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Exhibit No. 10.68
AGREEMENT AND MUTUAL RELEASE AND DISCHARGE dated as of the day of
______________, 2001.
BY AND BETWEEN: METHYLGENE INC.
(hereinafter referred to as the "METHYLGENE")
AND: HYBRIDON, INC.
(hereinafter referred to as "HYBRIDON")
WHEREAS Hybridon is currently a shareholder of Methylgene;
WHEREAS Hybridon wishes to sell shares it owns in the share capital of
Methylgene pursuant to an offer (the "OFFER") dated February 12, 2001 from Paul
Capital Partners (Paul Capital Partners and any affiliates thereof hereinafter
referred to as "PAUL CAPITAL") and accepted by Hybridon on February 14, 2001;
WHEREAS Hybridon may sell other shares it owns in the share capital of
Methylgene to certain existing shareholders or to others; and
WHEREAS Methylgene has agreed to cooperate and assist Hybridon in effecting
these transactions;
THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION RECEIVED, THE PARTIES
HERETO AGREE AS FOLLOWS:
1. COMPLIANCE - METHYLGENE
1.1 Methylgene hereby certifies that it is and, to its knowledge,
Hybridon is in compliance with and not in default of any and
all agreements between Hybridon and Methylgene existing as at
the date hereof including, for greater certainty but not
limited to, the agreements listed in Schedule A attached
hereto;
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2. COMPLIANCE - HYBRIDON
2.1 Hybridon hereby certifies that it is and, to its knowledge,
Methylgene is in compliance with and not in default of any and
all agreements between Hybridon and Methylgene existing as at
the date hereof including, for greater certainty but not
limited to, the agreements listed in Schedule A attached
hereto;
3. NON-COMPETITION
3.1 The introductory paragraph of Section 13.1 of the Shareholders
Agreement (as defined in Schedule A) is amended by deleting
same and replacing it with the following:
"13.1 Hybridon undertakes in favour of Methylgene, whether
directly or indirectly, alone or in partnership,
association, joint venture or other collaboration
with any other person, company, partnership, business
or entity, as a principal, agent, shareholder,
employee, partner, consultant, subcontractor, unless
for the benefit of Methylgene, at the request of
Methylgene or with the consent of Methylgene, not
to:"
3.2 Section 13.1.1 of the Shareholders Agreement is amended by
deleting same and replacing it with the following:
"13.1(A) from the date of the Agreement and Mutual Release and
Discharge entered into between Methylgene and
Hybridon until the expiry of a thirty (30) month
period starting the later of (a) May 31, 2001, (b)
the closing of the transaction contemplated by the
Offer and (c) Hybridon no longer having a nominee on
Methylgene's Board of Directors (the "COMMENCEMENT
DATE"), research, develop or market anywhere in the
world (i) any antisense compounds to inhibit DNA
Methyltransferases ("DNA METASES"), or (ii) any
method of inhibiting DNA MeTases for the treatment of
any indication;
13.1(B) from the date of the Agreement and Mutual Release and
Discharge entered into between Methylgene and
Hybridon until the expiry of an eighteen (18) month
period starting on the Commencement Date (the
"RESTRICTIVE TERM"), not to engage in research or
development or marketing anywhere in the world
relating to the fields of histone deacetylases and
beta-lactamases. If prior to the expiration of the
Restrictive Term, Methylgene gives Hybridon written
notice designating a target gene or genes within
either histone deacetylases or beta-lactamases or
both, as the case may be, as the Second Molecular
Target and Third Molecular Target, respectively,
under the License Agreement dated January 4, 1996 as
amended and restated
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between the parties as of September 21, 2000 (the
"LICENSE AGREEMENT"), then Hybridon, for an
additional period of 18 months from the expiration of
the Restrictive Term, shall refrain from research or
development or marketing anywhere in the world
relating to either histone deacetylases or beta
lactamases, or both, depending upon which is the
location of the target gene or genes so designated by
Methylgene, and the designation of such target gene
or genes shall be deemed to have exhausted
Methylgene's rights under the License Agreement, to
specify a Second Molecular Target, if one designation
is made and a Third Molecular Target if two
designations are made;"
3.3 Sections 13.1.3 and 13.1.4 of the Shareholders Agreement are amended by
deleting same and replacing them with the following:
"13.1.3 from the date of the Agreement and Mutual Release and
Discharge entered into between Methylgene and Hybridon until
the expiry of a two (2) year period starting on the
Commencement Date, solicit entities which are customers or
suppliers of Methylgene on the relevant date with respect to
compounds or methods of the type described in 13.1(A) and
13.1(B); or
13.1.4 from the date of the Agreement and Mutual Release and
Discharge entered into between Methylgene and Hybridon until
the expiry of a two (2) year period starting on the
Commencement Date, encourage any person employed by Methylgene
to leave Methylgene or solicit for employment any person who
is at the time of solicitation employed by Methylgene."
3.4 Section 13.1 of the Shareholders Agreement is amended by adding the
following:
"13.1.5 Nothing in the foregoing shall restrict the right of Hybridon
to own up to 5% of the outstanding capital stock of companies
whose shares are traded on a recognized stock exchange."
3.5 In the event of a merger or acquisition involving Hybridon and a
non-affiliate third party (as the term "affiliate" is defined in the
License Agreement), the provisions of Section 13 of the Shareholders'
Agreement (until their expiration pursuant to the provisions of such
Section 13), as hereinabove amended, and the provisions of Section
4 below shall continue to apply to the surviving entity
but shall not be construed in any way which would prejudice and shall
not prejudice the right and ability of the surviving entity to continue
to do any research and development activities which the non-affiliate
third party was undertaking prior to the time of the merger.
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3.6 All other provisions of Section 13 of the Shareholders Agreement shall
continue to apply mutatis mutandis. To the extent Hybridon is still a
party to the Shareholders Agreement at the time of the initial public
offering of the shares of Methylgene (the "IPO"), Hybridon undertakes
that, pursuant to such IPO, it will agree to the termination of the
Shareholders Agreement, save and except for the provisions of its
Section 13, as amended hereby, which shall continue to apply for the
relevant period.
4. CONFIDENTIALITY
4.1 Hybridon agrees, as long as such information or knowledge is
not part of the public domain or required to be disclosed in
accordance with applicable law, not to disclose, publish or
reveal in any manner whatsoever and to whomever, any
information or knowledge of a confidential nature concerning
the business operated by Methylgene, including, without
limiting the generality of the foregoing, trade secrets,
biological targets, chemical structures, inventions, software,
computer programs, patents, licences, manufacturing processes,
know-how, customer lists or contracts of Methylgene, whether
acquired by it in its capacity as a shareholder or through any
nominee on the Board of Directors, its representatives on the
scientific advisory board of Methylgene or from any other
means, Hybridon hereby expressly acknowledging that such trade
secrets, biological targets, chemical structures, inventions,
software, computer programs, patents, licences, manufacturing
processes, know-how, customer lists or contract and all other
information of a confidential nature concerning the business
operated by Methylgene has been disclosed to it at any time on
a confidential basis.
5. UNDERTAKING - LOCK-UP AGREEMENT
5.1 Hybridon shall, if it is a shareholder of Methylgene, at the
request of the underwriters engaged by Methylgene in
connection with its IPO, sign a lock-up agreement in their
favour in customary form under which Hybridon shall agree not
to sell or otherwise dispose of in any way any of its shares
in the share capital of Methylgene for the period applicable
to other significant shareholders of Methylgene following the
IPO, the whole as required by the underwriters. Furthermore,
Hybridon recognizes that it may be subject to certain escrow
requirements imposed by regulators in connection with an IPO
and agrees to comply therewith.
6. RELEASE AND DISCHARGE - HYBRIDON
6.1 Except for obligations of the parties set forth in any
agreement between them which are intended to survive the
execution of this agreement, Hybridon hereby releases and
discharges Methylgene from any claims, liabilities, actions or
demands of any kind which Hybridon now has or hereafter can,
shall or may
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have against Methylgene for or by reason of or in any way
arising out of any cause, matter or thing whatsoever existing
up to the present time.
7. RELEASE AND DISCHARGE - METHYLGENE
7.1 Except for obligations of the parties set forth in any
agreement between them which are intended to survive the
execution of this agreement, Methylgene hereby releases and
discharges Hybridon from any claims, liabilities, actions or
demands of any kind which Methylgene now has or hereafter can,
shall or may have against Hybridon for or by reason of or in
any way arising out of any cause, matter or thing whatsoever
existing up to the present time.
8. HYBRIDON REPRESENTATIVE - BOARD OF DIRECTORS
8.1 Notwithstanding any provision of the Shareholders' Agreement,
Hybridon agrees that, in the event it should own less than
350,000 shares in the share capital of Methylgene, Hybridon
shall no longer be entitled to appoint or elect a nominee on
Methylgene's Board of Directors and shall cause its nominee at
that time to resign and execute a full release and discharge
in customary form upon written notice by Methylgene to
Hybridon.
9. EXPENSES
9.1 Hybridon hereby agrees to pay any and all out-of-pocket
expenses (including, without limitation, the fees and
disbursements of Methylgene's legal and patents counsel)
incurred by Methylgene in connection with the proposed sale by
Hybridon of its shares in the share capital of Methylgene to
Paul Capital, to any other shareholder of Methylgene or to any
other person.
10. OBLIGATIONS OF METHYLGENE
10.1 Methylgene agrees to use its commercially reasonable efforts
to approve such measures as are necessary to combine its
presently outstanding class A and class B common shares into a
single class so as to eliminate any preference between them in
the distribution of assets as dividends or distributions upon
liquidation and in furtherance of this Methylgene shall
recommend that the holders of its class A and class B common
shares approve and agree to any action required of them to
implement the combination of the two classes of stock. Upon
such approval, Methylgene will see to the implementation of
these actions.
10.2 Methylgene agrees to use its commercially reasonable efforts
to obtain the approval and consent of the other shareholders
of Methylgene to the amendment to the Shareholders Agreement
contemplated by Section 3 herein.
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Notwithstanding the foregoing however, Hybridon undertakes and
agrees to abide by the provisions of Section 3 of this
agreement, whether or not the other shareholders of Methylgene
give their approval and consent to the amendments to the
Shareholders Agreement contemplated thereby.
10.3 Methylgene shall and shall cause its counsel promptly to
review and comment upon the forms of waiver and waiver request
letter proposed by Hybridon for the purpose of Hybridon
soliciting the waiver by the holders of shares of Methylgene
capital stock of rights in the nature of preemption or first
refusal which are a precondition of Hybridon's selling its
shares to Paul Capital and to recommend such waivers to its
shareholders. Furthermore, and subject to compliance with the
terms of the Shareholders Agreement, Hybridon agrees, if one
or more offers are made to it prior to the later of May 31,
2001 and the closing of the transaction contemplated by the
Offer, to sell any other shares it owns in the capital of
Methylgene to the other shareholders, to Methylgene or to a
third party arranged by Methylgene at the same price and on
substantially the same commercial terms as set forth in the
Offer.
11. This agreement shall terminate on April 30, 2001 if the transaction
contemplated in the Offer does not close on or prior to April 30, 2001
and, save and except for Section 9, no provision of this agreement
shall survive such termination,.
12. This mutual release and discharge may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. The
agreements herein are in addition to any other agreements or
understandings between the parties, which other agreements and
understandings are not terminated hereby and continue to apply.
13. The mutual release and discharge is governed by the laws of the
Province of Quebec.
14. The present release and discharge is being drafted in English language
at the request of the parties hereto. La presente quittance a ete
redigee en langue anglaise a la demande des parties aux presentes.
METHYLGENE INC.
Per:
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HYBRIDON, INC.
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Per:
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SCHEDULE A
- Unanimous Shareholders' Agreement dated January 4, 1996, as amended from
time to time;
- Shareholders Agreement dated January 4, 1996, as amended from time to time
as restated on September 21, 2000 (the "SHAREHOLDERS' AGREEMENT");
- License Agreement dated January 4, 1996, as amended from time to time;
- License Agreement dated March 12, 1999 between Hybridon and Integrated DNA
Technologies Inc. ("IDT"), and the letter agreement dated July 26, 1999
between Methylgene and IDT;
- License Agreement dated October 13, 1994 between McGill University and
Hybridon, as amended from time to time;
- License Agreement dated December 15, 1995 between McGill University and
Hybridon;
- License Agreement dated February 1, 1990 between the Worcester Foundation
for Experimental Biology Inc. and Hybridon and restated September 8, 1993;
- Letter Agreement dated February 27, 1998 between Methylgene and McGill
University;
- Letter Agreement dated July 1, 1999 between Methylgene and the University
of Massachussetts (UMASS); and
- All licensed and sublicensed patents.
- Letter Agreement dated December 18, 1995 among Hybridon and Worcester
Foundation for Biomedical Research, Inc. and into which Methylgene
intervened.
- Various confidentiality agreements executed from time to time between
Methylgene and Hybridon.