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Exhibit 10.66
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT made as of November 6, 1996 by and among Boston
University, a nonprofit corporation existing under the laws of Massachusetts
("Boston University"), ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (individually, a "Stockholder" and collectively, the
"Stockholders"), and Reed R. Prior ("Mr. Prior"), and Seragen, Inc., a Delaware
corporation (the "Company").
WHEREAS, the Stockholders are the holders of outstanding securities (the
"Shares"), of the Company;
WHEREAS, the Company has entered into an employment agreement with Mr.
Prior of even date herewith (the "Employment Agreement");
WHEREAS, the Stockholders and Mr. Prior desire to promote their mutual
interests and the interests of the Company by providing in this Agreement for
the terms and conditions governing certain transfers of shares of the Company's
outstanding securities, the management and operation of the Company, the
relations among the Stockholders and certain other matters; and
WHEREAS, the Board of Directors of the Company has determined that it is in
the best interests of the Company that the Company enter into this Agreement;
NOW, THEREFORE, in consideration of the covenants and agreements set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, the parties hereto
covenant and agree as follows:
1. GENERAL PROVISIONS
1.1 SHARES SUBJECT TO THIS AGREEMENT. The Stockholders expressly agree that the
terms and restrictions of this Agreement shall apply to all Shares which any of
them now owns or hereafter acquires by any means, including without limitation
by purchase, assignment or operation of law, or as a result of any stock
dividend, stock split, reorganization, reclassification, whether voluntary or
involuntary, or other similar transaction, and to any shares of capital stock of
any successor in interest of the Company, whether by sale, merger, consolidation
or other similar transaction, or by purchase, assignment or operation of law.
1.2 NO PARTNERSHIP RELATIONSHIP. Notwithstanding, but not in limitation of, any
other provision of this Agreement, the parties understand and agree that the
creation, management and operation of the Company shall not create or imply a
general partnership between or among the parties and shall not make any party
the agent or partner of any other party for any purpose.
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1.3 TERM AND TERMINATION. This Agreement shall become effective commencing on
the date hereof and shall continue until Mr. Prior's employment is terminated
pursuant to Paragraph 4 of the Employment Agreement.
2. BOARD OF DIRECTORS
2.1 NUMBER OF DIRECTORS. Each Stockholder shall take or cause to be taken such
actions as may be required from time to time to establish and maintain the
number of persons comprising the Board of Directors of the Company at nine (9).
Without limiting the generality of the foregoing, at each annual meeting of the
stockholders, and at each special meeting of the stockholders called for the
purpose of electing directors of the Company, and at any time at which the
stockholders have the right to, or shall, elect directors of the Company, then,
and in each event, the Stockholders shall vote all Shares owned by them (or
shall consent in writing in lieu of a meeting of stockholders, as the case may
be) to set the number of directors of the Company in accordance with the
preceding sentence.
2.2 ELECTION OF DIRECTORS DESIGNATED BY OR AFFILIATED WITH BOSTON UNIVERSITY.
Each Stockholder shall take or cause to be taken such actions as may be required
from time to time not to elect to the Company's Board of Directors more than two
(2) persons designated by or affiliated with Boston University. Without limiting
the generality of the foregoing, at each annual meeting of the stockholders, and
at each special meeting of the stockholders called for the purpose of electing
directors of the Company, and at any time at which stockholders have the right
to, or shall, elect directors of the Company, then, and in each event, the
Stockholders shall vote all Shares owned by them (or shall consent in writing in
lieu of a meeting of stockholders, as the case may be) to elect persons as
directors of the Company in accordance with the preceding sentence.
2.3 ELECTION OF DIECTORS APPROVED BY MR. PRIOR. Each Stockholder shall take or
cause to be taken such actions as may be required from time to time to elect to
the Company's Board of Directors Mr. Prior plus three (3) outside directors with
expericence in the pharmaceutical industry reasonably acceptable to Mr. Prior.
Without limiting the generality of the foregoing, at each annual meeting of the
stockholders, and at each special meeting of the stockholders called for the
purpose of electing directors of the Company, and at any time at which
stockholders have the right to, or shall, elect directors of the Company, then,
and in each event, the Stockholders shall vote all Shares owned by them (or
shall consent in writing in lieu of a meeting of stockholders, as the case may
be) to elect persons as directors of the Company in accordance with the
preceding sentence.
3. PARTICIPATION IN SALES
3.1 CO-SALE RIGHT. In the event that Boston University (the "Offeree") receives
a bona fide offer from a third party or parties other than the Company or any
other Stockholder (the "Purchaser") to purchase in one transaction or in a
series of related transactions fifty percent (50%) or more of the shares of
common stock, $.01 par value, of the Company ("Common
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Stock") currently owned by the Offeree, measured on a fully diluted basis,
taking into account all shares of Common Stock issuable upon exercise or
conversion of options, warrants, conversion rights and other rights to acquire
equity securities ("Convertible Securities") currently held by the Offeree (the
"Co-Sale Shares"), for a specified price payable in cash or otherwise and on
specified terms and conditions (the "Offer"), and the Offeree proposes to sell
or otherwise transfer the Co-Sale Shares to the Purchaser pursuant to the Offer,
Mr. Prior shall have the right to sell to the Purchaser, at the same price per
Share and on the same terms and conditions as stated in the Offer, such number
of shares of Common Stock (the "Prior Co-Sale Shares") equal to the Co-Sale
Shares multiplied by a fraction, (a) the numerator of which is the aggregate
number of shares of Common Stock then owned by Mr. Prior ("Mr. Prior's Shares"),
assuming that all Convertible Securities held by Mr. Prior have been exercised
or converted, whether or not such Convertible Securities are then exercisable or
convertible, and (b) the denominator of which is the aggregate number of shares
of Common Stock then outstanding, assuming that all outstanding Convertible
Securities have been exercised or converted, whether or not such Convertible
Securities are then exercisable or convertible. If the Offer is for the purchase
of Convertible Securities, the Offer shall be deemed to be an offer for the
number of shares of Common Stock into which the Convertible Securities are then
exercisable or convertible for purposes of determining the number of the Prior
Co-Sale Shares, and the Offeree shall negotiate with the Purchaser to acquire
the Prior Co-Sale Shares in shares of Common Sock in lieu of Convertible
Securities.
3.2 NOTICES OF OFFER AND INTENT TO PARTICIPATE. The Offeree shall provide notice
to Mr. Prior stating the name of the Purchaser, the terms of the Offer and the
period of time available to Mr. Prior for notifying the Offeree of his intent to
participate in the sale (the "Notice Period"). The Offeree shall, if reasonably
possible, provide Mr. Prior with a Notice Period of up to thirty (30) days, but
in no event will the Offeree provide Mr. Prior with a Notice Period of less than
ten (10) days. If Mr. Prior wishes to participate in any sale pursuant to
Section 3.1, he shall notify the Offeree in writing of such intention as soon as
practicable after his receipt of the notice from the Offeree and in any event
within the Notice Period. If the Offeree does not receive such notice from Mr.
Prior within the Notice Period, the Offeree shall be free to consummate the
proposed transaction without any obligation to include Mr. Prior's Shares in
such transaction.
3.3 SALE OF CO-SALE SHARES. The Offeree and Mr. Prior shall sell to the
Purchaser all, or at the option of the Purchaser, any part of the shares
proposed to be sold by him at not less than the price and upon other terms and
conditions, if any, not more favorable to the Purchaser than those stated in the
Offer; provided, however, that any purchase of less than all of such shares by
the Purchaser shall be made from the Offeree and Mr. Prior pro rata based upon
the relative amount of the shares that the Offeree and Mr. Prior are otherwise
entitled to sell pursuant to Section 3.1.
3.4 LOAN OF COMMON STOCK. To enable Mr. Prior to exercise his co-sale rights
pursuant to Section 3.1 hereof, the Company shall lend to Mr. Prior an amount
(the "Loan Amount")
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equal to the greater of (a) the Prior Co-Sale Shares and (b) the number of
shares of Common Stock issuable upon exercise of the vested portion of stock
options issued to Mr. Prior pursuant to Paragraph 3(c) of the Employment
Agreement, multiplied by the exercise price(s) for such options. Mr. Prior shall
deliver to the Company a promissory note in the principal amount of the Loan
Amount, which note shall be due and payable at the closing of the sale of the
Co-Sale Shares and shall bear simple interest at the rate of six percent (6%)
per annum.
4. ASSET VALUE REALIZATION BONUS
4.1 ASSET VALUE REALIZATION BONUS. The Stockholders agree and consent to the
provisions of Paragraph 3(i) of the Employment Agreement providing for the
payment of an Asset Value Realization Bonus (as defined in the Employment
Agreement) to Mr. Prior in the circumstances described therein. Boston
University agrees that in the event that an Asset Value Realization Bonus is due
to Mr. Prior in connection with a sale of all or substantially all of the equity
securities of the Company as part of a Change of Ownership (as defined in the
Employment Agreement), and the Company fails to pay such fee at closing, Boston
University immediately will pay its pro rata share of such fee based on the
number of Shares sold by it in relation to the total number of equity securities
sold.
5. PUBLIC ANNOUNCEMENTS
5.1 PUBLIC ANNOUNCEMENTS. Boston University agrees that it will not issue any
press releases or otherwise make any public statement with respect to the
business, operations, products or prospects of the Company, except for any
disclosures it may be required by law to make by virtue of being a stockholder
of the Company or as may be approved by the Company.
6. REPRESENTATIONS AND WARRANTIES
6.1 REPRESENTATIONS AND WARRANTIES OF CORPORATE STOCKHOLDERS. Each Stockholder
that is a corporation hereby represents and warrants to each other party as
follows:
(a) Organization and Authority. Such Stockholder is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated. Such Stockholder has the
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby.
(b) Corporate Action. Such Stockholder has taken all corporate action
necessary for it to enter into this Agreement and to consummate the
transactions contemplated hereby.
(c) Absence of Violation. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
constitute a
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violation of, or default under, or conflict with, or require any consent
under any term or provision of the certificate of incorporation or by-laws
of such Stockholder or any contract, commitment, indenture, lease or other
agreement to which such Stockholder is a party or by which such Stockholder
or any of its assets is bound.
(d) Binding Obligation. This Agreement constitutes a valid and binding
obligation of such Stockholder, enforceable in accordance with its terms,
except to the extent that such enforceability may be limited by bankruptcy,
insolvency and similar laws affecting the rights and remedies of creditors
generally, and by general principles of equity and public policy.
6.2 REPRESENTATIONS AND WARRANTIES OF INDIVIDUAL STOCKHOLDERS AND MR. PRIOR.
Each Stockholder who is an individual and Mr. Prior hereby represents and
warrants to each other party as follows:
(a) Absence of Violation. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
constitute a violation of, or default under, or conflict with, or require
any consent under any term or provision of any contract, commitment,
indenture, lease or other agreement to which such party is a party or by
which such party or any of his or her assets is bound.
(b) Binding Obligation. This Agreement constitutes a valid and binding
obligation of such party, enforceable in accordance with its terms, except
to the extent that such enforceability may be limited by bankruptcy,
insolvency and similar laws affecting the rights and remedies of creditors
generally, and by general principals of equity and public policy.
7. MISCELLANEOUS
7.1 NOTICES. All notices, requests, consents and other communications hereunder
shall be in writing, shall be addressed to the receiving party's address set
forth below or to such other address as a party may designate by notice
hereunder, and shall be either (i) delivered by hand, (ii) made by telex,
telecopy or facsimile transmission, (iii) sent by overnight courier, or (iv)
sent by registered mail, return receipt requested, postage prepaid.
If to the Stockholders or Mr. Prior: to the address set forth on
Schedule I hereto.
If to the Company: Seragen, Inc.
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Attention: President
With a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
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All notices, requests, consents and other communications hereunder shall be
deemed to have been given either (i) if by hand, at the time of the delivery
thereof to the receiving party at the address of such party set forth above,
(ii) if made by telex, telecopy or facsimile transmission, at the time that
receipt thereof has been acknowledged by electronic confirmation or otherwise,
(iii) if sent by overnight courier, on the next business day following the day
such notice is delivered to the courier service, or (iv) if sent by registered
mail, on the fifth business day following the day such mailing is made.
7.2 ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior oral or written agreements and understandings
relating to the subject matter hereof. No statement, representation, warranty,
covenant or agreement of any kind not expressly set forth in this Agreement
shall affect, or be used to interpret, change or restrict, the express terms and
provisions of this Agreement.
7.3 MODIFICATIONS AND AMENDMENTS. The terms and provisions of this Agreement may
be modified or amended only by written agreement executed by all parties hereto.
7.4 WAIVERS AND CONSENTS. The terms and provisions of this Agreement may be
waived, or consent for the departure therefrom granted, only by written document
executed by the party entitled to the benefits of such terms or provisions. No
such waiver or consent shall be deemed to be or shall constitute a waiver or
consent with respect to any other terms or provisions of this Agreement, whether
or not similar. Each such waiver or consent shall be effective only in the
specific instance and for the purpose for which it was given, and shall not
constitute a continuing waiver or consent.
7.5 ASSIGNMENT. The rights and obligations under this Agreement may not be
assigned by any party hereto without the prior written consent of the other
parties.
7.6 BENEFIT. All statements, representations, warranties, covenants and
agreements in this Agreement shall be binding on the parties hereto and shall
inure to the benefit of the respective successors and permitted assigns of each
party hereto. Nothing in this Agreement shall be construed to create any rights
or obligations except among the parties hereto, and no person or entity shall be
regarded as a third-party beneficiary of this Agreement.
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7.7 GOVERNING LAW. This Agreement and the rights and obligations of the parties
hereunder shall be construed in accordance with and governed by the law of the
Commonwealth of Massachusetts, without giving effect to the conflict of law
principles thereof.
7.8 ARBITRATION. Any controversy, dispute or claim arising out of or in
connection with this Agreement, or the breach, termination or validity hereof,
shall be settled by final and binding arbitration to be conducted by an
arbitration tribunal in Boston, Massachusetts, pursuant to the rules of the
American Arbitration Association. The arbitration tribunal shall consist of
three arbitrators. The party initiating arbitration shall nominate one
arbitrator in the request for arbitration and the other party shall nominate a
second in the answer thereto within thirty (30) days of receipt of the request.
The two arbitrators so named will then jointly appoint the third arbitrator. If
the answering party fails to nominate its arbitrator within the thirty (30)-day
period, or if the arbitrators named by the parties fail to agree on the third
arbitrator within sixty (60) days, the office of the American Arbitration
Association in Boston, Massachusetts shall make the necessary appointments of
such arbitrator(s). The decision or award of the arbitration tribunal (by a
majority determination, or if there is no majority, then by the determination of
the third arbitrator, if any) shall be final, and judgment upon such decision or
award may be entered in any competent court or application may be made to any
competent court for judicial acceptance of such decision or award and an order
of enforcement. In the event of any procedural matter not covered by the
aforesaid rules, the procedural law of the Commonwealth of Massachusetts shall
govern.
7.9 JURISDICTION AND SERVICE OF PROCESS. Any legal action or proceeding with
respect to this Agreement shall be brought in the courts of the Commonwealth of
Massachusetts or of the United States of America for the District of
Massachusetts. By execution and delivery of this Agreement, each of the parties
hereto accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each of the parties
hereto irrevocably consents to the service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by certified mail, postage prepaid, to the party at its address set
forth in Section 7.1 hereof.
7.10 SEVERABILITY. In the event that any court of competent jurisdiction shall
determine that any provision, or any portion thereof, contained in this
Agreement shall be unenforceable in any respect, then such provision shall be
deemed limited to the extent that such court deems it enforceable, and as so
limited shall remain in full force and effect. In the event that such court
shall deem any such provision, or portion thereof, wholly unenforceable, the
remaining provisions of this Agreement shall nevertheless remain in full force
and effect, provided, that if without such invalid provisions, the fundamental
mutual obligations of the parties cannot be achieved, then any party may
terminate this Agreement without penalty by written notice to the others.
7.11 INTERPRETATION. The parties hereto acknowledge and agree that: (i) each
party and its counsel reviewed and negotiated the terms and provisions of this
Agreement and have
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contributed to its revision; (ii) the rule of construction to the effect that
any ambiguities are resolved against the drafting party shall not be employed in
the interpretation of this Agreement; and (iii) the terms and provisions of this
Agreement shall be construed fairly as to all parties hereto and not in favor of
or against any party, regardless of which party was generally responsible for
the preparation of this Agreement.
7.12 HEADINGS AND CAPTIONS. The headings and captions of the various
subdivisions of this Agreement are for convenience of reference only and shall
in no way modify or affect the meaning or construction of any of the terms or
provisions hereof.
7.13 ENFORCEMENT. Each of the parties hereto acknowledges and agrees that the
rights acquired by each party hereunder are unique and that irreparable damage
would occur in the event that any of the provisions of this Agreement to be
performed by the other parties were not performed in accordance with their
specific terms or were otherwise breached. Accordingly, in addition to any other
remedy to which the parties hereto are entitled at law or in equity, each party
hereto shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement by any other party and to enforce specifically the terms and
provisions hereof in any federal or state court to which the parties have agreed
hereunder to submit to jurisdiction.
7.14 NO WAIVER OF RIGHTS, POWERS AND REMEDIES. No failure or delay by a party
hereto in exercising any right, power or remedy under this Agreement, and no
course of dealing among the parties hereto, shall operate as a waiver of any
such right, power or remedy of the party. No single or partial exercise of any
right, power or remedy under this Agreement by a party hereto, nor any
abandonment or discontinuance of steps to enforce any such right, power or
remedy, shall preclude such party from any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder. The election of any
remedy by a party hereto shall not constitute a waiver of the right of such
party to pursue other available remedies. No notice to or demand on a party not
expressly required under this Agreement shall entitle the party receiving such
notice or demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such
notice or demand to any other or further action in any circumstances without
such notice or demand.
7.15 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made by the parties hereto in this Agreement or in any other
agreement, certificate or instrument provided for or contemplated hereby, shall
survive (i) the execution and delivery hereof, and (ii) any investigations made
by or on behalf of the parties, and shall remain in full force and effect for a
period of four (4) years following the date hereof. No claim shall be made by a
party for any alleged misrepresentation or breach of warranty by the other party
unless notice for such claim shall have been given to the other party in
accordance with the notice provision hereof prior to the expiration of the
survival period specified above with respect to such representation or warranty.
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7.16 EXPENSES. Each of the parties hereto shall pay its own fees and expenses
(including the fees of any attorneys, accountants, appraisers or others engaged
by such party) in connection with this Agreement (except that the Company shall
pay Mr. Prior's expenses) and the transactions contemplated hereby whether or
not the transactions contemplated hereby are consummated.
7.17 NO BROKER OR FINDER. Each of the parties hereto represents and warrants to
the others that no broker, finder or other financial consultant has acted on its
behalf in connection with this Agreement or the transactions contemplated hereby
in such a way as to create any liability on the other. Each of the parties
hereto agrees to indemnify and save the others harmless from any claim or demand
for commission or other compensation by any broker, finder, financial consultant
or similar agent claiming to have been employed by or on behalf of such party
and to bear the cost of legal expenses incurred in defending against any such
claim.
7.18 PUBLICITY. No party shall issue any press releases or otherwise make any
public statement with respect to the transactions contemplated by this Agreement
without the prior written consent of the other parties, except as may be
required by law.
7.19 COUNTERPARTS. This Agreement may be executed in one or more counterparts,
and by different parties hereto on separate counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be executed by their duly authorized representatives,
as of the date first written above.
STOCKHOLDERS:
BOSTON UNIVERSITY
By:
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Name:
Title:
By:
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By:
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By:
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By:
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MR. PRIOR
By:
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Reed R. Prior
COMPANY:
SERAGEN, INC.
By:
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President and Chief
Technology Officer
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Schedule I
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Stockholders
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c/▇ ▇▇▇▇▇▇▇ and Associates, Inc.
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Mr. Prior
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Reed R. Prior
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