of any
provision of this Warrant.
15. GOVERNING LAW. This Warrant will be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
Seragen, Inc.
By:
--------------------------
<PAGE> 9
EXHIBIT I
PURCHASE FORM
-------------
To: Seragen, Inc.
97 South Street
Hopkinton, MA Dated:
The undersigned pursuant to the provisions set forth in the attached
Warrant (No. W-96-__), hereby irrevocably elects to purchase __ shares of the
Common Stock (the "Common Stock") covered by such Warrant and herewith __ (i)
makes payment of $__, representing the full purchase price for such shares at
the price per share provided for in such Warrant, OR __ (ii) elects to purchase
the Warrant Shares by means of a "cashless exercise" as described in Section
1(b) of the Warrant Certificate OR __ (iii) makes payment of $____ and
instructs the Company that the remainder of the purchase price is to be paid by
means of the "cashless exercise" procedure described in Section 1(b) of the
Warrant Certificate (please check one).
The undersigned is aware that issuance of the Common Stock by the
Company has not been registered under the Securities Act of 1933, as amended
(the "1933 Act") or any state securities laws. The undersigned understands that
the reliance by the Company on exemptions under the 1933 Act is predicated in
part upon the truth and accuracy of the statements of the undersigned in this
Purchase Form.
The undersigned represents and warrants that (1) it has been furnished
with all information which it deems necessary to evaluate the merits and risks
of the purchase of the Common Stock; (2) it has had the opportunity to ask
questions concerning the Common Stock and the Company and all questions posed
have been answered to its satisfaction; (3) it has been given the opportunity to
obtain any additional information it deems necessary to verify the accuracy of
any information obtained concerning the Common Stock and the Company; and (4) it
has such knowledge and experience in financial and business matters that it is
able to evaluate the merits and risks of purchasing the Common Stock and to make
an informed investment decision relating thereto.
The undersigned hereby represents and warrant that it is purchasing the
Common Stock for its own account for investment and not with a view to the sale
or distribution of all or any part of the Common Stock.
The undersigned understands that because the Common Stock has not been
registered under the 1933 Act, it must continue to bear the economic risk of the
investment for an indefinite time and the Common Stock cannot be sold unless the
Common Stock is registered under applicable federal and state securities laws or
an exemption from such registration is available.
The undersigned agrees that it will in no event sell or distribute or
otherwise dispose of all or any part of the Common Stock unless (1) there is an
effective registration statement
<PAGE> 10
under the 1933 Act and registration or qualification, if applicable, under state
securities laws covering any such transaction involving the Common Stock or (2)
the Company receives an opinion of its legal counsel (concurred in by legal
counsel for the Company) stating that such transaction is exempt from
registration or qualification or the Company otherwise satisfies itself that
such transaction is exempt from registration.
The undersigned consents to the placing of a legend on its certificate
for the Common Stock stating that the Common Stock has not been registered and
setting forth the restriction on transfer contemplated hereby and to the placing
of a stop transfer order on the books of the Company and with any transfer
agents against the Common Stock until the Common Stock may be legally resold or
distributed without restriction.
The undersigned understands that at the present time Rule 144 of the
Securities and Exchange Commission (the "SEC") may not be relied on for the
resale or distribution of the Common Stock.
The undersigned has considered the Federal and state income tax
implications of the exercise of the Warrant and the purchase and subsequent sale
of the Common Stock.
-------------------
Dated:----------------
<PAGE> 1
Exhibit 10.59
COLLATERAL ASSIGNMENT OF PATENTS
--------------------------------
THIS COLLATERAL ASSIGNMENT OF PATENTS made as of the 1st day of
July, 1996, by SERAGEN TECHNOLOGY, INC., a Delaware corporation having its
principal offices at 97 South Street, Hopkinton, Massachusetts 01748
("Assignor"), jointly in favor of all of the persons identified on Schedule A
hereto (the persons set forth on Schedule A hereto shall be collectively
referred to as the "Investors" and individually each as an "Investor").
W I T N E S S E T H
WHEREAS, Seragen, Inc. ("Seragen") has transferred certain patents to
the Assignor pursuant to an Assignment of Patents by Seragen to the Assignor
dated as of June 28, 1996; and
WHEREAS, pursuant to a Subscription and Registration Agreement dated as
of June 28, 1996 the Investors will make a capital contribution to Seragen, in
the aggregate amount of $23,800,000, in return for certain consideration,
including the Sale by Seragen of its Class B Common Stock of the Assignor (the
"Class B Shares") to the Investors in the amounts set forth on Schedule A
hereto; and
WHEREAS, as a condition to the making of their capital contributions,
the Investors have required that the Assignor execute and deliver this Agreement
in order to secure payment by the Assignor of dividends on its Class B Shares;
NOW, THEREFORE, in further consideration for the transfer of patents to
the Assignor, and for the Investors' capital contributions to Seragen, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Assignor hereby agrees with the Investors as follows:
1. Assignment of Patents.
---------------------
To secure the complete and timely payment, observance,
performance and satisfaction of all obligations of the Assignor with respect to
payments of dividends on the Class B Shares (the "Secured Obligations"),
Assignor hereby grants, assigns and conveys to each Investor, jointly and
rateably, in accordance with the Investors' respective percentage interests as
set forth on Schedule A (such percentage interests to be proportionately
adjusted upon each redemption of Class B Shares), an individual interest in its
entire right, title and interest in and to all of its now owned and existing or
hereafter acquired patents and patent applications and letters patent that may
have been or may hereafter be granted in the United States (including, without
limitation, those listed in Schedule B annexed hereto), and all reissues,
divisions, continuations, renewals, extensions, and continuations-in-part
thereof, together with all rights to bring actions for past, present, and future
infringements and all rights corresponding thereto, including, without
limitation, the right to retain all profits and damages from such past
<PAGE> 2
infringements, and all proceeds of any of the foregoing (including, without
limitation, license royalties and proceeds of infringement suits). All of the
foregoing shall hereinafter be referred to as the "Patents". The interests
granted hereby are and shall be subject and subordinate to all licenses and
rights heretofore or hereafter granted by Assignor to third parties to make,
have made, use, sell or otherwise develop, use or exploit the technology and
inventions described and claimed under the Patents, including, but not limited,
to the licensed third parties set forth on Schedule C hereto.
2. Joint Security Interests.
------------------------
The Investors shall share rateably all proceeds from or
distributions with respect to the Collateral. For purposes of this Agreement,
Rateably shall mean pro-rata in proportion to the percentage interests set forth
on Schedule A, as such schedule may be modified from time to time. All actions
on behalf of the Investors hereunder must be taken on behalf of all Investors
when such action is authorized by a positive vote of the Required Investors. The
rights of the Investors hereunder may be enforced only by an agent (the
"Security Agent") appointed by and acting for the Investors. Such Security Agent
shall evidence his, her or its authority by delivering to the Assignor a
certificate executed by all of the Investors, and the Assignor may rely on such
certificate until it is withdrawn or replaced by another certificate executed by
at least the Required Investors.
3. Rights Prior to Default.
-----------------------
Notwithstanding the foregoing, Assignor shall be entitled to
collect and retain all license royalties with respect to the Patents, except
during any period after receipt of Notice from the Security Agent duly
authorized to act for the Investors (the "Security Agent") that a dividend
payment on the Class B Shares is due and payable, and the expiration of 60 days
following such receipt of notice without payment of such dividend arrearage (an
"Event of Default").
4. Further Assurances.
------------------
Assignor shall promptly prepare, execute and deliver to the
Required Investors or the Security Agent from time to time all such documents
and instruments and financing statements, in form suitable for recording at the
United States Patent and Trademark Office or other appropriate governmental
office, and take such further action as the Required Investors or the Security
Agent, at the direction of the Required Investors, requests of Assignor to
perfect the transfer of the rights established hereunder. For purposes of this
Agreement, the term "Required Investors" shall mean Investors holding in the
aggregate at least 75% of the percentage interests as set forth on Schedule A,
as such Schedule may be amended from time to time.
5. License to Use Patents; Transfer; Sublicenses.
---------------------------------------------
- 2 -
<PAGE> 3
(a) Subject to the provisions hereof, the Investors grant to
Assignor the exclusive right and license to make, have made, use, sell and
commercially exploit the technology and the inventions as described and claimed
under the Patents for Assignor's benefit. The license granted hereunder shall be
royalty-free, world-wide and assignable and/or sublicensable in connection with
any venture or enterprise which the Assignor may from time to time elect to
establish or participate in.
(b) Upon the redemption in full by the Assignor of the Class B
Shares, each Investor shall promptly reassign to Assignor all right, title and
interest in the Patents assigned to the Investors hereunder, and shall execute
and deliver to Assignor all deeds, assignments and other instruments as may be
necessary to re-vest (without recourse or warranty) full title to Assignor in
the Patents, in form suitable for recording by Assignor in the United States
Patent and Trademark Office or other appropriate governmental office.
6. Prosecution and Enforcement of Patents.
--------------------------------------
(a) Assignor shall have the full power and discretion to
pursue the prosecution of any patent application pending as of the date of this
Agreement until such time as this Agreement shall terminate, to make application
on patentable inventions and to preserve, enforce and maintain for the benefit
of the Investors, to the extent Assignor determines to be commercially
reasonable, all rights in the Patents. Any expenses incurred in connection with
such an application shall be borne by Assignor.
(b) Upon and at any time after the occurrence of an Event of
Default, the Investors shall have the right, but Investors shall in no way be
obligated to the Assignor, to bring suit jointly in their own name, or in the
name of the Security Agent, or take such other actions as the Required Investors
deem necessary or proper to maintain the Patents in full force and effect and to
enforce the Patents and any license or sublicense thereunder, in which event
Assignor shall at the request of the Required Investors or the Security Agent
perform any and all lawful acts and execute any and all documents the Required
Investors or the Security Agent deem necessary or proper to enforce the same,
and Assignor shall promptly, upon demand, reimburse and indemnify the Investors
or the Security Agent for all costs and expenses (including attorneys' fees,
expenses and disbursements) incurred by the Investors or such Security Agent in
the exercise of Investors' rights hereunder.
7. Rights and Remedies.
-------------------
Upon and at any time after the occurrence of any Event of
Default, the Required Investors or the Security Agent may declare all of the
Secured Obligations to be immediately due and payable, and upon such events (and
not prior thereto) the Required Investors or the Security Agent may terminate
the license granted to Assignor in Section 5 hereof, and shall then have the
following further rights and remedies subject to any then existing licenses or
other rights of third parties;
- 3 -
<PAGE> 4
(a) All rights and remedies provided by law, including
those provided by the Uniform Commercial Code; and
(b) All rights and remedies provided in this Agreement.
8. Right of Agent to Dispose of Patents.
------------------------------------
Without limiting the generality of Section 5 hereof, upon and
at any time after the occurrence of any Event of Default, the Required Investors
or the Security Agent may immediately, without demand of performance of any of
the Secured Obligations or of any covenant of any agreement, instrument or
document referred to in Section 5 hereof or otherwise, and without notice
(except as provided herein), sell at public or private sale or otherwise realize
upon, in Massachusetts or elsewhere, all of, or from time to time, any part of
the Patents, or any interest which the Investors may have therein. After
deducting from the proceeds of such sale or other disposition of the Patents all
costs and expenses (including reasonable legal costs and fees of brokers and
attorneys), the Required Investors or the Security Agent shall apply the residue
of the proceeds to the payment of the Secured Obligations pro rata in accordance
with the percentages set forth in Schedule A hereto, and any surplus shall be
returned to Assignor or as required by court order. In the event that the
proceeds of any sale or other disposition of the Patents hereunder are
insufficient to pay all of the Secured Obligations in full, Assignor will be
liable for the deficiency, together with interest thereon, at the rate provided
in the respective lending agreement, and all costs and expenses of collection of
such deficiency, including (to the extent permitted by law), without limitation,
attorneys' fees, expenses and disbursements.
9. Certain Representations and Warranties and Covenants.
----------------------------------------------------
Assignor represents, warrants and covenants that:
(a) Assignor is the sole and exclusive owner of the
entire right, title and interest in and to the Patents except as indicated,
free and clear of any liens, charges and encumbrances; and
(b) Assignor has the unqualified right to execute and deliver
this Agreement and perform its terms, and shall not take any action, or permit
any action to be taken by others under its control, or fail to take any action,
which such action or inaction, in the opinion of the Assignor, would adversely
affect any of Assignee's rights hereunder.
10. Waivers, Assignments, Choice of Law, etc.
-----------------------------------------
(a) No delay or omission on the part of the Investors in
exercising any right hereunder shall operate as a waiver of such right or of any
other right hereunder. No waiver by Investors of any default shall be effective
unless in writing nor operate as a waiver of any other default or to the same
default on a future occasion.
- 4 -
<PAGE> 5
(b) This Agreement shall inure to the benefit of and be
binding upon Assignor, Investors and their respective successors and assigns.
Assignor may not assign its rights nor delegate its duties hereunder without the
prior express written approval of the Required Investors.
(c) The provisions of Section 5 to the contrary
notwithstanding, this Agreement shall continue to be effective or be reinstated,
as the case may be, if at any time any amount received by the Investors in
respect of the Secured Obligations is rescinded or must otherwise be restored or
returned by the Investors upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of Assignor or upon the appointment of any
intervenor or conservator of, or trustee or similar official for, Assignor or
any substantial part of its properties, or otherwise, all as though such
payments had not been made.
(d) This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts and shall take effect as an instrument under seal.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby. The section
headings are for convenience of reference only and shall not be considered in
construing this Agreement, which may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument. Except as otherwise provided herein, notice to Assignor or the
Investors shall be deemed to have been sufficiently given or served for all
purposes hereof if mailed by certified or registered mail, return receipt
requested, or delivered by commercial courier service, to the addresses as set
forth below:
If to the Investors: at the addresses set forth
in Schedule A hereto
If to the Assignor: Seragen Technology, Inc.
97 South Street
Hopkinton, MA 01748
Attention: President
Fax: (508) 435-9805
with a copy to: Jeffrey M. Wiesen, Esquire
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
Fax: (617) 542-2241
(e) Assignor, to the extent that it may lawfully do so,
hereby consents to service of process, and to be sued, in the Commonwealth of
Massachusetts and consents to the jurisdiction of the courts of the Commonwealth
of Massachusetts and the United States District Court for the District of
Massachusetts, as well as to the jurisdiction of courts from which an
- 5 -
<PAGE> 6
appeal may be taken from such courts, for the purpose of any suit, action or
other proceeding arising out of this Agreement or any of its obligations
hereunder or with respect to the transactions contemplated hereby, and expressly
waives any and all objections it may have as to venue in any such courts.
Assignor further agrees that a summons and complaint commencing an action or
proceeding in any of such courts shall be properly served and shall confer
personal jurisdiction if served personally or by certified mail to it at its
address set forth above or as otherwise provided under the laws of the
Commonwealth of Massachusetts.
- 6 -
<PAGE> 7
IN WITNESS WHEREOF, Assignor and each Investor have executed this
Collateral Assignment of Patents as a sealed instrument as of the date first
written above.
SERAGEN TECHNOLOGY, INC.
By: /s/ George W. Masters
-------------------------------
George W. Masters, President
INVESTORS:
/s/ Leon C. Hirsch
----------------------------------
Leon C. Hirsch
/s/ Turi Josefsen
----------------------------------
Turi Josefsen
/s/ Gerald S. J. Cassidy
----------------------------------
Gerald S. J. Cassidy
/s/ Loretta P. Cassidy
----------------------------------
Loretta P. Cassidy
SERAGEN LLC
By: /s/ Kenneth G. Condon
-------------------------------
Name:
Title:
- 7 -
<PAGE> 8
SCHEDULE A
TO
SERAGEN TECHNOLOGY, INC. COLLATERAL ASSIGNMENT OF PATENTS
<TABLE>
INVESTORS
---------
<CAPTION>
Number of % Interest in
INVESTOR CLASS B SHARES CLASS B SHARES
- -------- -------------- --------------
<S> <C> <C>
Mr. Leon C. Hirsch 7,000 29.4%
150 Glover Avenue
Norwalk, CT 06856
Fax: (203) 846-5988
Ms. Turi Josefsen 3,000 12.6%
150 Glover Avenue
Norwalk, CT 06856
Fax: (203) 846-5988
Mr. Gerald S.J. Cassidy 2,000 8.4%
Mrs. Loretta P. Cassidy
c/o G. Cassidy & Associates, Inc.
700 13th Street, N.W., Suite 400
Washington, DC 20005
Fax: (202) 347-2708
Seragen LLC 11,800 49.6%
147 Bay State Road
Boston, MA 02215
Attn: Kenneth G. Condon
Vice President for Financial
Affairs and Treasurer
Fax: (617) 353-5492 ------ -----
23,800 100.0%
</TABLE>
- 8 -
<PAGE> 9
SCHEDULE B
TO
SERAGEN TECHNOLOGY, INC. COLLATERAL ASSIGNMENT OF PATENTS
<TABLE>
PATENTS OWNED
-------------
APPLICANT OR Filing Expiration
PATENT NUMBER DESCRIPTION DATE DATE TITLE
------------- ----------- ------ ---------- -----
<S> <C> <C> <C>
1. 07/695,480 Interleukin Receptor 05/03/91 Seragen Technology
Targeted Molecules for
Arthritis Treatment
2. 07/832,843 Methods of Treating 02/10/92 Beth Israel Hospital
Diabetes Seragen Technology
Brigham & Women's Hospital
J.F. Bach
3. 07/665,762 Use of Cell 03/07/91 Seragen Technology
Surface Receptor
Targeted Molecules for
Viral Disease Treatment
4. 07/832,843 Desensitization of 02/10/92 Seragen Technology
Specific Allergies
5. 07/701,932 Interleukin Receptors 05/17/91 Seragen Technology
Targeted Molecules for
Neoplastic Cell Growth
Treatment
6. 07/726,316 EGF Receptor Targeted 07/05/91 Seragen Technology
Molecules for Inflammatory
Arthritis Treatment
7. 07/596,518 Mammalian Model 11/12/90 Seragen Technology
of a
Malignant Disorder
</TABLE>
-9-
<PAGE> 10
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
8. U.S. Patent Hybrid Compound 03/02/90 05/05/2009 Seragen Technology
No. 5,110,912 Purification
9. 07/879,630 Novel Diphtheria Toxin 05/07/92 U.C.L.A.
Based Molecules Seragen Technology
10. 06/618,199 A Fused Gene and its 06/07/84 Seragen Technology
Encoded Hybrid Protein
11. 07/549,363 Hybrid Molecules 07/06/90 Seragen Technology
(Targeting the High
Affinity IL-2 Receptor
12. 07/590,113 Inhibiting Unwanted 09/28/90 Seragen Technology
Immune Responses University
(DAC197) (B-IL-2) Hospital
13. 07/467,880 Cytotoxic Lymphocyte 01/19/90 Seragen Technology
Protense Related
Molecules and Method
14. 07/388,557 IL-2 Deletion Mutants 08/02/89 Seragen Technology
</TABLE>
<PAGE> 11
SCHEDULE C
TO
SERAGEN TECHNOLOGY, INC. COLLATERAL ASSIGNMENT OF PATENTS
LICENSES GRANTED
----------------
Certain rights held by Eli Lilly & Company under
various existing agreements with Assignor.
<PAGE> 1
Exhibit 10.60
REASSIGNMENT OF PATENTS
Reference is made herein to a certain Collateral Assignment of Patents
(the "Collateral Assignment") made as of the 22nd day of May, 1995, by Seragen,
Inc. to certain Guarantors identified on Schedule A to the Collateral Assignment
(the "Guarantors").
This REASSIGNMENT OF PATENTS is made as of the 1st day of July, 1996,
by Guarantors to SERAGEN, INC.
W I T N E S S E T H:
WHEREAS, the Collateral Assignment was executed and delivered to the
Escrow Agent to secure certain obligations of Seragen, Inc., to the Guarantors
in the original aggregate amount of up to $23,800,000; and
WHEREAS, Seragen, Inc., has paid and/or performed all of the Guaranteed
Obligations to the various bank lenders, and therefore, the obligations of the
Guarantors under the respective guarantees have terminated and are no longer of
any force and effect;
NOW, THEREFORE, in accordance with the obligations under paragraph 5(b)
of the Collateral Assignment, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Guarantors hereby
agree with Seragen, Inc., as follows:
1. REASSIGNMENT OF PATENTS. The Guarantors hereby grant, assign and
convey to Seragen, Inc., all of their respective rights, title and interest in
and to the "Patents" as such term is defined in the Collateral Assignment. All
rights of any nature whatsoever granted by Seragen, Inc., to the Guarantors
pursuant to the Collateral Assignment are hereby reassigned to Seragen, Inc.,
and the Collateral Assignment is hereby terminated and shall be null and void
and of no further force or effect whatsoever.
2. FURTHER ASSURANCES. The Guarantors shall promptly execute and
deliver to Seragen, Inc., upon request from time to time, all documents,
instruments and certificates, in form suitable for recording at the United
States Patent and Trademark Office or other appropriate governmental office, and
take such further action as Seragen, Inc., reasonably requests of Guarantors to
effectuate the reassignment of rights contemplated hereunder.
3. CERTAIN REPRESENTATIONS OF GUARANTORS. Each Guarantor represent,
warrant and covenant that:
(a) Such Guarantor has made no grant, transfer or disposition
of any of the respective rights assigned to such Guarantor pursuant to the
Collateral Assignment therein; and
(b) Each Guarantor has the right to execute and deliver this
Agreement and perform its terms, and shall not take any action, or permit any
action to be taken by others under
<PAGE> 2
(b) Each Guarantor has the right to execute and deliver this
Agreement and perform its terms, and shall not take any action, or permit any
action to be taken by others under its control, or fail to take any action,
which action or inaction would affect the validity or enforceability of the
Patents or any of Seragen, Inc.'s right hereunder.
4. Waivers, Assignments, Choice of Law, etc.
-----------------------------------------
(a) No delay or omission on the part of Seragen, Inc., in
exercising any right hereunder shall operate as a waiver of such right or of any
other right hereunder.
(b) This Agreement shall inure to the benefit of and be binding
upon Seragen, Inc. and the Guarantors and all of their respective successors
and assigns.
(c) This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts and shall take effect as an instrument under seal.
IN WITNESS WHEREOF, each Guarantor has executed this Agreement as a
sealed instrument as of the date first written above.
GUARANTORS:
/s/ Leon C. Hirsch
------------------------------------
Leon C. Hirsch
/s/ Turi Josefman
------------------------------------
Turi Josefman
/s/ Gerald S. J. Cassidy
------------------------------------
Gerald S. J. Cassidy
/s/ Loretta P. Cassidy
------------------------------------
Loretta P. Cassidy
Boston University
By: /s/ Kenneth G. Condon
----------------------------------
- 2 -
<PAGE> 1
Exhibit 10.61
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Escrow Agreement") dated as of July 1,
1996, by and among SERAGEN TECHNOLOGY, INC., a Delaware corporation with an
address at 97 South Street, Hopkinton, Massachusetts 01748 (the "Assignor"), the
Investors set forth on Schedule A hereto (each an "Investor" and collectively
the "Investors"), and MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C. (the
"Escrow Agent").
WHEREAS, Seragen, Inc. ("Seragen") has transferred certain patents to
the Assignor pursuant to an Assignment of Patents by Seragen to the Assignor;
and
WHEREAS, pursuant to a Subscription Agreement of even date herewith the
Investors will make a capital contribution to Seragen, in the aggregate amount
of $23,800,000, in return for certain consideration, including the issuance by
the Assignor of its Class B Common Stock (the "Class B Shares") to the Investors
in the amounts set forth on Schedule A hereto; and
WHEREAS, as a condition to the making of their capital contributions,
the Investors have required that the Assignor execute and deliver a certain
Collateral Assignment of Patents as security for the obligations of the Assignor
with respect to payment of dividends on the Class B Shares;
WHEREAS, in order to facilitate the grant of the conditional assignment
of Patents to the Investors and the reassignment of the Patents to the Assignor
upon redemption in full of the Class B Shares, the Assignor and the Investors
have agreed that the Collateral Assignment of Patents and the Reassignment of
Patents shall be delivered to the Escrow Agent to be held pursuant to this
Escrow Agreement; and
WHEREAS, the Escrow Agent has agreed to serve as escrow agent pursuant
to the terms and conditions of this Escrow Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. APPOINTMENT OF THE ESCROW AGENT. The Assignor and the Investors
hereby appoint and designate the Escrow Agent as escrow agent for the purposes
set forth herein, and the Escrow Agent hereby accepts such appointment, subject
to the terms and conditions contained herein.
2. Establishment of the Escrow.
---------------------------
Concurrently with the execution of this Agreement, (i) the
Assignor is delivering to the Escrow Agent to hold pursuant to the terms of this
Escrow Agreement, five fully-executed copies of a Collateral Assignment of
Patents (the "Collateral Assignment"), and (ii) each
<PAGE> 2
Investor, is delivering to the Escrow Agent to hold pursuant to the terms of
this Escrow Agreement two fully-executed copies of a Reassignment of Patents
(the "Reassignment"). The documents delivered to the Escrow Agent are sometimes
collectively referred to as the "Escrow Documents." The Escrow Agent hereby
acknowledges receipt of the Escrow Documents and agrees to hold and distribute
the Escrow Documents as provided herein.
3. Distribution of the Collateral Assignment of Patents.
----------------------------------------------------
In the event that the Security Agent authorized to act for the
Investors under the Collateral Assignment of Patents (the "Security Agent")
delivers to the Escrow Agent, with a copy to the Assignor, a written notice
stating that a dividend payment on the Class B Shares is in arrears and is due
and payable, the Escrow Agent shall, upon the expiration of 60 days following
such receipt of notice without payment of such arrearage, insert the date of the
notice in the first line of each copy of the Collateral Assignment and deliver
to each Investor one executed and dated copy of the Collateral Assignment and
deliver one fully-executed and dated copy of the Collateral Assignment to the
Assignor along with notice of the delivery to the Security Agent.
4. Distribution of Reassignment of Patents.
---------------------------------------
In the event the Assignor gives the Escrow Agent a written
notice purported to be signed by a duly-authorized officer, that all of the
Class B Shares have been redeemed by the Assignor, Escrow Agent shall as soon
after receipt of such notice as is practicable, but in no event later than the
10th day following such notice, insert the date of the notice in the first line
of the Reassignment and deliver to each of the Assignor and each Investor one
fully-executed and dated copy of the Reassignment of Patents.
5. ESCROW AGENT FEES AND EXPENSES. The Escrow Agent shall not be
entitled to compensation for its services hereunder as Escrow Agent, but shall
be entitled to reimbursement for its out of pocket costs and expenses
indemnification payments due under paragraph 6.6 hereof. The costs and expenses
of Escrow Agent, including attorneys' fees, shall be borne by the Assignor.
6. Escrow Agent.
------------
6.1 DUTIES AND RESPONSIBILITIES. The duties and
responsibilities of the Escrow Agent hereunder shall be limited to those
expressly set forth in this Escrow Agreement, and the Escrow Agent shall not be
bound in any way by any other contract or agreement between the parties hereto,
whether or not the Escrow Agent has knowledge of any such contract or agreement
or of the terms or conditions thereof. In the event the Escrow Agent shall be
uncertain as to any duties or responsibilities hereunder or shall receive
instructions from any of the parties hereto with respect to the Escrow Documents
which in its belief are in conflict with any of the provisions of this Escrow
Agreement, it shall be entitled to refrain from taking any action until it has
consulted with its counsel or it shall be directed to do so in writing by the
parties hereto or by order of a court of competent jurisdiction in proceedings
which the Escrow Agent or any other party hereto shall be entitled to commence.
The Escrow Agent may act upon
- 2 -
<PAGE> 3
the advice of its counsel in taking or refraining from taking any action
hereunder and may act upon any instrument or other writing believed in good
faith to be genuine and to be signed and presented by the proper person or
persons.
6.2 LIABILITY. The Escrow Agent shall not be liable to
anyone for any damage, loss or expense incurred as a result of any act or
omission of the Escrow Agent, unless such damage, loss or expense is caused by
the Escrow Agent's willful default or gross negligence. Accordingly, and without
limiting the foregoing, the Escrow Agent shall not incur any such liability with
respect to (a) any action taken or omitted under this Escrow Agreement, or (b)
any action taken or omitted in reliance upon any instrument, including any
written notice or instruction provided for herein, not only as to its due
execution by an authorized person and as to the validity and effectiveness of
such instrument, but also as to the truth and accuracy of any information
contained therein.
6.3 DISPUTES. In the event of a dispute between any of the
parties hereto sufficient in the discretion of the Escrow Agent to justify its
doing so, the Escrow Agent shall be entitled to tender the Escrow Documents into
the registry or custody of any court of competent jurisdiction, to initiate such
legal proceedings as it deems appropriate, and pursuant thereto to be discharged
from all further duties and liabilities under this Escrow Agreement with respect
to the Escrow Documents so tendered. Any such legal action may be brought in any
such court as the Escrow Agent shall determine to have jurisdiction with respect
to such matter. The filing of any such legal proceedings shall not deprive the
Escrow Agent of its rights to indemnification hereunder.
6.4 ATTACHMENT. In the event all or any part of the Escrow
Documents shall be attached, garnished or levied upon pursuant to any court
order, or the delivery thereof shall be stayed or enjoined by a court order, or
any other order, judgment or decree shall be made or entered by any court
affecting the Escrow Documents or any part hereof or any act of the Escrow
Agent, the Escrow Agent is authorized to obey and comply with all writs, orders,
judgments or decrees so entered or issued by any such court, without the
necessity of inquiring whether such court has jurisdiction; and if the Escrow
Agent obeys or complies with any such writ, order, or decree, it shall not be
liable to any of the parties hereto or any other person by reason of such
compliance.
6.5 LEGAL ACTION. The Escrow Agent shall have no duty to
incur any out-of-pocket expenses or to take any legal action in connection
with this Escrow Agreement or towards its enforcement, or to appear in,
prosecute or defend any action or legal proceeding that would result in or
might require it to incur any cost, expense, loss, or liability, unless and
until it shall be indemnified with respect thereto in accordance with
Paragraph 6.6 of this Agreement.
6.6 INDEMNIFICATION. Without determining or limiting any
rights as between the Assignor and the Investors, which rights shall exist
outside this Escrow Agreement and not be prejudiced hereby, the Assignor and the
Investors jointly and severally hereby agree to indemnify and hold harmless the
Escrow Agent against any and all cost, loss, damage,
- 3 -
<PAGE> 4
disbursement, liability, and expense, including reasonable attorneys' fees,
which may be imposed upon or incurred by the Escrow Agent hereunder, or in
connection with the performance of its duties hereunder, including any
litigation arising out of this Escrow Agreement, or involving the subject matter
hereof, except only costs, losses, claims, damages, disbursements, liabilities
and expenses arising out of the Escrow Agent's acts or omissions for which the
Escrow Agent is adjudged willfully malfeasant or grossly negligent by a final
decree, order or judgement of a court of competent jurisdiction from which no
appeal is taken within the applicable appeals period.
6.7 RESIGNATION. The Escrow Agent, and the Escrow Agent's
successors hereinafter appointed, may at any time resign by giving notice in
writing to the Assignor and the Agent, and shall be discharged of all duties
hereunder upon the appointment of a successor escrow agent which shall be
appointed by mutual agreement of the Assignor and the Agent. If the Agent and
the Assignor are unable to agree on a successor escrow agent, any of such
parties may petition a court of competent jurisdiction to appoint one. From the
date upon which the Escrow Agent sends notice of any resignation until the
acceptance by a successor escrow agent appointed as provided herein, the Escrow
Agent's sole obligation hereunder shall be to hold the Escrow Documents
delivered to it in accordance with this Escrow Agreement. Any such successor
escrow agent shall deliver to the Assignor and the Agent a written certificate
accepting such appointment hereunder, and thereupon it shall succeed to all the
rights and duties of the escrow agent hereunder and shall be entitled to receive
the benefit of the provisions set forth above.
6.8 LAW FIRM ESCROW AGENT. Nothing contained herein shall be
deemed to prevent any law firm serving as the Escrow Agent, or as a successor
escrow agent, from acting as counsel for the Assignor or any Investor, any of
their respective stockholders, or any of their respective affiliates, or any
other party in any matter, including resolution of disputes and claims subject
to, arising under or related to the bank loan transactions referred to herein or
arising under or related to this Escrow Agreement.
7. TERMINATION OF AGREEMENT. When all of the Escrow Documents
have been distributed pursuant to the provisions of this Escrow Agreement, this
Escrow Agreement, except for the provisions of Sections 6.2 and 6.6 hereof,
shall terminate.
In the event that the Escrow Agent has not distributed the
Escrow Documents pursuant to the provisions of this Escrow Agreement, or
pursuant to the joint instructions of the Assignor and the Security Agent before
the first date at which none of the Class B Shares issued by the Assignor are
outstanding, this Agreement shall terminate on said date, and the Escrow Agent
shall be authorized to destroy the Escrow Documents remaining in its possession,
and as of said termination date, this Escrow Agreement shall null, void, and of
no further force or effect whatsoever, except for the provisions of Section 6.2
and 6.6 hereof which shall survive such termination.
- 4 -
<PAGE> 5
8. Miscellaneous.
-------------
8.1 NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing, shall be addressed to the
receiving party's address set forth below or to such other address as a party
may designate by notice hereunder, and shall be either (i) delivered by hand,
(ii) made by telex, telecopy or facsimile transmission, (iii) sent by overnight
courier, or (iv) sent by certified or registered mail, return receipt requested,
postage prepaid.
If to the Investors: Mr. Leon C. Hirsch
150 Glover Avenue
Norwalk, CT 06856
Fax: (203) 846-5988
Ms. Turi Josefsen
150 Glover Avenue
Norwalk, CT 06856
Fax: (203) 846-5988
Mr. Gerald S.J. Cassidy
Mrs. Loretta P. Cassidy
c/o G. Cassidy & Associates, Inc.
700 13th Street, N.W., Suite 400
Washington, DC 20005
Fax: (202) 347-2708
Seragen LLC
147 Bay State Road
Boston, MA 02215
Attn: Kenneth G. Condon
Vice President for Financial
Affairs and Treasurer
Fax: (617) 353-5492
- 5 -
<PAGE> 6
If to the Assignor: Seragen Technology, Inc.
97 South Street
Hopkinton, MA 01748
Attention: President
Fax: (508) 435-9805
with a copy to: Jeffrey M. Wiesen, Esquire
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
Fax: (617) 542-2241
If to the Escrow Agent: Mintz, Levin, Cohn, Ferris
Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
Attn: Jeffrey M. Wiesen, Esquire
Dennis I. Greene, Esquire
All notices, requests, consents and other communications hereunder
shall be deemed to have been given either (i) if by hand, at the time of the
delivery thereof to the receiving party at the address of such party set forth
above, (ii) if made by telecopy or facsimile transmission, at the time that
receipt thereof has been acknowledged by electronic confirmation or otherwise,
(iii) if sent by overnight courier, on the next business day following the day
such notice is delivered to the courier service, or (iv) if sent by certified or
registered mail, on the 5th business day following the day such mailing is made.
8.2 ENTIRE AGREEMENT. This Escrow Agreement embodies the
entire agreement and understanding between the parties hereto with respect to
the subject matter hereof and supersedes all prior oral or written agreements
and understandings relating to the subject matter hereof. No statement,
representation, warranty, covenant or agreement of any kind not expressly set
forth in this Escrow Agreement shall affect, or be used to interpret, change or
restrict, the express terms and provisions of this Escrow Agreement. This Escrow
Agreement is being executed and delivered, and the Escrow Documents are being
deposited, for the purposes of providing a mechanism for delivery of the
Collateral Assignment and Reassignment documents at some future time.
8.3 MODIFICATIONS AND AMENDMENTS. The terms and provisions
of this Escrow Agreement may be modified or amended only by written agreement
executed by all parties hereto.
- 6 -
<PAGE> 7
8.4 WAIVERS AND CONSENTS. The terms and provisions of this
Escrow Agreement may be waived, or consent for the departure therefrom granted,
only by written document executed by the party entitled to the benefits of such
terms or provisions. No such waiver or consent shall be deemed to be or shall
constitute a waiver or consent with respect to any other terms or provisions of
this Escrow Agreement, whether or not similar. Each such waiver or consent shall
be effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent.
8.5 BENEFIT. All statements, representations, warranties,
covenants and agreements in this Escrow Agreement shall be binding on the
parties hereto and shall inure to the benefit of the parties hereto. Nothing in
this Escrow Agreement shall be construed to create any rights or obligations
except among the parties hereto, and no other person or entity shall be regarded
as a third-party beneficiary of this Escrow Agreement.
8.6 GOVERNING LAW. This Escrow Agreement and the rights and
obligations of the parties hereunder shall be construed in accordance with and
governed by the law of the Commonwealth of Massachusetts, without giving effect
to the conflict of law principles thereof.
8.7 SEVERABILITY. In the event that any court of competent
jurisdiction shall determine that any provision, or any portion thereof,
contained in this Escrow Agreement shall be unenforceable in any respect, then
such provision shall be deemed limited to the extent that such court deems it
enforceable, and as so limited shall remain in full force and effect. In the
event that such court shall deem any such provision, or portion thereof, wholly
unenforceable, the remaining provisions of this Escrow Agreement shall
nevertheless remain in full force and effect.
8.8 HEADINGS AND CAPTIONS. The headings and captions of the
various subdivisions of this Escrow Agreement are for convenience of reference
only and shall in no way modify or affect the meaning or construction of any of
the terms or provisions hereof.
8.9 ENFORCEMENT. Each of the parties hereto acknowledges and
agrees that the rights acquired by each party hereunder are unique and that
irreparable damage would occur in the event that any of the provisions of this
Escrow Agreement to be performed by the other party were not performed in
accordance with their specific terms or were otherwise breached. Accordingly, in
addition to any other remedy to which the parties hereto are entitled at law or
in equity, each party hereto shall be entitled to an injunction or injunctions
to prevent breaches of this Escrow Agreement by the other party and to enforce
specifically the terms and provisions hereof in any federal or state court to
which the parties have agreed hereunder to submit to jurisdiction.
8.10 NO WAIVER OF RIGHTS, POWERS AND REMEDIES. No failure or
delay by a party hereto in exercising any right, power or remedy under this
Escrow Agreement, and no course of dealing between the parties hereto, shall
operate as a waiver of any such right, power or
- 7 -
<PAGE> 8
remedy of the party. No single or partial exercise of any right, power or remedy
under this Escrow Agreement by a party hereto, nor any abandonment or
discontinuance of steps to enforce any such right, power or remedy, shall
preclude such party from any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder. The election of any remedy by a
party hereto shall not constitute a waiver of the right of such party to pursue
other available remedies. No notice to or demand on a party not expressly
required under this Escrow Agreement shall entitle the party receiving such
notice or demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such
notice or demand to any other or further action in any circumstances without
such notice or demand.
8.11 EXPENSES. Except for the fees and expenses of the
Escrow Agent which shall be paid as provided in Section 6, each of the parties
hereto shall pay its own fees and expenses (including the fees of any attorneys,
accountants, appraisers or others engaged by such party) in connection with this
Escrow Agreement and the transactions contemplated hereby whether or not the
transactions contemplated hereby are consummated.
8.12 COUNTERPARTS. This Escrow Agreement may be executed in
one or more counterparts, and by different parties hereto on separate
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.13 OTHER DELIVERIES. Notwithstanding any provision of this
Escrow Agreement to the contrary, if at any time the Escrow Agent shall receive
joint written instructions signed by the Assignor and the Security Agent with
respect to delivery of any or all of the Escrow Documents, the Escrow Agent
shall deliver such Escrow Documents in accordance with such written
instructions.
- 8 -
<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement as of the day and year first above written.
Assignor:
SERAGEN TECHNOLOGY, INC.
By: /s/ George W. Masters
-------------------------------------
Name: George W. Masters
Title: Vice Chairman, Chief Executive
Officer and President
Investors:
/s/ Leon C. Hirsch
--------------------------------------
Leon C. Hirsch
/s/ Turi Josefsen
--------------------------------------
Turi Josefsen
/s/ Gerald S. J. Cassidy
--------------------------------------
Gerald S. J. Cassidy
/s/ Loretta P. Cassidy
--------------------------------------
Loretta P. Cassidy
SERAGEN LLC
By: /s/ Kenneth G. Condon
---------------------------------
Name:
Title:
Escrow Agent:
/s/ Mintz, Levin, Cohn, Ferris, Glovsky and Popeo
-------------------------------------------------
Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C.
- 9 -
<PAGE> 1
Exhibit 10.62
ASSIGNMENT OF PATENTS
---------------------
WHEREAS, SERAGEN, INC., a Delaware corporation, having a place of
business at 97 South Street, Hopkinton, Massachusetts 01748 (hereinafter
"Seragen"), is the owner of certain right, title and interest in and to
inventions and the United States patents rights relating thereto;
WHEREAS, Seragen, represents and warrants that it has the sole and
exclusive right to make this Assignment of Patents; and
WHEREAS, SERAGEN TECHNOLOGY, INC., a Delaware corporation, having a
place of business at 97 South Street, Hopkinton, Massachusetts 01748
(hereinafter "Seragen Technology") is desirous of acquiring Seragen's entire
right, title and interest in and to said patent rights;
NOW THEREFORE, in consideration of (i) the issuance by Seragen
Technology of all of its authorized Class A Common Stock and Class B Common
Stock to Seragen, (ii) the execution by Seragen and Seragen Technology of an
Irrevocable License Agreement of even date herewith, and (iii) the delivery by
Seragen Technology of a certain Collateral Assignment of Patents in favor of
persons and entities to whom Seragen will transfer its Class B Common Stock of
Seragen Technology, and (iv) other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, Seragen hereby grants, assigns
and conveys to Seragen Technology its entire right, title and interest in and to
all of its now owned and existing or hereafter acquired patents and patent
applications and letters patent that may have been or may hereafter be granted
in the United States (including, without limitation, those listed in
<PAGE> 2
may hereafter be granted in the United States (including, without limitation,
those listed in Schedule A annexed hereto), and all reissues, divisions,
continuations, renewals, extensions, and continuations-in-part thereof,
together with all rights to bring actions for past, present, and future
infringements and all rights corresponding thereto, including, without
limitation, the right to retain all profits and damages from such past
infringements, and all proceeds of any of the foregoing (including, without
limitation, license royalties and proceeds of infringement suits). All of the
foregoing shall hereinafter be referred to as the "Patents". The interests
granted hereby are and shall be subject and subordinate to all licenses and
rights heretofore or hereafter granted by Seragen to third parties to make,
have made, use, sell or otherwise develop, use or exploit the technology and
inventions described and claimed under the Patents, including, but not limited,
to the licensed third parties set forth on Schedule B hereto.
Seragen further agrees, without charge to but at the expense of Seragen
Technology, to execute all rightful oaths, assignments, powers of attorney and
other papers which Seragen Technology, its successors, assigns or
representatives deem desirable for obtaining, maintaining, reissuing and
renewing United States patents and foreign patents for all inventions disclosed
in the Patents and for vesting, perfecting, maintaining and recording title to
said Patents in Seragen Technology.
SERAGEN, INC.
By: /s/ George W. Masters
------------------------------------
Title: Vice Chairman, Chief Executive
Officer and President
DATED AS OF: June 28, 1996
- 2 -
<PAGE> 3
SCHEDULE A
TO
SERAGEN, INC. ASSIGNMENT OF PATENTS
<TABLE>
PATENTS OWNED
-------------
<CAPTION>
APPLICANT OR FILING EXPIRATION
PATENT NUMBER DESCRIPTION DATE DATE TITLE
------------- ----------- ---- ---- -----
<S> <C> <C> <C>
1. 07/695,480 Interleukin Receptor 05/03/91 Seragen Technology
Targeted Molecules for
Arthritis Treatment
2. 07/832,843 Methods of Treating 02/10/92 Beth Israel Hospital
Diabetes Seragen Technology
Brigham & Women's Hospital
J.F. Bach
3. 07/665,762 Use of Cell 03/07/91 Seragen Technology
Surface Receptor
Targeted Molecules for
Viral Disease Treatment
4. 07/832,843 Desensitization of 02/10/92 Seragen Technology
Specific Allergies
5. 07/701,932 Interleukin Receptors 05/17/91 Seragen Technology
Targeted Molecules for
Neoplastic Cell Growth
Treatment
6. 07/726,316 EGF Receptor Targeted 07/05/91 Seragen Technology
Molecules for Inflammatory
Arthritis Treatment
</TABLE>
-3-
<PAGE> 4
<TABLE>
<CAPTION>
APPLICANT OR FILING EXPIRATION
PATENT NUMBER DESCRIPTION DATE DATE TITLE
------------- ----------- ---- ---- -----
<S> <C> <C> <C> <C>
7. 07/596,518 Mammalian Model 11/12/90 Seragen Technology
of a
Malignant Disorder
8. U.S. Patent Hybrid Compound 03/02/90 05/05/2009 Seragen Technology
No. 5,110,912 Purification
9. 07/879,630 Novel Diphtheria Toxin 05/07/92 U.C.L.A.
Based Molecules Seragen Technology
10. 06/618,199 A Fused Gene and its 06/07/84 Seragen Technology
Encoded Hybrid Protein
11. 07/549,363 Hybrid Molecules 07/06/90 Seragen Technology
(Targeting the High
Affinity IL-2 Receptor
12. 07/590,113 Inhibiting Unwanted 09/28/90 Seragen Technology
Immune Responses University
(DAC197) (B-IL-2) Hospital
13. 07/467,880 Cytotoxic Lymphocyte 01/19/90 Seragen Technology
Protense Related
Molecules and Method
14. 07/388,557 IL-2 Deletion Mutants 08/02/89 Seragen Technology
</TABLE>
- 4 -
<PAGE> 5
SCHEDULE B
TO
SERAGEN, INC. ASSIGNMENT OF PATENTS
LICENSES GRANTED
----------------
Certain rights held by Eli Lilly & Company under
various existing agreements with Assignor.
-5-
<PAGE> 1
Exhibit 10.63
IRREVOCABLE LICENSE AGREEMENT
This Irrevocable License Agreement, dated June 28, 1996, by and between
Seragen, Inc., a Delaware corporation with its principal office at 97 South
Street, Hopkinton, Massachusetts 01748 ("Seragen") and Seragen Technology, Inc.,
a Delaware corporation with its principal office at 97 South Street, Hopkinton,
Massachusetts 01748 ("Seragen Technology").
WHEREAS, certain patents and patent applications, including but not
limited to those listed on Schedule A attached hereto (the "Patents") have been
assigned to Seragen Technology by Seragen pursuant to an Assignment of Patents
of even date herewith (the "Assignment of Patents"); and
WHEREAS, it is the intention of Seragen Technology, by this Irrevocable
License Agreement, to grant to Seragen irrevocable rights to practice the
inventions claimed by the Patents;
NOW, THEREFORE, in consideration of the foregoing, and of the
assignment of the Patents by Seragen to Seragen Technology, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, hereby agree as
follows:
1. GRANT OF LICENSE. Seragen Technology hereby grants to Seragen an
irrevocable, worldwide, royalty-bearing, exclusive license, throughout the
world, in all fields, to make and
<PAGE> 2
have made, to use, to offer for sale, to sell and have sold, to import and have
imported, and to export and have exported any and all products which are claimed
by the Patents or made through the use of inventions claimed in the Patents and
to practice any and all methods claimed in the Patents.
2. ROYALTIES. Seragen Technology shall be entitled to receive a
royalty (the "Royalty") payable in arrears in cash quarterly on the first day
of each January, April, July and October commencing on October 1, 1996 (each,
a "Royalty Payment Date"). The Royalty payable on each Royalty Payment Date
shall be equal to the amount of any Dividend which the holders of Series B
Preferred Stock of Seragen are entitled to receive on last day of the month
preceding the month of the Royalty Payment Date but which is not paid on or
prior to said date.
3. RECORDING OF LICENSE. In the event that Seragen Technology records
the Assignment of Patents, Seragen shall record this license in the United
States Patent and Trademark office and such other foreign patent offices as
Seragen Technology shall record the Assignment of Patents.
4. Miscellaneous.
-------------
a. This Irrevocable License Agreement may only be amended by a
written instrument signed by both parties, which makes specific reference to
this Irrevocable License Agreement.
- 2 -
<PAGE> 3
b. Seragen may assign this Irrevocable License Agreement without
the consent of Seragen Technology. This Irrevocable License Agreement shall
be binding upon and shall inure to the benefit of Seragen and Seragen
Technology and their respective successors and assigns.
c. This Irrevocable License Agreement is governed by the laws of
the Commonwealth of Massachusetts.
- 3 -
<PAGE> 4
IN WITNESS WHEREOF, the parties have executed this Irrevocable License
Agreement under seal as of the date first above written.
SERAGEN, INC. SERAGEN TECHNOLOGY, INC.
By: /s/ George W. Masters By: /s/ George W. Masters
----------------------------- ---------------------------
Title: Vice Chairman, Chief Title: Vice Chairman, Chief
Executive Officer and Executive Officer and
President President
- 4 -
<PAGE> 5
SCHEDULE A
TO
IRREVOCABLE LICENSE AGREEMENT
<TABLE>
PATENTS OWNED
-------------
<CAPTION>
APPLICANT OR FILING EXPIRATION
PATENT NUMBER DESCRIPTION DATE DATE TITLE
------------- ----------- ---- ---- -----
<S> <C> <C> <C>
1. 07/695,480 Interleukin Receptor 05/03/91 Seragen Technology
Targeted Molecules for
Arthritis Treatment
2. 07/832,843 Methods of Treating 02/10/92 Beth Israel Hospital
Diabetes Seragen Technology
Brigham & Women's Hospital
J.F. Bach
3. 07/665,762 Use of Cell 03/07/91 Seragen Technology
Surface Receptor
Targeted Molecules for
Viral Disease Treatment
4. 07/832,843 Desensitization of 02/10/92 Seragen Technology
Specific Allergies
5. 07/701,932 Interleukin Receptors 05/17/91 Seragen Technology
Targeted Molecules for
Neoplastic Cell Growth
Treatment
6. 07/726,316 EGF Receptor Targeted 07/05/91 Seragen Technology
Molecules for Inflammatory
Arthritis Treatment
7. 07/596,518 Mammalian Model 11/12/90 Seragen Technology
of a
Malignant Disorder
</TABLE>
- 5 -
<PAGE> 6
<TABLE>
<CAPTION>
APPLICANT OR FILING EXPIRATION
PATENT NUMBER DESCRIPTION DATE DATE TITLE
------------- ----------- ---- ---- -----
<S> <C> <C> <C> <C>
8. U.S. Patent Hybrid Compound 03/02/90 05/05/2009 Seragen Technology
No. 5,110,912 Purification
9. 07/879,630 Novel Diphtheria Toxin 05/07/92 U.C.L.A.
Based Molecules Seragen Technology
10. 06/618,199 A Fused Gene and its 06/07/84 Seragen Technology
Encoded Hybrid Protein
11. 07/549,363 Hybrid Molecules 07/06/90 Seragen Technology
(Targeting the High
Affinity IL-2 Receptor
12. 07/590,113 Inhibiting Unwanted 09/28/90 Seragen Technology
Immune Responses University
(DAC197) (B-IL-2) Hospital
13. 07/467,880 Cytotoxic Lymphocyte 01/19/90 Seragen Technology
Protense Related
Molecules and Method
14. 07/388,557 IL-2 Deletion Mutants 08/02/89 Seragen Technology
</TABLE>
- 6 -
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JAN-01-1996
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0
3,786,667
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<TOTAL-LIABILITY-AND-EQUITY> 16,876,148
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