-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FPbhGhMDm6DUX/D3WEk9dKlPO57B8JHxZM/YxAsxf6hYjHMIK5y9w+6XqQI1jmr0 XUPREVgNuLvq3KZ/2ISJEg== 0000908259-02-000006.txt : 20020515 0000908259-02-000006.hdr.sgml : 20020515 20020515130512 ACCESSION NUMBER: 0000908259-02-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20020331 FILED AS OF DATE: 20020515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OXIGENE INC CENTRAL INDEX KEY: 0000908259 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 133679168 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-21990 FILM NUMBER: 02650112 BUSINESS ADDRESS: STREET 1: 321 ARSENAL STREET CITY: WATERTOWN STATE: MA ZIP: 02472 BUSINESS PHONE: 6176737800 10-Q 1 a10qmar02.txt OXIGENE, INC. 1ST QUARTER 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q (Mark One) [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2002 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from ______ to ______ Commission File Number: 0-21990 OXiGENE, INC. ---------------------------------------------------- (Exact name of Registrant as specified in its charter) Delaware 13-3679168 ------------------------------ ------------------ (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 321 ARSENAL STREET WATERTOWN, MA 02472 ---------------------------------------------------------- (Address of principal executive offices, including zip code) (617) 673-7800 ------------------------------------- (Telephone number, including area code) Not applicable ------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 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 [] As of March 31, 2002, there were 12,636,664 shares of the Registrant's Common Stock issued and outstanding. OXiGENE, INC. Cautionary Factors that may Affect Future Results ------------------------------------------------- Our disclosure and analysis in this report contain "forward-looking statements." Forward-looking statements give management's current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historic or current facts. They use words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning. These include statements, among others, relating to our planned future actions, our clinical trial plans, our research and development plans, our prospective products or product approvals, our beliefs with respect to the sufficiency of our cash and available-for-sale securities, our plans with respect to funding operations, projected expense levels, and the outcome of contingencies. Any or all of our forward-looking statements in this report may turn out to be wrong. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Consequently, no forward-looking statement can be guaranteed. Actual results may vary materially from those set forth in forward-looking statements. The uncertainties that may cause differences include, but are not limited to, the Company's history of losses, anticipated continuing losses and uncertainty of future profitability; the early stage of product development; uncertainties as to the future success of ongoing and planned clinical trials; the unproven safety and efficacy of products under development; the sufficiency of the Company's existing capital resources; the possible need for additional funds; uncertainty of future funding; the Company's dependence on others for much of the clinical development of its drugs under development, as well as for obtaining regulatory approvals and conducting manufacturing and marketing of any product candidates that might successfully reach the end of the development process; the impact of government regulations, health care reform and managed care; competition from other companies and other institutions pursuing the same, alternative or superior technologies; the risk of technological obsolescence, and uncertainties related to the Company's ability to obtain adequate patent and other intellectual property protection for its proprietary technology and product candidates; dependence on officers, directors and other individuals; and risks related to product liability exposure. We will not update forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law. You are advised to consult any further disclosures we make in our reports to the Securities and Exchange Commission including our 10-Q, 8-K and 10-K reports. Our filings list various important factors that could cause actual results to differ materially from expected results. We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties. -2- INDEX Page No. -------- PART I - FINANCIAL INFORMATION...............................................4 Item 1.Financial Statements...............................................4 Condensed Consolidated Balance Sheets.............................4 Condensed Consolidated Statements of Operations...................5 Condensed Consolidated Statements of Cash Flows...................6 Notes to Condensed Consolidated Financial Statements..............7 Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations.........................................10 Item 3.Quantitative and Qualitative Disclosures about Market Risks.......17 PART II - OTHER INFORMATION.................................................18 Item 1.Legal Proceedings.................................................18 Item 2.Changes in Securities and Use of Proceeds.........................18 Item 3.Defaults upon Senior Securities...................................18 Item 4.Submission of Matters to a Vote of Security Holders...............18 Item 5.Other Information.................................................18 Item 6.Exhibits and Reports on Form 8-K..................................18 Signatures..................................................................19 -3- PART I - FINANCIAL INFORMATION Item 1. Financial Statements OXiGENE, Inc. Condensed Consolidated Balance Sheets (All amounts, except share amounts, in thousands)
March 31, December 31, 2002 2001 ---- ---- (Unaudited) Assets Current assets: Cash $ 16,525 $ 19,030 Available-for-sale securities 1,671 - Prepaid expenses 298 457 Interest receivable 1 - Other current assets 14 13 -------- -------- Total current assets 18,509 19,500 Property and equipment, at cost 863 867 Accumulated depreciation (271) (237) -------- -------- Net property and equipment 592 630 License agreements, net of accumulated amortization 1,240 1,939 Deposits 77 84 -------- -------- Total assets $ 20,418 $ 22,153 ======== ======== Liabilities and stockholders' equity Current liabilities: License agreement payable - current portion $ 273 $ 270 Accrued expenses for research and development 1,350 1,269 Other accrued expenses 512 514 Other payables 1,208 1,138 -------- -------- Total current liabilities 3,343 3,191 License agreement payable - non-current portion 454 442 Stockholders' equity: Common Stock, $.01 par value, 60,000,000 shares authorized: 12,636,664 shares at March 31, 2002 and 11,432,093 shares at December 31, 2001 issued and outstanding 123 114 Additional paid-in capital 84,067 82,385 Accumulated deficit (64,811) (60,640) Accumulated other comprehensive income 423 461 Notes receivable (2,657) (3,765) Deferred compensation (524) (35) -------- -------- Total stockholders' equity 16,621 18,520 -------- -------- Total liabilities and stockholders' equity $ 20,418 $ 22,153 ======== ========
See accompanying notes. -4- OXiGENE, Inc. Condensed Consolidated Statements of Operations (All amounts in thousands, except per share data) (Unaudited)
Three months ended March 31, 2002 2001 ---- ---- Revenues: Licensing revenue $ - $ 757 Interest income 79 352 -------- -------- Total revenues 79 1,109 -------- -------- Expenses: Costs relating to licensing revenue - 624 Amortization of license agreement 20 74 Research and development 1,910 1,251 General and administrative 3,629 1,187 -------- -------- Total costs and expenses 5,559 3,136 -------- -------- Net loss from operations (5,480) (2,027) Gain on sale of joint venture 1,325 - Interest expense (13) (17) Other expense, net (3) (99) -------- -------- Net loss $ (4,171) $ (2,143) ======== ======== Basic and diluted net loss per common share $ (0.35) $ (0.19) ======== ======== Weighted average number of common shares outstanding 11,961 11,376 ======== ========
See accompanying notes. -5- OXiGENE, Inc. Condensed Consolidated Statements of Cash Flows (All amounts in thousands) (Unaudited)
Three months ended March 31, 2002 2001 ---- ---- Operating Activities: Net loss $ (4,171) $ (2,143) Adjustment to reconcile net loss to net cash used in operating activities: Gain on sale of joint venture (1,325) - Compensation expense related to issuance of Common Stock 2,297 - Depreciation 38 43 Abandonment of property and equipment 2 - Compensation related to issuance of options 13 66 Amortization of deferred licensing revenue - (133) Amortization of licensing agreement 24 74 Loss on sale of available-for-sale securities - 99 Changes in operating assets and liabilities: Prepaid expenses and other current assets 166 (129) Accounts payable and accrued expenses 138 (301) -------- -------- Net cash used in operating activities (2,818) (2,424) Investing activities: Purchase of available-for-sale securities (1,691) - Proceeds from sale of investment 2,000 - Purchase of property and equipment (3) (125) Deposits - 18 Amounts paid for licensing agreement - 17 -------- -------- Net cash provided by (used in) investing activities 306 (90) Effect of exchange rate on changes in cash 7 (24) -------- -------- Net decrease in cash and cash equivalents (2,505) (2,538) Cash and cash equivalents at beginning of period 19,030 27,063 -------- -------- Cash and cash equivalents at end of period $ 16,525 $ 24,525 ======== ========
See accompanying notes. -6- OXiGENE, Inc. Notes to Condensed Consolidated Financial Statements March 31, 2002 (Unaudited) 1. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2002 are not necessarily indicative of the results that may be expected for the year ending December 31, 2002. The condensed consolidated balance sheet at December 31, 2001 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2001. All dollar amounts are shown in thousands, except par value and per share data. Revenue Recognition Revenue is deemed earned when all of the following have occurred: all obligations of the Company relating to the revenue have been met and the earnings process is complete; the monies received or receivable are not refundable irrespective of the research results; and there are neither future obligations nor future milestones to be met by the Company with respect to such revenue. Collaboration revenues are earned based upon research expenses incurred and milestones achieved. Non-refundable payments upon initiation of contracts are deferred and amortized over the period in which the Company is obligated to participate on a continuing and substantial basis in the research and development activities outlined in each contract. Amounts received in advance of reimbursable expenses are recorded as deferred revenue until the related expenses are incurred. Milestone payments are recognized as revenue in the period in which the parties agree that the milestone has been achieved and is deemed no further obligation exists. Available-for-Sale Securities In accordance with the Company's investment policy, surplus cash is invested in corporate and U.S. Government debt securities. The Company designates its marketable securities as available-for-sale securities. Available-for-sale securities are carried at fair value, with the unrealized gains and losses, net of tax, if any, reported as accumulated other comprehensive income (loss) in stockholders' equity. Realized gains and losses and declines in value judged to be other-than-temporary on available-for-sale -7- securities are included in other expense, net. Interest and dividends on securities classified as available-for-sale are included in interest income. Net Loss Per Share Basic and diluted net loss per share were calculated in accordance with the provisions of Statement of Financial Accounting Standards No. 128, Earnings Per Share, by dividing the net loss per share by the weighted-average number of shares outstanding. All options issued by the Company were antidilutive and, accordingly, excluded from the calculation of weighted-average shares. Comprehensive Income (Loss) Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income ("SFAS 130"), establishes rules for the reporting and display of comprehensive income and its components and requires unrealized gains or losses on the Company's available-for-sale securities and the foreign currency translation adjustments to be included in accumulated other comprehensive income. Accumulated other comprehensive income consists of unrealized loss on available-for-sale securities of approximately $0.02 million and approximately $1.0 million and accumulated foreign currency translation adjustment gain of approximately $0.4 million and approximately $0.5 million at March 31, 2002 and December 31, 2001, respectively. 2. Stockholders' Equity In January 2002, the Company offered to cancel 1,119,071 options outstanding with exercise prices significantly above the current market value of the Company's Common Stock. A total of 1,109,571 options were subsequently cancelled. Under the recently adopted Compensation Award Stock Program, a total of 821,030 shares of Common Stock were issued to directors. In addition, under the Restricted Stock Program, 208,541 shares of Restricted Common Stock were issued to employees and consultants. The restricted shares are subject to forfeiture and transfer restrictions until they vest, generally over a three-year period. As a result, the Company recognized non-cash compensation expense of approximately $2.9 million, of which approximately $2.3 million was recognized in the first quarter of 2002 and approximately $0.6 million will be recognized over three years through 2004. Under the terms of both programs, participants are permitted to request a loan from the Company, the proceeds of which are to be used to satisfy any participant tax obligations that arise from the awards. These loans will be evidenced by a promissory note. Principal amounts outstanding under the promissory note will accrue interest at a rate of 10% per year, compounded annually. The principal amount, together with accrued interest on the principal amount to be repaid, will be repaid in three equal installments, on the first three anniversary dates of the stock grant date. Shares of Common Stock have been pledged to the Company as security for repayment of the obligations under the notes, and the stock certificates representing those shares shall remain in the possession of the Company until the loans are repaid. In the event a participant fails to pay all amounts due under a promissory note, the number of shares of that participant's stock, sufficient to satisfy the unpaid amounts, will be forfeited. No loans have been issued to date. The market value of the Company's Common Stock at March 31, 2002 was lower than the exercise price of previously issued Stock Appreciation Rights ("SARs"). SARs granted to employees pursuant to the amended and restated 1992 Plan entitled the holder to receive the number of shares of Common Stock as is equal -8- to the excess of the fair market value of one share of Common Stock on the effective date of exercise over the fair market value of one share of Common Stock on the date of grant, divided by the fair market value on the date of exercise, multiplied by the number of rights exercised. These rights vest ratably over three years and are exercisable for ten years. Accordingly, there was no financial reporting impact for the three months ended March 31, 2002. During the three months ended March 31, 2002, the Company recorded stock-based compensation expense of approximately $0.01 million in connection with options issued to non-employees in the prior years. 3. Subsequent Event On April 23, 2002, the Company and Active Biotech AB ("Active") signed an exclusive licensing agreement pursuant to which the Company granted to Active certain intellectual property rights related to the Company's benzamide-based compound, Declopramide. Under the terms of the agreement, the Company will supply all of its existing documentation and results from its Phase I Declopramide trials to Active. Active assumes all responsibilities for development of the compound and the Company will share any future milestone and royalty payments resulting from successful development of the compound. 4. Termination of Joint Venture Agreement On May 17, 2000, the Company entered into a joint venture agreement with Peregrine Pharmaceutical, Inc. ("Peregrine") forming Arcus Therapeutics, LLC ("ARCUS") to develop and commercialize certain technologies. Under the terms of the agreement, Peregrine and the Company supplied intellectual property and a license to use certain compounds, respectively, to the joint venture. In February 2002, the Company and Peregrine agreed to conclude the ARCUS joint venture. Under the terms of the agreement, Peregrine paid the Company $2.0 million and both Peregrine and the Company reacquired full rights and interest to the vascular targeting platforms they contributed to the joint venture. -9- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This Management's Discussion and Analysis of Financial Condition and results of Operations as of March 31, 2002 and 2001 should be read in conjunction with the sections of our audited consolidated financial statements and notes thereto, as well as our "Management's Discussion and Analysis of Financial Condition and Results of Operations" that is included in our Annual Report on Form 10-K for the year ended December 31, 2001. Description of Business OXiGENE, Inc. (the "Company") is an international biopharmaceutical company engaged principally in the research and development of products for use in the treatment of cancer. Historically, the Company's activities were directed primarily towards products designed to complement and enhance the clinical efficacy of radiation and chemotherapy, which are the most common and traditional forms of non-surgical cancer treatment. Recently, however, our efforts have focused primarily on our vascular targeting agents ("VTAs" or "VTA"), Combretatastin CA4 Prodrug ("CA4P") and Oxi-4503. The Company has incurred losses since inception, principally as a result of research and development and general and administrative expenses in support of operations. The Company has devoted substantially all of its efforts and resources to research and development conducted on its own behalf and through strategic collaborations with clinical institutions, universities and other research organizations. The Company's failure to successfully complete human clinical trials, develop and market products over the next several years, or to realize product revenues, would have a material effect on its business, financial condition and results of operations. Royalties or other revenue generated for the Company from commercial sales of the Company's potential products are not expected for several years, if at all. On December 15, 1999, the Company entered into a Research Collaboration and License Agreement with Bristol-Myers Squibb Company ("BMS"). This agreement gave BMS world-wide rights to develop Combretastatin compounds, including OXiGENE's lead compound CA4P, as a new class of anti-cancer agents. Pursuant to the terms of the BMS Agreement, BMS paid a non-refundable license fee and agreed to assume all research, development, commercialization and/or marketing costs of all in-licensed products. In October 2001, the Company announced that it had regained its rights to the Combretastatin anti-tumor compounds licensed to BMS upon the agreement of the parties to conclude the Research Collaboration and License Agreement. The Company recognized approximately $6.9 million of deferred revenue as revenue in the fourth quarter of 2001 as a result of the termination of the above stated agreement. The Company may incur future liability to BMS upon the in-license of certain technologies related to the agreement. In February of 2002, the Company and BMS finalized a termination agreement setting forth the two companies' agreement with respect to the termination. On May 17, 2000, the Company entered into a joint venture agreement with Peregrine Pharmaceuticals, Inc. ("Peregrine"), forming Arcus Therapeutics LLC ("ARCUS") to develop and commercialize VTA technologies employing conjugated antibodies. Under the terms of the joint venture agreement, the Company agreed to provide exclusive licenses to its next generation tubulin-binding compounds -10- for use solely in conjunction with a Peregrine antibody and, based upon the development success of the joint venture, agreed to fund up to $20.0 million of the development expenses of ARCUS. In addition, the Company paid Peregrine an upfront licensing fee of $1.0 million and purchased $2.0 million, or 585,009 shares, of Peregrine's Common Stock. In June 2001, the Company sold all 585,009 shares of Peregrine's Common Stock and recorded a loss on sale of available-for-sale securities of approximately $0.6 million. In February 2002, the Company and Peregrine agreed to conclude the ARCUS joint venture. Under the terms of the agreement, Peregrine paid the Company $2.0 million and both Peregrine and the Company reacquired full rights and interest to the vascular targeting platforms they contributed to the joint venture. In July 2001, the Company concluded the sale of its nutritional and diagnostic technology, Nicoplex and Thiol, respectively, to CampaMed LLC ("CampaMed"). Under the terms of the agreement, CampaMed provided approximately $3.3 million in future payments based upon sales of the products. In addition, the Company was granted a 10% equity position in CampaMed. No revenue was recognized under this agreement during the period ended March 31, 2002. In September 2001, the Company entered into a Joint Research Agreement with Jomed N.V. ("Jomed") to research restenosis inhibitors, integrating Jomed's stent technology with the Company's platform of VTAs. Pursuant to the agreement, Jomed has agreed to fund and perform proof-of-concept studies with the Company's VTAs on drug eluting stents. At the conclusion of the studies, and dependant in part on the results of the studies, the Company and Jomed intend to meet to negotiate further business terms regarding rights, licenses and royalties arrangements for going forward. In September 2001, the Company signed a Materials-Cooperative Research and Development Agreement with the National Eye Institute, a division of the National Institutes of Health, to study the effects of CA4P on an animal model of proliferative diabetic retinopathy, which is an eye disease characterized by aberrant neo-vasculature growth. The Company agreed to fund the cost of this study. The Company has generated a cumulative net loss of approximately $64.8 million for the period from its inception through March 31, 2002. The Company expects to incur significant additional operating losses over at least the next several years, principally as a result of its continuing clinical trials, planned future clinical trials, and anticipated research and development expenditures. The principal source of the Company's working capital has been the proceeds of private and public equity financing and the exercise of warrants and stock options. Prior to entering into the agreement with BMS, the Company had no material licensing revenues or other fee income. The Company will continue to have no material amount of revenues or fee income due to the termination of the BMS agreement, unless the Company enters into another arrangement providing licensing or fee revenue. As of March 31, 2002, the Company had no long-term debt or loans payable. -11- Results of Operations - Three Months Ended March 31, 2002 and 2001 Revenues Three Months Ended March 31, 2002 and 2001 For the three months ended March 31, 2002, the Company had no licensing revenue due to the termination of the Research Collaboration and License Agreement with BMS. For the three months ended March 31, 2001, the Company had licensing revenue of approximately $0.8 million. For the three months ended March 31, 2002 and 2001, the Company had interest income of approximately $0.1 million and approximately $0.4 million, respectively. The decrease in interest income is primarily due to the Company's overall cash position decreasing as well as declining interest rates and returns on investments throughout 2002. The Company will continue to generate no material amount of revenues or fee income due to the termination of the BMS agreement, unless the Company enters into another arrangement providing the Company licensing or fee revenue. Expenses Three Months Ended March 31, 2002 and 2001 Total operating expenses for the three months ended March 31, 2002 and 2001 amounted to approximately $5.6 million and approximately $3.1 million, respectively. Research and development expenses increased to approximately $1.9 million during the three months ended March 31, 2002 from approximately $1.3 million for the comparable 2001 period. The increase of approximately $0.6 million was attributable to the Company's decision to proceed forward with the research and development of its lead compound CA4P following the termination of the Research Collaboration and License Agreement with BMS, of which, research and development costs associated with this agreement were previously assumed by BMS. Partially offsetting this increase was the Company's termination of its joint venture with Peregrine, ARCUS, and the conclusion of further development of its benzamide-based compound, Declopramide. Non-qualified stock options ("NQSOs") granted to certain consultants and advisory board members who are not employees resulted in research and development expenses relative to the fair value of the options that vested during the applicable reporting period. During 2002 and 2001, the Company recorded approximately $0.01 million and approximately $0.07 million, respectively, of research and development expenses related to options issued for services provided by non-employees. Because the market value of the Company's Common Stock at December 31, 2001 was lower than the exercise price of previously issued SARs and there was no balance for previously recorded charges for the SARs, no expense was recorded for the three month period ended March 31, 2002 and 2001. Generally, the Company makes payments to its clinical investigators if and when certain pre-determined milestones in its clinical trials are reached, rather than on a fixed quarterly or monthly basis. As a result of the foregoing and the existence of outstanding SARs and NQSOs, research and development expenses have fluctuated, and are expected to continue to fluctuate, from quarter to quarter. -12- General and administrative expenses for the year ended March 31, 2002 increased to approximately $3.6 million from approximately $1.2 million for the comparable 2000 period. The increase of approximately $2.4 million was primarily attributable to a one-time non-cash compensation charge associated with the Compensation Award Stock Program of approximately $2.2 million and an approximate $0.1 million recurring charge associated with the Restricted Stock Program, issued in February 2002. Absent this one-time charge of approximately $2.3 million, general and administrative expenses would have increased approximately $0.1 million, which was due to higher legal expenses. In an effort to preserve cash and reduce cash flow requirements, the Company's policy has been, and will continue to be, to minimize the number of employees and to use outside consultants to perform services for the Company to the extent practicable. Liquidity and Capital Resources The Company has experienced net losses and negative cash flow from operations each year since its inception, except in fiscal 2000. As of March 31, 2002, the Company had an accumulated deficit of approximately $64.8 million. The Company expects to incur additional expenses, resulting in operating losses, over at least the next several years due to, among other factors, its continuing clinical trials, planned future clinical trials, and other anticipated research and development activities. The Company had cash and available-for-sale securities of approximately $18.2 million at March 31, 2002, compared to approximately $19.0 million at December 31. 2001. In February 2002, the Company received $2.0 million from Peregrine in connection with the termination of the ARCUS joint venture. Absent this payment, the cash and available-for-sale securities would have been approximately $16.1 million. The approximate decrease of $2.9 million was attributable to higher legal expenses, costs associated with further development of the Company's lead compound, CA4P, which such costs were not assumed by BMS due to the termination of the Research Collaboration and License Agreement, and normal increases in monthly recurring charges. The Company anticipates that cash and cash equivalent balances will continue to decrease as cash is utilized in the normal course of operations, such decrease may be offset in whole or in part to the extent the Company enters into any new collaboration agreements that are a source of funding. The Company's policy is to seek to contain fixed expenditures by maintaining a relatively small number of employees and relying as much as possible on outside services for its research, development, pre-clinical testing and clinical trials. The Company makes quarterly payments to the University of Lund, Lund, Sweden, for pre-clinical research. -13- The Company anticipates that its cash and cash equivalents as of March 31, 2002, should be sufficient to satisfy the Company's projected cash requirements as of that date through approximately the third quarter of 2005. The Company has focused and streamlined its research and development programs and has thereby reduced its projected annual cash burn rate. Management believes that these cost containment measures should make available the capital required to pursue the Company's current business plan, including the planned continued clinical development of the Company's lead compound, CA4P. Further, the Company believes its existing capital is sufficient to fund operations through completion of clinical trials and the FDA approval process of CA4P, whether or not such approval is ultimately obtained. However, the Company's cash requirements may vary materially from those now planned for or anticipated by management due to numerous risks and uncertainties. These risks and uncertainties include, but are not limited to, the progress of and results of its pre-clinical testing and clinical trials of CA4P, the progress of the Company's research and development programs; the time and costs expended and required to obtain any necessary or desired regulatory approvals; the resources, if any, that the Company devotes to developing manufacturing methods and advanced technologies; the ability of the Company to enter into licensing arrangements, including any unanticipated licensing arrangements that may be necessary to enable the Company to continue the Company's development and clinical trial programs; the costs and expenses of filing, prosecuting and, if necessary, enforcing the Company's patent claims, or defending the Company against possible claims of infringement by the Company of third party patent or other technology rights; the impact of competition, including the threat of technological advances and obsolescence; the cost of commercialization activities and arrangements, if any, undertaken by the Company; and, if and when approved, the demand for the Company's products, which demand is dependent in turn on circumstances and uncertainties that cannot be fully known, understood or quantified unless and until the time of approval, for example the range of indications for which any product is granted approval. The Security and Exchange Commission recommends that information about contractual obligations and commercial commitments be provided in a single location, preferably in a tabular form by due date and by expiration date. The following table presents such information as of March 31, 2002:
Contractual Obligations Payments due by period - ----------------------- Total Less than After 5 1 year 1-3 years 4-5 years years ---------------------------------------------------------- License Agreement Payable $ 727,000 $273,000 $ 454,000 $ - $ - Termination Agreement 290,000 290,000 - - - Operating lease 2,622,000 218,000 894,000 612,000 898,000 --------------------------------------------------------- Total contractual cash obligations $3,639,000 $781,000 $1,348,000 $612,000 $898,000 =========================================================
Critical Accounting Policies In December 2001, the SEC requested that all registrants discuss their most "critical accounting policies" in management's discussion and analysis of financial condition and results of operations. The SEC indicated that a "critical accounting policy" is one which is both important to the portrayal of the Company's financial condition and results and requires management's most -14- difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We believe the following accounting policies to be critical: Revenue - The Company has entered into collaborations with a pharmaceutical company and a university. These agreements provided for the development, manufacturing and commercialization responsibilities related to our drug candidates. Under these arrangements, the Company administered and participated in several aspects of the remaining development of our drug candidates, Combretastatin and Declopramide. The Company's collaborations have generally provided for the Company's partners to make up-front payments, additional payments upon the achievement of specific research and product development milestones, share in the costs of development and/or pay royalties. The Company recognizes revenue in accordance with Staff Accounting Bulletin (SAB) No. 101 ("SAB 101"), Revenue Recognition in Financial Statements. Under this accounting method, the Company recognizes revenue when it is earned, that is when all of the following have occurred: all obligations of the Company relating to the revenue have been met and the earning process is complete; the monies received or receivable are not refundable irrespective of research results; and there are neither future obligations nor future milestones to be met by the Company with respect to such revenue. In general, collaboration revenues are earned based upon research expenses incurred and milestones achieved. Non-refundable payments upon initiation of contracts are deferred and amortized over the period in which the Company is obligated to participate on a continuing and substantial basis in the research and development activities outlined in each contract. The Company continually reviews these estimates that could result in a change in the deferral period. Amounts received in advance of reimbursable expenses are deferred and only recognized when the related expenses have been incurred. Milestone payments are recognized as revenue in the period in which the parties agree that the milestone has been achieved and it is deemed that no further obligations exist. Patent and Acquired License Costs - The Company files applications for patents in connection with technologies being developed. The patent applications and any patents issued as a result of these applications are important to the protection of the Company's technologies that may result from its research and development efforts. Costs associated with patent applications and maintaining patents are expensed as incurred. The Company has capitalized the costs of acquiring licenses related to its exclusive License Agreement for the commercial development, use and sale of products or services covered by patent rights related to Combretastatin owned by ASU. The present value of the amount payable under the License Agreement has been capitalized and is being amortized over the term of the agreement (approximately 15.5 years). The Company also is required to pay royalties on future net sales of products relating to these certain patent rights. The Company evaluates it intangibles for important indicators in accordance with SFAS No. 121. The Company does not have any impairment issues at March 31, 2002. Use of Estimates - The Company prepares financial statements in accordance with generally accepted accounting principles. These principles require that the Company make estimates and use assumptions that affect the reporting of the Company's assets and the Company's liabilities as well as the disclosures that the Company makes regarding assets and liabilities and income and expense that are contingent upon uncertain factors as of the reporting date. The Company's -15- actual results, based upon the future resolution of these uncertainties, could differ from our estimates. R&D Disclosure Members of the Company's research and development team typically work on a number of development projects concurrently. Accordingly, the Company does not separately track the costs for each of these research and development projects to enable separate disclosure of these costs on a project-by-project basis. For the quarter ended March 31, 2002 and the year ended December 31, 2001, however, the Company estimates that the majority of the research and development expense was related to sub-contract clinical expense and employee salaries related to the research and development of Declopramide, a third generation benzamide technology, the ARCUS joint venture and the next generation of VTAs. The expenses involved with Declopramide relate to the Phase II human clinical trials that were performed at three centers in the U.S and conducted by a leading clinical research organization; the ARCUS joint venture expenses were related to payments to the University of Texas Southwestern for the preclinical development of conjugated monoclonal antibodies to be used as VTAs; and the expenses for the drug discovery program targeted at developing the next enhanced Combretastatin like compound relates to in vitro work performed at Baylor University and in vivo studies at the University of Lund. Tax Matters As of March 31, 2002, the Company had net operating loss carry forwards of approximately $85.0 million for U.S. and foreign income tax purposes, of which approximately $52.6 million expires for U.S. tax purposes through 2020. Due to the degree of uncertainty related to the ultimate use of these loss carry forwards, the Company has fully reserved this tax benefit. Additionally, the future utilization of the U.S. net operating loss carry forwards are subject to limitations under the change in stock ownership rules of the Internal Revenue Service. -16- Item 3. Quantitative and Qualitative Disclosures about Market Risks The Company has reviewed the provisions of Regulation S-K Item 305. At March 31, 2002, the Company did not hold any derivative financial instruments, commodity-based instruments or other long-term debt obligations. The Company has adopted an Investment Policy and maintains its investment portfolio in accordance with the Investment Policy. The primary objectives of the Investment Policy is to preserve principal, maintain proper liquidity to meet operating needs and maximize yields while preserving principal. Although our investments are subject to credit risk, we follow procedures in place to limit the amount of credit exposure in any single issue, issuer or type of investment. Our investments are also subject to interest rate risk and will decrease in value if market interest rates increase. However, due to the conservative nature of our investments and relatively short duration, we believe interest rate risk is mitigated. The Company's cash and marketable securities are maintained primarily in U.S. dollar accounts and amounts payable for research and development to research organizations are contracted in U.S. dollars. Accordingly, the Company's exposure to foreign currency risk is limited because its transactions are primarily based in U.S. dollars. -17- PART II - OTHER INFORMATION Item 2. Legal Proceedings There are no material suits or claims pending or, to the best of the Company's knowledge, threatened against the Company. Item 3. Changes in Securities and Use of Proceeds None. Item 4. Defaults upon Senior Securities None. Item 5. Submission of Matters to a Vote of Security Holders None. Item 6. Other Information Not applicable. Item 7. Exhibits and Reports on Form 8-K (a) Exhibits. 10.13 Employment Agreement with Joel-Tomas Citron dated as of January 2, 2002. * 10.14 Termination Agreement by and between the Registrant and Bristol-Myers Squibb Company dated as of February 15, 2002. * 10.15 Plan and Agreement of Liquidation of Arcus Therapeutics LLC dated as of February 28, 2002. * Confidential treatment requested as to certain portions of the document, which portions have been omitted and filed separately with the Securities and Exchange Commission. (b) Reports on Form 8-K. On February 28, 2002, the Company filed a report on Form 8-K announcing that the Arcus Therapeutics LLC joint venture with Peregrine Pharmaceuticals Inc. ("Peregrine") ended with Peregrine paying the Company $2.0 million and both companies reacquiring full rights to their respective vascular targeting technologies as well as the rights to any discoveries related to their contributions to the joint venture. -18- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. OXiGENE, INC. (Registrant) By: /s/ Frederick W. Driscoll ----------------------------- Frederick W. Driscoll President and Chief Executive Officer May 15, 2002 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- /s/ Rick St. Germain Controller and Chief May 15, 2002 - -------------------- Accounting Officer Rick St. Germain -19- EX-10 3 exh1013.txt EXHIBIT 10.13 Exhibit 10.13 CONFIDENTIAL TREATMENT REQUESTED AS TO PORTIONS OF THIS DOCUMENT, WHICH PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURTIES AND EXCHANGE COMMISSION. EMPLOYMENT AGREEMENT This Employment Agreement (this "Agreement") is entered into as of January 2, 2002, by and between OXiGENE INC., a Delaware corporation with its principal offices at 321 Arsenal Street, Watertown, Massachusetts 02472 ("OXiGENE" or the "Company"), and JOEL-TOMAS CITRON (the "Executive"). W I T N E S S E T H: WHEREAS, Executive and OXiGENE desire to enter into an employment agreement relating to the position of Chairman of the Board of Directors of OXiGENE upon the terms and conditions set forth in this Agreement. NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter contained, the parties hereby agree as follows: 1. Definitions. For purposes of this Agreement, the following capitalized terms used herein shall have the respective meanings set forth below. Other capitalized terms used herein are defined elsewhere in this Agreement. "Cause" shall mean (i) the Executive's willful and continuing breach of duty to the Company in the course of his employment hereunder, (ii) an act of fraud or theft committed by the Executive against the Company, or (iii) the Executive having been convicted by a court of competent jurisdiction of a felony, For purposes of this Agreement, no act, or failure to act, on the Executive's part shall be deemed "willful" unless done, or omitted to be done, by him not in good faith and without reasonable belief that his action or omission was in the best interests of the Company and its subsidiaries. Notwithstanding the foregoing, the Executive shall not be deemed to have been terminated for Cause pursuant to Section 9 hereof unless and until there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Company's Board of Directors (the "Board") at a meeting of the Board called and held for such purpose (after reasonable notice to the Executive, an opportunity for him, together with his counsel, to be heard before the Board and, in the case of (i) above, a reasonable opportunity to cure such breach), finding that in the good faith opinion of the Board the Executive was guilty of conduct set forth above in this definition and specifying the particulars thereof in detail. "Closing Market Price" means, at a given time, the most recent closing price of OXiGENE common stock on the Nasdaq National Market or the then current principal exchange on which it is traded. "Good Reason" means the occurrence, without the Executive's express written consent, of any of the following: (i) the assignment to the Executive of any duties or responsibilities inconsistent with his status as Chairman of the Board, his removal from that position, a diminution in the nature or status of his responsibilities from those in effect immediately prior to the date hereof or the employment by the Company of an executive officer more senior to Executive; (ii) relocation of the Executive's principal place of employment by more than 5 miles from its location as of the date hereof; or (iii) a material breach of this Agreement by the Company. "Termination Date" means the effective date of Executive's termination of employment. 2. Employment. The Company shall employ the Executive, and the Executive shall serve the Company, upon the terms and conditions hereinafter set forth. 3. Duties. 3.1 Executive shall serve in the capacity of Chairman of the Board. The Executive shall report directly to the Board only. All of the Company's officers, including the Vice-Chairman, shall report directly to the Executive except to the extent otherwise set forth in the employment agreements. During the Employment Term (as defined in Section 4 hereof), the Executive shall have the duties, responsibility, and authority necessary to maximize shareholder value, including with respect to: (i) [********************************]; (ii) [**************************************************] or (iii) the continuation of the business of the Company, with the Company entering into Phase II clinical trials for a Combretastatin-based drug or application (the "Phase II Trials"), and the development of a plan of budgeting and financing for the Company sufficient to complete the Phase II Trials. 3.2 Executive, so long as he is employed hereunder, (i) shall devote such amount of his professional time and attention to the services required of him as an employee of OXiGENE as the Board may from time to time deem appropriate, except as otherwise agreed and except as permitted in accordance with paid vacation time subject to OXiGENE's existing vacation policy and subject to OXiGENE's existing policies pertaining to reasonable periods of absence due to sickness, personal injury or other disability, (ii) shall use his best efforts to promote the interests of OXiGENE, and (iii) shall discharge his responsibilities in a diligent and faithful manner, consistent with sound business practices. 4. Term. The term of the Executive's employment under this Agreement shall commence on the date first written above, and, unless sooner terminated on an earlier date in accordance with the provisions herein provided, shall terminate on the second anniversary of such date (the "Employment Term"). 5. Base Salary; Stock; Stock Options. During the Employment Term, the Executive shall receive an annual base salary in the amount of $60,000 (the "Base Salary"), payable monthly in twelve (12) equal installments of $5,000 per month. OXiGENE shall grant to the Executive 175,000 unregistered shares that are freely saleable, subject to applicable securities laws. OXiGENE shall grant to the Executive, (1) an option to purchase 100,000 shares (the "100,000 Share Option") of common stock of OXiGENE, pursuant to the OXiGENE Inc. 1996 Stock Incentive Plan (the "Stock Plan"). Such option shall have an exercise price equal to the Closing Market Price on the date of the grant, and (2) an option to purchase 50,000 shares (the "50,000 Share Option") of common stock of OXiGENE, on the same terms as the 100,000 Share Option except as to vesting (as set forth in Section 6 hereof). Pursuant to the Stock Plan, both options expire after ten (10) years from their date of grant. Both the 100,000 Share Option and the -2- 50,000 Share Option may be exercised on a "cashless" basis, in accordance with the form of the Company's standard stock option agreement, a copy of which is annexed hereto. 6. Vesting Schedule for Options. The 100,000 Share Option and the 50,000 Share Option shall vest and become exercisable upon the earlier to occur of: [******************************************************************************] (ii) [**************************************************************] approved by the Board, following the announcement of which the Closing Market Price of the OXiGENE common stock is $4.00 or more (after adjustment for any splits), per share for either (1) twenty (20) consecutive trading days or (2) thirty (30) trading days within a consecutive forty (40) trading day period; or (iii) the Company enters into Phase II Trials pursuant to a budget submitted to the Board by management and approved by the Board, sufficient to enable the Company to complete such trial from available funds, and after the first public announcement of the commencement of (or the intent to commence) the Phase II Trials, the Closing Market Price of the OXiGENE common stock is $4.00 or more (after adjustment for any splits), per share for either (1) twenty (20) consecutive trading days or (2) thirty (30) trading days within a consecutive forty (40) trading day period; provided, however, in the case of the 50,000 Share Option, the Closing Market Price of the common stock in Sections 6(ii) and 6(iii) shall be $5.00 (after adjustment for any splits). 7. Benefits. Executive shall be entitled to participate in and receive benefits under any employee benefit plan, arrangement or perquisite generally made available by OXiGENE during the Employment Term to its executives, other than with respect to medical and health benefits. 8. Business Expenses. Executive shall be entitled to receive prompt reimbursement for all reasonable and customary expenses incurred by him in performing services hereunder during the Employment Term; provided that such expenses are incurred and accounted for in accordance with the policies and procedures established by OXiGENE. These expenses will include travel, lodging, meals, secretarial assistance, and $1,000.00 per month (which is being paid to executive for medical and health coverage). 9. Termination. OXiGENE may terminate Executive's employment for Cause. The Executive may terminate the Executive's employment hereunder with thirty (30) days prior notice. If, however, the Executive terminates without Good Reason, this Employment Agreement shall terminate and all unexercised options that are or were issued in connection with this Employment Agreement (which shall be the 100,000 Share Option and the 50,000 Share Option) shall also terminate at such time. Upon such termination, Executive shall be entitled to ask for the payments, awards and benefit of any kind from OXiGENE, other than benefits which may be payable to Executives under any plan of OXiGENE which provide benefits to executive officers of OXiGENE generally for termination of employment. 10. No Solicitation; Confidentiality; Work for Hire. 10.1 For a period of one (1) year after the Termination Date, neither the Executive nor any Executive-Controlled Person (as defined below) will, without the prior written consent of the Board, directly or indirectly solicit for employment, or make an unsolicited recommendation to any other person that it -3- employ or solicit for employment, any person who is or was, at any time during the nine (9) month period prior to the Termination Date, an officer, executive or key employee of OXiGENE or of any affiliate of OXiGENE. As used in this Agreement, the term "Executive-Controlled Person" shall mean any company, partnership, firm or other entity as to which Executive possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such entity, whether through the ownership of voting securities, by contract or otherwise, Notwithstanding the foregoing, this provision shall not apply to the solicitation of individuals who have, for at least one (1) year prior to the Termination Date, not been employed by OXiGENE. 10.2 (a) Executive acknowledges that, through his status as Chairman of the Board, he has, and will have, possession of important, confidential information and knowledge as to the business of OXiGENE and its affiliates, including, but not limited to, information and knowledge related to drugs and compounds developed or under development by the Company or any of its affiliates, financial results and projections, future plans, the provisions of other important contracts entered into by OXiGENE and its affiliates, possible acquisitions and similar information. Executive agrees that all such information and knowledge constitutes a vital part of the business of OXiGENE and its affiliates and is by its nature trade secrets and confidential information proprietary to OXiGENE and its affiliates (collectively, "Confidential Information"). Executive agrees that he shall not, so long as the Company or any of its affiliates remains in existence, divulge, communicate, furnish or make accessible (whether orally or in writing or in books, articles or any other medium) to any individual, firm, partnership, corporation or other entity, any knowledge or information with respect to Confidential Information directly or indirectly useful in any aspect of the business of OXiGENE or any of its affiliates. As used in the preceding sentence, "Confidential Information" shall not include any knowledge or information that; (i) is or becomes available to others, other than as a result of a breach by Executive of this Section 10.2; (ii) was available to Executive on a nonconfidential basis prior to its disclosure to Executive through his status as an employee of OXiGENE or any affiliate; (iii) becomes available to Executive on a nonconfidential basis from a third party (other than OXiGENE, any affiliate or any of its or their representatives) who is not bound by any confidentiality obligation to OXiGENE or any affiliate; (iv) was known by the Executive prior to his employment by OXiGENE as evidenced by Executive's preexisting written records; (v) was not maintained as confidential information by OXiGENE; (vi) is otherwise information generally known or available to others within OXiGENE's industry; or (vii) is information that is legally compelled, by applicable law, to be disclosed by Executive, provided, however, that in such an event Executive shall give prompt notice to OXiGENE of such requirement so that OXIGENE may seek a protective order or other appropriate remedy. (b) All memoranda, notes, lists, records and other documents or papers (and all copies thereof), including such items stored in computer memories, on microfiche or by any other means, made or compiled by or on behalf of Executive or made available to him relating to the business of OXiGENE or any of its affiliates are and shall be and remain OXiGENE's property and shall be delivered to OXiGENE promptly upon the termination of Executive's employment with OXiGENE or at any other time on request and such information shall be held confidential by Executive after the termination of his employment with OXiGENE. -4- 10.3 The provisions contained in this Section 10 as to the time periods, scope of activities, persons or entities affected, and territories restricted shall be deemed divisible so that, if any provision contained in this Section 10 is determined to be invalid or unenforceable, such provisions shall be deemed modified so as to be valid and enforceable to the full extent lawfully permitted. 10.4 Executive agrees that the provisions of this Section 10 are reasonable and necessary for the protection of OXiGENE and that they may not be adequately enforced by an action for damages and that, in the event of a breach thereof by Executive or any Executive-Controlled Person, OXiGENE shall be entitled to apply for and obtain injunctive relief in any court of competent jurisdiction to restrain the breach or threatened breach of such provision or otherwise to enforce specifically such provisions against such violation, without the necessity of the posting of any bond by OXiGENE. Executive further covenants and agrees that if he shall violate any of his covenants under this Section 10, OXiGENE shall be entitled to an accounting and repayment of all profits, compensation, commissions, remuneration or other benefits that Executive directly or indirectly has realized and/or may realize as a result of, growing out of or in connection with any such violation. Such a remedy shall, however, be cumulative and not exclusive and shall be in addition to any injunctive relief or other legal or equitable remedy to which OXiGENE is or may be entitled. 11. Taxes. Any amounts payable to the Executive hereunder shall be paid to Executive withholding only all applicable taxes required to be withheld by OXiGENE pursuant to federal state and local law. The Executive shall be solely responsible for all taxes imposed to the Executive by reason of his receipt of any amounts of compensation or benefits payable hereunder. 12. Indemnification. OXiGENE shall indemnify the Executive for all claims, losses, expenses, costs, obligations, and liabilities of every nature whatsoever incurred by the Executive as a result of the Executive's acts or omissions as an employee of OXiGENE, but excluding from such indemnification any claims, losses, expenses, costs, obligations, or liabilities incurred by the Executive as a result of the Executive's bad faith, willful misconduct or gross negligence. 13. Severability. The Executive acknowledges and agrees that (i) he has had an opportunity to seek advice of counsel in connection with this Agreement and (ii) the restrictive covenants are reasonable in geographical and temporal scope and in all other respects. If it is determined that any of the provisions of this Agreement, including, without limitation, any of the restrictive covenants, or any part thereof, is invalid or unenforceable, the remainder of the provisions of this Agreement shall not thereby be affected and shall be given full effect, without regard to the invalid portions. 14. Scope. If any court determines that any of the covenants contained in this Agreement, including, without limitation, any of the restrictive covenants, or any part thereof, is unenforceable because of the duration or geographical scope of such provision, the duration or scope of such provision, as the case may be, shall be reduced so that such provision becomes enforceable and, in its reduced form, such provision shall then be enforceable and shall be enforced. -5- 15. Enforceability; Jurisdictions. The Company and the Executive intend to and hereby confer jurisdiction to enforce the restrictive covenants upon the courts of any jurisdiction within the geographical scope of the restrictive covenants. If the courts of any one or more of such jurisdictions held the restrictive covenants wholly unenforceable by reason of breadth of scope or otherwise it is the intention of the Company and the Executive that such determination not bar or in arty way affect the Company's right to the relief provided above in the courts of any other jurisdiction within the geographical scope of such restrictive covenants, as to breaches of such restrictive covenants in such other respective jurisdictions, such restrictive covenants as they relate to each jurisdictions being, for this purpose, severable, diverse and independent covenants, subject, where appropriate, to the doctrine of res judicata. 16. Notices. All notices or other documents to be given hereunder by either party hereto to the other shall be in writing and delivered personally or sent postage prepaid by registered or certified mail, return receipt requested. Notices shall be sent to the following addresses until a notice of change of address by like notice has been duly provided: If to the Executive: Joel-Tomas Citron, 660 Madison Avenue, 22nd Floor, New York, NY 10021. If to the Company: OXiGENE Inc., 321 Arsenal Street, Watertown, MA 02472 Attention: Frederick W. Driscoll. 17. Amendments. This Agreement may not be altered, modified or amended except by a written instrument signed by each of the parties hereto. 18. Location. The Executive will be located in or around New York City, New York, and the Company will provide the Executive with suitable office space and staff. 19. Waiver. Waiver by any party hereto of any breach or default by arty other party of any of the terms of this Agreement shall not operate as a waiver of any other breach or default, whether similar to or different from the breach or default waived. 20. Governing Law. This Agreement shall be governed by the laws of the State of New York, Manhattan County, without reference to the principles of conflict of laws. Each of the parties hereto consents to the jurisdiction of the federal and state courts of the State of New York in connection with any claim or controversy arising out of or connected with this Agreement, and said courts shall be the exclusive forum for the resolution of any such claim or controversy. 21. Assignment. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned or delegated by any party hereto without the prior written consent of the other party; provided, however, that any payments and benefits owed to Executive under this Agreement shall inure to the benefit of his heirs and personal representatives. 22. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors, permitted assigns, heirs, executors and legal representatives. 23. Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an -6- original but all such counterparts together shall constitute one and the same instrument. Each counterpart may consist of two copies hereof each signed by one of the parties hereto. 24. Headings. Headings to sections in this Agreement are for the convenience of the parties only and are not intended to be a part of, or to affect the meaning or interpretation of, this Agreement. 25. No Construction Against Drafting Party. This Agreement shall not be construed for or against either party on the basis that a party drafted the Agreement, or any provisions thereof. 26. Equitable Principles. The Executive represents and warrants that this Agreement is executed and delivered after OXiGENE recommended and provided an opportunity to the Executive to seek advice of legal counsel. 27. All Other Agreements Superseded. This Agreement contains the entire agreement between Executive and OXiGENE with respect to all matters relating to Executive's employment with OXiGENE and, as of the date hereof, will supersede and replace any other agreements, written or oral, between the parties relating to the terms or conditions of Executive's employment with OXiGENE, provided, however, that nothing in this Agreement shall amend or affect any options previously granted to Executive pursuant to the Stock Plan. IN WITNESS WHEREOF, OXiGENE and Executive have caused this Agreement to be executed as of the date first above written. /s/ Joel-Tomas Citron --------------------- Joel-Tomas Citron OXiGENE, Inc. By: /s/ Bjorn Nordenvall ------------------------- Name: Bjorn Nordenvall Title: CEO -7- EX-10 4 exh1014.txt EXHIBIT 10.14 Exhibit 10.14 CONFIDENTIAL TREATMENT REQUESTED AS TO PORTIONS OF THIS DOCUMENT, WHICH PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURTIES AND EXCHANGE COMMISSION. TERMINATION AGREEMENT THIS TERMINATION AGREEMENT (this "Agreement") is entered into as of February 15, 2002 (the "Effective Date"), by and between OXiGENE Europe AB, a company duly organized and existing under the laws of Sweden and having offices at Blasieholmsgatan 2c, S-111 48 Stockholm, Sweden, for and on behalf of itself and its Affiliates ("OXiGENE"), and Bristol-Myers Squibb Company, a company duly organized and existing under the laws of the State of Delaware and having offices at Route 206 and Province Line Road, Princeton, New Jersey, USA 08543-4000, for and on behalf of itself and its Affiliates ("BMS"). PRELIMINARY STATEMENTS A. OXiGENE and BMS entered into that certain Research Collaboration and License Agreement, dated as of December 15, 1999 (the "License Agreement"). B. By a letter dated October 24, 2001, BMS informed OXiGENE that BMS was exercising its right under Section 15.4 of the License Agreement to terminate the License Agreement in its entirety effective April 24, 2002 or any earlier date upon which OXiGENE and BMS may agree. C. In accordance with Section 15.5(a) of the License Agreement, OXiGENE and BMS have agreed to terminate the License Agreement upon the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the foregoing Preliminary Statements and the mutual promises and covenants set forth herein, OXiGENE and BMS hereby agree as follows: 1. TERMINATION OF LICENSE AGREEMENT. 1.1 Termination. The parties hereby agree that the License Agreement is terminated as of the Effective Date. 1.2 Right to Cross-Reference. BMS shall permit OXiGENE to cross-reference BMS' U.S. IND No. [******] in its entirety solely in connection with OXiGENE's development of Licensed Products (or other products that would constitute Licensed Products, but for the expiration of the relevant [*****]year period(s) referred to in clause (i) of Section 3.1(g)) pursuant to Section 3 hereof. Within 10 days after the Effective Date, BMS shall file with the FDA all documents required authorize OXiGENE to cross reference BMS U.S. IND No. [******] in its entirety for such purpose. BMS represents and warrants to OXiGENE that such IND is the only IND, NDA or other regulatory filing made or filed with respect to any Collaboration Compound or Covered Product. 1.3 Survival. (a) Except to the extent provided herein, [*****************************************] this Agreement shall not supersede, modify or otherwise affect the provisions of the License Agreement that expressly survive the termination, relinquishment or expiration of the License Agreement, which provisions of the License Agreement shall continue in full force and effect. (b) Notwithstanding Section 1.3(a) and the parties' continuing obligations under Section 12 of the License Agreement, OXiGENE shall be permitted to provide Confidential Information of BMS to any third party under appropriate terms and conditions, including confidentiality provisions equivalent to those set forth in the License Agreement, for consulting, manufacturing development, manufacturing, external testing, marketing trials and sublicensing or potential sublicensing, in each case solely with respect to a Collaboration Compound(s) and/or Licensed Product(s); provided, however, that OXiGENE shall encourage any such third party to validate and confirm the accuracy and completeness of any such Confidential Information of BMS that OXiGENE elects to disclose pursuant to this Section 1.3(b); and provided, further, that BMS shall have no liability with respect to OXiGENE or any such third party, either directly or indirectly, in connection with the receipt, use or reliance upon any such Confidential Information of BMS. 1.4 Representation and Warranty. BMS represents and warrants that, to the best of BMS' knowledge, (i) the Transferred Materials, the technical information and documentation listed on Exhibit B and the Licensed Patents constitute all of the BMS Collaboration Technology and all of the data, reports, records, materials and other intellectual property owned or controlled by BMS) that relates directly and primarily (whether or not exclusively) to Collaboration Compounds and/or Covered Products; and (ii) in the case of the Licensed Patents, constitute all of the pending patent applications that relate directly and primarily (whether or not exclusively) to Collaboration Compounds and/or Covered Products as to which former and/or current BMS employees (in their capacity as employees of BMS) are either the only inventors or co-inventors along with former and/or current employees of OXiGENE. BMS covenants and agrees to transfer or license to OXiGENE, without additional consideration, any additional intellectual property (including patent applications or patents) materials, data, reports or records that are subsequently discovered to relate directly and primarily to Collaboration Compounds or Covered Products. This Section 1.4, however, shall not pertain to the subject matter of Section 2.4, which shall be governed solely by Section 2.4. 1.5 Definitions. As used in this Section 1, the terms "Collaboration Compound," "Confidential Information," "Covered Product," and "BMS Collaboration Technology" shall have the respective meanings set forth in the License Agreement. 2. TRANSFER OF SUPPLIES. 2.1 Generally. OXiGENE hereby agrees to receive from BMS, and BMS hereby agrees to transfer to OXiGENE, the quantities of the compounds set forth on the attached Exhibit A ( "Transferred Materials"). OXiGENE shall pay BMS the sum of [**********] (the "Transfer Payment") as a reimbursement of BMS' costs of acquiring the Transferred Materials. 2.2 Shipment. (a) BMS shall package and ship, in accordance with OXiGENE's written instructions, the Transferred Materials. Risk of loss with respect to the Transferred Materials shall shift to OXiGENE upon BMS' deposit thereof with the common carrier selected by OXiGENE. OXiGENE shall bear, and BMS shall invoice OXiGENE for, all costs of any special packaging required or requested by OXiGENE and of such shipment. -2- (b) Simultaneously with BMS' shipment of the Transferred Materials, BMS shall transmit to OXiGENE a package of technical information and documentation concerning same, the contents of which are outlined on the attached Exhibit B. 2.3 Invoicing; Payment. BMS shall be entitled to invoice OXiGENE for the Transfer Payment and permitted costs under Section 2.2(a) after the shipment of the Transferred Materials in accordance with Section 2.2. Payment of any such invoice(s) shall be due within 30 days. OXiGENE shall be liable for all taxes arising from the purchase and sale of the Transferred Materials other than taxes imposed on the gross income of BMS or any of its Affiliates. 2.4 Future Purchases. BMS may, but shall not be required to, maintain some or all of its current inventory of [********] [*******] that was originally manufactured by Aerojet. OXiGENE acknowledges that the quality of such material has previously been disclosed to OXiGENE by BMS. OXiGENE may, from time to time, request BMS to sell OXiGENE quantities of such material upon terms and conditions that the parties shall agree to. BMS shall not unreasonably deny any such requests by OXiGENE, so long as BMS continues to maintain such inventory. During the [***********] period immediately following the Effective Date, if BMS determines to dispose of such inventory, BMS will give OXiGENE at least 30 days' prior written notice thereof, and OXiGENE shall have the right to acquire any or all of such inventory upon terms and conditions that the parties shall agree to. 2.5 Representations and Warranties; Disclaimer. (a) BMS represents and warrants that it owns the Transferred Materials and any other materials that OXiGENE may purchase pursuant to this Section 2, and that BMS has the right to sell same to OXiGENE and that BMS will furnish to OXiGENE all information in its possession or control concerning the safety and quality of the Transferred Materials and such other materials. (b) EXCEPT AS EXPRESSLY PROVIDED IN SECTIONS 1.4 AND 2.5(a), BMS EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE TRANSFERRED MATERIALS, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT OF THIRD PARTY RIGHTS, OR ARISING FROM A COURSE OF DEALING OR USAGE OF TRADE PRACTICE. 3. PATENT LICENSES. 3.1 Definitions. For purposes of this Agreement, the following terms shall have the following respective meanings unless the context dictates otherwise. (a) "Field" shall mean the prevention, diagnosis, control or treatment of any human or animal disease or condition by use of a Licensed Product(s), either as a single agent or in combination with any other therapy. (b) "First Commercial Sale" shall mean, with respect to any Licensed Product, the first sale for use or consumption by the general public of such Licensed Product in a country after all required marketing and pricing approvals have been granted, or otherwise permitted, by the governing health authority of such country. "First Commercial Sale" shall not include the sale of any Licensed Product for use in clinical trials or for compassionate use prior to the approval of an NDA; provided, however, that if and to the extent that OXiGENE receives remuneration for any such compassionate use or named patient sales, OXiGENE shall pay royalties thereon in accordance with Section 3.7. -3- (c) "Licensed Patents" shall mean the letters patent and patent applications set forth on the attached Exhibit C, as well as any and all substitutions, extensions, renewals, continuations, continuations-in-part, divisions, patents-of-addition and/or reissues thereof and all foreign and/or PCT counterparts thereto. (d) "Licensed Product" shall mean any pharmaceutical product the manufacture, sale or use of which in the jurisdiction in which it is manufactured or sold is covered by a Valid Claim of any Licensed Patent. (e) "Major Market" shall mean [*********************************]. (f) "Net Sales" shall mean, with respect to any Licensed Product, the gross amount invoiced to third parties by OXiGENE, its Affiliates or its sublicensees, as the case may be, for such Licensed Product, commencing with the First Commercial Sale of such Licensed Product, less deductions for: [************************************************************] Such amounts shall be determined from the books and records of [***********], its Affiliates or its sublicensees, as the case may be, maintained in accordance with the generally accepted accounting principles, consistently applied. Notwithstanding the foregoing, in the event a Licensed Product is sold in conjunction with another proprietary active component so as to be a combination product (whether packaged together or in the same therapeutic formulation), Net Sales shall be calculated by multiplying the Net Sales of such combination product by a fraction, the numerator of which shall be the fair market value of the Licensed Product as if sold separately (determined in accordance with generally accepted accounting principles), and the denominator of which shall be the aggregate fair market value of all the proprietary active components of such combination product, including the Licensed Product, as if sold separately. In the event no such separate sales are made by OXiGENE, its Affiliates or its sublicensees, Net Sales of the combination product shall be calculated in a manner to be negotiated and agreed upon by the parties, reasonably and in good faith, prior to any sale of such combination product, which shall be based upon the respective estimated commercial values of the proprietary active components of such combination product. Notwithstanding the foregoing, in connection with (X) any sale or other disposition of Licensed Product that is not a bona fide, arms length transaction for money, or (Y) any other use of Licensed Product that does not result in or give rise to sales revenue that is customary in the country in which such use takes place (except as provided in the next paragraph), Net Sales shall be calculated at the relevant open market price in the country in which such sale, disposition or use takes place, or, if such price is not reasonably ascertainable, at a reasonable price, assessed on an arms length basis, for the goods and/or services received in consideration of the sale, disposition or use of Licensed Product. OXiGENE's or any of its Affiliate's transfer of Licensed Product to another Affiliate or a sublicensee shall not result in any Net Sales, unless such Licensed Product is consumed by such Affiliate or sublicensee in the course of its commercial activities. In such case, Net Sales shall occur upon such other Affiliate's or sublicensee's sale of such Licensed Product to a third party. Further, the disposition of Licensed Product for, or the use of Licensed Product in, pre-clinical or clinical (Phase I - III) trials or other market-focused (Phase IV or V) trials or free samples shall not result in any Net Sales. (g) "Valid Claim" shall mean (i) a pending claim in any patent application that has not been pending for more than five years, or (ii) a claim of any issued letters patent that, in each case, has not been held invalid or -4- unenforceable by final decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and that is not admitted to be invalid or unenforceable through reissue, disclaimer or otherwise. 3.2 Representations and Warranties of BMS; Disclaimer. (a) BMS represents and warrants to OXiGENE that, as of the Effective Date: (i) With respect to any of the Licensed Patents that BMS does not jointly own with OXiGENE, BMS and/or its Affiliates are the owner of, or have exclusive rights to, all of such Licensed Patents and have the exclusive right to grant the licenses therefor granted under this Section 3; (ii) With respect to any of the Licensed Patents that BMS jointly owns with OXiGENE, BMS and/or its Affiliates have the exclusive right to grant the licenses granted under this Section 3 with respect to BMS' interests in such Licensed Patents; (iii)All of the Licensed Patents consist of either patent applications that have been filed and are pending and actively being prosecuted as of the Effective Date, or issued letters patent that are in full force and effect and have been maintained through the Effective Date; (iv) BMS is not aware of any claim or demand asserted or threatened by a third party which BMS reasonably believes can be enforced by a third party against any Licensed Patents; and (v) BMS has not entered into any agreement with any third party which is in conflict with the rights granted to OXiGENE under to this Section 3, and the execution and performance of this Agreement by BMS do not and shall not violate any agreement or undertaking to which BMS is a party. (b) EXCEPT AS EXPRESSLY PROVIDED IN SECTIONS 1.4 AND 3.2(a), BMS EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE LICENSED PATENTS, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT OF THIRD PARTY RIGHTS, OR ARISING FROM A COURSE OF DEALING OR USAGE OF TRADE PRACTICE. 3.3 Grant. BMS hereby grants OXiGENE an exclusive (even as to BMS, subject to Section 3.9(b)), world-wide, royalty-bearing right and license in the Field, with the right to grant sublicenses subject to the terms of this Agreement, under BMS' respective interests in the Licensed Patents, to develop, make, have made, use, sell, offer for sale, have sold, import and export Licensed Products. 3.4 Sublicensing. (a) OXiGENE shall guarantee and be responsible for the making of all payments due, and the making of reports required, under this Agreement by reason of milestones achieved with respect to any Licensed Product and sales of any -5- Licensed Products by its Affiliates or sublicensees and their diligent discharge of OXiGENE's obligations under, and compliance with all applicable terms of, this Agreement. Each Affiliate or sublicensee of OXiGENE shall agree in writing to keep books and records, and permit BMS to review such books and records, pursuant to the relevant provisions of, and to observe all other applicable terms of, this Agreement. The rights of BMS under this Agreement are preserved in connection with any such sublicensing. OXiGENE shall promptly provide BMS with notice of any sublicense granted hereunder. (b) OXiGENE hereby unconditionally guarantees the performance of any of its Affiliates and its sublicensees hereunder. In the event of a breach by an Affiliate or sublicensee of OXiGENE in the observance of applicable terms of this Agreement, BMS shall be entitled to proceed against either such Affiliate or sublicensee or directly against OXiGENE, as BMS may determine in its sole discretion, to enforce this Agreement. 3.5 License Fees. (a) In partial consideration of the rights and licenses granted to OXiGENE under this Section 3 (collectively, the "Licenses"), within [*****] days after the execution of this Agreement OXiGENE shall pay BMS a non-refundable, non-creditable initial license fee in the amount of [**********]. OXiGENE acknowledges that the amount payable under this Section 3.5(a) has been negotiated in a manner such that BMS shall be deemed to have paid all patent prosecution expenses payable by BMS under the License Agreement that have not been paid as of the Effective Date. (b) In partial consideration of the Licenses, within [****] days after the execution of this Agreement OXiGENE shall pay BMS a non-refundable, non-creditable additional license fee in the amount of [************]. 3.6 Patent Prosecution Milestone Payments by OXiGENE. In partial consideration of the Licenses, OXiGENE shall pay BMS the following milestone payments upon the first occurrence of each event set forth below: (i) [********] upon the issuance of the first notice of allowance, in any Major Market, with respect to any claim of U.S. patent application [********] or any substitution, continuation, continuation-in-part, division, patent-of-addition, or foreign counterpart to any of the foregoing that covers the [**********] and/or any pharmaceutical composition thereof; and (ii) [*******] upon the issuance of the first letters patent, in any Major Market, with respect to any claim of U.S. patent application [*******] or any substitution, continuation, continuation-in-part, division, patent-of-addition, or foreign counterpart to any of the foregoing that covers the [********] and/or any pharmaceutical composition thereof. Each of the foregoing payments shall be made within [*****] days after achievement of such milestone. For the avoidance of doubt, after OXiGENE has made any of the foregoing payments with respect to any claim, OXiGENE shall have no further obligation to make such payment with respect to any other claim. -6- 3.7 Royalties. (a) In partial consideration of the Licenses, OXiGENE shall pay BMS a royalty on Net Sales of each Licensed Product, commencing on the First Commercial Sale of each Licensed Product by OXiGENE, its Affiliates or its sublicensees, in an amount equal to [****] percent of the [**********] Net Sales of such Licensed Product by OXiGENE, its Affiliates and its sublicensees during the term of this Agreement. (b) The obligation to pay royalties to BMS under this Section 3.7 is imposed only once with respect to the same unit of Licensed Product, regardless of the number of Licensed Patents pertaining thereto. 3.8 Payment and Reports. (a) Except as otherwise provided in this Agreement, all royalty and other payments due hereunder shall be paid quarterly within [***] days after the end of each calendar quarter. Each such payment shall be accompanied by a statement, Licensed Product-by-Licensed Product and country-by-country, of the amount of Net Sales during such quarter and the amount of royalties due on such Net Sales. (b) OXiGENE shall make all payments required under this Agreement as directed by BMS from time to time, in U.S. Dollars. All royalties due hereunder shall first be determined in the currency of the country in which the Licensed Products in question were sold and then converted into equivalent U.S. funds. The exchange rate for such conversion shall be that rate quoted in The Wall Street Journal on the last business day of the applicable reporting period. (c) OXiGENE, its Affiliates and its sublicensees shall keep complete and accurate records pertaining to the sale of Licensed Products and covering all transactions from which Net Sales are derived for a period of [*****] after the year in which such sales occurred, and in sufficient detail to permit BMS to confirm the accuracy of royalty payments due hereunder. (d) At the request and expense (except as provided below) of BMS, OXiGENE, its Affiliates and its sublicensees shall permit an independent, certified public accountant appointed by BMS and reasonably acceptable to OXiGENE, at reasonable times and upon reasonable notice, to examine those records and all other material documents relating to or relevant to Net Sales in the possession or control of OXiGENE, its Affiliates or its sublicensees, for a period of three years after such royalties have accrued. The results of any such examination shall be made available to both parties. If, as a result of any inspection of the books and records of OXiGENE, its Affiliates or its sublicensees, it is shown that OXiGENE's royalty payments under this Agreement were less than the amount which should have been paid, then OXiGENE shall make all payments required to eliminate any discrepancy revealed by said inspection within [***] days after BMS' demand therefor. Furthermore, if the aggregate royalty payments OXiGENE made were less than [*****] of the amount which should have been paid during the period in question, OXiGENE shall also reimburse BMS for the reasonable out-of-pocket cost of such inspection and shall pay interest on the deficiency pursuant to Section 3.8(g). (e) In the event that OXiGENE is required to withhold any tax to the tax or revenue authorities in any country in connection with any payment to BMS due to the laws of such country, such amount shall be deducted from the royalty or other payment to be made by OXiGENE, and OXiGENE shall notify BMS and promptly furnish BMS with copies of any tax certificate or other documentation evidencing such withholding. Each party agrees to cooperate with the other party in claiming exemptions from such deductions or withholdings under any agreement or treaty from time to time in effect. -7- (f) If at any time legal restrictions prevent OXiGENE's prompt remittance of part or all of the royalties due with respect to any country where a Licensed Product is sold, OXiGENE shall convert the amount owed to BMS into U.S. funds and shall pay BMS directly from OXiGENE's U.S. source of funds for the amount impounded. OXiGENE shall then pay all future royalties due to BMS from OXiGENE's U.S. source of funds so long as the legal restrictions of this Section 3.8(f) still apply. (g) In the event that any payment OXiGENE is required to make hereunder is not made within [********] after such payment was originally due, OXiGENE shall pay interest on the past due amount as follows at the rate of [*****] per annum, until payment in full is made. 3.9 Intellectual Property Matters; Prosecution of Licensed Patents. (a) From and after the Effective Date OXiGENE shall have sole responsibility for preparing, filing, prosecuting, maintaining and enforcing all Licensed Patents, at its sole cost and expense. Following the execution of this Agreement the parties shall make arrangements for the prompt, orderly transfer to OXiGENE of all files, papers and information in BMS' possession and control relating to the Licensed Patents. (b) In the event that OXiGENE wishes to abandon the prosecution, maintenance or enforcement of any Valid Claim(s) of any Licensed Patent other than in the ordinary course of agreeing on the language of claims with any patent office, it shall promptly notify BMS of such wish and shall, if so requested by BMS, execute an instrument canceling the license granted to OXiGENE under this Section 3 with respect to such Valid Claim(s) and expressly permitting BMS to continue such prosecution, maintenance and/or enforcement, at BMS' sole cost and expense. (c) OXiGENE shall have sole responsibility for defending against, or otherwise disposing of, any claim of, or action for, infringement of any patents owned or licensed by third parties which is threatened, made or brought against either party by reason of OXiGENE's, or its Affiliates' or sublicensees' exploitation of the rights granted to OXiGENE under this Agreement or by reason of the manufacture, use or sale of any Licensed Products; provided, however, that OXiGENE shall not have any such responsibility with respect to any claim or action to the extent it arises from BMS' exploitation of any of its interests in the Licensed Patents prior to or after the Effective Date. (d) At OXiGENE's request, BMS shall provide reasonable assistance to OXiGENE in the activities set forth in Sections 3.9(a), 3.9(c) and 3.10(a), including by providing access to personnel and records of BMS pertaining to the Licensed Patents, provided that the rendering of such assistance does not unreasonably interfere with the conduct of BMS' business in the ordinary course. 3.10 Patent Enforcement. (a) OXiGENE shall have the right, but not the duty, to institute patent infringement actions against third parties with respect to any alleged infringement of the Licensed Patents. BMS shall execute all reasonable, necessary and proper documents and take such reasonable actions (other than -8- allowing itself to be named as a party in any litigation or alternative dispute resolution proceeding, and provided that the taking of such actions does not require BMS to expend more than incidental sums of money and does not unreasonably interfere with the conduct of BMS' business in the ordinary course) as shall be appropriate to allow OXiGENE to institute and prosecute infringement actions under this Section 3.10. (b) The costs and expenses of bringing and maintaining any infringement action under Section 3.10(a) shall be borne solely by OXiGENE. To the extent BMS agrees to take any action pursuant to Section 3.10(a) that requires BMS to expend more than incidental sums of money, OXiGENE shall reimburse BMS therefor, promptly after receiving an invoice(s) from BMS. (c) Any award or compensation (including the fair market value of any non-monetary compensation) paid by third parties as a result of any infringement action brought by OXiGENE under Section 3.10(a) (whether by way of settlement or otherwise) shall be allocated first to reimbursement of OXiGENE for all expenses incurred by it in connection with such action. Any remaining award or compensation shall be allocated to OXiGENE; provided, however, that to the extent any such award or compensation (including the fair market value of non-monetary compensation) shall relate to the sale of any compounds or products that infringe upon any Licensed Patent (and/or to lost revenue or profits with respect to any Licensed Product), then OXiGENE shall pay BMS a royalty thereon in substantial accordance with Section 3.7, the exact amount of such royalty to be calculated in a manner agreed upon by the parties. 3.11 Indemnification by OXiGENE. (a) OXiGENE shall indemnify and hold BMS and its Affiliates and their respective directors, officers, employees and agents, harmless from and against any and all liabilities, damages, losses, costs and expenses (including the reasonable fees of attorneys and other professionals and other reasonable litigation expenses) arising out of or resulting from: (i) the negligence, recklessness or intentional misconduct of OXiGENE, its Affiliates or its sublicensees and their respective directors, officers, employees and agents, in connection with OXiGENE's exercise of any of its rights hereunder; (ii) any and all product liability claims resulting from the development and/or commercialization of any Licensed Product by OXiGENE, its Affiliates or its sublicensees; or (iii)any warranty claims, Licensed Product recalls or any tort claims of personal injury (including death) or property damage relating to or arising out of the manufacture, use, distribution or sale of any Licensed Product by OXiGENE, its Affiliates or its sublicensees due to any negligence, recklessness or intentional misconduct by, or strict liability of, OXiGENE, its Affiliates or its sublicensees, and their respective directors, officers, employees and agents, except, in each case, to the comparative extent such claim arose out of or resulted from the negligence, recklessness or intentional misconduct of BMS or its Affiliates and their respective directors, officers, employees and agents. For the avoidance of doubt, it is acknowledged that (a) except as may be otherwise provided in the License Agreement, OXiGENE shall have no obligation to indemnify BMS for any claims resulting from, arising out of or relating to the conduct of any clinical trial by BMS; and (b) BMS' obligation to indemnify OXiGENE for any such claim under Section 14.1 of the License Agreement shall continue in effect. -9- (b) In the event that any person entitled thereto (an "indemnitee") is seeking indemnification under Section 3.11(a), such indemnitee shall inform OXiGENE of a claim as soon as reasonably practicable after the indemnitee receives notice of the claim, shall permit OXiGENE to assume direction and control of the defense of the claim (including the sole right to settle it at the sole discretion of OXiGENE, provided that such settlement does not impose any material obligation on the indemnitee or BMS) and shall cooperate as requested (at the expense of OXiGENE) in the defense of the claim (including, without limitation, granting OXiGENE limited access to pertinent records and making persons under such indemnitee's control available for interview and testimony). (c) As the parties intend complete indemnification, all costs and expenses incurred by any indemnitee to enforce this Section 3.11 shall be reimbursed by OXiGENE. 3.12 Term; Termination. (a) The term of the Licenses shall commence as of the Effective Date and, unless sooner terminated as provided hereunder, shall expire as follows: (i) As to each Licensed Product in each country, the Licenses shall expire upon the expiration of the last of the Valid Claims of the Licensed Patents to expire with respect to such Licensed Product in such country. (ii) The Licenses shall expire in their entirety upon the termination of the all Valid Claims of all Licensed Patents with respect to all Licensed Products in all countries. (b) Following the expiration of the Licenses with respect to a Licensed Product in a country pursuant to Section 3.12(a)(i), OXiGENE shall have the royalty-free, perpetual right to continue to make, have made, use, sell, offer for sale, have sold and export such Licensed Product in such country. Following the expiration of all Licenses in their entirety pursuant to Section 3.12(a)(ii), OXiGENE shall have the royalty-free, perpetual right to continue to make, have made, use, sell, offer for sale, have sold and export all Licensed Products in all countries. (c) Each party shall have the right to terminate the Licenses, upon notice to the other party, in the event that such other party materially defaults with respect to any of its material obligations under this Agreement and does not cure such default within [********] after the receipt of a notice from the non-breaching party specifying the nature of, and requiring the remedy of, such default (or, if such default cannot be cured within such [*********] period, if the breaching party does not commence and diligently continue actions to cure same during such [********] period). Any termination pursuant to this Section 3.12(c) shall be without prejudice to any of the non-breaching party's other rights under this Agreement, and in addition to any other remedies available to it by law or in equity. (d) Provided that OXiGENE is not in material breach of any obligation under this Agreement at the time of any termination of the Licenses pursuant to Section 3.12(c), OXiGENE shall have the right for one year thereafter to dispose of all Licensed Product then in its inventory and to complete manufacture of and dispose of any work-in-progress then being manufactured, as though this Agreement had not terminated. OXiGENE shall pay royalties thereon, in accordance with the provisions of this Agreement, as though this Agreement had not terminated. -10- (e) Upon any termination of any of the Licenses, all relevant sublicenses granted by OXiGENE under this Agreement shall terminate simultaneously, subject, nevertheless, to Section 3.12(d). (f) Termination, relinquishment or expiration of this Agreement for any reason shall be without prejudice to any rights which shall have accrued to the benefit of either party prior to such termination, relinquishment or expiration. Such termination, relinquishment or expiration shall not relieve either party from obligations which are expressly indicated to survive termination or expiration of this Agreement. (g) Termination, relinquishment or expiration of this Agreement shall not terminate a party's obligation to pay all royalties, milestone payments and other monetary obligations that may have accrued hereunder prior to such termination. All of the parties' rights and obligations under Sections 1, 2.3, 2.4(b), 2.5, 3.2(b), 3.4, 3.8, 3.11, 3.12(b), (f) and (g), 4.3, 4.6, 4.12, 4.13 and 4.14 shall survive termination, relinquishment or expiration hereof. 4. MISCELLANEOUS. 4.1 Definition. For purposes of this Agreement, "Affiliate" have the meaning set forth in the License Agreement. 4.2 Relationship of Parties. Nothing in this Agreement is intended or shall be deemed to constitute a partnership, agency, employment or joint venture relationship between the parties. Neither party shall be entitled to, or shall, incur any debts or make any commitments for the other, except to the extent, if at all, specifically provided herein. 4.3 Guaranty. OXiGENE, Inc. hereby unconditionally guaranties the performance of all obligations of OXiGENE Europe AB under this Agreement. In the event of a breach by OXiGENE Europe AB in the observance of the terms of this Agreement, BMS shall be entitled to proceed against either OXiGENE Europe AB or directly against OXiGENE, Inc., as BMS may determine in its sole discretion, to enforce this Agreement. 4.4 Assignment. (a) Each party shall be entitled to assign this Agreement to any of its Affiliates upon 60 days' prior written notice to the other party; provided, however, that in the event of any such assignment, the assigning party shall remain jointly and severally liable with respect to all of its obligations hereunder, and in the event of any default relating to any such obligations, the other party shall be entitled to proceed against either such Affiliate or directly against the assigning party, as such other party may determine in its sole discretion, to enforce this Agreement. (b) Except as provided in Section 4.4(a), neither party shall be entitled to assign its rights hereunder without the express written consent of the other party, except that each party may assign this Agreement to any assignee of all or substantially all of such party's business (or that portion thereof to which this Agreement relates) or in the event of such party's merger, consolidation or similar transaction. (c) No assignment contemplated by this Section 4.4 shall be valid or effective unless and until the assignee/transferee shall agree in writing to be bound by the provisions of this Agreement. -11- 4.5 Further Actions. Each party shall execute, acknowledge and deliver such further instruments, and take all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement. 4.6 Notice. Any notice or request required or permitted to be given under or in connection with this Agreement shall be deemed to have been sufficiently given if in writing and personally delivered or sent by certified mail (return receipt requested), facsimile transmission (receipt verified), or overnight express courier service (signature required), prepaid, to the party for which such notice is intended, at the address set forth for such party below: (i) In the case of BMS, to: Bristol-Myers Squibb Company P.O. Box 4000 Route 206 & Province Line Road Princeton, New Jersey 08543-4000 USA Attention: Vice President & Senior Counsel, Pharmaceutical Research Institute and Worldwide Business Development Facsimile No.: 609-252-4232 (ii)In the case of OXiGENE, to: OXiGENE Europe AB c/o OXiGENE, Inc. 321 Arsenal Street Watertown, Massachusetts 02472 Attention: President Facsimile No.: 617-924-9229 or to such other address for such party as it shall have specified by like notice to the other party, provided that notices of a change of address shall be effective only upon actual receipt thereof. If delivered personally or by facsimile transmission, the date of delivery shall be deemed to be the date on which such notice or request was given. If sent by overnight express courier service, the date of delivery shall be deemed to be the next business day after such notice or request was deposited with such service. If sent by certified mail, the date of delivery shall be deemed to be the fifth business day after such notice or request was deposited with the postal service in the country of mailing. 4.7 Use of Name. Except as otherwise provided herein, neither party shall have any right, express or implied, to use in any manner the name or other designation of the other party or any other trade name or trademark of the other party for any purpose in connection with the performance of this Agreement. 4.8 Waiver. A waiver by either party of any of the terms and conditions of this Agreement in any instance shall not be deemed or construed to be a waiver of such term or condition for the future, or of any subsequent breach hereof. All rights, remedies, undertakings, obligations and agreements contained in this Agreement shall be cumulative, and none of them shall be in limitation of any other remedy, right, undertaking, obligation or agreement of either party. -12- 4.9 Compliance with Law. Nothing in this Agreement shall be deemed to permit a party to export, re-export or otherwise transfer any Licensed Product sold under this Agreement without compliance with applicable laws. 4.10 Severability. When possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement. 4.11 Amendment. No amendment, modification or supplement of any provisions of this Agreement shall be valid or effective unless made in writing and signed by a duly authorized officer of each party. 4.12 Governing Law; English Original; Jurisdiction. (a) This Agreement shall be governed by and interpreted in accordance with the laws of the State of New Jersey without regard to its choice of law principles; provided, however, that any arbitration proceeding conducted pursuant to Section 4.13 shall be governed by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958. The English original of this Agreement shall prevail over any translation hereof. (b) Without prejudice to the rights and obligations of the parties under Section 4.13, each party hereby consents to the in personam jurisdiction of any state or federal court sitting in the State of New York with respect to any matter arising in connection with this Agreement and further consents to the service of any process, notice of motion or other application to any such court or a judge thereof outside the State of New York by registered or certified mail or personal service, provided that reasonable time is allowed for appearance. Each party hereby waives, to the greatest extent it may do so, any defense it may have on the grounds of inconvenient forum with respect to any action or proceeding maintained in any state or federal court in New York. (c) For purposes of consistency, Section 17.15 of the License Agreement is hereby amended to replace all references therein to "New Jersey" with the words "New York." 4.13 Arbitration. (a) Any dispute arising out of or relating to any provisions of this Agreement shall be finally settled by arbitration to be held in New York, New York, under the auspices and then current commercial arbitration rules of the American Arbitration Association (the "AAA"). Such arbitration shall be conducted by three arbitrators. Within 30 days after the commencement of any arbitration, each party shall appoint one arbitrator, and these two arbitrators shall jointly appoint the third arbitrator, who shall have significant experience in pharmaceutical drug development and commercialization; provided, however, that if the two arbitrators appointed by the parties are unable to agree upon the third arbitrator within 30 days after their appointment, then the third arbitrator shall be appointed by the AAA. The parties shall instruct such arbitrators to render a determination of any such dispute within four months after their appointment. All arbitration proceedings shall be conducted in English. Judgment upon any award rendered may be entered in any court having jurisdiction, or application may be made to such court for a judicial acceptance of the award and an order of enforcement, as the case may be. -13- (b) Section 4.13(a) shall not prohibit a party from seeking injunctive relief from a court of competent jurisdiction in the event of a breach or prospective breach of this Agreement by the other party which would cause irreparable harm to the first party. (c) For purposes of consistency, Section 17.16(a) of the License Agreement is hereby amended to replace the reference therein to "Philadelphia, Pennsylvania" with the words "New York, New York." 4.14 No Consequential Damages. IN NO EVENT SHALL EITHER PARTY OR ANY OF ITS RESPECTIVE AFFILIATES OR SUBLICENSEES BE LIABLE TO THE OTHER PARTY OR ANY OF ITS AFFILIATES OR SUBLICENSEES 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, OR CLAIMS OF CUSTOMERS OF ANY OF THEM OR OTHER THIRD PARTIES FOR SUCH OR OTHER DAMAGES. 4.15 Entire Agreement. Except as set forth in Section 1.3 hereof, this Agreement (together with the Exhibits hereto) sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges all prior discussions and negotiations between them, and neither of the parties shall be bound by any conditions, definitions, warranties, understandings or representations with respect to such subject matter other than as expressly provided herein or as duly set forth on or subsequent to the Effective Date in writing and signed by a proper and duly authorized officer or representative of the party to be bound thereby. 4.16 Parties in Interest. All the terms and provisions of this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective permitted successors and assigns. 4.17 Descriptive Headings. The descriptive headings of this Agreement are for convenience only, and shall be of no force or effect in construing or interpreting any of the provisions of this Agreement. 4.18 Counterparts. This Agreement may be executed simultaneously in two counterparts, any one of which need not contain the signature of more than one party, but both such counterparts taken together shall constitute one and the same agreement. 4.19 Events of Force Majeure. Neither party shall be held liable or responsible to the other party nor be deemed to be in default under or in breach of any provision of this Agreement for failure or delay in fulfilling or performing any obligation under this Agreement when such failure or delay is due to force majeure, and without the fault or negligence of the party so failing or delaying. For purposes of this Agreement, force majeure shall be defined as causes beyond the control of the party, including, without limitation, acts of God; acts, regulations, or laws of any government; war; civil commotion; destruction of production facilities or materials by fire, flood, earthquake, explosion or storm; labor disturbances; epidemic; and failure of public utilities or common carriers. In such event OXiGENE or BMS, as the case may be, shall immediately notify the other party of such inability and of the period for which such inability is expected to continue. The party giving such notice shall thereupon be excused from such of its obligations under this Agreement as it is thereby disabled from performing for so long as it is so disabled and for 30 days thereafter. To the extent possible, each party shall use reasonable efforts to minimize the duration of any force majeure. * * * -14- IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed by its duly authorized officer as of the Effective Date. OXIGENE EUROPE AB By:/s/ Frederick W. Driscoll ---------------------------- Name: Frederick W. Driscoll ---------------------------- Title: President ---------------- BRISTOL-MYERS SQUIBB COMPANY By:/s/ Elliott Sigal -------------------- Name: Elliott Sigal -------------------- Title: Senior Vice President ---------------------------- ACCEPTED AND AGREED TO WITH RESPECT TO SECTION 4.3: OXIGENE, INC. By:/s/ Frederick W. Driscoll ---------------------------- Name: Frederick W. Driscoll ---------------------------- Title: President ---------------- -15- EXHIBIT A [*************************************************************] Quantity Item To Be Sold ------------------------------------------------------------- A. API & Related Compounds ------------------------------------------------------------- [**************************] [****] ------------------------------------------------------------- [******] [****] ------------------------------------------------------------- [**********************************] [****] ------------------------------------------------------------- [**********************] [****] ------------------------------------------------------------- [**********************] [****] ------------------------------------------------------------- [**********************************] [****] ------------------------------------------------------------- B. Drug Product ------------------------------------------------------------- [**********************] [****] ------------------------------------------------------------- [**********************] [****] ------------------------------------------------------------- EXHIBIT B [*********************************************************] [***************************] Reports: o [*********************************************************] o [*********************************************************] o [*********************************************************] o [*********************************************************] Data: o [*********************************************************] o [*********************************************************] o [*********************************************************] o [*********************************************************] o [*********************************************************] o [*********************************************************] o [*********************************************************] o [*********************************************************] o [*********************************************************] o [*********************************************************] o [*********************************************************] Other Documents: o [*********************************************************] o [*********************************************************] o [*********************************************************] o [*********************************************************] o [*********************************************************] [***************************] o [*********************************************************] o [*********************************************************] o [*********************************************************] o [*********************************************************] EXHIBIT C LICENSED PATENTS (1) [************************************************] (2) [************************************************] (3) [************************************************] EX-10 5 exh1015.txt EXHIBIT 10.15 Exhibit 10.15 PLAN AND AGREEMENT OF LIQUIDATION BY AND AMONG PEREGRINE PHARMACEUTICALS, INC., OXiGENE, INC. AND ARCUS THERAPEUTICS LLC PLAN AND AGREEMENT OF LIQUIDATION This Plan and Agreement of Liquidation (this "Agreement") is entered into as of February 28, 2002, by and among Peregrine Pharmaceuticals, Inc., a Delaware corporation ("Peregrine"), OXiGENE, Inc., a Delaware corporation ("OXiGENE"), and Arcus Therapeutics LLC, a Delaware limited liability company ("Arcus"). RECITALS WHEREAS, in connection with that certain Limited Liability Company Agreement of Arcus Therapeutics LLC by and between Peregrine (formerly known as Techniclone Corporation) and OXiGENE, dated May 11, 2000 (the "LLC Agreement"), Peregrine assigned to Arcus certain license agreements identified on the attached Exhibit A (the "License Agreements") relating to vascular targeting agent technology (the "VTA Technology") and contributed to Arcus the Techniclone Contributed Technology (as defined in the LLC Agreement), in consideration for a membership interest in Arcus (the "Peregrine Membership Interest") and OXiGENE contributed to Arcus the OXiGENE Contributed Technology (as defined in the LLC Agreement) and agreed to provide certain monies to fund the on-going research of Arcus; WHEREAS, pursuant to the terms of this Agreement and in consideration for OXiGENE's and Peregrine's mutual undertakings hereunder, (i) Peregrine desires to pay to OXiGENE the sum of Two Million Dollars ($2,000,000), (ii) OXiGENE and Peregrine desire to cause Arcus to transfer and distribute the Techniclone Contributed Technology in-kind to Peregrine, including the assignment to Peregrine of the License Agreements, (iii) OXiGENE and Peregrine desire to cause Arcus to transfer and distribute the OXiGENE Contributed Technology in-kind to OXiGENE; and (iv) Arcus, Peregrine and OXiGENE desire to exchange a mutual general release in connection herewith; and WHEREAS, OXiGENE and Peregrine desire to liquidate and dissolve Arcus in accordance with the terms hereof and applicable Delaware law. NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereby agree as follows: 1. Payment, Distribution and Release. 1.1 Transfer and Payment to OXiGENE. Subject to and upon the terms and conditions of this Agreement, at the Closing (as defined below), Peregrine shall deliver to OXiGENE by wire transfer of immediately available funds the sum of Two Million Dollars ($2,000,000) (the "Cash Payment"). 1.2 Distribution to Peregrine. Subject to and upon the terms and conditions of this Agreement, including, without limitation, Sections 2.2 and 10.3, at the Closing, OXiGENE and Peregrine shall cause Arcus to distribute, and Arcus shall distribute, to Peregrine all of Arcus' rights, title and interests to the Techniclone Contributed Technology (as defined in the LLC Agreement) including, without limitation, the following, but not including those contracts and agreements set forth in Schedule 1.2 hereto, which contracts and agreements require the consents of third parties in connection with the assignment thereof (the "Peregrine Excluded Contracts"), (a) all rights, title and interests of Arcus under the License Agreements and any other contracts, agreements or other instruments set forth on Schedule 2.6 attached hereto (collectively, the "Peregrine Contracts"); (b) copies of all books, records, correspondence, manuals, studies, reports or summaries relating to the Techniclone Contributed Technology, including such as may have been developed by Arcus during term of the LLC Agreement (the "Peregrine Records"); and (c) all rights, title and interests of Arcus to all intangible property rights, including but not limited to inventions, discoveries, trade secrets, processes, formulas, know-how, United States and foreign patents, patent applications, trade names, trademarks, trademark registrations, applications for trademark registrations, copyrights, copyright registrations, owned or, where not owned, used by Arcus arising out of or relating to the Techniclone Contributed Property and all licenses and other agreements to which Arcus is a party (as licensor or licensee) or by which Arcus is bound relating to the Techniclone Contributed Technology (collectively, the "Peregrine Intangible Property", and together with the Peregrine Contracts and the Peregrine Records, the "Peregrine Assets"). The foregoing Peregrine Assets shall include all of Arcus' rights, title and interests to any and all additions, modifications and enhancements to, and developments and discoveries based upon or arising from, the Techniclone Contributed Technology made by or on behalf of Arcus during the term of the LLC Agreement, including any of the foregoing which arose due to or out of the funding by Arcus of Dr. Philip Thorpe's laboratory. At any time and from time to time after the Closing, at Peregrine's reasonable request and without further consideration, Arcus and/or OXiGENE promptly shall execute and deliver such instruments of sale, transfer, conveyance, assignment and confirmation, and take such other action, as Peregrine may reasonably request to more effectively transfer, convey and assign to Peregrine, and to confirm Peregrine's title to, the Peregrine Assets, to assist Peregrine in exercising all rights with respect thereto and to carry out the purpose and intent of this Agreement. 1.3 Distribution to OXiGENE. Subject to and upon the terms and conditions of this Agreement, at the Closing, OXiGENE and Peregrine shall cause Arcus to distribute, and Arcus shall distribute, to OXiGENE all of Arcus' rights, title and interests to the OXiGENE Contributed Technology (as defined in the LLC Agreement), including, without limitation,: (a) all rights, title and interests of Arcus under the contracts, agreements or other instruments set forth on Schedule 2.7 attached hereto (collectively, the "OXiGENE Contracts"); -2- (b) copies of all books, records, correspondence, manuals, studies, reports or summaries relating to the OXiGENE Contributed Technology, including such as may have been developed by Arcus during term of the LLC Agreement (the "OXiGENE Records"); (c) all rights, title and interests of Arcus to all intangible property rights, including but not limited to inventions, discoveries, trade secrets, processes, formulas, know-how, United States and foreign patents, patent applications, trade names, trademarks, trademark registrations, applications for trademark registrations, copyrights, copyright registrations, owned or, where not owned, used by Arcus arising out of or relating to the OXiGENE Contributed Property and all licenses and other agreements to which Arcus is a party (as licensor or licensee) or by which Arcus is bound relating to the OXiGENE Contributed Technology (collectively, the "OXiGENE Intangible Property"); and (d) all of the remaining assets of Arcus, after the distributions described in Section 1.2 and in Subsections 1.3(a), (b) and (c) have been completed (the "Remaining Assets" and together with the OXiGENE Contracts, the OXiGENE Intangible Property and the OXiGENE Records the "OXiGENE Assets"; the OXiGENE Assets together with the Peregrine Assets, collectively, the "Assets"). The foregoing OXiGENE Assets shall include all of Arcus' rights, title and interests to any and all additions, modifications and enhancements to, and developments and discoveries based upon or arising from, the OXiGENE Contributed Technology made by or on behalf of Arcus during the term of the LLC Agreement, including any of the foregoing which arose due to or out of the funding by Arcus of Dr. Philip Thorpe's laboratory. At any time and from time to time after the Closing, at OXiGENE's reasonable request and without further consideration, Arcus and/or Peregrine promptly shall execute and deliver such instruments of sale, transfer, conveyance, assignment and confirmation, and take such other action, as OXiGENE may reasonably request to more effectively transfer, convey and assign to OXiGENE, and to confirm OXiGENE's title to, the OXiGENE Assets, to assist OXiGENE in exercising all rights with respect thereto and to carry out the purpose and intent of this Agreement. 1.4 Assumption of Liabilities. Arcus shall transfer the Peregrine Assets to Peregrine and the OXiGENE Assets to OXiGENE free and clear of all claims, liabilities, liens, pledges, charges, encumbrances and security interests of any kind. At the Closing, OXiGENE shall assume and agree to perform, pay and discharge, and shall remain unconditionally liable for only those obligations, liabilities and commitments, fixed or contingent, of Arcus, which were incurred or accrued in the ordinary course of Arcus' business prior to the Closing Date and which are set forth on Schedule 1.4 hereto (other than liabilities of Peregrine described in Sections 1.7(b), 3.4, 5.3 and 10.3) as well as any legal, accounting and filing fees and expenses incurred by Arcus following the Closing Date in connection with the liquidation and dissolution of Arcus (the "OXiGENE Assumed Liabilities"). -3- 1.5 Mutual General Release. At the Closing, Peregrine, Arcus and OXiGENE shall deliver to each other a mutual general release in the form of the attached Exhibit 1.5. 1.6 The Closing. The Closing shall take place by the exchange of documents by facsimile or courier service and the delivery of the Cash Payment to OXiGENE on such date or at such location as is mutually agreeable to the parties (the "Closing Date"). 1.7 The Liquidation and Dissolution. (a) Immediately following the Closing, subject to Section 10.3, OXiGENE shall take all necessary steps to liquidate Arcus in accordance with the requirements of the Delaware Limited Liability Company Act and to cause Arcus to be dissolved in Delaware and in any other jurisdiction in which Arcus has qualified to do business; (b) In connection with such liquidation, OXiGENE and Peregrine shall jointly be responsible for, and, subject to the provisions of Sections 3.4, 4.4, 5.3 and 10.3 hereof, each agrees to pay fifty percent (50%) of any and all amounts associated with, the payment of, or ensuring payment of, all liabilities and debts of Arcus for which members of Arcus may legally be held liable (the "Arcus Liabilities"), other than the OXiGENE Assumed Liabilities, and shall cause the remaining assets of Arcus (subject to the prior consummation of all of the transfers contemplated in this Agreement) to be distributed to OXiGENE, free and clear of any liabilities or obligations related thereto. Notwithstanding anything to the contrary set forth herein, the first one hundred thousand dollars ($100,000) of Arcus Liabilities shall be paid by, and shall be the sole and exclusive obligation of, OXiGENE. (c) OXiGENE shall cause draft tax returns to be prepared for all years for which returns of Arcus have not yet been filed and will provide to Peregrine a draft of all such tax returns at least 30 days before the filing thereof. Both OXiGENE and Peregrine shall be bound by any position taken on any such filed return (and may not file any statements with their respective returns of an inconsistent position). 2. Representations Regarding Arcus OXiGENE represents to Peregrine, to the best of OXiGENE's knowledge, and Peregrine represent to OXiGENE, to the best of Peregrine's knowledge, as follows: 2.1 Organization. Arcus is a limited liability company duly organized, validly existing and in good standing under the laws of the state of Delaware, and has all requisite power and authority (corporate and other) to own its properties, to carry on its business as now being conducted, to execute and deliver this Agreement and the agreements contemplated herein, and to consummate the transactions contemplated hereby and thereby. 2.2 Authorization. The execution and delivery of this Agreement by Arcus, and the agreements provided for herein, and the consummation by Arcus of all transactions contemplated hereby and thereby, have been duly authorized by all requisite manager and member action. This Agreement and all such other agreements and obligations entered into and undertaken in connection with the -4- transactions contemplated hereby and thereby to which Arcus is a party constitute the valid and legally binding obligations of Arcus, enforceable against Arcus in accordance with their respective terms. Except as set forth in Schedule 1.2, the execution, delivery and performance by Arcus of this Agreement and the agreements provided for herein, and the consummation by Arcus of the transactions contemplated hereby and thereby, will not, with or without the giving of notice or the passage of time or both, (a) violate the provisions of any law, rule or regulation applicable to Arcus; (b) violate the provisions of the LLC Agreement or any other operating agreement or document pertaining to Arcus; (c) violate any judgment, decree, order or award of any court, governmental body or arbitrator; or (d) conflict with or result in the breach or termination of any term or provision of, or constitute a default under, or cause any acceleration under, or cause the creation of any lien, charge or encumbrance upon the properties or assets of Arcus pursuant to any indenture, mortgage, deed of trust or other instrument or agreement to which Arcus is a party or by which Arcus or any of its properties is or may be bound. Schedule 1.2 attached hereto sets forth a true, correct and complete list of all contracts for which consents and approvals of third parties that are required in connection with the consummation by Arcus of the transactions contemplated by this Agreement. 2.3 Transfer of the Assets. At the Closing, Arcus will distribute, assign and transfer to Peregrine all of Arcus' rights, title and interests to the Peregrine Assets. The delivery to Peregrine of the instruments of transfer of ownership contemplated by this Agreement will vest in Peregrine all of Arcus' rights, title and interests to the Peregrine Assets. At the Closing, Arcus will distribute, assign and transfer to OXiGENE all of Arcus' rights, title and interests to the OXiGENE Assets. The delivery to OXiGENE of the instruments of transfer of ownership contemplated by this Agreement will vest in OXiGENE all of Arcus' rights, title and interests to the OXiGENE Assets. 2.4 Absence of Undisclosed Liabilities. Except for the OXiGENE Assumed Liabilities and as and to the extent set forth on Schedule 2.5 attached hereto, either individually or in the aggregate, to Arcus' knowledge, Arcus does not have any liability or obligation, secured or unsecured, affecting the Assets, whether accrued, absolute, contingent, or, to Arcus' knowledge, unasserted or otherwise. 2.5 Litigation. Except as set forth on Schedule 2.5 attached hereto, Arcus is not a party to, or to Arcus' knowledge threatened with, and none of the Assets are subject to, any litigation, suit, action, investigation, proceeding or controversy before any court, administrative agency or other governmental authority relating to or affecting the Assets. Arcus is not in violation of or in default with respect to any judgment, order, writ or injunction of any court, administrative agency or governmental authority or any regulation of any administrative agency or governmental authority. 2.6 Peregrine Contracts. (a) Schedule 2.6 attached hereto contains a true, complete and correct list and description of the License Agreements and each other contract or agreement, whether verbal or oral, the subject matter of which relates to or is dependent upon any of the Techniclone Contributed Technology; -5- (b) Except as set forth on Schedule 2.6 attached hereto: (i) Arcus does not have any knowledge that any Peregrine Contract is not a valid and binding agreement of the other parties thereto; (ii) Arcus has fulfilled all material obligations required pursuant to the Peregrine Contracts to have been performed by Arcus on its part prior to the date hereof; (iii)Arcus is not in breach of or default under any Peregrine Contract, and no event has occurred which with the passage of time or giving of notice or both would constitute such a default, result in a loss of rights or result in the creation of any lien, charge or encumbrance, thereunder or pursuant thereto; and (iv) to the knowledge of Arcus, there is no existing breach or default by any other party to any Peregrine Contract, and no event has occurred which with the passage of time or giving of notice or both would constitute a default by such other party, result in a loss of rights or result in the creation of any lien, charge or encumbrance thereunder or pursuant thereto. (c) Except for those contracts and agreements set forth on Schedule 1.2, the continuation, validity and effectiveness of each Peregrine Contract will not be affected by the transfer thereof to Peregrine under this Agreement and all such Peregrine Contracts are assignable to Peregrine without consent from any other party, or if a third party consent is required, such consent shall be obtained by Peregrine following the Closing and Arcus shall consent thereto. (d) True, correct and complete copies of all Peregrine Contracts on Schedule 2.6 have previously been delivered by Arcus to Peregrine. 2.7 OXiGENE Contracts. (a) Schedule 2.7 attached hereto contains a true, complete and correct list and description of the OXiGENE Contracts and each other contract or agreement, whether verbal or oral, the subject matter of which relates to or is dependent upon any of the OXiGENE Contributed Technology; (b) Except as set forth on Schedule 2.7 attached hereto: (i) Arcus does not have any knowledge that any OXiGENE Contract is not a valid and binding agreement of the other parties thereto; (ii) Arcus has fulfilled all material obligations required pursuant to the OXiGENE Contracts to have been performed by Arcus on its part prior to the date hereof; -6- (iii)Arcus is not in breach of or default under any OXiGENE Contract, and no event has occurred which with the passage of time or giving of notice or both would constitute such a default, result in a loss of rights or result in the creation of any lien, charge or encumbrance, thereunder or pursuant thereto; and (iv) to the knowledge of Arcus, there is no existing breach or default by any other party to any OXiGENE Contract, and no event has occurred which with the passage of time or giving of notice or both would constitute a default by such other party, result in a loss of rights or result in the creation of any lien, charge or encumbrance thereunder or pursuant thereto. (c) The continuation, validity and effectiveness of each OXiGENE Contract will not be affected by the transfer thereof to OXiGENE under this Agreement and all such OXiGENE Contracts are assignable to OXiGENE without consent from any other party, or if a third party consent is required, such consent shall be obtained by OXiGENE following the Closing. (d) True, correct and complete copies of all OXiGENE Contracts on Schedule 2.7 have previously been delivered by Arcus to OXiGENE. 2.8 Other Intangible Property. Arcus has received no notice of, and has no knowledge of any basis for, a claim against it that any of Arcus' operations, activities, products or publications infringes on any patent, trademark, trade name, copyright or other property right of a third party, or that Arcus is illegally or otherwise using the trade secrets, formulae or any property rights of others. Arcus has no disputes with or claims against any third party for infringement by such third party of any trade name or other Intangible Property of Arcus. Arcus has taken all steps reasonably necessary to protect its right, title and interest in and to the Intangible Property. 2.9 Disclosure. No representation or warranty by Arcus in this Agreement or in any Exhibit hereto, or in any list, statement, document or information set forth in or attached to any Schedule delivered or to be delivered pursuant to this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit any material fact necessary in order to make the statements contained therein not misleading. Arcus has disclosed to Peregrine and to OXiGENE all material facts pertaining to the transactions contemplated by this Agreement. 3. Representations Regarding Peregrine Peregrine represents and warrants to OXiGENE as follows: 3.1 Organization and Authority. Peregrine is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware, and has requisite power and authority (corporate and other) to own its properties and to carry on its business as now being conducted. Peregrine has full power to execute and deliver this Agreement and to consummate the transactions contemplated hereby and thereby. -7- 3.2 Authorization. The execution and delivery of this Agreement by Peregrine, and the agreements provided for herein, and the consummation by Peregrine of all transactions contemplated hereby, have been duly authorized by all requisite corporate action. This Agreement and all such other agreements and written obligations entered into and undertaken in connection with the transactions contemplated hereby constitute the valid and legally binding obligations of Peregrine, enforceable against Peregrine in accordance with their respective terms. The execution, delivery and performance of this Agreement and the agreements provided for herein, and the consummation by Peregrine of the transactions contemplated hereby and thereby, will not, with or without the giving of notice or the passage of time or both, (a) violate the provisions of any law, rule or regulation applicable to Peregrine; (b) violate the provisions of Peregrine's Certificate of Incorporation or Bylaws; (c) violate any judgment, decree, order or award of any court, governmental body or arbitrator; or (d) conflict with or result in the breach or termination of any term or provision of, or constitute a default under, or cause any acceleration under, or cause the creation of any lien, charge or encumbrance upon the properties or assets of Peregrine pursuant to any indenture, mortgage, deed of trust or other agreement or instrument to which it or its properties is a party or by which Peregrine is or may be bound. 3.3 Disclosure. No representation or warranty by Peregrine in this Agreement or in any Exhibit hereto, or in any list, statement, document or information set forth in or attached to any Schedule delivered or to be delivered pursuant hereto, contains or will contain any untrue statement of a material fact or omits or will omit any material fact necessary in order to make the statements contained therein not misleading. 3.4 Third Party Claims. Except as set forth on Schedule 3.4, Peregrine has not had any meetings with any third parties regarding the possibility of licensing any of Arcus' proprietary technology. To the extent that any claims against Arcus or its members are asserted after the Closing Date (i) by any of the parties listed on Schedule 3.4 hereto in connection with any of the matters discussed at such meetings, or (ii) as a result of any actions taken or omissions made, on behalf of Arcus, by Peregrine, then Peregrine agrees to indemnify and hold harmless the other parties hereto in connection with any such claims. 3.5 No Knowledge. Peregrine is not aware, and has no knowledge, of any breach, or the basis for any potential breach, of the representations and warranties of OXiGENE or of Arcus contained in this Agreement which could give rise to any claim against OXiGENE or Arcus under this Agreement. Peregrine acknowledges and agrees that OXiGENE is relying, in part, on the foregoing representations in entering into this Agreement and, therefore, Peregrine waives all rights and claims that may now exist or may hereafter arise, including, without limitation, claims seeking indemnification under Section 4.4 of this Agreement, the assertion of which rights or claims would be inconsistent with the preceding sentence. 4. Representations Regarding OXiGENE. OXiGENE represents and warrants to Peregrine as follows: -8- 4.1 Organization and Authority. OXiGENE is a corporation duly organized, validly existing and in good standing under the laws of the state of Delaware, and has requisite power and authority (corporate and other) to own its properties and to carry on its business as now being conducted. OXiGENE has full power to execute and deliver this Agreement and to consummate the transactions contemplated hereby and thereby. 4.2 Authorization. The execution and delivery of this Agreement by OXiGENE, and the agreements provided for herein, and the consummation by OXiGENE of all transactions contemplated hereby, have been duly authorized by all requisite corporate action. This Agreement and all such other agreements and written obligations entered into and undertaken in connection with the transactions contemplated hereby constitute the valid and legally binding obligations of OXiGENE, enforceable against OXiGENE in accordance with their respective terms. The execution, delivery and performance of this Agreement and the agreements provided for herein, and the consummation by OXiGENE of the transactions contemplated hereby and thereby, will not, with or without the giving of notice or the passage of time or both, (a) violate the provisions of any law, rule or regulation applicable to OXiGENE; (b) violate the provisions of OXiGENE's Certificate of Incorporation or Bylaws; (c) violate any judgment, decree, order or award of any court, governmental body or arbitrator; or (d) conflict with or result in the breach or termination of any term or provision of, or constitute a default under, or cause any acceleration under, or cause the creation of any lien, charge or encumbrance upon the properties or assets of OXiGENE pursuant to any indenture, mortgage, deed of trust or other agreement or instrument to which it or its properties is a party or by which OXiGENE is or may be bound. 4.3 Disclosure. No representation or warranty by OXiGENE in this Agreement or in any Exhibit hereto, or in any list, statement, document or information set forth in or attached to any Schedule delivered or to be delivered pursuant hereto, contains or will contain any untrue statement of a material fact or omits or will omit any material fact necessary in order to make the statements contained therein not misleading. 4.4 Third Party Claims. Except as set forth on Schedule 4.4, OXiGENE has not had any meetings with any third parties regarding the possibility of licensing and research of Arcus' proprietary technology. To the extent that any claims against Arcus or its members are asserted after the Closing Date (i) by any of the parties listed on Schedule 4.4 hereto in connection with any of the matters discussed at such meetings, or (ii) as a result of any actions taken or omissions made on behalf of Arcus, by OXiGENE, then OXiGENE agrees to indemnify and hold harmless the other parties hereto in connection with any such claims. 4.5 No Knowledge. OXiGENE is not aware, and has no knowledge, of any breach, or the basis for any potential breach, of the representations and warranties of Peregrine or of Arcus contained in this Agreement which could give rise to any claim against Peregrine or Arcus under this Agreement. OXiGENE acknowledges and agrees that Peregrine is relying, in part, on the foregoing representations in entering into this Agreement and, therefore, OXIGENE waives all rights and claims that may now exist or may hereafter arise, including, without limitation, claims seeking indemnification under Section 3.4 of this Agreement, the assertion of which rights or claims would be inconsistent with the preceding sentence. -9- 5. Covenants of Peregrine and OXiGENE. 5.1 Taxes. OXiGENE shall be responsible for and will, on a timely basis, file all tax returns for and pay any and all taxes, penalties, interest and additions to tax which shall become due or shall have accrued on account of the ownership of the Assets by Arcus on or prior to the Closing Date. 5.2 Satisfaction of Conditions. The parties hereto covenant and agree to use their commercially reasonable efforts to obtain the satisfaction of the conditions specified in this Agreement. 5.3 Third Party Claims. Except as set forth on Schedule 5.3, OXiGENE and Peregrine have not had any meetings together with any third parties regarding the possibility of licensing any of Arcus' proprietary technology. To the extent that any claims against Arcus or its members are asserted after the Closing Date by any of the parties listed on Schedule 5.3 hereto in connection with any of the matters discussed at such meetings, OXiGENE and Peregrine agree that they shall be jointly responsible for, and each agrees to pay fifty percent (50%) of any and all amounts associated with any liabilities, costs or expenses arising out of, such claims for which Members of Arcus may legally be held liable. 6. [Intentionally omitted.] 7. Conditions to Obligations of Peregrine. The obligations of Peregrine under this Agreement are subject to the fulfillment, at the Closing Date, of the following conditions precedent, each of which may be waived in writing in the sole discretion of Peregrine: 7.1 Continued Truth of Representations and Warranties of OXiGENE; Compliance with Covenants and Obligations. The representations and warranties of OXiGENE (as set forth in Section 4, as updated at the Closing Date) shall be true on and as of the Closing Date as though such representations and warranties were made on and as of such date, except for any changes permitted by the terms hereof or consented to in writing by Peregrine. OXiGENE shall have performed and complied with all terms, conditions, covenants, obligations, agreements and restrictions required by this Agreement to be performed or complied with by it prior to or at the Closing Date. 7.2 Approval and Authorization. The manager and members of Arcus shall have duly authorized the transactions contemplated by this Agreement. All proceedings required to be taken on the part of Arcus to authorize or carry out this Agreement and to distribute, assign, transfer and deliver the Peregrine Assets to Peregrine shall have been taken. All corporate and other proceedings required to be taken on the part of OXiGENE to authorize or carry out this Agreement shall have been taken. -10- 7.3 Consents of Third Parties. Following the Closing, Peregrine shall obtain the requisite consents and approvals of all third parties whose consent or approval is required in order for Arcus or OXiGENE, as the case may be, to consummate the transactions contemplated by this Agreement, including, without limitation, from all of the parties to the contracts and agreements set forth on Schedule 1.2 attached hereto and Arcus shall consent thereto. 7.4 Adverse Proceedings. No action or proceeding by or before any court or other governmental body or any other third party shall have been instituted or threatened by any governmental body or third party whatsoever which shall seek to restrain, prohibit or invalidate the transactions contemplated by this Agreement or which might affect the right of Peregrine to own or use the Peregrine Assets after the Closing. 7.5 The Peregrine Assets. At the Closing, Peregrine shall receive good, clear, record and marketable title to the Peregrine Assets, free and clear of all liens, liabilities, security interests and encumbrances of any nature whatsoever. 7.6 Closing Deliveries. Peregrine shall have received at or prior to the Closing each of the following items: (a) such instruments of conveyance, assignment and transfer in form and substance satisfactory to Peregrine, as shall be appropriate to convey, transfer and assign to, and to vest in, Peregrine, all of Arcus' rights, title and interests to the Peregrine Assets, including the Assignment and Assumption Agreement in substantially the form of Exhibit 7.6(a) attached hereto; (b) a duly executed mutual general release from OXiGENE and Arcus, substantially in the form of the attached Exhibit 1.5; (c) such contracts, files and other data and documents pertaining to the Peregrine Assets as Peregrine may reasonably request; (d) a certificate of the officers of OXiGENE, and such other documents evidencing satisfaction of the conditions specified in Section 7 (including without limitation, this Section 7.6) as Peregrine shall reasonably request; (e) certificates of the Secretary of Arcus and the Secretary of OXiGENE attesting to the incumbency of Arcus' manager and the officers of OXiGENE, respectively, and the authenticity of the resolutions authorizing the transactions contemplated by this Agreement; (f) the schedules listed in Section 2; and (g) such other documents, instruments or certificates as Peregrine may reasonably request. -11- 8. Conditions to Obligations of OXiGENE. The obligations of Arcus and OXiGENE under this Agreement are subject to the fulfillment, at the Closing Date, of the following conditions precedent, each of which may be waived in writing at the sole discretion of Arcus and OXiGENE: 8.1 Continued Truth of Representations and Warranties of Peregrine; Compliance with Covenants and Obligations. The representations and warranties of Peregrine (as set forth in Section 3 and as updated prior to the Closing) in this Agreement shall be true on and as of the Closing Date as though such representations and warranties were made on and as of such date, except for any changes consented to in writing by OXiGENE. Peregrine shall have performed and complied with all terms, conditions, obligations, agreements and restrictions required by this Agreement to be performed or complied with by it prior to or at the Closing Date. 8.2 Corporate Proceedings. The manager and members of Arcus shall have duly authorized the transactions contemplated by this Agreement. All proceedings required to be taken on the part of Arcus to authorize or carry out this Agreement and to distribute, assign, transfer and deliver the OXiGENE Assets to OXiGENE shall have been taken. All corporate and other proceedings required to be taken on the part of Peregrine to authorize or carry out this Agreement shall have been taken. 8.3 Consents of Third Parties. Following the Closing, Peregrine shall obtain the requisite consents and approvals of all third parties whose consent or approval is required in order for Arcus or Peregrine, as the case may be, to consummate the transactions contemplated by this Agreement, including, without limitation, from all of the parties to the contracts and agreements set forth on Schedule 1.2 attached hereto and Arcus shall consent thereto. 8.4 Adverse Proceedings. No action or proceeding by or before any court or other governmental body or any third party shall have been instituted or threatened by any governmental body or third party whatsoever which shall seek to restrain, prohibit or invalidate the transactions contemplated by this Agreement or which might affect the right of OXiGENE to own or use the OXiGENE Assets after the Closing. 8.5 The OXiGENE Assets. At the Closing, OXiGENE shall receive good, clear, record and marketable title to the OXiGENE Assets, free and clear of all liens, liabilities, security interests and encumbrances of any nature whatsoever. 8.6 Closing Deliveries. OXiGENE shall have received at or prior to the Closing each of the following items: (a) such instruments of conveyance, assignment and transfer, in form and substance satisfactory to OXiGENE, as shall be appropriate to convey, transfer and assign to, and to vest in, OXiGENE, all of Arcus' rights, title and interests to the OXiGENE Assets, including the Assignment and Assumption Agreement in substantially the form of Exhibit 8.6(a) attached hereto; -12- (b) a certificate of Peregrine's officers and such other documents evidencing satisfaction of the conditions specified in this Section 8 (including, without limitation, this Section 8.6) as OXiGENE shall reasonably request; (c) certificates of the Secretary of Arcus and the Secretary of Peregrine attesting to the incumbency of Arcus' manager and the officers of Peregrine, respectively, and the authenticity of the resolutions authorizing the transactions contemplated by this Agreement; (d) such other documents, instruments or certificates as OXiGENE may reasonably request; (e) the Cash Payment (which shall be delivered at the Closing). (f) a duly executed mutual general release from Peregrine and Arcus, substantially in the form of the attached Exhibit 1.5; (g) such contracts, files and other data and documents pertaining to the OXiGENE Assets as OXiGENE may reasonably request; (h) the schedules listed in Section 2; and (i) such other documents, instruments or certificates as OXiGENE may reasonably request. 9. [Intentionally omitted.] 10. Post-Closing Agreements Peregrine and OXiGENE agree that from and after the Closing Date: 10.1 Proprietary Information. (a) Peregrine and OXiGENE shall hold in confidence, and use their best efforts to have all of their respective officers, directors and personnel hold in confidence, all knowledge and information that has not been previously disclosed to the public with respect to the Peregrine Assets and the OXiGENE Assets and shall not disclose, publish or make use of the same without the consent of the other, except to the extent that such information shall have become public knowledge other than by breach of this Agreement by the other. (b) Peregrine and OXiGENE agree that the remedy at law for any breach of this Section 10.1 would be inadequate and that each shall be entitled to injunctive relief in addition to any other remedy it may have upon breach of any provision of this Section 10.1. -13- 10.2 Liquidation and Dissolution. OXiGENE shall carry out its obligations to liquidate and cause the dissolution of Arcus pursuant to the terms of this Agreement and the LLC Agreement (provided, however, that this Agreement shall control in the event of a conflict). 10.3 Consents. (a) Following the Closing Date, Peregrine shall deliver to OXiGENE all of the consents and approvals relating to the assignment of the contracts and agreements set forth in Schedule 1.2 hereto (the "Consents") and Arcus shall consent thereto. Upon delivery to OXiGENE of all of the Consents, the Peregrine Excluded Contracts shall be transferred to Peregrine effective immediately therewith. (b) In the event Peregrine fails to deliver to OXiGENE all of the Consents, then the Peregrine Excluded Contracts shall remain with Arcus. Peregrine agrees to indemnify and hold harmless both Arcus and OXiGENE from any and all costs, fees and expenses incurred as a result of Peregrine's failure to obtain and deliver to OXiGENE all of the Consents and Arcus' retention of the Peregrine Excluded Contracts, including, without limitation, all of OXiGENE's costs, fees and expenses as a result of any delay or deterrence in satisfying its obligations hereunder with respect to the liquidation and dissolution of Arcus. Peregrine further agrees to reimburse OXiGENE and Arcus for all costs, fees and expenses associated with the Peregrine Excluded Contracts which arise after the Closing Date. 11. Termination of Agreement 11.1 Termination by Agreement of the Parties. This Agreement may be terminated by the mutual written agreement of the parties hereto. 11.2 Termination by Reason of Breach. All of the obligations hereunder, including, without limitation, the obligation to purchase and sell the OXiGENE Assets and the Peregrine Assets and to pay the Cash Payment, may be terminated by OXiGENE, if at any time prior to the Closing there shall occur a material breach of any of the representations, warranties or covenants of Peregrine or the failure by Peregrine to perform any material condition or obligation hereunder, and may be terminated by Peregrine, if at any time prior to the Closing there shall occur a material breach of any of the representations, warranties or covenants of OXiGENE or the failure of OXiGENE to perform any material condition or obligation hereunder. 12. Notices Except to the extent otherwise provided herein, any notices or other communications required or permitted hereunder shall be sufficiently given if delivered personally or sent by federal express or other overnight delivery service, registered or certified mail, postage prepaid, addressed as follows or to such other address of which the parties may have given notice: -14- To OXiGENE: OXiGENE, Inc. 321 Arsenal Street Watertown, MA 02472 Attn: Fred Driscoll And a copy to: Mintz Levin Cohn Ferris Glovsky and Popeo PC One Financial Center Boston, MA 02111 Attn: Jeffrey M. Wiesen, Esq. To Peregrine: Peregrine Pharmaceuticals, Inc. 14282 Franklin Avenue Tustin, CA 92780 Attention: Edward Legere With a copy to: Jeffers, Shaff, & Falk, LLP 18881 Von Karman Avenue, Suite 1400 Irvine, California 92612 Attention: Mark R. Ziebell, Esq. Unless otherwise specified herein, such notices or other communications shall be deemed received (a) on the date delivered, if delivered personally; (b) three business days after being sent, if sent by registered or certified mail; or (c) on the date of actual receipt, if delivered by any other method. 13. Dispute Resolution. Subject to Section 10.1, in the event of a dispute arising in connection with this Agreement, each party hereto agrees to notify the other parties hereto of the specific complaints or points of disagreement and to use good faith efforts to resolve any conflicts without legal action. Any controversy or claim arising out of or relating to this Agreement or any breach thereof that is not resolved by the parties in the manner set forth above shall be settled by binding arbitration in Chicago, Illinois under the Rules of Commercial Arbitration of the American Arbitration Association before a single arbitrator mutually selected by the parties. The costs of the arbitration, including administration fees, shall be shared by the parties in proportion to their fault as determined by the arbitrator. Notwithstanding the foregoing, the parties agree that if any breach or threatened breach of this Agreement would necessarily result in immediate, irreparable injury to any party, that party, in addition to any other remedies available under this Agreement, shall have the right to seek injunctive relief in any court of competent jurisdiction. 14. Successors and Assigns This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that none of the parties hereto may assign their respective obligations hereunder without the prior written consent of each of the other parties hereto. -15- 15. Entire Agreement: Amendments; Attachments 15.1 This Agreement, all Schedules and Exhibits hereto, and all agreements and instruments to be delivered by the parties pursuant hereto represent the entire understanding and agreement among the parties hereto with respect to the subject matter hereof and supersede all prior oral and written and all contemporaneous oral negotiations, commitments and understandings between such parties. The parties hereto may amend or modify this Agreement, in such manner as may be agreed upon, by a written instrument executed by the parties hereto. 15.2 If the provisions of any Schedule or Exhibit to this Agreement are inconsistent with the provisions of this Agreement, the provisions of this Agreement shall prevail. The Exhibits and Schedules attached hereto or to be attached hereafter are hereby incorporated as integral parts of this Agreement. 16. Expenses Except as otherwise expressly provided herein, the parties hereto shall each pay their own fees and expenses in connection with this Agreement and the transactions contemplated hereby. Subject to the terms of Sections 1.7(b), 3.4, 5.3 and 10.3, all expenses of Arcus, including, without limitation, all legal and accounting fees and expenses incurred in connection with this Agreement and the preparation and filing of all tax returns referred to herein and all costs, fees and expenses associated with the dissolution and liquidation of Arcus, shall be borne and paid by OXiGENE, except that all of the expenses of Peregrine's accountants and of Jeffers, Shaff & Falk, LLP, shall be borne and paid by Peregrine. 17. Press Releases; Publicity Each of Peregrine and OXiGENE shall issue its own press release following the Closing Date and the parties shall agree on and use the same language in the first two (2) paragraphs of such press releases. Each party shall also have the right to review and comment on the entire press release to be issued by the other prior to such issuance. Except, as may be required (i) by applicable federal securities laws, (ii) by a court of competent jurisdiction, or (iii) to enforce a party's rights hereunder, neither party may disclose the terms of this Agreement. 18. Governing Law This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware. 19. Section Headings The section headings are for the convenience of the parties and in no way alter, modify, amend, limit, or restrict the contractual obligations of the parties. 20. Severability The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. -16- 21. Counterparts This Agreement may be executed in one or more counterparts, including electronically transmitted counterparts each of which shall be deemed to be an original, but all of which shall be one and the same document. 22. Definitions. All capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the LLC Agreement. 23. Amendment of LLC Agreement. To the extent that any of the terms set forth in this Agreement related to the liquidation and dissolution of Arcus are inconsistent with those set forth in the LLC Agreement, the terms of this Agreement shall supercede and amend the LLC Agreement. [The remainder of this page has been intentionally left blank.] -17- IN WITNESS WHEREOF, the parties hereto have caused this Plan and Agreement of Liquidation to be duly executed by their authorized representatives as of the date first above written. OXiGENE, Inc. By: /s/ Frederick W. Driscoll -------------------------- Name: Frederick W. Driscoll -------------------------- Its: President -------------- Peregrine Pharmaceuticals, Inc. By: /s/ Paul Lytle --------------- Name: Paul Lytle --------------- Its: VP Finance --------------- Arcus Therapeutics LLC By: OXiGENE, Inc. Its: Member By: /s/ Frederick W. Driscoll ----------------------------- Name: Frederick W. Driscoll ----------------------------- Its: President ----------------- and By: Peregrine Pharmaceuticals, Inc. Its: Member By: /s/ Paul Lytle ------------------ Name: Paul Lytle ------------------ Its: VP Finance ------------------ -18- -----END PRIVACY-ENHANCED MESSAGE-----