SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-25544
Miravant Medical Technologies
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 77-0222872
- --------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
7408 Hollister Avenue, Santa Barbara, California 93117
- --------------------------------------------------------------------------------
(Address of principal executive offices, including zip code)
(805) 685-9880
- --------------------------------------------------------------------------------
(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 |_|
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at July 31, 1998
----- ----------------------------
Common Stock, $.01 par value 13,980,683
<PAGE>
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page
----
<S> <C>
Item 1. Consolidated Financial Statements
Consolidated balance sheets as of June 30, 1998 and
December 31, 1997..........................................................3
Consolidated statements of operations for the three months ended
June 30, 1998 and 1997, and for the six months ended
June 30, 1998 and 1997.....................................................4
Consolidated statements of cash flows for the six months ended
June 30, 1998 and 1997.....................................................5
Notes to consolidated financial statements .....................................6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations .......................................9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.............................14
Item 5. Other Information...............................................................14
Item 6. Exhibits and Reports on Form 8-K................................................14
Signatures......................................................................15
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
MIRAVANT MEDICAL TECHNOLOGIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
------------------ ------------------
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents............................................... $ 26,909,000 $ 55,666,000
Investments in short-term marketable securities......................... 26,596,000 27,796,000
Accounts receivable..................................................... 473,000 1,833,000
Prepaid expenses and other current assets............................... 550,000 772,000
------------------ ------------------
Total current assets....................................................... 54,528,000 86,067,000
Property, plant & equipment:
Vehicles................................................................ 28,000 28,000
Furniture and fixtures.................................................. 1,705,000 1,578,000
Equipment............................................................... 4,274,000 3,752,000
Leasehold improvements.................................................. 4,059,000 3,071,000
Capital lease equipment................................................. 184,000 184,000
------------------ ------------------
10,250,000 8,613,000
Accumulated depreciation and amortization............................... 4,129,000 2,886,000
------------------ ------------------
6,121,000 5,727,000
Investments in affiliates.................................................. 4,476,000 895,000
Loan to affiliate, net of reserve of $500,000 at June 30, 1998............. -- --
Patents and other assets................................................... 987,000 342,000
------------------ ------------------
Total assets............................................................... $ 66,112,000 $ 93,031,000
================== ==================
Liabilities and shareholders' equity
Current liabilities:
Accounts payable........................................................ $ 3,883,000 $ 4,290,000
Accrued payroll and expenses............................................ 724,000 1,022,000
Current portion of capital lease obligations............................ 5,000 21,000
------------------ ------------------
Total current liabilities.................................................. 4,612,000 5,333,000
Shareholders' equity:
Common stock, 50,000,000 shares authorized;
14,056,172 and 13,952,847 shares
issued and outstanding at June 30, 1998 and
December 31, 1997, respectively........................................ 164,129,000 170,451,000
Notes receivable from officers.......................................... (1,178,000) --
Deferred compensation................................................... (3,616,000) (1,899,000)
Accumulated deficit..................................................... (97,835,000) (80,854,000)
------------------ ------------------
Total shareholders' equity................................................. 61,500,000 87,698,000
------------------ ------------------
Total liabilities and shareholders' equity................................. $ 66,112,000 $ 93,031,000
================== ==================
See accompanying notes.
</TABLE>
<PAGE>
MIRAVANT MEDICAL TECHNOLOGIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
1998 1997 1998 1997
------------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Revenues:
Grants, licensing and royalty income........ $ 1,331,000 $ 433,000 $ 1,966,000 $ 724,000
----------------- ----------------- ----------------- -----------------
1,331,000 433,000 1,966,000 724,000
Costs and expenses:
Research and development.................... 8,346,000 4,364,000 14,664,000 8,230,000
Selling, general and administrative......... 2,535,000 2,006,000 5,582,000 4,270,000
Loss in investment in affiliate............. 441,000 240,000 895,000 472,000
------------------- ----------------- ----------------- -----------------
Total costs and expenses....................... 11,322,000 6,610,000 21,141,000 12,972,000
Loss from operations........................... (9,991,000) (6,177,000) (19,175,000) (12,248,000)
Interest and other income (expense):
Interest and other income................... 927,000 443,000 2,195,000 1,079,000
Interest expense............................ -- (2,000) (1,000) (4,000)
------------------- ----------------- ---------------- -----------------
Total interest and other income................ 927,000 441,000 2,194,000 1,075,000
------------------- ----------------- ----------------- -----------------
Net loss....................................... $ (9,064,000) $ (5,736,000) (16,981,000) $ (11,173,000)
=================== ================= ================ =================
Net loss per share - basic and diluted......... $ (0.64) $ (0.46) (1.20) $ (0.90)
=================== ================= ================ =================
Shares used in computing net loss per share.... 14,104,004 12,365,451 14,102,940 12,368,328
=================== ================= ================= =================
See accompanying notes.
</TABLE>
<PAGE>
MIRAVANT MEDICAL TECHNOLOGIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended June 30,
Operating activities: 1998 1997
------------------- -----------------------
<S> <C> <C>
Net loss.......................................................... $ (16,981,000) $ (11,173,000)
Adjustments to reconcile net loss to net cash used by operating
activities:
Depreciation and amortization.................................. 1,309,000 450,000
Amortization of deferred compensation.......................... 1,507,000 611,000
Reserve for loan receivable from affiliate..................... 500,000 --
Changes in operating assets and liabilities:
Accounts receivable......................................... 1,360,000 1,593,000
Prepaid expenses and other assets........................... (489,000) (676,000)
Accounts payable and accrued payroll and expenses........... (705,000) (138,000)
------------------- -----------------------
Net cash used in operating activities............................. (13,499,000) (9,333,000)
Investing activities:
Purchases of marketable securities ............................... (8,700,000) (25,727,000)
Sales of marketable securities ................................... 9,900,000 25,000,000
Investments in affiliates......................................... (2,105,000) 472,000
Purchases of property, plant and equipment........................ (1,637,000) (586,000)
------------------- -----------------------
Net cash used in investing activities............................. (2,542,000) (841,000)
Financing activities:
Proceeds from issuance of Common Stock, less issuance costs....... 2,930,000 612,000
Purchases of Common Stock......................................... (13,952,000) (4,316,000)
Payments of executive officer notes............................... (1,178,000) --
Payments of loan to affiliate..................................... (500,000) --
Payments of capital lease obligations............................. (16,000) (22,000)
Payments of long term obligations................................. -- (28,000)
------------------- -----------------------
Net cash used in financing activities............................. (12,716,000) (3,754,000)
Net decrease in cash and cash equivalents......................... (28,757,000) (13,928,000)
Cash and cash equivalents at beginning of period.................. 55,666,000 31,498,000
------------------- -----------------------
Cash and cash equivalents at end of period........................ $ 26,909,000 $ 17,570,000
=================== =======================
Supplemental disclosures:
Cash paid for:
State taxes..................................................... $ 111,000 $ 80,000
=================== =======================
Interest ....................................................... $ 1,000 $ 5,000
=================== =======================
Non-cash investing activities:
Investment in affiliate from issuance of Common Stock............ $ 1,476,000 $ --
=================== =======================
See accompanying notes.
</TABLE>
<PAGE>
MIRAVANT MEDICAL TECHNOLOGIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The information contained herein has been prepared in accordance with Rule
10-01 of Regulation S-X. The information at June 30, 1998, and for the
three and six month periods ended June 30, 1998 and 1997, is unaudited. In
the opinion of management, the information reflects all adjustments
necessary to make the results of operations for the interim periods a fair
statement of such operations. All such adjustments are of a normal
recurring nature. Interim results are not necessarily indicative of
results for a full year. For a presentation including all disclosures
required by generally accepted accounting principles, these financial
statements should be read in conjunction with the audited consolidated
financial statements for the year ended December 31, 1997 included in the
Miravant Medical Technologies Annual Report on Form 10-K filed with the
Securities and Exchange Commission.
2. Accounting Policies
Investments in Affiliates
Investments in affiliates, owned more than 20% but not in excess of 50%,
where the Company is not deemed to be able to exercise controlling
influence, are recorded under the equity method. Investments in
affiliates, owned less than 20% where the Company is not deemed to be able
to exercise controlling influence, are recorded under the cost method.
Under the equity method, investments are carried at acquisition cost and
adjusted for the proportionate share of the affiliates' earnings or
losses. Under the cost method, investments are carried at acquisition cost
and written down only to the extent dividends received are in excess of
cumulative share of earnings or if a significant decline in the market
value of the investment is determined to be other than temporary.
In December 1996, the Company purchased a 33% equity interest in Ramus
Medical Technologies ("Ramus") for $2 million. The Company has recorded
100% of Ramus' loss to the extent of the investment made by the Company.
Under the accounting policy noted above, the investment in Ramus has been
fully offset by their losses as of June 30, 1998 and was $895,000 at
December 31, 1997.
3. Investments in Affiliates
In June 1998, the Company purchased a 9% equity interest in Xillix
Technologies Corp. ("Xillix") for $5 million. The investment was made in
the form of $3 million in cash and $2 million in restricted Miravant
Common Stock at a premium price to current market. The investment recorded
in the consolidated financial statements of $4.5 million represents cash
of $3 million and the fair market value on the date of the agreement of
58,909 shares of Common Stock of $25.06 per share or $1.5 million. The
investment will be accounted for under the cost method. In conjunction
with the investment, the Company also entered into an exclusive strategic
alliance agreement with Xillix to co-develop proprietary systems
incorporating PhotoPoint(TM) and Xillix's fluorescence imaging technology
for diagnosing and treating early stage cancer and pre-malignant tissues.
The agreement provides that both companies will own co-developed products
and will share the research and development costs associated with the
development program. Xillix will receive drug royalty payments from
Miravant based on the sale of the Company's drugs used in conjunction with
the co-developed technology.
4. Loan to Affiliate
In April 1998, the Company entered into a revolving credit agreement with
its affiliate, Ramus, pursuant to which the Company, at the request of
Ramus, shall from time to time make loans to Ramus in an aggregate
outstanding principal amount not exceeding at any one time $2 million. The
unpaid principal amount of the loans, which are to be used to fund Ramus'
clinical trial and operating costs, accrues interest at a variable rate
(7.35% as of June 30, 1998) based on the Company's bank rate, and matures
approximately one and a half years after the completion by Ramus of its
first surgical implant in a human involving coronary artery bypass surgery
in a formally conducted clinical trial. The loans are evidenced by a
promissory note, the balance of which shall be convertible under certain
circumstances at the option of the Company into shares of Ramus stock.
Additionally, under the terms of the revolving credit agreement and upon
the occurrence of specified milestones, the Company issued a warrant to
purchase 10,000 shares of the Company's Common Stock to the Chief
Executive Officer of Ramus at a price equal to the average closing price
of the Common Stock over the twenty consecutive trading days immediately
prior to the date of issuance. As of June 30, 1998, Ramus had borrowed
$500,000 under the revolving credit agreement. The Company has established
a reserve for the entire outstanding balance of the loan receivable at
June 30, 1998.
5. Shareholders' Equity
Effective June 30, 1998, the Company entered into an Amendment Agreement
with the purchasers of 900,000 shares under the Securities Purchase
Agreement dated September 22, 1997. Included among the provisions of the
Amendment Agreement is a change in the price protection provisions which
originally required the Company to issue additional shares or pay cash to
the purchasers to the extent that the 30 day average closing price of the
Company's Common Stock prior to September 22, 1998 was less than the
original $50.00 per share purchase price. Under the Amendment Agreement,
the Company's obligation under the price protection provisions relating to
the 900,000 shares is now spread out over an eight month period beginning
August 1, 1998 and ending March 1, 1999, and is determined by the
difference between the original purchase price and the 30 day average
closing bid price of the Common Stock on the first day of each month
beginning August 1 and ending March 1 (each a "measurement date"). The
total number of additional shares that can be issued to fulfill this price
protection obligation has been limited to 900,000 shares with any
remaining balance to be paid in cash. Additionally, the Company also has
the option to repurchase all or a part of the purchasers' shares at the
original closing price of $50.00 per share and thus eliminate all of the
purchasers' rights, including the price protection provisions, under both
the Amendment Agreement and the Securities Purchase Agreement.
Under the Amendment Agreement, the exercise price of the original warrants
issued to these purchasers under the Securities Purchase Agreement has
been reduced to $35.00 and under certain limited circumstances, the
Company has the right to redeem the warrants. Furthermore, the lock-up
agreement was amended to provide that, if the Company does not repurchase
the Common Stock, 1/8th of the shares and original warrant shares will be
released from the lock up on each measurement date. In addition, if the
Company does not repurchase all of the purchasers' original 900,000 shares
within sixty (60) days of the closing of the Amendment Agreement, the
Company has agreed to issue an additional 450,000 warrants to the
purchasers at an exercise price of $35.00 per share within five business
days of March 1, 1999 or the earlier termination of the lock-up agreement.
6. Per Share Data
The Company has adopted Statement of Financial Accounting Standards No.
128 "Earnings per Share" ("SFAS No. 128"), which supersedes Accounting
Principles Board Opinion No. 15 and which is effective for all periods
ending after December 31, 1997. SFAS No. 128 replaced the presentation of
primary and fully diluted earnings per share with basic and diluted
earnings per share. Unlike primary earnings per share, basic earnings per
share excludes any dilutive effects of options, warrants and convertible
securities. Diluted earnings per share is very similar to the previously
reported fully diluted earnings per share and reflects the potential
dilution that would occur if securities or other contracts to issue common
stock were exercised or converted to common stock. Common stock equivalent
shares from stock options and warrants have been excluded from this
computation as their effect is antidilutive. All previously stated
earnings per share amounts conform to the new SFAS No. 128 requirements.
Basic loss per common share for the quarters ended June 30, 1998 and 1997
were computed by dividing the net loss by the weighted average shares
outstanding during the period in accordance with SFAS No. 128. Since the
effect of the assumed exercise of stock options and other convertible
securities was antidilutive, basic and diluted loss per share as presented
on the consolidated statements of operations are the same.
7. Subsequent Events
Common Stock Purchase Commitment
On July 28, 1998, in accordance with the Amendment Agreement dated June
30, 1998, the Company repurchased the 225,000 shares subject to the price
protection provisions of the Amendment Agreement for both the August 1 and
September 1, 1998 measurement dates. This repurchase eliminated the
Company's obligation to issue additional shares or pay cash under the
amended price protection provisions with respect to the repurchased
shares. Although the Company maintains the right, it is under no
obligation nor has it notified the parties of its intent to repurchase any
or all of the remaining shares. The repurchased shares will be retired by
the Company.
Lease Commitment
In July 1998, the Company entered into a lease for approximately 27,400
square feet of primarily office space. The current base rent for this
lease is approximately $34,250 per month. The lease expires in October
2003 and provides for rent to be adjusted annually based on increases in
the consumer price index. The lease also provides the Company with the
ability to sublet all or a portion of the property. The leased property is
located in a business park and is subject to a master lease.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
consolidated financial statements and notes thereto. This Quarterly Report on
Form 10-Q may be deemed to include forward looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 that involve risk and uncertainty, including financial,
clinical, business environment and trend projections. Although Miravant Medical
Technologies (the "Company") believes that its expectations are based on
reasonable assumptions, it can give no assurance that its goals will be
achieved. The important factors that could cause actual results to differ
materially from those in the forward looking statements herein include, without
limitation, the early stage of development of both the Company and its products,
the timing and uncertainty of results of both research and regulatory processes,
the extensive government regulation applicable to the Company's business, the
unproven safety and efficacy of the Company's drug and device products, the
Company's significant additional financing requirements, the uncertainty of
future capital funding, the highly competitive environment of the international
pharmaceuticals and medical device industries and the presence of a number of
competitors with significantly greater financial, technical and other resources
and extensive operating histories, the Company's potential exposure to product
liability or recall, uncertainties relating to patents and other intellectual
property, including whether the Company will obtain sufficient protection or
competitive advantage therefrom, the Company's dependence upon a limited number
of key personnel and consultants, the Company's significant reliance upon its
collaborative partners for achieving its goals, and other factors detailed in
the Company's report on Form 10-K for the year ended December 31, 1997.
General
Since its inception, the Company has been principally engaged in the
research and development of drugs and medical device products for use in
PhotoPoint, the Company's proprietary technologies for photodynamic therapy. The
Company has been unprofitable since its founding and has incurred a cumulative
net loss of approximately $97.8 million as of June 30, 1998. The Company expects
to continue to incur substantial and increasing operating losses for the next
several years due to continued and increased spending on research and
development programs, the funding of preclinical and clinical testing and
regulatory activities and the costs of manufacturing, marketing, sales,
distribution and administrative activities.
The Company's revenues generally primarily reflect income earned from
licensing agreements, grants and license royalties from the sale of medical
device products. For the quarter ended June 30, 1998, the Company's revenues
were generated from clinical reimbursements, royalties from device licensing
agreements and revenue from grants. To date, the Company has received no revenue
from the sale of drug products, and the Company is not permitted to engage in
commercial sales of drugs or devices until such time, if ever, as the Company
receives requisite regulatory approvals. As a result, the Company does not
expect to record significant product sales until such approvals are received.
Until the Company commercializes its product(s), the Company expects
revenues to continue to be attributable to licensing agreements, grants and
license royalties from the sale of medical device products. The Company
anticipates that future revenues and results of operations may continue to
fluctuate significantly depending on, among other factors, the timing and
outcome of applications for regulatory approvals, the continued support from its
collaborative partners, the Company's ability to successfully manufacture,
market and distribute its drug and device products and/or the establishment of
collaborative arrangements for the manufacturing, marketing and distribution of
its products. The Company anticipates its operating activities will result in
substantial net losses for several more years.
<PAGE>
The Company is currently conducting clinical trials in oncology and
ophthalmology. In dermatology, the Company is investigating topical formulations
of its photoselective drugs. Based upon the outcome of these studies and various
economic and development factors, including cost, reimbursement and the
available alternative therapies, the Company may or may not elect to further
develop PhotoPoint procedures in oncology, ophthalmology, dermatology or in any
other indications.
In June 1998, the Company and Pharmacia & Upjohn, Inc. ("Pharmacia &
Upjohn") amended the development and funding provisions of their previously
executed Purlytin(TM) license agreements discussed below. Under the amended
ophthalmology agreement, the Company will conduct all preclinical and U.S.
clinical trials and will be reimbursed by Pharmacia & Upjohn for all
out-of-pocket expenses incurred, provided that the trials are conducted in
accordance with the agreement. Pharmacia & Upjohn will conduct all international
clinical trials in ophthalmology. Under the amended agreement for the fields of
oncology and urology, the Company will conduct all preclinical and clinical
trials and will receive up to $20 million over the next two years, to be paid
quarterly, for the reimbursement of direct and indirect costs incurred and the
achievement of specified milestones. Under both of the amended agreements,
Pharmacia & Upjohn will also pay the Company royalties on product sales.
The Company has awarded, and may award in the future, stock options
that vest upon the achievement of certain milestones. Under Accounting
Principles Board Opinion No. 25 ("APB No. 25"), such options are accounted for
as variable stock options. As such, until the milestone is achieved (but only
after it is determined to be probable), deferred compensation is recorded in an
amount equal to the difference between the fair market value of the Common Stock
on the date of determination less the option exercise price and is adjusted from
period to period to reflect changes in the market value of the Common Stock.
Deferred compensation, as it relates to a particular milestone, is amortized
over the period between when achievement of the milestone becomes probable and
when the milestone is estimated to be achieved. Amortization of deferred
compensation could result in significant additional compensation expense being
recorded in future periods based on the market value of the Common Stock from
period to period.
Effective June 21, 1996, the Compensation Committee of the Board of
Directors adjusted the future vesting periods of variable stock options covering
400,000 shares of Common Stock. These variable stock options were adjusted to
change the vesting periods to specific dates as opposed to the original vesting
periods which were based upon the achievement of milestones; no change was made
to the exercise prices of these variable stock options. This change in the
vesting periods provides for the options to be accounted for as non-variable
options and therefore alleviates the impact of deferred compensation fluctuating
in future periods based on changes in the per share market value from period to
period. As of June 30, 1998, options covering 302,500 shares with an exercise
price of $34.75 per share have vested and options covering 75,000 shares have
been canceled. The remaining unvested shares will vest in the years 1998 through
2000.
In December 1997, the Company provided equity loans to certain
executive officers to be used to exercise options to acquire the Company's
Common Stock and pay for the related option exercise price and payroll taxes.
The notes accrue interest at a fixed rate, are payable in five years and are
collateralized by the underlying shares acquired upon exercise. Under APB No. 25
and related interpretations, such notes are required to be accounted for as
deferred compensation. The deferred compensation is determined as the difference
between the fair market value of the Common Stock on the date of exercise less
the option exercise price. As of June 30, 1998, the deferred compensation will
be amortized over the five-year term of the notes at $135,000 per quarter.
<PAGE>
Results of Operations
The following table provides a summary of the Company's revenues for
the three and six months ended June 30, 1998 and 1997:
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
1998 1997 1998 1997
----------------- ------------------ ----------------- -----------------
<S> <C> <C> <C> <C>
Consolidated Revenues
- ---------------------
Grants and contracts........... $ 197,000 $ -- $ 338,000 $ --
Royalties...................... 84,000 58,000 133,000 124,000
License........................ 1,050,000 375,000 1,495,000 600,000
----------------- ----------------- ----------------- -----------------
Total revenue................. $ 1,331,000 $ 433,000 $ 1,966,000 $ 724,000
================= ================= ================= =================
</TABLE>
Revenues. For the three months ended June 30, 1998, revenues increased
to $1.3 million from $433,000 for the three months ended June 30, 1997. Total
revenues for the six months ended June 30, 1998 increased to $2.0 million as
compared to $724,000 for the same period in 1997. The increase in revenues for
both the three and six month periods ending June 30, 1998 is related to an
increase in license revenues which represents the billing for the specific
reimbursement of clinical costs in connection with the license agreement entered
into in July 1995 with Pharmacia & Upjohn. In addition, the Company recorded
$197,000 and $338,000 for the three and six month periods ended June 30, 1998,
respectively, associated with two on-going grants initially received in the
third quarter of 1997. There were no active grants or grant revenue recorded
during the first six months of 1997. Under the amended license agreements
entered into in June 1998 with Pharmacia and Upjohn, the Company anticipates
recording license income for the specific reimbursement of clinical costs
throughout 1998 and beyond. The level of such license, grant and royalty income
is likely to fluctuate materially from period to period and in the future
depending on the amount of clinical costs incurred and/or reimbursed, the
achievement of milestones and the extent of development activities under the
amended Pharmacia & Upjohn license agreements, the amount of grant income
awarded and expended and the amount of device products sold by Laserscope,
pursuant to a license agreement entered into in 1992 which provides royalties
from the sale of the Company's previously designed device products.
Research and Development. The Company's research and development
expenses for the three months ended June 30, 1998 increased to $8.3 million from
$4.4 million for the three months ended June 30, 1997. Research and development
expenses for the six months ended June 30, 1998 increased to $14.7 million from
$8.2 million for the six months ended June 30, 1997. The increase in research
and development expenses relates primarily to costs associated with the
screening, treatment and monitoring of qualified individuals participating in
clinical trials, the preparation of the documentation for clinical trials, and
the preclinical work associated with the development of existing and new
compounds, formulations and clinical programs. In addition, research and
development expenses continue to increase in conjunction with the Company's
progression through the various stages of preclinical and clinical trials and
the increased costs associated with the purchase of raw materials and supplies
for the production of clinical devices and drugs for use in these trials. The
Company anticipates future research and development expenses to increase as the
Company continues its clinical trials in ophthalmology and oncology and expands
its research and development programs, which includes the increased hiring of
personnel and continued expansion of preclinical and clinical testing. See
"--General."
Selling, General and Administrative. The Company's selling, general and
administrative expenses for the three months ended June 30, 1998 increased to
$2.5 million from $2.0 million for the three months ended June 30, 1997. Total
selling, general and administrative costs for the first six months of 1998
increased to $5.6 million as compared to $4.3 million for the same period in
1997. The increase in selling, general and administrative expenses for both the
three and six month periods ending June 30, 1998 as compared to the same periods
in 1997 are a result of (i) the increase in costs associated with professional
services received from financial consultants, attorneys, and public and media
relations and (ii) payroll and overhead costs due to the addition of
administrative and corporate personnel. The Company expects future selling,
general and administrative expenses to continue to grow as a result of the
increased support required for research and development activities, continuing
corporate development and professional services, compensation expense associated
with stock options and financial consultants and general corporate matters, as
well as the other factors described above.
Loss in Investment in Affiliate. For the three months ended June 30,
1998 and 1997, the Company recorded as expense $441,000 and $240,000,
respectively, in connection with its investment in Ramus in December 1996. For
the six months ended June 30, 1998 the Company recorded $895,000 as expense
related to Ramus as compared to $472,000 for the six months ended June 30, 1997.
The amounts recorded as expense in 1998 and 1997 represent the full amount of
the affiliate's losses for the respective periods to the extent of the
investment made in Ramus. Ramus' losses from operations are expected to be
ongoing throughout 1998 and beyond, and the level of such losses are expected to
fluctuate depending on research and development activities and preclinical and
clinical trial progress. However, as the investment in Ramus has been completely
reduced as of June 30, 1998, under the equity method of accounting, the Company
will not record any further losses incurred by Ramus unless additional
investments are made.
Interest and Other Income. For the three months ended June 30, 1998,
net interest and other income increased to $927,000 compared to net interest and
other income of $441,000 for the three months ended June 30, 1997. Total net
interest and other income for the six months ended June 30, 1998 increased to
$2.2 million as compared to $1.1 million for the same period in 1997. The
increase in net interest and other income for both the three and six month
periods in 1998 resulted primarily from the investment of proceeds received from
the Company's private equity offering in September 1997. Additionally, for the
six month period in 1998, the Company also recorded as other income $152,000 as
a transaction fee for the guaranty of a loan to one of its directors. The
transaction fee was paid in the form of the Company's Common Stock which will be
retired.
The Company does not believe that inflation has had a material impact
on its results of operations.
Liquidity and Capital Resources
Since inception through June 30, 1998, the Company has accumulated a
deficit of approximately $97.8 million and expects to continue to incur
substantial and increasing operating losses for the next several years. The
Company has financed its operations primarily through private placements of
common and preferred stock, private placements of convertible notes and short
term notes, its initial public offering, Pharmacia & Upjohn's purchase of Common
Stock and a secondary public offering. As of June 30, 1998, the Company had
received proceeds from the sale of equity securities and convertible notes of
approximately $181.5 million. The Company has available a $1.0 million bank line
of credit which has a variable rate of interest based on the bank's lending rate
(7.35% as of June 30, 1998), which expires on January 31, 1999, and is
collateralized by the Company's cash balances. The credit agreement subjects the
Company to certain customary restrictions, including a prohibition on the
payment of dividends. The Company presently has no outstanding borrowings under
the bank line of credit.
In connection with the licensing agreement with Pharmacia & Upjohn, the
Company has recorded as license income the reimbursement of clinical costs of
$1.5 million for the six months ended June 30, 1998. Under the amended license
agreements entered into with Pharmacia & Upjohn in June 1998, the Company
anticipates recording license income for the specific reimbursement of clinical
costs throughout the remainder of 1998 and beyond.
In June 1998, the Company purchased a 9% equity interest in Xillix. The
investment was made in the form of $3 million cash and $2 million in restricted
shares of the Company's Common Stock valued at a premium to market. The shares
(58,909) had a fair market value of $1.5 million on the date the investment was
made. In addition to the investment, the Company entered into a strategic
alliance agreement with Xillix to co-develop proprietary systems incorporating
the technology of each company and to share the research and development costs.
Under the revolving credit agreement entered into in April 1998 with
its affiliate, Ramus, the Company has provided Ramus with $500,000 of the $2
million credit limit as of June 30, 1998. At the request of Ramus, the Company
will continue, from time to time, to provide Ramus with additional amounts under
this agreement.
For the first six months of 1998, the Company required cash for
operations of approximately $13.5 million compared to $9.3 million for the same
period in 1997. The increase in cash used in operations was primarily due to an
increase in operating activities associated with the continued expansion of
preclinical and clinical testing, the increase in research and development
programs and personnel, the reduction of accounts payable and the increase in
general corporate activities. For the first six months of 1998, the Company
required cash from its financing activities of approximately $12.7 million as
compared to $3.8 million for the same period in 1997. The increase is primarily
related to the repurchase by the Company of its Common Stock as well as the
issuance of executive equity notes during the first three months of 1998. This
increase was partially offset by proceeds received from the exercise of options
and warrants.
The Company invested a total of $1.6 million in property, plant and
equipment during the first six months of 1998 compared to $586,000 during the
same period in 1997. The increase is directly related to costs incurred for the
expansion of the Company's laboratory and office space as well as the purchase
of equipment for this space. The Company expects to continue to purchase
property and equipment in the future as it expands its preclinical, clinical and
research and development activities. Since inception, the Company has entered
into capital lease agreements for approximately $184,000 of equipment,
consisting primarily of laboratory equipment. The Company expects to continue to
lease equipment from time to time as needed, when and if financing resources
become available at acceptable terms to the Company.
The Company's capital funding requirements will depend on numerous
factors, including the progress and magnitude of the Company's research and
development programs and preclinical testing and clinical trials, the time
involved in obtaining regulatory approvals, the cost involved in filing and
maintaining patent claims, technological advances, competitor and market
conditions, the ability of the Company to establish and maintain collaborative
arrangements, the cost of manufacturing scale-up and the cost and effectiveness
of commercialization activities and arrangements.
The Company may require substantial funding to continue its research
and development activities, preclinical and clinical testing and manufacturing,
marketing, sales, distribution and administrative activities. Additionally,
under the Amendment Agreement dated June 30, 1998 to the Company's Securities
Purchase Agreement dated September 22, 1997, the Company may be required to
expend substantial funds to fulfill its obligations under the price protection
provisions. Furthermore, the Company may expend significant additional cash
resources to repurchase shares of it Common Stock under the Common Stock
repurchase program previously approved by the Company's Board of Directors and
if it exercises its option to repurchase its shares under the Amendment
Agreement. The Company has raised funds in the past through the public or
private sale of securities, and may raise funds in the future through public or
private financings, collaborative arrangements or from other sources. The
success of such efforts will depend in large part upon continuing developments
in the Company's preclinical and clinical testing. The Company continues to
explore and, as appropriate, enter into discussions with other companies
regarding the potential for equity investment, collaborative arrangements,
license agreements or development or other funding programs with the Company in
exchange for manufacturing, marketing, distribution or other rights to products
developed by the Company. However, there can be no assurance that discussions
with other companies will result in any investments, collaborative arrangements,
agreements or funding, or that the necessary additional financing through debt
or equity financing will be available to the Company on acceptable terms, if at
all. Further, there can be no assurance that any arrangements resulting from
these discussions will successfully reduce the Company's funding requirements.
If additional funding is not available to the Company when needed, the Company
will be required to scale back its research and development programs,
preclinical and clinical testing and administrative activities and the Company's
business and financial results and condition would be materially adversely
affected.
<PAGE>
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On June 10, 1998, the Company held its Annual Meeting of Stockholders. The
following individuals were elected to the Board of Directors:
Votes Votes
For Withheld
--------------- ---------------
Charles T. Foscue 10,875,964 23,848
Gary S. Kledzik, Ph.D. 10,875,964 23,848
David E. Mai 10,875,964 23,848
Donald K. McGhan 10,430,731 469,081
Raul E. Perez, M.D. 10,877,526 22,286
Jonah Shacknai 10,877,526 22,286
In addition, the shareholders also approved the following proposal:
<TABLE>
<CAPTION>
Votes Votes Broker
For Against Abstained Non-Votes
-------------- -------------- -------------- ----------------
<S> <C> <C> <C> <C>
1. Proposal to ratify the selection of
the Company's independent auditors. 10,882,997 1,315 15,500 0
</TABLE>
ITEM 5. OTHER INFORMATION
Notice of any shareholder proposal intended to be presented at
the Company's 1999 Annual Meeting of Shareholders that is not
submitted to the Company pursuant to SEC Rule 14a-8 will be
considered untimely if not received by the Company on or
before March 24, 1999.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
See Exhibit Index on page 16.
(b) Reports on Form 8-K.
Form 8-K dated June 30, 1998, Other Events - Item 5:
announcing that the Company had amended the
Securities Purchase Agreement dated September 22,
1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed in its behalf by the
undersigned thereunto duly authorized.
Miravant Medical Technologies
Date: August 13, 1998 By: /S/ John M. Philpott
------------------------
John M. Philpott
Chief Financial Officer and Controller
(on behalf of the Company and as
Principal Financial Officer and
Principal Accounting Officer)
<PAGE>
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
Incorporating
Exhibit Reference
Number Description (if applicable)
- ------ ----------- ---------------
<S> <C>
3.1 Certificate of Amendment of the Restated Certificate of Incorporation of the Registrant
filed with the Delaware Secretary of State on September 12, 1997. [E][3.1]
3.2 Certificate of Amendment of the Restated Certificate of Incorporation of the Registrant [C][3.11]
filed with the Delaware Secretary of State on July 24, 1995.
3.3 Restated Certificate of Incorporation of the Registrant filed with the Delaware Secretary [B][3.1]
of State on December 14, 1994.
3.4 Certificate of Amendment of the Certificate of Incorporation of the Registrant filed with [A][3.2]
the Delaware Secretary of State on March 17, 1994.
3.5 Certificate of Amendment of the Certificate of Incorporation of the Registrant filed with [A][3.3]
the Delaware Secretary of State on October 7, 1992.
3.6 Certificate of Amendment of the Certificate of Incorporation of the Registrant filed with [A][3.4]
the Delaware Secretary of State on November 21, 1991.
3.7 Certificate of Amendment of the Certificate of Incorporation of the Registrant filed with [A][3.5]
the Delaware Secretary of State on September 27, 1991.
3.8 Certificate of Amendment of the Certificate of Incorporation of the Registrant filed with [A][3.6]
the Delaware Secretary of State on December 20, 1989.
3.9 Certificate of Amendment of the Certificate of Incorporation of the Registrant filed with [A][3.7]
the Delaware Secretary of State on August 11, 1989.
3.10 Certificate of Amendment of the Certificate of Incorporation of the Registrant filed with [A][3.8]
the Delaware Secretary of State on July 13, 1989.
3.11 Certificate of Incorporation of the Registrant filed with the Delaware Secretary of State [A][3.9]
on June 16, 1989.
3.12 Amended and Restated Bylaws of the Registrant. [E][3.12]
4.1 Specimen Certificate of Common Stock. [B][4.1]
4.2 Form of Convertible Promissory Note. [A][4.3]
4.3 Form of Indenture. [A][4.4]
4.4 Special Registration Rights Undertaking. [A][4.5]
4.5 Undertaking Agreement dated August 31, 1994. [A][4.6]
4.6 Letter Agreement dated March 10, 1994. [A][4.7]
4.7 Form of $10,000,000 Common Stock and Warrants Offering Investment Agreement. [A][4.8]
4.8 Form of $55 Common Stock Purchase Warrant. [D][4.1]
4.9 Form of $60 Common Stock Purchase Warrant. [D][4.2]
4.10 Form of $35 Amended and Restated Common Stock Purchase Warrant. [F][4.1]
4.11 Form of Additional $35 Common Stock Purchase Warrant. [F][4.2]
4.12 Warrant to Purchase 10,000 Shares of Common Stock between the Registrant and Charles S.
Love.*
10.1 Amended and Restated Development and Commercial Supply Agreement dated June 8, 1998
between the Registrant and Pharmacia & Upjohn Co.*
10.2 Amended and Restated Development and License Agreement dated June 8, 1998 between the
Registrant and Pharmacia & Upjohn S.p.A.*
10.3 Amended and Restated Ophthalmology Development and License Agreement dated June 8, 1998
between the Registrant and Pharmacia & Upjohn AB.*
10.4 Right of First Refusal Agreement dated June 8, 1998 between the Registrant and Pharmacia &
Upjohn, Inc.*
10.5 Credit Agreement dated April 1, 1998 between the Registrant and Ramus Medical
Technologies.*
10.6 Convertible Promissory Note dated April 1, 1998 between the Registrant and Ramus Medical
Technologies.*
10.7 Strategic Alliance Agreement dated June 2, 1998 between the Registrant and Xillix
Technologies Corp.*
10.8 Subscription Agreement relating to the Registrant's Common Stock dated June 2, 1998
between the Registrant and Xillix Technologies Corp.
10.9 Subscription Agreement relating to Xillix's Common Stock dated June 2, 1998 between the
Registrant and Xillix Technologies Corp.
11.1 Statement regarding computation of net loss per share.
27.1 Financial Data Schedule.
- -------------------------------------------
[A] Incorporated by reference from the exhibit referred to in brackets
contained in the Registrant's Registration Statement on Form S-1
(File No. 33-87138).
[B] Incorporated by reference from the exhibit referred to in brackets
contained in Amendment No. 2 to the Registrant's Registration
Statement on Form S-1 (File No. 33-87138).
[C] Incorporated by reference from the exhibit referred to in brackets
contained in the Registrant's Form 10-Q for the quarter ended June
30, 1995, as amended on Form 10-Q/A dated December 6, 1995 (File No.
0-25544).
[D] Incorporated by reference from the exhibit referred to in brackets
contained in the Registrant's Registration Statement on Form S-3
(File No. 333-39905).
[E] Incorporated by reference from the exhibit referred to in brackets
contained in the Registrant's Form 10-Q for the quarter ended
September 30, 1997 (File No. 0-25544).
[F] Incorporated by reference from the exhibit referred to in brackets
contained in the Registrant's Form 8-K dated June 30, 1998 (File No.
0-25544).
* Confidential portions of this exhibit have been deleted and filed
separately with the Commission pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934.
</TABLE>
EXHIBIT C
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE, IN
RELIANCE ON EXEMPTIONS FROM SUCH REGISTRATION AND QUALIFICATION FOR NONPUBLIC
OFFERINGS. ACCORDINGLY, THE SALE, TRANSFER OR OTHER DISPOSITION OF SUCH
SECURITIES OR ANY PORTION THEREOF MAY NOT BE ACCOMPLISHED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND QUALIFICATION UNDER
APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY TO THE EFFECT THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
WARRANT NO. ___ _______, 19__
WARRANT TO PURCHASE 10,000 SHARES OF COMMON STOCK
OF MIRAVANT MEDICAL TECHNOLOGIES
Miravant Medical Technologies, a Delaware corporation (the "Company"),
hereby certifies that Charles S. Love (the "Holder"), is entitled to purchase,
on the terms and conditions contained herein, 10,000 shares (the "Warrant
Shares") of the Company's common stock, $0.01 par value per share ("Common
Stock"), at the Fair Market Value on the date hereof ***** per Warrant Share
(the "Warrant Purchase Price") at any time and from time to time during the
Exercise Period (as such term is defined below).
This Warrant is subject to the following terms and conditions:
***** Confidential Treatment Requested
<PAGE>
1. DEFINITIONS. For the purposes of this Warrant, the following terms shall have
the respective meanings set forth below:
"Common Stock" shall have the meaning set forth in the preamble of this
Warrant.
"Company" shall have the meaning set forth in the preamble of this Warrant.
"Current Market Price" per share of Common Stock shall mean, as of any
specified date on which the Common Stock is publicly traded, the average of
the daily market prices of the Common Stock over the 20 consecutive
trading days immediately preceding (and not including) such date. The
"daily market price" for each such trading day shall be (i) the closing
price on such day on the principal stock exchange on which the Common Stock
is then listed or admitted to trading or on NASDAQ as applicable, (ii) if
no sale takes place on such day on any such exchange or system, the average
of the closing bid and asked prices regular way on such day for the Common
Stock as officially quoted on any such exchange or system, (iii) if the
Common Stock is not then listed or admitted to trading on any stock
exchange or system, the last reported sale price regular way on such day
for the Common Stock, or if no sale takes place on such day, the average of
the closing bid and asked prices for the Common Stock on such day, as
reported by NASDAQ or the National Quotation Bureau, (iv) in the event the
Common Stock is not then listed or admitted to trading on any securities
exchange and if no such reported sale price or bid and asked prices are
available, the average of the reported high bid and low asked prices on
such day, as reported by a reputable quotation service, or a newspaper of
general circulation in the City of Los Angeles customarily published on
each Business Day. If the daily market price cannot be determined for the
20 consecutive trading days immediately preceding such date in the manner
specified in the foregoing sentence, then the Common Stock shall not be
deemed to be publicly traded as of such date.
"Designated Office" shall have the meaning set forth in Section 2.
"Exercise Period" shall mean the period commencing on the date of this
Warrant and ending on the Expiration Date.
"Expiration Date" shall mean ***** from the date of this Warrant.
"Fair Market Value" per share of Common Stock as of any specified date
shall mean (i) if the Common Stock is publicly traded on such date, the
Current Market Price per share or (ii) if the Common Stock is not publicly
traded on such date, the fair market value per share of Common Stock
as determined in good faith by the Board of Directors of the Company and
set forth in a written notice to the Holder. "Holder" shall have the
meaning set forth in the preamble of this Warrant.
"NASDAQ" shall mean the National Association of Securities Dealers'
Automatic Quotation System, or any successor reporting system.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association,
corporation, limited liability company, limited liability partnership,
institution, public benefit corporation, entity or government (whether
Federal, state, county, city, municipal or otherwise, including, without
limitation, any instrumentality, political subdivision, agency, body or
department thereof).
"Warrant Purchase Price" shall have the meaning set forth in the preamble
of this Warrant (as adjusted in accordance with the terms of this Warrant).
"Warrant" shall mean this Warrant, any amendment of such original
Warrant, and any Warrant issued upon transfer, division or combination of,
or in substitution for, such original Warrant or any other such Warrant.
All Warrants shall at all times be identical as to terms and conditions and
date, except as to the number of Warrant Shares for which they may be
exercised.
"Warrant Shares" shall have the meaning set forth in the preamble of this
Warrant.
***** Confidential Treatment Requested
<PAGE>
2. EXERCISE.
2.1 Exercise; Delivery of Certificates. This Warrant may be exercised, at
the option of the Holder, at any time and from time to time during the Exercise
Period, for all or any part of the Warrant Shares. This Warrant may be exercised
by delivering the payment of the Warrant Purchase Price for the number of
Warrant Shares being purchased and concurrently surrendering this Warrant to the
Company at its principal office (the "Designated Office"), together with the
Form of Exercise Subscription attached hereto duly completed and signed. The
Warrant Shares purchased under this Warrant shall be and are deemed to be issued
to the Holder as the record owner of such shares as of the close of business on
the date on which this Warrant shall have been surrendered and payment made
therefor. Certificates for Warrant Shares so purchased shall be delivered to the
Holder within three Business Days after this Warrant has been exercised, and, in
case of a purchase of less than all of the Warrant Shares purchasable upon
exercise of this Warrant, the Company shall cancel this Warrant and, within
three Business Days, shall execute and deliver to the Holder a new Warrant of
like tenor for the balance of the Warrant Shares. Each stock certificate so
delivered shall be registered in the name of the Holder or such other name as
shall be designated by the Holder.
2.2 Payment of Warrant Price. Payment of the Warrant Purchase Price may be
made, at the option of the Holder (i) by certified or official bank check, (ii)
by wire transfer, (iii) by instructing the Company to withhold and cancel a
number of Warrant Shares then issuable upon exercise of this Warrant with
respect to which the excess of the Fair Market Value over the Warrant Purchase
Price for such cancelled Warrant Shares is at least equal to the Warrant
Purchase Price for the shares being purchased, (iv) by surrender to the Company
of shares of Common Stock previously acquired by the Holder with a Fair Market
Value equal to the Warrant Purchase Price for the shares being purchased or (v)
by any combination of the foregoing.
2.3 No Fractional Shares. The Company shall not be required to issue
fractional shares of Common Stock upon the exercise of this Warrant. If any
fraction of a share of Common Stock would, except for the provisions of this
paragraph, be issuable on the exercise of this Warrant (or specified portion
thereof), the Company shall pay to Holder an amount in cash calculated by it to
be equal to the then Fair Market Value per share of Common Stock multiplied by
such fraction computed to the nearest whole cent.
3. ADJUSTMENTS TO THE NUMBER OF WARRANT SHARES AND TO THE WARRANT PURCHASE
PRICE. The number of Warrant Shares for which this Warrant is exercisable and
the Warrant Purchase Price shall be subject to adjustment from time to time as
set forth in this Section 3.
3.1 Stock Dividends, Subdivisions and Combinations. If at any time the
Company shall:
(a) pay a dividend or other distribution on its Common Stock
in shares of Common Stock or shares of any other class or series of capital
stock,
(b) subdivide its outstanding shares of Common Stock into a
larger number of shares of such Common Stock, or
(c) combine its outstanding shares of Common Stock into a
smaller number of shares of such Common Stock, then the number of Warrant Shares
purchasable upon exercise of this Warrant immediately prior to the record date
for such dividend or distribution or the effective date of such subdivision or
combination shall be adjusted so that the Holder of this Warrant shall
thereafter be entitled to receive upon exercise of this Warrant the kind and
number of shares of Common Stock that such Holder would have owned or have been
entitled to receive immediately after such record date or effective date had
this Warrant been exercised immediately prior to such record date or effective
date. An adjustment made pursuant to this Section 3 shall become effective
immediately after the effective date of such event, but be retroactive to the
record date, if any, for such event. 3.2 Rights; Options; Warrants. If at any
time the Company shall issue (without payment of any consideration) to all
holders of outstanding Common Stock rights, options or warrants to subscribe for
or purchase shares of Common Stock or securities convertible into or
exchangeable for Common Stock, then the Company shall also distribute such
rights, options, warrants or securities to the Holders of this Warrant as if
this Warrant had been exercised immediately prior to the record date for such
distribution.
4. MISCELLANEOUS.
4.1 Restrictive Legend. This Warrant, any warrant issued upon transfer of
this Warrant and any Warrant Shares issued upon exercise of this Warrant or any
portion thereof shall be imprinted with the following legend, in addition to any
legend required under applicable state securities laws:
THE SECURITY REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES
LAW. THIS SECURITY MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED
OR OTHERWISE ASSIGNED, EXCEPT IN COMPLIANCE WITH THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND ALL APPLICABLE STATE SECURITIES LAWS.
The legend shall be appropriately modified upon issuance of
certificates for shares of Common Stock.
Upon request of the Holder of such a certificate, the Company shall
issue to such Holder a new certificate free of the foregoing legend,
if, with such request, the Holder provides the Company with an opinion
of counsel stating that the securities evidenced by such certificate
can be sold under Rule 144 or a similar Rule permitting resales
without restriction.
4.2 Other Covenants. The Company covenants and agrees that, as long as any
Warrant Shares are issuable with respect to outstanding Warrants, the Company
will perform all of the following covenants for the express benefit of the
Holder of the Warrant Shares: (a) the Warrant Shares shall, upon issuance, be
duly authorized, validly issued, fully paid and nonassessable shares of Common
Stock; (b) each Holder of a Warrant shall, upon the exercise thereof in
accordance with the terms hereof, receive good and marketable title to the
Warrant Shares, free and clear of all voting and other trust arrangements to
which the Company is a party or by which it is bound, preemptive rights of any
stockholder, liens, encumbrances, equities and claims whatsoever; and (c) at all
times prior to the Expiration Date, the Company shall have reserved for issuance
a sufficient number of authorized but unissued shares of Common Stock, or other
securities or property for which this Warrant may then be exercisable, to permit
this Warrant (or if this Warrant has been divided, all outstanding Warrants) to
be exercised in full.
4.3 No Voting Rights; Limitation Of Liability. Except as expressly set
forth in this Warrant, nothing contained in this Warrant shall be construed as
conferring upon the Holder (i) the right to vote or to consent as a stockholder
in respect of meetings of stockholders for the election of directors of the
Company or any other matter, (ii) the right to receive dividends except as set
forth in Section 3, or (iii) any other rights as a stockholder of the Company.
No provisions hereof, in the absence of affirmative action by the Holder to
purchase shares of Common Stock, and no mere enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of such Holder for
the Warrant Purchase Price or as a stockholder of the Company, whether such
liability is asserted by the Company or by its creditors.
4.4 Modification And Waiver. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement is sought.
4.5 Notices. All notices, requests, demands and other communications which
are required or may be given under this Warrant shall be in writing and shall be
deemed to have been duly given if transmitted by telecopier with receipt
acknowledged, or upon delivery, if delivered personally or by recognized
commercial courier with receipt acknowledged, or upon the expiration of 72 hours
after mailing, if mailed by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
(a) If to the Holder, at:
Charles S. Love
346-B Bollay Drive
Santa Barbara, California 93117
Telephone: (805) 961-1424
Facsimile: (805) 961-1434
(b) If to the Company, at:
Miravant Medical Technologies
7408 Hollister Avenue
Goleta, California 93117
Attention: David E. Mai, President
Telephone: (805) 685-9880
Facsimile: (805) 685-2959
or at such other address or addresses as the Holders, or the Company, as the
case may be, may specify by written notice given in accordance with this Section
4.5.
4.6 Successors and Assigns. Holder may assign all or any portion of this
Warrant at any time or from time to time with the prior written consent of the
Company. Each assignment of this Warrant, in whole or in part, shall be
registered on the books of the Company to be maintained for such purpose, upon
surrender of this Warrant at the Designated Office, together with appropriate
instruments of assignment, duly filled in and executed. Upon such surrender and
delivery, the Company shall, at its own expense, within three Business Days
execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees specified in such assignment and in the denominations specified
therein and this Warrant shall promptly be cancelled. In the event any portion
of this Warrant is not being assigned, the Company shall, at its own expense,
within three Business Days issue to the Holder a new Warrant evidencing the
portion not so assigned. This Warrant shall be binding upon and inure to the
benefit of the Company and the Holder of this Warrant, and their respective
successors and permitted assigns.
4.7 Descriptive Headings. The descriptive headings of the several
paragraphs of this Warrant are for convenience of reference only and do not
constitute a part of this Warrant and are not to be considered in construing or
interpreting this Warrant.
4.8 Lost Warrant Or Certificates. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant or of a stock certificate evidencing Warrant Shares and, in the
case of any such loss, theft or destruction, upon receipt of an indemnity
reasonably satisfactory to the Company or, in the case of any such mutilation,
upon surrender and cancellation of such Warrant or stock certificate, the
Company shall make and deliver to Holder, within three Business Days of receipt
by the Company of such documentation, a new Warrant or stock certificate, of
like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock
certificate.
4.9 Termination Of this Warrant. This Warrant shall terminate and shall no
longer be exercisable after the Expiration Date.
4.10 Governing Law. In all respects, including all matters of construction,
validity and performance, this Warrant and the rights and obligations arising
hereunder shall be governed by, and construed and enforced in accordance with,
the laws of the State of California applicable to contracts made and performed
in such state, without regard to principles thereof regarding conflicts of laws.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed and
issued by its duly authorized representative on the date first above written.
MIRAVANT MEDICAL TECHNOLOGIES,
a Delaware corporation
By:
Gary S. Kledzik, Chairman
By:
Joseph E. Nida, Secretary
<PAGE>
FORM OF EXERCISE SUBSCRIPTION
(To be signed only upon exercise of this Warrant)
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise such Warrant to purchase,
_______________________________________ (_____________) shares of Common Stock
for an aggregate Warrant Purchase Price of _________________________________
Dollars ($____________________), such Warrant Purchase Price to be paid as
follows (check as applicable): |_| certified or official bank check in the
amount of $____________________; |_| wire transfer in the amount of
$___________________; |_| cancellation of _________________________ Warrant
Shares; or |_| surrender of __________________ shares of Common Stock. The
undersigned requests that a certificate(s) for such shares be issued in the name
of ____________________________________, and delivered to, , whose address is
________________________________________ .
The undersigned represents that it is acquiring such shares of Common Stock
for its own account for investment purposes only and not with a view to or for
sale in connection with any distribution thereof.
Dated: ___________________ ______________________________________
Name of the Holder (must conform
precisely to the name specified on
the face of the Warrant)
______________________________________
Signature of authorized representative
of the Holder
______________________________________
Print or type name of authorized
representative
______________________________________
Social Security Number of the Holder:
Address of the Holder:
______________________________________
______________________________________
______________________________________
AMENDED AND RESTATED
DEVELOPMENT AND COMMERCIAL SUPPLY AGREEMENT
between
PHARMACIA & UPJOHN CO.
and
MIRAVANT MEDICAL TECHNOLOGIES
June 8, 1998
<PAGE>
AMENDED AND RESTATED
DEVELOPMENT AND COMMERCIAL SUPPLY CONTRACT
THIS AGREEMENT, effective as of June 8, 1998 (the "Effective Date"), by and
among PHARMACIA & UPJOHN CO., a Delaware corporation having a place of business
in Clayton, North Carolina ("P&U"); and MIRAVANT MEDICAL TECHNOLOGIES, a
Delaware corporation having its principal place of business in Santa Barbara,
California ("Miravant").
W I T N E S S E T H:
WHEREAS, P&U (successor by merger to Pharmacia, Inc.) and Miravant (f/k/a
PDT, Inc.) entered into a Development and Commercial Supply Agreement as of
August 31, 1994 (the "Original Supply Agreement"), to develop and manufacture a
certain emulsion product;
WHEREAS, the development of this emulsion product is nearly complete and,
in anticipation of entering the commercial manufacturing phase, the parties
desire to make certain amendments to the Original Agreement;
WHEREAS, P&U plans to transfer its production facility in Clayton, N.C.,
and, in anticipation of such transfer, the parties desire to make further
amendments, and the parties have therefore agreed to amend and restate the
Original Agreement in its entirety as set forth below;
NOW, THEREFORE, the parties agree as follows:
SECTION 1. - DEFINITIONS
1.1 Definitions. The terms set forth in Exhibit 1 shall have the indicated
meanings for purposes of this Agreement.
SECTION 2. - DEVELOPMENT WORK
2.1 Description. As part of the Development Work, P&U will, in accordance
with applicable GLP/GMP requirements for injectibles, use commercially
reasonable efforts to: (a) perform such additional formulation work as the
parties shall agree to perform, (b) produce stability lots and supplies of
Emulsions containing the Agent for use in the preclinical and clinical studies,
(c) establish quality assurance, cleaning and manufacturing procedures for the
manufacture of the Emulsions and the Product in accordance with GMP and the
Specifications, (d) perform process scale-up for regulatory filing and
commercial distribution, and (e) obtain such engineering and other services as
may be required to enable P&U to comply with applicable environmental laws in
the manufacture of Emulsions containing the Agent. Miravant (or its Affiliates
or licensees) will conduct all preclinical and clinical studies.
2.2 Efforts of the Parties. Both parties shall use commercially reasonable
efforts in carrying out their roles. The foregoing notwithstanding, the parties
acknowledge that no assurance can be given that the Products can be developed,
or that, if developed, such Products will have commercial utility or that FDA
regulatory approval can be obtained.
2.3 Location. Except as otherwise provided in Section 5.4, all Development
Work to be performed by P&U under this Agreement shall be performed at P&U's
research and development facilities or its plant in Clayton, North Carolina
("Clayton Facility").
2.4 Development Work Data Collection. P&U shall maintain records and retain
samples of all raw materials and Emulsions and the Product, including all
FDA-required records and samples, in accordance with FDA requirements and in
sufficient detail and in good scientific and patent manner as will properly
reflect all work done and results achieved in the performance of the Development
Work. Except to the extent disclosing P&U Technology, all Data produced,
generated or procured by P&U or its employees during the Development Work
(including Development Work done prior to the Effective Date) shall be owned by
and shall be Proprietary Information of Miravant. Upon the reasonable request of
Miravant, (a) Miravant may examine and review such Data at reasonable times, and
(b) P&U shall deliver to Miravant copies of such Data. P&U shall not be required
to retain any Data or samples beyond the later of ***** from the date of
completion of the Development Work or the period for which applicable FDA
regulations require such Data and samples to be retained.
***** Confidential Treatment Requested
<PAGE>
2.5 Regulatory Filings; Drug Master File. P&U will provide Miravant, at
Miravant's request, with all chemistry, manufacturing and controls information
required to be submitted in an IND, NDA or amendment or supplement thereto,
except such information described on Exhibit 5 (the "DMF Information") The DMF
Information shall not be submitted to Miravant, but all such information shall
be submitted in a drug master file ("DMF") prepared and promptly submitted by
P&U. In respect to such DMF:
(c) the contents and format shall comply with applicable FDA
requirements, including 21 C.F.R. ss.314.420 (or, if appropriate, the
equivalent government authority in the applicable country);
(d) P&U shall maintain such DMF in a current status at all times, and
Miravant shall be informed of the making of all changes to the DMF in
accordance with applicable FDA regulations and guidelines;
(e) P&U shall authorize Miravant to cross reference any information
contained in such DMF in connection with Miravant's submittal of the IND,
NDA or amendment or supplement thereto for use with Product manufactured by
P&U or under the licenses expressly granted to Miravant hereunder; and
(f) a letter authorizing Miravant to cross-reference the DMF will be
submitted to the FDA on behalf of Miravant by P&U.
All FDA filing or user fees associated with the IND, NDA, DMF or amendments or
supplements thereto shall be borne by Miravant.
2.6 Quality Assurance; Access to P&U Technology.
(a) Product Testing. P&U shall assume responsibility for all quality
assurance testing, including raw material testing, in-process control
testing and final product release testing, in connection with the Emulsions
and the Product in accordance with all applicable FDA regulations. Miravant
shall have the right to also have an independent, qualified laboratory
perform such testing periodically when Miravant deems it necessary to do
so. Subject to appropriate confidentiality undertakings, P&U agrees to
disclose to such third party such analytical methods and product
specifications as may be required to conduct such testing.
(b) Inspection Rights. To assure satisfaction with the applicable
quality control procedures in connection with the Development Work and
commercial production of the Product, upon reasonable prior notice, and at
reasonable times with a representative of P&U present, P&U shall permit
Miravant or its representatives to periodically review P&U's quality
control procedures and records. To the extent reasonably required to comply
with GLP/GMP requirements or to the extent a review of such records is not
adequate to assure satisfaction with such quality control requirements,
Miravant's regulatory personnel may visit P&U's production facility upon
reasonable prior notice. Such visits shall be conducted in a reasonable
manner and shall be limited to the equipment, records or production area
relating to P&U's performance under this Agreement. In addition to the
foregoing rights, Miravant shall have the right to inspect and audit such
facilities for compliance with GMP requirements. Miravant shall provide P&U
at least five (5) days notice of its intention to conduct such inspection
and audit, and such inspection and audit shall in no way interfere with the
manufacturing, packaging or control of the Product or any other products.
None of the foregoing rights shall apply to the DMF Information, to which
Miravant may have access solely as provided in Section 2.5(d) below.
(c) Site Visit Restrictions. Miravant personnel shall observe all
safety regulations of P&U when on P&U's premises. Miravant acknowledges
that P&U considers that such facility (including its equipment and manner
of use) embodies Proprietary Information, all of which shall be subject to
the provisions of Section 10 below. To the extent any such inspection or
audit cannot be reasonably performed due to the unavoidable observance of
confidential information of any third party which has imposed restrictions
on P&U's disclosure of such information, the parties shall determine in
good faith alternative procedures to assure compliance with GMP
requirements (including using an independent third party).
(d) Access to P&U Technology. Notwithstanding anything to the contrary
in this Agreement, Miravant shall not have access to or the right to use:
(a) any P&U Technology described in subsection (a) of the definition of P&U
Technology (Paragraph 1.20 of Exhibit 1); and (b) except as otherwise
expressly provided in this Agreement, any other P&U Technology. To the
extent Miravant needs to review P&U Emulsion Technology not otherwise
available to it under this Agreement to confirm that an Emulsion or the
Product is manufactured in accordance with all applicable GMP requirements
and Product Specifications, P&U shall disclose such information as is
required to comply with such requirements to an independent third party
consultant selected by Miravant and to which P&U does not reasonably
object. Such consultant shall be directed not to submit any report or other
information to Miravant prior to providing P&U an opportunity to review
such information and expunge any of P&U's Proprietary Information embodying
P&U Technology. P&U shall complete promptly its review of such reports and
other information. To the extent Miravant's chief medical officer
reasonably requires to review any expunged P&U Technology to assure the
safety of an Emulsion or the Product or to assure that an Emulsion or
Product is manufactured in accordance with all applicable GMP requirements
and Product Specifications, and notifies P&U of such requirement, P&U shall
allow only such individual to review the original version of such reports
solely for such purpose.
SECTION 3. - DEVELOPMENT WORK MANAGEMENT
3.1 Project Leaders. The parties designate the following individuals as
their respective Project Leaders:
For P&U: Lynn Collins-Gold
For Miravant: Jan Guerrero
The Project Leaders (and their staffs) shall meet at least once each calendar
quarter, or from time to time as agreed by the parties, to exchange scientific
information and progress reports summarizing the Development Work completed, the
results obtained during that quarter and the Development Work expected to be
performed in the next quarter. Either party may change its Project Leader upon
prior notice to the other party.
3.2 Administrative Responsibility. The technical personnel and other
representatives at any time furnished by either party to the other or otherwise
performing services pursuant to this Agreement shall at all times remain the
employees or representatives of the party furnishing such personnel. Except as
otherwise expressly provided in Section 4 below, each party shall be responsible
for and shall pay all salaries, living allowances, insurance coverages,
traveling expenses, any withholding required for tax or other purposes and other
remunerations and expenses to which its own employees or representatives may be
entitled. Notwithstanding the foregoing, such employees or representatives of
either party, while on the property of the other party or its designee, shall be
at all times subject to the reasonable rules and regulations adopted by such
other party with respect to the conduct of its own employees or representatives.
SECTION 4. - DEVELOPMENT WORK COMPENSATION
4.1 Initial Fee. In consideration of P&U's commitment to develop the
Emulsions and the Product in accordance with the terms hereof and the use of
P&U's Technology for the development of the Emulsions and the Product, Miravant
paid P&U an initial fee of $600,000.
4.2 Hourly Rates. P&U shall provide the services required to perform the
Development Work after the Effective Date at the hourly rates set forth in
Exhibit 2 hereto. It is assumed that all standard laboratory equipment and
instrumentation procurement and usage are included in the hourly charge, with
the exception of dedicated equipment used solely for the Development Work as
provided in Section 4.4 herein.
4.3 Travel and Supplies. Subject to its prior written approval for travel
outside the United States, Miravant shall also reimburse P&U for its actual,
reasonable and necessary out-of-pocket travel expenses incurred specifically in
connection with providing the services hereunder (exclusive of commuting
expenses), including, but not limited to, coach air and ground transportation,
reasonable lodging and meals. Miravant shall also reimburse P&U for its
out-of-pocket expenses for courier services, outside reproduction services,
laboratory chemicals (except the Agent which shall be provided by Miravant
pursuant to Section 5.5), other laboratory supplies, and outside analytical or
other testing work, and other purchased items which are not presently available
at the P&U site and which are required to produce Emulsions for the Development
Work (including any replacement items). P&U may, without Miravant's prior
approval, procure any item of laboratory or other equipment with a purchase
price less than ***** without the prior approval by Miravant, which is required
for P&U to perform its obligations hereunder, and is not now available for use
at the facility where the equipment is needed. All equipment purchased pursuant
to this Section 4.3 by P&U shall be owned by P&U.
4.4 Purchased Equipment. P&U shall not acquire any laboratory equipment or
other item with a purchase price greater than ***** without Miravant's prior
consent. Upon receipt of such consent, P&U shall then have the option to
purchase such item itself. All such items purchased by P&U shall be owned by
P&U, and P&U may charge Miravant for the pro rata allocable depreciation on such
equipment based upon five year straight line depreciation. All equipment
purchased pursuant to this Section 4.4 by Miravant shall be owned by Miravant.
Title to and risk of loss of any equipment purchased under this Section 4.4
shall be in P&U if purchased by P&U, and in Miravant if purchased by Miravant.
Miravant may, at its option, furnish P&U the use of any such equipment Miravant
possesses or to which it may have access, in which case Miravant shall retain
title to and risk of loss of such equipment. P&U shall, upon request by
Miravant, plainly mark any equipment owned by Miravant which is in P&U's
possession.
***** Confidential Treatment Requested
<PAGE>
4.5 Invoicing. During the Development Work after the Effective Date, P&U
shall submit monthly invoices to Miravant which shall include: (a) total hours
expended by each person in a category listed on Exhibit 2 for whom reimbursement
is sought, and (b) itemized list of all reimbursable expenses. Miravant's
payment shall be due thirty (30) days after its receipt of each such invoice,
except for amounts that Miravant reasonably disputes. P&U shall maintain
accurate records of time charges and travel and equipment expenses, and shall
maintain accurate supporting documents to verify all of the foregoing. Such
records and documents shall be available for audit by Miravant during normal
business hours and on reasonable notice, but not later than the end of the
calendar year in which the invoice is rendered.
SECTION 5. - COMMERCIAL SUPPLY
5.1 Purchase and Sale. During the term of this Agreement, (a) Miravant
shall purchase, and P&U shall manufacture and supply, all of Miravant's (and its
Affiliates') worldwide requirements of Emulsions containing the Agent for
commercial use; and (b) to the extent not purchased by Miravant, Miravant shall
cause its licensees to purchase from P&U, and P&U shall manufacture and supply,
all of their worldwide requirements of such Emulsions for commercial use. Except
as set forth in Section 5.2 below, P&U shall not be obligated to supply more
than ***** Units per year of the Product. The Initial Facility will be
configured to produce up to ***** Units per year. P&U's main production line
will be modified to produce the Product in excess of such quantity. P&U shall
not be required to produce the Product for commercial use above such level until
***** further notice from Miravant that its requirements will exceed such level,
plus the amount of time required for internal and FDA validation and approval of
such modified production facility.
5.2 Expanded Capacity.
(a) Miravant's Right to Manufacture. As soon as practicable, Miravant
shall notify P&U in writing when it expects its aggregate annual worldwide
requirements of Product to exceed ***** Units ("Notice to Expand"). P&U
shall then have the right to produce all such additional worldwide
requirements of Product if the parties negotiate mutually acceptable terms
amending this Agreement (including construction time periods and extension
of the term of this Agreement for the construction of a dedicated or
multipurpose production line ("Expanded Production Line")). In no event
shall P&U be obligated to supply Product manufactured in the Expanded
Production Line sooner than ***** after entering into a written agreement
with Miravant to construct the Expanded Production Line, plus the amount of
time required for internal and FDA validation and approval of such
production facility. If the parties fail to agree upon such terms for an
Expanded Production Line, (a) P&U shall continue to produce, and Miravant
shall continue to purchase, Product from P&U up to ***** Units or such
higher quantity as P&U may then commit in writing to provide for so long as
this Agreement shall continue pursuant to Section 13; and (b) Miravant
shall have the right to manufacture (or have manufactured) its requirements
of the Products in excess of the quantity so committed by P&U as provided
in Section 5.2(b) below.
(b) Standby License; Supply of *****. If Miravant elects to
manufacture or have manufactured by a third party Miravant's excess
requirements for the Product as provided in Section 5.2(a) and if then
requested by Miravant, P&U and Miravant shall enter into a separate license
agreement providing Miravant with a non-exclusive license (with a right to
sublicense as provided below) under the P&U Emulsion Technology to
manufacture the Product (the "Standby License Agreement"). The Standby
License Agreement shall provide, among other customary terms and
conditions, the following: (i) the license grant shall continue
indefinitely, subject to termination for breach of such Standby License
Agreement; (ii)***** (iii) Miravant may grant to one or more third parties
(other than an Emulsion Competitor, unless Miravant terminates under
Section 13.2 for a material breach by P&U, in which case there will be no
such restrictions) a sublicense under the P&U Emulsion Technology for the
purpose of producing the Product and supplying it to Miravant and its
Affiliates and licensees. An "Emulsion Competitor" means a third party
which, at the time of entering into the applicable licensing arrangement,
is manufacturing or selling pharmaceutical emulsion products competitive
with those manufactured or sold by P&U or any of its Affiliates. In
addition, P&U shall agree to supply its ***** for use in producing the
Product; provided, that such ***** is then used in the Product. Such
material shall be supplied upon commercially reasonable terms, including a
supply price equal to the amount referred to in Exhibit 4 hereto and P&U
may not terminate such supply agreement, other than for specified causes to
be set forth therein, without providing written notice of at least *****
***** Confidential Treatment Requested
<PAGE>
5.3 Packaging. Unless otherwise specified by Miravant, all Product supplied
hereunder shall be in finished dosage form, i.e., packaged, labeled, and
suitable for shipment to end users in accordance with the Packaging
Specifications.
5.4 Manufacturing Location. All Product shall be manufactured at the
Clayton Facility, except that, at P&U's option, P&U shall have the right to
manufacture and supply such Product from one or more production facilities owned
by P&U or any of its Affiliates on the following conditions:
(a) Such other production facility or facilities shall have been
approved by the FDA (and, if appropriate, the equivalent governmental
authority in the applicable country) for manufacturing the Product;
(b) Miravant shall have access to such facility and related records to
the same extent as it does to the Clayton Facility; and
(c) The Production Cost will not exceed the Production Cost which
would have applied if such Products were manufactured at the Clayton
Facility, and there will not be any additional costs for Development Work
as a result of using such other facility.
5.5 Supply of Agent. Within thirty (30) days after submitting any purchase
order for the Product, Miravant shall use its best efforts to deliver at no cost
to P&U, DDP to P&U's manufacturing plant (INCOTERMS 1990), sufficient quantities
of the Agent and other active therapeutic ingredients necessary for P&U to
manufacture the Product thereunder. The Agent shall be shipped in containers
adequate to prevent losses or breakage from all reasonably expected handling
procedures. In the event Miravant is unable to provide the Agent and other
active therapeutic ingredients within any such 30 day period, the "lead time"
period for the manufacture of the Product referred to in Paragraph 5.1 of
Exhibit 2 hereof under the affected purchase order shall be extended for the
period of time P&U is delayed by such inability. Miravant shall retain title to
all Agent and other active therapeutic ingredients supplied to P&U. Except as
provided in Section 7.5 below, P&U shall bear the risk of loss for such Agent
and other active therapeutic ingredients while they are in the care, custody and
control of P&U. Such Agent and other active therapeutic ingredients shall meet
the specifications therefor.
5.6 *****
(a) *****
(b) *****
(c) *****
(d) *****
SECTION 6. - ADDITIONAL TERMS AND CONDITIONS
6.1 Additional Terms. The supply and purchase of the Product shall be
governed by the terms of this Agreement, including the terms and conditions set
forth in Exhibit 3.
6.2 Agreement Governs. The terms and conditions of this Agreement,
including all Exhibits hereto, constitute the entire agreement between the
parties with respect to all purchase orders issued to P&U for the supply of
Product. Acceptance by P&U of Miravant's orders is expressly limited to and
conditioned upon acceptance of these terms and conditions, which may not be
changed or waived except in a writing signed by the parties. Any additional or
inconsistent terms and conditions contained in Miravant's purchase orders or
other documents supplied by Miravant or in acknowledgments or other documents
supplied by P&U are hereby expressly rejected.
SECTION 7. - COMPENSATION
7.1 Supply Price. Subject to adjustment as provided in Section 7.3 below,
the purchase price for each Unit of Product supplied by P&U during any year for
commercial sale ("Supply Price") ***** units annually during the ***** from the
Effective Date without a price limitation, and, thereafter, the Supply Price
***** and ***** . The Production Cost shall be determined in the manner
described in Exhibit 4 hereto.
***** Confidential Treatment Requested
<PAGE>
7.2 *****
*****
*****
7.3 Adjustments. If P&U can demonstrate its Production Costs have increased
due to changes in GMP or other legal requirements or manufacturing methods
outside of P&U's control, then the parties will agree on an equitable adjustment
to the Supply Price, and if they fail to agree within ***** , it will be
resolved as provided in Article 14 hereof.
7.4 INTENTIONALLY DELETED.
7.5 Agent Yield. To the extent P&U's consumption of the Agent exceeds the
amount permitted by the yield rate determined as provided below, P&U shall
credit Miravant for the amount of Miravant's actual costs to procure such
excessive consumption of the Agent. After the ***** of commercial production (so
long as at least ***** commercial batches of the Product were produced in P&U's
Initial Facility), the parties shall determine an appropriate yield rate of the
Agent. In making such determination the parties shall apply customary production
standards and take into account all relevant factors, including the actual yield
losses during such commercial production, likely effect of contemplated changes
to the production methods, container size and configuration, and anticipated
production schedules. In no event shall such yield rate exceed the lower limit
of a ***** confidence interval containing the mean of the actual yields during
such commercial production. The parties shall establish reasonable procedures
for measuring the actual yields, calculating Miravant's actual costs to procure
Agent, adjusting such yield rate to account for the effect of changes to the
Specifications, GMP and other legal requirements and other conditions beyond the
reasonable control of P&U. The foregoing procedure, including ***** of
commercial operation, shall be applied each time the production facility is
transferred to a different capacity batch size. All Agent used (including all
production losses not resulting from P&U's gross negligence) during each such
***** period shall be Miravant's responsibility.
7.6 Payment. P&U shall submit invoices upon each shipment for the number of
Units so shipped. Miravant shall pay all invoices, plus all proper taxes,
freight and other transportation charges stated thereon, within thirty (30) days
after its receipt.
***** Confidential Treatment Requested
<PAGE>
SECTION 8. - INVENTIONS AND LICENSES
8.1 P&U Technology. P&U shall retain the entire right, title and interest
in all P&U Technology, and except as otherwise provided in Sections 5.2(b) and
13.7, nothing in this Agreement shall give Miravant any ownership or other
rights in or to any P&U Technology.
8.2 Miravant Technology. Miravant shall retain the entire right, title and
interest in all Miravant Technology, and nothing in this Agreement shall give
P&U any ownership rights in or to any Miravant Technology.
8.3 Development Technology. Miravant shall own the entire right, title and
interest in all Development Technology, whether conceived solely by its
employees or consultants or conceived solely by or jointly with employees or
consultants of P&U or its Affiliates and employees or consultants. P&U hereby
assigns and agrees to assign, and shall cause its Affiliates to assign and agree
to assign, to Miravant all right, title and interest in such Development
Technology conceived by employees or consultants of P&U or its Affiliates,
either solely or jointly with others.
8.4 P&U License. Miravant hereby grants and agrees to grant to P&U *****
license to use Miravant's Patents, Know-How and the Development Technology to
manufacture Emulsions and the Product exclusively for Miravant (and its
licensees and Affiliates) and to perform its other obligations hereunder. Such
license shall include the right to grant sublicenses only to P&U Affiliates to
the extent necessary for the performance of this Agreement. Miravant also grants
and agrees to grant to P&U and its Affiliates an ***** (subject to the
confidentiality provisions contained in Section 10 below), worldwide license
(with right to sublicense and assign) to use the Development Technology for the
manufacture, use and sale of any emulsion product suitable for parenteral
nutritional purposes or as a delivery system for compounds other than compounds
for photodynamic therapeutic uses.
8.5 Patent Applications. If a patentable invention embodying Development
Technology is conceived in the course of and within the scope of the Development
Work and reduced to practice during the term hereof or within ***** thereafter,
Miravant shall have the sole right to determine whether to file patent
applications covering the invention and shall bear all expenses incurred in
connection with the prosecution of all applications and the maintaining of all
patents. P&U shall cooperate in the filing and prosecution of any such
applications and patents.
8.6 Patent Infringement.
(a) Miravant Indemnity. Miravant shall defend and indemnify P&U and
its Affiliates from any claims or actions brought against P&U or its
Affiliates alleging that the manufacture, use or sale by or for Miravant or
P&U of the Product or any Emulsion infringes any claim of any United States
or foreign patent or other proprietary right of a third party; provided
that Miravant shall have no obligation to so defend or indemnify to the
extent such infringement results from the use of P&U Technology or
Development Technology invented solely by P&U or its Affiliates, in each
case, other than uses where the presence of the Agent causes the
infringement. P&U shall have the right to advisory counsel in such action
at its own expense. Miravant shall have the right to settle or otherwise
terminate said actions; provided, the settlement does not obligate P&U in
any way.
(b) P&U Indemnity. P&U shall defend and indemnify Miravant and its
Affiliates from any claims or actions brought against Miravant or its
Affiliates alleging that the manufacture, use or sale by or for Miravant or
P&U of the Product or any Emulsion manufactured by P&U infringes any claim
of any United States or foreign patent or other proprietary right of a
third party, to the extent such infringement results only from the use of
P&U Technology or Development Technology invented solely by P&U or its
Affiliates, in each case, other than uses where the presence of the Agent
causes the infringement. Miravant shall have the right to advisory counsel
in such action at its own expense. P&U shall have the right to settle or
otherwise terminate said actions; provided, the settlement does not
obligate Miravant in any way.
SECTION 9. - TRADEMARKS.
9.1 Trademark Selection. Miravant shall have the sole authority to select
and use trademarks for the Product and shall bear all the costs associated with
such selection. Miravant shall defend, indemnify and hold P&U harmless from and
against all claims, demands, liabilities, damages, costs and expenses (including
attorneys' reasonable fees) in respect to the alleged infringement of trademark,
trade name or other similar rights of third parties arising out of the sale and
marketing of Product by or for Miravant.
***** Confidential Treatment Requested
<PAGE>
SECTION 10. - CONFIDENTIALITY
10.1 Non-Disclosure. Except as otherwise provided in Section 10.2 below,
during the duration of this Agreement and thereafter: (a) neither party shall
use or disclose to third parties any of the other party's Proprietary
Information, and (b) neither party shall use or disclose to third parties,
except as permitted by, or reasonably necessary to perform its obligations
under, this Agreement, any Development Technology or any Data unless or until it
becomes part of the public domain or is lawfully received by the receiving party
from a third party under no obligation to the disclosing party with respect
thereto, it being expressly understood, however, that Miravant shall be entitled
to file patent applications with respect to any inventions embodied in the
Development Technology and shall be entitled to license the Development
Technology to a third party manufacturer of the Product in accordance with
Section 5.2(b) and 13.7 hereof. Both parties shall take all reasonable steps to
minimize the risk of disclosure of any Proprietary Information of the other,
including without limitation:
(i) limiting access to such information to only those employees and
consultants approved by the other party whose duties require them to
possess same (which consultant approval shall not be unreasonably
withheld);
(ii) requiring such employees and consultants to execute a written
agreement obligating such employees or consultants to maintain the
confidentiality of the information to at least the same extent as his
employer is obligated; copies of such agreements shall be provided to the
other party on request;
(iii) exercising at least the same degree of care that it uses for its
own Proprietary Information; and
(iv) providing proper and secure storage for the Proprietary
Information.
10.2 Permitted Disclosure. Either party may disclose Proprietary
Information of the other pursuant to a lawful request, order or demand of any
governmental agency or judicial authority or, to the extent reasonably necessary
for a party to perform its obligations hereunder, to any Affiliates or
subcontractors; provided, that protective orders or other assurances of
confidentiality are received to the extent reasonably available from such
agency, authority or third party; and provided, further, that the disclosing
party (a) gives the other party notice of the request or order and reasonable
time to object, (b) follows any proper instructions of the other party regarding
such disclosure or objections; and (c) prior notice of any intended disclosure
to such Affiliate or subcontractor which shall have entered into a nondisclosure
agreement substantially equivalent to the terms of this Section 10.
10.3 Duties Upon Termination. Except to the extent reasonably necessary for
exercising its rights which survive termination of this Agreement, upon request
by the disclosing party after such termination, the receiving party shall return
all Proprietary Information of the other in its possession and shall make no
further use of such Proprietary Information.
10.4 Disclosure of Agreement. Any public disclosure of this Agreement, the
terms hereof, the transactions contemplated hereby or the results obtained
hereunder (including, without limitation, press releases, advertising,
governmental filings, discussions with lenders, investment bankers, public
officials and the media and other statements made available generally by a party
hereto to the public) will be reviewed and consented to by each party prior to
such disclosure, and neither party hereto shall disclose the terms of this
Agreement to any third party without the prior written consent of the other.
Such consents shall not be untimely or unreasonably withheld by either party
hereto. In addition, if either party is required to make public disclosure of
this Agreement, or of any provision hereof or of the transactions contemplated
hereby pursuant to any law, rule or regulation of any government agency,
including without limitation the United States Securities and Exchange
Commission or any securities exchange on which securities of the disclosing
party are then listed, then in each case, the disclosing party shall endeavor to
obtain confidential treatment of the Agreement and transactions contemplated
hereby to the extent reasonably requested by the other party.
10.5 Technical Publication. No technical paper, abstract, article,
publication, or announcement of advances generated in connection with the
Development Work, whether during the period of performance of this Agreement or
thereafter, shall be made by either party without the written consent of the
other party.
10.6 Injunctive Relief. Both parties acknowledge that either party would
not have an adequate remedy at law for breach of any of the covenants contained
in this Section 10 and hereby consent to the enforcement of same by the
non-breaching party by means of temporary or permanent injunction issued by any
court having jurisdiction thereof and further agrees that it be entitled to
assert any claim it may have for damages resulting from the breach of such
covenants in addition to seeking injunctive or other relief.
<PAGE>
SECTION 11. - EXCLUSIVITY
11.1 P&U. P&U agrees that during the term of this Agreement, its services
and activities in developing and manufacturing the Emulsions, the Product or
***** shall be exclusive to and only for Miravant, its licensees and Affiliates.
Notwithstanding the foregoing, P&U may ***** to any third party.
11.2 Miravant. Except as otherwise provided herein, Miravant agrees that
during the term of this Agreement it shall purchase from P&U all of its (and its
Affiliates') worldwide requirements of the Emulsions, and, to the extent not
purchased by Miravant, it shall cause its licensees to purchase from P&U all of
their worldwide requirements of Emulsions.
SECTION 12. - REPRESENTATIONS AND WARRANTIES
Each party hereby warrants and represents as follows:
12.1 It has full power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated herein. This Agreement and the
provisions hereof constitute the valid and legally binding obligations of it and
do not require the consent, approval or authorization of any person, public or
governmental authority or other entity;
12.2 The execution and delivery of this Agreement by it, and the
performance of its obligations hereunder, are not in violation or breach of, and
will not conflict with or constitute a default under, its Certificate of
Incorporation or Bylaws, or any material agreement, contract, commitment or
obligation to which it is a party or by which it is bound, and will not conflict
with or violate any applicable law, rule, regulation, judgment, order or decree
of any governmental agency or court having jurisdiction over it or its assets or
properties; and
12.3 In the case of Miravant only, it represents and warrants that it has
the exclusive right to exploit the Agent for all medical uses, and no rights
thereto have been granted to any third party.
SECTION 13. - TERMINATION.
13.1 Term of Agreement. Unless terminated earlier as provided in Sections
13.2 through 13.5 or 16.2 below, this Agreement shall continue in full force and
effect indefinitely, except that either party may terminate this Agreement upon
or after the tenth anniversary of the first commercial sale of the Products, by
giving written notice of its intent to so terminate at least ***** prior to the
effective date of termination.
13.2 Termination for Cause. Without prejudice to any other rights it may
have hereunder or at law or in equity, either party may terminate this Agreement
immediately by written notice to the other party upon the occurrence of any of
the following:
(a) the other party becomes insolvent, an order for relief is entered
against the other party under any bankruptcy or insolvency laws or laws of
similar import, or fails generally to pay its debts as they become due;
(b) the other party makes an assignment for the benefit of its
creditors or a receiver or custodian is appointed for it, or its business
is placed under attachment, garnishment or other process involving a
significant portion of its business;
(c) the other party fails to maintain operations as a going business
for more than twenty days; or
(d) after sixty days' written notice from the terminating party (which
notice shall state the intent to so terminate), the other party fails to
remedy any material breach of this Agreement.
13.3 Termination by P&U. P&U may terminate this Agreement ***** after
written notice to Miravant if ***** In either of such events, Miravant and P&U
shall meet together within the thirty (30) day notice period to consider the
causes for delay and alternatives to termination of this Agreement.
13.4 Termination by Either Party. Either party may terminate this Agreement
upon written notice at any time if: (a) Miravant permanently abandons the
further development of Emulsions containing the Agent or the Product, (b)
neither party is able to obtain, after expending commercially reasonable efforts
in good faith, a stable viable formulation of Emulsion to submit in an NDA; or
(c) Miravant stops sales of Product at any time.
***** Confidential Treatment Requested
<PAGE>
13.5 Right to Withdraw. Miravant may permanently withdraw the Product from
the market because such Product: (a) is subject to a recall not involving only
isolated lots; (b) is recalled or withdrawn in any country in the world; or (c)
is otherwise reasonably believed to have material adverse risks not affecting
only isolated lots. If Miravant so withdraws the Product, it shall then have the
right to terminate this Agreement.
13.6 Rights and Duties Upon Termination. Termination of this Agreement, for
whatever reason, shall not affect any rights or obligations accrued by either
party prior to the effective date of termination including a purchase order for
Product. Without limiting the generality of the foregoing, upon termination of
this Agreement after commencement of manufacturing:
(a) Provided that Miravant provides adequate assurances for payment,
P&U shall sell to Miravant at the Supply Price (Miravant shall then have
the obligation to purchase) P&U's inventory of Product and/or to return to
Miravant its existing inventory of the Agent, in whole or in part, by
notice to Miravant within thirty (30) days following termination.
(b) Upon any termination by Miravant, P&U shall continue to cooperate
with Miravant in respect of all requirements of the FDA and this Agreement
regarding previously produced Product.
(c) Upon any termination, both parties shall immediately cease using
the other party's Proprietary Information, except as permitted by Sections
8.3, 8.4, and 13.7
13.7 Miravant License. In the event of termination of this Agreement: (i)
by either party under Section 13.1, (ii) by Miravant under Section 13.2, or
(iii) by P&U under Section 13.3, and the request of Miravant, P&U shall grant
Miravant a non-exclusive license to practice the P&U Emulsion Technology to
manufacture, or have manufactured by a third party (other than an Emulsion
Competitor), Emulsions (including the Product). Miravant shall pay P&U a royalty
on its Net Sales of Emulsions containing the Agent or the Product for *****
years following termination of this Agreement or for ***** years following the
first commercial sale, whichever is later. The royalty per Unit of Product shall
be equal to the following percentages of the Product:
(a) *****, if terminated by P&U under Section 13.1;
(b) *****, for the ***** following such first commercial sale and
***** for ***** , if terminated by Miravant under Section 13.1 (and no
royalty shall be payable on Net Sales after ***** of such first
commercial sale);
(c) *****, if terminated by Miravant under Section 13.2; and
(d) *****, if terminated by P&U under Section 13.3.
13.8 Miravant's Books and Records. Miravant shall maintain adequate books
and records to verify the calculation and derivation of royalties payable by
Miravant. Such books and records shall be available for inspection and audit by
P&U and its representatives at reasonable times and on reasonable notice, but
not later than the end of the second calendar year after the year in which the
records are generated, for the purpose of verifying reports and payments due
hereunder. In the event such inspection and audit should show an understatement
of the royalties payable by Miravant, Miravant shall promptly pay to P&U any
additional amounts due hereunder, and if such understatement should be more than
five percent (5%) of the royalties for the respective period, Miravant shall
also bear the expenses incurred for said audit.
13.9 Disagreements. In the event of a disagreement which cannot be resolved
in respect of the calculation of the royalties referred to in Section 13.7
herein, the matter shall be submitted for dispute resolution pursuant to Section
14 and at least one neutral arbitrator shall be a certified public accountant.
13.10 Survival. The following Sections survive any termination of this
Agreement: 1, 2.4, 4, 5.2(b), 8, 9, 10, 12, 13.6, 13.7, 13.8, 15, and Paragraphs
2, 3, and 12 of Exhibit 2 and any other provisions which by their terms extend
beyond termination.
***** Confidential Treatment Requested
<PAGE>
SECTION 14. - DISPUTE RESOLUTION
14.1 Mediation. If a dispute arises under this Agreement which cannot be
resolved by the personnel directly involved, either party may invoke the dispute
resolution procedure set forth in this Section 14 by giving written notice to
the other party, designating an executive officer with appropriate authority to
be its representative in negotiations relating to the dispute. Upon receipt of
such notice, the other party shall, within ten (10) business days, designate an
executive officer with similar authority to be its representative. The
designated executive officers shall, following whatever investigation each deems
appropriate, promptly enter into discussions concerning the dispute. If the
dispute is not resolved as a result of such discussion within 60 days after the
date of such notice, either party may commence arbitration as provided in
Section 14.2 below.
14.2 Arbitration. Subject to the terms of Section 14.1 above, any dispute,
controversy or claim arising out of or in connection with this Agreement, or the
breach, termination or invalidity thereof, shall be settled by arbitration in
Raleigh, North Carolina before a panel of three (3) arbitrators in accordance
with the Commercial Arbitration Rules of the American Arbitration Association.
The parties agree that the arbitrators shall have the power to award damages,
injunctive relief and reasonable attorneys' fees and expenses to either party in
such arbitration. The decision reached by such arbitrators in any such
proceeding shall be final and binding upon the parties thereto. The parties
shall, however, in addition to the rights provided in Section 10.6, remain free
to apply to any competent judicial authority for interim or conservatory
measures, even after the transmittal of the file to the aforesaid arbitrators
and even if there are no exceptional circumstances.
SECTION 15. - LIMITATION OF LIABILITY
IN NO EVENT SHALL EITHER PARTY NOR ANY OF ITS RESPECTIVE AFFILIATES BE
LIABLE TO THE OTHER PARTY OR ANY OF ITS AFFILIATES FOR SPECIAL, INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER IN CONTRACT, WARRANTY, TORT,
NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, including, but not limited to, loss
of profits (except for Profit) or revenue, loss of use of any equipment, cost of
capital, down time costs, delays, or claims of customers of any of them or other
third parties for such or other damages.
SECTION 16. - MISCELLANEOUS
16.1 Choice of Law. This Agreement shall be governed and interpreted, and
all rights and obligations of the parties shall be determined, in accordance
with the laws of the State of North Carolina, excluding its conflicts of law
rules.
16.2 Force Majeure.
(a) P&U and Miravant shall not be deemed to be in default nor be
liable for loss, damage, or for delay in performance, when and to the
extent due to causes beyond its reasonable control or from fire, strike,
labor difficulties, act or omission of any governmental authority,
compliance with governmental regulations, noncompliance with GLP/GMP
requirements despite such party's good faith efforts and adherence to
procedures consistent with past practice, insurrection or riot, embargo,
delays or shortages in transportation.
(b) Each party agrees to give the other party prompt written notice of
the occurrence of any such condition, the nature thereof, and the extent to
which the affected party will be unable fully to perform its obligations
hereunder. Each party further agrees to use reasonable efforts to correct
the condition as quickly as possible and to give the other party prompt
written notice when it is again fully able to perform such obligations. In
the event such condition is not corrected within six (6) months from the
original notification under this Section 16.2, the party whose performance
was not affected by the condition may terminate this Agreement.
16.3 Notices. All notices, requests, demands, waivers, consents,
approvals or other communications to any party hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally
to such party or sent to such party by facsimile transmission or by
registered or certified mail, postage prepaid, to its address as shown
below:
Miravant:
Miravant Medical Technologies
7408 Hollister Avenue
Santa Barbara, CA 93117
Attention: Dr. Gary S. Kledzik
Fax: 805-685-2959
with a copy, in the case of notices expressly provided for in this Agreement,
to:
Joseph E. Nida
Nida & Maloney, P.C.
800 Anacapa Street
Santa Barbara, CA 93101
Fax: (805) 568-1195
P&U: Pharmacia &Upjohn Inc.
8484 U.S. 70 West
Clayton, NC 27520
Attention:
Fax: 919-553-3601
with copies, in the case of notices expressly provided for in this Agreement,
to:
James F. Farrington, Jr.
Wiggin & Dana
301 Tresser Blvd.
Stamford, CT 06901
Fax: (203) 363-7676
or to such other address as the addressee may have specified in notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval or other communications will be deemed to have been given as
of the date so delivered, telegraphed, telexed, or five days after so mailed.
16.4 Severability. In the event that any provision of this Agreement, which
is not a material part of the consideration thereof, shall be found in any
jurisdiction to be illegal or unenforceable in law or equity, such finding shall
in no event invalidate any other provision of this Agreement in that
jurisdiction, and this Agreement shall be deemed amended to the minimum extent
required to comply with the law of such jurisdiction.
16.5 Entire Contract. This instrument states the entire agreement reached
between the parties hereto with respect to the transactions contemplated hereby
and may not be amended or modified except by written instrument duly executed by
the parties hereto. Any and all previous agreements and understandings between
the parties regarding the subject matter hereof, whether written or oral, are
superseded by this Agreement. The failure of either party hereto to enforce at
any time, or for any period of time, any provision of this Agreement shall not
be construed as a waiver of such provision or of the right of such party
thereafter to enforce each and every provision.
16.6 Assignment, Binding Effect. Neither party shall assign this Agreement
or any of their respective rights or obligations hereunder, by operation of law
or otherwise, without the prior written consent of the other party (which shall
not be unreasonably withheld), and any such attempted assignment without such
consent shall be void. Notwithstanding the foregoing, either party shall assign
this Agreement to a third party (and shall then be released from all liabilities
hereunder arising thereafter) without such consent upon thirty (30) days' prior
notice, if such third party (a) acquires (by purchase or merger) all or
substantially all of such party's business and assets or, in the case of P&U,
the production facility at Clayton, N.C., and substantially all of the P&U's
assets relating thereto, (b) assumes all of the obligations of such party
hereunder, and (c) Miravant is provided reasonable assurances of performance of
all obligations hereunder by the successor to P&U, including, without
limitation, protections that include P&U control of analytical methods, a direct
supply arrangement for Emulsions between such assignee and P&U or one or more of
its Affiliates (to the extent P&U or any of its Affiliates then have any rights
under separate agreements with Miravant to sell the Emulsion) and for Emulsion
also to be provided to Miravant and other assurances commensurate with the
release of liability of P&U as set forth above. In no event shall Miravant so
assign this Agreement to a third party which is an Emulsion Competitor at the
time of such assignment. No assignment shall be effective until the assignee
shall have unconditionally assumed in writing all of the assignor's obligations
hereunder and a written notice of such assignment is given to the other party.
When duly assigned in accordance with the foregoing, this Agreement shall be
binding upon and inure to the benefit of P&U, Miravant and their respective
successors and permitted assignees.
16.7 Independent Contractor. Each party shall be and shall endeavor to act
as the independent contractor of the other party. Neither party shall be the
legal agent of the other for any purpose whatsoever and therefore has no right
or authority to make or underwrite any promise, warranty or representation, to
execute any contract or otherwise to assume any obligation or responsibility in
the name of or in behalf of the other party, except to the extent specifically
authorized in writing by the other party. Neither of the parties hereto shall be
bound by or liable to any third persons for any act or for any obligation or
debt incurred by the other toward such third party, except to the extent
specifically agreed to in writing by the party so to be bound.
16.8 Headings. All section headings contained in this Agreement are for
convenience of reference only, do not form a part of this Agreement and shall
not affect in any way the meaning or interpretation of this Agreement.
16.9 Future Modifications. The parties acknowledge that the non-financial
terms hereof relating to the manufacturing of the Product, including delivery,
storage, manufacturing method and quality control, are based on the parties'
current best estimates of expected conditions, which estimates were derived from
laboratory test results and P&U's commercial experience with other fat emulsion
products. After filing the first NDA, the parties shall discuss such
non-financial terms and appropriate changes as may be reasonably required in
view of the actual commercial manufacturing requirements. In no event shall such
adjustments apply to Miravant's compensation obligations.
PHARMACIA & UPJOHN CO.
By: /S/
------------------------------------
Name: _________________________________
Title: _______________________________
MIRAVANT MEDICAL TECHNOLOGIES
By: /S/
------------------------------------
Name: Gary S. Kledzik
Title: Chairman of the Board and
Chief Executive Officer
<PAGE>
EXHIBIT 1
DEFINED TERMS
1.1 "Act" means the United States Federal Food, Drug & Cosmetic Act (21 U.S.C.
Section 301 et seq.), or any successor act, as the same may be amended from time
to time, and the regulations promulgated thereunder.
1.2 "Affiliate" means any person, firm or corporation which, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, a party, but only so long as such relationship
exists. "Control" means the legal or beneficial ownership of more than fifty
percent (50%) of the voting or equity interests or the power or right to direct
the management and affairs of the business (including acting as the general
partner of a limited partnership).
1.3 "Agent" means Miravant's tin ethyl etiopurpurin compound suitable for
intravenous administration in a lipid emulsion formulation.
1.4 "Compound" means any photosensitizing agent (other than the Agent), or a
derivative or ***** of such photosensitizing agent or the Agent, which Miravant
has the right to use and which is suitable for intravenous administration in a
lipid emulsion formulation.
1.5 "Data" means all books, records, reports, lab notebooks, charts, graphs,
computations, analyses, recordings, photographs, computer programs and
documentation thereof, computer information storage means and other graphic or
written data generated in the performance of the Development Work, including any
data required to be maintained pursuant to applicable FDA regulations.
1.6 "Development Technology" means all Inventions, to the extent embodying the
composition or manufacture of any Emulsion, conceived or reduced to practice by
P&U, Miravant and their respective Affiliates, or any of them, either separately
or jointly with one another, during the course of the performance of the
Development Work.
1.7 "Development Work" means the program of work previously undertaken by P&U on
behalf of Miravant in connection with the development of formulations for
Emulsions suitable for intravenous administration of a photodynamic therapeutic
compound and the additional work described in Section 2.1.
1.8 "Emulsion" means a lipid emulsion suitable for intravenous administration of
the Agent.
1.9 "FDA" means the United States Food and Drug Administration or any successor
agency having the administrative authority to regulate the approval for testing
or marketing of human pharmaceutical or biological therapeutic products in the
United States (or, where appropriate, the equivalent governmental authority in
any foreign country).
1.10 "FDA Approval" means approval by the FDA of Miravant's NDA.
1.11 "GLP" means the applicable current good laboratory practices promulgated
from time to time by the FDA in accordance with the Act, including those set
forth in 21 CFR Part 58.
1.12 "GMP" means the applicable current good manufacturing practices promulgated
from time to time by the FDA in accordance with the Act, including those set
forth in 21 CFR Parts 210 and 211.
1.13 "IND" means an investigational new drug application submitted to the FDA
under 21 CFR 312 for the purpose of conducting clinical investigations of
Emulsions containing the Agent (or the equivalent in any foreign country).
1.14 "Invention" means any invention which may be protectable by patents in the
country in which the invention was made, whether or not patent applications are
filed.
1.14A "Initial Facility" means the small batch production facility at the
Clayton Facility used for the production of clinical materials of the Emulsion
and which shall be used to produce the initial requirements of the Product, up
to ***** Units.
***** Confidential Treatment Requested
<PAGE>
1.15 "Know-How" means all inventions (whether or not patentable), trade secrets,
technical and other information and data, including, without limitation,
formulae; compositions; processes; controls; systems (including QA systems) and
procedures; apparatus; correlations; flow sheets; reports; operating, test and
performance data; and process, mechanical, material and product specifications.
1.16 "NDA" means a New Drug Application or other premarket approval application
to sell the Product, and any supplement or abbreviated application relating
thereto, submitted to the FDA by or on behalf of Miravant (or the equivalent in
any foreign country).
1.17 "Packaging Specifications" means the packaging, labeling and shipping
specifications for the Product determined by Miravant and approved by P&U.
1.18 "Patents" means patents of all countries, including improvement patents,
patents of addition, patents of importation, certificates of invention, utility
model and design patents, and all reissues, renewals and extensions thereof; and
applications for such patents, including original, divisional, continuation and
continuation-in-part applications pending before any patent office.
1.19 "Miravant Technology" means all Patents and Know-How owned or licensed by
Miravant or any of its Affiliates relating to the composition or manufacture of
the Agent and any Compounds, including, to the extent Miravant is permitted to
grant a sublicense to P&U, any Patents or Know-How licensed by Miravant from a
third party.
1.20 "P&U Technology" means all Patents and Know-How (other than Development
Technology) owned or licensed by P&U or any of its Affiliates which: (a) relate
to the composition or manufacture of phospholipid, soybean oil or other
proprietary raw materials; or (b) are used by P&U to manufacture (including to
sterilize) any Emulsion or other emulsion product, including, in each case, to
the extent P&U is permitted to grant a sublicense to Miravant, any Patents or
Know-How licensed by P&U from a third party (the Patents and Know-How described
in subsection (b) are referred to as "P&U Emulsion Technology").
1.21 "Product" means the injectible formulation in final dosage form of the
Agent suspended in an Emulsion described in the Product Specifications.
1.22 "Product Specifications" means the specifications for the Product specified
by Miravant in its NDA and approved by the FDA and P&U, and any modifications or
changes thereto specified by Miravant and approved by the FDA and P&U.
1.23 "Project Leaders" means the individual designated by P&U and the individual
designated by Miravant having the authority, obligations and responsibilities
referenced in Section 3.2 hereto.
1.24 "Proprietary Information" means all Know-How or other confidential or
proprietary information:
(a) relating to the composition, manufacture or use of the Agent, any
Compound, any Emulsion, the Product or P&U's other emulsion products;
(b) designated in writing by either party as confidential, proprietary or
not to be disclosed, whether by letter or by the use of an appropriate
proprietary stamp or legend, prior to or at the time any such Know-How or
confidential or proprietary information is disclosed by one party to the other;
or
(c) which is orally or visually disclosed (including the observation of
process equipment at the Clayton Facility), or is disclosed in writing without
an appropriate letter, proprietary stamp or legend, and which: (1) would be
apparent to a reasonable person familiar with the pharmaceutical and
biotechnology industries that such information is of a confidential or
proprietary nature, or (2) the disclosing party, within thirty (30) days after
such disclosure, delivers to the recipient a written document or documents
describing such information and referencing the place and date of such oral,
visual or written disclosure and the names of the employees or officers of the
recipient to whom such disclosure was made.
Proprietary Information shall not include any Know-How or other confidential or
proprietary information which:
(A) either before or after the date of the disclosure to the receiving
party becomes published or generally known to the public through no
fault or omission on the part of the receiving party, but such
inapplicability applies only after such information is published or
becomes generally known;
(B) was known or used by the receiving party prior to its date of
disclosure to the receiving party by the disclosing party, as evidenced
by the prior written records of the receiving party;
(C) either before or after the date of the disclosure to the receiving
party is lawfully disclosed to the receiving party by an independent,
unaffiliated third party rightfully in possession of the proprietary
information; or
(D) is independently developed by the receiving party without reference
to or reliance upon any proprietary information of the disclosing
party.
1.25 "Reprocessing" means the performance of any procedures or processes in
connection with the manufacture of the Product not normally required in the
manufacture of the Product which would require a regulatory submission to the
FDA or the initiation of additional stability studies.
1.26 "Specifications" means the Product Specifications and the Packaging
Specifications.
1.27 "Unit" means a container having a volume of ***** of Product (emulsion
containing ***** of emulsion), or such other volumes as the parties may agree
from to time.
1.28 "Other Definitions" The following terms are defined in the indicated
Sections of the Agreement:
Term Section
Clayton Facility 2.4
DMF 2.5
Initial Facility 2.2
Supply Price 7.1
***** Confidential Treatment Requested
<PAGE>
EXHIBIT 2
DEVELOPMENT WORK COMPENSATION
1998
Personnel Hourly Rate
Laboratory Technician $*****
and Junior Scientist
Senior Scientist and $*****
Project Manager
Such rates shall be subject to escalation on *****, and annually thereafter, at
a rate not to exceed the percentage increase for the preceding twelve (12) month
period in the Consumer Price Index for All Urban Consumers (U.S. South Region)
issued by the Bureau of Labor Statistics, or comparable successor index.
***** Confidential Treatment Requested
<PAGE>
EXHIBIT 3
TERMS AND CONDITIONS OF SALE
1. Storage Requirements. P&U shall maintain at all times during the term of this
Agreement adequate inventories of all raw materials and packaging components in
a quantity sufficient so that delivery of all Product to the marketplace will be
made in a timely manner. Such storage requirements shall be limited by the
purchase forecasts furnished by Miravant pursuant to Section 5.1 hereof. Unless
the parties otherwise agree, P&U shall not be required to store any finished
Product after completion of the release tests therefor or at other than room
temperature. After successful completion of release testing, P&U has the right
to ship the Product ordered by Miravant to Miravant in a commercially reasonable
manner.
2. Samples. P&U shall retain at all times during the term of this Agreement
samples of each lot of active ingredient and final dosage forms with respect to
the Product for time periods which are in accordance with GMP.
3. Product Recalls. In the event (i) any government authority issues a request,
directive or order that Product be recalled, (ii) a court of competent
jurisdiction orders such a recall or (iii) Miravant reasonably determines after
consultation with P&U that Product should be recalled, the parties shall take
all appropriate corrective actions. Except to the extent such recall is
attributable to P&U's gross negligence or willful misconduct or a breach of
P&U's warranties under Section 11.1 hereof, Miravant shall be responsible for
the cost of notifying end users and costs associated with shipment of any
recalled Product from end users. To the extent such recall is attributable to
P&U's gross negligence or willful misconduct or a breach of P&U's warranties
under Section 11.1 hereof, P&U shall be responsible for the cost of notifying
end users and costs associated with shipment of any recalled Product from end
users. P&U and Miravant shall fully cooperate with one another and provide all
reasonable assistance in conducting any recall under this Section; provided,
that P&U shall have no financial obligation for recall expenses unless any such
recall is attributable to P&U under the above conditions.
4. General Obligations of P&U and Miravant.
4.1 Except as provided in Section 5.5 of the Agreement and Section 8.2
hereof, all other materials required to manufacture, test, package, label and
release the Product shall be supplied by P&U.
4.2 P&U shall manufacture the Product in accordance with, and conduct such
quality assurance and other testing which demonstrates that the Product meets,
the Specifications and GMP. P&U shall not conduct Reprocessing with respect to
the Product without the prior written approval of Miravant. P&U shall not
release or distribute any Product to any third party, or use the Product in any
way not expressly permitted in the Agreement, except with Miravant's prior
written consent.
4.3 In the event P&U's manufacturing facility is inspected by
representatives of any federal, state or local regulatory agency in connection
with P&U's manufacture of the Product, P&U shall notify Miravant immediately (by
telephone and, if possible, in writing) upon learning of such inspection, and
shall supply Miravant with copies of any correspondence or portions of
correspondence which relate to the Product. Miravant may send representatives to
the manufacturing facility and may participate fully in any portion of such
inspection relating to the Product (and shall do so, at P&U's request). In the
event P&U receives any regulatory letter or written comments from any federal,
state or local regulatory agency in connection with its manufacture of the
Product requiring a response or action by P&U, including but not limited to
receipt of a Form 483 (Inspectional Observations) or a Warning Letter, Miravant
promptly will provide P&U with any data or information required by P&U in
preparing any response relating to P&U's manufacture of the Product, and will
cooperate fully with P&U in preparing such response. P&U shall provide Miravant
with a copy of each such response for Miravant's review prior to submission of
the response.
4.4 Miravant shall promptly notify P&U of, and shall provide P&U with
copies of, any correspondence and other documentation received or prepared by
Miravant in connection with any of the following events: (1) receipt of a
regulatory letter from the FDA in connection with the manufacture of the
Product; (2) any recall of the Product; (3) the withdrawal of the Product from
the market; (4) any change in Miravant's formulation of, or manufacturing
process for, the Agent, (5) any change in Miravant's labeling for the Product;
(6) any regulatory comments relating to the manufacture of the Product requiring
a response or action by Miravant.
4.5 Miravant shall maintain complaint files in accordance with GMP
regulations. P&U shall promptly provide to Miravant copies of all complaints
received with respect to the Product as well as responses sent, if any. Miravant
shall promptly provide P&U with copies of any complaints relating to the
manufacture of the Product received by Miravant. Miravant shall have
responsibility for reporting all complaints relating to the Product, including
complaints relating to the manufacture of the Product, to the FDA.
4.6 P&U shall maintain all manufacturing and analytical records, all
records of shipments of the Product from P&U, and all validation data relating
to the Product for the time periods required by applicable laws and regulations
and shall make such data available to the FDA upon Miravant's request or if
required by law.
5. Orders.
5.1 Forecasts. Beginning with the first day of the quarter following the
quarter in which Miravant's NDA for the Product is approved, Miravant shall
provide quarterly its estimated forecast of requirements for the Product for
each of the ***** following the end of the quarter in which such forecast is
submitted (each a "Forecast"). The monthly sales quantities shown in the
Forecast for the ***** shall be considered a firm purchase order. All Forecasts
under this Agreement and updates thereof for any period after the ***** shall be
for the sole purpose of assisting P&U in its planning and will not constitute an
obligation of Miravant to purchase the quantities of Product indicated;
provided, however, that the total quantity of Product ordered by Miravant in any
quarter shall not exceed Miravant's most recent estimated quantity by more than
***** without P&U's prior written consent. Miravant and P&U shall each cooperate
to attempt to meet each others needs in connection with the manufacture and
supply of Product for Miravant's launch and the months following FDA Approval
before the Forecasts are applicable. As soon as practicable, P&U and Miravant
shall agree upon actual delivery times based upon scheduling and production
results determined during the Development Work.
5.2 Purchase Orders. Except to the extent the parties may otherwise agree
with respect to a particular shipment, the Product shall be ordered by Miravant
pursuant to written purchase orders, which shall be sent to P&U with not less
than the number of days "lead time" prior to delivery dates agreed on by the
parties for delivery times based on scheduling and production results determined
during the Development Work, as provided in Section 5.1 above. Subject to
Section 5.1, upon receipt of each purchase order hereunder, P&U shall supply the
Product, in such quantities and within the time period specified in such
purchase order. During the period of time that the Initial Facility is used for
commercial use, P&U may produce up to ***** Units in each production run of up
to ***** duration. Miravant's order requirements shall be subject to such
production limits. When the Initial Facility is modified or another production
line or facility is used to produce larger quantities (as described in Section
5.1 of the Agreement), the parties shall establish other production limits to
allow efficient utilization of such larger facility.
5.3 Emergency Orders. In the event Miravant experiences an emergency
backorder or other emergency situation, Miravant may place one or more purchase
orders for amounts of Product exceeding the amounts P&U would otherwise be
obligated to supply under this Agreement, or specifying a "lead time" of less
than the "lead time" agreed to by the parties pursuant to Section 5.1 hereof.
P&U shall use all reasonable efforts to accommodate such emergency purchase
orders according to their terms; and in the event P&U does supply Product in
accordance with the terms of such an emergency purchase order, any additional
costs incurred and documented by P&U in connection with the filling of such
emergency purchase order shall be reimbursed by Miravant.
6. Shipment. Product shall be shipped in the manner and to the location
specified by Miravant. All Products shall be delivered Ex Works Clayton Facility
(INCOTERMS 1990), or as otherwise agreed to by the parties.
7. Claims.
7.1 In the event that any of the Product delivered to Miravant by P&U shall
fail to conform with the permissible quantity requirements of any purchase order
or warranties set forth in Section 11.1 hereof, Miravant shall be entitled to
reject such Product by giving written notice to P&U within thirty (30) days
after Miravant's receipt of such Product. Any notice given hereunder shall
specify the manner in which the Product fails to conform to such quantity
requirements or warranties. If it is determined that the nonconformity (i) is
due to damage to the Product caused by (a) Miravant or (b) any carrier, or (ii)
results from the Agent supplied by Miravant, P&U shall have no liability to
Miravant with respect thereto. If such nonconformity is caused in any other
manner, P&U shall credit Miravant's account for the price invoiced for such
nonconforming Products and Miravant's cost for the Agent supplied therefor. If
payment therefor has previously been made by Miravant, P&U shall at Miravant's
option pay Miravant the amount of such credit or offset the amount thereof
against other amounts then due P&U. Except to the extent otherwise specified in
Sections 11.1 and 12.1 hereof, the foregoing remedy constitutes the exclusive
remedy against P&U, and the entire liability of P&U in connection with any
shipment.
7.2 In any case where Miravant expects to make a claim against P&U with
respect to nonconforming Product, Miravant shall not dispose of such Product
without written authorization and instructions of P&U either to dispose of the
Product or to return the Product to P&U.
***** Confidential Treatment Requested
<PAGE>
8. Packaging.
8.1 Containers. P&U shall supply containers meeting FDA requirements and
Packaging Specifications for each Unit of Product, which Product shall be filled
into these containers and appropriately sterilized and packaged for shipment to
Miravant pursuant to GMP and the Packaging Specifications.
8.2 Labels. Miravant shall supply in a timely manner all necessary labels
(or label copy for procurement of labels by P&U) and package inserts for the
containers for each Unit of Product as well as for the shipping container, which
labels and package inserts shall comply with applicable FDA requirements and
shall be the only labels and package inserts used by P&U for Product. All labels
and labeling produced by P&U, including in terms of packaging layout, design and
color, shall be consistent with artwork supplied or approved by Miravant and P&U
shall comply with Miravant's requirements concerning labels and labeling;
provided, however, that Miravant shall consider in good faith any requests by
P&U as to physical dimensions and specifications relating to the methods of
handling and affixing on containers. In no event shall P&U be responsible for
the content of any label or otherwise liable for any failure to supply adequate
warnings or to comply with the requirements of 21 CFR Part 201 relating to the
content of labels or package inserts.
9. Taxes. The actual amount of sales, use, excise, value-added and similar taxes
levied upon the transfer of Product to Miravant are payable by Miravant. Any
such tax may be contested with any assessing governmental authority so long as
Miravant agrees in advance to indemnify P&U therefor. Property, franchise, and
other business privilege-type taxes are not reimbursable by Miravant, except as
they may be a component of overhead. P&U shall pay any taxes imposed by a
government on the income resulting from the sale of Product or the receipt of
payments from Miravant hereunder, including but not limited to gross income,
adjusted gross income, supplemental net income, gross receipts, excess profits
taxes or other similar taxes.
10. Late Payments. If payments are not made within thirty (30) days after the
date when due, unless contested in good faith, Miravant shall pay, in addition
to the overdue payment, a late charge equal to the lesser of 1-1/2% per month or
the highest applicable rate allowed by law on all such overdue amounts. If, in
the reasonable judgment of P&U, the financial condition of Miravant at any time
does not justify continuation of such terms of payment, P&U may demand full or
partial payment in advance.
11. Product Warranty.
11.1 Product Warranty. P&U warrants that the Product, at the time of
shipment to Miravant, (a) will comply with the Specifications; and (b) will not
be products that have been adulterated within the meaning of the Act, or any
applicable state or local law substantially similar to the Act. Product sold
hereunder shall have been manufactured, packaged, labeled, stored and shipped in
conformity with all applicable GMP requirements and with the Specifications; and
Product sold hereunder shall have been manufactured, packaged and stored in
facilities which are approved by the FDA at the time of such manufacture,
packaging and storage, to the extent such approval is required by law. The
foregoing warranties shall not apply to any Product to the extent the
nonconformity or adulteration results from the Agent or other materials provided
by Miravant or was manufactured, packaged, labeled, stored and shipped in
accordance with practices or other specifications stipulated by Miravant. Title
to all Product sold hereunder shall pass to Miravant as provided herein free and
clear of any security interest, lien or other encumbrance.
11.2 Remedy. Should any failure to conform with the foregoing warranties
appear prior to the expiration date of the Product, and if given prompt written
notice by Miravant, P&U shall correct such nonconformity by, at its option, (1)
replacing promptly the nonconforming Product or (2) refunding promptly the
payments by Miravant for such nonconforming Product.
11.3 Exclusive Warranties and Remedies.
(a) No Other Warranties. Except as expressly provided for in Section
11.1, P&U makes no representations or warranties of any nature whatsoever
with respect to the Product, any Emulsions or other materials supplied
hereunder by it to Miravant or its licensees or Affiliates, and ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY DISCLAIMED
BY PHARMACIA AND ITS AFFILIATES AND THEIR SUBCONTRACTORS.
(b) Exclusive Remedy. Except as otherwise expressly provided in
Section 12.1, correction of nonconformities in the manner and for the
period of time provided in Section 11.2 shall be the exclusive remedy and
shall constitute fulfillment of all obligations to Miravant, its Affiliates
and other purchasers of Product directly or indirectly from P&U, its
Affiliates and their subcontractors (including any liability for direct,
indirect, special, incidental or consequential damages), whether in
warranty, contract, negligence, tort, strict liability, or otherwise with
respect to any nonconformance of or defect or deficiency in the Product or
other materials supplied hereunder by P&U or its Affiliates.
12. Indemnification.
12.1 Indemnification by P&U. Subject to Miravant's compliance with its
obligations set forth in Section 12.4 below, P&U agrees to indemnify, defend and
hold Miravant and its Affiliates, their shareholders, directors, officers,
employees and agents harmless from and against any and all losses, damages,
liabilities, claims, demands, judgments, settlements, costs and expenses
(including, without limitation, reasonable attorneys' fees and other costs of
defense) (collectively "Losses") attributable to, or arising out of, any claim,
lawsuit or other action by a third party for personal injury or property damage
to the extent caused by a breach of any P&U warranty or representation hereunder
or the gross negligence or willful misconduct of P&U in the manufacture of the
Product or any Emulsion.
12.2 Indemnification by Miravant. Subject to P&U's compliance with its
obligations set forth in Section 12.4 below, Miravant agrees to indemnify,
defend and hold P&U and its Affiliates, their shareholders, directors, officers,
employees and agents harmless from and against any and all Losses attributable
to, or arising out of (a) any claim, lawsuit or other action by a third party
for personal injury or property damage, arising out of or connected with the use
or sale of the Product or an Emulsion (except for Losses caused by P&U's gross
negligence or willful misconduct in the manufacture of the Product or Emulsion),
(b) Miravant's negligence or willful misconduct, or (c) breach of any Miravant
representation or warranty hereunder.
12.3 Employees. Except as otherwise provided in Section 12.1 or 12.2, each
party shall indemnify and hold the other party harmless, and hereby forever
releases and discharges the other party, from and against all claims, demands,
liabilities, damages and expenses (including reasonable attorney's fees) arising
out of personal injury (including death) or property damage incurred or suffered
by the indemnifying party, its Affiliates, contractors or their employees
(regular or contract) arising out of or in connection with the work performed
hereunder, except to the extent caused by the sole negligence of such other
party, its employees or agents.
12.4 Notice and Assistance. A party (the "indemnitee") which intends to
claim indemnification under this Section 12 shall promptly notify the other
party (the "indemnitor") in writing of any action, claim or other matter in
respect of which the indemnitee or any of its employees or agents intend to
claim such indemnification. The indemnitee shall permit, and shall cause its
employees and agents to permit, the indemnitor, at its discretion, to settle any
such action, claim or other matter and agrees to the complete control of such
defense or settlement by the indemnitor; provided, however, that such settlement
does not adversely affect the indemnitee's rights hereunder or impose any
obligations on the indemnitee in addition to those set forth herein in order for
it to exercise such rights. No such action, claim or other matter shall be
settled without the prior written consent of the indemnitor and the indemnitor
shall not be responsible for any legal fees or other costs incurred other than
as provided herein.
12.5 Unenforceability. The foregoing indemnity obligations of this Section
12 shall not be deemed to extend to any type of claim, act or omission by P&U or
Miravant for which the indemnity obligation would be void, unenforceable or
otherwise not permitted by applicable law, and if any are deemed to so extend,
it shall be interpreted and restricted to the extent to which it is permitted by
applicable law.
13. Compliance with Law.
13.1 Scope. P&U and Miravant shall comply with all applicable federal,
state and local laws, regulations and executive orders insofar as applicable to
the performance of their respective obligations hereunder. Notwithstanding the
foregoing, Miravant shall be solely responsible for compliance with all
applicable regulatory requirements relating to the registration, advertising,
sale, adverse reaction reporting and other activities concerning the Product,
including, but not limited to, compliance with applicable FDA and other
regulatory authorities' requirements; provided, that P&U shall comply with
applicable GLP/GMP requirements as provided in Section 2.1 of the Agreement and
Section 12.1 hereof.
13.2 Assistance by Miravant. Miravant and P&U shall furnish each other
reasonable assistance for compliance with Section 13.1 above to the extent such
compliance involves the composition, toxicity, safety and other chemical or
physical characteristics of the Agent or any Emulsion, including, but not
limited to, furnishing to the extent reasonably available to it, the technical
data required by all environmental, health, safety and fire laws.
<PAGE>
14. Insurance.
14.1 Scope. Both parties shall maintain insurance during the term of this
Agreement with policy limits and coverage as are customary in the respective
party's business and reasonably adequate to cover all perils customarily
protected against in performing their respective obligations hereunder or while
visiting any facility in connection with this Agreement. Subject to reasonable
self-insurance limits, such insurance shall include the following minimum
coverage and policy limits: (a) Workers' Compensation in accordance with all
applicable statutory requirements; (b) Employer's Liability in an amount not
less than *****; (c) Comprehensive General Liability, including Independent
Contractor's Liability, Contractual Liability and Products - Completed
Operations Liability, as well as coverage on all equipment (other than motor
vehicles licensed for highway use) owned, hired or used in performance of this
Agreement in an amount not less than ***** combined single limit; and (d)
Automobile Liability, covering all motor vehicles owned, hired or used, in an
amount not less than ***** bodily injury and property damage combined single
limit each occurrence; provided, that the limit of the insurance referred to in
clause (c) may be ***** prior to commencing *****. In the event such insurance
or the specified limits thereof are not commercially available at reasonable
premiums, the parties shall discuss alternate forms of protection and shall not
withhold consent to any reasonable alternative.
14.2 Evidence of Insurance. Both parties shall furnish the other party
certificates of insurance evidencing the foregoing coverage, which certificates
shall provide: (a) that the insurer will provide thirty days' written notice
prior to any cancellation; and (b) without limiting either party's indemnity
obligations hereunder, that the other party shall be named as an additional
insured for the original insured's acts or omissions.
***** Confidential Treatment Requested
<PAGE>
EXHIBIT 4
*****
(b) Accounting Standards and Procedures.
(1) Except as otherwise stated herein, the Production Cost shall be
determined in accordance with generally accepted cost accounting
principles applied on a consistent basis in the country of
manufacture. *****, the parties shall determine the variance between
the aggregate of the actual Production Cost and the aggregate
Production Cost paid by Miravant for Product purchased during such
year. If such variance is positive, Miravant shall pay such amount
within thirty days of receipt of invoice; and if such variance is
negative, P&U shall issue Miravant a credit. Production Cost for the
succeeding ***** shall be based on the actual Production Cost *****
with appropriate standard cost adjustments for Miravant's purchase
forecasts, planned manufacturing efficiencies, and expected cost
variations in raw materials, labor and overhead.
(2) Any method of allocating a particular cost under this Agreement shall
be consistent with the method of allocating that cost for any other
product manufactured at that same location. For any materials which
are purchased by P&U for both its own products and for Product, except
with respect to emulsifier and other materials manufactured by P&U or
any of its Affiliates, the cost to Miravant shall not be more than for
P&U's own products.
(3) As used herein, "cost" for purchased materials or services means the
actual amount paid therefor including the benefit of any price
reductions, payment or terms discounts, or other reimbursements, such
as volume discounts, which may be applicable to such purchases by any
arrangement with the supplier.
(4) In no event shall reimbursement for costs or overhead be duplicated in
any manner.
(5) Overhead shall be allocated in a manner consistent with similar
Clayton Facility products and in accordance with generally accepted
cost accounting methods applied on a consistent basis.
(c) Books and Records. P&U shall maintain adequate books and records to verify
the calculation and derivation of Production Cost. Such books and records
shall be available for inspection and audit by Miravant and its
representatives at reasonable times and on reasonable notice, but not later
than the end of the second calendar year after the year in which the
records are generated, for the purpose of verifying reports and payments
due hereunder. In the event such inspection and audit should show an
variance with the Production Cost actually paid by Miravant, such variance
shall be paid promptly by payments by P&U or Miravant, as the case many be,
and if such variance should be more than five percent (5%) of the aggregate
Production Costs paid during the respective period, P&U shall also bear the
expenses incurred for said audit.
***** Confidential Treatment Requested
<PAGE>
EXHIBIT 5
*****
***** Confidential Treatment Requested
RESTATED AND AMENDED
DEVELOPMENT AND LICENSE AGREEMENT
between
PHARMACIA & UPJOHN S.p.A.
and
MIRAVANT MEDICAL TECHNOLOGIES
June 8, 1998
<PAGE>
RESTATED AND AMENDED
DEVELOPMENT AND LICENSE AGREEMENT
THIS RESTATED AND AMENDED DEVELOPMENT AND LICENSE AGREEMENT is made and
entered into as of the 8th day of June, 1998 by and between PHARMACIA & UPJOHN
S.p.A., an Italian corporation organized and existing under the laws of Italy,
with its head offices at via Robert Koch 1.2, 20152 Milan, Italy (hereinafter
referred to as "P&U"), and MIRAVANT MEDICAL TECHNOLOGIES, a corporation
organized and existing under the laws of the State of Delaware, with its head
offices at 7408 Hollister Avenue, Santa Barbara, California 93117, U.S.A.
(hereinafter referred to as "MRVT").
WITNESSETH THAT:
WHEREAS, P&U is a pharmaceutical company doing research, development and
marketing of pharmaceutical products;
WHEREAS, MRVT is a pharmaceutical and medical device company which, using
its proprietary technology and know-how, has developed and will continue to
develop, on its own or in collaboration with third parties, photoreactive drugs
and related light devices for the diagnosis and treatment of a wide variety of
diseases;
WHEREAS, P&U and MRVT are parties to a Development and License Agreement
dated July 1, 1995, as amended (the "License Agreement").
WHEREAS, the experience of the parties over the term of the License
Agreement has given rise to the need to modify the License Agreement in order to
expedite development and meet P&U's desire to be involved only in the Fields of
Oncology and Urology.
WHEREAS, the parties have agreed that, in lieu of the cumbersome structure
contemplated in the License Agreement, MRVT will have full and complete control
of the Development Program for SnET2 for indications in the Fields of Oncology
and Urology and will pay for all expenses, subject to payment by P&U to MRVT of
a significant portion of the expected costs of the Development Program in
Oncology and Urology through June 30, 2000.
WHEREAS, P&U's affiliate, Pharmacia & Upjohn AB, will continue to have the
rights in the Ophthalmology Field pursuant to a mutually agreeable agreement
entered into on the date hereof.
NOW, THEREFORE, in consideration of the above premises and the covenants
contained herein, the parties hereto agree as follows:
<PAGE>
ARTICLE I - DEFINITIONS
1.01 Affiliate. "Affiliate" shall mean, with respect to any specified
party, any person or entity that directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with
the party specified. For purposes of this definition, "Control" including with
correlative meanings, the terms "controlled by" and "under common control with"
means ownership directly or indirectly of more than fifty percent (50%) of the
equity capital having the right to vote for election of directors (or in the
case of an entity other than a corporation, the equivalent management
authority).
1.02 Agreement. "Agreement" shall mean this Restated and Amended
Development and License Agreement. The term "Ancillary Agreements," as used
herein, shall mean the following related agreements: SnET2 Device Supply
Agreement, dated July 1, 1995, as amended, and the Product Supply Agreement,
dated July 1, 1995, as amended.
1.03 Clinical Tests. "Clinical Tests" shall mean any tests performed on
humans in preparation and support of regulatory submissions.
1.04 Development Program. "Development Program" shall *****.
1.05 Effective Date. The term "Effective Date" shall mean January 1, 1998.
1.06 FDA. The term "FDA" shall mean the United States Food and Drug
Administration or any successor agency having the administrative authority to
regulate the approval for testing or marketing of human pharmaceutical or
biological medical products and/or medical devices in the United States or where
appropriate, the equivalent governmental authority in any foreign country.
1.07 Fields. The term "Fields" shall mean the fields of Oncology and
Urology.
1.08 Gross Sales. "Gross Sales" shall mean the final gross invoiced price
from the sale of Product by P&U and its Affiliates or Sublicensees; provided,
however, that Gross Sales shall exclude sales of Products which are intended for
resale between P&U entities, its Affiliates and Sublicensees.
1.09 GCP. "GCP" shall mean current "good clinical practices" for carrying
out clinical studies in humans as set forth in regulations promulgated by the
FDA as such may be amended from time to time or, where appropriate, the
equivalent regulations promulgated by the equivalent governmental authority in
any foreign country.
1.10 GLP. "GLP" shall mean current "good laboratory practices" for
conducting nonclinical laboratory studies as set forth in regulations (21 CFR
Part 58) promulgated by the FDA as such may be amended from time to time or,
where appropriate, the equivalent regulations promulgated by the equivalent
governmental authority in any foreign country.
1.11 GMP. "GMP" shall mean current "good manufacturing practices" for
preparation of drug products as set forth in regulations (21 CFR Parts 210 and
211) promulgated by the FDA as such may be amended from time to time or, where
appropriate, the equivalent regulations promulgated by the equivalent
governmental authority in any foreign country.
1.12 Light Devices. "Light Devices" shall mean the instruments that
produce, deliver or measure light for use with the Product.
1.13 Major Countries. "Major Countries" shall mean the ***** and *****.
1.14 Net Sales. "Net Sales" shall mean Gross Sales less the following:
trade, cash and quantity discounts; returns, normal trade allowances, normal
charge-backs, federal, state, or other governmental rebates and adjustments;
taxes on the sale or transportation absorbed by P&U; and sales to P&U's
Affiliates or third parties of Product not for resale in the Territory
1.15 New SnET2. "New SnET2" shall mean the Photodynamic Therapy drug
designated by MRVT as tin ethyl etiopurpurin in any formulation or strength,
other than SnET2, as defined in Section 1.21.
1.16 NDA. "NDA" shall mean a "New Drug Application" or other premarket
approval application for Product and any supplement or abbreviated application
relating thereto, submitted to the FDA or its equivalent in any foreign country.
***** Confidential Treatment Requested
<PAGE>
1.17 Patent Rights. "Patent Rights" shall mean all United States and
foreign patent applications, as well as continuation, divisional or
continuation-in-part applications, and all patents issuing therefrom including
reissue or reexamination patents containing at least one claim covering Product,
its use or sale, and only to the extent such Patent Rights are directed to
Product, which Patent Rights are now or hereafter owned or acquired by MRVT or
any of its Affiliates, or licensed to MRVT or any of its Affiliates. Patent
Rights licensed to MRVT will only be granted to P&U to the extent permitted by
MRVT's license agreement and P&U will do nothing to disturb such agreement. 1.18
Photodynamic Therapy. "Photodynamic Therapy" shall mean the technique of
diagnosis and/or treatment of abnormal or normal biological or medical
conditions, either in-vivo or ex-vivo, through the use of drugs activated by any
type of electromagnetic radiation or magnetic field.
1.19 Preclinical Tests. "Preclinical Tests" shall mean any nonhuman tests
performed in preparation and support of regulatory submissions.
1.20 Product. "Product" shall mean pharmaceutical products for Photodynamic
Therapy containing tin ethyl etiopurpurin as the active drug substance and any
isomers and derivatives thereof, in any formulation, whether SnET2 as defined in
Section 1.21 or New SnET2 as defined in Section 1.15.
1.21 SnET2. "SnET2" shall mean the Photodynamic Therapy drug designated by
MRVT as tin ethyl etiopurpurin in the injectable lipid emulsion formulation
being tested in clinical trials as of the Effective Date, regardless of the vial
or other container size.
1.22 Sublicensee. "Sublicensee" shall mean a third party to whom P&U has
granted, in whole or in part, the right to market or co-market the Product in
one or more countries in the Territory and who performs selling activities such
as invoicing customers in one or more countries in the Territory.
1.23 Technology. "Technology" shall mean all information and data
including, but not limited to, technical, pharmacological, toxicological and
clinical information, know-how, inventions and improvements possessed by MRVT as
of the Effective Date or generated or obtained by MRVT during the term of this
Agreement relating to the registration, manufacture, use, or sale of Product, in
each case to the extent MRVT has the right to provide the same to P&U hereunder,
provided however, that "Technology" shall not include any such information or
data regarding the design or manufacture of any Light Device.
1.24 Territory. "Territory" shall mean the entire world.
1.25 Unit. "Unit" shall mean *****.
ARTICLE II - NOT USED
ARTICLE III - LICENSE, GRANT AND ROYALTIES
3.01 License. Subject to the terms of this Agreement. MRVT hereby grants to
P&U and P&U's Affiliates an exclusive worldwide, royalty-bearing, license under
the Patent Rights and Technology, to use, distribute and sell Product for
diagnosis or treatment in the Fields in the Territory. P&U may sublicense,
totally or in part, the license rights granted under this Section 3.01,
provided, however, (i) P&U must notify MRVT, in writing, of any such sublicense
at least thirty (30) days in advance; (ii) P&U remains responsible to MRVT for
all contractual obligations of the Sublicensee including, but not limited to,
payment of royalties, keeping of records and reporting of sales, as if the
Sublicensee's sales were P&U's sales and (iii) the Sublicensee agrees to be
bound by the terms of this Agreement to the same extent as P&U to the extent
applicable to the Sublicensee.
3.02 Term of License. The license rights granted under Section 3.01 shall
remain in effect in each country in the Territory for the duration of the Patent
Rights or for a period of ten (10) years from the first commercial sale of
Product in such country, whichever shall be longer. After this period, P&U shall
have an irrevocable, fully paid-up, nonexclusive license under the Technology in
such country.
3.03 *****
(a) *****
(b) *****
(c) *****
***** Confidential Treatment Requested
<PAGE>
3.04 Development Prograam - Expense. P&U shall reimburse MRVT its actual
direct and indirect costs and expenses incurred to perform the *****, up to an
aggregate of Twenty Million Dollars (US) ($20,000,000). Such payments shall be
made in advance in quarterly calendar installments of Two Million Five Hundred
Thousand Dollars (US) ($2,500,000), commencing on July 1, 1998. *****.
3.05 Royalties. P&U shall, for the term of the license specified by Section
3.02, pay MRVT royalties on Net Sales of Product to third parties at the rate of
***** on total Net Sales of Product of *****, per calendar year and a royalty of
***** on the part of total Net Sales of Product ***** per calendar year, subject
to the provisions of Section 6.03. In a number of countries in *****, P&U
operates through distributors, which are local companies appointed to manage the
importation, distribution, promotion and sale of P&U's products. Royalties due
to MRVT by P&U under this Agreement on sales of Product in countries where P&U
operates through distributors shall be calculated on the F.O.B. prices at which
the Product is invoiced to distributors by P&U.
3.06 Sublicense Fees. P&U shall pay MRVT ***** of any up-front or lump-sum
fees received by P&U in consideration of the grant of a sublicense to Product.
3.07 Payment of Royalties. The royalties due pursuant to Section 3.05 shall
be reported quarterly within thirty (30) days after March 31, June 30, September
30, and December 31. Such royalties shall be paid to MRVT or its designed
Affiliate semi-annually within sixty (60) days after June 30 and December 31 of
each calendar year. Each payment to MRVT or its designated Affiliate shall be
accompanied by a report containing sufficient information to enable MRVT or its
designated Affiliate to verify the accuracy of the calculation of Net Sales on
which such payment was based during the payment period, including a statement of
Gross Sales and Net Sales and a reconciliation of the credits, allowances and
rebates contemplated by Section 1.14 to calculate Net Sales from Gross Sales.
3.08 Payment of Royalties and Fees. For the purpose of converting and
paying royalties and sublicense fees specified by Section 3.06 herein, monies
shall be first computed in the currency of the country where the sales took
place or the expense was incurred, and then, unless another currency is
designated by MRVT, converted into US dollars at the most favorable buying
exchange rates prevailing on the day P&U converts the local currency into US
dollars for payment to MRVT.
3.09 P&U Ceases to Market or Sell Product. Subject to the provisions of
Section 5.06, unless otherwise mutually agreed to by the parties and provided
that a particular Product is sold or is to be sold in a Major Country by one
party only, be it P&U or its Affiliate or a Sublicensee, should P&U or its
Affiliates or Sublicensee cease to market or sell a Product in that Major
Country or fail to launch a particular Product in that Major Country within
***** from the occurrence of the latest to occur of the following events (if
applicable in such Major Country): (i) issuance of Product's NDA approval in
that Country, (ii) governmental price approval, (iii) reimbursement of the
social security payment (if any), and (iv) NDA approval of all relevant Light
Devices, P&U shall have no further rights to the Product in that country nor
shall P&U have any further obligations for the Product in that country, except
such obligation that accrued prior to divestment from P&U of rights to the
Product. Subject to MRVT's responsibility for regulatory matters, in the event
rights to Product are divested from P&U pursuant to this Section 3.09 and upon
MRVT's request, P&U shall immediately transfer the NDA approval in that country
to MRVT or to an appointee of MRVT, provide to MRVT all data in P&U's possession
or control relating to that Product and take all such other actions as are
necessary or useful to permit MRVT to obtain regulatory approvals to market
Product in such country. If P&U fails to comply with the foregoing within thirty
(30) business days after Miravant's notice, P&U hereby irrevocably appoints MRVT
as its attorney-in-fact to secure the transfer of the NDA approval to MRVT. MRVT
shall market the Product under its own tradenames or brands and shall not use
P&U's tradenames or brands. Failure by P&U to launch a Product or interruption
of marketing or sale of a Product pursuant to this Section 3.09 shall not be
considered a breach of this Agreement within the meaning of Article X. For the
avoidance of doubt it is understood between the parties hereto that the
provisions of this Section 3.09 shall not apply in the event that P&U or its
Affiliates or Sublicensees cease to sell a Product or fails to launch a Product
in a Major Country as described above, for reasons related to the safety and
efficacy of a Product.
***** Confidential Treatment Requested
<PAGE>
3.10 Books and Records. P&U shall keep, and shall cause its Affiliates and
Sublicensees to keep, full, true and accurate books of accounts and other
records, for a period of ***** containing sufficient detail as may be necessary
for MRVT to properly ascertain and verify the royalties payable to it hereunder
in accordance with generally accepted accounting principles. Upon MRVT's
request, P&U shall permit an independent certified accountant selected by MRVT
(except one to whom P&U has some reasonable objection) to have access once each
year during ordinary business hours to such P&U records as may be necessary to
determine the correctness of any report and payment made under this Agreement.
If the audit shows that P&U has underpaid any royalties by ten percent (10%) or
more, for any period covered by the audit, P&U shall, in addition to immediately
remitting to MRVT the amount of underpayment, pay for the cost of such audit. In
the event the audit shows that P&U has overpaid any royalties due pursuant to
Section 3.05, P&U shall be allowed to deduct the amount of such overpayment from
the next semiannual royalty payment due to MRVT.
ARTICLE IV - DEVELOPMENT PROGRAM
4.01 Development. *****
4.02 Preparation of Regulatory Filings. MRVT shall be responsible for
preparing and filing in its own name any regulatory filings necessary for
conducting Clinical Tests.
4.03 MRVT Responsibility. MRVT shall be responsible for conducting all
necessary Preclinical Tests and Clinical Tests for SnET2 to be used in any
indications within the Fields, and shall pay all costs and expenses to perform
such work, *****.
4.04 New SnET2 for Any Indication. MRVT shall be responsible for conducting
all necessary Development Program work for any New SnET2 for any indication in
the Fields. The Development Program Expenses associated with such Preclinical
Tests and Clinical Tests shall be paid by P&U so long as such work is performed
in accordance with the development plan accepted by P&U and such expenses are
incurred in accordance with the budget accepted by P&U.
4.05 Submission of NDA. MRVT shall be responsible for assembling the
information to prepare each NDA for a Product and to submit it to the concerned
health authorities in the Territory. All such NDAs shall be filed in the name
of, and shall remain the sole and exclusive property of, MRVT; provided, that
P&U shall have the right to control all pricing and reimbursement approvals.
MRVT shall be responsible for all reporting and other actions required to comply
with any regulatory requirements applicable to the holder of an NDA. If P&U
markets Product for an indication, MRVT will file any necessary regulatory
notices to support P&U's marketing, including in any country, where legally
required, transferring an NDA into the name of P&U. ***** After due
consideration of P&U's views and good pharmaceutical practices, MRVT shall make
the final decisions on any NDA, other than pricing and reimbursement matters.
ARTICLE V - DUTIES OF THE PARTIES
5.01 Promotion and Customer Service. As MRVT's exclusive licensee for
Product in the Territory, P&U agrees to use all reasonable efforts to introduce,
promote, market and sell Product in the Territory for the Fields. P&U shall
maintain adequate facilities, Product inventory and personnel to ensure prompt
handling and servicing of customers' inquiries and orders and prompt shipment
and servicing of Product.
5.02 Care of Product. P&U shall comply with all applicable regulatory
requirements regarding acceptable methods for care, handling, storage and
shipment of Product. Each party hereby agrees that it shall promptly provide the
other, on request, all information known to it that is necessary for compliance
with the applicable law and regulations concerning the care, handling, storage,
labeling, packaging and shipment of Product.
5.03 Exclusive. During the term of this Agreement, unless otherwise agreed
to by MRVT, P&U shall not either directly, or indirectly, develop or sell other
Photodynamic Therapy drugs in the Fields. P&U agrees that it shall secure the
same agreement from its Affiliates and Sublicensees. P&U's United States
Affiliate's rights under Section XI of the Development and Commercial Supply
Agreement, between such Affiliate and Miravant, dated as of August 31, 1994 (the
"Clayton Agreement"), are expressly excluded from the provisions of this Section
5.03.
***** Confidential Treatment Requested
<PAGE>
5.04 Authorization. P&U and MRVT each warrant that it has the legal
capacity to enter into this Agreement and that it has secured all necessary
approvals.
5.05 Obligations to MRVT's Licensor. P&U agrees to undertake all
sublicensee obligations set forth in any license agreement MRVT entered into
relating to Patent Rights or Product as of the Effective Date. MRVT represents
and warrants that it has fully disclosed to P&U all such licenses in effect as
of the Effective Date.
5.06 Sale of Product by MRVT. Subject to the terms of this Agreement, MRVT
agrees, while the license granted to P&U under Article III hereof with respect
to any Product is in effect in any country in the Territory, not to license
and/or appoint any other licensee, distributor or marketing representative in or
for such country for such Product, not to sell such Product in or for use in
such country, and not to accept orders for such Product from the purchasers
located within such country or from purchasers MRVT has reason to believe will
sell such Product within or for use in such country, except as provided in this
Section 5.06. *****.
5.07 Right to License Patent Rights, Product and Technology. MRVT hereby
represents and warrants that it owns or has rights to use the Technology and
Patent Rights described herein, and that it has the right to grant sublicenses
under any license to SnET2 or covering Product held by MRVT.
5.08 Compliance with Applicable Law. In exercising the rights, and in
carrying out the duties and obligations set forth in this Agreement, each party
represents and warrants that it shall comply with all applicable state, federal
and country laws or rules. Each party further represents and warrants that it
shall comply with all applicable rules and regulations governing the
manufacture, distribution, promotion, marketing and sale of Product in the
Territory and that it shall specifically comply with GLPs, GCPs, GMPs or other
equivalent regulatory requirements of that country.
5.09 Duty to Develop Product. MRVT shall use all reasonable efforts to
develop Product in the Fields in accordance with the MRVT Development Plan.
5.10 Patent Filing, Prosecution and Maintenance. MRVT shall be responsible
for all decisions relating to and all costs associated with preparing, filing,
prosecuting and maintaining the Patent Rights. MRVT shall timely notify P&U
about each patent application filed that relates to Product, its progress and
subsequent disposition. MRVT shall not voluntarily abandon or forfeit any Patent
Rights, without the prior approval of P&U, such approval not to be unreasonably
withheld or delayed.
5.11 MRVT's Representations. MRVT hereby represents and warrants that:
(a) It is not party to any agreement, arrangement or understanding
with any third party that in any material way conflicts with its ability to
fulfill any of its obligations under this Agreement.
(b) It will not knowingly commit any material act or fail to take any
act which would cause a material omission or permit any acts or omissions
to occur that would be in conflict with its obligations under this
Agreement or diminish in any material respect the potential scope of the
grant of rights to P&U under this Agreement.
(c) It has no knowledge that the license rights granted to P&U with
respect to the Product shall be subject to any material retained right of
any state, federal or foreign government or governmental entity, except for
the rights of the United States government under the Bayh-Dole Act and
except as disclosed to P&U.
(d) It has no knowledge that making, using or selling any Products
(along or in combination with any Light Devices) may infringe the patent
rights of any third party nor does it have any knowledge that any third
party is infringing the Patent Rights.
(e) Other than as disclosed to P&U prior to July 1, 1995, it has no
agreement, understanding or undertakings with any third parties regarding
ownership or disposition of tin ethyl etiopurpurin, isomers and derivatives
thereof, or any Product.
***** Confidential Treatment Requested
<PAGE>
5.12 Access to Information Relating to Light Devices. MRVT shall provide
P&U with access to information or data relating to Light Devices that P&U may
need to perform its obligations and exercise its rights hereunder, including
compliance with any regulatory requirements and the marketing and sale of the
Products.
5.13 Access to Light Devices. The parties mutually acknowledge that an
essential feature of the development of Product for marketing hereunder is
access by P&U to Light Devices. MRVT agrees that it shall undertake all
necessary action to enable P&U to access Light Devices and to insure that P&U
has continued access to Light Devices during the term of the license rights
specified by Section 3.02 and in accordance with the Ancillary Agreements.
ARTICLE VI - SUPPLY OF PRODUCT
6.01 Commercial Supply of Product. P&U shall purchase from MRVT, and MRVT
shall supply P&U, all of P&U's requirements of Product in finished form to be
sold by P&U in the Territory. P&U acknowledges that MRVT's obligations to supply
P&U with Product are dependent upon P&U's United States Affiliate fulfilling its
obligations to MRVT under the Clayton Agreement.
6.02 Commercial Transfer Price. The "Transfer Price" for Product supplied
to P&U by MRVT shall be equal to the sum of the following:
(a) *****
(b) *****
6.03 *****
*****
6.04 Ownership of Trademarks. ***** The parties shall jointly select all
trademarks to be used in connection with the Products in the Fields, and
Miravant shall not grant rights to use such marks outside the Fields without
P&U's prior consent, which consent shall not be unreasonably withheld if such
use is not likely to adversely affect the sales and marketing of the Products in
the Fields. All trademarks related to SnET2 will be the property of MRVT, and
MRVT will indemnify and hold harmless P&U from and against any and all
infringement claims related to the trademarks.
ARTICLE VII - *****
7.01*****
7.02*****
7.03 Limitation of Section 7.1. Section 7.1 shall not apply to any
non-Photodynamic Therapy drug or any product other than a New Product developed
by Miravant and Miravant's grant of rights or licenses with respect to such
non-Photodynamic Therapy drug or other product shall not be limited by Section
7.01. Transfer of all or substantially all of the business or assets of Miravant
to a third party, whether by merger, acquisition or otherwise, shall not be
deemed a grant to a third party of a right or license with respect to a New
Product nor give rise to any right or obligation under Section 7.01 herein.
Section 7.01 shall not apply to a New Product unless at the time the right of
first negotiation is offered the New Product is being developed, or Miravant
expects to develop, for an indication within the Fields.
***** Confidential Treatment Requested
<PAGE>
ARTICLE VIII - REGULATORY RESPONSIBILITIES
8.01 Complaints. MRVT and P&U shall share with each other all data on
complaints in respect of Product subject to this Agreement including, but not
limited to, complaints or information regarding performance or allegations or
reports of any effects on a patient from use of such Product, as soon as such
data is available. To the extent that it has knowledge thereof, each party shall
promptly notify the other in writing of any defect in, or condition of, Product
subject to this Agreement that may cause any such Product to violate the
applicable laws and regulations of any country in the Territory where such
Product is being sold by P&U. As the holder of the NDA, MRVT shall be
responsible for complying with all regulatory requirements relating to the
reporting and processing of complaints and adverse events.
8.02 Recall. In the event of a total or partial recall of Product sold by
MRVT to P&U under this Agreement, whether voluntary or mandated by law, the
parties agree to cooperate fully to effect the recall. In the event such recall
results from the gross negligence or willful misconduct of MRVT, MRVT shall bear
all the expenses associated with such recall. In the event such recall results
from the gross negligence or willful misconduct of P&U, P&U shall bear all the
expenses associated with such recall. If any recall results without gross
negligence or willful misconduct of either party, then MRVT and P&U shall
equally bear the expenses of such recall. P&U agrees to maintain adequate sales
and service records to enable it to carry out any Product recall and to conduct
such recall.
8.03 Adverse Reactions. Each party shall be responsible for maintaining
such records and making such reports as may be required in connection with any
regulatory approval held by the party. Each party shall immediately inform the
other of all adverse drug experience reports and other information relating to
the safety or effectiveness of Product which come to its attention.
ARTICLE IX - PUBLICATION AND CONFIDENTIALITY
9.01 Publication. Each party hereto shall give ten (10) days prior written
notice to the other party of all SEC filings and public announcements relating
to the contractual relationship between the parties, which will be subject to
reasonable approval of the other party, and if there is a dispute, it will be
resolved by the opinion of the disclosing party's counsel in their discretion,
except that the other party shall resolve all disclosure issues relating to such
party's confidential information.
9.02 Disclosure. MRVT shall disclose to P&U all information relating to the
Patent Rights, Technology and Product for the Fields that has not previously
been disclosed; provided, however, that MRVT shall only be required to disclose
such information to P&U as is necessary or useful for P&U to fulfill its
obligations under this Agreement. All information disclosed by one party to the
other under this Section 9.02 shall be deemed "Confidential Information" and
treated as provided in Section 9.03 hereof. P&U shall disclose to MRVT, or MRVT
shall have access to, information developed by P&U related to Product including,
but not limited to, all regulatory data including clinical data and
investigators' reports, applications and licenses.
9.03 Confidential Information. Unless otherwise mutually agreed to by the
parties, the parties agree to maintain in confidence all Confidential
Information disclosed to the other pursuant to Section 9.02 and shall not,
during the term of this Agreement and for a period of five (5) years thereafter,
use such Confidential Information, except as permitted by this Agreement or
disclose the same to anyone other than those of its officers, directors,
employees, Affiliates and Sublicensees to the extent necessary in connection
with either party's activities as contemplated in this Agreement. Each party
shall use its reasonable efforts to ensure that its officers, directors,
employees, Affiliates and Sublicensees do not disclose or make any unauthorized
use of such Confidential Information.
9.04 Limitations on Confidentiality. The obligation of confidentiality
contained in Section 9.03 shall not apply to the extent that (i) a party is
required to disclose information by applicable law, such as pursuant to
Securities and Exchange Commission rules and regulations, or order of a
governmental agency or a court of competent jurisdiction; (ii) a party can
demonstrate that the disclosed information was, at the time of disclosure,
already in the public domain other than as a result of actions or failure to act
of a party, its officers, directors, employees, Affiliates and Sublicensees in
violation hereof; (iii) the disclosed information was rightfully known by a
party or its Affiliates or Sublicensees (as shown by its written records) prior
to the date of disclosure to the other party in connection with this Agreement;
or (iv) the disclosed information was received by a party or its Affiliates or
Sublicensees on an unrestricted basis from a third party source that is not the
other party or an Affiliate of the other party and not under a duty of
confidentiality, and that was rightfully known to said source.
<PAGE>
ARTICLE X - TERM AND TERMINATION
10.01 Term.
(a) Subject to the provisions of Section 3.02 and this Article X, the
term of this Agreement shall continue for so long as P&U is required to pay
royalties. Unless terminated earlier, commencing July 1, 2000, and
continuing every two years thereafter, the parties shall agree in writing
upon their respective share of the funding for development of the Product
in the Fields for the following 24 months in accordance with the MRVT
Development Plan.
(b) *****
10.02 Termination for Breach. In the event either party shall materially
breach any of the terms, conditions and agreements contained herein to be kept,
observed and performed by it, then the other party may terminate this Agreement,
at its option and without prejudice to any of its other legal and equitable
rights and remedies, by giving the party which committed the breach sixty (60)
days' notice of its intent to terminate, particularly specifying the breach,
unless the notified party within such sixty (60) day period shall have cured the
breach. The sixty (60) day period may be extended for a period not exceeding an
additional ninety (90) days for breaches which cannot be reasonably cured within
the sixty (60) day period if the party has commenced to cure the breach within
that period.
10.03 Termination by Bankruptcy. In the event either party shall file a
voluntary petition or any answer admitting the jurisdiction of the Court and the
material allegations of, or shall consent to, an involuntary petition pursuant
to or purporting to be pursuant to any reorganization or insolvency law of any
jurisdiction, or shall make an assignment of substantially all of its assets for
the benefit of creditors, or shall apply for or consent to the appointment of a
receiver or trustee of a substantial part of its property (such party, upon the
occurrence of any such event, a "Bankrupt Party"), then to the extent permitted
by law the other party hereto may thereafter immediately terminate this
Agreement by giving notice of termination to the Bankrupt Party, unless the
proceeding is dismissed within ninety (90) days of its filing.
10.04 *****
10.05 Effect of Termination. It is understood and agreed that the
termination of this Agreement shall not affect the rights or obligations of the
parties which (i) by the terms hereof, continue after the termination of this
Agreement, or (ii) have accrued prior to such termination including, but not
limited to, the rights of MRVT to receive any amounts then owing from P&U for
royalties due hereunder, all of which amounts shall be immediately due and
payable on such termination date. Upon termination of this Agreement, other than
under Section 10.01(a), the Ancillary Agreements will also terminate in respect
to the Fields. Articles VIII, IX and XII shall survive the expiration or
termination of this Agreement.
***** Confidential Treatment Requested
<PAGE>
ARTICLE XI - PATENT INFRINGEMENT
11.01 Infringement by Third Parties. If, during the term of this Agreement,
either MRVT or P&U shall acquire knowledge or have reasonable cause to believe
that any of the Patent Rights, as such Patent Rights cover Product, shall be
infringed or used without authorization by any other person in the Territory,
either party shall promptly notify the other of such knowledge. MRVT and P&U
shall promptly meet to discuss the commercial impact of such third party
infringement and the most efficient and expeditious manner to proceed against
said third party.
11.02 Initiation of Action by MRVT or P&U. MRVT may take all steps in its
name which are necessary or advisable including, without limitation, the
institution of any action or proceeding for the obtaining of damages or the
enjoinment of any such infringement and to prosecute, settle, compromise or
otherwise dispose of the same. MRVT shall be entitled to the full recovery of
any money or other property collected by way of judgment, settlement (whether
prior to or after the institution of any action or proceedings) or otherwise on
any action initiated by MRVT. If MRVT does not commence such an action within
one hundred eighty (180) days, after a request to do so by P&U, then P&U may
initiate an action or proceeding for the obtaining of damages or the enjoinment
of any such infringement and to prosecute, settle, compromise or otherwise
dispose of the same. P&U shall be entitled to the full recovery of any money or
other property collected by way of judgment, settlement (whether prior to or
after the institution of any action or proceeding) or otherwise on any action
initiated by P&U. Each party agrees to reasonably cooperate with the other party
in any legal proceeding and to pay all its own costs taken pursuant to this
Section 11.02.
11.03 Claims Against P&U or MRVT. If any claim is made or action brought
against P&U or MRVT based on the claim that P&U or MRVT is infringing any third
party patent rights by virtue of the manufacture, use or sale of Product
hereunder, P&U or MRVT shall promptly so notify the other. The parties shall
then consult with each other as to the most efficient and reasonable course of
action to take relative to such third party claim. Each party hereto shall pay
its own expenses in defending any such third party claim. MRVT shall solely be
responsible for any trademark infringement claims and for all damages claimed
against P&U and its Affiliates by any third party.
11.04 Damages Paid to Third Party. If, in any such action described in
Section 11.03, a court of competent jurisdiction determines that P&U or MRVT is
obligated to pay damages to any third person (excluding trademark claims)
because P&U or MRVT's manufacture, use or sale of a Product was held to be an
infringement of a third party right, the parties shall equally share such costs.
11.05 Reduction of Royalties. In the event the legal proceedings described
in Section 11.03 result in a settlement or other final action which requires P&U
to pay a royalty to a third party in order to continue to use or sell Product,
the royalty paid by P&U to MRVT for such Product shall be reduced by an amount
equal to one-half (1/2) of the rate of the royalty that P&U is required to pay
to such third party, not to exceed fifty percent (50%) of the royalties that
would be payable to MRVT.
ARTICLE XII - INDEMNIFICATION
12.01 Indemnification. Except for matters relating to indemnification for
infringement of intellectual property rights, as to which Article X shall be the
sole and exclusive provisions, each party to this Agreement shall indemnify and
hold the other party hereto harmless from and against any and all actions,
causes of action, claims, demands, suits, controversies, damages, verdicts,
judgments, executions and all costs and expenses in connection therewith
including, but not limited to, reasonable attorneys' fees, whether or not well
founded in fact or in law, brought or claimed by any third persons, which and to
the extent thereof shall arise from any breach of this Agreement by or from the
negligent acts or omissions of the indemnifying party under this Agreement (a
"Liability"). Except to the extent P&U is required to indemnify MRVT under the
foregoing sentence and to the extent P&U's Affiliate is required to indemnify
MRVT under the Clayton Agreement, MRVT shall defend, indemnify and hold harmless
P&U and its Affiliates and each of their directors, officers, employees and
agents against any and all claims, costs, liabilities, damages and expenses
(including reasonable attorneys' fees) arising out of or incurred in connection
with the practice of the licenses granted hereunder or the clinical testing,
manufacture, handling, ingestion, distribution, sale, administration, or other
use (including any failure to warn or comply with any regulatory or applicable
legal requirements) of any Product or Light Device.
12.02 Notice of Defense of Actions. Each party shall give the other prompt
notice of any potential Liability, and promptly after receipt by a party
claiming indemnification under this Section 12.02 of notice of the commencement
of any action, such indemnified party will notify the indemnifying party of the
commencement of the action and generally summarize such action. The indemnifying
party shall have the right to participate in and to assume the defense of such
action with counsel of its choosing. An indemnifying party shall not have the
right to direct the defense of such an action of an indemnified party if counsel
to such indemnified party has reasonably concluded that there may be defenses
available to it that are different from or additional to those available to the
indemnifying party; provided, however, that in such event, the indemnifying
party shall bear the fees and expenses of separate counsel reasonably
satisfactory to the indemnifying party. The failure to notify an indemnifying
party promptly of the commencement of any such action if prejudicial to the
ability to defend such action shall relieve such indemnifying party of any
liability to the indemnified party under this Section 12.02, but the omission to
so notify the indemnifying party will not relieve such party of any liability
that such party may have to any indemnified party otherwise than under this
Section. No settlement of any claim or action may be made without the consent of
the indemnifying party (which shall not be unreasonably withheld or delayed).
ARTICLE XIII - RESOLUTION OF DISPUTES
13.01 Arbitration. Any and all disputes arising out of or in connection
with the performance of this Agreement shall be finally settled by arbitration
in accordance with the rules of the American Arbitration Association, except
that each party will be entitled to select one (1) arbitrator and the two (2)
arbitrators so selected shall select a third arbitrator and if they cannot
agree, then the third arbitrator, who shall not be a citizen of the United
States or Italy, will be selected by the American Arbitration Association. The
arbitration shall be held in New York, New York. The award rendered shall be
final and binding upon the parties. Judgment on any award may be entered in any
court having jurisdiction over the parties or their assets. To the extent any
claims relate to the validity, construction, scope, enforceability or
infringement of any Patent Rights, such claim shall not be required to be
submitted to arbitration hereunder and shall be resolved by a court of competent
jurisdiction. The costs of the arbitration shall be shared equally by the
parties.
ARTICLE XIV - MISCELLANEOUS
14.01 Force Majeure. Neither P&U nor MRVT shall be in default under this
Agreement nor liable for any failure to perform or for delay in performance
resulting from any cause beyond its reasonable control or due to compliance with
any regulations, orders or act of any federal, provincial, state or municipal
government, or any department or agency thereof, civil or military authority,
acts of God, fires, floods or weather, strikes or lockouts, factory shutdowns,
embargoes, wars, hostilities or riots.
14.02 Taxes. Each of the parties hereto shall be responsible for its own
taxes imposed as a result of the performance by such party under this Agreement
including, but not restricted to, any sales tax, any tax on or measured by any
royalty or other payment required to be made by it hereunder, any registration
tax, any tax imposed with respect to the granting of or transfer of licenses or
other rights hereunder or the payment or receipt of royalties hereunder. For the
avoidance of any doubt, it is agreed that any withholding tax levied on a
payment required to be made pursuant to this Agreement, shall be the
responsibility of the party receiving such payment. The parties shall cooperate
fully with each other in obtaining and filing all requisite certificates and
documents with the appropriate authorities and shall use their best efforts to
take such further action as may reasonably be necessary to avoid the deduction
of any withholding or similar taxes from any remittance of funds by P&U to MRVT
hereunder, provided, however, that P&U may withhold tax it is required to
collect or pay on behalf of MRVT.
14.03 Notices. All notices, proposals, submissions, offers, approvals,
agreements, elections, consents, acceptances, waivers, reports, plans, requests,
instructions and other communications required or permitted to be made or given
hereunder (all of the foregoing hereinafter collectively referred to as
"Communications") shall be in writing, in the English language, and shall be
deemed to have been duly made or given when (i) delivered personally with
receipt acknowledged, (ii) mailed in any post office, enclosed in a registered
or certified postage-paid envelope, return receipt requested, (iii) sent by
facsimile, telex or cablegram (which shall promptly be confirmed by a writing
sent by registered or certified mail, return receipt requested) or (iv) sent by
a recognized courier (e.g., DHL, Federal Express, etc.), in each case addressed
or sent to the parties at the following addresses and facsimile numbers or to
such other or additional address or facsimile number as any party shall
hereafter specify by Communication to the other party:
P&U: Pharmacia & Upjohn S.p.A.
via Robert Koch 1.2
20152 Milan
Italy
Attn: President
Fax #: 39 2 4838 2734
With a copy to: Pharmacia & Upjohn S.p.A.
via Robert Koch 1.2
20152 Milan
Italy
Attn: General Counsel
Fax #: 39 2 4838 2734
MRVT: Miravant Medical Technologies
7408 Hollister Avenue
Santa Barbara, California 93117
U. S. A.
Attn: President
Fax #: 805 685 2959
<PAGE>
With a copy to: Nida & Maloney, P.C.
800 Anacapa Street
Santa Barbara, California 93101
U. S. A.
Attn: Joseph E. Nida
Fax #: 805 568 1955
Notice of a change of address shall be deemed given when actually received. All
other Communications shall be deemed to have been given, received and dated on
the earlier of: (i) when actually received or on the date when delivered
personally or (ii) one (1) day after being sent by facsimile, cable, telex (each
promptly confirmed by a writing as aforesaid) or courier and seven (7) business
days after mailing.
14.04 Relationship. The relationship between the parties shall be governed
by the terms of this Agreement and shall not extend to other activities,
transactions or contracts. Neither party hereto is in any way the agent,
venturer or partner of the other party.
14.05 Governing Law. The provisions of this Agreement shall be governed in
all respects by the laws of New York without regard to conflicts of laws
principles.
14.06 Other Instruments. The parties hereto covenant and agree that they
will execute such other and further instruments and documents as are or may
become reasonably necessary or convenient to effectuate and carry out the
provisions of this Agreement or may be reasonably requested by the other party.
14.07 Legal Construction. In case anyone or more of the provisions
contained in this Agreement shall be invalid or unenforceable in any respect,
the validity and enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired thereby and the parties will
attempt to agree upon a valid and enforceable provision which shall be a
reasonable substitute for such invalid and unenforceable provision in light of
the tenor of this Agreement and, upon so agreeing, shall incorporate such
substitute provision in this Agreement.
14.08 Entire Agreement, Modification, Consents and Waivers. This Agreement
contains the entire agreement of the parties with respect to the subject matter
hereof and no interpretation, change, termination or waiver of or extension of
time for performance under any provision of this Agreement shall be binding upon
any party, unless in writing and signed by the party intended to be bound
thereby. In addition to this Agreement, the parties have entered into two other
agreements, namely, the Product Supply Agreement, dated July 1, 1995, as
amended, and the SNET2 Device Supply Agreement, dated July 1, 1995. It is the
intent of the parties that the terms of these Agreements be read as a whole and
as being consistent with one another. Receipt by any party of money or other
consideration due under this Agreement, with or without knowledge of breach,
shall not constitute a waiver of such breach or any provision of this Agreement.
Except as otherwise provided in this Agreement, no waiver of or other failure to
exercise any right under or default or extension of time for performance under
any provision of this Agreement shall affect the right of any party to exercise
any subsequent right under any provision of this Agreement or otherwise enforce
said provision or any other provision hereof or to exercise any right or remedy
in the event of any other default, whether or not similar.
14.09 Section Headings: Construction. The section headings and titles
contained herein are each for reference only and shall not be deemed to affect
the meaning or interpretation of this Agreement. The singular shall include the
plural, the conjunctive shall include the disjunctive and the masculine gender
shall include the feminine and neuter, and vice versa, unless the context
otherwise requires.
14.10 Amendment. This Agreement may only be amended in writing by an
agreement designated as an amendment and executed by the parties hereto. 14.11
Limitation of Damages. IN NO EVENT SHALL EITHER PARTY NOR ANY OF ITS RESPECTIVE
AFFILIATES BE LIABLE TO THE OTHER PARTY OR ANY OF ITS AFFILIATES FOR SPECIAL,
INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER IN CONTRACT, WARRANTY,
TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, including, but not limited to,
loss of profits or revenue, loss of use of any equipment, cost of capital, down
time costs, delays, or claims of customers of any of them or other third parties
for such or other damages.
ARTICLE XV - BINDING EFFECT: ASSIGNMENT
15.01 Binding Effect and Assignment. This Agreement shall inure to the
benefit of and be binding upon each of the parties hereto and their respective
successors and assigns. Neither this Agreement, nor any of the right and
obligations under this Agreement, may be assigned, transferred or otherwise
disposed of by either party without the prior consent of the other party, unless
such assignment, transfer or disposition is to a successor to substantially all
the business or assets of the transferor, provided that such successor shall in
any event agree in writing with the other party to specifically assume all
obligations of the transfer or under this Agreement in a manner satisfactory to
the other party. Subject to the foregoing limitations, the Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the parties.
15.02 Right to Seek Assurance. In the event all or substantially all of the
assets of either P&U or MRVT are acquired by a third party, the non-acquired
party shall have the absolute right pursuant to Section 15.01 to receive a
binding written assurance and undertaking from such party that the third party
intends to faithfully perform all of the duties and obligations of the acquired
party set for in this Agreement. The acquired party shall take all action
necessary to enable the non-acquired party to obtain such written assurance.
<PAGE>
ARTICLE XVI - APPROVAL OF BOARD OF DIRECTORS
Each party warrants and represents to the other party that, to the extent
legally required, this Agreement has been approved by its Board of Directors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officer thereunder duly authorized as
of the date first hereinabove written.
MIRAVANT MEDICAL TECHNOLOGIES PHARMACIA & UPJOHN S.p.A.
By: /S/ By: /S/
------------------------- -------------------------------
Gary S. Kledzik, Title:_____________________________
Chairman of the Board and
Chief Executive Officer
AMENDED AND RESTATED OPHTHALMOLOGY
DEVELOPMENT & LICENSE AGREEMENT
between
PHARMACIA & UPJOHN AB
and
MIRAVANT MEDICAL TECHNOLOGIES
June 8, 1998
<PAGE>
THIS AMENDED and RESTATED OPHTHALMOLOGY DEVELOPMENT AND LICENSE AGREEMENT
(the "Agreement") is made and entered into as of June 8, 1998, by and between
PHARMACIA & UPJOHN AB, a company organized and existing under the laws of
Sweden, (hereinafter referred to as "P&U AB"), and MIRAVANT MEDICAL
TECHNOLOGIES, INC., a company organized and existing under the laws of the state
of Delaware, with its head offices at 7408 Hollister Avenue , Santa Barbara,
California 93117, U.S.A. (hereinafter referred to as "Miravant")
WITNESSETH THAT:
WHEREAS, P&U AB is a pharmaceutical company doing research, development and
marketing of pharmaceutical products;
WHEREAS, Miravant is a pharmaceutical and medical device company that,
using its proprietary technology and know-how, has developed and will continue
to develop, on its own or in collaboration with third parties, photoreactive
drugs and related light devices for the diagnosis and treatment of a wide
variety of diseases;
WHEREAS, Pharmacia & Upjohn S.p.A., an Italian corporation and affiliate of
P&U AB ("P&U SpA"), and Miravant entered into that certain Development and
License Agreement, dated July 1, 1995 (the "SPA License Agreement"), under which
P&U SpA was granted certain licenses under Miravant's technology for use in the
Field of oncology, dermatology and urology; and the SPA License Agreement was
amended on July 10, 1996 to include a sublicense to P&U AB for use in the field
of ophthalmology;
WHEREAS, on the date hereof, P&U SpA and Miravant have amended the SPA
License Agreement, under which, among other changes, P&U SpA's license will be
limited to the Field of oncology and urology; and Miravant and P&U AB have
agreed to continue such arrangement directly by entering into this separate
Agreement for the field of ophthalmology;
NOW, THEREFORE, in consideration of the above premises and the covenants
contained herein, the parties hereto agree as follows:
<PAGE>
ARTICLE 1 - DEFINITIONS
The following capitalized terms used herein shall have the meanings set forth
below:
1.1 Affiliate. "Affiliate" shall mean, with respect to any specified party,
any person or entity that directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the party specified. For purposes of this definition, "Control" including with
correlative meanings, the terms "controlled by" and "under common control with"
means ownership directly or indirectly of more than fifty percent (50%) of the
equity capital having the right to vote for election of directors (or in the
case of an entity other than a corporation, the equivalent management
authority).
1.2 Agreement. "Agreement" shall mean this Amended and Restated Development
and License Agreement.
1.3 Clinical Tests. "Clinical Tests" shall mean any tests, performed on
humans in preparation and support of regulatory submissions.
1.4 Development Program. "Development Program" shall mean the program to be
conducted by Miravant and P&U AB to develop Product (as hereinafter defined) and
obtain regulatory approvals for the sale of Product in the Territory (as
hereinafter defined) in accordance with the provisions of Article 4 hereof.
1.5 Effective Date. The term "Effective Date" shall mean May 19, 1998.
1.6 FDA. "FDA" shall mean the United States Food and Drug Administration or
the equivalent governmental authority in any other country, or any successor
agency having the administrative authority to regulate the approval for testing
or marketing of human pharmaceutical or biological medical products and/or
medical devices.
1.7 Field. "Field" shall mean the field of Ophthalmology.
1.8 Gross Sales. "Gross Sales" shall mean the final gross invoiced price
from the sale of Product by P&U AB and its Affiliates or Sublicensees; provided,
that Gross Sales shall exclude sales of Product intended for resale between P&U
AB and its Affiliates and Sublicensees. Gross Sales from the sale of the Product
in Eastern Europe, the Middle East, Africa and Central America by Sublicensees
which are not Affiliates of P&U AB shall be measured by the F.O.B. invoiced
price from P&U AB or one of its Affiliates to such distributors.
1.9 GCP. "GCP" shall mean current "good clinical practices" for carrying
out clinical studies in humans as set forth in regulations promulgated by the
FDA, as such may be amended from time to time or, where appropriate, the
equivalent regulations promulgated by the equivalent governmental authority in
any other country.
1.10 GLP. "GLP" shall mean current "good laboratory practices" for
conducting nonclinical laboratory studies as set forth in regulations (21 CFR
Part 58) promulgated by the FDA, as such may be amended from time to time or,
where appropriate, the equivalent regulations promulgated by the equivalent
governmental authority in any other country.
1.11 GMP. "GMP" shall mean current "good manufacturing practices" for the
preparation of drug products as set forth in regulations (21 CFR Parts 210 and
211) promulgated by the FDA, as such may be amended from time to time, or where
appropriate, the equivalent regulations promulgated by the equivalent
governmental authority in any other country.
1.12 IND. "IND" shall mean all governmental approvals required to
commence clinical testing in humans, including an "investigational new drug
application" submitted to the FDA under 21 CFR ss.312 for the purpose of
conducting clinical investigations of Product or the equivalent in any other
country.
1.13 Light Devices. "Light Devices" shall mean the instruments that
produce, deliver or measure light for use with Product.
1.14 Major Countries. "Major Countries" shall mean the ***** and *****.
1.15 Major Indication. "Major Indication" shall mean the indications in the
Field as set forth in Schedule 1.15.
1.16 Minor Indication. "Minor Indication" shall mean the indications in the
Field as set forth in Schedule 1.16.
***** Confidential Treatment Requested
<PAGE>
1.17 Net Sales. "Net Sales" shall mean Gross Sales less the following:
trade, cash and quantity discounts; returns, normal trade allowances,
charge-backs, federal, state, or other governmental rebates and adjustments;
taxes on the sale or transportation of the Products absorbed by P&U AB.
1.18 *****
1.19 New SnET2. "New SnET2" shall mean the Photodynamic Therapy drug
designated by Miravant as tin ethyl etiopurpurin in any formulation or strength,
other than SnET2 (as defined in Section 1.28).
1.20 NDA. "NDA" shall mean all approvals (including, where applicable,
pricing and reimbursement) to sell a pharmaceutical product in any country,
including a "New Drug Application" or other premarket approval application for
Product, and any supplement or abbreviated application relating thereto,
submitted to the FDA or the equivalent in any other country.
1.21 Operating Committee. "Operating Committee" shall mean the committee
appointed pursuant to the provisions of Section 4.2 hereof.
1.22 Other Indications. "Other Indications" shall mean the indications in
the Field set forth in Schedule 1.22.
1.23 Out-of-Pocket Expenses. "Out-of Pocket Expenses" shall mean actual
expenses, including expenses for outside consultants and CRO's, in relation to
Product paid after the Effective Date by Miravant or its Affiliates to third
parties who are not Affiliates of Miravant.
1.24 Patent Rights. "Patent Rights" shall mean all patent applications, as
well as continuation, divisional or continuation-in-part applications, and all
patents issuing therefrom, including reissue or reexamination patents,
containing at least one claim covering Product, its use or sale, and only to the
extent such Patent Rights are directed to Product, which are now or hereafter
owned or acquired by Miravant or any of its Affiliates, or licensed to Miravant
or any of its Affiliates, and all extensions and supplementary protection
certificates relating thereto. Patent Rights licensed to Miravant will only be
granted to P&U AB to the extent permitted by Miravant's license agreement and
P&U AB will do nothing to disturb such agreement.
1.25 Photodynamic Therapy. "Photodynamic Therapy" shall mean the technique
of diagnosis and/or treatment of abnormal or normal biological or medical
conditions, either in-vivo or ex-vivo, through the use of drugs activated by any
type of electromagnetic radiation or magnetic field.
1.26 Preclinical Tests. "Preclinical Tests" shall mean any nonhuman tests
performed in preparation and support of regulatory submissions.
1.27 Product. "Product" shall mean pharmaceutical products for Photodynamic
Therapy containing tin ethyl etiopurpurin as the active drug substance and any
isomers and derivatives thereof, in any formulation, whether SnET2 (as defined
in Section 1.28) or New SnET2 (as defined in Section 1.19).
1.28 SnET2. "SnET2" shall mean the Photodynamic Therapy drug designated by
Miravant as tin ethyl etiopurpurin in the injectable lipid emulsion formulation,
strength and unit dosage form being tested in clinical trials as of the
Effective Date.
1.29 Steering Committee. "Steering Committee" shall have the meaning set
forth in Section 4.2.
1.30 Sublicensee. "Sublicensee" shall mean a third party to whom P&U AB or
any of its Affiliates has granted, in whole or in part, the right to market or
comarket the Product in one or more countries in the Territory and who performs
selling activities such as invoicing customers in one or more countries in the
Territory.
1.31 Technology. "Technology" shall mean all information and data,
including, but not limited to, technical, pharmacological, toxicological and
clinical information, know-how, inventions and improvements possessed by
Miravant as of the Effective Date or generated or obtained by Miravant during
the term of this Agreement relating to the registration, manufacture, use or
sale of Product, in each case to the extent Miravant has the right to provide
the same to P&U AB hereunder; provided, that "Technology" shall not include any
such information or data regarding the design or manufacture of any Light
Device.
1.32 Territory. "Territory" shall mean the entire world.
1.33 Unit. "Unit" shall mean *****
***** Confidential Treatment Requested
<PAGE>
1.33 Schedules. The Schedules which are attached to this Agreement and
which are herein incorporated, are as follows:
Schedule Description
1.15 Major Indications
1.16 Minor Indications
1.22 Other Indications
3.3 Key Countries
ARTICLE 2 - INTENTIONALLY OMITTED
ARTICLE 3 - LICENSE GRANT AND ROYALTIES
3.1 License. Subject to the terms of this Agreement, Miravant hereby grants
to P&U AB and P&U AB's Affiliates an exclusive worldwide, royalty-bearing,
license under the Patent Rights and the Technology, not to mean devices, to use,
distribute and sell Product for diagnosis or treatment in the Field in the
Territory. P&U AB may sublicense, totally or in part, the license rights granted
under this Section 3.1; provided, that (i) P&U AB must notify Miravant in
writing of any such sublicense at least thirty (30) days in advance; (ii) P&U AB
remains responsible to Miravant for all contractual obligations of the
Sublicensee, including, but not limited to, payment of royalties, keeping of
records and reporting of sales, as if the Sublicensee's sales were P&U AB's
sales; and (iii) the Sublicensee agrees to be bound by the terms of this
Agreement to the same extent as P&U AB to the extent applicable to the
Sublicensee.
3.2 Term of License. With respect to Product, the license rights granted
under Section 3.1 shall remain in effect in each country in the Territory for
the duration of the Patent Rights or for a period of ten (10) years from the
first commercial sale of Product on a country-by-country basis, whichever shall
be longer. After this period, P&U AB shall have an irrevocable, fully paid-up,
nonexclusive license under the Technology in such country.
3.3 Milestone Payments. For Major and Minor Indications, P&U AB shall pay
Miravant only the following sums upon achievement of the stated milestones:
(i) if, after conducting ***** for any Major and Minor Indication, the
Operating Committee decides to proceed with ***** for such indication
*****, P&U AB shall pay Miravant: ***** for each Major Indication (or,
in the case of *****; and ***** for each Minor Indication; provided,
that in the event ***** are not required for any indication and the
Operating Committee decides to proceed with *****, P&U AB shall not
owe Miravant a ***** milestone payment for each such indication;
(ii) for each Major and Minor Indication, at ***** in one or more of the
Key Countries listed in Schedule 3.3, P&U AB shall pay Miravant *****
for each Major Indication so approved, and ***** for each Minor
Indication so approved.
(iii)P&U AB shall not owe Miravant any milestone payments for Other
Indications in Ophthalmology.
3.4 Royalties. P&U AB shall, for the term of the license specified by
Section 3.2, pay Miravant royalties on Net Sales of such Products to third
parties at the rate of ***** on total Net Sales of Product ***** per calendar
year, and a royalty of ***** on the part of total Net Sales of such Products
***** per calendar year, *****
3.5 Sublicense Fees. P&U AB shall pay Miravant ***** of any up-front or
lump-sum fees received by P&U AB in consideration of the grant of a sublicense
to Product, other to an Affiliate.
3.6 Payment of Milestone Payments and Out-of- Pocket Expenses. All amounts
of money due pursuant to Section 3.4 and for the payment of Out-of-Pocket
Expenses described in Article 4 shall be paid to Miravant or its designated
Affiliate within thirty (30) days from receipt by P&U AB of the relevant
Miravant invoice.
3.7 Payment of Royalties. The royalties due pursuant to Section 3.4 shall
be reported quarterly within thirty (30) days after March 31, June 30, September
30 and December 31. Such royalties shall be paid to Miravant or its designated
Affiliate semi-annually within sixty (60) days after June 30 and December 31 of
each calendar year. Each payment to Miravant or its designated Affiliate shall
be accompanied by a report containing sufficient information to enable Miravant
or its designated Affiliate to verify the accuracy of the calculation of Net
Sales on which such payment was based during the payment period, including a
statement of Gross Sales and Net Sales and a reconciliation of the credits,
allowances, rebates and other deductions contemplated by Section 1 .14 to
calculate Net Sales from Gross Sales.
***** Confidential Treatment Requested
<PAGE>
3.8 Payment of Royalties, Fees, and Expenses. The milestone payments
specified by Section 3.3 herein shall be paid to Miravant in US dollars. For the
purpose of converting and paying royalties, Out-of-Pocket Expenses and
sublicense fees specified by Section 3.5 herein, monies shall be first computed
in the currency of the country where the sales took place or the expense was
incurred, and then, unless another currency is designated by Miravant, converted
into US dollars at the most favorable buying exchange rates prevailing on the
day P&U AB converts the local currency into US dollars for payment to Miravant.
3.9 P&U AB Ceases to Market or Sell Product. Unless otherwise mutually
agreed to by the parties and provided that a particular Product is sold or is to
be sold in a Major Country by one entity only, be it P&U AB or its Affiliate or
a Sublicensee, should P&U AB or its Affiliates or Sublicensees cease to market
or sell a Product in that Major Country or fails to launch a particular Product
in that Major Country within ***** from the occurrence of the latest to occur of
the following events (if applicable in such Major Country): (i) issuance of
Product's NDA approval in that country, (ii) governmental price approval, (iii)
reimbursement of the social security (if any), and (iv) NDA approval of all
relevant Light Devices, P&U AB shall have no further rights to the Product in
that country nor shall P&U AB have any further obligations for the Product in
that country, except such obligations which accrued prior to divestment from P&U
AB of rights to the Product. In the event rights to a Product are divested from
P&U AB in any country pursuant to this Section 3.09 and upon Miravant's request,
P&U AB shall immediately transfer the NDA approval in that country to Miravant
or to an appointee of Miravant, provide to Miravant all data in P&U AB's
possession or control relating to that Product and take all such other actions
as are necessary or useful to permit Miravant to obtain regulatory approvals to
market Product in such country. If P&U AB fails to comply with the foregoing
within thirty (30) business days after such Miravant request, P&U AB hereby
irrevocably appoints Miravant as its attorney-in-fact to secure the transfer of
the NDA approval to Miravant. Miravant shall market the Product under its own
tradenames or brands and shall not use P&U AB's tradenames or brands. Failure by
P&U AB to launch a Product or interruption of marketing or sale of a Product
pursuant to this Section 3.09 shall not be considered a breach of this Agreement
within the meaning of Article 10. For the avoidance of doubt, it is understood
between the parties hereto that the provision of this Section 3.09 shall not
apply in the even that P&U AB or its Affiliates or Sublicensees cease to sell a
Product in a Major Country for reasons related to the safety and efficancy of a
Product.
3.10 Books and Records. P&U AB shall keep, and shall cause its Affiliates
and Sublicensees to keep, complete and accurate books of accounts and other
records, for a period of ***** from the relevant sale, containing sufficient
detail as may be necessary for Miravant to properly ascertain and verify the
royalties payable to it hereunder in accordance with generally accepted
accounting principles. Upon Miravant's request, P&U AB shall permit an
independent certified accountant selected by Miravant (except one to whom P&U AB
has some reasonable objection) to have access once each year during ordinary
business hours to such P&U AB records as may be necessary to determine the
correctness of any report and payment made under this Agreement. If the audit
shows that P&U AB has underpaid any royalties by ten percent (10%) or more, for
any period covered by the audit, P&U AB shall, in addition to immediately
remitting to Miravant the amount of underpayment, pay for the cost of such
audit. In the event the audit shows that P&U AB has overpaid any royalties due
pursuant to Section 3.4, P&U AB shall be allowed to deduct the amount of such
overpayment from the next semiannual royalty payment due to Miravant.
3.12 Reimbursement. Prior to the date hereof, P&U AB paid to Miravant the
sum of Five Hundred Thousand US Dollars ($500,000), as reimbursement for prior
expenses incurred by Miravant in the development of SnET2 for the Field.
***** Confidential Treatment Requested
<PAGE>
ARTICLE 4 - STRATEGIC PLAN, DEVELOPMENT AND FUNDING
4.1 Strategic Plan. The parties have developed a written plan in respect to
the Field of Ophthalmology, dated as of January 1998. This plan shall be called
the " Strategic Plan".
4.2 Operating Committee. The details of the planning, direction and
activities to be conducted under the Strategic Plan are under the coordination
of an Operating Committee consisting of ***** members. *****. Each of the
parties shall have ***** representatives on the Operating Committee.
Responsibilities of the Operating Committee shall be limited to recommendation
of additions and deletions to the indications to the Strategic Plan, amendment
and approval of the Development Program including schedules and budgets,
approval of protocols for Clinical Tests, and review and approval of
publications and presentations related to Product. If the Operating Committee
recommends to add any indication, it shall also determine whether it is a Major,
Minor or Other Indication, based on criteria including but not limited to, *****
and *****. Any addition or deletion of an indication shall be made by the
parties as an amendment of this Agreement. Each party may replace any of its
respective members without the consent of the other party. In addition to the
Operating Committee, there will be a steering committee which will be composed
of ***** members, ***** from Miravant and ***** from P&U (the "Steering
Committee"). The Steering Committee will be convened in the event of a deadlock
between the members of the Operating Committee. In the event that the Steering
Committee is deadlocked, then P&U will have the deciding vote. The Steering
Committee will include senior executives from both P&U and Miravant.
4.3 Voting. Each member of the Operating Committee shall have one (1) vote
and all decisions of the Operating Committee shall require a majority vote.
4.4 Reporting of Results. Within ten (10) days after March 31 and September
30 of each year, each party shall provide the other party with a detailed
progress report on its implementation of the Strategic Plan, including
experimental results and Phase I, Phase II and Phase III Clinical Test data. The
parties shall also consult periodically and at such times as determined by the
Operating Committee
4.5 Preparation of IND. Miravant shall be responsible for preparing and
filing in its own name any IND necessary for conducting Clinical Tests to be
performed under the Strategic Plan; provided, that in the event Miravant cannot
hold an IND in its own name in a country, the parties shall mutually agree how
to proceed.
4.6 SnET2 for Ophthalmology. Unless otherwise determined by the parties,
Miravant shall be responsible for conducting all necessary Preclinical Tests and
Phase I and Phase II Clinical Tests for SnET2 to be used in any indications in
the Field. The Out-of-Pocket Expenses associated with Preclinical Tests, Phase I
and Phase II Clinical Tests being conducted by Miravant on the Effective Date,
or conducted by Miravant thereafter, shall be reimbursed by P&U AB; provided,
that these studies were conducted in accordance with the protocols and budget
approved by the Operating Committee. Miravant shall be responsible for
conducting Phase III Clinical Tests of SnET2 in the United States, and P&U AB
shall reimburse Miravant for all Out of Pocket Expenses so incurred; provided,
that these studies were conducted in accordance with the protocols and budgets
approved by the Operating Committee. P&U AB will be responsible for conducting
Phase III Clinical Tests of SnET2 in the rest of the world. P&U AB shall be
responsible for conducting all post-NDA approval studies which may be necessary.
The Operating Committee has the right to determine, in its reasonable judgment,
whether to proceed to Phase III Clinical Tests for any indication in the Field.
All Clinical Tests shall be conducted in accordance with the protocols approved
by the Operating Committee. Miravant shall supply to P&U AB SnET2 and Light
Devices to enable P&U AB to carry out such Phase III Clinical Tests conducted by
it. The actual costs of SnET2 and Light Devices for all Clinical Test phases
shall be shared equally by the parties hereto.
4.7 New SnET2 for any Indication. Miravant shall be responsible for
conducting all necessary Preclinical Tests and Phase I and Phase II Clinical
Tests for any New SnET2 for any indication in the Field. The Out-of-Pocket
Expenses associated with such Preclinical Tests and Phase I and Phase II
Clinical Tests shall be reimbursed by P&U AB; provided, that these studies have
been conducted in agreement with the Operating Committee. P&U AB shall be
responsible for conducting, and shall bear all cost associated with, Phase III
Clinical Tests of New SnET2 for any indication, as well as for all post-NDA
approval studies which may be necessary; provided, that the Operating Committee
has the right to determine, in its reasonable judgment, whether to proceed to
Phase III Clinical Tests of New SnET2 for any indication. Miravant shall supply
to P&U AB New SnET2 and Light Devices to enable P&U AB to carry out Phase III
Clinical Tests required to support an NDA for New SnET2. The actual costs of New
SnET2 and Light Devices for all Clinical Test phases will be shared equally by
the parties hereto.
***** Confidential Treatment Requested
<PAGE>
4.8 Submission of NDA. P&U AB shall be responsible for assembling the
information supplied by Miravant to prepare each NDA for a Product and to submit
it to the concerned health authorities of the Territory. All such NDAs shall be
filed in the name of, and shall remain the sole and exclusive property of, P&U
AB, subject to Section 3.9 hereof. Before an NDA is submitted to the concerned
health authorities, it shall be reviewed and approved by the Operating
Committee. If P&U AB does not file an NDA for the United States within nine (9)
months after its receipt of all investigator reports, clinical data, and other
information required to be submitted in an NDA, Miravant may prepare the NDA and
submit it under P&U AB's name, unless such delay was not caused by the lack of
diligent efforts by P&U AB.
4.9 Audit of Out-of-Pocket Expenses. Miravant shall keep, or cause its
Affiliates to keep, complete and accurate records of Out-of-Pocket Expenses in
sufficient detail for P&U AB to verify the accuracy of any invoices submitted to
P&U AB by Miravant for payment of Out-of-Pocket Expenses pursuant to Section 4.6
and 4.7. P&U AB shall have the right to audit such records on an annual basis,
using an independent certified accountant, at a date and time acceptable to
Miravant during normal business hours. If as a result of the audit, it is
determined that P&U AB has been overcharged by Miravant during a calendar year
by more than ten percent (10%) of the actual expenses, Miravant shall pay for
the cost of the audit, and P&U AB shall, at its discretion, either deduct the
amount of the overcharge from the next semiannual royalty payment or take a
credit against payment of future invoices for Out-of-Pocket Expenses.
ARTICLE 5 - DUTIES OF THE PARTIES
5.1 Promotion and Customer Service. As Miravant's exclusive licensee for
Product in the Territory, P&U AB agrees to use all reasonable efforts to
introduce, promote, market and sell Product in the Territory. P&U AB shall
maintain adequate facilities, Product inventory and personnel to ensure prompt
handling and servicing of customers' inquiries and orders and prompt shipment
and servicing of Product.
5.2 Care of Product. P&U AB shall comply with all applicable regulatory
requirements regarding acceptable methods for the care, handling, storage and
shipment of Product. Each party hereby agrees that it shall promptly provide to
the other, on request, all information known to it which is necessary for
compliance with the applicable laws and regulations concerning the care,
handling, storage, labeling, packaging and shipment of Product.
5.3 Exclusive. During the term of this Agreement, unless otherwise agreed
to by Miravant, P&U AB shall not, directly, or indirectly, develop or sell other
Photodynamic Therapy drugs for use in the Field. P&U AB agrees that it shall
secure the same agreement from its Affiliates and Sublicensees. Clayton's rights
under Section XI of the Clayton/Miravant Contract, dated 31st August 1994 (as
such terms are defined in Section 7.1), are expressly excluded from the
provisions of this Section 5.3.
5.4 Authorization. P&U AB and Miravant each warrant that it has the legal
capacity to enter into this Agreement and that it has secured all necessary
approvals.
5.5 Obligations to Miravant's Licensor. To the extent relating to Patent
Rights or Products in the Field, P&U AB agrees to undertake all sublicensee
obligations set forth in any license agreement between Miravant and third
parties which was fully disclosed to P&U AB on or prior to July 10, 1996.
5.6 Sale of Product by Miravant. Subject to the terms of this Agreement,
while the license granted to P&U AB under Article III hereof with respect to any
Product is in effect in any country in the Territory, Miravant shall not license
or appoint any other licensee, distributor or marketing representative in or for
such country for such Product in the Field, sell such Product in or for use in
such country, nor accept orders for such Product from purchasers located within
such country or from any purchasers Miravant has reason to believe will sell
such Product within or for use in such country except as provided for in Section
3.9.
5.7 Right to License Patent Rights, Product and Technology. Miravant hereby
represents and warrants that it owns or has rights to use the Technology and
Patent Rights described herein, and that it has the right to grant sublicenses
under any license to SnET2 or covering Product held by Miravant.
5.8 Access to Information Relating to Light Devices. Both parties agree to
provide the other with access to information or data relating to Light Devices
which either party may need for regulatory approval to market Product in the
Field and which Miravant may need for regulatory purposes for products other
than Product in the Field.
<PAGE>
5.9 Access to Light Devices. The parties mutually acknowledge that an
essential feature of the development of Product for marketing hereunder is
access by P&U AB to Light Devices. Miravant agrees that it shall undertake all
necessary action to enable P&U AB to access Light Devices and to insure that P&U
AB has continued access to Light Devices during the term of the license rights
specified by Section 3.2.
5.10 Compliance with Applicable Law. In exercising the rights and in
carrying out the duties and obligations set forth in this Agreement, each party
represents and warrants that it shall comply with all applicable state, federal
and country laws or rules. Each party further represents and warrants that it
shall comply with all applicable rules and regulations governing the
manufacture, distribution, promotion, marketing and sale of Product in the
Territory and that it shall specifically comply with GLP's, GCP's, GMP's or
other equivalent regulatory requirements of any country. Unless otherwise
disclosed, Miravant represents and warrants that all studies which were done
prior to the Effective Date and which are included in the IND or NDA for KS
and/or BCC have been conducted in accordance with GLP's, GCP's, and GMP's where
applicable.
5.11 Duty to Develop Product. Each party agrees that it shall use
reasonable efforts to develop Product in the Field in accordance with the
Strategic Plan.
5.12 Patent Filing, Prosecution and Maintenance. Miravant shall be
responsible for all decisions relating to and all costs associated with
preparing, filing, prosecuting and maintaining Patent Rights. Miravant shall
timely notify P&U AB about each patent application filed which relates to
Product, its progress and subsequent disposition. Miravant shall not voluntarily
abandon or forfeit any Patent Rights, without the prior approval of P&U AB, such
approval shall not be unreasonably withheld or delayed.
5.13 Miravant's Representations. Miravant hereby represents and warrants
that:
(i) It is not party to any agreement, arrangement or understanding with
any third party which in any material way conflicts with its ability
to fulfill any of its obligations under this Agreement.
(ii) It will not knowingly commit any material act or fail to take any act
which would cause a material omission or permit any acts or omissions
to occur which would be in conflict with its obligations under this
Agreement or diminish in any material respect the potential scope of
the grant of rights to P&U AB under this Agreement.
(iii)It has no knowledge that the license rights granted to P&U AB with
respect to the Product shall not be subject to any material retained
rights of any state, federal or foreign government or governmental
entity, except for the rights of the United States government under
the Bayh-Dole Act and except as disclosed to P&U AB prior to July 10,
1996.
(iv) It has no knowledge that making, using or selling any Products (alone
or in combination with any Light Devices) may infringe the patent
rights of any third party nor does it have any knowledge that any
third party is infringing the Patent Rights.
(v) It has no agreement, understanding or undertaking, with any third
parties regarding the ownership or disposition of tin ethyl
etiopurpurin, isomers and derivatives thereof or any Product.
ARTICLE 6 - *****
6.1 *****
6.2 *****
6.3 *****
6.4 *****
***** Confidential Treatment Requested
<PAGE>
ARTICLE 7 - SUPPLY OF PRODUCT
7.1 Commercial Supply of Product. P&U AB shall purchase from Miravant, and
Miravant shall supply P&U AB, all of P&U AB's requirements of Product in
finished form to be sold by P&U AB in the Territory. P&U AB acknowledges that
Miravant has a Development and Commercial Supply Contract with Pharmacia &
Upjohn Co., which has a production facility at Clayton, N.C. ("Clayton"), to
manufacture certain formulations of Product (the "Clayton Agreement").
Miravant's obligations to supply P&U AB with Product are dependent upon Clayton
fulfilling its obligations to Miravant.
7.2 Commercial Transfer Price. The "Transfer Price" for Product supplied to
P&U AB by Miravant shall be equal to the sum of the following:
(i) *****
(ii) *****
7.3 *****
(i) *****
(ii) *****
a. *****
b. *****
*****
7.4 Clinical Supply of Product. Miravant shall supply P&U AB all of P&U
AB's requirements of Product for use in Clinical Tests. The parties shall share
equally the costs of such Product.
7.5 Ownership of Trademarks. P&U AB shall own all trademarks, logos and/or
trade dress which it registers for use or otherwise uses in connection with
Product.
ARTICLE 8 - REGULATORY RESPONSIBILITIES
8.1 Complaints. Miravant and P&U AB shall share with each other all data on
complaints in respect of Product subject to this Agreement including, but not
limited to, complaints or information regarding performance or allegations or
reports of any effects on a patient from use of such Product, as soon as such
data is available. To the extent that it has knowledge thereof, each party shall
promptly notify the other in writing of any defect in, or condition of, Product
subject to this Agreement which may cause any such Product to violate the
applicable laws and regulations of any country in the Territory where such
Product is being sold by P&U AB.
8.2 Recall. In the event of a total or partial recall of Product sold by
Miravant to P&U AB under this Agreement, whether voluntary or mandated by law,
the parties agree to cooperate fully to effect the recall. In the event such
recall results from the gross negligence or willful misconduct of Miravant,
Miravant shall bear all the expenses associated with such recall. In the event
such recall results from the gross negligence or willful misconduct of P&U AB,
P&U AB shall bear all the expenses associated with such recall. If any recall
results without gross negligence or willful misconduct of either party, then
Miravant and P&U AB shall equally bear the expenses of such recall. P&U AB
agrees to maintain adequate sales and service records to enable it to carry out
any Product recall and to conduct such recall.
8.3 Adverse Reactions. Each party shall be responsible for maintaining such
records and making such reports as may be required in connection with any
regulatory approval held by the party. Each party shall immediately inform the
other of all adverse drug experience reports and other information relating to
the safety or effectiveness of product which come to its attention.
***** Confidential Treatment Requested
<PAGE>
ARTICLE 9 - PUBLICATION AND CONFIDENTIALITY
9.1 Publication. At least thirty (30) days prior to the time either party
submits any data or articles related to Product or Technology for publication or
presentation, the proposed publication or presentation must be sent to the
Operating Committee for review and clearance. If the Operating Committee so
decides, such publication or presentation can be delayed as long as necessary to
preserve US or foreign patent or other property rights.
9.2 Disclosure. Miravant shall disclose to P&U AB from time to time all
information relating to the Patent Rights, Technology and Product for the Field
which was not previously disclosed; provided, that Miravant shall only be
required to disclose such information to P&U AB as is necessary for P&U AB to
fulfill its obligations under this Agreement. All information disclosed by one
party to the other under this Section 9.2 shall be deemed "Confidential
Information" and treated as provided in Section 9.3 hereof. P&U AB shall
disclose to Miravant, or Miravant shall have access to, information developed by
P&U AB related to Product including, but not limited to, the NDA's and other
regulatory data including clinical data and investigators' reports, applications
and licenses.
9.3 Confidential Information. Unless otherwise mutually agreed to by the
parties, the parties agree to maintain in confidence all Confidential
Information disclosed to the other pursuant to Section 9.2 and shall not, during
the term of this Agreement and for a period of five (5) years thereafter, use
such Confidential Information, except as permitted by this Agreement or disclose
the same to anyone other than those of its officers, directors, employees,
Affiliates and Sublicensees to the extent necessary in connections with either
party's activities as contemplated in this Agreement. Each party shall use its
reasonable efforts to ensure that its officers, directors, employees, Affiliates
and Sublicensees do not disclose or make any unauthorized use of such
Confidential Information.
9.4 Limitations on Confidentiality. The obligation of confidentiality
contained in Section 9.3 shall not apply to the extent that (i) a party is
required to disclose information by applicable law, such as pursuant to
Securities and Exchange Commission rules and regulations, or order of a
governmental agency or a court of competent jurisdiction, (ii) a party can
demonstrate that the disclosed information was, at the time of disclosure,
already in the public domain other than as a result of actions or failure to act
of a party, its officers, directors, employees, Affiliates and Sublicensees in
violation hereof; (iii) the disclosed information was rightfully known by a
party or its Affiliates or sublicensees (as shown by its written records) prior
to the date of disclosure to the other party in connection with this Agreement;
or (iv) the disclosed information was received by a party or its Affiliates or
Sublicensees on an unrestricted basis from a third party source which is not the
other party or an Affiliate of the other party and not under a duty of
confidentiality, and which was rightfully known to said source.
ARTICLE 10 - TERM AND TERMINATION
10.1 Term. Subject to the provisions of this Article 10, the term of this
Agreement shall continue so long as P&U AB shall be obligated to pay royalties
on the sale of any Product in the Territory.
10.2 Termination for Breach. In the event either party shall materially
breach any of the terms, conditions and agreements contained herein to be kept,
observed and performed by it, then the other party may terminate this Agreement,
at its option and without prejudice to any of its other legal and equitable
rights and remedies, by giving the party which committed the breach sixty (60)
days' notice of its intent to terminate, particularly specifying the breach,
unless the notified party within such 60 day period shall have cured the breach.
The 60 day period shall be extended for a period not exceeding an additional
ninety (90) days for breaches which cannot be reasonably cured within the 60 day
period if the party has commenced to cure the breach within that period.
10.3 Termination by Bankruptcy. In the event either party shall file a
voluntary petition or any answer admitting the jurisdiction of the Court and the
material allegations of, or shall consent to, an involuntary petition pursuant
to or purporting to be pursuant to any reorganization or insolvency law of any
jurisdiction, or shall make an assignment of substantially all of its assets for
the benefit of creditors, or shall apply for or consent to the appointment of a
receiver or trustee of a substantial part of its property (such party, upon the
occurrence of any such event, a "Bankrupt Party"), then to the extent permitted
by law the other party hereto may thereafter immediately terminate this
Agreement by giving notice of termination to the Bankrupt Party, unless the
proceeding is dismissed within ninety (90) days of its filing.
10.4 Effect of Termination. It is understood and agreed that the
termination of this Agreement shall not affect the rights or obligations of the
parties which (i) by the terms hereof, continue after the termination of this
Agreement, or (ii) have accrued prior to such termination including, but not
limited to, the rights of Miravant to receive any amounts then owing from P&U AB
for royalties due hereunder, all of which amounts shall be immediately due and
payable on such date.
ARTICLE 11 - PATENT INFRINGEMENT
11.1 Infringement by Third Parties. If, during the term of this Agreement,
either Miravant or P&U AB shall acquire knowledge or have reasonable cause to
believe that any of the Patent Rights claiming a Product, or its use or
manufacture, shall be infringed or used without authorization by any other
person in the Territory, such party shall promptly notify the other of such
knowledge. Miravant and P&U AB shall promptly meet to discuss the commercial
impact of such third party infringement and the most efficient and expeditious
manner to proceed against said third party.
11.2 Initiation of Action by Miravant or P&U AB. Miravant may take all
steps in its name which are necessary or advisable including, without
limitation, the institution of any action or proceeding for the obtaining of
damages or the enjoinment of any such infringement and to prosecute, settle,
compromise or otherwise dispose of the same. Miravant shall be entitled to the
full recovery of any money or other property collected by way of judgment,
settlement (whether prior to or after the institution of any action or
proceeding) or otherwise on any action initiated by Miravant. If Miravant does
not commence such an action within one hundred eighty (180) days after a request
to do so by P&U AB, then P&U AB may initiate an action or proceeding for the
obtaining of damages or the enjoinment of any such infringement and to
prosecute, settle, compromise or otherwise dispose of the same. P&U AB shall be
entitled to the full recovery of any money or other property collected by way of
judgment, settlement (whether prior to or after the institution of any action or
proceeding) or otherwise on any action initiated by P&U AB. Each party agrees to
reasonably cooperate with the other party in any legal proceeding and to pay all
of its own costs taken pursuant to this Section 11.2.
11.3 Claims Against P&U AB or Miravant. If any claim is made or action
brought against P&U AB or Miravant based on the claim that P&U AB or Miravant is
infringing any third party patent rights by virtue of the manufacture, use or
sale of Product hereunder, P&U AB or Miravant shall promptly so notify the
other. The parties shall then consult with each other as to the most efficient
and reasonable course of action to take relative to such third party claim. Each
party hereto shall pay its own expenses in defending any such third party claim.
P&U AB shall solely be responsible for any trademark infringement claims and for
all damages claimed against P&U and its Affiliates by any third party.
11.4 Damages Paid to Third Party. If, in any such action described in
Section 11.3, a court of competent jurisdiction determines that P&U AB or
Miravant is obligated to pay damages to any third person (excluding trademark
claims) because P&U AB or Miravant's manufacture, use or sale of a Product was
held to be an infringement of a third party right, *****.
11.5 Reduction of Royalties. In the event the legal proceedings described
in Section 11.3 result in a settlement or other final action which requires P&U
AB to pay a royalty to a third party in order to continue to use or sell
Product, the royalty paid by P&U AB to Miravant for such Product shall be
reduced by an amount equal to ***** of the rate of the royalty that P&U AB is
required to pay to such third party, not to exceed ***** of the royalties which
would otherwise be payable to Miravant.
ARTICLE 12 - INDEMNIFICATION
12.1 Indemnification. Except for matters relating to indemnification for
infringement of intellectual property rights, as to which Article 11 shall be
the sole and exclusive provisions, each party to this Agreement shall indemnify
and hold the other party hereto harmless from and against any and all action,
causes of action, claims, demands, suits, controversies, damages, verdicts,
judgments, executions and all cost and expenses in connection therewith
including, but not limited to, reasonable attorneys' fees, whether or not well
founded in fact or in law, brought or claimed by any third persons, which and to
the extent thereof shall arise from any breach of this Agreement by, or from the
negligent acts or omissions of, the indemnifying party under this Agreement (a
"Liability").
***** Confidential Treatment Requested
<PAGE>
12.2 Notice of Defense of Actions. Each party shall give the other prompt
notice of any potential Liability, and promptly after receipt by a party
claiming indemnification under this Section 12.2 of notice of the commencement
of any action, such indemnified party will notify the indemnifying party of the
commencement of the action and generally summarize such action. The indemnifying
party shall have the right to participate in and to assume the defense of such
action with counsel of its choosing. An indemnifying party shall not have the
right to direct the defense of such an action of an indemnified party if counsel
to such indemnified party has reasonably concluded that there may be defenses
available to it that are different from or additional to those available to the
indemnifying party; provided, that in such event, the indemnifying party shall
bear the fees and expenses of separate counsel reasonably satisfactory to the
indemnifying party. The failure to notify an indemnifying party promptly of the
commencement of any such action, if prejudicial to the ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 12.2, but the omission so to notify the
indemnifying party will not relieve such party of any liability that such party
may have to any indemnified party otherwise than under this Section. No
settlement of any claim or action may be made without the consent of the
indemnifying party (which shall not be unreasonably withheld or delayed).
ARTICLE 13 - RESOLUTION OF DISPUTES
13.1 Resolution of Disputes by Parties' Presidents. The parties recognize
that a bona fide dispute as to certain matters may from time to time arise
during the term of this Agreement which relate to either party's rights or
obligations hereunder. In the event of the occurrence of such a dispute, either
party may, by written notice to the other, have such dispute referred to their
respective officer designated below or their successors, for attempted
resolution by good faith negotiations within sixty (60) days after such notice
is received. Said designated officers are as follows:
For Miravant - President
For P&U - Managing Director
In the event the designated officers are not able to resolve such dispute
within such sixty (60) day period, any party may invoke the provisions in
Section 13.2 below, other than for matters within the scope of the Operating
Committee or the Steering Committee.
13.2 Arbitration. Except as expressly provided in Section 13.1, any and all
disputes arising out of or in connection with the performance of this Agreement
shall be finally settled by arbitration in accordance with the rules of the
American Arbitration Association, except that each party will be entitled to
select one (1) arbitrator and the two (2) arbitrators so selected shall select a
third arbitrator and if they cannot agree, then the third arbitrator who shall
not be a citizen of the United States or of Sweden, will be selected by the
American Arbitration Association. The arbitration shall be held in New York, New
York. The award rendered shall be final and binding upon the parties. Judgment
on any award may be entered in any court having jurisdiction over the parties or
their assets. To the extent any claims relate to the validity, construction,
scope, enforceability or infringement of any Patent Rights, such claim shall not
be required to be submitted to arbitration hereunder and shall be resolved by a
court of competent jurisdiction. The costs of arbitration shall be shared
equally by the parties.
ARTICLE 14 - MISCELLANEOUS
14.1 Force Majeure. Neither P&U AB nor Miravant shall be in default under
this Agreement nor liable for any failure to perform or for delay in performance
resulting from any cause beyond its reasonable control or due to compliance with
any regulations, order or act of any federal, provincial, state or municipal
government, or any department or agency thereof, civil or military authority,
acts of God, fires, floods or weather; strikes or lockouts; factory shutdowns,
embargoes, wars, hostilities or riots.
14.2 Taxes. Each of the parties hereto shall be responsible for its own
taxes imposed as a result of the performance by such party under this Agreement
including, but not restricted to, any sales tax, any tax on or measured by any
royalty or other payment required to be made by it hereunder, any registration
tax, any tax imposed with respect to the granting of or transfer of licenses or
other rights hereunder or the payment or receipt of royalties hereunder. For the
avoidance of any doubt, it is agreed that any withholding tax levied on a
payment required to be made pursuant to this Agreement, shall be the
responsibility of the party receiving such payment. The parties shall cooperate
fully with each other in obtaining and filing all requisite certificates and
documents with the appropriate authorities and shall use their best efforts to
take such further action as may reasonably be necessary to avoid the deduction
of any withholding or similar taxes from any remittance of funds by P&U AB to
Miravant hereunder; provided, that P&U AB may withhold any tax it is required to
collect or pay on behalf of Miravant.
14.3 Notices. All notices, proposals, submissions, offers, approvals,
agreements, elections, consents, acceptances, waivers, reports, plans, requests,
instructions and other communications required or permitted to be made or given
hereunder (all of the foregoing hereinafter collectively referred to as
"Communications") shall be in writing, in the English language, and shall be
deemed to have been duly made or given when (i) delivered personally with
receipt acknowledged, (ii) mailed in any post office, enclosed in a registered
or certified postage-paid envelope, return receipt requested, (iii) sent by
facsimile, telex or cablegram (which shall promptly be confirmed by a writing
sent by registered or certified mail, return receipt requested) or (iv) sent by
a recognized courier (e.g. DHL, Federal Express, etc.), in each case addressed
or sent to the parties at the following addresses and facsimile numbers or to
such other or additional address or facsimile number as any party shall
hereafter specify by Communication to the other party:
<PAGE>
P&U AB: Pharmacia & Upjohn AB
Lindhagensgatan 133
S-112 87 STOCKHOLM
SWEDEN
Attention: General Counsel
Fax: +46 8 695 47 08
With a copy to: James F. Farrington, Jr.
Wiggin & Dana
301 Tresser Blvd.
Stamford, CT 06901
USA
Fax: +1 203 363 7676
Miravant: Miravant, Inc.
7408 Hollister Avenue
Santa Barbara, CA 93117
U.S.A.
Attn: President
Fax # 805-685-2959
With a copy to: Nida & Maloney, P.C.
800 Anacapa Street
Santa Barbara, CA 93101
U.S.A.
Attn: Joseph E. Nida
Fax # 805-568-1955
Notice of a change of address shall be deemed given when actually received. All
other Communications shall be deemed to have been given, received and dated on
the earlier of: (i) when actually received or on the date when delivered
personally or (ii) one (1) day after being sent by facsimile, cable, telex (each
promptly confirmed by a writing as aforesaid) or courier and seven (7) business
days after mailing.
14.4 Relationship. The relationship between the parties shall be governed
by the terms of this Agreement and shall not extend to other activities,
transactions or contracts. Neither party hereto is in any way the agent,
venturer of partner of the other party.
14.5 Governing Law. The provisions of this Agreement shall be governed in
all respects by the laws of New York without regard to conflicts of laws
principles.
14.6 Other Instruments. The parties hereto covenant and agree that they
will execute such other and further instruments and documents as may become
reasonably necessary or convenient to effectuate and carry out the provisions of
this Agreement or may be reasonably requested by the other party.
14.7 Legal Construction. In case any one or more of the provisions
contained in this Agreement shall be invalid or unenforceable in any respect,
the validity and enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired thereby and the parties will
attempt to agree upon a valid and enforceable provision which shall be a
reasonable substitute for such invalid and unenforceable provision in light of
the tenor of this Agreement and, upon so agreeing, shall incorporate such
substitute provision in this Agreement.
14.8 Entire Agreement, Modification, Consents and Waivers. This Agreement
contains the entire agreement of the parties with respect to the subject matter
hereof and no interpretation, change, termination or waiver of or extension of
time for performance under any provision of this Agreement shall be binding upon
any party, unless in writing and signed by the party intended to be bound
thereby. Receipt by any party of money or other consideration due under this
Agreement, with or without knowledge of breach, shall not constitute a waiver of
such breach or any provision of this Agreement. Except as otherwise provided in
this Agreement, no waiver of or other failure to exercise any right under or
default or extension of time for performance under any provision of this
Agreement shall affect the right of any party to exercise any subsequent right
under any provision of this Agreement or otherwise enforce said provision or any
other provision hereof or to exercise any right or remedy in the event of any
other default, whether or not similar.
14.9 Agreements Read as a Whole. In order to accomplish the objective of
the Strategic Plan as outlined in Section 4.1 the parties have entered into
three (3) agreements which are:
Amended and Restated Ophthalmology Development and License Agreement, dated
the date hereof.
Product Supply Agreement, dated July 1, 1995, as amended; and
SNET2 Device Supply Agreement for Ophthalmology, dated December 20, 1996.
It is the intent of the parties that the terms of these Agreements be read as a
whole and as being consistent with one another. In the event of an inconsistency
between the terms of any of the Agreements, which significantly impacts the
parties' ability to carry out the Strategic Plan, such inconsistency shall be
resolved by the Operating Committee. In the event the Operating Committee cannot
resolve such inconsistent term, the matter shall be referred to the Steering
Committee for resolution pursuant to Section 4.2.
14.10 Section Headings; Construction. The section headings and titles
contained herein are each for reference only and shall not be deemed to affect
the meaning or interpretation of this Agreement. The singular shall include the
plural, the conjunctive shall include the disjunctive and the masculine gender
shall include the feminine and neuter, and vice versa, unless the context
otherwise requires.
14.11 Amendment. This Agreement may only be amended in writing by an
agreement designated as an amendment and executed by the parties hereto.
14.12 Survival. Articles 9 and 12 shall survive the expiration or
termination of this Agreement.
ARTICLE 15 - BINDING EFFECT: ASSIGNMENT
15.1 Binding Effect and Assignment. This Agreement shall inure to the
benefit of and be binding upon each of the parties hereto and their respective
successors and assigns. Neither this Agreement, nor any of the rights and
obligations under this Agreement, may be assigned, transferred or otherwise
disposed of by either party without the prior consent of the other party, unless
such assignment, transfer or disposition is to a successor to substantially all
the business or assets of the transferor; provided, that, such successor shall
in any event agree in writing with the other party to assume all obligations of
the transferor under this Agreement in a manner satisfactory to the other party.
Subject to the foregoing limitations, the Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the parties.
15.2 Right to Seek Assurance. In the event all or substantially all of the
assets of either P&U AB or Miravant are acquired by a third party, the
non-acquired party shall have the right pursuant to Section 15.1 to receive a
written assurance from such third party that the third party intends to
faithfully perform all of the duties and obligations of the acquired party set
forth in this Agreement. The acquired party shall take all action necessary to
enable the non-acquired party to obtain such written assurance.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officer thereunder duly authorized as
of the date first hereinabove written.
MIRAVANT MEDICAL TECHNOLOGIES PHARMACIA & UPJOHN AB
By: /S/ By: /S/
--------------------------------- -------------------------
Gary S. Kledzik, Chairman of the Board Title: _______________________
Officer and Chief Executive Officer
By: /S/
-------------------------
Title: _______________________
<PAGE>
SCHEDULE 1.15
Major Indications.
*****
***** Confidential Treatment Requested
<PAGE>
SCHEDULE 1.16
Minor Indications.
*****
***** Confidential Treatment Requested
<PAGE>
SCHEDULE 1.22
Other Indications.
*****
***** Confidential Treatment Requested
<PAGE>
SCHEDULE 3.3
Key Countries.
*****
***** Confidential Treatment Requested
June 8, 1998
Miravant Medical Technologies
7408 Hollister Avenue
Santa Barbara, CA 93117
U.S.A.
Attn: Gary S. Kledzik, Ph.D.
Re: Pharmacia & Upjohn ("P&U")/
Miravant Medical Technologies ("Miravant") - Right of First Refusal
Dear Gary:
We have today agreed to amend that certain Development and Commercial
Supply Agreement, dated as of August 31, 1994, between Miravant and Pharmacia &
Upjohn & Co. (successor to Pharmacia, Inc.) (such agreement, as amended on the
date hereof, is referred to as the "Clayton Agreement"). Under Section 16.6 of
the Clayton Agreement, P&U has the right to assign the Clayton Agreement to a
third party which acquires its production facility in Clayton, North Carolina
(the "Clayton Facility"). As you were previously informed by P&U, Pharmacia &
Upjohn Inc. has now entered into an agreement with *****, under which P&U will
***** its entire worldwide parenteral nutrition and fluids therapy business,
including the Clayton Facility and other production plants.
We understand that Miravant consents to our assignment of the Clayton
Agreement and releases P&U from all liabilities and obligations under the
Clayton Agreement from and after the effective date of such assignment, subject
to the following:
1. P&U shall retain rights to all information relating to the analytical
methods in the DMF relating to the Miravant ***** being developed and
produced at the Clayton Facility *****;
2. ***** shall assume in writing to Miravant all of P&U's obligations under
the Clayton Agreement;
3. ***** and P&U shall also negotiate toward a separate supply agreement under
which ***** will supply P&U directly its commercial requirements of the
Miravant Product, to the extent P&U or one or more of its Affiliates has
the right to sell the Miravant Product. If we conclude such an agreement,
(a) Miravant will continue to supply the ***** to ***** under the terms set
forth in the Clayton Agreement; and (b) Miravant will continue to have all
other rights and obligations it now has under the Clayton Agreement,
including participation in the development of the formulation of the
Miravant Product, purchase clinical supplies, and purchase its commercial
requirements of the Miravant Product for uses outside of any fields for
which P&U has marketing rights.
4. *****
Please indicate your consent to the assignment of the Clayton Agreement on the
terms set forth above by signing and returning a copy of this letter.
Very truly yours,
PHARMACIA & UPJOHN, INC.
By:/S/
----------------------------------
Title:_______________________________
AGREED TO:
MIRAVANT MEDICAL TECHNOLOGIES
By:/S/
--------------------------------------------
Gary S. Kledzik, Chairman of the Board
and Chief Executive Officer
***** Confidential Treatment Requested
CREDIT AGREEMENT
This Credit Agreement (the "Credit Agreement"), is made as of April 1,
1998 (the "Effective Date"), between Ramus Medical Technologies, a California
corporation (the "Company"), and Miravant Medical Technologies, a Delaware
corporation (the "Lender").
R E C I T A L S :
A. The Company and a subsidiary of the Lender are parties to an Investment
Agreement dated as of December 27, 1996 (the "Investment Agreement"), a
Co-Development Agreement dated as of December 27, 1996 (the "Co-Development
Agreement"), a Series A Preferred Stock Registration Rights Agreement dated as
of December 27, 1996 (the "Registration Rights Agreement") and an Option to
Purchase Ramus Medical Technologies Agreement dated as of December 27, 1996 (the
"Option Agreement" and, collectively with the Investment Agreement, the
Co-Development Agreement and the Registration Rights Agreement, the "Existing
Agreements").
B. The Company desires to borrow from the Lender, and the Lender desires to
lend to the Company, Two Million Dollars ($2,000,000) on the terms and
conditions set forth herein.
C. On March 11, 1998 the Lender received written notice from the Company
that as of such date the Company had completed the first surgical procedure to
implant the Company's initial product in a radial artery in a human subject in
accordance with the definition of "Milestone Date" as set forth in Section 1 of
this Credit Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Definitions.
"Borrowing" shall mean the borrowing of Loans on a given date.
"Commitment" shall mean, initially, Two Million Dollars ($2,000,000) and
shall be reduced by the dollar amount of each Loan.
"Common Stock" shall have the meaning provided in Subsection 7.2(b).
"Credit Documents" shall mean this Credit Agreement and the Note.
"Credit Event" shall mean the making of any Loan.
"Default" shall mean any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Disbursement Date" shall have the meaning provided in Subsection 2.4.
"Events of Default" shall have the meaning provided in Section 6 of the
Note.
*****
"Expiration Date" shall have the meaning provided in Section 2 of the
Option Agreement.
***** Confidential Treatment Requested
<PAGE>
"Fair Market Value" shall have the meaning provided in Subsection 7.2(c).
"Initial Borrowing Date" shall mean the date on which the initial Borrowing
occurs.
"Lien" shall have the meaning provided in Subsection 4.2.
"Loan" shall have the meaning provided in Subsection 2.1.
"Maturity Date" shall mean a date that is twelve (12) months after the
Expiration Date.
"Milestone Date" shall mean a date that is three (3) months after the day
on which the Lender receives written notice that the Company has completed
the first surgical procedure to implant the Company's initial product in a
radial artery in a human subject in its formally conducted clinical trials
supervised by the United States Food and Drug Administration, or the
regulatory equivalent in the country in which treatment is undertaken,
provided that such human subject suffers no Serious Adverse Event or
Serious Adverse Device Effect during said three-month period.
"Note" shall have the meaning provided in Subsection 2.5.
"Notice of Borrowing" shall have the meaning provided in Subsection 2.3.
*****
"Person" shall mean any individual, partnership, joint venture, limited
liability company, firm, corporation, association, trust or other
enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
*****
"Serious Adverse Event or Serious Adverse Device Effect" shall mean with
respect to any such first implant which is the subject of a Milestone Date,
an event or effect, as applicable, which is recorded by the applicable
investigator which results in death, is life threatening, is disabling,
gives rise to a malignant tumor, is a congenital anomaly in the offspring,
fetal distress or death, requires hospitalization (initial or prolonged)
(but does not include planned hospitalization) and requires intervention to
prevent permanent impairment or damage.
"Total Consideration" shall have the meaning provided in Subsection 7.2(b).
"Unutilized Commitment" shall mean at any time the Commitment at such time
less the aggregate principal amount of all Loans made by the Lender to
date.
"Warrant" shall have the meaning provided in Subsection 7.1.
2. Amount and Terms of Credit.
2.1 The Loan. Subject to the terms and conditions set forth herein, the
Lender agrees, at any time and from time to time prior to the Maturity Date, to
make loans (any loan made by the Lender a "Loan") to the Company. The aggregate
principal amount of Loans shall not at any time exceed Two Million Dollars
($2,000,000).
2.2 Maximum Amount and Frequency of Each Borrowing. The aggregate principal
amount of each Loan hereunder shall not be more than the Unutilized Commitment
at such time. After the initial Borrowing hereunder, the Company shall not
request additional Loans pursuant to this Agreement more frequently than one
such Loan request during each thirty (30) day interval following the Initial
Borrowing Date.
2.3 Notice of Borrowing. Whenever the Company desires to make a Borrowing
hereunder, it shall give the Lender at least two (2) business days prior written
notice of each Loan to be made hereunder. Each such notice (each a "Notice of
Borrowing") shall be in the form of Exhibit A appropriately completed to specify
the aggregate principal amount of the Loan to be made pursuant to such
Borrowing, and the date of such Borrowing (which shall be no earlier than the
next business day).
2.4 Disbursement of Funds. On the date specified in each Notice of
Borrowing (each such date a "Disbursement Date"), the Lender will make the
amount of such Loan available *****.
***** Confidential Treatment Requested
<PAGE>
2.5 Note. The Company's obligation to pay the principal of, and interest
on, the Loans shall be evidenced by a convertible promissory note duly executed
and delivered by the Company substantially in the form of Exhibit B with blanks
appropriately completed in conformity herewith (the "Note"). The Note shall (i)
be payable to the order of the Lender and be dated the date hereof, (ii) be in a
stated principal amount equal to the original amount of the Commitment and be
payable in the principal amount of the Loans evidenced thereby, (iii) to the
extent not prepaid, mature, with respect to each Loan evidenced thereby, on the
Maturity Date, (iv) be entitled to the benefits of this Credit Agreement and (v)
bear interest on the outstanding principal of the Loans as provided in
Subsection 2.6.
2.6 Interest. The unpaid principal amount of each Loan from the date the
proceeds thereof are made available to the Company until the Maturity Date, or
until prepaid by the Company, shall bear interest at a rate equal to such rate
available for an equivalent loan to the Lender from ***** Bank on such
Disbursement Date; provided, however, that such interest rate shall not exceed
ten percent (10%) per annum. Interest payable through the Expiration Date will
accrue and be added to the principal on that date. After the Expiration Date
interest will be payable quarterly until the Maturity Date.
2.7 Prepayments. The Company shall have the right to prepay the Loans,
without premium or penalty, in whole or in part from time to time upon ten (10)
business days prior written notice to the Lender. Any amount voluntarily prepaid
may not be reborrowed, but shall not affect the availability of any unused
portion of the original Commitment.
2.8 Termination of Commitment. The Lender's Commitment hereunder shall
terminate on the earliest of (i) the date the aggregate principal amount of the
Loans made to the Company hereunder first reaches the amount of the Commitment;
(ii) the occurrence of an Event of Default under either of the Credit Documents;
or (iii) the Maturity Date.
3. Conditions Precedent. The obligation of the Lender to make any Loan is
subject, at the time of the making of any Loan, to the satisfaction of the
following conditions:
3.1 Execution of Credit Agreement; Note. On the Initial Borrowing Date the
Company shall have executed and delivered to the Lender this Credit Agreement
and the Note.
3.2 No Default; Representations and Warranties. At the time of each Credit
Event and also after giving effect thereto (i) there shall have occurred no
Event of Default, and (ii) all representations and warranties contained in the
Credit Documents and in the Investment Agreement shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on and as of such date, with such changes in the
ordinary course of business as shall be reasonably acceptable to the Lender.
3.3 Notice of Borrowing. Prior to each Credit Event, the Lender shall have
received a Notice of Borrowing with respect thereto meeting the requirements of
Subsection 2.3.
3.4 Corporate Documents; Proceedings. All corporate and legal proceedings
and all instruments and agreements in connection with the transactions
contemplated in the Credit Documents shall be satisfactory in form and substance
to the Lender, and the Lender shall have received all information and copies of
all documents and papers, including records of corporate proceedings and
governmental approvals, if any, which the Lender reasonably may have requested
in connection therewith, such documents and papers where appropriate to be
certified by proper corporate or governmental authorities.
4. Representations, Warranties and Agreements. In order to induce the Lender to
enter into this Agreement and to make the Loans hereunder, in addition to the
representations, warranties and agreements in the Investment Agreement, which
are incorporated herein, the Company makes the following representations,
warranties and agreements as of the Effective Date, which shall survive the
execution and delivery of this Credit Agreement and the Note and the making of
the Loans.
4.1 Corporate Power and Authority. The Company has the corporate power and
has taken all corporate proceedings necessary to execute and deliver, and
perform the terms and provisions of, each of the Credit Documents and has taken
all necessary corporate action to authorize the execution, delivery and
performance by it of each of such Credit Documents. The Company has duly
executed and delivered each of the Credit Documents to which the Company is
party, and each of such Credit Documents constitutes the legal, valid and
binding obligation of the Company enforceable in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws relating to or affecting rights of
creditors and general equitable principles.
***** Confidential Treatment Requested
<PAGE>
4.2 No Violation. Neither the execution, delivery or performance by the
Company of the Credit Documents, nor compliance by it with the terms and
provisions thereof, (i) will contravene any provision of any law, statute, rule
or regulation or any order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will conflict or be inconsistent with or
result in any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any levy, lien, encumbrance or security
interest ("Lien") upon any of the property or assets of the Company pursuant to
the terms of, any indenture, mortgage, deed of trust, credit agreement, loan
agreement or any other material agreement, contract or instrument to which the
Company is a party or by which it or any of its property or assets is bound or
to which it may be subject or (iii) will violate any provision of the Articles
of Incorporation or Bylaws of the Company.
4.3 Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made prior to the Effective Date), or exemption
by, any governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with, (i) the execution,
delivery and performance of the Credit Documents or (ii) the legality, validity,
binding effect or enforceability of the Credit Documents.
4.4 Use of Proceeds. All proceeds from each Loan shall be used by the
Company in accordance with and in furtherance of the Company's Business Plan
dated January 20, 1998.
5. Affirmative Covenants. The Company covenants and agrees that, from and after
the Effective Date and until the Commitment has terminated and the Loans and the
Note, together with interest, and all other obligations incurred hereunder and
thereunder, are paid or otherwise satisfied in full, it will comply with the
affirmative covenants set forth in Sections 6.1, 6.2, 6.3, 6.4, 6.5 and 6.7 (c)
of the Investment Agreement.
6. Negative Covenants. The Company covenants and agrees that, from and after the
Effective Date and until the Commitment has terminated and the Loans and the
Note, together with accrued interest, and all other obligations incurred
hereunder and thereunder, are paid or otherwise satisfied in full, it will
comply with the negative covenants set forth in Sections 6.6 and 6.7(a) and (b)
of the Investment Agreement.
7. Milestone Date. Upon the occurrence of the Milestone Date described herein:
7.1 Warrant. The Lender shall, within ten (10) business days following the
occurrence of the Milestone Date, execute and deliver to ***** a Warrant to
purchase ten thousand (10,000) shares of the Lender's common stock at the Fair
Market Value (as defined in the Warrant) substantially in the form attached
hereto as Exhibit C (the "Warrant"); provided, however, that this Subsection 7.1
shall not apply if there is less than $100,000 in Unutilized Commitment
remaining on such date.
7.2 *****
(c) "Fair Market Value" per share of Common Stock shall mean, as of any
specified date on which the Common Stock is publicly traded, the average of the
daily market prices of the Common Stock over the thirty (30) consecutive trading
days immediately preceding (and not including) such date. The "daily market
price" for each such trading day shall be (i) the closing price on such day on
the principal stock exchange on which the Common Stock is then listed or
admitted to trading or on NASDAQ as applicable, (ii) if no sale takes place on
such day on any such exchange or system, the average of the closing bid and
asked prices regular way on such day for the Common Stock as officially quoted
on any such exchange or system, (iii) if the Common Stock is not then listed or
admitted to trading on any stock exchange or system, the last reported sale
price regular way on such day for the Common Stock, or if no sale takes place on
such day, the average of the closing bid and asked prices for the Common Stock
on such day, as reported by NASDAQ or the National Quotation Bureau, (iv) in the
event the Common Stock is not then listed or admitted to trading on any
securities exchange and if no such reported sale price or bid and asked prices
are available, the average of the reported high bid and low asked prices on such
day, as reported by a reputable quotation service, or a newspaper of general
circulation in the City of Los Angeles customarily published on each business
day. If the daily market price cannot be determined for the thirty (30)
consecutive trading days immediately preceding such date in the manner specified
in the foregoing sentence, then the Common Stock shall not be deemed to be
publicly traded as of such date. In such event, the Fair Market Value per share
of the Common Stock shall be determined in good faith by the Lender's Board of
Directors and set forth in a written notice to *****.
(d) *****
***** Confidential Treatment Requested
<PAGE>
8. Miscellaneous.
8.1 Payment of Expenses, etc. The Company shall pay all reasonable
out-of-pocket costs and expenses of the Lender in connection with the execution
and delivery of the Credit Documents and the documents and instruments referred
to herein and therein (including, without limitation, the reasonable fees and
disbursements of counsel for the Lender in connection herewith and therewith),
to a maximum of Ten Thousand Dollars ($10,000).
8.2 Notices. Any notice required under this Credit Agreement shall be
sufficient if sent by registered or certified mail postage and charges prepaid,
return receipt requested, or by hand delivery including overnight delivery
service to the following addresses or such address hereinafter specified in
writing:
the Lender: Miravant Medical Technologies
7408 Hollister Avenue
Goleta, California 93117
Attn: David E. Mai, President
the Company: Ramus Medical Technologies
346-B Bollay Drive
Santa Barbara, California 93117
Attn: Charles S. Love, President
8.3 No Waiver; Remedies Cumulative. No failure or delay on the part of the
Lender in exercising any right, power or privilege hereunder or under the Note
and no course of dealing between the Company and the Lender or the holder of the
Note shall operate as a waiver thereof; nor shall any single or partial exercise
of any right power or privilege hereunder or under the Note preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege hereunder or thereunder. The rights, powers and remedies expressly
provided herein or in the Note are cumulative and not exclusive of any rights,
powers or remedies which the Lender or the holder of the Note would otherwise
have. No notice to or demand on the Company in any case shall entitle the
Company to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Lender or the holder
of any Note to any other or further action in any circumstances without notice
or demand.
8.4 Governing Law, Severability. This Credit Agreement shall be governed
and construed in accordance with the laws of the State of California. The
invalidity or unenforceability of any provision of this Credit Agreement shall
not affect the validity or enforceability of any other provision of this Credit
Agreement, and each other provision of the Credit Agreement shall be severable
and enforceable to the fullest extent permitted by applicable law.
8.5 Counterparts. This Credit Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
8.6 Effectiveness; Integration. This Credit Agreement and the Note,
together with all exhibits and schedules, constitute the entire agreement of the
parties with respect to the subject matter hereof and thereof.
8.7 Headings Descriptive. The headings of the several sections and
subsections of this Credit Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Credit Agreement.
8.8 Amendment or Waiver. Neither this Credit Agreement nor the Note nor any
terms or hereof or thereof may be changed, waived, discharged or terminated
unless such change, waiver, discharge or termination is in writing signed by the
Lender.
8.9 Existing Agreements. The parties to this Credit Agreement hereby
expressly agree that each of the Existing Agreements are ratified, confirmed and
in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Credit Agreement as of the date first above
written.
. RAMUS MEDICAL TECHNOLOGIES,
a California corporation
/S/
------------------------------
Charles S. Love, President
/S/
------------------------------
Michael E. Flynn, Secretary
MIRAVANT MEDICAL TECHNOLOGIES,
a Delaware corporation
/S/
------------------------------
Gary S. Kledzik, Chairman
/S/
------------------------------
Joseph E. Nida, Secretary
<PAGE>
EXHIBIT A
NOTICE OF BORROWING
(Date)
Miravant Medical Technologies
7408 Hollister Avenue
Goleta, California 93117
Attention: David E. Mai, President
Gentlemen:
The undersigned refers to the Credit Agreement, dated as of April 1, 1998
(as amended from time to time, the "Credit Agreement," the terms defined therein
being used herein as therein defined), among the undersigned and you, as the
Lender, and hereby gives you notice, irrevocably, pursuant to Section 2.3 of the
Credit Agreement, that the undersigned hereby requests a Borrowing under the
Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing (the "Proposed Borrowing") as required by Section 2.3
of the Credit Agreement:
(i) The business day of the Proposed Borrowing is _____________, 199__.
(ii) The aggregate principal amount of the Proposed Borrowing is
$______________.
(iii) The proceeds of the borrowing will be used for the following
purposes:
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Borrowing:
(A) The representations and warranties contained in the Credit
Documents and in the Investment Agreement are correct, before and after giving
effect to the Proposed Borrowing and to the application of the proceeds thereof,
as though made on and as of such date; and
(B) No Default or Event of Default has occurred and is continuing,
or would result from such Proposed Borrowing or from the application of the
proceeds thereof.
Very truly yours,
RAMUS MEDICAL TECHNOLOGIES
Charles S. Love, President
Michael E. Flynn, Secretary
EXHIBIT B
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE, IN
RELIANCE ON EXEMPTIONS FROM SUCH REGISTRATION AND QUALIFICATION FOR NONPUBLIC
OFFERINGS. ACCORDINGLY, THE SALE, TRANSFER OR OTHER DISPOSITION OF SUCH
SECURITIES OR ANY PORTION THEREOF MAY NOT BE ACCOMPLISHED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND QUALIFICATION UNDER
APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY TO THE EFFECT THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
CONVERTIBLE PROMISSORY NOTE
$2,000,000 Santa Barbara, California
April 1, 1998
FOR VALUE RECEIVED, receipt of which is hereby acknowledged, Ramus
Medical Technologies, a California corporation (the "Company"), promises to pay
to the order of Miravant Medical Technologies, a Delaware corporation (the
"Lender") at the Lender's offices located at 7408 Hollister Avenue, Goleta,
California 93117 (or such other place as Lender may direct from time to time),
on or prior to the Maturity Date (as defined in that certain Credit Agreement,
dated as of April 1, 1998, between the Company and Lender (the "Agreement")), in
lawful money of the United States, the principal sum of Two Million Dollars
($2,000,000) or, if less, the outstanding principal amount of all unpaid Loans
(as defined in the Agreement) made by Lender pursuant to the Agreement, unless a
portion of this Note shall have been previously converted pursuant to the terms
of this Note, in which case such portion of outstanding principal and accrued
interest (if any) converted under this Note shall be satisfied to the extent
converted and by the issuance and delivery of fully paid and non-assessable
shares of stock to the Lender as set forth below.
The Lender is hereby authorized by the Company to endorse on the
schedule attached to this Note (or any continuation thereof) the amount of each
Loan made by the Lender to the Company under the Agreement, the date such Loan
is made and the amount of each payment, prepayment or conversion of principal of
such Loan received by the Lender, provided that any failure by the Lender to
make any such endorsement shall not affect the obligations of the Company
hereunder or under the Agreement in respect of the Loans. The aggregate unpaid
amount of Loan advances as reflected on the schedule attached to this Note shall
be presumptive evidence of the entire outstanding Loan amount, absent manifest
error.
1. Interest; Usury Laws.
The Company promises also to pay interest at the rates and at the times
provided in this Note and the Agreement. The Company and the Lender intend to
comply at all times with applicable usury laws. If at any time such laws would
render usurious any amounts due under this Note under applicable law, then it is
the Company's and the Lender's express intention that the Company not be
required to pay interest on this Note at a rate in excess of the maximum lawful
rate, that such excess amount shall be immediately credited to the principal
balance of this Note (or, if this Note has been fully paid, refunded by the
Lender to the Company), and the provisions hereof shall immediately reformed and
the amounts thereafter decreased, so as to comply with the then applicable usury
law, but so as to permit the recovery of the fullest amount otherwise due under
this Note.
2. Prepayment.
The Company shall be entitled at any time to prepay any portion or
all of the indebtedness owed hereunder without penalty upon ten (10) business
days prior written notice to permit the Lender to exercise its rights under
Section 3 below (the "Series B Conversion Right"). Each prepayment hereunder
shall be credited first to accrued interest and then to principal. Interest
shall thereupon cease to accrue upon the principal so paid. Such prepayment will
be made by wire transfer of immediately available funds.
3. *****
4. *****
***** Confidential Treatment Requested
<PAGE>
5. Representations and Warranties.
Lender represents and warrants that:
(a) Lender is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the
Company to reach an informed and knowledgeable decision to
purchase this Note. Lender has had an opportunity to ask
questions and receive answers concerning the terms and conditions
of this Note and has been afforded access to information
concerning the Company and to the Company's executive officers,
and by reason of Lender's business and financial experience has
the capacity to protect Lender's own interest in connection with
the transaction. Lender has received full and adequate
information concerning the Company and its proposed plan of
operations.
(b) Lender is acquiring this Note, and will acquire shares of the
Company's capital stock, if so elected by Lender, for Lender's
own account and not with a view to or for resale in connection
with any distribution thereof. Lender understands that this Note
has not been, and any shares of the Company's capital issued
hereunder will not be, registered under the Securities Act of
1933, as amended, by reason of a specific exemption from the
registration provisions of such Act, which exemption depends
upon, among other things, the bona fide nature of Lender's
investment intent and the accuracy of Lender's representations as
expressed herein. Lender further understands that this Note and
any shares of the Company's capital stock issued hereunder must
be held indefinitely unless they are subsequently registered
under the Act or exemption from such registration is available.
(c) Lender understands that the certificate or certificates
evidencing shares of the Company's capital stock issued hereunder
will be imprinted with a legend substantially similar to that
appearing at the top of this Note.
6. Default.
If any of the following events (hereafter called "Events of
Default") shall occur:
(a) If the Company shall not make a payment hereunder at the time
that such payment is due;
(b) If the Company shall make a general assignment for the benefit of
creditors; or
(c) If the Company shall file a voluntary petition in bankruptcy, or
shall be adjudicated as bankrupt or insolvent, or shall file any
petition or answer seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar
relief under the present or any future Federal Bankruptcy Act or
other applicable federal, state or other statute, law or
regulation, or shall file any answer admitting the material
allegation of a petition filed against the Company in such
proceeding, or shall seek or consent to or acquiesce in the
appointment of any trustee, receiver or liquidator of the Company
of all or any substantial part of the properties of the Company,
or the Company shall commence the winding up or the dissolution
or liquidation of the Company; or
(d) If, within sixty (60) days after a court of competent
jurisdiction shall have entered an order, judgment or decree
approving any complaint or petition against the Company seeking
reorganization, dissolution or similar relief under the present
or any future Federal Bankruptcy Act or other applicable federal,
state or other statute, law or regulation, such order, judgment
or decree shall not have been dismissed or stayed pending appeal,
or if, within sixty (60) days after the appointment, without the
consent or acquiescence of the Company, of any trustee, receiver
or liquidator of the Company or of all or any substantial part of
the properties of the Company, such appointment shall not have
been vacated or stayed pending appeal, or if, within sixty (60)
days after the expiration of any such stay, shall not have been
vacated; or
(e) If Borrower should materially breach any of the covenants,
representations, warranties, terms or conditions of this Note or
the Agreement or contained in any statement or certificate at any
time given or made to Lender pursuant thereto or in connection
therewith, and in the case of any breach of any representations,
warranties or covenants in the Agreement capable of cure, such
breach shall continue for thirty (30) days after notice thereof
from Lender to the Company; then, and in each and every such
case, Lender may by notice in writing to the Company declare all
amounts under this Note to be forthwith due and payable and
thereupon the balance shall become so due and payable, without
presentation, protest or further demand or notice of any kind,
all of which are hereby expressly waived.
7. Transferability.
This Note may be transferred only upon surrender of the original Note
for registration of transfer, duly endorsed or accompanied by a duly executed
written instrument of transfer, in a form satisfactory to the Company. Lender
shall provide the Company with prompt notice of any transfer of this Note;
provided, however, that failure to provide such notice shall not void the
transfer. Upon compliance of the above, a new Note for like principal amount
will be issued to, and registered in the name of, the transferee. The principal
of this Note is payable only to the registered holder of this Note.
8. Use of Proceeds.
The Company agrees to use the proceeds of this Note as provided for
in the Company's Business Plan dated January 20, 1998.
<PAGE>
6
9. Governing Law.
This Note is unsecured and shall be governed by the laws of the State
of California.
IN WITNESS WHEREOF, this Note is executed as of the date first written
above.
RAMUS MEDICAL TECHNOLOGIES, a California corporation
By: /S/
------------------------------
Charles S. Love, President
By: /S/
------------------------------
Michael E. Flynn, Secretary
Agreed to and Accepted:
MIRAVANT MEDICAL TECHNOLOGIES,
a Delaware corporation
By: /S/
------------------------------
Gary S. Kledzik, Chairman
By: /S/
------------------------------
Joseph E. Nida, Secretary
<PAGE>
SCHEDULE OF LOANS
AND
PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Date Amount of Loan Amount Paid Notations Made By
</TABLE>
MIRAVANT MEDICAL TECHNOLOGIES/
XILLIX TECHNOLOGIES CORP.
STRATEGIC ALLIANCE AGREEMENT
June 1998
<PAGE>
MIRAVANT MEDICAL TECHNOLOGIES/ XILLIX TECHNOLOGIES CORP.
STRATEGIC ALLIANCE AGREEMENT
Table of Contents
ARTICLE I - DEFINITIONS........................................................2
ARTICLE II - OWNERSHIP AND LICENSE.............................................5
ARTICLE III - RESEARCH, DEVELOPMENT AND FUNDING................................7
ARTICLE IV - COMMERCIAL SUPPLY.................................................9
ARTICLE V - MARKETING AND SALE OF CO-DEVELOPED DEVICES........................10
ARTICLE VI - PAYMENTS AND ACCOUNTING..........................................12
ARTICLE VII - REGULATORY RESPONSIBILITIES.....................................13
ARTICLE VIII - PATENTS........................................................14
ARTICLE IX - PUBLICATIONS AND CONFIDENTIALITY.................................15
ARTICLE X - WARRANTIES OF MRVT................................................16
ARTICLE XI - WARRANTIES OF XILLIX.............................................17
ARTICLE XII - MUTUAL WARRANTIES...............................................17
ARTICLE XIII - TERM & TERMINATION.............................................18
ARTICLE XIV - INDEMNIFICATION.................................................19
ARTICLE XV - MISCELLANEOUS....................................................20
ARTICLE XVI - BINDING EFFECT; ASSIGNMENT......................................22
ARTICLE XVII - RESOLUTION OF DISPUTES.........................................22
MIRAVANT MEDICAL TECHNOLOGIES/XILLIX TECHNOLOGIES CORP.
STRATEGIC ALLIANCE AGREEMENT
THIS MIRAVANT MEDICAL TECHNOLOGIES/XILLIX TECHNOLOGIES CORP. STRATEGIC
ALLIANCE AGREEMENT ("Agreement") entered into this ____ day of June, 1998,
between MIRAVANT MEDICAL TECHNOLOGIES, a Delaware corporation, with corporate
offices at 7408 Hollister Avenue, Santa Barbara, California 93117 (hereinafter
referred to as "MRVT") and XILLIX TECHNOLOGIES CORP., a British Columbia
corporation with corporate offices at #300 - 13775 Commerce Parkway, Richmond,
B.C. Canada V6V 2V4 (hereinafter referred to as "Xillix").
WHEREAS, MRVT is a pharmaceutical and medical device company which, using
its proprietary technology and know-how, has developed and will continue to
develop, on its own or in collaboration with third party vendors, photoreactive
drugs and devices for use in photodynamic therapy;
WHEREAS, Xillix is a medical device company which, using its proprietary
technology and know-how, has developed and will continue to develop, on its own
or in collaboration with third party vendors, Fluorescence Imaging Systems; and
WHEREAS, MRVT and Xillix desire to exclusively co-develop and commercialize
new technology and devices incorporating MRVT's Photodynamic Therapy technology
and Xillix's Fluorescence Imaging technology; and
WHEREAS, MRVT and Xillix are concurrently entering into Subscription
Agreements (the "Subscription") pursuant to which MRVT will be investing FIVE
MILLION DOLLARS ($5,000,000 U.S.) in Xillix through the combination of purchase
of Xillix common stock and issuance of MRVT common stock.
NOW, THEREFORE, in consideration of the premises and mutual covenants
exchanged herein, the parties agree as follows:
ARTICLE I - DEFINITIONS
1.01 Act. The term "Act" shall mean the Food, Drug & Cosmetic Act (21
U.S.C. ss. 301, et seq.) as such shall be amended from time to time and
regulations promulgated thereunder.
1.02 Affiliate. The term "Affiliate" shall mean, with respect to any
specified party, any company that directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the party specified. For purposes of this definition, "control" including with
correlative meanings, the terms "controlled by" and "under common control with"
means ownership directly or indirectly of more than fifty percent (50%) of the
equity capital having the right to vote for election of directors (or in the
case of an entity other than a corporation, the equivalent management
authority).
1.03 Clinical Evaluations. The term "Clinical Evaluations" shall mean any
tests performed by Xillix on Co-Developed Devices not reportable in regulatory
submissions.
1.04 Clinical Device. The term "Clinical Device" shall mean any
Co-Developed Device or MRVT Component or Xillix Component used in the
Preclinical Tests and Clinical Trials necessary for the support of regulatory
submissions as defined in writing by the Operating Committee.
1.05 Clinical Trials. The term "Clinical Trials" shall mean any tests
performed on humans in preparation and support of regulatory submissions.
1.06 Co-Developed Device. The term "Co-Developed Device" shall mean any new
instrument, device or product, or any functionally separable component thereof,
that embodies, incorporates, is comprised of, functions or is produced by means
of, or derives its utility from, any Co-Developed Technology. This term does not
include the existing MRVT Components and Xillix Components.
1.07 Co-Developed Technology. The term "Co-Developed Technology" shall mean
all new technology or systems developed that incorporates a combination of MRVT
Technology and Xillix Technology. This term does not include MRVT Technology and
Xillix Technology.
1.08 Fluorescence Imaging. The term "Fluorescence Imaging" shall mean the
use of fluorescence/reflectance spectroscopy and/or imaging for the purpose of
detection, diagnosis and dosimetry.
1.09 Effective Date. The "Effective Date" of this Agreement shall be the
date first written hereinabove upon the execution of this Agreement by the last
of the parties to sign.
1.10 FDA. The term "FDA" shall mean the United States Food and Drug
Administration or any successor agency having the administrative authority to
regulate the approval for testing or marketing of human pharmaceutical,
biological medical or medical device products in the United States (or, where
appropriate, the equivalent governmental authority in any foreign country).
1.11 Field. The term "Field" shall mean the Field of Oncology and other
fields added by majority vote of the Operating Committee.
1.12 GCP. The term "GCP" shall mean the applicable current good clinical
practices promulgated from time to time by the FDA in accordance with the Act,
and which may be amended from time to time (or the equivalent in any foreign
country).
1.13 GLP. The term "GLP" shall mean the applicable current good laboratory
practices promulgated from time to time by the FDA in accordance with the Act,
and which may be amended from time to time (or the equivalent in any foreign
country).
1.14 GMP. The term "GMP" shall mean the applicable current good
manufacturing practices promulgated from time to time by the FDA in accordance
with the Act, and which may be amended from time to time (or the equivalent in
any foreign country).
1.15 Gross Sales. The term "Gross Sales" shall mean the final gross
invoiced price from the sale of Co-Developed Devices by the seller (and its
Affiliates, sublicensees or marketing partners). In the event of a sale of a
Co-Developed Device to an Affiliate or sublicensee, and the subsequent resale by
such Affiliate or sublicensee, Gross Sales shall be computed on the basis of
such subsequent resale.
1.16 IDE. The term "IDE" shall mean an "investigational device exemption"
application or any other application submitted to the FDA for the purpose of
conducting clinical investigations of a device, and any supplement or
abbreviated application thereof (or the equivalent in any foreign country).
1.17 IND. The term "IND" shall mean an "investigational new drug"
application or any other application submitted to the FDA in accordance with the
Act for the purpose of conducting clinical investigations of a drug and any
supplement or abbreviated application thereof (or the equivalent in any foreign
country).
1.18 Know-How. The term "Know-How" shall mean all ideas, concepts,
inventions (whether or not patentable), discoveries, improvements, unpublished
research and development information, information disclosed (whether or not
claimed) in Patent applications or in issued Patents, trade secrets, technical
and other information and data, including, without limitation, apparatus;
compositions; methods; processes; techniques; controls; routines; systems
(including quality assurance systems); procedures; reports; operating, test and
performance data; and process, mechanical, material and product specifications.
1.19 Manufacturing Partner. The term "Manufacturing Partner" shall mean the
party who manufactures the Co-Developed Device from time to time selected by the
Operating Committee.
1.20 Marketing Partner. The term "Marketing Partner" shall mean the
marketing partner from time to time selected by the Operating Committee to
market the Co-Developed Device.
1.21 MRVT Component. The term "MRVT Component" shall mean any subassembly
or other part or device used for the delivery of light through a Co-Developed
Device, whether proprietary to MRVT or not, developed, manufactured, licensed,
or otherwise capable of being provided by MRVT for incorporation into and
manufacture of Co-Developed Devices.
1.22 MRVT Drug. The term "MRVT Drug" shall mean any Photodynamic Therapy
compound conceived by, owned by or licensed to MRVT or any of its Affiliates, to
the extent that MRVT has the right to use, make, sell or license such compound.
1.23 MRVT Technology. The term "MRVT Technology" shall mean MRVT's
proprietary pharmaceutical and medical device products (trademarked
"PhotoPoint"), using the principles of Photodynamic Therapy.
1.24 NDA. The term "NDA" shall mean a New Drug Application or other
premarket approval application for a MRVT Drug, and any supplement or
abbreviated application relating thereto, submitted to the FDA (or the
equivalent in any foreign country).
1.25 Net Sales. The term "Net Sales" shall mean Gross Sales less the
following: tariffs, import or export duties, excise, value-added and sales
taxes, where such tariffs, duties or taxes are separately stated as part of the
sales price; customary trade, distributor, quantity and cash discounts actually
given; rebates and adjustments required by governmental entities and made
pursuant to governmental or private third-party health or medical insurance
programs; allowances or credits for returns or rejections. In the event of a
sale to an Affiliate or a sublicensee, and the subsequent resale by such
Affiliate or sublicensee, Net Sales shall be computed on the basis of such
subsequent resale. In the event that any Co-Developed Device is sold as a
component of another product, "Net Sales" shall mean the portion of such other
product's invoice price that is allocable to the Co-Developed Device based on
the customary price of the Co-Developed Device when sold separately or, in the
absence of such customary price, on the ratio of the cost of the Co-Developed
Device to the total cost of such other product.
1.26 Patents. The term "Patents" shall mean all United States and foreign
patents, including improvement patents, patents of addition, patents of
importation, certificates of invention, utility model and design patents, method
patents, and all reissues, renewals and extensions thereof; and all United
States and foreign patent applications, including original, divisional,
continuation and continuation-in-part applications pending before any patent
office.
1.27 Photodynamic Therapy. The term "Photodynamic Therapy" shall mean the
technique of diagnosis and/or treatment of abnormal or normal biological or
medical conditions, either in-vivo or ex-vivo, through the use of drugs
activated by any type of electromagnetic radiation or magnetic field, including
PhotoPoint.
1.28 PMA. The term "PMA" shall mean a Pre-Market Approval Application,
510(k) Application or any other application for regulatory approval of a device,
and any supplement or abbreviated application relating thereto, submitted to the
FDA (or the equivalent in any foreign country).
1.29 Preclinical Tests. The term "Preclinical Tests" shall mean any
nonhuman or human tests performed as part of the Co-Development research and
development activity, prior to preparation and support of a regulatory
submission.
1.30 Xillix Component. The term "Xillix Component" shall mean any
subassembly, part or device, whether proprietary to Xillix or not, developed,
manufactured, licensed, or otherwise capable of being provided by Xillix for
incorporation into and manufacture of Co-Developed Devices.
1.31 Xillix Technology. The term "Xillix Technology" shall mean Xillix's
proprietary Fluorescence Imaging systems, including LIFE-Lung and LIFE-GI, using
the principles of Fluorescence Imaging.
ARTICLE II - OWNERSHIP AND LICENSE
2.01 Ownership of Technology.
MRVT retains all right, title and interest in and to all MRVT Technology,
MRVT Components and MRVT Drugs. Xillix retains all right, title and interest in
and to all Xillix Technology and Xillix Components. All right, title and
interest in and to the Co-Developed Technology and Co-Developed Device shall be
owned by the parties as follows unless otherwise agreed to in writing by the
parties:
MRVT *****
Xillix *****
2.02 Distribution Rights to Marketing Partner.
Subject to the terms of this Agreement, MRVT and Xillix hereby (i) grants
to the Marketing Partner an exclusive, worldwide distribution right under the
Co-Developed Technology to use, distribute, and sell Co-Developed Devices in the
Field, (ii) MRVT grants to the Marketing Partner an exclusive, worldwide
distribution right under the MRVT Technology to use, distribute and sell the
MRVT Components in the Field, but only when such MRVT Components are components
of Co-Developed Devices, and (iii) Xillix grants to the Marketing Partner an
exclusive, worldwide distribution right under the Xillix Technology to use,
distribute and sell the Xillix Components in the Field, but only when such
Xillix Components are components of Co-Developed Devices. The Marketing Partner
may subdistribute, totally or in part, the distribution rights granted to it
under this Section 2.02, or may appoint one or more third parties to
subdistribute Co-Developed Devices (including the Xillix Components and MRVT
Components as described in (ii) and (iii) above); provided, however, that (a)
the Marketing Partner must notify the parties in writing of each such
subdistributor at least thirty (30) days in advance; (b) the Marketing Partner
remains responsible to the parties for all contractual obligations of the
subdistributor, including, but not limited to, keeping of records, reporting of
sales and payment of invoices, as if the subdistributor's sales were the
Marketing Partner's sales and (c) the subdistributor agrees to be bound by the
terms of this Agreement to the same extent as the Marketing Partner.
2.03 Manufacturing Partner.
Subject to the terms of this Agreement, MRVT and Xillix hereby grants to
the Manufacturing Partner an exclusive, worldwide, manufacture right under the
Co-Developed Technology to make and manufacture, the Co-Developed Devices in the
Field solely for sale to the Marketing Partner. The Manufacturing Partner may
subcontract, totally or in part, the manufacture rights granted to it under this
Section 2.03; provided, however, that (a) the Manufacturing Partner must notify
the parties in writing of each such subcontractor at least thirty (30) days in
advance; (b) the Manufacturing Partner remains responsible to the parties for
all contractual obligations of the subcontractor, including, but not limited to,
keeping of records, reporting and payment of invoices, as if the subcontractor's
responsibilities were the Manufacturing Partner's responsibilities and (c) the
subcontractor agrees to be bound by the terms of this Agreement to the same
extent as the Manufacturing Partner.
***** Confidential Treatment Requested
<PAGE>
2.04 Exclusivity.
During the term of this Agreement, or as otherwise agreed to in writing by
the parties: (i) neither party shall, directly or indirectly, grant any rights
in, to or under the Co-Developed Technology to any third party, whether in the
Field or not, except as provided in Sections 2.02 and 2.03 hereof; (ii) neither
the Marketing Partner nor the Manufacturing Partner shall, directly or
indirectly, make, use, distribute or sell Xillix Components or MRVT Components
apart from the Co-Developed Technology or purchase Xillix Components or MRVT
Components from a third party; (iii) neither the Marketing Partner nor the
Manufacturing Partner, nor Xillix or MRVT, shall directly or indirectly make,
use, sell, distribute or license Co-Developed Devices outside the Field; (iv)
neither Xillix or MRVT, nor the Marketing Partner or the Manufacturing Partner
shall, directly or indirectly, make, use, sell, distribute or license any
Co-Developed Device with any Photodynamic Therapy drug other than MRVT Drugs;
and (v) neither MRVT nor Xillix will engage in any activity with any third party
in the area of Photodynamic Therapy, in the case of Xillix, and in the area of
Fluorescence Imaging, in the case of MRVT, during the term of this Agreement and
for a period of ***** after termination of this Agreement. In the event of any
such termination of this Agreement for material breach, the non-breaching party
shall not be subject to the ***** period described in
the prior sentence.
2.05 *****
ARTICLE III - RESEARCH, DEVELOPMENT AND FUNDING
3.01 Co-Development.
MRVT and Xillix agree to use reasonable efforts to cooperate in the joint
development of Co-Developed Technology and Co-Developed Devices. Unless
otherwise agreed to in writing by the parties, the parties will pay for the
development and clinical trial costs in accordance with Article VI, and (i) MRVT
shall provide, during the development and Clinical Trial period, without charge,
MRVT Components for incorporation into and manufacture of Co-Developed Devices;
and (ii) Xillix shall provide, during the development and Clinical Trial period,
without charge, Xillix Components for incorporation into and manufacture of
Co-Developed Devices. In addition, each party will provide facilities and
technical support without charge to the other party. Except as otherwise
provided herein, the joint development of the Co-Developed Technology and
Co-Developed Devices and the provision of the MRVT Components and the Xillix
Components shall be coordinated by an "Operating Committee" as set forth in
Section 3.02, provided, however, that MRVT shall solely determine the
appropriate MRVT Drugs.
3.02 Operating Committee.
Unless otherwise agreed to in writing by the parties, within thirty (30)
days after the Effective Date the parties shall establish an operating committee
(the "Operating Committee") consisting of four (4) members. The Operating
Committee shall direct and monitor the research and development collaboration
between MRVT and Xillix. MRVT and Xillix shall each appoint two (2)
representatives to the Operating Committee and the Operating Committee will
select one member as Chairman. The number of members of the Operating Committee
may be expanded at any time, provided all members agree to do so in writing and
so long as each party has an equal number of representatives. Responsibilities
of the Operating Committee shall include, but are not limited to, development
and approval of Co-Developed Device specifications, identification and pricing
of MRVT Components and Xillix Components, defining Clinical Devices,
establishing prices for the Co-Developed Devices, testing protocols, schedules
and budgets, selection of the Marketing Partner and the Manufacturing Partner,
and review and approval of publications and presentations related to
Co-Developed Technology and Co-Developed Devices. Each member of the Operating
Committee shall have one (1) vote and all decisions of the Operating Committee
shall require a majority vote. In the event of a tie vote of the Operating
Committee, the matter shall be resolved in accordance with Article 17 hereof.
***** Confidential Treatment Requested
<PAGE>
3.03 Research & Development and Clinical Evaluations.
The Operating Committee will be responsible for all research and
development activities as well as Clinical Evaluations. Unless otherwise agreed
to in writing by the parties, MRVT shall contribute MRVT Components and MRVT
Drugs and Xillix shall contribute Xillix Components and Co-Developed Devices for
use in such Clinical Evaluations and tests, each at no cost to the other. Also,
each party will provide facilities and technical support without charge to the
other party. All other actual costs of all research, development and Clinical
Evaluations of Co-Developed Devices shall be shared ***** percent ***** by MRVT
and ***** percent ***** by Xillix unless otherwise agreed to in writing by the
parties.
3.04 Preclinical Tests of Co-Developed Devices.
Unless otherwise agreed to in writing by the parties, (i) MRVT shall
conduct or arrange for a third party to conduct, all reasonably necessary
Preclinical Tests of Co-Developed Devices, and (ii) MRVT shall contribute MRVT
Components and MRVT Drugs and Xillix shall contribute Xillix Components and
Co-Developed Devices, each at no cost to the other. Also, each party will
provide facilities and technical support without charge to the other party. All
actual costs of Preclinical Tests shall be shared ***** percent ***** by MRVT
and ***** percent ***** by Xillix unless otherwise agreed to in writing by the
parties.
<PAGE>
3.05 Clinical Trials.
Unless otherwise agreed to in writing by the parties, (i) MRVT shall
conduct or arrange for a third party to conduct, all reasonably necessary
Clinical Trials of Co-Developed Devices, and (ii) MRVT shall contribute MRVT
Components and MRVT Drugs and Xillix shall contribute Xillix Components and
Co-Developed Devices, each at no cost to the other. Also, each party will
provide facilities and technical support without charge to the other party. All
other actual costs shall be paid by MRVT unless otherwise agreed to in writing
by the parties.
3.06 Regulatory Submissions.
MRVT shall prepare and submit, or arrange for a third party to prepare and
submit, in the name of MRVT, any applicable regulatory submissions covering
Co-Developed Devices, including any IDE or IND applications which may be
necessary for conducting Clinical Trials of Co-Developed Devices. The actual
costs of regulatory submissions for Co-Developed Devices shall be paid by MRVT.
Unless otherwise agreed to in writing by the parties, MRVT shall be responsible
for securing government or private price approvals and reimbursement
qualifications in preparation for product launch of Co-Developed Devices in the
Fields. MRVT and Xillix agree to provide each other with access to information
or data relating to Co-Developed Devices which the other may need for regulatory
submissions or compliance. If necessary, Xillix will file any amendments to its
existing FDA filings consistent with MRVT's regulatory filing and strategy.
***** Confidential Treatment Requested
<PAGE>
ARTICLE IV - COMMERCIAL SUPPLY
4.01 Supply of Components.
Each party shall provide all requirements of the Manufacturing Partner for
MRVT Components or Xillix Components for use in manufacturing Co-Developed
Devices for commercial sale in the Field. Each party shall sell MRVT Components
or Xillix Components to the Manufacturing Partner at transfer prices to be
determined by the Operating Committee, but not to exceed prices granted by the
parties to other customers for similar quantities. If a party determines not to
provide a certain component to the Manufacturing Partner for use in
manufacturing a Co-Developed Device for commercial sale in the Field, or cannot
supply such component to the Manufacturing Partner, in either case for a period
of six (6) months, then the parties, through mutual discussion in good faith,
shall negotiate a license for the Manufacturing Partner and the non-defaulting
party (the "Non-Defaulting Party") to manufacture or have manufactured such
unavailable or non-supplied components, at the Non-Defaulting Party's own cost
and solely for use as a component in a Co-Developed Device in the Field. Such
license shall include a royalty on commercially reasonable terms and conditions,
taking into account the respective performance of the parties under the
Agreement and the relative investment of the parties in the Xillix Technology or
the MRVT Technology, as the case may be. In the case where a party determines
not to provide a component which it is then providing to the Manufacturing
Partner, such party shall use reasonable efforts to continue to supply such
component to the Manufacturing Partner or the other party for a period of nine
(9) months or until the Manufacturing Partner or the other party determines it
is able to supply such component, whichever is sooner.
<PAGE>
4.02 Manufacture of Co-Developed Devices.
The Manufacturing Partner shall have the exclusive right under the
Co-Developed Technology to manufacture Co-Developed Devices for commercial sale
in the Field, but only to the Marketing Partner. In the event the Manufacturing
Partner determines, for any reason, not to manufacture a Co-Developed Device,
for a period of six (6) months or longer, then the Manufacturing Partner's
rights shall terminate. In such an event, the Manufacturing Partner shall use
reasonable efforts to continue to supply Co-Developed Devices to the Marketing
Partner, at transfer prices to be determined by mutual agreement in writing by
the parties, but not to exceed prices granted by the Manufacturing Partner to
the Marketing Partner for similar quantities, for a period of nine (9) months or
until MRVT and Xillix have appointed a new Manufacturing Partner and are able to
supply Co-Developed Devices, whichever is sooner.
4.03 Initial Forecast Requirements.
At least six (6) months prior to any anticipated FDA approval of
Co-Developed Devices, the Manufacturing Partner shall provide to MRVT and Xillix
a written forecast of its requirements for MRVT Components and Xillix Components
for the period extending from that forecast date through the first full quarter
following such FDA approval. This is the "Initial Forecast" for MRVT Components
and the Xillix Components. The MRVT Components and the Xillix Components shown
in the Initial Forecast shall be considered a firm purchase order by the
Manufacturing Partner.
4.04 Order Forecasts.
Each quarter, beginning six (6) months prior to any anticipated FDA
approval of Co-Developed Devices, the Manufacturing Partner shall provide MRVT
and Xillix written forecasts of the Manufacturing Partner's quarterly
requirements for Components for the next twelve (12) month period (the "Rolling
Forecast"). Such Rolling Forecasts shall be for the purpose of assisting MRVT
and Xillix in its planning. In each quarter, unless otherwise agreed to by MRVT
and Xillix, the quantities of MRVT Components and Xillix Components purchased by
the Manufacturing Partner shall not vary from the forecasted quantity by more
than fifteen percent (15%).
4.05 Purchase Orders and Shipment.
The Manufacturing Partner shall order MRVT Components and Xillix Components
from MRVT and Xillix by submitting written, non-cancelable purchase orders to
MRVT and Xillix identifying the quantity, the MRVT Components and the Xillix
Components ordered, shipping instructions, including the common carrier to be
used and the place to which the goods should be delivered, and the requested
delivery date. No later than ten (10) business days after receipt of the
purchase order, MRVT and Xillix shall provide the Manufacturing Partner with the
shipping date. MRVT Components and Xillix Components shall be shipped in the
manner and to the location specified by the Manufacturing Partner.
<PAGE>
ARTICLE V - MARKETING AND SALE OF CO-DEVELOPED DEVICES
5.01 (i) Marketing and Sale of Co-Developed Devices.
Subject to the terms and conditions hereof, the Marketing Partner selected
by the parties shall use its best reasonable efforts to market the Co-Developed
Technology and shall provide all necessary customer or other service, shipping
and receiving and invoicing services in support of the sales of Co-Developed
Devices.
5.01 (ii) Marketing and Sale of MRVT Drugs.
Subject to the terms and conditions hereof, MRVT, or a marketing partner
selected by MRVT, shall use its best reasonable efforts to market the MRVT Drugs
in connection with the Co-Developed Devices and shall provide all necessary
customer or other service, shipping and receiving and invoicing services in
support of the sales of MRVT Drugs sold in connection with the Co-Developed
Technology by the Marketing Partner, and MRVT shall pay to Xillix royalties on
the sale of MRVT Drugs as follows:
(a) *****
(b) *****
5.02 Ownership of Trademarks.
(a) The registration, maintenance and protection of all trademarks, logos
and/or trade dress owned by Xillix for use in connection with the Xillix
Components shall be the responsibility of Xillix. The registration, maintenance
and protection of all trademarks, logos and/or trade dress owned by MRVT for use
in connection with the MRVT Components and the MRVT Drugs shall be the
responsibility of MRVT. Ownership of trademarks of Co-Developed Devices shall be
owned by the parties as follows, unless otherwise agreed to in writing by the
parties: MRVT *****, Xillix *****. The Co-Developed Device will be labeled with
a MRVT Trademark if requested by MRVT.
(b) Each party acknowledges that the other party owns all right, title and
interest in their respective corporate names, logos and are the owners of
certain other trademarks, service marks, and tradenames; and that each party
will not acquire any interest in any of these trademarks, service marks or
tradenames of the other party by virtue of this Agreement or the activities
under it.
(c) During the term of this Agreement, each party may indicate to the
public and the trade that they have a business relationship with the other and
will be developing the Co-Developed Devices and Co-Developed Technology. With
the other party's prior written approval, either party may also use the
trademarks and tradenames of the other party to promote and solicit sales of the
Co-Developed Devices and Co-Developed Technology if they strictly comply with
the other party's instructions regarding that use. Both parties agree not to
adopt or use those trademarks or tradenames of the other party, or any
confusingly similar word or symbol, as part of its company name or (to the
extent they have power to prevent such use) allow such names or marks to be used
by others.
(d) At the expiration or termination of this Agreement, both parties agree
to immediately discontinue any use of the corporate name and all trademarks,
tradenames and service marks of the other party, as well as any other
combination of words, designs, trademarks or tradenames that would indicate that
such party has a business relationship with the other party.
***** Confidential Treatment Requested
<PAGE>
ARTICLE VI - PAYMENTS AND ACCOUNTING
6.01 Payment of Research and Development, Clinical Evaluations and
Preclinical Costs.
Unless otherwise agreed in writing, during Research and Development,
Clinical Evaluations and Preclinical Tests, each party shall pay the expenses
thereof, excluding MRVT Components, Xillix Components, MRVT Drugs and
Co-Developed Devices, as follows:
MRVT *****
Xillix *****
All requests for expense reimbursement shall be made quarterly within sixty
(60) days of the end of each quarter. Reimbursement will be made within thirty
(30) days of the receipt of an invoice. A party who receives an invoice may pay
the invoice by setting off sums owed to that party by the submitting party,
excluding MRVT Components and Xillix Components.
6.02 Payment of Clinical Trial Costs.
During Clinical Trials, excluding MRVT Components, Xillix Components and
the Co-Developed Device, MRVT will pay all Clinical Trial costs unless otherwise
agreed in writing.
6.03 Payment for MRVT Components and Xillix Components.
Once Co-Developed Devices are in commercial distribution, each party shall
submit invoices to the Manufacturing Partner upon shipment of components. The
Manufacturing Partner shall pay all invoices, plus all applicable taxes or
freight and other transportation charges stated thereon, within thirty (30) days
after date of invoice.
6.04 Payment of Royalties.
The royalties due under this Agreement shall be paid quarterly within
thirty (30) days after March 31, June 30, September 30 and December 31. Each
payment shall be accompanied by a report containing sufficient information to
enable the other party to verify the accuracy of the calculation of Net Sales on
which such payment was based during the royalty period, including a statement of
Gross Sales and Net Sales and a reconciliation of the credits, allowances and
rebates used to calculate Net Sales from Gross Sales.
6.05 Payment of Monies.
All payments made pursuant to this Agreement by one party to the other
shall be made in U.S. dollars.
***** Confidential Treatment Requested
<PAGE>
6.06 Late Payments.
In the event any payment due pursuant to this Agreement is not paid within
the time specified, in addition to remitting the amount of the payment as
required by this Agreement, the late paying party shall pay the other party
interest on such amount at the prime rate per annum, as published from time to
time in the Wall Street Journal; such interest being payable on demand together
with all costs incurred by the collecting party to collect the amounts due
hereunder, including, but not limited to, reasonable attorney fees and
disbursements.
6.07 Books and Records.
Each of MRVT and Xillix shall keep, and shall cause their Affiliates and
the Manufacturing Partner and Marketing Partner and sublicensees to keep, full,
true and accurate books of accounts and other records, for a period of five (5)
years, containing sufficient detail as may be necessary for the other party to
properly ascertain and verify the costs and royalties payable to it hereunder in
accordance with generally accepted accounting principles. Upon either MRVT's or
Xillix's request, the other party shall permit an employee of the requesting
party or an independent certified accountant selected by the requesting party
(except one to whom the other has reasonable objection) to have access once each
year during ordinary business hours to such records as may be necessary to
determine the correctness of any report and payment made under this Agreement.
If an audit shows that either party has overstated costs or underpaid royalties
by ten percent (10%) or more, for any financial period covered by the audit,
that party shall, in addition to immediately remitting the amount of cost
overstatement or royalty underpayment, pay for the cost of such audit.
ARTICLE VII - REGULATORY RESPONSIBILITIES
7.01 Compliance With Applicable Law.
In exercising the rights, and in carrying out the duties and obligations
set forth in this Agreement, each party represents and warrants that it shall
comply with all applicable state, federal and other laws or rules. Each party
further represents and warrants that it shall comply to the extent of its duties
hereunder with all applicable state, federal or other rules and regulations
governing the manufacture, records, distribution, promotion, marketing and sale
of Co-Developed Devices, MRVT Components or Xillix Components, as the case may
be, and that it shall specifically comply with GCPs, GLPs, GMPs or other
equivalent regulatory requirements of any country.
7.02 Notification of FDA Action.
MRVT and Xillix shall promptly notify each other of, and shall provide
copies of, any correspondence and other documentation received or prepared in
connection with any FDA action or notification regarding Co-Developed Devices.
MRVT and Xillix shall jointly determine whether a recall, field action, or other
regulatory action is warranted. In the event of a total or partial recall of
Co-Developed Devices, whether voluntary or mandated by law, MRVT and Xillix
agree to cooperate fully with each other to effect such recall. In the event a
recall results from the gross negligence or willful misconduct of either party,
then that party, whether MRVT or Xillix, shall bear the expenses associated with
such recall. In the event a recall results from the gross negligence or willful
misconduct of both MRVT and Xillix, then the parties shall equitably share the
expenses associated with such recall, to the extent that each party is
responsible.
ARTICLE VIII - PATENTS
8.01 Patents.
If a patentable invention embodying Co-Developed Technology, or related to
Co-Developed Devices or to the Field, is conceived in the course of this
Agreement and reduced to practice during the term of this Agreement and for a
period of two (2) years after its termination, MRVT and Xillix shall together
determine whether to file patent applications covering the invention. Both
parties agree to begin application and prosecution in a timely manner once
patentable inventions are identified and disclosed. Any such patent applications
shall be prepared by the parties and filed in the name of the parties as defined
in Section 2.01. Xillix and MRVT shall prepare, prosecute and maintain any and
all of their respective Patents embodying Co-Developed Technology or related to
Co-Developed Devices for the Field. The reasonable costs thereof shall be the
responsibility of each party separately or shared according to the ownership
thereof, as defined in Section 2.01, and any rights hereunder shall be owned in
the same proportions. If either party elects not to prepare, prosecute or
maintain any such Patent, then the other party shall have the right, but not the
obligation, to do so in its own name, at its own expense and for its own benefit
and assignment of rights in such Patent. If MRVT and Xillix mutually agree in
writing to allow either party to utilize any Patent outside the Field, such
agreement shall include, at a minimum, terms as to the development, manufacture
and royalty obligations of the parties.
8.02 Patent Infringement by Third Parties.
If, during the term of this Agreement, either MRVT or Xillix shall acquire
knowledge or have reasonable cause to believe that any patent rights covering
Co-Developed Devices, Co-Developed Technology shall be infringed or used without
authorization by any third party, either MRVT or Xillix shall promptly notify
the other of such knowledge. MRVT and Xillix agree to cooperate in making prompt
investigation of such possible infringement.
8.03 Initiation of Action by MRVT or Xillix.
If MRVT and Xillix determine to jointly institute any action described in
Section 8.02, then MRVT and Xillix shall share in the costs of such action
according to the ownership as defined thereof, in Section 2.01 and in the full
recovery of any money or other property collected by way of judgment, settlement
(whether prior to or after the institution of any action or proceeding) or
otherwise on any action initiated jointly by the parties. If either MRVT or
Xillix determines not to be involved in any such action, then it will execute an
assignment of its rights to the other party, and the other party may take all
steps in the name of both parties which are necessary or advisable including,
without limitation, the institution of any action or proceeding for the
obtaining of damages or the enjoinment of any such infringement and to
prosecute, settle, compromise or otherwise dispose of the same. That party,
whether MRVT or Xillix, shall pay all costs taken pursuant to this Section 8.03
and shall be entitled to the full recovery of any money or other property
collected by way of judgment, settlement (whether prior to or after the
institution of any action or proceeding) or otherwise on any action initiated by
the party.
8.04 Claims Against MRVT or Xillix.
If any claim is made or action brought against MRVT or Xillix based on the
claim that MRVT or Xillix is infringing any third party patent rights by virtue
of the manufacture, use or sale of Co-Developed Devices or Co-Developed
Technology hereunder, MRVT or Xillix shall promptly so notify the other. The
parties shall then consult with each other as to the course of action to take
relative to such third party claim. Unless otherwise agreed to in writing by the
parties, each party hereto shall pay its own expenses in defending any such
third party claim and if they cannot agree, then it shall be resolved in
accordance with Article 17 hereof. MRVT shall be solely responsible for any
infringement claims related to MRVT's trademarks, Patents or other intellectual
property, including the MRVT Technology or the MRVT Components, and for all
damages related thereto. Xillix shall be solely responsible for any infringement
claims related to Xillix's trademarks, Patents or other intellectual property,
including the Xillix Technology or the Xillix Components, and for all damages
related thereto.
8.05 Damages to Third Party.
If, in any such action described in Section 8.04, a court of competent
jurisdiction determines that MRVT or Xillix is obligated to pay damages to any
third person because the manufacture, use, sale, distribution or licensing of
the Co-Developed Technology or Co-Developed Devices was held to be an
infringement of a third party right, the parties shall be responsible for any
damages and associated costs related thereto in accordance with the ownership
thereof, as defined in Section 2.01.
ARTICLE IX - PUBLICATIONS AND CONFIDENTIALITY
9.01 Publication.
(a) At least thirty (30) days prior to the time either party submits any
data or articles related to Co-Developed Technology or Co-Developed Devices for
publication or presentation, the proposed publication or presentation must be
sent to the Operating Committee for review and approval. If the Operating
Committee so decides, such publication or presentation can be delayed as long as
necessary to preserve U.S. or foreign patent or other property rights.
(b) The parties agree that neither of them will make any public
announcements or issue any press release arising out of or in connection with
this Agreement without consulting with the other party prior to making any
announcement or press release and the parties will use all reasonable effort,
acting expeditiously and in good faith, to agree upon a text for such
announcement or release which is satisfactory to each of them. If the parties
fail to agree upon such text, the party making the disclosure will make only
such public announcement or release as its counsel advises in writing is legally
required to be made.
9.02 Confidential Information.
Unless otherwise agreed to in writing by the parties, the parties agree to
maintain in confidence information relating to MRVT Technology, Xillix
Technology, Co-Developed Technology or Co-Developed Devices (including without
limitation, information developed in Preclinical Tests and Clinical Trials), and
licenses, Patents, patent applications, technology or processes and business
plans of the other party, including, without limitation, information designated
as confidential in writing from one party to another (all of the foregoing
hereinafter referred to as "Confidential Information"), disclosed to the other
and shall not, during the term of this Agreement and for a period of five (5)
years thereafter, use such Confidential Information, except as permitted by this
Agreement or disclose the same to anyone other than those of its officers,
directors, employees, Affiliates and sublicensees as are necessary in connection
with either parties' activities as contemplated in this Agreement, provided that
these disclosees agree in writing to be similarly bound.
9.03 Limitations on Confidentiality.
The obligation of confidentiality in Section 9.02 shall not apply to the
extent that (i) a party is required to disclose information by applicable law,
such as pursuant to Securities and Exchange Commission rules and regulations, or
by order of a governmental agency or a court of competent jurisdiction; (ii) a
party can demonstrate that the disclosed information was, at the time of
disclosure, already in the public domain other than as a result of actions or
failure to act of a party, its officers, directors, employees, Affiliates and
sublicensees in violation hereof; (iii) the disclosed information was rightfully
known by a party or its Affiliates or sublicensees (as shown by its written
records) prior to the date of disclosure to the other party in connection with
this Agreement; or (iv) a party can demonstrate that the disclosed information
was received by a party or its Affiliates or sublicensees on an unrestricted
basis from a third party which is not the other party or an Affiliate of the
other party and not under a duty of confidentiality, and which was rightfully
known to said source.
ARTICLE X - WARRANTIES OF MRVT
10.01 Warranty.
MRVT represents and warrants that MRVT Components and Co-Developed Devices,
at the time of shipment to Xillix, shall not have been misbranded or adulterated
within the meaning of the Act, or of any applicable state or local law. MRVT
further represents and warrants that MRVT Components sold to Xillix hereunder
shall have been manufactured, packaged, labeled, stored and shipped in
conformity with all applicable GMP requirements.
10.02 No Other Product Warranties.
Except as expressly provided for in this Article X, MRVT makes no
representations or warranties of any nature whatsoever with respect to the MRVT
Components, the MRVT Technology the Co-Developed Technology and the Co-Developed
Devices, and ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY
DISCLAIMED BY MRVT AND ITS AFFILIATES.
10.03 Product Liability Insurance.
Upon commencement of Clinical Trials, MRVT shall obtain product liability
insurance in such reasonable amounts as is customary for pharmaceutical
companies in the United States and shall name Xillix as an additional named
insured on its policy of product liability insurance. MRVT shall not cancel the
insurance policy or fail to renew it without providing Xillix with sixty (60)
days notice in advance of such cancellation or non-renewal.
10.04 Limitation on Liabilities.
MRVT will not be responsible to Xillix or any third party for
consequential, extraordinary or punitive damages. MRVT's total liability for
damages to Xillix under this Agreement, excluding any liability for direct
damages, lost profits and reasonable attorneys' fees, shall not exceed
$2,000,000.00, regardless of the form of action.
ARTICLE XI - WARRANTIES OF XILLIX
11.01 Warranty.
Xillix represents and warrants that Xillix Components shall not have been
misbranded or adulterated within the meaning of the Act, or of any applicable
state or local law. Xillix further represents and warrants that the Xillix
Components shall have been manufactured, packaged, labeled, stored and shipped
in conformity with all applicable GMP requirements.
11.02 No Other Product Warranties.
Except as expressly provided for in this Article XI, Xillix makes no
representations or warranties of any nature whatsoever with respect to the
Xillix Components or the Xillix Technology, and ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, ARE HEREBY DISCLAIMED BY XILLIX AND ITS AFFILIATES.
11.03 Product Liability Insurance.
Upon commencement of Clinical Trials, Xillix shall obtain product liability
insurance in such reasonable amounts as is customary for medical device
companies in Canada and shall name MRVT as an additional named insured on its
policy of product liability insurance. Xillix shall not cancel the insurance
policy or fail to renew it without providing MRVT with sixty (60) days notice in
advance of such cancellation or non-renewal.
11.04 Limitation on Liabilities.
Xillix will not be responsible to MRVT or any third party for
consequential, extraordinary or punitive damages. Xillix's total liability for
damages to MRVT under this Agreement, excluding any liability for direct
damages, lost profits and reasonable attorneys' fees, shall not exceed
$2,000,000.00, regardless of the form of action.
ARTICLE XII - MUTUAL WARRANTIES
12.01 Right, Power and Authority to Execute.
Each party hereby represents and warrants to the other party that it has
full right, power and authority to enter into this Agreement and that the
Agreement has been duly authorized by all necessary actions of its directors and
shareholders and constitutes a valid and binding obligation.
12.02 Corporate Good Standing.
Each party represents and warrants to the other party that it is a
corporation duly organized and validly existing and in good standing under the
laws of its respective jurisdiction of incorporation and that no governmental
approval or consent of any third party is necessary for the execution or
delivery by such party of this Agreement or for the legality, validity or
enforceability of this Agreement as to such party.
<PAGE>
12.03 Duration of Representations and Warranties.
Each party represents and warrants to the other party that the
representations and warranties set forth in Articles X, XI, and XII shall be
true as of the Effective Date of this Agreement.
ARTICLE XIII - TERM & TERMINATION
13.01 Term of Agreement.
This Agreement shall be effective as of the date first set forth
hereinabove ("Effective Date"), and shall continue in full force and effect for
seven (7) years from the date of first NDA approval for commercial sale of
Co-Developed Devices. If an NDA is not approved by December 31, 2003, then this
Agreement shall continue for an additional period of one year, which shall renew
automatically for additional periods of one year, unless either party decides to
terminate this Agreement upon thirty (30) days prior written notice. Provided
that both parties agree in writing, at least one hundred eighty (180) days prior
to the expiration of the then-existing term, MRVT and Xillix may have the option
to extend the term of this Agreement by successive two (2) year periods. Subject
to the other terms and conditions of this Agreement, royalty payments payable
hereunder shall continue for the life of the Co-Developed products.
13.02 Termination for Material Breach.
Either party may terminate this Agreement in the event of a material breach
by the other, provided that the party asserting such breach first serves written
notice of the alleged material breach on the offending party and such alleged
breach is not cured within thirty (30) days of said notice, unless such material
breach cannot reasonably be cured within said period, in which case the cure
period will be extended ninety (90) days if the offending party has commenced to
cure the material breach within the thirty (30) day period and continues to
diligently effect such cure. The nondefaulting party can, at its option, waive
the right to terminate the Agreement and specifically enforce this Agreement. A
material breach of the Subscription Agreement will be deemed a material breach
of this Agreement.
13.03 Termination for Insolvency.
In the event that either party becomes insolvent or shall suspend its
business, or shall file a voluntary petition or any answer admitting the
jurisdiction of the court and the material allegations of, or shall consent to,
an involuntary petition pursuant to or purporting to be pursuant to any
reorganization or insolvency law of any jurisdiction, or shall make an
assignment for the benefit of creditors, or shall apply for or consent to the
appointment of a receiver or trustee of all or a substantial part of its
property (such party, upon the occurrence of any such event, a "Bankrupt
Party"), and if such proceeding is not terminated within sixty (60) days of such
a filing, then to the extent permitted by the law another party hereto may
thereafter immediately terminate this Agreement by giving written notice of
termination to the Bankrupt Party.
<PAGE>
13.04 Effect of Expiration or Termination.
Expiration or earlier termination of this Agreement shall not extinguish
rights or obligations previously accrued or vested, and Sections 2.04, 2.05,
4.01, 5.01(ii), 5.02, 6.07, 8.01, 8.02, 8.03, 8.04, 8.05, 9.02, 10.01, 10.02,
10.03, 10.04, 11.01, 11.02, 11.03, 11.04, 14.01, 14.02, 14.03, 15.03, 17.01 and
17.02 hereof shall survive the termination of this Agreement.
ARTICLE XIV - INDEMNIFICATION
14.01 MRVT Indemnity.
MRVT agrees to indemnify, protect and defend Xillix and hold Xillix
harmless from and against any claims, damages, liability, harm, loss, costs,
penalties, lawsuits, threats of lawsuit, recalls or other governmental action,
including reasonable attorneys' fees, brought or claimed by any third party
which (i) arise as the result of MRVT's breach of this Agreement or of any
warranty or representation made by MRVT under this Agreement; (ii) result from
the negligent acts or willful malfeasance on the part of MRVT or its employees
or agents, or (iii) result from any claim made against Xillix in connection with
MRVT's manufacture or sale of defective MRVT Components or Co-Developed Devices.
Upon the filing of any such legal claim or lawsuit against Xillix, Xillix shall
promptly notify MRVT, in writing, of any such claim and MRVT shall, at its
expense, with attorneys reasonably acceptable to Xillix, handle, defend and
control such claim or lawsuit.
14.02 Xillix Indemnity.
Xillix agrees to indemnify, protect, and defend MRVT and hold MRVT harmless
from and against any claims, damages, liabilities, harm, loss, costs, penalties,
lawsuits, threats of lawsuit, recalls or other governmental action, including
reasonable attorneys' fees, brought or claimed by any third party, which (i)
arise as a result of Xillix's breach of this Agreement or of any warranty or
representation by Xillix under this Agreement; or, (ii) result from the
negligent acts or willful malfeasance on the part of Xillix or its employees or
agents, or (iii) result from any claim made against MRVT in connection with
Xillix's manufacture or sale of defective Components or the Co-Developed
Devices. Upon the filing of any such legal claim or lawsuit against MRVT, MRVT
shall promptly notify Xillix, in writing, of any such claim and Xillix shall, at
its expense, with attorneys reasonably acceptable to MRVT, handle, defend, and
control such claim or lawsuit.
14.03 Notice of Defense of Actions.
Each party shall give the other prompt notice of any potential liability,
and promptly after receipt by a party claiming indemnification under this
Article XIV, of notice of the commencement of any action, such indemnified party
shall notify the indemnifying party of the commencement of the action and
generally summarize such action. The indemnifying party shall have the right to
participate in and to assume the defense of such action with counsel of its
choosing. An indemnifying party shall not have the right to direct the defense
in such an action of an indemnified party if counsel to such indemnified party
has reasonably concluded that there may be defenses available to it that are
different from or additional to those available to the indemnifying party;
provided, however, that in such event, the indemnified party shall bear the fees
and expenses of separate counsel reasonably satisfactory to the indemnifying
party. The failure to notify an indemnifying party promptly of the commencement
of any such action, if prejudicial to the ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Article XIV. No settlement of any claim or action, or decision not to
appeal a judgment, may be made without the consent of the indemnifying party
(which consent shall not be unreasonably withheld or delayed).
ARTICLE XV - MISCELLANEOUS
15.01 Force Majeure.
No party to this Agreement shall be liable to another party for any loss,
injury, delay, damage or other casualty suffered or incurred by such other party
due to strikes, lockouts, accidents, fire, delays in manufacture, transportation
or delivery of material, embargoes, inability to ship, explosions, floods, war,
governmental action or any other cause similar thereto which is beyond the
reasonable control of such other party and any failure or delay by a party in
the performance of any of its obligations under this Agreement, other than for
the payment of money, shall not be considered as a breach of this Agreement due
to, but only so long as there exists, one or more of the foregoing causes.
15.02 Relationship.
This Agreement shall not be construed to create between the parties hereto
or their respective successors or permitted assignees the relationship of
principal and agent, joint ventures, co-partners or any other similar
relationship, the existence of which is hereby expressly denied by each party.
The parties shall not be liable to any third party in any way for engagement,
obligation, contract, representation or transaction or for any negligent act or
omission to act of the other except as expressly provided.
15.03 Governing Law.
The provisions of this Agreement shall be governed in all respects by the
laws of the State of California, without regard to the conflict of law
provisions thereof, or the United Nations Convention on Contracts For the
International Sale of Goods.
15.04 Notice.
All notices, proposals, submissions, offers, approvals, agreements,
elections, consents, acceptances, waivers, reports, plans, requests,
instructions and other communications required or permitted to be made or given
hereunder (all of the foregoing hereinafter collectively referred to as
"Communications") shall be in writing, and shall be deemed to have been duly
made or given when: a) delivered personally with receipt acknowledged; b) sent
by registered or certified mail or equivalent, return receipt requested, or c)
sent by facsimile or telex (which shall promptly be confirmed by a writing sent
by registered or certified mail or equivalent, return receipt requested), or d)
sent by recognized overnight courier for delivery within twenty-four (24) hours,
in each case addressed or sent to the parties at the following addresses and
facsimile numbers or to such other or additional address or facsimile as any
party shall hereafter specify by communication to the other parties:
<PAGE>
To MRVT: Miravant Medical Technologies
7408 Hollister Avenue
Santa Barbara, CA 93117
Attention: President
Facsimile: 805-685-2959
With a copy to: Nida & Maloney, P.C.
800 Anacapa Street
Santa Barbara, CA 93101
Attention: Joseph E. Nida
Facsimile: 805-568-1955
To Xillix: Xillix Technologies Corp.
#300 - 13775 Commerce Parkway
Richmond, B.C. Canada V6V 2V4
Attention: President and Chief
Executive Officer
Facsimile: 604-278-5111
With a copy to: Fraser & Beatty
15th Floor, The Grosvenor Building
1040 W. Georgia Street
Vancouver, B.C., V6E 4H8
Attention: Gary Sollis
Facsimile: 604-683-5214
Notice of change of address shall be deemed given when actually received, all
other Communications shall be deemed to have been given, received and dated on
the earlier of: (i) when actually received, or on the date when delivered
personally; (ii) one (1) day after being sent by facsimile, cable, telex (each
promptly confirmed by a writing as aforesaid) or overnight courier; or four (4)
business days after mailing.
15.05 Legal Construction.
In case any one or more of the provisions contained in this Agreement shall
be invalid or unenforceable in any respect, the validity and enforceability of
the remaining provisions contained herein shall not in any way be affected or
impaired thereby and the parties will attempt to agree upon a valid and
enforceable provision which shall be a reasonable substitute for such invalid
and unenforceable provision in light of the tenor of this Agreement, and, upon
so agreeing, shall incorporate such substitute provision in this Agreement.
15.06 Entire Agreement, Modifications, Consents, Waivers.
This Agreement contains the entire agreement of the parties with respect to
the subject matter hereof. This Agreement may not be modified or amended except
by an instrument or instruments in writing signed by the party against whom
enforcement of any such modification or amendment is sought. Each party hereto
may, by an instrument in writing, waive compliance by another party hereto with
any term or provision of this Agreement on the part of such other party to be
performed or complied with. The waiver by either party hereto of a breach of any
term or provision of this Agreement shall not be construed as a waiver of any
other or subsequent breach.
15.07 Section Headings; Construction.
The section headings and titles contained herein are each for reference
only and shall not be deemed to affect the meaning or interpretation of this
Agreement. The words "hereby", "herein", "hereinabove", "hereinafter", "hereof"
and "hereunder", when used anywhere in this Agreement, refer to this Agreement
as a whole and not merely to a subdivision in which such words appear, unless
the context otherwise requires. The singular shall include the plural, the
conjunctive shall include the disjunctive and the masculine gender shall include
the feminine and neuter, and vice versa, unless the context otherwise requires.
15.08 Execution Counterparts.
This Agreement may be executed in any number of counterparts and each such
duplicate counterpart shall constitute an original, any one of which may be
introduced in evidence or used for any other purpose without the production of
its duplicate counterpart. Moreover, notwithstanding that any of the parties did
not execute the same counterpart, each counterpart shall be deemed for all
purposes to be an original, and all such counterparts shall constitute one and
the same instrument, binding on both of the parties hereto.
ARTICLE XVI - BINDING EFFECT; ASSIGNMENT
16.01 Binding Effect and Assignment.
This Agreement shall inure to the benefit of and be binding upon each of
the parties hereto and their respective successors and assigns. Neither this
Agreement, nor any of the rights and obligations under this Agreement, may be
assigned, transferred or otherwise disposed of by either party without prior
written consent of the other party, unless such assignment, transfer or
disposition is to a successor to substantially all the business or assets of the
transferor; provided that, such successor shall in any event agree in writing
with the other party to assume all obligations of the transferor under this
Agreement in a manner satisfactory to the other party. Subject to the foregoing
limitations, the Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the parties.
16.02 Right to Seek Assurance.
In the event all or substantially all of the assets of either MRVT or
Xillix are acquired by a third party, the non-acquired party shall have the
right pursuant to Section 16.01 to receive written assurance from such third
party that the third party intends to faithfully perform all of the duties and
obligations of the acquired party set forth in this Agreement. The acquired
party shall take all necessary action to enable the non-acquiring party to
obtain such written assurance.
ARTICLE XVII - RESOLUTION OF DISPUTES
17.01 Resolutions.
Any and all disputes arising out of or in connection with this Agreement
unable to be resolved by the Operating Committee shall be negotiated in good
faith by the Presidents of MRVT and Xillix to achieve a reasonable resolution of
such issue.
17.02 Arbitration.
Any and all disputes arising out of or related to this Agreement, and which
are not resolved in accordance with Section 17.01 hereof, shall be finally
settled by arbitration in accordance with the rules of the American Arbitration
Association by arbitrators familiar with medical technology. The arbitration
will be held in Los Angeles, California, on consecutive business days. The award
rendered shall be final and binding upon the parties. Judgment on any award may
be entered in any court having jurisdiction over the parties or their assets.
Notwithstanding anything to the contrary contained in this paragraph, or to the
extent any claims relate to the validity, construction, scope, enforceability or
infringement of any Patent Rights, such claim shall not be required to be
submitted to arbitration hereunder and shall be resolved by a court of competent
jurisdiction. The costs of the arbitration shall be shared equally by the
parties. Each party will pay their own attorneys' fees and costs.
[Signatures on next page.]
<PAGE>
IN WITNESS WHEREOF, the parties have cause this Agreement to be executed as
of the day and year first written above.
MIRAVANT MEDICAL TECHNOLOGIES
By:/S/
------------------------------
Title:__________________________________
Date:___________________________________
XILLIX TECHNOLOGIES CORP.
By:/S/
------------------------------
Title:__________________________________
Date:___________________________________
SUBSCRIPTION AGREEMENT
TO: MIRAVANT MEDICAL TECHNOLOGIES (the "Corporation")
1. The undersigned hereby irrevocably subscribes for and agrees to purchase,
subject to the terms and conditions of this Subscription Agreement, 58,909
common shares in the capital of the Corporation (the "Purchased Securities") for
an aggregate consideration of $2,000,000 (U.S.), representing a subscription
price of $33.95 (U.S.) per Purchased Security.
2. By executing this Subscription Agreement, the undersigned represents,
warrants and covenants to the Corporation (and acknowledges that the Corporation
and its counsel are relying thereon) that:
(a) the issue and sale of the Purchased Securities to it or, if
applicable, to any purchaser on whose behalf it is contracting
hereunder, is being made in reliance upon exemptions from the
requirements as to the involvement of a registered dealer, the filing
of a prospectus and the delivery of an offering memorandum as set out
in securities legislation in British Columbia relating to the sale of
the Purchased Securities;
(b) the Purchased Securities will be subject to certain resale
restrictions under applicable securities laws and that the undersigned
agrees to comply with such restrictions. The undersigned also
acknowledges that it has been independently advised with respect to
applicable resale restrictions, that no representation has been made
to it by or on behalf of the Corporation with respect thereto and that
it is solely responsible for complying with such restrictions (and the
Corporation is not in any manner responsible for ensuring such
compliance);
(c) it is aware of the characteristics of the Purchased Securities, the
risks relating to an investment therein and of the fact that it will
not be able to resell the Purchased Securities except in accordance
with limited exemptions under applicable securities legislation and
regulatory policy;
(d) it has not received, nor has it requested, nor does it have any need
to receive, any offering memorandum, or any other document (other than
financial statements, interim financial statements or any other
document, other than an offering memorandum, the content of which is
prescribed by statute or regulation) describing the business and
affairs of the Corporation which has been prepared for delivery to,
and review by, prospective purchasers in order to assist it in making
an investment decision in respect of the Purchased Securities and it
is not aware of any advertisement in printed media of general and
regular paid circulation, radio or television with respect to the
distribution of the Purchased Securities;
(e) it is a British Columbia corporation whose principal place of business
is in British Columbia, and at which this investment decision was
made;
(f) it is purchasing the Purchased Securities as principal for its own
account, not for the benefit of any other person, and not with a view
to the resale or distribution of the Purchased Securities;
(g) it has an aggregate acquisition cost of purchasing the Purchased
Securities of not less than $97,000;
(h) it has not been formed solely or primarily for the purpose of
purchasing the Purchased Securities pursuant to exemptions from the
prospectus and/or registration requirements of applicable securities
legislation;
(i) it will not resell or otherwise transfer or dispose of any of the
Purchased Securities except in accordance with the provisions of all
applicable securities laws;
(j) it has been afforded with full access to all relevant financial,
technical, operational and corporate information relating to the
Corporation and the Purchased Securities, has been afforded an
opportunity to ask such questions of the Corporation's officers,
employees, agents, accountants and representatives concerning the
foregoing and all other relevant matters as it has deemed necessary or
desirable, has been given all such information that has been requested
in order to assess and evaluate the Purchased Securities and the
merits and the risks of the transactions contemplated herein, and, as
a result, has acquired sufficient information concerning the
Corporation to make an informed and knowledgeable decision with
respect to the purchase of the Purchased Securities;
(k) this Subscription Agreement has been duly and validly authorized,
executed and delivered by and constitutes a legal, valid, binding and
enforceable obligation of the undersigned;
(l) it has such knowledge and experience in financial and business affairs
as to be capable of evaluating the merits and risks of its investment
in the Purchased Securities and is able to bear the economic risk of
loss of its investment;
(m) if required by applicable securities legislation, policy or order or
securities commission, stock exchange or other regulatory authority,
the undersigned will execute, deliver, file and otherwise assist the
Corporation in filing, such reports, undertakings, forms and other
documents with respect to the issue of the Purchased Securities as may
be required by any securities commission, stock exchange or other
regulatory authority;
(n) the Purchased Securities are not being purchased by the undersigned as
a result of any material information concerning the Corporation that
has not been publicly disclosed and the undersigned's decision to
tender this offer and acquire the Purchased Securities has not been
made as a result of any verbal or written representation as to fact or
otherwise made by or on behalf of the Corporation or any other person
and is based entirely upon currently available public information
concerning the Corporation;
(o) it understands that the Purchased Securities have not been and will
not be registered under the U.S. Securities Act or any state
securities law, and that the sale contemplated hereby is being made in
reliance on Rule 506 of Regulation D under the U.S. Securities Act
("Regulation D");
(p) it is an "accredited investor" as defined in Rule 501(a) of Regulation
D;
(q) if it decides to offer, sell or otherwise transfer the Purchased
Securities, such securities may be offered, sold or otherwise
transferred only (i) to the Corporation, (ii) outside the United
States in accordance with Rule 904 of Regulation S under the U.S.
Securities Act, or (iii) inside the United States in accordance with
(A) Rule 144A under the U.S. Securities Act to a person who the seller
reasonably believes is a Qualified Institutional Buyer (as defined in
Rule 144A) that is purchasing for its own account or for the account
of a Qualified Institutional Buyer to whom notice is given that the
offer, sale or transfer is being made in reliance on Rule 144A, (B)
the exemption from registration under the U.S. Securities Act provided
by Rule 144 thereunder, if applicable, or (C) with the prior written
consent of the Corporation, another exemption from registration under
the U.S. Securities Act.
(r) all certificates representing the Purchased Securities, as well as all
certificates issued in exchange for or in substitution of the
foregoing securities, will bear a legend to the following effect:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S.
SECURITIES ACT"), THE HOLDER HEREOF, BY PURCHASING SUCH
SECURITIES, AGREES FOR THE BENEFIT OF MIRAVANT MEDICAL
TECHNOLOGIES THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED ONLY (A) TO MIRAVANT MEDICAL TECHNOLOGIES,
(B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF
REGULATION S UNDER THE U.S. SECURITIES ACT, OR (C) INSIDE THE
UNITED STATES IN ACCORDANCE WITH (1) RULE 144A UNDER THE U.S.
SECURITIES ACT TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A) THAT IS
PURCHASING FOR HIS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE OFFER, SALE
OR TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) THE
EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, OR (3) WITH THE
PRIOR WRITTEN CONSENT OF MIRAVANT MEDICAL TECHNOLOGIES, ANOTHER
EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT."
provided that the legend shall be removed at any time after the first
anniversary of the date of issue of the Purchased Securities, upon
request by the holder of such securities;
(s) it understands and acknowledges that the Corporation may instruct its
registrar and transfer agent not to record a transfer without first
being notified by the Corporation that it is satisfied that such
transfer is exempt from or not subject to registration under the U.S.
Securities Act; and
(t) it acknowledges that, pursuant to British Columbia Securities
Commission Blanket Order BOR#95/17, an initial trade report in the
prescribed form in respect of the resale of the Purchased Securities
must be filed within 10 days of the initial trade of such securities
and where the undersigned has filed such an initial trade report, the
undersigned is not required to file a further report in respect of
additional trades of Purchased Securities acquired on the same date
and under the same exemption as the Purchased Securities that are the
subject of the initial trade report.
The undersigned acknowledges that the foregoing representations and
warranties are made by it with the intent that they may be relied upon in
determining the undersigned's eligibility to subscribe for and purchase the
Purchased Securities hereunder. The undersigned further agrees that, by
accepting the Purchased Securities on the Closing Date, it shall be representing
and warranting that the foregoing representations and warranties are true as at
the Closing Date with the same force and effect as if they had been made by it
at the Closing Time.
3. The Corporation represents, warrants and covenants to the undersigned (and
acknowledges that the undersigned is relying thereon) that:
(a) the Corporation and each of its subsidiaries is a valid and subsisting
corporation, duly incorporated or amalgamated and in good standing
under the laws of its jurisdiction of incorporation;
(b) the common shares of the Corporation are listed and posted for trading
on the National Market System of NASDAQ ("NASDAQ") and, to the best of
its knowledge, the Corporation is not in default of any of the listing
requirement of NASDAQ;
(c) the authorized share capital of the Corporation consists of 50,000,000
common shares, of which, as of May 26, 1998, 14,073,401 shares are
issued and outstanding as fully paid and non-assessable;
(d) the common shares of the Corporation are registered under Section
12(g) of the U.S. Securities Exchange Act of 1934, as amended, and the
Corporation has filed all material required by Section 13 or 15(d)
thereof during the 12 months prior to the Closing Date;
(e) no person, firm or corporation holds any securities convertible into
shares of the Corporation or has any agreement, warrant, option, right
or privilege being or capable of becoming an agreement, warrant,
option or right for the purchase, subscription or issuance of any
unissued securities of the Corporation, except pursuant to this
Agreement and, as of June 1, 1998, pursuant to options which are
exercisable or exchangable into an aggregate of not more than
2,327,461 common shares of the Corporation, and pursuant to warrants
which are exercisable or exchangable into an aggregate of not more
than 2,911,052 common shares of the Corporation;
(f) upon their issuance on the Closing Date, the Common Shares will be
validly issued and outstanding as fully paid and non-assessable
securities of the Corporation;
(g) on the Closing Date, the Common Shares will have been conditionally
approved for listing and posted for trading on the Exchange, subject
to the Corporation fulfilling all requirements of the Exchange in
connection therewith;
(h) the Corporation and each of its subsidiaries has the corporate power
and capacity to own and lease its assets and to carry on its business
as now conducted by it;
(i) the Corporation and each of its subsidiaries is conducting its
business in material compliance with all applicable laws, rules and
regulations of each jurisdiction in which its business is carried on
and is duly licensed, registered or qualified in all jurisdictions in
which it owns, leases or operates its property or carries on business
to enable its business to be carried on as now conducted and its
property and assets to be owned, leased and operated and all such
licences, registrations and qualifications are valid and subsisting
and in good standing, except in respect of matters which do not and
will not result in any material adverse change to the business,
business prospects or condition (financial or otherwise) of the
Corporation and its subsidiaries, on a consolidated basis;
(j) the audited financial statements of the Corporation for its fiscal
period ended December 31, 1997 (the "Corporation's Financial
Statements") present fairly the financial position and results of the
operations of the Corporation for the periods then ended and the
Corporation's Financial Statements have been prepared in accordance
with generally accepted accounting principles applied on a consistent
basis;
(k) except as publicly disclosed, since December 31, 1997 there has not
been any adverse material change of any kind whatsoever in the
financial position or condition of the Corporation, or any damage,
loss or other change of any kind whatsoever in circumstances
materially affecting the business or assets of the Corporation, or the
right or capacity of the Corporation to carry on its business;
(l) there has not been any material change in the capital stock or
long-term debt or in the assets, liabilities or obligations (absolute,
accrued, contingent or otherwise) of the Corporation, and its
subsidiaries, on a consolidated basis, since December 31, 1997 that
has not been publicly disclosed;
(m) there has not been any material change in, and there have been no
material facts, transactions, events or occurrences which could
materially adversely affect, the business, business prospects,
condition (financial or otherwise) or results of the operations of the
Corporation, and its subsidiaries, on a consolidated basis, since
December 31, 1997 that has not been publicly disclosed;
(n) except as has been publicly disclosed, since December 31, 1997 the
Corporation and each of its subsidiaries has carried on its business
in the ordinary course;
(o) to the best of its knowledge, except as publicly disclosed, there are
no actions, suits, judgments, investigations or proceedings of any
kind whatsoever outstanding, pending or threatened by or against or
affecting the Corporation or its subsidiaries, if any, at law or in
equity or before or by any federal, provincial, state, municipal or
other governmental department, commission, board, bureau or agency,
domestic or foreign, of any kind whatsoever, which will materially
adversely affect the business, operations or financial condition of
the Corporation, and its subsidiaries, on a consolidated basis, or any
of its assets or properties, or which materially adversely affects or
may materially adversely affect the distribution of the Purchased
Securities or any action taken or to be taken by the Corporation
pursuant to or in connection with this Subscription Agreement and, to
the best of its knowledge, there is no basis therefor;
(p) no securities commission or similar regulatory authority in Canada has
issued any order preventing or suspending trading in any securities of
the Corporation;
(q) the Corporation will, prior to the Closing Time, fulfil all legal
requirements (including, without limitation, compliance with all
applicable securities laws) to be fulfilled by the Corporation to
enable the Purchased Securities to be offered for sale to the
undersigned as contemplated in this Subscription Agreement;
(r) to the best of its knowledge, the Corporation or, as applicable, each
of its subsidiaries, is not in default or breach of, and the execution
and delivery of, and the performance of and compliance with the terms
of this Subscription Agreement, does not and will not conflict with,
or result in any breach of or the acceleration of any indebtedness
under, or constitute a default under, and does not and will not create
a state of facts which, after notice or lapse of time or both, would
result in a breach of or constitute a default under, any term or
provision of the memorandum, articles, by-laws or resolutions of the
Corporation (including its subsidiaries), or any indenture, contract,
agreement (written or oral), instrument, lease or other document,
including without limitation the contracts to which the Corporation
(including its subsidiaries) is a party or by which it is bound, or
any judgment, decree, order, statute, rule or regulation applicable to
the Corporation (including its subsidiaries), which default or breach
might reasonably be expected to materially adversely affect the
business, operations, capital or condition (financial or otherwise) of
the Corporation (including its subsidiaries) or its assets or
properties;
(s) the Corporation has full corporate power and authority to enter into
this Subscription Agreement and to perform its obligations set out
herein and this Subscription Agreement has been duly authorized,
executed and delivered by the Corporation and is a legal, valid and
binding obligation of the Corporation, enforceable against the
Corporation in accordance with its terms except that:
(i) the enforcement thereof may be limited by bankruptcy,
insolvency and other laws affecting the enforcement of
creditors' rights generally;
(ii) equitable remedies including, without limitation, specific
performance and injunction may be granted only in the
discretion of a court; and
(iii)rights of indemnity, contribution and waiver of
contribution may be limited under applicable law;
(t) there is not, in the constating documents or by-laws of the
Corporation or in any agreement, mortgage, note, debenture, indenture
or other instrument or document to which the Corporation is a party,
any restriction upon or impediment to the declaration or payment of
dividends by the Corporation to the holders of its common shares. The
representations and warranties of the corporation contained in this
Subscription Agreement shall be true at the Closing Time as though
they were made at the Closing Time;
(u) set out in Schedule B hereto is a complete list of all plans and
arrangements under which options or other rights to acquire shares
have been granted by the Corporation, or under which shares of the
Corporation have been reserved for issuance, which, in each case, sets
forth the number of shares reserved for issuance under such plan or
arrangement and the number of options and/or similar rights
outstanding thereunder, in each case as of June 1, 1998;
(v) the Corporation agrees to file a Form D with respect to the Purchased
Securities with the U.S. Securities and Exchange Commission (the
"SEC") as required under Regulation D and to provide a copy thereof to
the undersigned within fifteen (15) days after the Closing Date. The
Corporation shall, on or prior to the Closing Date, take such action
as is necessary under all applicable Securities Laws (as defined
below) to sell the Purchased Securities to the undersigned in the
manner contemplated in this Agreement, and to provide evidence of any
such action so taken to the undersigned on or prior to the Closing
Date. "Securities Laws" shall mean the securities laws, rules and
regulations of Canada, of the United States, and of any state,
province or governmental or regulatory authority of Canada or of the
United States, including blue sky laws;
(w) the Corporation shall, for a period of 18 months after the Closing
Date, provided that it continues to be a reporting issuer under the
applicable securities laws of the United States of America and that
the undersigned continues to hold any of the Purchased Securities,
timely file all reports required to be filed with all applicable
securities regulatory authorities, and the Corporation shall not,
during such period, terminate its status as an issuer required to file
reports under any applicable Securities Law even if such Securities
Law would permit such termination;
(x) the Corporation shall, for a period of 18 months after the Closing
Date, provided that the undersigned continues to hold any of the
Purchased Securities and that the Corporation continues to be a
reporting issuer under the applicable securities laws of the United
States of America, send the following reports to the undersigned: (i)
within three (3) business days after the filing with any securities
regulatory authority, a copy of each annual, quarterly or other
periodic report, each proxy statement and each current report; and
(ii) within one (1) business day after release, a copy of each press
release issued by the Corporation or any of its subsidiaries;
(y) the Corporation shall, for a period of 18 months after the Closing
Date, provided that the Corporation continues to satisfy the listing
requirements of the National Market System of NASDAQ and that the
undersigned continues to hold any of the Purchased Securities,
continue the uninterrupted listing and trading of its common shares on
the National Market System of NASDAQ and on any other securities
exchange on which any of its securities may be or become listed and
traded, and comply in all respects with the Corporation's reporting,
filing and other obligations under the By-laws or rules of NASDAQ and
any such other securities exchange; and
(z) the Corporation will use the proceeds of the sale of the Purchased
Securities for working capital and/or such other purposes as
management or the Board of Directors of the Corporation shall
determine.
4. The sale of the Purchased Securities will be completed at the offices of Nida
& Maloney, the Corporation's counsel, in Santa Barbara, California at 10:00 a.m.
(Pacific daylight time), or such other time as the Corporation and the
undersigned may agree upon in writing (the "Closing Time") on June 2, 1998, or
such other date as the Corporation and the undersigned may agree upon in writing
(the "Closing Date"). The certificate for the Purchased Securities subscribed
for by the undersigned hereunder will, on the Closing Date, be issued and
registered in the name set out in the Registration Instructions below and will
promptly thereafter be delivered in accordance with the Delivery Instructions
below.
5. The obligation of the undersigned to complete the subscription contemplated
hereby will be subject to and conditional on the fulfilment on or before the
Closing Time of the following conditions, compliance with which may be waived in
whole or in part by the undersigned, at any time, in its discretion and upon
such terms as it may consider appropriate:
(a) the representations and warranties of the Corporation contained herein
will be true at and as of the Closing Time as though such
representations and warranties were made again at and as of such time;
(b) the Corporation will have performed and complied with all covenants,
agreements and conditions required hereby to be performed or complied
with by the Corporation prior to Closing Time;
(c) the Purchased Securities will have been approved for listing and
trading on the National Market System of NASDAQ, subject only to the
filing of all required documents and the payment of the required fees
within the times stipulated by NASDAQ;
(d) no order, judgment, injunction, decree, award or writ of any court,
tribunal, arbitrator, governmental agency or other person will have
been entered that prohibits or restricts the completion of the
subscription or which, in the opinion of the undersigned, acting
reasonably, could prevent or restrict any party hereto from performing
any of its obligations hereunder;
(e) the undersigned will have received a favourable written opinion of the
Corporation's counsel, dated the Closing Date, substantially in the
form attached hereto as Schedule A;
(f) the purchase by the Corporation of 2,691,904 common shares in the
capital of the undersigned, at an aggregate subscription price of Can.
$7,187,384, pursuant to a subscription agreement of even date; and
(g) the execution and delivery of a Strategic Alliance Agreement between
the Corporation and the undersigned, in form and substance acceptable
to each of them.
6. The obligation of the Corporation to complete the transactions contemplated
hereby will be subject to and conditional on the fulfillment on or before the
Closing Time of the following conditions, compliance with which may be waived in
whole or in part by the Corporation, at any time, in its discretion and upon
such terms as it may consider appropriate:
(a) the representations and warranties of the undersigned contained herein
will be true at and as of the Closing Time as though such
representations and warranties were made again at and as of such time;
(b) the undersigned will have performed and complied with all covenants,
agreements and conditions required hereby to be performed or compiled
with by the undersigned prior to the Closing Time;
(c) the Purchased Securities will have been approved for listing and
trading on the National Market System of NASDAQ, subject only to the
filing of all required documents and the payment of the required fees
within the times stipulated by NASDAQ;
(d) no order, judgment, injunction, decree, award or writ of any court,
tribunal, arbitrator, governmental agency or other person will have
been entered that prohibits or restricts the completion of the
subscription or which, in the opinion of the Corporation, acting
reasonably, could prevent or restrict any party hereto from performing
any of its obligations hereunder;
(e) the purchase by the Corporation of 2,691,904 common shares in the
capital of the undersigned, at an aggregate subscription price of Can.
$7,187,384, pursuant to a subscription agreement of even date; and
(f) the execution and delivery of a Strategic Alliance Agreement between
the Corporation and the undersigned, in form and substance acceptable
to each of them.
7. The undersigned agrees to deliver to the Corporation, not later than 5:00
p.m. (Pacific daylight time) at least two business days prior to the Closing
Date, a certified cheque or bank draft payable to the Corporation or its
counsel, Nida & Maloney, in trust, for the aggregate subscription price of the
Purchased Securities subscribed for under this Subscription Agreement or payment
of the same amount in such other manner as is acceptable to the Corporation.
8. This subscription may be accepted or rejected by the Corporation.
Confirmation of acceptance or rejection of a subscription will be forwarded to
the undersigned promptly after the acceptance or rejection of the subscription.
If this subscription is rejected, the undersigned understands that, if it has
delivered a certified cheque or bank draft representing the purchase price of
the Purchased Securities subscribed for, such cheque or bank draft will be
promptly returned to it without interest.
9. The undersigned agrees to indemnify and hold harmless the Corporation, and
its directors, officers, employees, agents, advisors and shareholders, from and
against any and all loss, liability, claim, damage and expense whatsoever
including, but not limited to, any and all fees, costs and expenses whatsoever
reasonably incurred in investigating, preparing or defending against any
litigation, administrative proceeding or investigation commenced or threatened
or any claim whatsoever arising out of or based upon any representation or
warranty of the undersigned contained herein or in any document furnished by the
undersigned to the Corporation in connection herewith being untrue in any
material respect or any breach or failure by the undersigned to comply with any
covenant or agreement made by the undersigned herein or in any document
furnished by the undersigned to the Corporation in connection herewith.
10. The Corporation agrees to indemnify and hold harmless the undersigned, and
its directors, officers, employees, agents, advisors and shareholders, from and
against any and all loss, liability, claim, damage and expense whatsoever
including, but not limited to, any and all fees, costs and expenses whatsoever
reasonably incurred in investigating, preparing or defending against any
litigation, administrative proceeding or investigation commenced or threatened
or any claim whatsoever arising out of or based upon any representation or
warranty of the Corporation contained herein or in any document furnished by the
Corporation to the undersigned in connection herewith being untrue in any
material respect or any breach or failure by the Corporation to comply with any
covenant or agreement made by the Corporation herein or in any document
furnished by the Corporation to the undersigned in connection herewith.
11. Before Closing Time, no party hereto will make any public statement or issue
any press release concerning the transactions contemplated herein, except as may
be necessary, in the opinion of counsel to the party making such disclosure, to
comply with the requirements of any applicable law, order, rule, regulation or
published policy of any regulatory authority having jurisdiction. Upon any
public statement or release being so required, the party making such disclosure
will consult with the other party prior to making any statement or issuing a
press release and the parties will use all reasonable efforts, acting
expeditiously and in good faith, to agree upon a text for such statement or
release which is satisfactory to each of them. If the parties fail to agree upon
such text, the party making the disclosure will make only such public statement
or release as its counsel advises in writing is legally required to be made.
12. The covenants, representations and warranties contained herein shall survive
the closing of the transactions contemplated hereby, notwithstanding any
investigation at any time made, or any evidence as to the truth or accuracy
thereof at any time accepted, by or on behalf of the other party.
13. The Corporation shall be entitled to rely on delivery of a facsimile copy of
this Agreement, and acceptance by the Corporation of such facsimile copy shall
be legally effective to create a valid and binding agreement between the
undersigned and the Corporation in accordance with the terms hereof.
14. This Subscription Agreement shall be governed by and construed in accordance
with the laws of the State of California and the federal laws of the United
States applicable therein. This Subscription Agreement is not transferable or
assignable by either of the parties hereto. Time shall be of the essence hereof.
DATED at the City of Vancouver, in the Province of British Columbia
this ______ day of June, 1998.
XILLIX TECHNOLOGIES CORP. ______________________________
(Name of Subscriber - please print) Address:
By:/S/
------------------------------
Authorized Signature
_____________________________________ ______________________________
(Official Capacity or Title,- please print) (Telephone Number)
<PAGE>
Registration Instructions: Delivery Instructions:
Register the Purchased Securities Deliver the Purchased Securities
as set forth below: as set forth below:
Name Name
Account reference, if applicable Account reference, if applicable
Address Contact Name
Telephone Number
ACCEPTANCE
Miravant Medical Technologies hereby accepts the above
subscription and agrees to be bound by all of the covenants and agreements on
its part set forth above as of this _________ day of June, 1998.
MIRAVANT MEDICAL TECHNOLOGIES
Per:/S/
------------------------------
Per:/S/
------------------------------
SCHEDULE A
FORM OF LEGAL OPINION
SCHEDULE B
PLANS AND ARRANGEMENTS
SUBSCRIPTION AGREEMENT
TO: XILLIX TECHNOLOGIES CORP. (the "Corporation")
1. The undersigned hereby irrevocably subscribes for and agrees to purchase,
subject to the terms and conditions of this Subscription Agreement, 2,691,904
common shares in the capital of the Corporation (the "Purchased Securities") for
an aggregate consideration of $7,187,384 (Canadian), representing a subscription
price of $2.67 (Canadian) per Purchased Security.
2. The undersigned acknowledges that the issuance and sale of the Purchased
Securities is subject to the approval of The Toronto Stock Exchange (the
"Exchange"). The undersigned further acknowledges that, pursuant to the terms of
a financial advisory agreement dated September 4, 1997 between the Corporation
and 1991 Capital West Partners ("Capital West"), as amended, the Corporation
will pay to Capital West an advisory fee in the amount of 5% of the gross
proceeds received by it from the issue and sale of the Purchased Securities.
3. By executing this Subscription Agreement, the undersigned represents,
warrants and covenants to the Corporation (and acknowledges that the Corporation
and its counsel are relying thereon) that:
(a) the issue and sale of the Purchased Securities to it or, if
applicable, to any purchaser on whose behalf it is contracting
hereunder, is being made in reliance upon exemptions from the
requirements as to the involvement of a registered dealer, the filing
of a prospectus and the delivery of an offering memorandum as set out
in securities legislation in British Columbia relating to the sale of
the Purchased Securities;
(b) the Purchased Securities will be subject to certain resale
restrictions under applicable securities laws and that the undersigned
agrees to comply with such restrictions. The undersigned also
acknowledges that it has been independently advised with respect to
applicable resale restrictions, that no representation has been made
to it by or on behalf of the Corporation with respect thereto and that
it is solely responsible for complying with such restrictions (and the
Corporation is not in any manner responsible for ensuring such
compliance);
(c) it is aware of the characteristics of the Purchased Securities, the
risks relating to an investment therein and of the fact that it will
not be able to resell the Purchased Securities except in accordance
with limited exemptions under applicable securities legislation and
regulatory policy;
(d) it has not received, nor has it requested, nor does it have any need
to receive, any offering memorandum, or any other document (other than
financial statements, interim financial statements or any other
document, other than an offering memorandum, the content of which is
prescribed by statute or regulation) describing the business and
affairs of the Corporation which has been prepared for delivery to,
and review by, prospective purchasers in order to assist it in making
an investment decision in respect of the Purchased Securities and it
is not aware of any advertisement in printed media of general and
regular paid circulation, radio or television with respect to the
distribution of the Purchased Securities;
(e) it is a Delaware corporation whose principal place of business is in
California, and at which this investment decision was made;
(f) it is purchasing the Purchased Securities as principal for its own
account, not for the benefit of any other person, and not with a view
to the resale or distribution of the Purchased Securities;
(g) it has an aggregate acquisition cost of purchasing the Purchased
Securities of not less than $97,000;
(h) it has not been formed solely or primarily for the purpose of
purchasing the Purchased Securities pursuant to exemptions from the
prospectus and/or registration requirements of applicable securities
legislation;
(i) it will not resell or otherwise transfer or dispose of any of the
Purchased Securities except in accordance with the provisions of all
applicable securities laws;
(j) it has been afforded with full access to all relevant financial,
technical, operational and corporate information relating to the
Corporation and the Purchased Securities, has been afforded an
opportunity to ask such questions of the Corporation's officers,
employees, agents, accountants and representatives concerning the
foregoing and all other relevant matters as it has deemed necessary or
desirable, has been given all such information that has been requested
in order to assess and evaluate the Purchased Securities and the
merits and the risks of the transactions contemplated herein, and, as
a result, has acquired sufficient information concerning the
Corporation to make an informed and knowledgeable decision with
respect to the purchase of the Purchased Securities;
(k) this Subscription Agreement has been duly and validly authorized,
executed and delivered by and constitutes a legal, valid, binding and
enforceable obligation of the undersigned;
(l) it has such knowledge and experience in financial and business affairs
as to be capable of evaluating the merits and risks of its investment
in the Purchased Securities and is able to bear the economic risk of
loss of its investment;
(m) if required by applicable securities legislation, policy or order or
securities commission, stock exchange or other regulatory authority,
the undersigned will execute, deliver, file and otherwise assist the
Corporation in filing, such reports, undertakings, forms and other
documents with respect to the issue of the Purchased Securities
(including, without limitation, the undertaking required by the
Exchange in the form attached as Schedule A hereto) as may be required
by any securities commission, stock exchange or other regulatory
authority;
(n) the Purchased Securities are not being purchased by the undersigned as
a result of any material information concerning the Corporation that
has not been publicly disclosed and the undersigned's decision to
tender this offer and acquire the Purchased Securities has not been
made as a result of any verbal or written representation as to fact or
otherwise made by or on behalf of the Corporation, Capital West or any
other person and is based entirely upon currently available public
information concerning the Corporation;
(o) it understands that the Purchased Securities have not been and will
not be registered under the U.S. Securities Act or any state
securities law, and that the sale contemplated hereby is being made in
reliance on Rule 506 of Regulation D under the U.S. Securities Act
("Regulation D");
(p) it is an "accredited investor" as defined in Rule 501(a) of Regulation
D;
(q) if it decides to offer, sell or otherwise transfer the Purchased
Securities, such securities may be offered, sold or otherwise
transferred only (i) to the Corporation, (ii) outside the United
States in accordance with Rule 904 of Regulation S under the U.S.
Securities Act, or (iii) inside the United States in accordance with
(A) Rule 144A under the U.S. Securities Act to a person who the seller
reasonably believes is a Qualified Institutional Buyer (as defined in
Rule 144A) that is purchasing for its own account or for the account
of a Qualified Institutional Buyer to whom notice is given that the
offer, sale or transfer is being made in reliance on Rule 144A, (B)
the exemption from registration under the U.S. Securities Act provided
by Rule 144 thereunder, if applicable, or (C) with the prior written
consent of the Corporation, another exemption from registration under
the U.S. Securities Act.
(r) all certificates representing the Purchased Securities, as well as all
certificates issued in exchange for or in substitution of the
foregoing securities, will bear a legend to the following effect:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S.
SECURITIES ACT"), THE HOLDER HEREOF, BY PURCHASING SUCH
SECURITIES, AGREES FOR THE BENEFIT OF XILLIX TECHNOLOGIES CORP.
THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED ONLY (A) TO XILLIX TECHNOLOGIES CORP., (B) OUTSIDE
THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S
UNDER THE U.S. SECURITIES ACT, OR (C) INSIDE THE UNITED STATES IN
ACCORDANCE WITH (1) RULE 144A UNDER THE U.S. SECURITIES ACT TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A) THAT IS PURCHASING
FOR HIS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE OFFER, SALE
OR TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2) THE
EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, OR (3) WITH THE
PRIOR WRITTEN CONSENT OF XILLIX TECHNOLOGIES CORP., ANOTHER
EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT.
DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY"
IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA."
provided that, if any such securities are being sold outside the
United States in accordance with Rule 904 of Regulation S, the legend
may be removed by providing both the seller's and broker's
representation letters to CIBC Mellon Trust Company, as registrar and
transfer agent, to the effect set forth in Schedule B to this
Subscription Agreement, or in such other form as CIBC Mellon Trust
Company or the Corporation may from time to time prescribe;
(s) it understands and acknowledges that the Corporation may instruct CIBC
Mellon Trust Company not to record a transfer without first being
notified by the Corporation that it is satisfied that such transfer is
exempt from or not subject to registration under the U.S. Securities
Act; and
(t) it acknowledges that, pursuant to British Columbia Securities
Commission Blanket Order BOR#95/17, an initial trade report in the
prescribed form in respect of the resale of the Purchased Securities
must be filed within 10 days of the initial trade of such securities
and where the undersigned has filed such an initial trade report, the
undersigned is not required to file a further report in respect of
additional trades of Purchased Securities acquired on the same date
and under the same exemption as the Purchased Securities that are the
subject of the initial trade report.
The undersigned acknowledges that the foregoing representations and
warranties are made by it with the intent that they may be relied upon in
determining the undersigned's eligibility to subscribe for and purchase the
Purchased Securities hereunder. The undersigned further agrees that, by
accepting the Purchased Securities on the Closing Date, it shall be representing
and warranting that the foregoing representations and warranties are true as at
the Closing Date with the same force and effect as if they had been made by it
at the Closing Time.
4. The Corporation represents, warrants and covenants to the undersigned (and
acknowledges that the undersigned is relying thereon) that:
(a) the Corporation and each of its subsidiaries is a valid and subsisting
corporation, duly incorporated or amalgamated and in good standing
under the laws of its jurisdiction of incorporation;
(b) the common shares of the Corporation are listed and posted for trading
on the Exchange and, to the best of its knowledge, the Corporation is
not in default of any of the listing requirement of the Exchange;
(c) the authorized share capital of the Corporation consists of
750,000,000 common shares, of which, as of June 1, 1998, 28,491,525
shares are issued and outstanding as fully paid and non-assessable;
(d) the Corporation is a "reporting issuer" not in default under the
applicable securities laws of each of the Provinces of Canada other
than Quebec;
(e) no person, firm or corporation holds any securities convertible into
shares of the Corporation or has any agreement, warrant, option, right
or privilege being or capable of becoming an agreement, warrant,
option or right for the purchase, subscription or issuance of any
unissued securities of the Corporation, except pursuant to this
Agreement and, as of June 1, 1998, pursuant to options which are
exercisable or exchangable into an aggregate of not more than
3,510,000 common shares of the Corporation;
(f) upon their issuance on the Closing Date, the Common Shares will be
validly issued and outstanding as fully paid and non-assessable
securities of the Corporation;
(g) on the Closing Date, the Common Shares will have been conditionally
approved for listing and posted for trading on the Exchange, subject
to the Corporation fulfilling all requirements of the Exchange in
connection therewith;
(h) the Corporation and each of its subsidiaries has the corporate power
and capacity to own and lease its assets and to carry on its business
as now conducted by it;
(i) the Corporation and each of its subsidiaries is conducting its
business in material compliance with all applicable laws, rules and
regulations of each jurisdiction in which its business is carried on
and is duly licensed, registered or qualified in all jurisdictions in
which it owns, leases or operates its property or carries on business
to enable its business to be carried on as now conducted and its
property and assets to be owned, leased and operated and all such
licences, registrations and qualifications are valid and subsisting
and in good standing, except in respect of matters which do not and
will not result in any material adverse change to the business,
business prospects or condition (financial or otherwise) of the
Corporation and its subsidiaries, on a consolidated basis;
(j) the audited financial statements of the Corporation for its fiscal
period ended December 31, 1997 (the "Corporation's Financial
Statements") present fairly the financial position and results of the
operations of the Corporation for the periods then ended and the
Corporation's Financial Statements have been prepared in accordance
with generally accepted accounting principles applied on a consistent
basis;
(k) except as publicly disclosed, since December 31, 1997 there has not
been any adverse material change of any kind whatsoever in the
financial position or condition of the Corporation, or any damage,
loss or other change of any kind whatsoever in circumstances
materially affecting the business or assets of the Corporation, or the
right or capacity of the Corporation to carry on its business;
(l) there has not been any material change in the capital stock or
long-term debt or in the assets, liabilities or obligations (absolute,
accrued, contingent or otherwise) of the Corporation, and its
subsidiaries, on a consolidated basis, since December 31, 1997 that
has not been publicly disclosed;
(m) there has not been any material change in, and there have been no
material facts, transactions, events or occurrences which could
materially adversely affect, the business, business prospects,
condition (financial or otherwise) or results of the operations of the
Corporation, and its subsidiaries, on a consolidated basis, since
December 31, 1997 that has not been publicly disclosed;
(n) except as has been publicly disclosed, since December 31, 1997 the
Corporation and each of its subsidiaries has carried on its business
in the ordinary course;
(o) to the best of its knowledge, except as publicly disclosed, there are
no actions, suits, judgments, investigations or proceedings of any
kind whatsoever outstanding, pending or threatened by or against or
affecting the Corporation or its subsidiaries, if any, at law or in
equity or before or by any federal, provincial, state, municipal or
other governmental department, commission, board, bureau or agency,
domestic or foreign, of any kind whatsoever, which will materially
adversely affect the business, operations or financial condition of
the Corporation, and its subsidiaries, on a consolidated basis, or any
of its assets or properties, or which materially adversely affects or
may materially adversely affect the distribution of the Purchased
Securities or any action taken or to be taken by the Corporation
pursuant to or in connection with this Subscription Agreement and, to
the best of its knowledge, there is no basis therefor;
(p) no securities commission or similar regulatory authority in Canada has
issued any order preventing or suspending trading in any securities of
the Corporation;
(q) the Corporation will, prior to the Closing Time, fulfil all legal
requirements (including, without limitation, compliance with all
applicable securities laws) to be fulfilled by the Corporation to
enable the Purchased Securities to be offered for sale to the
undersigned as contemplated in this Subscription Agreement;
(r) to the best of its knowledge, the Corporation or, as applicable, each
of its subsidiaries, is not in default or breach of, and the execution
and delivery of, and the performance of and compliance with the terms
of this Subscription Agreement, does not and will not conflict with,
or result in any breach of or the acceleration of any indebtedness
under, or constitute a default under, and does not and will not create
a state of facts which, after notice or lapse of time or both, would
result in a breach of or constitute a default under, any term or
provision of the memorandum, articles, by-laws or resolutions of the
Corporation (including its subsidiaries), or any indenture, contract,
agreement (written or oral), instrument, lease or other document,
including without limitation the contracts to which the Corporation
(including its subsidiaries) is a party or by which it is bound, or
any judgment, decree, order, statute, rule or regulation applicable to
the Corporation (including its subsidiaries), which default or breach
might reasonably be expected to materially adversely affect the
business, operations, capital or condition (financial or otherwise) of
the Corporation (including its subsidiaries) or its assets or
properties;
(s) the Corporation has full corporate power and authority to enter into
this Subscription Agreement and to perform its obligations set out
herein and this Subscription Agreement has been duly authorized,
executed and delivered by the Corporation and is a legal, valid and
binding obligation of the Corporation, enforceable against the
Corporation in accordance with its terms except that:
(i) the enforcement thereof may be limited by bankruptcy, insolvency
and other laws affecting the enforcement of creditors' rights
generally;
(ii) equitable remedies including, without limitation, specific
performance and injunction may be granted only in the discretion
of a court; and
(iii)rights of indemnity, contribution and waiver of contribution may
be limited under applicable law;
(t) there is not, in the constating documents or by-laws of the
Corporation or in any agreement, mortgage, note, debenture, indenture
or other instrument or document to which the Corporation is a party,
any restriction upon or impediment to the declaration or payment of
dividends by the Corporation to the holders of its common shares. The
representations and warranties of the corporation contained in this
Subscription Agreement shall be true at the Closing Time as though
they were made at the Closing Time;
(u) set out in Schedule D hereto is a complete list of all plans and
arrangements under which options or other rights to acquire shares
have been granted by the Corporation, or under which shares of the
Corporation have been reserved for issuance, which, in each case, sets
forth the number of shares reserved for issuance under such plan or
arrangement and the number of options and/or similar rights
outstanding thereunder, in each case as of June 1, 1998;
(v) the Corporation agrees to file a Form D with respect to the Purchased
Securities with the U.S. Securities and Exchange Commission (the
"SEC") as required under Regulation D and to provide a copy thereof to
the undersigned within fifteen (15) days after the Closing Date. The
Corporation shall, on or prior to the Closing Date, take such action
as is necessary under all applicable Securities Laws (as defined
below) to sell the Purchased Securities to the undersigned in the
manner contemplated in this Agreement, and to provide evidence of any
such action so taken to the undersigned on or prior to the Closing
Date. "Securities Laws" shall mean the securities laws, rules and
regulations of Canada, of the United States, and of any state,
province or governmental or regulatory authority of Canada or of the
United States, including blue sky laws;
(w) the Corporation shall, for a period of 18 months after the Closing
Date, provided that it continues to be a reporting issuer in one or
more Canadian jurisdictions and that the undersigned continues to hold
any of the Purchased Securities, timely file all reports required to
be filed with all applicable securities regulatory authorities, and
the Corporation shall not, during such period, terminate its status as
an issuer required to file reports under any applicable Securities Law
even if such Securities Law would permit such termination;
(x) the Corporation shall, for a period of 18 months after the Closing
Date, provided that the undersigned continues to hold any of the
Purchased Securities and that the Corporation continues to be a
reporting issuer in one or more Canadian jurisdictions, send the
following reports to the undersigned: (i) within three (3) business
days after the filing with any securities regulatory authority, a copy
of each annual, quarterly or other periodic report, each proxy
statement and each current report; and (ii) within one (1) business
day after release, a copy of each press release issued by the
Corporation or any of its subsidiaries;
(y) the Corporation shall, for a period of 18 months after the Closing
Date, provided that the Corporation continues to satisfy the listing
requirements of such Exchange(s) and that the undersigned continues to
hold any of the Purchased Securities, continue the uninterrupted
listing and trading of its common shares on The Toronto Stock Exchange
and on any other securities exchange on which any of its securities
may be or become listed and traded, and comply in all respects with
the Corporation's reporting, filing and other obligations under the
By-laws or rules of the Exchange and any such other securities
exchange; and
(z) the Corporation will use the proceeds of the sale of the Purchased
Securities for working capital and/or such other purposes as
management or the Board of Directors of the Corporation shall
determine.
5. The sale of the Purchased Securities will be completed at the offices of
Fraser & Beatty, the Corporation's counsel, in Vancouver, British Columbia at
10:00 a.m. (Vancouver time), or such other time as the Corporation and the
undersigned may agree upon in writing (the "Closing Time") on June 2, 1998, or
such other date as the Corporation and the undersigned may agree upon in writing
(the "Closing Date"). The certificate for the Purchased Securities subscribed
for by the undersigned hereunder will, on the Closing Date, be issued and
registered in the name set out in the Registration Instructions below and will
promptly thereafter be delivered in accordance with the Delivery Instructions
below.
6. The obligation of the undersigned to complete the subscription contemplated
hereby will be subject to and conditional on the fulfilment on or before the
Closing Time of the following conditions, compliance with which may be waived in
whole or in part by the undersigned, at any time, in its discretion and upon
such terms as it may consider appropriate:
(a) the representations and warranties of the Corporation contained herein
will be true at and as of the Closing Time as though such
representations and warranties were made again at and as of such time;
(b) the Corporation will have performed and complied with all covenants,
agreements and conditions required hereby to be performed or complied
with by the Corporation prior to Closing Time;
(c) the Exchange will have accepted notice of the issuance of the
Purchased Securities as contemplated by the terms of this Agreement,
subject only to the filing of all required documents and the payment
of the required fees within the times stipulated by the Exchange;
(d) no order, judgment, injunction, decree, award or writ of any court,
tribunal, arbitrator, governmental agency or other person will have
been entered that prohibits or restricts the completion of the
subscription or which, in the opinion of the undersigned, acting
reasonably, could prevent or restrict any party hereto from performing
any of its obligations hereunder;
(e) the undersigned will have received a favourable written opinion of the
Corporation's counsel, dated the Closing Date, substantially in the
form attached hereto as Schedule C;
(f) the purchase by the Corporation of 58,909 common shares in the capital
of the undersigned, at an aggregate subscription price of U.S.
$2,000,000, pursuant to a subscription agreement of even date; and
(g) the execution and delivery of a Strategic Alliance Agreement between
the Corporation and the undersigned, in form and substance acceptable
to each of them.
7. The obligation of the Corporation to complete the transactions contemplated
hereby will be subject to and conditional on the fulfillment on or before the
Closing Time of the following conditions, compliance with which may be waived in
whole or in part by the Corporation, at any time, in its discretion and upon
such terms as it may consider appropriate:
(a) the representations and warranties of the undersigned contained herein
will be true at and as of the Closing Time as though such
representations and warranties were made again at and as of such time;
(b) the undersigned will have performed and complied with all covenants,
agreements and conditions required hereby to be performed or compiled
with by the undersigned prior to the Closing Time;
(c) the Exchange will have accepted notice of the issuance of the
Purchased Securities as contemplated by the terms of this Agreement,
subject only to the filing of all required documents and the payment
of the required fees within the times stipulated by the Exchange;
(d) no order, judgment, injunction, decree, award or writ of any court,
tribunal, arbitrator, governmental agency or other person will have
been entered that prohibits or restricts the completion of the
subscription or which, in the opinion of the Corporation, acting
reasonably, could prevent or restrict any party hereto from performing
any of its obligations hereunder;
(e) the purchase by the Corporation of 58,909 common shares in the capital
of the undersigned, at an aggregate subscription price of U.S.
$2,000,000, pursuant to a subscription agreement of even date; and
(f) the execution and delivery of a Strategic Alliance Agreement between
the Corporation and the undersigned, in form and substance acceptable
to each of them.
8. The undersigned agrees to deliver to the Corporation, not later than 5:00
p.m. (Vancouver time) at least two business days prior to the Closing Date:
(a) two manually signed and completed copies of the Private Placement
Questionnaire and Undertaking attached as Schedule A and such other
documents as may be requested as contemplated by paragraph 3(m)
hereof; and
(b) a certified cheque or bank draft payable to the Corporation or its
counsel, Fraser & Beatty, in trust, for the aggregate subscription
price of the Purchased Securities subscribed for under this
Subscription Agreement or payment of the same amount in such other
manner as is acceptable to the Corporation.
9. This subscription may be accepted or rejected by the Corporation.
Confirmation of acceptance or rejection of a subscription will be forwarded to
the undersigned promptly after the acceptance or rejection of the subscription.
If this subscription is rejected, the undersigned understands that, if it has
delivered a certified cheque or bank draft representing the purchase price of
the Purchased Securities subscribed for, such cheque or bank draft will be
promptly returned to it without interest.
10. The undersigned agrees to indemnify and hold harmless the Corporation, and
its directors, officers, employees, agents, advisors and shareholders, from and
against any and all loss, liability, claim, damage and expense whatsoever
including, but not limited to, any and all fees, costs and expenses whatsoever
reasonably incurred in investigating, preparing or defending against any
litigation, administrative proceeding or investigation commenced or threatened
or any claim whatsoever arising out of or based upon any representation or
warranty of the undersigned contained herein or in any document furnished by the
undersigned to the Corporation in connection herewith being untrue in any
material respect or any breach or failure by the undersigned to comply with any
covenant or agreement made by the undersigned herein or in any document
furnished by the undersigned to the Corporation in connection herewith.
11. The Corporation agrees to indemnify and hold harmless the undersigned, and
its directors, officers, employees, agents, advisors and shareholders, from and
against any and all loss, liability, claim, damage and expense whatsoever
including, but not limited to, any and all fees, costs and expenses whatsoever
reasonably incurred in investigating, preparing or defending against any
litigation, administrative proceeding or investigation commenced or threatened
or any claim whatsoever arising out of or based upon any representation or
warranty of the Corporation contained herein or in any document furnished by the
Corporation to the undersigned in connection herewith being untrue in any
material respect or any breach or failure by the Corporation to comply with any
covenant or agreement made by the Corporation herein or in any document
furnished by the Corporation to the undersigned in connection herewith.
12. Before Closing Time, no party hereto will make any public statement or issue
any press release concerning the transactions contemplated herein, except as may
be necessary, in the opinion of counsel to the party making such disclosure, to
comply with the requirements of any applicable law, order, rule, regulation or
published policy of any regulatory authority having jurisdiction. Upon any
public statement or release being so required, the party making such disclosure
will consult with the other party prior to making any statement or issuing a
press release and the parties will use all reasonable efforts, acting
expeditiously and in good faith, to agree upon a text for such statement or
release which is satisfactory to each of them. If the parties fail to agree upon
such text, the party making the disclosure will make only such public statement
or release as its counsel advises in writing is legally required to be made.
13. The covenants, representations and warranties contained herein shall survive
the closing of the transactions contemplated hereby, notwithstanding any
investigation at any time made, or any evidence as to the truth or accuracy
thereof at any time accepted, by or on behalf of the other party.
14. The Corporation shall be entitled to rely on delivery of a facsimile copy of
this Agreement, and acceptance by the Corporation of such facsimile copy shall
be legally effective to create a valid and binding agreement between the
undersigned and the Corporation in accordance with the terms hereof.
15. This Subscription Agreement shall be governed by and construed in accordance
with the laws of the Province of British Columbia and the laws of Canada
applicable therein. This Subscription Agreement is not transferable or
assignable by either of the parties hereto. Time shall be of the essence hereof.
DATED at the City of Santa Barbara, in the State of California this
______ day of June, 1998.
MIRAVANT MEDICAL TECHNOLOGIES ___________________________________
(Name of Subscriber - please print) Address:
By:/S/
------------------------------
Authorized Signature
_____________________________________ ___________________________________
(Official Capacity or Title,- please print) (Telephone Number)
<PAGE>
Registration Instructions: Delivery Instructions:
Register the Purchased Securities Deliver the Purchased Securities
as set forth below: as set forth below:
Name Name
Account reference, if applicable Account reference, if applicable
Address Contact Name
Telephone Number
ACCEPTANCE
Xillix Technologies Corp. hereby accepts the above subscription and
agrees to be bound by all of the covenants and agreements on its part set
forth above as of this _________ day of June, 1998. XILLIX TECHNOLOGIES
CORP.
Per:/S/
------------------------------
Per:/S/
------------------------------
<PAGE>
SCHEDULE A
TSE QUESTIONNAIRE AND UNDERTAKING
NOTE: The attached must be completed in duplicate.
THE TORONTO STOCK EXCHANGE
PRIVATE PLACEMENT QUESTIONNAIRE AND UNDERTAKING
QUESTIONNAIRE
1. DESCRIPTION OF TRANSACTION
(a) Name of Issuer of the Securities: Xillix Technologies Corp.
(b) Number and class of Securities to be Purchased: 2,691,904 Common
shares.
(c) Purchase Price: $2.67 per Share.
2. DETAILS OF PURCHASER
(a) Name of Purchaser: Miravant Medical Technologies
(b) Address: 7408 Hollister Avenue, Santa Barbara, CA, 93117
(c) Names and addresses of persons having a greater than 10% beneficial
interest in the purchaser:
3. RELATIONSHIP TO ISSUER
(a) Is the purchaser, or any person named in response to 2(c) above, an
insider of the issuer for the purposes of the Ontario Securities Act
(before giving effect to this private placement)? If so, state the
capacity in which the purchaser (or person named in response to 2(c)
qualifies an insider:
(b) If the answer to (a) is "no", are the purchaser and the issuer
controlled by the same person or company? If so, give details:
4. DEALINGS OF PURCHASER IN SECURITIES OF THE ISSUER
Give details of all trading by the purchaser, as principal, in the
securities of the issuer (other than debt securities which are not
convertible into equity securities), directly or indirectly, within the 60
days preceding the date hereof:
<PAGE>
UNDERTAKING
To: The Toronto Stock Exchange
The undersigned has subscribed for and agreed to purchase, as principal,
the securities described in item 1 of this Private Placement Questionnaire and
Undertaking.
The undersigned undertakes not to sell or otherwise dispose of any of the
said securities so purchased or any securities derived therefrom for a period of
six months from the date of the closing of the transaction herein or for such
period as is prescribed by applicable securities legislation, whichever is the
longer, without the prior consent of The Toronto Stock Exchange and any other
regulatory body having jurisdiction.
Dated at the City of Santa Barbara, in the State of California, this
______ day of June, 1998.
MIRAVANT MEDICAL TECHNOLOGIES
(Name of Purchaser - please print)
By:/S/
------------------------------
Authorized Signature
___________________________________
(Official Capacity or Title, if
applicable - please print)
___________________________________
(Please print name of individual
whose signature appears above if
different than the name of the
purchaser printed above)
<PAGE>
SCHEDULE B
REPRESENTATION LETTERS OF THE SELLER AND BROKER
See attached
REPRESENTATION LETTER OF THE SELLER
Date: _________________________
CIBC MELLON TRUST COMPANY,
as registrar and transfer agent
for the Common Shares of Xillix Technologies Inc.
P.O. Box 1900
Mall Level
1177 West Hastings St.
Vancouver, BC V6C 3K9
Dear Sir/Madam:
Sale of Common Shares
The undersigned (the "Seller") proposes to sell _______________ shares of
common stock, represented by certificate number __________ (the "Shares"), of
Xillix Technologies Inc. (the "Company") through _____________________________
[Name of Broker] pursuant to Rule 904 of Regulation S under the United States
Securities Act of 1933, as amended. In order to induce you to render your advice
to the transfer agent of the Company, enabling such transfer agent to remove the
restrictive legend and any stop transfer order from the Shares, the undersigned
hereby represents and warrants to you as follows:
(1) no offer to sell the Shares will be made to a person in the United
States;
(2) the undersigned either: (a) is not an "affiliate" (as defined below)
of the Company, or (b) is an affiliate of the Company solely by virtue
of holding a position as a director or officer of the Company;
(3) the sale of the Shares will be executed in, on or through the
facilities of The Toronto Stock Exchange in accordance with the
procedures of such exchange, and neither the undersigned nor any
person acting on the undersigned's behalf knows that the sale has been
prearranged with a buyer in the United States;
(4) no "directed selling efforts" will be made in the United States by the
undersigned, any affiliate of the undersigned, or any person acting on
behalf of the undersigned;
(5) the undersigned is not a person who participates, pursuant to any
contractual arrangement, in the distribution of these securities;
(6) that in the event the undersigned is a director or officer of the
Company, the undersigned represents that, in connection with the
proposed sale of Shares, no selling concession, fee or other
remuneration will be paid in connection with such offer or sale other
than the usual and customary broker's commission that will be received
by a person executing such transaction as agent; and
(7) the transactions described herein are not a part of or incident to any
hedging transaction.
For purposes of these representations, "affiliate" means a person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Company. "Directed selling
efforts" means any activity undertaken for the purposes of, or that could
reasonably be expected to have the effect of, conditioning the market in the
United States for the Shares. This would include, but not be limited to, the
solicitation of offers to purchase the Shares from persons in the United States.
"United States" means the United States of America, its territories or
possessions, any State of the United States, and the District of Columbia.
The undersigned understands that the Company is relying upon the
representations contained in this letter and agrees that legal counsel to the
Company shall be entitled to rely upon the representations, warranties and
covenants contained in this letter to the same extent as if this letter had been
addressed to them.
Yours very truly,
---------------------------
<PAGE>
REPRESENTATION LETTER OF THE BROKER
[Letterhead Of Broker]
Date: ____________________
CIBC MELLON TRUST COMPANY,
as registrar and transfer agent
for the Common Shares of Xillix Technologies Inc.
P.O. Box 1900
Mall Level
1177 West Hastings St.
Vancouver, BC V6C 3K9
Dear Sir/Madam:
Sale of Shares Pursuant to SEC Rule 904
We have read the representation letter of our customer,
_________________________ (the "Seller") dated _______________________, pursuant
to which the Seller has requested that we sell, for the Seller's account,
_____________ shares of common stock represented by certificate number _______
(the "Shares") of Xillix Technologies Inc. (the "Company"). We will execute
sales of the Shares pursuant to Rule 904 of Regulation S under the United States
Securities Act of 1933, as amended, on behalf of the Seller. In that connection,
we hereby represent to you as follows:
(1) no offer to sell the Shares will be made to a person in the United
States;
(2) the sale of the Shares will be executed in, on or through the
facilities of The Toronto Stock Exchange, and, to the best of our
knowledge, the sale will not be pre-arranged with a buyer in the
United States;
(3) no "directed selling efforts" will be made in the United States by the
undersigned, any affiliate of the undersigned, or any person acting on
behalf of the undersigned;
(4) we will do no more than execute the order or orders to sell the Shares
as agent for the Seller and will receive no more than the usual and
customary broker's commission that would be received by a person
executing such transaction as agent; and
(5) to the best of our knowledge the transactions described herein are not
a part of or incident to any hedging transaction.
For purposes of these representations, "affiliate" means a person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the undersigned. "Directed
selling efforts" means any activity undertaken for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the market in the
United States for the Shares. This would include, but not be limited to, the
solicitation of offers to purchase the Shares from persons in the United States.
"United States" means the United States of America, its territories or
possessions, any State of the United States, and the District of Columbia.
Legal counsel to the Company shall be entitled to rely upon the
representations, warranties and covenants contained in this letter to the same
extent as if this letter had been addressed to them.
If you have any questions regarding this transaction, please telephone the
undersigned at (_____)______-__________.
Sincerely,
___________________________________
[Name of Broker]
By:________________________________
Title: ____________________________
<PAGE>
SCHEDULE C
FORM OF LEGAL OPINION
June 2, 1998
Xillix Technologies Corp.
300-13775 Commerce Parkway
Richmond, British Columbia
V6V 2V4
- -and-
Miravant Medical Technologies
7408 Hollister Avenue
Santa Barbara, CA
93117
Dear Sirs/Mesdames:
Xillix Technologies Corp.
- Issuance of Common Shares to Miravant Medical Technologies
We have acted as counsel to Xillix Technologies Corp. (the "Company") in
connection with the issuance by the Company of 2,691,904 common shares (the
"Purchased Securities") to Miravant Medical Technologies (the "Purchaser")
pursuant to a subscription agreement between the Company and the Purchaser dated
as of the 2nd day of June, 1998 (the "Xillix Subscription Agreement").
We have reviewed:
(a) an executed copy of the Xillix Subscription Agreement;
(b) an executed copy of the Strategic Alliance Agreement between the
Company and the Purchaser dated as of June 2, 1998 relating to the
development and commercialization of the Purchaser's photodynamic
therapy technology with the Company's fluorescence imaging technology
(the "Strategic Alliance Agreement");
(c) an executed copy of the subscription agreement between the Purchaser
and the Company relating to the issue and sale of 58,909 common shares
of the Purchaser (the "Miravant Subscription Agreement");
(d) a certificate of the President and Chief Executive Officer and the
Corporate Secretary of the Company dated June 2, 1998 relating to
certain factual matters;
(e) a certificate of the Corporate Secretary of the Company dated June 2,
1998 with respect to the Memorandum and Articles of the Company and,
among other things, the resolutions of the directors of the Company
approving the issue and sale of the Purchased Securities and the
entering into of the Xillix Subscription Agreement, the Miravant
Subscription Agreement and the Strategic Alliance Agreement
(collectively, the "Agreements");
(f) a certificate of CIBC Mellon Trust Company, the registrar and transfer
agent for the common shares of the Company (the "Transfer Agent"),
dated June 2, 1998 confirming the number of outstanding common shares
of the Company; and
(g) correspondence from The Toronto Stock Exchange (the "Exchange")
relating to the listing of the Purchased Securities.
We have examined such statutes and regulations, corporate records,
certificates and other documents and have considered such questions of law and
have made such other examinations, searches and investigations as we have
considered relevant and necessary as a basis for the opinions hereinafter set
forth. In such examination, we have assumed the genuineness of all signatures
and the authenticity of all documents submitted to us as originals and the
conformity to authentic originals of all documents submitted to us as certified,
notarial or true copies or reproductions. We have also assumed, for the purposes
of the opinions expressed herein, that the Xillix Subscription Agreement has
been duly authorized, executed and delivered by the Purchaser and is binding
upon and enforceable against the Purchaser.
As to various questions of fact material to the opinions herein,
information with respect to which is in the possession of the Company, we have
relied upon the certificates referred to in subparagraphs (d) and (e) above
(collectively, the "Company Certificates"), copies of which have been delivered
to you today. We have also relied on certain other certificates with respect to
certain factual matters.
For the purposes of the opinions expressed below, we have assumed:
(a) the accuracy of the representations, warranties and acknowledgements
of the Purchaser set out in each of the Agreements; and
(b) that there has been no advertisement of the Purchased Securities, or
of the offering or sale thereof, whether in printed media of general
and regular paid circulation, on radio or television or otherwise, and
that no offering memorandum has been delivered to the Purchaser.
In expressing the opinion set forth in paragraph 1, we have relied solely
upon a Certificate of Good Standing for the Company issued by the Registrar of
Companies, dated June 1, 1998, a copy of which has been delivered to you today.
In expressing the opinion set forth in paragraph 7, we have not reviewed
the register of members of the Company but have relied solely upon the Company
Certificates and the confirmation of the Transfer Agent referred to in
subparagraph (d) above.
In expressing the opinion set forth in paragraph 10, we have relied solely
upon a certificate of the British Columbia Securities Commission ("BCSC"), dated
June 1, 1998, a copy of which has been delivered to you today.
The opinions expressed below are subject to the qualification that no
effective order, ruling or decision has been issued or granted by a court or
regulatory or administrative body that has the effect of precluding or
restricting the offering, issue or sale by the Company of the Purchased
Securities or restricting any trades of any securities of the Company and at the
relevant time there is no such order affecting any person engaged in such a
trade.
Whenever our opinion with respect to the existence or absence of facts or
circumstances is qualified by the phrases "of which we are aware" or "to our
knowledge", it is intended to indicate that during the course of our
representation of the Company no information has come to our attention which
would give us actual knowledge of the existence of such facts or circumstances.
However, other than a review of the Company Certificates, the Agreements and
certain corporate proceedings of the Company which were made available to us and
an examination of our files and inquiries of the lawyers of this firm
responsible for files relating to the Company, we have not undertaken any
special or independent investigation to determine the existence or absence of
such facts or circumstances. No inference as to our knowledge as to such facts
and circumstances should be drawn merely from our representation of the Company.
The opinions expressed herein are restricted to the laws of the Province of
British Columbia and the federal laws of Canada applicable therein. In
particular, we express no opinion with respect to the laws of the United States
of America or any state thereof.
Based and relying upon and subject to the foregoing, we are of the opinion
that:
1. The Company has been duly amalgamated and validly exists under the
laws of the Province of British Columbia and is in good standing with
respect to the filing of its annual returns with the Office of the
Registrar of Companies of British Columbia.
2. The Company has all requisite corporate capacity, power and authority
to carry on its business as now conducted by it, to own its assets and
to enter into, deliver and to perform its obligations under the
Agreements.
3. Each of the Agreements has been duly authorized by all necessary
corporate action on the part of the Company and has been duly executed
and delivered by and on behalf of the Company.
4. The Xillix Subscription Agreement is a valid and legally binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except as rights to indemnity and waiver of
contribution thereunder may be limited under applicable law, and
subject to bankruptcy, insolvency, liquidation, reorganization,
reconstruction and other similar laws of general application affecting
the enforcement of creditors' rights and to the availability of
equitable remedies being in the discretion of a court of competent
jurisdiction.
5. None of the execution and delivery of any of the Agreements, nor the
fulfillment by the Company of the terms thereof, conflicts or will
conflict with or results or will result in a breach of, or creates a
state of facts which, after notice or lapse of time or both, will
result in a breach of or conflict with any of the terms, conditions or
provisions of the Memorandum or Articles of the Company or, to our
knowledge, of any resolutions of its shareholders or directors or any
material license or permit issued to the Company or any agreement or
instrument to which the Company is a party or by which it is bound as
of the date hereof.
6. The Purchased Securities have been duly and validly allotted and
issued as fully paid and non-assessable common shares in the capital
of the Company, and have been duly and validly registered in the name
of the Purchaser.
7. The authorized share capital of the Company consists of 750,000,000
common shares without par value, of which 28,491,525 common shares
were issued and outstanding as of the close of business on June 1,
1998 (ie, prior to giving effect to the issue of the Purchased
Securities).
8. The Exchange has accepted notice of the issuance of the Purchased
Securities and has conditionally approved the listing thereof on the
Exchange, subject to the satisfaction of the conditions to such
acceptance and approval stipulated by the Exchange, the filing of all
required documents and the payment of the required fees, all within
the times stipulated by the Exchange, and all as set forth in the
correspondence from the Exchange referred to in subparagraph (g) on
page 2.
9. To our knowledge, there are no actions, suits, proceedings or
investigations, whether on behalf of or against the Company and its
subsidiaries, taken as a whole, pending or threatened against or
affecting the Company and its subsidiaries, taken as a whole, at law
or in equity, before or by any federal, provincial, municipal or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which would reasonably be
expected to materially adversely affect the property, assets or
business of the Company and its subsidiaries, taken as a whole, or
which questions the validity of the issuance and sale, as fully paid
and non-assessable, of all or any of the outstanding common shares of
the Company, or any action taken or to be taken by the Company
pursuant to or in conjunction with any of the Agreements.
10. The Company is a reporting issuer and is not in default of filing
financial statements or paying fees and charges relating to those
filings required by the Securities Act (British Columbia) (the "B.C.
Act") and the regulations thereunder.
11. The offering, sale and delivery of the Purchased Securities by the
Company to the Purchaser in accordance with the terms of the Xillix
Subscription Agreement are exempt, either by statute, regulation, rule
or order, from the prospectus requirements of the B.C. Act and, except
as have been obtained or completed, no documents are required to be
filed, proceedings taken, and no approval or consent of, or
registration or filing with, any regulatory authority in British
Columbia is required, in order to permit the offering, issuance, sale
and delivery of the Purchased Securities by the Company to the
Purchaser, except for the filing within 10 days of the date hereof of
reports in prescribed form prepared and executed in accordance with
applicable securities laws, together with applicable fees.
12. The first trade of any of the Purchased Securities by the Purchaser in
British Columbia will be deemed to be a distribution in such Province
and accordingly will be subject to the prospectus and registration
requirements contained in the B.C. Act, unless otherwise exempted from
those requirements.
This opinion is limited to the specific issues addressed herein and is
limited in all respects to laws and interpretations thereof existing on the date
hereof. We do not undertake to update this opinion for changes in such laws or
interpretations. This opinion may be relied upon by you solely in connection
with the transaction contemplated herein and is not to be relied upon by any
other person or for any other purpose unrelated to this transaction without our
prior written consent.
Yours very truly,
<PAGE>
SCHEDULE D
PLANS AND ARRANGEMENTS
Please see attached.
Exhibit 11.1
MIRAVANT MEDICAL TECHNOLOGIES
Statement Regarding Computation of Net Loss Per Share
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1998 1997 1998 1997
----------------- ----------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Basic
Net loss......................................... $ (9,064,000) $ (5,736,000) $ (16,981,000) $ (11,173,000)
================= ================= ================== ==================
Weighted average common shares outstanding....... 14,104,004 12,365,451 14,102,940 12,368,328
================= ================= ================== ==================
Net loss per share............................... $ (0.64) $ (0.46) $ (1.20) $ (0.90)
================= ================= ================== ==================
Diluted
Net loss......................................... $ (9,064,000) $ (5,736,000) $ (16,981,000) $ (11,173,000)
================= ================= ================== ==================
Weighted average common shares outstanding....... 14,104,004 12,365,451 14,102,940 12,368,328
================= ================= ================== ==================
Net loss per share............................... $ (0.64) $ (0.46) $ (1.20) $ (0.90)
================= ================= ================== ==================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS FOUND IN
THE COMPANY'S FORM 10-Q FOR THE PERIOD ENDING JUNE 30, 1998, AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-START> Jan-1-1998
<PERIOD-END> Jun-30-1998
<CASH> 26,909
<SECURITIES> 26,596
<RECEIVABLES> 473
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 54,528
<PP&E> 10,250
<DEPRECIATION> (4,129)
<TOTAL-ASSETS> 66,112
<CURRENT-LIABILITIES> 4,612
<BONDS> 0
0
0
<COMMON> 164,129
<OTHER-SE> (102,629)
<TOTAL-LIABILITY-AND-EQUITY> 66,112
<SALES> 0
<TOTAL-REVENUES> 1,966
<CGS> 0
<TOTAL-COSTS> 21,141
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1
<INCOME-PRETAX> (16,981)
<INCOME-TAX> 0
<INCOME-CONTINUING> (16,981)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (16,981)
<EPS-PRIMARY> (1.20)
<EPS-DILUTED> (1.20)
</TABLE>
