Exhibit 10.1
AMENDMENT NO. 4
TO
LICENSE AND DEVELOPMENT AGREEMENT
This Amendment No. 4 to License and Development Agreement (this
"Amendment") is made as of the 21st day of May, 1999 (the "Effective Date") by
and between Aronex Pharmaceuticals, Inc., a Delaware corporation ("Aronex"), and
Genzyme Corporation, a Massachusetts corporation ("Genzyme"). Capitalized terms
used without definition in this Amendment shall have the meanings given to such
terms in the Development Agreement (as defined below).
RECITALS
WHEREAS, Aronex (f/k/a Argus Pharmaceuticals, Inc.) and Genzyme entered
into a License and Development Agreement dated September 10, 1993 (as
subsequently amended by amendments dated September 8, 1995, September 10, 1996
and March 27, 1997, the "Development Agreement") relating to the development,
license, manufacture, marketing and sale of pharmaceutical compositions
incorporating "AR-623" (also known as "Atragen(TM)");
WHEREAS, Genzyme has elected to terminate its Option and relinquish its
rights thereunder, effective as of March 24, 1999 (the "Election");
WHEREAS, as a result of the Election by Genzyme, Aronex is obligated
pursuant to Section 2.4 of the Development Agreement to pay Genzyme the sum of
$2,000,000 (the "Repayment Amount") on or before April 24, 1999, which has been
extended to the Effective Date, plus an additional amount of $500,000 (the
"Minimum Royalty Amount") of minimum royalty payments by April 24, 2000; and
WHEREAS, Aronex and Genzyme desire to amend the Development Agreement
(i) to restructure the Repayment Amount and the Minimum Royalty Amount owing by
Aronex as a result of such Election under Section 2.4 thereof into a convertible
note to be issued to Genzyme by Aronex, (ii) to issue Genzyme a warrant to
purchase 50,000 shares of Aronex Common Stock, and (iii) to provide Genzyme with
registration rights with respect to shares it may receive upon conversion of
such convertible note as well as shares issuable upon exercise of the warrant;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, Aronex and Genzyme agree as follows:
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1. RESTRUCTURING OF REPAYMENT AMOUNT AND MINIMUM ROYALTY AMOUNT.
The parties agree that the Repayment Amount and the Minimum Royalty Amount
required to be paid by Aronex to Genzyme as a result of the Election shall be
due and payable pursuant to the terms of a three-year Convertible Note from
Aronex in the form of Exhibit 2.4(a) hereto. Such Convertible Note shall provide
for interest of 10% per annum, to be payable in semi-annual payments and the
principal amount thereof to be due on the expiration of three years. In
addition, part or all of the principal of the Convertible Note may be converted,
at Genzyme's election, into shares of Common Stock of Aronex at a purchase price
of $4.35 per share, at any time and from time to time, prior to the repayment
thereof. As a result, Section 2.4 of the Development Agreement is hereby amended
by adding the following paragraph at the end thereof:
"Notwithstanding anything contained in this Section 2.4 to the
contrary, the obligation of Aronex to pay (i) $2,000,000 within thirty
days of the Option Expiration Date and (ii) $500,000 minimum royalty
within the first twelve months following the due date of the $2,000,000
amount, is hereby canceled and terminated in exchange for the issuance
by Aronex and delivery to Genzyme of (i) a Convertible Note (the
"Convertible Note") in the principal amount of $2,500,000 in the form
attached hereto as Exhibit 2.4(a) and (ii) a Common Stock Purchase
Warrant (the "Warrant") to purchase 50,000 shares of the Common Stock
of Aronex, par value $.001 per share (the "Common Stock"), at a
purchase price of $4.00 per share in the form attached hereto as
Exhibit 2.4(b)."
2. REGISTRATION RIGHTS.
The following section shall be added to the Development Agreement as
Section 11 thereof:
"11. Registration Rights.
(a) Shelf Registration. Within sixty days from the receipt of notice
from Genzyme of its interest to either exercise the Warrant or
convert a portion of the principal amount of the Convertible
Note, Aronex shall use its reasonable best efforts to prepare for
filing with the Securities and Exchange Commission (the
"Commission"), and cause to be declared effective, a "shelf"
registration statement (the "Shelf Registration") pursuant to
Rule 415 under the Securities Act of 1933, as amended (the
"Securities Act"), providing for the sale by the Stockholder (as
hereafter defined) of the Registrable Shares (as hereinafter
defined). Aronex agrees to use its reasonable best efforts to
keep such Shelf Registration continuously effective for a period
ending on the earliest of (a) the tenth anniversary of the
effective date of such Shelf Registration, (b) the date on which
all Registrable Shares covered thereby have been sold thereunder,
or (c) the date upon which all Registrable Shares are freely
transferable without restriction under the Securities Act. For
the purpose of this Section 11, "reasonable best efforts"
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shall mean the best efforts of Aronex consistent with sound and
reasonable business practices and judgment. "Registrable Shares"
means any shares of Common Stock issuable upon conversion of the
Convertible Note, (ii) any shares of Common Stock issuable upon
exercise of the Warrant, and (iii) any other shares of Common
Stock issued in respect of the shares referred to in (i) or (ii)
(because of stock splits, stock dividends, subdivisions,
combinations, reclassifications, recapitalizations, or similar
events), provided, however, that any such shares shall cease to
be Registrable Shares when such shares become eligible for resale
under Rule 144(k) of the Securities Act by persons who are not
affiliates of Aronex or upon (a) any transfer that results in the
purchaser of such shares receiving shares that are not
"restricted securities" within the meaning of Rule 144 or (b) any
transfer to a person or entity that, by virtue of Section 11(g)
hereof is not entitled to the rights set forth in this Section
11. "Stockholder" means Genzyme and any persons or entities to
whom the rights granted under this Section 11 are transferred in
accordance with Section 11(g).
(b) Registration Procedures. In connection with Aronex's obligations with
respect to the Shelf Registration, Aronex shall use its reasonable
best efforts to effect the registration in furtherance of the sale of
the Registrable Shares in accordance with the intended method or
methods of distribution thereof described in the Shelf Registration.
In connection therewith, Aronex shall, as promptly as may be
practicable:
(i) prepare and file with the Commission a registration
statement with respect to the Registrable Shares on any form for
which Aronex then qualifies or which counsel for Aronex shall
deem appropriate and which form shall be available for the
disposition of the Registrable Shares in accordance with the
intended method or methods of disposition thereof;
(ii) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such
registration statement effective for the applicable period
specified in Section 11(a) above or as may be reasonably
requested by Stockholder in order to incorporate information
concerning Stockholder or its intended method of distribution,
and otherwise to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
registration statement.
(iii) furnish to Stockholder, prior to the filing thereof
with the Commission, a copy of such registration statement and
each amendment thereof and each supplement, if any, to the
prospectus included therein and Aronex shall use its
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reasonable best efforts to reflect in each such document, when
so filed with the Commission, such comments as Stockholder may
reasonably propose;
(iv) furnish to Stockholder a copy of such
registration statement, each amendment and supplement thereto
(in each case including all exhibits thereto but excluding all
documents incorporated by reference therein unless
specifically so requested by Stockholder) and such reasonable
number of copies of the prospectus included in such
registration statement (including each preliminary prospectus)
as Stockholder may reasonably request;
(v) use reasonable best efforts to register or
qualify the Registrable Shares under such other securities
laws or blue sky laws of such jurisdictions as Stockholder
shall reasonably request, and take any and all such actions as
may be reasonably necessary or advisable to enable Stockholder
to consummate the disposition in such jurisdictions of such
Registrable Shares;
(vi) notify Stockholder, at any time when a
prospectus relating thereto is required to be delivered under
the Securities Act within the period that Aronex is required
to keep the registration statement effective, of the happening
of any event as a result of which the prospectus included in
such registration statement (as then in effect) contains an
untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading and promptly
prepare, file with the Commission and furnish Stockholder a
reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that as thereafter
declared to the purchasers of such shares, such prospectus
shall not include an entire statement of a material fact or
omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading.
(vii) advise Stockholder, promptly after receiving
notice thereof, of any stop order issued or threatened by the
Commission and use its reasonable best efforts to take all
actions required to prevent the entry of such stop order, or
to remove it if entered; and
(viii) use its reasonable best efforts to cause all
Registrable Shares included in such registration statement to
be listed, by the date of the first sale of Registrable Shares
pursuant to such registration statement, on each securities
exchange or market on which the Common Stock of Aronex is then
listed or proposed to be listed.
(ix) shall (a) make reasonably available for
inspection by Stockholder, and any attorney, accountant or
other agent retained by Stockholder all relevant financial and
other records, pertinent corporate documents and properties of
Aronex and (b) cause Aronex's officers, directors, employees,
accountants and auditors to supply all
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relevant information reasonably requested by Stockholder or
any such attorney, accountant or agent in connection with such
registration statement, in each case as may be reasonably
necessary to enable such persons to conduct a reasonable
investigation within the meaning of Section 11 of the
Securities Act.
(x) shall use its reasonable best efforts to take all
other steps necessary effect the registration of the
Registrable Shares contemplated hereby.
(c) Expenses. All expenses incident to Aronex's performance of or
compliance with the provisions of this Section 11 will be
borne by Aronex. Notwithstanding the foregoing, Stockholder
shall pay any and all underwriting fees, discounts or
commissions attributable to the sale of Registrable Shares.
(d) Indemnification.
(i) Upon the registration of Registrable Shares pursuant to
Section 11 hereof, Aronex shall, and it hereby agrees to,
indemnify and hold harmless, to the extent permitted by law,
Stockholder, its officers and directors, each underwriter of
such Registrable Shares, if any, and each person who
controls such person (within the meaning of the Securities
Act) against all losses, claims, damages, liabilities and
expenses (including reasonable attorneys' fees and expenses)
to which Stockholder, its officers, directors, each
underwriter, or such controlling persons may become subject,
insofar as such losses, claims, damages, liabilities and
expenses (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement
of material fact contained in any such registration
statement, any prospectus or preliminary prospectus
contained therein or any amendment or supplement thereto, or
any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse
Stockholder, each such underwriter and each such controlling
person for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any
such loss, claim, damage, liability or action; except (A)
insofar as the same arise out of or are based upon an untrue
statement or omission or alleged omission so made based upon
information furnished by Stockholder, underwriter or
controlling person in writing specifically for use in such
registration statement or prospectus or (B) insofar as the
same are caused by Stockholder's or such underwriter's
failure to deliver a copy of such registration statement or
prospectus or any amendments or supplements thereto after
Aronex has furnished Stockholder or such underwriter with a
sufficient number of copies of the same.
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(ii) In connection with any registration statement under which
Registrable Shares are registered under the Securities Act
and pursuant to which Stockholder offers and sells
Registrable Shares, Stockholder shall, and it hereby agrees
to, indemnify and hold harmless, to the extent permitted by
law, each of Aronex, its officers and directors, and each
person who controls Aronex (within the meaning of the
Securities Act) and, if the offering is an underwritten
offering, the underwriters, against all losses, claims,
damages, liabilities and expenses (including reasonable
attorneys' fees and expenses) to which Aronex, its officers
and directors, underwriters, or controlling persons may
become subject, insofar as such losses, claims, damages,
liabilities and expenses (or actions in respect thereof)
arise out of or are based upon any untrue statement or
alleged untrue statement of material fact contained in any
such registration statement, any prospectus or preliminary
prospectus contained therein or any amendment or supplement
thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading and
will reimburse Aronex and each such officer, director,
underwriter and controlling person for any legal or other
expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage,
liability or action, insofar as (A) the same arise out of or
are based upon any untrue statement or omission or alleged
omission so made based upon information furnished by
Stockholder, or an underwriter or controlling person of
Stockholder, in writing specifically for use in such
registration statement or prospectus or (B) the same are
caused by Stockholder's or such underwriter's failure to
deliver a copy of such registration statement or prospectus
or any amendments or supplements thereto after Aronex has
furnished Stockholder or such underwriter with a sufficient
number of copies of the same and provided, further, that the
liability of Stockholder under this Section 11 shall be
limited to the proportion of any such loss, claim, damage,
liability or expense which is equal to the proportion that
the public offering price of Registrable Shares sold by
Stockholder under such registration statement bears to the
total public offering price of all securities sold
thereunder, but not to exceed the amount of the proceeds
received by Stockholder from the sale of the Registrable
Shares covered by such registration statement.
(iii)Any person entitled to indemnification hereunder will (A)
give prompt notice to the indemnifying party of any claim
with respect to which it seeks indemnification (but the
failure to give such notice will not affect the right to
indemnification hereunder, unless the indemnifying party is
materially prejudiced by such failure) and (B) unless in
such indemnified party's reasonable judgment a conflict of
interest may exist between such indemnified and indemnifying
parties with respect to such claim, permit such indemnifying
party to assume the defense of such claim with counsel
selected
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by the indemnifying party and reasonably satisfactory to the
indemnified party. If such defense is not assumed by the
indemnifying party or if the indemnifying party is not
permitted to assume such defense then (x) the indemnified
party shall select counsel, which counsel must be reasonably
satisfactory to the indemnifying party and (y) the
indemnifying party will not be subject to any liability for
any settlement made without its consent (which consent will
not be unreasonably withheld). No indemnifying party will
consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect
of such claim or litigation. An indemnifying party who is
not entitled to, or elects not to, assume the defense of a
claim will not be obligated to pay the fees and expenses of
more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the
reasonably judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any
other of such indemnified parties with respect to such
claim, in which case the indemnifying party shall be
obligated to pay the fees and expenses of one additional
counsel, who must be reasonably satisfactory to the
indemnifying party.
(iv) Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 11(d)(i)
or 11(d)(ii) are unavailable or are insufficient to hold
harmless an indemnified party in respect of any losses,
claims, damages, liabilities or expenses (or actions in
respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims,
damages, liabilities or expenses (or actions in respect
thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified
party as well as any other relevant equitable
considerations. The relative fault of such indemnifying
party and indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission
to state a material fact relates to information supplied by
such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or
omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section
11(d)(iv) were determined by pro rata allocation (even if
Stockholder or any underwriters or all of them were treated
as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable
considerations referred to in this Section 11(d)(iv). No
person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act)
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shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
(v) The indemnification and contribution obligations and each
other provision set forth in this Section 11(d) shall remain
in full force and effect regardless of any investigation
made by or on behalf of Aronex, Stockholder, any officer or
employee of Aronex or Stockholder, any underwriter, any
officer or employee of such underwriter, or any controlling
person of any of the foregoing and shall survive the
transfer and registration of Registrable Shares by
Stockholder.
(e) Rule 144 Reporting. With a view to making available to
Stockholder the benefits of Rule 144 promulgated by the
Commission under the Securities Act, Aronex agrees to use its
reasonable best efforts to:
(i) make and keep adequate current public information with
respect to Aronex available, as those terms are used in Rule
144 under the Securities Act;
(ii) file with the Commission in a timely manner all reports and
other documents required of Aronex under the Securities Act
and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); and
(iii)furnish to Stockholder promptly upon request a written
statement by Aronex as to its compliance with the reporting
requirements of Rule 144 and the Exchange Act, a copy of the
most recent annual or quarterly report of Aronex, and such
other reports and documents of Aronex as Stockholder may
reasonably request in order to permit Stockholder to avail
itself of any rule or regulation of the Commission allowing
Stockholder to sell its Registrable Shares without
registration.
(f) Amendments and Waivers. Any provision of this Section 11 may be
amended or waived if, but only if, in the case of an amendment,
such amendment is in writing and is signed by Aronex and
Stockholder. No failure or delay by Aronex or Stockholder in
exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.
(g) Transfers of Certain Rights.
(i) The rights granted to Stockholder under this Section 11
may be transferred or succeeded to only by (i) an affiliate of Stockholder, (ii)
a person or entity that acquires substantially all of the assets of Stockholder,
or (iii) any other person or entity that acquires at least 25% of the
Registrable Shares; provided, however, that Aronex is given written notice prior
to or
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promptly following such transfer stating the name and address of the transferee
and identifying the securities with respect to which such rights are being
assigned. Such notice shall include or be accompanied by a written undertaking
by the transferee to comply with the obligations imposed on Stockholders under
this Section 11.
(ii) A transferee to whom rights are transferred pursuant to
this Section 11(g) may not again transfer such rights to any other person or
entity, other than as provided in Section 11(g)(i) above."
3. NO OTHER AMENDMENTS. Except as specifically amended hereby, the
Development Agreement shall continue in full force and effect.
IN WITNESS WHEREOF the parties hereto have executed this Amendment in
one or more copies effective as of the Effective Date.
ARONEX PHARMACEUTICALS, INC.
By: /s/ Geoffrey F. Cox
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Name: Geoffrey F. Cox
---------------------------------
Title: Chairman of the Board & Chief
Executive Officer
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GENZYME CORPORATION
By: /s/ Richard Douglas
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Name: Richard Douglas
---------------------------------
Title: Senior Vice President,
Corporate Development
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