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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1995
------------------
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 0-17999
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ImmunoGen, Inc.
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(Exact name of registrant as specified in its charter)
Massachusetts 04-2726691
- - ---------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
148 Sidney Street
Cambridge, MA 02139
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(Address of principal executive offices, including zip code)
(617) 661-9312
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(Registrant's telephone number, including area code)
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(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
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
At February 14, 1996 there were 15,526,357 shares of common stock, par
value $.01 per share, of the registrant outstand/ing.
Total Number of Pages: 39
Exhibit Index at Page: 17
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IMMUNOGEN, INC.
TABLE OF CONTENTS
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Page
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PART I - FINANCIAL INFORMATION
Item 1 Financial Statements
Conslidated Balance Sheets as of
June 30, 1995 and December 31, 1995........................... 3
Consolidated Statements of Operations
for the three months and the six months
ended December 31, 1994 and 1995.............................. 4
Consolidated Statements of Stockholders'
Equity for the year ended June 30, 1995 and for
the six months ended December 31, 1995........................ 5
Consolidated Statements of Cash Flows
for the six months ended December 31,
1994 and 1995................................................. 6
Notes to Consolidated Financial Statements.................... 7
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations................. 9
PART II - OTHER INFORMATION
Item 6 Exhibits and Reports on Form 8-K............................... 14
Signatures...................................................................... 16
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IMMUNOGEN, INC.
CONSOLIDATED BALANCE SHEETS
As of June 30, 1995 and December 31, 1995
June 30, December 31,
1995 1995
------------- -------------
ASSETS
Cash and cash equivalents $ 3,047,236 $ 877,406
Other current assets (Note D) 293,852 1,003,077
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Total current assets 3,341,088 1,880,483
------------- -------------
Property and equipment, net of accumulated
depreciation 13,621,383 5,084,142
Other assets (Note D) 83,700 1,683,700
------------- -------------
Total assets $ 17,046,171 $ 8,648,325
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable 2,229,003 1,998,392
Accrued compensation 316,973 432,811
Other accrued liabilities 978,253 723,098
Subordinated convertible debentures (Note C) - 360,000
Current portion of capital lease obligations 942,749 136,340
------------- -------------
Total current liabilities 4,466,978 3,650,641
------------- -------------
Capital lease obligations 2,330,680 109,157
Other non-current liabilities 125,354 -
Commitments
Redeemable convertible preferred stock,
$.01 par value; authorized 277,080 shares;
none issued - -
Stockholders' equity (Note C):
Common stock, $.01 par value; authorized
20,000,000 shares; issued and outstanding
12,578,606 and,15,074,226 shares as of
June 30, 1995 and December 31, 1995, respectively 125,786 150,742
Additional paid-in capital 118,988,736 122,266,150
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119,114,522 122,416,892
Accumulated deficit (108,991,363) (117,528,365)
------------ -------------
Total stockholders' equity 10,123,159 4,888,527
------------- -------------
Total liabilities and stockholders' equity $ 17,046,171 $ 8,648,325
============= =============
The accompanying notes are an integral part of the financial statements.
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IMMUNOGEN, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months and six months ended December 31, 1994 and 1995
Three Months Ended Six Months Ended
December 31, December 31,
-------------------------------------- ---------------------------------
1994 1995 1994 1995
----------- ------------ ------------ -----------
Revenues: $ 223,162
Development fees $ 86,834
Interest $ 142,956 22,281 $ 319,605 56,614
Licensing - 7,500 - 7,500
Other 13,929 13,929 24,715 27,857
----------- ----------- ------------ -----------
Total revenues 156,885 130,544 344,320 315,133
----------- ----------- ------------ -----------
Expenses:
Research and development 5,164,704 2,721,238 9,718,052 5,645,838
General and administrative 921,371 507,693 1,917,612 961,264
Interest 121,988 228,166 290,200 592,272
Loss on disposal of assets
(Note D) - 1,652,014 - 1,652,014
----------- ----------- ------------ -----------
Total expenses 6,208,063 5,109,111 11,925,864 8,851,388
----------- ----------- ------------ -----------
Loss before income taxes (6,051,178) (4,978,567) (11,581,544) (8,536,255)
Income tax expense 1,887 294 4,219 747
----------- ----------- ------------ -----------
Net loss $(6,053,065) $(4,978,861) $(11,585,763) $(8,537,002)
=========== =========== ============ ===========
Loss per common share $ (0.48) $ (0.36) $ (0.92) $ (0.65)
=========== =========== ============ ===========
Shares used in computing loss
per share amounts 12,569,486 13,757,414 12,564,652 13,169,662
=========== =========== ============ ===========
The accompanying notes are an integral part of the financial statements.
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IMMUNOGEN, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the six months ended December 31, 1995
Common Stock
------------------------------------
Additional Total
Paid-in Accumulated Stockholders'
Shares Amount Capital Deficit Equity
---------- -------- ------------ ------------- -----------
Balance at June 30, 1995 12,578,606 $125,786 $118,988,736 $(108,991,363) $10,123,159
---------- -------- ------------ ------------- -----------
Stock options excercised 11,000 110 7,041 - 7,151
Issuance and conversion of 7% subordinated
convertible debentures 2,484,620 24,846 3,270,373 - 3,295,219
Net loss for the six months ended
December 31, 1995 - - - (8,537,002) (8,537,002)
---------- -------- ------------ ------------- -----------
Balance at December 31, 1995 15,074,226 $150,742 $122,266,150 $(117,528,365) $ 4,888,527
========== ======== ============ ============= ===========
The accompanying notes are an integral part of the financial statements.
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IMMUNOGEN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended December 31, 1994 and 1995
Six Months Ended
December 31,
--------------------------------------------------
1994 1995
------------------ -------------------
Cash flows from operating activities:
Net loss $(11,585,763) $(8,537,002)
Adjustments to reconcile net loss to net
cash used for operating activities:
Depreciation and amortization 1,683,527 1,590,150
Loss on disposal of facility - 1,652,014
Other - 34,199
Changes in operating assets and liabilities:
Other current assets 319,306 77,370
Accounts payable (733,022) (230,611)
Accrued compensation 114,299 115,838
Other accrued liabilities (121,700) (35,659)
Other non-current liabilities (27,856) (27,856)
------------ -----------
Net cash used for operating activities (10,351,209) (5,361,557)
------------ -----------
Cash flows from investing activities:
Capital expenditures (384,604) (18,251)
Proceeds from sale of marketable securities 18,660,193 -
Purchase of marketable securities (5,466,562) -
------------ -----------
Net cash provided by (used for)
investing activities 12,809,027 (18,251)
------------ -----------
Cash flows from financing activities:
Proceeds from subordinated convertible debentures - 3,600,000
Stock issuances, net 14,545 7,151
Principal payments on capital lease obligations (471,241) (397,173)
------------ -----------
Net cash provided by (used for)
financing activities (456,696) 3,209,978
------------ -----------
Net change in cash and cash equivalents 2,001,122 (2,169,830)
------------ -----------
Cash and cash equivalents, beginning balance 1,572,389 3,047,236
------------ -----------
Cash and cash equivalents, ending balance $ 3,573,511 $ 877,406
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for interest $ 163,949 $ 592,272
============ ===========
Cash paid for income taxes $ 456 $ 5,000
============ ===========
Supplemental disclosure of noncash financing activities:
Issuance of 2,484,620 shares of common stock for conversion of $3,295,219 of principal and interest on 7% subordinated
convertible debentures to debenture holders.
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IMMUNOGEN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. In the opinion of management, the accompanying financial statements
include all adjustments, consisting of only normal recurring accruals, necessary
to present fairly the consolidated financial position, results of operations
and cash flows of ImmunoGen, Inc. (the "Company"), which include those of its
wholly-owned subsidiary, ImmunoGen Securities Corp., and its 72%-owned
subsidiary, Apoptosis Technology, Inc. ("ATI").
The Company has been unprofitable since inception and expects to incur
net losses over the next several years, if it is able to raise sufficient
working capital to continue operations. The Company's cash resources at
December 31, 1995 were $877,000, and the Company has continued since that date
actively to seek additional capital by pursuing one or more financing
transactions and/or strategic partnering arrangements, as well as implementing
the lease assignments described in Note D. While the Company remains hopeful
that it will be able to consummate an additional financing transaction in the
near term, no assurance can be given that such financing will be available to
the Company on acceptable terms, if at all. If the Company is unable to obtain
financing on acceptable terms in order to maintain operations, it could be
forced to curtail or discontinue operations.
B. Effective September 1, 1995 the Company entered into an agreement to
sublease approximately 82% of one of its Cambridge, Massachusetts facilities and
to lease certain related equipment. The initial term of this sublease agreement
expires in February 1997, with two successive one-year renewal options, the
first of which has been exercised by the sublessee. Net receipts under this
agreement, which are credited to reduce operating expenses, are expected to
total approximately $1.7 million through February 1998, of which approximately
$550,000 is expected to be received by the Company in fiscal 1996.
C. In August 1995 the Company issued $3.6 million of 7% subordinated
convertible debentures, due July 31, 1996, in a private placement to a small
number of overseas investors. As of December 13, 1995, debentures totalling
$3.24 million plus accrued interest thereon had been converted to shares of the
Company's Common Stock. On December 22, 1995 conversion notices for the
remaining $360,000 principal balance were received by the Company. However,
because Nasdaq Stock Market regulations prohibit certain issuances of stock
without the prior approval of shareholders and such approval had not been
obtained, the Company was unable to convert the debentures at that time.
Subsequent to December 31, 1995 the Company sought and received an exception to
the shareholder approval requirement from the Nasdaq Stock Market, the
shareholders were notified of the exception and in early 1996 the remaining
convertible debentures were converted into shares of the Company's Common Stock.
In total, 2,753,269 shares were issued to the holders of the $3.6 million 7%
subordinated convertible debentures for both principal and interest.
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D. In January 1996 the Company assigned its leases on its Canton,
Massachusetts production facility and equipment to another biotechnology
company. Under the terms of the agreements, the assignee has assumed all
payment obligations under the leases, which amount to approximately $116,000 per
month, and, in addition, will make cash payments to the Company totaling
approximately $2.4 million at various dates through July 1999. As of December
31, 1995 the Company's books reflect this January 1996 disposition of the
Company's Canton assets. Short-term and long-term amounts due the Company from
the assignee under these agreements are reflected in the Company's December 31,
1995 consolidated balance sheets in Other Current Assets and Other Assets,
respectively. Approximately $635,000 of this amount was received by the Company
in January 1996 and an additional $150,000 is expected to be received in
February 1996. In addition, the Company recognized a net loss on its equipment
lease at the Canton facility of approximately $1.7 million. The Company
estimates that the assignment of its Canton leases will save approximately
$140,000 per month in total monthly operating expenses.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Company was formed to develop, produce and market commercial
cancer and other pharmaceuticals based on molecular immunology. The Company is
in a research and development phase and expects no revenues to be derived from
product sales in the near future.
Since July 1, 1994 the Company has taken steps to reduce its operating
costs, including implementation of a restructuring plan in December 1994 and,
effective September 1, 1995, subleasing approximately 82% of one of its
Cambridge, Massachusetts facilities and leasing certain related equipment. The
initial term of this sublease agreement expires in February 1997, with two
one-year renewal options. During the quarter ended December 31, 1995, the
sublessee exercised the first option, extending the current term to February
1998. In addition, effective January 1, 1996 the Company has assigned its
leases on its Canton, Massachusetts facility and equipment to another
biotechnology company. Under the terms of the agreements, the assignee has
assumed all payment obligations under the leases, which amount to approximately
$116,000 per month and, in addition, will make cash payments to the Company
totaling approximately $2.4 million at various dates to July 1999, of which
approximately $785,000 is expected in fiscal 1996. The Company estimates that
this transaction will save approximately $140,000 per month in total monthly
operating expenses.
The Company has been unprofitable since inception and expects to incur
net losses over the next several years, if it is able to raise sufficient
working capital to continue operations. The Company's cash resources at
December 31, 1995 were $877,000, and the Company has continued since that date
actively to seek additional capital by pursuing one or more financing
transactions and/or strategic partnering arrangements, as well as implementing
the lease assignments discussed above. While the Company remains hopeful that
it will be able to consummate an additional financing transaction in the near
term, no assurance can be given that such financing will be available to the
Company on acceptable terms, if at all. If the Company is unable to obtain
financing on acceptable terms in order to maintain operations, it could be
forced to curtail or discontinue operations.
RESULTS OF OPERATIONS
Three Months Ended December 31, 1994 and 1995
The Company's revenues decreased approximately 17% from approximately
$157,000 for the three months ended December 31, 1994 to approximately $131,000
in the same period in 1995. Interest income totalled approximately $143,000,
or 91%, of revenues for the three months
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ended December 31, 1994, compared to approximately $22,000, or 17%, of
revenues in the corresponding 1995 period. This 84% decrease in interest
income reflects the significant decrease in cash balances available for
investment in the 1995 period. Revenues for the three months ended December
31, 1995 include approximately $86,000 of development revenue, which represents
revenue earned under the Small Business Innovation Research Program of the
National Institutes of Health. Revenues in both periods also include a gain on
sale of assets which resulted from a sale/leaseback agreement for equipment at
the Canton facility executed in fiscal 1994 which had been deferred and
recorded as other income through December 1995.
Effective January 1, 1996, the Company assigned its facility and
equipment leases for its Canton, Massachusetts facility to another
biotechnology company. Under the terms of the agreements, the assignee has
assumed all payment obligations under the leases, which amount to approximately
$116,000 per month, and, in addition, will make cash payments to the Company
totaling approximately $2.4 million at various dates through July 1999. As of
December 31, 1995 the Company's books reflect this January 1996 disposition of
the Company's Canton assets. Short-term and long-term amounts due the Company
from the assignee under these agreements are reflected in the Company's
December 31, 1995 consolidated balance sheets in Other Current Assets and Other
Assets, respectively. Approximately $635,000 of this amount was received in
January 1996 and an additional $150,000 is expected to be received in February
1996. In addition, the Company recognized a net loss on its equipment lease at
the Canton facility of approximately $1.7 million. The Company estimates that
the assignment of its Canton leases will save approximately $140,000 per month
in total monthly operating expenses.
The Company's total expenses, including the one-time charge to
recognize the disposal of the Canton assets, decreased approximately 18% from
approximately $6.2 million for the three months ended December 31, 1994 to
approximately $5.1 million in the same period in 1995. However, exclusive of
that charge, the Company's total expenses decreased approximately 44% to
approximately $3.5 million for the three months ended December 31, 1995.
Research and development costs constituted the primary component of the
Company's total ongoing expenses (83% and 79% for the three months ended
December 31, 1994 and 1995, respectively), decreasing from approximately $5.2
million for the three months ended December 31, 1994 to approximately $2.7
million for the three months ended December 31, 1995. This 47% decrease is
principally the result of the savings associated with the Company's
restructuring plan implemented in December 1994 and that portion of facilities
costs savings attributable to the facility sublease allocated to research and
development.
General and administrative expenses decreased 45% from approximately
$921,000 for the three months ended December 31, 1994 to approximately $508,000
for the three months ended December 31, 1995. This decrease principally
represents savings associated with the restructuring plan and that portion of
facilities costs savings attributable to the facility sublease allocated to
general and administrative expenses.
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Interest expense increased 87% from approximately $122,000 for the
three months ended December 31, 1994 to approximately $228,000 for the three
months ended December 31, 1995. This increase is due to issuance costs
associated with, and accrued interest on, the Company's 7% subordinated
convertible debentures issued in an August 1995 private offering, offset
somewhat by lower interest costs associated with the decreasing principal
balances of the Company's capital lease agreements. Subsequent to December
1995 and the assignment of the Company's capital lease for equipment at the
Canton facility, only one capital lease agreement remains.
Six Months Ended December 31, 1995
The Company's revenues decreased approximately 8% from approximately
$344,000 for the six months ended December 31, 1994 to approximately $315,000
in the same period in 1995. Interest income totalled approximately $319,000,
or approximately 93%, of revenues for the six months ended December 31, 1994,
compared to approximately $57,000, or 18% of revenues, in the corresponding
1995 period. This decrease is attributable to the significant decrease in cash
balances available for investment in the 1995 period. Revenues for the six
month period ended December 31, 1995 include development revenues of
approximately $223,000, or 71% of total revenues, which represents revenue
earned under the Small Business Innovation Research Program of the National
Institutes of Health. Also included in revenues for the 1995 period are $7,500
of licensing revenues received by the Company's 72%-owned subsidiary, Apoptosis
Technology, Inc., on the signing of a licensing agreement. Revenues in both
periods include a gain on sale of assets which resulted from the sale/leaseback
agreement for certain equipment at the Canton, Massachusetts facility executed
in fiscal 1994 which had been deferred and recorded as income through December
1995.
Total expenses decreased approximately 26% from approximately $11.9
million for the six months ended December 31, 1994 to approximately $8.9
million in the corresponding 1995 period. Without the one-time charge for
disposal of the Canton facility and equipment, the Company's total expenses
would have decreased approximately 40%, from approximately $11.9 million to
approximately $7.2 million.
Research and development costs constituted the primary component of the
Company's total ongoing expenses (81% and 78% for the six months ended December
31, 1994 and 1995, respectively), decreasing approximately 42% from
approximately $9.7 million for the six months ended December 31, 1994 to
approximately $5.6 million for the corresponding 1995 period. As in the three
months ended December 31, this decrease is primarily the result of the
Company's restructuring plan implemented in December 1994 and that portion of
the facilities costs savings attributable to the facility sublease allocated to
research and development.
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General and administrative expenses decreased approximately 50% from
approximately $1.9 million for the six months ended December 31, 1994 to
approximately $1.0 million in the corresponding 1995 period. As in the three
months ended December 31, this decrease results principally from savings
associated with the restructuring plan implemented in December 1994 and that
portion of facilities costs savings attributable to the facility sublease
allocated to general and administrative expenses.
Interest expense increased 104% from approximately $290,000 for the six
months ended December 31, 1994 to approximately $590,000 for the corresponding
1995 period. This increase is due to issuance costs associated with, and
accrued interest on, the Company's 7% subordinated convertible debentures
issued in an August 1995 private offering, offset somewhat by lower interest
costs associated with the decreasing principal balance of the Company's capital
lease agreements.
LIQUIDITY AND CAPITAL RESOURCES
Since July 1, 1993 the Company has financed its operating deficit of
approximately $52.1 million from various sources, including net proceeds of
approximately $13.0 million raised in its February 1994 public offering, net
proceeds of approximately $3.3 million raised in its August 1995 private
offering to foreign investors and from the exercise of stock options. Since
July 1, 1993 the Company has received approximately $1.3 million of interest
income. At December 31, 1995 approximately $0.9 million of cash and cash
equivalents remained available.
In February 1994 the Company sold in a public offering 2,012,500 shares
of its Common Stock. Net proceeds to the Company amounted to $13,242,250. In
March 1994 the Company executed a sale/leaseback agreement to finance
approximately $4.0 million of equipment at its Canton, Massachusetts facility.
The transaction included warrants to purchase Common Stock, which expire in
April 1999.
In August 1995 the Company issued $3.6 million of 7% subordinated
convertible debentures, due July 31, 1996, in a private placement to a small
number of foreign investors. Net proceeds to the Company amounted to
approximately $3.3 million. As of December 13, 1995, debentures totalling
$3.24 million plus accrued interest thereon had been converted to shares of the
Company's Common Stock. On December 22, 1995 conversion notices for the
remaining $360,000 principal balance were received by the Company. However,
because Nasdaq Stock Market regulations prohibit certain issuances of stock
without the prior approval of shareholders and such approval had not been
obtained, the Company was unable to convert the debentures at
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that time. Subsequent to December 31, 1995 the Company sought and
received an exception to the shareholder approval requirement from the Nasdaq
Stock Market, the shareholders were notified of the exception and in early 1996
the remaining convertible debentures were converted into shares of the
Company's Common Stock. In total, 2,753,269 shares were issued to the holders
of the $3.6 million 7% subordinated convertible debentures for both principal
and interest.
In the period since July 1, 1993 approximately $8.1 million was
expended on property and equipment, including equipment sold and leased back by
the Company, principally for construction of the Company's manufacturing
facilities. No significant amounts are expected to be expended on property and
equipment in fiscal 1996.
Pursuant to its agreements with ATI, ImmunoGen has agreed to obtain or
furnish an additional $3.0 million in equity for ATI on such terms and
conditions as may be mutually agreed to by ATI and the providers of such
additional equity. The Company anticipates that approximately $650,000 of
funding may be required by ATI during calendar year 1996 in order for ATI to
satisfy certain contractual obligations.
The Company anticipates that its existing capital resources will enable
it to maintain its current and planned operations through February 1996.
Because of its continuing losses from operations and working capital deficit,
the Company will be required to obtain additional capital to satisfy its
ongoing capital needs and to continue its operations. Although management
continues to pursue additional funding arrangements, no assurance can be given
that such financing will in fact be available to the Company. If the Company
is unable to obtain financing on acceptable terms in order to maintain
operations, it could be forced to curtail or discontinue its operations.
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IMMUNOGEN, INC.
PART II - OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings
-----------------
Not applicable.
Item 2. Changes in Securities
---------------------
Not applicable.
Item 3. Defaults Upon Senior Securities
-------------------------------
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Not applicable.
Item 5. Other Information
-----------------
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
---------------------------------
(a) Exhibits
Exhibit 10.29 Leasehold Mortgage and Collateral
Assignment of Lessee's Interest dated
January 1, 1996 between OraVax, Inc.,
as assignor, and the Registrant, as assignee
Exhibit 10.30 Assignment of Lease dated January 1,
1996 between the Registrant, as assignor,
and OraVax, Inc., as assignee
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Exhibit 10.31 Assignment of Equipment Lease and
Lessor's Consent dated January 1, 1996
by and among the Registrant, as lessee,
OraVax, Inc., as assignee, and Aberlyn
Capital Managment Limited Partnership,
as lessor
(b) No reports on Form 8-K were filed during the three months
ended December 31, 1995.
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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.
IMMUNOGEN, INC.
Date: February 14, 1996 By: /s/ Mitchel Sayare
----------------------------
Mitchel Sayare
Chief Executive Officer
(principal executive officer)
Date: February 14, 1996 By: /s/ Frank J. Pocher
---------------------------
Frank J. Pocher
Vice President and
Chief Financial Officer
(principal financial officer)
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IMMUNOGEN, INC.
EXHIBIT INDEX
Sequentially Numbered
---------------------
Exhibits Page
- - -------- ----
10.29 Leasehold Mortgage and Collateral
Assignment of Lessee's Interest dated
January 1, 1996 between OraVax, Inc.,
as assignor, and the Registrant, as assignee 18
10.30 Assignment of Lease dated January 1,
1996 between the Registrant, as assignor,
and OraVax, Inc., as assignee 25
10.31 Assignment of Equipment Lease and
Lessor's Consent dated January 1, 1996
by and among the Registrant, as lessee,
OraVax, Inc., as assignee, and Aberlyn
Capital Management Limited Partnership,
as lessor 33
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LEASEHOLD MORTGAGE AND COLLATERAL ASSIGNMENT
--------------------------------------------
OF LESSEE'S INTEREST
--------------------
THIS LEASEHOLD MORTGAGE AND COLLATERAL ASSIGNMENT OF LESSEE'S INTEREST
(this "Mortgage") is made as of the 1st day of January, 1996 by ORAVAX, INC., a
Delaware corporation (the "Assignor"), with a mailing address at 38 Sidney
Street, Cambridge, Massachusetts 02139, to IMMUNOGEN, INC., its successors and
assigns (the "Assignee"), with a mailing address at 128 Sidney Street,
Cambridge, Massachusetts 02139.
Reference is made hereby to a certain Assignment of Lease (the
"Assignment"), of even date, by and between Assignee and Assignor, which
relates to Assignee's assignment to Assignor of all of Assignee's right, title
and interest in and to a lease (the "Space Lease") between Assignee and AEW #1
Corporation ("Landlord"), covering certain premises known as 90 Shawmut Road in
Canton, Massachusetts. Pursuant to the Lease Assignment, Assignor undertook
certain obligations, including without limitation the performance of all
obligations of Assignee under the Space Lease, and the payment of Two Million
Two Hundred Ninety Thousand Dollars ($2,290,000.00) in installments
(collectively, the "Obligations"). The Lease and the Assignment, as well as any
other instrument or agreement executed and/or delivered in connection
therewith, may be referred to as the "Instruments."
In order to secure further the prompt payment of all Obligations due in
respect of the Assignment, Assignor does hereby (I) assign, transfer, and set
over unto the Assignee (a) all right, title and interest of Assignor in, to and
under the Space Lease (including without limitation any leasehold improvements
therein, to the extent owned by Assignor), now existing or which Assignor may
from time to time hereafter obtain during the term of this Mortgage, together
with any and all extensions, amendments, replacements, substitutions or
modifications thereof; (b) all of Assignor's contractual rights now existing or
hereafter arising between Assignor and any successor landlord, together with
the right to dispose of or otherwise act with respect to such rights in the
event of bankruptcy or insolvency of any such landlord (the "Contractual
Rights"), and (c) all of Assignor's rights, whether evidenced by permit,
agreement or otherwise, to operate the premises demised under the Lease (the
"Premises") (the "Operating Rights") and (II) grant to Assignee all of
Assignor's right, title and interest in, under and to (x) the Lease (y) the
Contractual Rights, and (z) the Operating Rights, with MORTGAGE COVENANTS and
with all the rights of a secured party under the Uniform Commercial Code as in
effect from time to time in the Commonwealth of Massachusetts.
The Premises are more particularly described in Exhibit A attached
hereto, and consist in part of real property located at 90 Shawmut Road in
Canton, Massachusetts.
The rights granted in this Mortgage shall become operative or may be
exercised at the option of the Assignee upon the occurrence of any default
under this Mortgage or the other Instruments beyond any applicable cure period
(hereinafter, an "Event of Default"), provided that in no event shall an Event
of Default be deemed to exist until any default by Assignor has
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continued for a period of (i) fifteen (15) days after written notice
thereof by Assignee in the case of a payment due from Assignor to Assignee
under the Lease Assignment, and (ii) thirty (30) days after written notice
thereof by Assignee in the case of any default not involving such a payment,
or, if shorter, any period of time allowed by landlord under the Lease for
Assignee to cure a failure by Assignor. So long as there shall exist no default
in the payment of the indebtedness secured hereby or in the performance of any
obligation, covenant or agreement herein or in the Instruments, or a default
contained in the Lease on the part of the Assignor to be performed, which
continues beyond any cure period contained herein or therein, the Assignor
shall have the right to use and enjoy all rights and privileges granted to it
pursuant to the terms of the Lease.
Assignor hereby authorizes Assignee, its employees and agents, at the
Assignee's option, upon or at any time after an Event of Default and with such
notice as shall be required by law, if any, to enter upon the Premises and take
possession thereof and exercise all other rights and privileges granted to
Assignor pursuant to the Lease.
Assignor also authorizes Assignee, its employees and agents, at its
option after such Event of Default, to enforce all or any of such contractual
rights as may have been assigned hereby, and Assignor hereby irrevocably
appoints Assignee its attorney in fact, coupled with an interest, to do all
acts pertaining thereto in its place and stead.
Assignor also authorizes Assignee, its employees and agents, upon such
entry, at its option, to take over and assume the management, operation and
maintenance of the Premises as provided for pursuant to the terms of the Lease
and in connection therewith to perform all acts and to expend such monies as
Assignee may deem advisable, in the same manner and to the same extent as
Assignor might do including the right to enter into subleases with subtenants
for the management, operation and maintenance of the Premises described in the
Lease. Assignor hereby releases all claims against Assignee arising out of or
in connection with such management, operation and maintenance and the exercise
of its other rights hereunder.
Assignor agrees, represents, covenants and warrants to Assignee that
(1) Assignor has not executed any prior assignment of its rights thereunder,
(2) Assignor will not modify, amend or terminate the Lease without the prior
written consent of Assignee, which consent shall not be unreasonably withheld
provided that any such modification or amendment does not adversely affect the
security granted to Assignee hereunder, and that in the event of a proposed
termination, Assignee is furnished with substitute collateral reasonably
satisfactory to Assignee, (3) Assignor will not do any act which would destroy
or impair the benefits to Assignee of this Mortgage, and will promptly pay and
perform all of its obligations under the terms of the Lease, (4) Assignor is
the owner of a valid and subsisting interest as tenant under the Lease prior to
the expiration or any applicable cure periods set forth in the Lease, (5) the
Assignor has full power and lawful authority to mortgage and grant the security
interests in the manner and form herein done, (6) the Assignor will preserve
the leasehold estate created by the Lease, and will forever
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warrant and defend the same to the Assignee and will forever warrant
and defend the validity and priority of the lien hereof to the Assignee against
the claims of all persons and parties whomsoever (except as otherwise provided
in the Assignment), (7) the Assignor will not, without the Assignee's prior
written consent, enter into any agreement terminating, modifying or amending
the Lease or releasing the Landlord thereunder from any obligations imposed
upon it thereby, and any such termination, modification or amendment of the
Lease or release of the Landlord without the prior written consent thereto by
the Assignee (which consent shall not be unreasonably withheld provided that
any such modification or amendment does not adversely affect the security
granted to Assignee hereunder, and that in the event of a proposed termination,
Assignee is furnished with substitute collateral reasonably satisfactory to
Assignee), shall be void and of no force and effect, (8) if the Assignor
receives a notice of default under the Lease, it shall immediately cause a copy
of such notice to be given to the Assignee, (9) Assignor will send Assignee
copies of all statements and notices of a material nature, in addition to
notices of default, which are required to be given under any Lease or received
with respect thereto, (10) the interests of Assignor and Landlord under the
Lease shall not be merged and thereby extinguished without Assignee's prior
written consent, (11) notwithstanding any provisions of the Lease to the
contrary, no notice of cancellation of the Lease shall be given by the Assignor
until Assignee has given its prior written consent thereto, unless all
obligations of the Assignor pursuant to the Instruments have been paid or
performed in full and Assignee has acknowledged such payment or performance in
writing signed by an officer of the Assignee duly authorized to do so, and (12)
Assignor will not further mortgage or otherwise encumber the leasehold estate
or other interests hereby mortgaged or assigned.
Assignor shall not, without having obtained the prior written consent
of Assignee, which consent shall not be unreasonably withheld provided such
release, consent or waiver will not adversely affect the security granted
Assignee hereunder, release Landlord from any liability under the Lease or
otherwise, or consent to, suffer or permit or waive any act or omission on the
part of the Landlord. In addition, Assignor acknowledges that, under the terms
of that certain Consent to Assignment of Lease and Leasehold Mortgage to be
executed and delivered by Landlord in respect of the Assignment, Landlord
requires that Assignee remain liable to Landlord for all obligations and
liabilities of Assignor under the Lease. Therefore, Assignor agrees with
Assignee: (i) not to amend or modify, or agree to or acquiesce in any amendment
to or modification of, the Lease, the effect of which amendment or modification
would be to increase or extend the obligations or liability of the Assignor or
Assignee under the Lease, as so amended or modified, without Assignee's prior
written consent (which shall not be unreasonably withheld or delayed, provided
that Assignor shall have given Assignee such information as Assignee may
reasonably request regarding Assignor's financial standing and condition as to
allow Assignee to determine that Assignor has resources sufficient under the
circumstances to meet such increased obligations); and (ii) to immediately give
Assignee a true and complete copy of any notice or other correspondence
received by Assignor in respect of the Lease, including without limitation any
notice or correspondence concerning any failure, breach or default, whether
actual or alleged, on the part of Assignor under the Lease.
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The Assignee shall not be liable for any loss sustained by the Assignor
resulting from any act or omission of the Assignee in exercising its rights
hereunder or under the Lease unless such loss is caused by the bad faith of the
Assignee. Assignee shall not be obligated to perform or discharge any
obligation, duty or liability under the Lease (except as otherwise provided in
the Assignment), and Assignor hereby indemnifies and holds Assignee harmless
from any liability, loss, or damage which it might incur under the Lease
(except as otherwise provided in the Assignment), by reason of this Mortgage or
the exercise of its rights hereunder, or from any other claims or demands which
may be asserted against Assignee by reason of any alleged obligation or
undertaking on its part to be performed or discharged under the Lease (except
as otherwise provided in the Assignment) prior to completion of the exercise of
its rights hereunder or in defense of any such claims or demands, excluding,
however, any liability, loss, damage, claim or demand arising out of Assignee's
bad faith. The amount of any indemnified liability, loss, damage, claim or
demand, including costs, expenses and reasonable attorneys' fees, shall be
secured hereby. Upon the failure of the Assignor to do so, the Assignee may,
at its option, declare all sums secured hereby immediately due and payable and
shall cause any non-reimbursed amounts to be added to the debt secured hereby.
If Assignee incurs any such liability, loss or damage in the defense of any
such claims or demands, Assignor shall immediately, upon demand, reimburse
Assignee for the amount thereof, including costs, expenses and reasonable
attorneys' fees. It is further understood that, prior to completion of the
exercise of its rights hereunder, this Agreement shall not operate to place
responsibility upon the Assignee for the control, care, management or repair of
the Premises, nor for the carrying out of any of the terms and conditions of
the Lease; nor shall it operate to make the Assignee responsible or liable for
any negligence in the management, upkeep, repair or control of the Premises
resulting in loss or injury or death to any tenant, licensee, employee or
stranger.
Entry by Assignee upon the Premises under the terms of this Mortgage
shall not constitute Assignee a "mortgagee in possession" in contemplation of
law, except at the option of Assignee expressed in writing.
The provisions of this Mortgage shall be binding upon Assignor and
Assignor's legal representatives, successors and assigns and shall inure to the
benefit of the Assignee and its successors and assigns. To the maximum extent
permitted by law, this instrument shall be governed by the law of the
Commonwealth of Massachusetts.
This Mortgage shall remain in full force and effect so long as any
obligations under the Instruments shall remain outstanding and only a discharge
hereof appearing of record in the Norfolk County Registry of Deeds or Land
Court or other written acknowledgment signed by an officer of the Assignee duly
authorized to do so shall operate as a release of Assignee's rights and
interest hereunder.
The mortgage granted hereby is upon the STATUTORY CONDITION and also
upon the other conditions herein set forth, all of which shall be binding on
Assignor and those claiming
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under Assignor. For any breach of the aforesaid STATUTORY CONDITION or of any
of the other conditions herein set forth, Assignee or any subsequent holder of
this instrument shall have the STATUTORY POWER OF SALE in addition to any other
remedy or remedies provided herein.
Assignee may elect to exercise any or all of its rights hereunder and
the partial exercise of its rights hereunder at any one time shall not
thereafter preclude the exercise, at any later time or times, of its other
rights hereunder.
The mortgage lien granted hereby includes and attaches to all of
Assignor's rights and remedies at any time arising under or pursuant to Section
365(h) of the Bankruptcy Code, 11 U.S.C. Sec. 365(h), including, without
limitation, all of its rights to remain in possession of the Premises
thereunder.
Assignor shall not, without prior written consent of Assignee, elect to
treat the Lease as terminated or elect to remain in possession of the Premises
under Section 365(h)(1) of the Bankruptcy Code, 11 U.S.C. Sec. 365(h)(1). Any
such election made without Assignee's prior written consent shall be void.
Assignor hereby unconditionally assigns, transfers and sets over to
Assignee all of Assignor's claims and rights to the payment of damages arising
from any rejection of the Lease under the Bankruptcy Code, 11 U.S.C. Sec. 101
et seq. (the "Bankruptcy Code"). Assignee shall have the right to proceed in
its own name or in the name of Assignor in respect of any claim, suit, action
or proceeding relating to the rejection of the Lease, including, without
limitation, the right to file and prosecute, to the exclusion of Assignor, any
proofs of claim, complaints, motions, applications, notices and other
documents, in any case in respect of Landlord under the Bankruptcy Code. This
assignment constitutes a present, irrevocable and unconditional assignment of
the foregoing claims, rights and remedies, and shall continue in effect until
all of the indebtedness and obligations secured by this Mortgage shall have
been satisfied and discharged in full. Any amounts received by the Assignee as
damages arising out of the rejection of the Lease as aforesaid shall be applied
first to all costs and expenses of Assignee (including, without limitation,
reasonable attorneys' fees) incurred in connection with the exercise of any of
its rights or remedies hereunder.
If, pursuant to Section 365(h)(2) of the Bankruptcy Code, Assignor
seeks to offset against the rent reserved in the Lease the amount of any
damages caused by the non-performance by the Landlord of any of Landlord's
obligations under the Lease after the rejection by Landlord of the Lease under
the Bankruptcy Code, Assignor shall, prior to effecting such offset, notify the
Assignee of its intent so to do, setting forth the amounts proposed to be so
offset and the basis therefor. Assignee shall have the right to object to all
or any part of such offset, and, in the event of such objection, Assignor shall
not effect any offset of the amounts so objected to by Assignee. If Assignee
has failed to object as aforesaid within 30 days after notice from the
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Assignor in accordance with the first sentence of this paragraph,
Assignor may proceed to effect such offset in the amounts set forth in
Assignor's notice. Neither the Assignee's failure to reject as aforesaid nor
any objection or other communication between Assignee and Assignor relating to
such offset shall constitute an approval of any such offset by Assignee.
Assignor shall indemnify and save Assignee harmless from and against any and
all claims, demands, actions, suits, proceedings, damages, losses, costs and
expenses of every nature whatsoever (including, without limitation, attorneys'
fees) arising from or relating to any offset by Assignor against the rent
reserved in the Lease.
If any action, proceeding, motion or notice shall be commenced or filed
in respect of the Landlord of the Premises in connection with any case under
the Bankruptcy Code, the Assignee shall have the option, to the exclusion of
Assignor, exercisable upon notice from Assignee to Assignor, to conduct and
control any such litigation with counsel of Assignee's choice. Assignee may
proceed in its own name or in the name of Assignor in connection with any such
litigation, and Assignor agrees to execute any and all powers, authorizations,
consents or other documents required by the Assignee in connection therewith.
Assignor shall, upon demand, pay to Assignee all costs and expenses (including
reasonable attorneys' fees) paid or incurred by Assignee in connection with the
prosecution or conduct of any such proceedings. Any such costs or expenses not
paid by Assignor as aforesaid shall be secured by the lien of this Mortgage and
shall be added to the principal amount of the indebtedness secured hereby.
Assignor shall not commence any action, suit, proceeding or case, or file any
application or make any motion, in respect of the Lease in any such case under
the Bankruptcy Code without the prior written consent of Assignee.
Assignor shall, promptly after obtaining knowledge thereof, notify
Assignee orally of any filing by or against Landlord of a petition under the
Bankruptcy Code. Assignor shall thereafter forthwith give written notice of
such filing to Assignee setting forth any information available to Assignor as
to the date of such filing, the court in which such petition was filed, and the
relief sought therein. Assignor shall promptly deliver to Assignee, following
receipt, any and all notices, summonses, pleadings, applications and other
documents received by Assignor in connection with any such petition and any
proceedings relating thereto or in connection therewith.
Assignor and Assignee (by its acceptance of this Agreement) hereby
irrevocably waive any and all rights to a trial by jury in any action,
proceeding or counterclaim arising out of or in any way related to this
Agreement.
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IN WITNESS WHEREOF, the undersigned has caused this Mortgage to be
signed as an instrument under seal as of January 1, 1996.
ORAVAX, INC.
By: /s/ Lance K. Gordon
-------------------------------------------------
Lance K. Gordon
Its: President and Chief Executive Officer, hereunto
duly authorized
By: /s/ Keith S. Ehrlich
-------------------------------------------------
Keith S. Ehrlich
Its: Vice President, Treasurer and Chief Financial
Officer, hereunto duly authorized
COMMONWEALTH OF MASSACHUSETTS
Middlesex, ss.
On this 22nd day of January, 1996, before me personally appeared Lance
K. Gordon and Keith S. Ehrlich, the President and Chief Executive Officer, and
the Vice President, Treasurer and Chief Financial Officer, respectively, of
Oravax, Inc., and acknowledged this instrument to be the free act and deed of
Oravax, Inc.
/s/ Julie M. Klinger
---------------------
Notary Public
My commission expires:
[stamp: JULIE M. KLINGER
Notary Public
My Commission Expires Feb. 22, 2002]
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ASSIGNMENT OF LEASE
THIS ASSIGNMENT OF LEASE (this "Agreement"), dated as of January 1,
1996, by and between IMMUNOGEN, INC. ("Tenant"), a Massachusetts corporation,
and ORAVAX, INC. ("Assignee"), a Delaware corporation.
WHEREAS, by a lease (the "Lease") dated as of June 30, 1992, AEW #1
CORPORATION ("Landlord") leased to Tenant that certain 31,113 square-foot
building (the "Premises") known as and numbered 90 Shawmut Road, Canton,
Massachusetts; and
WHEREAS, on and subject to the terms and conditions set forth herein,
Tenant now desires to assign all of its right, title and interest in and to the
Lease to Assignee, and Assignee desires to accept such assignment, effective as
of the date hereof; and
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, each to the other paid, the receipt and sufficiency
of which are hereby acknowledged, Landlord, Tenant and Assignee hereby agree as
follows:
1. ASSIGNMENT; REPRESENTATION; INDEMNITY. (a) That, effective as
of the date hereof, Tenant hereby assigns to Assignee all of Tenant's
right, title and interest in and to the Lease, including without
limitation all security and other deposits currently being held by
Landlord in respect of the Lease, and Tenant's right to purchase the
Premises as set forth in Section 2.6 of the Lease, all upon the terms
and conditions herein set forth. A true copy of the Lease, together
with any amendments, is annexed as Exhibit A.
(b) Tenant represents and warrants to Assignee that, as of the
date hereof, it has not received from Landlord any written notice from
Landlord to the effect that any default (or event or circumstance
which, with the passage of time or the giving of notice, would
constitute a default) exists on the part of Tenant under the Lease, and
to the best of Tenant's actual knowledge, no such default, event or
circumstance in fact exists; and Tenant agrees with Assignee to
indemnify and hold Assignee harmless from and against any and all costs
and obligations to have been paid or performed by Tenant under the
Lease on or prior to the date hereof.
(c) Tenant agrees with Assignee to indemnify and hold Assignee
harmless from and against any and all loss, cost, damage and expense
suffered by Assignee (including without limitation reasonable
attorneys' fees and costs of defense) as a result of any claim under or
in respect of the Lease, which claim relates to the period prior to the
date hereof.
(d) Tenant has not dealt with any broker or other person or
firm to whom a commission or fee is or may be due in respect of this
assignment, and Tenant hereby agrees to
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indemnify and hold the Assignee and Landlord harmless from and
against any and all loss, cost, damage and expense (including without
limitation reasonable attorneys' fees and costs) suffered by the other
as a result of any claim against Assignee or Landlord that a fee or
commission is due on account of a relationship between the claimant and
the Tenant.
2. ACCEPTANCE AND ASSUMPTION OF OBLIGATIONS; INDEMNITY. (a) Assignee
accepts from Tenant the above assignment, and hereby agrees
with Landlord and Tenant faithfully to assume and perform each and
every obligation of Tenant under the Lease, including without
limitation the obligation to pay rent, additional rent, additional
charges, common area charges, real estate taxes and any and all other
costs and expenses, however labelled or designated, and to observe all
terms and conditions thereof, including without limitation the
prohibition against further subletting or assignment, with the same
force and effect as if Assignee were the Tenant originally named under
the Lease.
(b) Assignee agrees to accept the Premises in their "As Is"
condition as of December 29, 1995, and represents that Assignee has
inspected the Premises and any common areas demised under the Lease,
and is satisfied as to their suitability for Assignee's intended uses.
Neither Tenant nor Landlord shall be liable for the performance of any
work to prepare the Premises for Assignee's use, or for the
reimbursement of any cost or expense incurred by Tenant in connection
with any such work. Notwithstanding any provision hereof to the
contrary, Assignee shall be required upon the expiration or earlier
termination of the Lease to return the Premises to Landlord in such
condition as may be required in the Lease, and Tenant shall have no
liability for any restoration of or repair to the Premises. The removal
of any fixtures, equipment, additions, alterations or improvements,
whether made by Tenant or Assignee, shall be the sole responsibility of
Assignee.
(c) Assignee agrees with Tenant to indemnify and hold Tenant
harmless from and against any and all loss, cost, damage and expense
suffered by Tenant (including without limitation reasonable attorneys'
fees and costs of defense) as a result of any claim under or in respect
of the Lease, which claim relates to the period on or subsequent to the
date hereof. Notwithstanding the foregoing, Assignee shall not be
liable to indemnify Tenant from any such loss, cost, damage or expense
arising from any tort claim in the Premises occurring prior to the date
on which Tenant first delivers possession of the Premises to Assignee.
(d) Assignee has not dealt with any broker or other person or
firm to whom a commission or fee is or may be due in respect of this
assignment, and Assignee hereby agrees to indemnify and hold the Tenant
and Landlord harmless from and against any and all loss, cost, damage
and expense (including without limitation reasonable attorneys' fees
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and costs) suffered by the other as a result of any claim
against Tenant or Landlord that a fee or commission is due on account
of a relationship between the claimant and the Assignee.
(e) Assignee acknowledges that, under the terms of that certain
Consent to Assignment of Lease and Leasehold Mortgage to be executed
and delivered by Landlord in respect of this Assignment, Landlord
requires that Tenant remain liable to Landlord for all obligations and
liabilities of Assignee under the Lease. Therefore, Assignee agrees
with Tenant: (i) not to amend or modify, or agree to or acquiesce in
any amendment to or modification of, the Lease, the effect of which
amendment or modification would be to increase or extend the
obligations or liability of the Assignee under the Lease, as so amended
or modified, without Tenant's prior written consent (which shall not be
unreasonably withheld or delayed, provided that Assignee shall have
given Tenant such information as Tenant may reasonably request
regarding Assignee's financial standing and condition as to allow
Tenant to determine that Assignee has resources sufficient under the
circumstances to meet such increased obligations); and (ii) to
immediately give Tenant a true and complete copy of any notice or other
correspondence received by Assignee in respect of the Lease, including
without limitation any notice or correspondence concerning any failure,
breach or default, whether actual or alleged, on the part of Assignee
under the Lease.
3. EQUIPMENT LEASE. Assignee agrees that, as a material part of the
assignment and assumption transaction represented hereby,
Assignee and Tenant have entered into an Assignment and Assumption of
Equipment Lease of even date (the "Equipment Assignment"), whereby
Assignee has agreed to accept and assume from Tenant an assignment of
all of Tenant's right, title and interest in and to that certain Master
Lease Agreement dated as of March 31, 1994, by and between Tenant and
Aberlyn Capital Management Limited Partnership (the "Equipment Lease").
4. TENANT'S PAYMENTS FOR EQUIPMENT; COLLECTION. (a) In addition to
assuming Tenant's obligations under the Equipment Lease, and as
a material inducement to Tenant's entering into this Assignment,
Assignee has agreed to purchase from Tenant, and Tenant has agreed to
sell to Assignee, the leasehold improvements in the Premises, together
with certain other equipment, fixtures and personal property belonging
to Tenant, and assign to Assignee all of Tenant's right, title and
interest in and to the leasehold improvements heretofore made by Tenant
in the Premises. In consideration thereof, Tenant promises to pay to
Tenant the sum of Two Million Two Hundred Ninety Thousand Dollars
(US$2,290,000.00), which shall be paid in installments as follows:
1. Assignee promises to pay to Tenant (or to Tenant's
order) Five Hundred Thousand Dollars (US$500,000.00), to be
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paid to Tenant simultaneously with Tenant's execution
hereof;
2. Assignee promises to pay to Tenant (or to Tenant's
order) One Hundred Fifty Thousand Dollars (US$150,000.00) on
the later to occur of (x) 5:00 p.m., Boston time, on February
2, 1996, or (y) the date on which Tenant delivers to Assignee's
address set forth in Section 8 hereof all drawings, plans,
warranties and other technical information relevant to the
Premises and in the possession or under the control of Tenant
or its agents or employees (Tenant hereby represents to
Assignee that Tenant has in its possession or under its control
all drawings, plans, warranties and other technical information
necessary for the proper operation of the Premises for the
purposes for which the Premises were constructed);
3. Assignee promises to pay to Tenant (or to Tenant's order)
Three Hundred Thirty Thousand Dollars (US$330,000.00)
on the earlier to occur of (x) 5:00 p.m., Boston time, on
July 1, 1997, or (y) the date on which Assignee has closed
one or more contemplated equity financings having
aggregate gross proceeds of not less than Twenty Million
Dollars (US$20,000,000.00); and
4. Assignee promises to pay to Tenant (or to Tenant's order)
One Million Three Hundred Ten Thousand Dollars
(US$1,310,000.00) in four installments, the first
installment for Two Hundred Sixty Thousand Dollars
($260,000) being due and payable October 1, 1998, and the
remaining installments of Three Hundred Fifty Thousand
Dollars ($350,000) each being due and payable January 1,
1999, April 1, 1999, and July 1, 1999.
All payments referred to above shall be paid in immediately
available federal funds, either by wire transfer or by cashier's check
drawn on Fleet Bank of Massachusetts, N.A., BayBank, N.A., The First
National Bank of Boston or another national banking association in
Boston or New York City reasonably acceptable to Tenant. The payments
referred to in clauses (3) and (4) above shall be subject to adjustment
to the extent that any equipment leased by Tenant under the Equipment
Lease is missing or damaged, all as more particularly set forth in the
Equipment Assignment.
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(b) In the event that Assignee shall fail to make any such
payment when due, Assignee shall pay to Tenant, in addition to the
amount due, a late charge equal to five percent (5%) thereof and, if
such failure shall continue for fifteen (15) days after written notice
thereof from Tenant to Assignee, Tenant shall have the right (but not
the obligation), without limiting any other rights or remedies Tenant
may have, to: (i) declare the entire amount then unpaid (including
without limitation late charges) to be immediately due and payable in
full; (ii) to terminate this Assignment and declare the same null, void
and without further force or effect (without, however, in any way
affecting Tenant's liability for the period between the date hereof and
the date of such termination) and peaceably re-enter the Premises and
repossess the same and any leasehold improvements owned by Assignee;
and (iii) to exercise its rights under the Mortgage (as hereinafter
defined). In addition to the $2,290,000 to be paid as aforesaid,
Assignee shall, simultaneously with Assignee's execution hereof, pay
over to Tenant the $40,000.00 security deposit currently being held by
Landlord, as referenced in Section 3(c) above.
(c) The Assignee agrees to pay all costs of suit and other
expenses of collection, including reasonable fees and expenses of
attorneys at both the trial and appellate levels, in the event that
this instrument is placed in the hands of any attorney for collection
or suit is brought thereon.
(d) The Assignee hereby waives presentment, protest and
demand, notice of protest, demand and dishonor and non-payment hereof,
and to the extent permitted by law, waives and releases all rights of
redemption, valuation, appraisement, notice of election to mature or to
declare due the whole of the indebtedness evidenced hereby, and to the
extent permitted by law, errors, defects and imperfections in any
proceedings instituted by the Tenant under the terms hereof or benefits
that might accrue to the Assignee by virtue of any present or future
laws providing for any stay of execution, exemption from civil process,
or extension of time for payment. Further, Assignee agrees that its
liability hereunder shall remain unimpaired, notwithstanding any
extension of the time of payment or other indulgence granted by the
Tenant, or the release of all or any part of any security for the
liability of any party which may assume the obligation to make payment
of the indebtedness evidenced hereby, or the performance and the
obligations of the Assignee hereunder. The foregoing shall not be
deemed to constitute a waiver by Assignee of any rights that may be
available to Assignee under applicable law to offset against any such
payment obligation the amount of any judgment obtained by Assignee
against Tenant as a result of Tenant's failure or refusal to perform
its obligations hereunder.
(e) In no event shall either party, by any act of omission or
commission, be deemed to waive any of its rights or remedies hereunder
unless such waiver is in writing signed by such party, and no waiver of
any one event shall be construed as continuing or as a bar to or waiver
of such right or remedy on a subsequent event.
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(f) Any legal action or proceeding with respect to the
collection of the indebtedness evidenced hereby may, at the option of
the Tenant, be brought in the courts of The Commonwealth of
Massachusetts or of the United States of America for the District of
Massachusetts. By execution and delivery hereof, the Assignee accepts,
generally and unconditionally, the jurisdiction of the aforesaid
courts. The Assignee irrevocably consents to the service of process of
any of the aforementioned courts in any such action or proceeding by
the mailing of copies thereof by certified mail, postage prepaid, to
the party at its address set forth herein.
(g) Assignee's obligation to make each such payment as and when
due shall be secured by a Leasehold Mortgage and Assignment of Lessee's
Interest (the "Mortgage"), by Assignee in favor of Tenant, covering
Assignee's interest in the Lease, such Mortgage to be in the form
attached hereto as EXHIBIT B.
5. NOTICES, ETC. All notices, requests, consents and other communications
hereunder shall be in writing, shall be addressed to the receiving
party's address set forth below or to such other address as a
party may designate by notice hereunder, and shall be either (i)
delivered by hand, (ii) made by telex, telecopy or facsimile
transmission, (iii) sent by overnight courier, or (iv) sent by
registered or certified mail, return receipt requested, postage
prepaid.
If to the Landlord:
AEW #1 Corporation
265 Franklin Street
Boston, MA 02110
With a copy to:
Stephen M. Nolan, Esq.
Hill & Barlow
One International Place
Boston, MA 02109
If to the Tenant:
Immunogen, Inc.
128 Sidney Street
Cambridge, MA 02139
Attention: Mr. Frank Pocher
With a copy to:
-6-
7
Stephen T. Langer, Esq.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
If to Assignee:
Oravax, Inc.
38 Sidney Street
Cambridge, MA 02139
Attention:
With a copy to:
Jeffrey Hermanson, Esq.
Hale and Dorr
60 State Street
Boston, MA 02109
All notices, requests, consents and other communications
hereunder shall be deemed to have been given either (i) if by hand, at
the time of the delivery thereof to the receiving party at the address
of such party set forth above, (ii) if made by telex, telecopy or
facsimile transmission, at the time that receipt thereof has been
acknowledged by electronic confirmation or otherwise, (iii) if sent by
overnight courier, on the next business day following the day such
notice is delivered to the courier service, or (iv) if sent by
registered or certified mail, on the 5th business day following the day
such mailing is made. The Assignee shall give the holder prompt notice
of any change in the Assignee's principal address.
6. ACCOUNTING; SERVICE AGREEMENT. At or before the execution hereof, Tenant
has delivered to Assignee an accounting, in reasonable detail,
of Tenant's prior investment in the Premises and the leasehold
improvements therein. Tenant agrees to negotiate in good faith with
Assignee a mutually acceptable service agreement, pursuant to which
Tenant shall provide a reasonable level of consulting services to
Assignee to assist Assignee in making a smooth transition to the
Premises.
7. HEADINGS AND CAPTIONS. The headings and captions of the various
subdivisions of this Agreement are for convenience of reference
only and shall in no way modify, or affect the meaning or construction
of any of the terms or provisions hereof.
8. GOVERNING LAW. This Agreement and the rights and obligations of the
parties hereunder shall be construed in accordance with and governed by
the law of the
-7-
8
Commonwealth of Massachusetts, without giving effect to the
conflict of law principles thereof.
9. UNENFORCEABILITY, ETC. If any provision hereof or the application
thereof to any person or circumstances shall to any extent be
invalid or unenforceable, the remainder hereof, or the application or
such provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and
each provision hereof shall be valid and enforced to the fullest extent
permitted by law.
10. RATIFICATION. Except as hereinabove specifically assigned, the Lease is
hereby ratified and confirmed.
IN WITNESS WHEREOF, Landlord and Tenant have signed and sealed this
Amendment as of the day and year first above written.
IMMUNOGEN, INC.
By: /s/ Frank J. Pocher
-----------------------------------------
Frank J. Pocher, Vice President and Chief
Financial Officer
ORAVAX, INC.
By: /s/ Lance K. Gordon
-----------------------------------------
Name: Lance K. Gordon
President and Chief Executive Officer
By: /s/ Keith S. Ehrlich
-----------------------------------------
Name: Keith S. Ehrlich
Vice President, Treasurer and Chief
Financial Officer
-8-
1
ASSIGNMENT OF EQUIPMENT LEASE
AND LESSOR'S CONSENT
THIS ASSIGNMENT OF EQUIPMENT LEASE AND LESSOR'S CONSENT (this
"Agreement"), dated as of January 1, 1996, by and among IMMUNOGEN, INC.
("Lessee"), a Massachusetts corporation, ORAVAX, INC. ("Assignee"), a Delaware
corporation, and ABERLYN CAPITAL MANAGEMENT LIMITED PARTNERSHIP, a Delaware
limited partnership ("Lessor").
WHEREAS, by a Master Lease Agreement (the "Lease") dated as of March
31, 1994, Lessor leased to Lessee that certain equipment and other personal
property (the "Equipment") more particularly described in Lease Schedule No.
001 and Lease Schedule No. 002, each of which is attached to and made a part of
the Lease; and
WHEREAS, on and subject to the terms and conditions set forth herein,
Lessee now desires to assign all of its right, title and interest in and to the
Lease to Assignee, and Assignee desires to accept such assignment, effective as
of the date hereof; and
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, each to the other paid, the receipt and sufficiency
of which are hereby acknowledged, Lessor, Lessee and Assignee hereby agree as
follows:
1. ASSIGNMENT; REPRESENTATION; INDEMNITY. (a) That, effective as
of the date hereof, Lessee hereby assigns to Assignee all of Lessee's
right, title and interest in and to the Lease, including without
limitation all security and other deposits currently being held by
Lessor in respect of the Lease, and Lessee's right to purchase the
Equipment as set forth in Section 2.6 of the Lease and in the Lease
Schedules, all upon the terms and conditions herein set forth. A true
copy of the Lease, together with any amendments, is annexed as EXHIBIT
A.
(b) Lessee represents and warrants to Assignee that, as of the
date hereof, it has not received from Lessor any written notice from
Lessor to the effect that any Event of Default (or event or
circumstance which, with the passage of time or the giving of notice,
would constitute an Event of Default) exists on the part of Lessee
under the Lease, and to the best of Lessee's actual knowledge, no such
Event of Default, event or circumstance in fact exists; and Lessee
agrees with Assignee to indemnify and hold Assignee harmless from and
against any and all costs and obligations to have been paid or
performed by Lessee under the Lease on or prior to the date hereof.
(c) Lessee agrees with Assignee to indemnify and hold Assignee
harmless from and against any and all loss, cost, damage and expense
suffered by Assignee (including without limitation reasonable
attorneys' fees and costs of defense) as a result of any claim under or
in respect of the Lease, which claim relates to the period prior to the
date hereof.
(d) Lessee has not dealt with any broker or other person or
firm to whom a commission or fee is or may be due in respect of this
assignment, and Lessee hereby agrees to indemnify and hold the Assignee
and Lessor harmless from and against any and all loss, cost, damage and
expense (including without limitation reasonable attorneys' fees and
costs) suffered by the other as a result
2
of any claim against Assignee or Lessor that a fee or commission is due
on account of a relationship between the claimant and the Lessee.
(e) Lessee represents and warrants to Lessor that, as of the
date hereof, the Equipment is free from all liens and encumbrances made
by Lessee except the Lease.
2. ACCEPTANCE AND ASSUMPTION OF OBLIGATIONS; INDEMNITY. (a)
Assignee accepts from Lessee the above assignment, and hereby agrees
with Lessor and Lessee faithfully to assume and perform each and every
obligation of Lessee under the Lease, including without limitation the
obligation to pay Rent, additional rent, Supplemental Rent, additional
charges, taxes and any and all other costs and expenses, however
labelled or designated, and to observe all terms and conditions
thereof, including without limitation the prohibition against further
subletting or assignment, with the same force and effect as if Assignee
were the Lessee originally named under the Lease.
(b) Subject to the provisions of Section 8 hereof, Assignee
agrees to accept the Equipment in its "As Is" condition as of December
29, 1995, and represents that Assignee has inspected the Equipment, and
is satisfied as to its suitability for Assignee's intended uses.
Notwithstanding any provision hereof to the contrary, Assignee shall be
required upon the expiration or earlier termination of the Lease to
return the Equipment to Lessor in such condition as may be required in
the Lease, and Lessee shall have no liability in connection therewith.
Assignee agrees to pay to Lessee, simultaneously with the execution
hereof, an amount equal to the last month's rental payments due under
the Lease, which have been paid in advance by the Lessee. Assignee
agrees that such amount is $96,595.14.
(c) Assignee agrees with Lessee to indemnify and hold Lessee
harmless from and against any and all loss, cost, damage and expense
suffered by Lessee (including without limitation reasonable attorneys'
fees and costs of defense) as a result of any claim under or in respect
of the Lease, which claim relates to the period on or subsequent to the
date hereof.
(d) Assignee has not dealt with any broker or other person or
firm to whom a commission or fee is or may be due in respect of this
assignment, and Assignee hereby agrees to indemnify and hold the Lessee
and Lessor harmless from and against any and all loss, cost, damage and
expense (including without limitation reasonable attorneys' fees and
costs) suffered by the other as a result of any claim against Lessee or
Lessor that a fee or commission is due on account of a relationship
between the claimant and the Assignee.
(e) Assignee represents and warrants to Lessor that to the
best of its knowledge there is no sales, use or other tax required to
be paid in connection with the assignment effected hereby, and Assignee
shall pay any such tax if the same is later found applicable.
(f) Assignee acknowledges that as of the date hereof, there
remains unpaid under the Lease aggregate rent payments in the amount of
$3,091,044.48.
3. LESSOR'S CONSENT. (a) Lessor hereby consents to the Assignment of the
Lease to Assignee on the following terms and conditions:
-2-
3
(i) Neither the giving of this consent nor anything
contained herein shall be construed to modify, waive, impair or
affect any of the covenants, agreements, terms, provisions,
obligations or conditions contained in the Lease (except as may
herein be expressly provided), or to waive any breach thereof,
or any rights of Lessor against any person, firm, association
or corporation liable or responsible for the performance
thereof, or to increase the obligations or diminish the rights
of Lessor under the Lease, or to increase the rights or
diminish the obligations of the tenant thereunder, or to, in
any way, be construed as giving Assignee any greater rights
than the original Lessee named in the Lease would be entitled
to, and all covenants, agreements, terms, provisions and
conditions of the Lease are hereby mutually declared to be in
full force and effect.
(ii) The giving of this consent shall not be construed
either as a consent by Lessor to, or as permitting, any other
or further assignment of the Lease, whether in whole or in
part, or any subletting of the Equipment or any part thereof,
or as a waiver of the requirement of obtaining Lessor's consent
thereto, to the extent required under the Lease.
(iii) The giving of this Consent shall not result in any
liability on the part of Lessor for the payment of any
commissions or fees in connection with the proposed assignment
transaction herein contemplated by Lessee and Assignee; Lessor
hereby represents that it has dealt with no broker or other
party to whom a commission is due as a result of this
Agreement.
(b) Lessor represents and warrants to Lessee and Assignee that
as of the date hereof, no Event of Default (or event or circumstance
which, with the passage of time or the giving of notice, would
constitute an Event of Default) exists on the part of Lessee under the
Lease and the Lease has not been amended except as disclosed on Exhibit
A. Lessor is not currently holding any security deposits from Lessee or
any other amounts for the account of Lessee, but Lessor acknowledges
that the last month's rental payment under the Lease has been paid in
advance.
4. RELEASE. Effective as of the date hereof, (i) Lessor hereby
releases Lessee from any and all further liability or obligation under
or in respect of the Lease, which liability or obligation first arises
on or subsequent to the date hereof, and (ii) Lessee hereby releases
Lessor from any and all claims, actions or causes of action,
liabilities or obligations, of whatever type or nature, known or
unknown, arising out of or in respect of the Lease or Lessee's use of
the Equipment and first arising prior to the date hereof.
5. SPACE LEASE. Assignee agrees that, as a material part of the
assignment and assumption transaction represented hereby, Assignee and
Lessee have entered into an Assignment and Assumption of Lease of even
date (the "Space Assignment"), whereby Assignee has agreed to accept
and assume from Lessee an assignment of all of Lessee's right, title
and interest in and to that certain Lease dated as of June 30, 1992, by
and between Lessee and AEW #1 Corporation (the "Space Lease").
-3-
4
6. SECURED PARTIES, ETC. Lessor represents that there exist no
holders of chattel mortgages or security interests on the Equipment,
and no further consents or approvals are required for Lessor to enter
into this Agreement.
7. NOTICES, ETC. All notices, requests, consents and other
communications hereunder shall be in writing, shall be addressed to the
receiving party's address set forth below or to such other address as a
party may designate by notice hereunder, and shall be either (i)
delivered by hand, (ii) made by telex, telecopy or facsimile
transmission, (iii) sent by overnight courier, or (iv) sent by
registered or certified mail, return receipt requested, postage
prepaid.
If to the Lessor:
Aberlyn Capital Management Limited Partnership
1000 Winter Street
Waltham, MA 02154
Attention: Douglas Brian
If to the Lessee:
Immunogen, Inc.
128 Sidney Street
Cambridge, MA 02139
Attention: Mr. Frank Pocher
With a copy to:
Stephen T. Langer, Esq.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
If to Assignee:
Oravax, Inc.
38 Sidney Street
Cambridge, MA 02139
Attention:
-4-
5
With a copy to:
Jeffrey Hermanson, Esq.
Hale and Dorr
60 State Street
Boston, MA 02109
All notices, requests, consents and other communications
hereunder shall be deemed to have been given either (i) if by hand, at
the time of the delivery thereof to the receiving party at the address
of such party set forth above, (ii) if made by telex, telecopy or
facsimile transmission, at the time that receipt thereof has been
acknowledged by electronic confirmation or otherwise, (iii) if sent by
overnight courier, on the next business day following the day such
notice is delivered to the courier service, or (iv) if sent by
registered or certified mail, on the 5th business day following the day
such mailing is made.
8. INSPECTION. At or before the execution hereof, Lessee and
Assignee have performed a detailed inspection of the Equipment, and a
complete listing of any missing or damaged (other than ordinary wear
and tear) Equipment is annexed hereto as EXHIBIT B. If and to the
extent that there exists any such missing or damaged Equipment,
Assignee may deduct from the payment to be made to Lessee under Section
4(3) and 4(4) of the Space Assignment an amount equal to the product of
(i) the reasonable amount by which the value of any missing or damaged
Equipment is diminished by reason of such damage below its reasonable
value if not missing or undamaged, multiplied by a fraction, the
numerator of which is the number of months remaining in the term of the
Lease after December 31, 1995, and the denominator of which is the
total number of months in the term of the Lease.
9. HEADINGS AND CAPTIONS. The headings and captions of the
various subdivisions of this Agreement are for convenience of reference
only and shall in no way modify, or affect the meaning or construction
of any of the terms or provisions hereof.
10. GOVERNING LAW. This Agreement and the rights and obligations
of the parties hereunder shall be construed in accordance with and
governed by the law of the Commonwealth of Massachusetts, without
giving effect to the conflict of law principles thereof.
11. UNENFORCEABILITY, ETC. If any provision hereof or the
application thereof to any person or circumstances shall to any extent
be invalid or unenforceable, the remainder hereof, or the application
or such provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected
thereby, and each provision hereof shall be valid and enforced to the
fullest extent permitted by law.
12. RATIFICATION. Except as hereinabove specifically assigned and amended,
the Lease is hereby ratified and confirmed.
-5-
6
IN WITNESS WHEREOF, Lessor, Lessee and Assignee have signed and sealed
this Amendment as of the day and year first above written.
ABERLYN CAPITAL MANAGEMENT LIMITED
PARTNERSHIP
By: Aberlyn Capital Management Company, Inc.,
its general partner
By: /s/ Diana M. Spano
-----------------------------------------
Name: Diana M. Spano
(Vice) President
IMMUNOGEN, INC.
By: /s/ Frank J. Pocher
-----------------------------------------
Frank J. Pocher, Vice President and Chief
Financial Officer
ORAVAX, INC.
By: /s/ Lance K. Gordon
-----------------------------------------
Name: Lance K. Gordon
President and Chief Executive Officer
By: /s/ Keith S. Ehrlich
-----------------------------------------
Name: Keith S. Ehrlich
Vice President, Treasurer and Chief Financial
Officer
-6-
7
IN WITNESS WHEREOF, Lessor, Lessee and Assignee have signed and sealed
this Amendment as of the day and year first above written.
ABERLYN CAPITAL MANAGEMENT LIMITED
PARTNERSHIP
By: Aberlyn Capital Management Company, Inc.,
its general partner
By:
-----------------------------------------
Name:
(Vice) President
IMMUNOGEN, INC.
By: /s/ Frank J. Pocher
-----------------------------------------
Frank J. Pocher, Vice President and Chief
Financial Officer
ORAVAX, INC.
By: /s/ Lance K. Gordon
-----------------------------------------
Name: Lance K. Gordon
President and Chief Executive Officer
By: /s/ Keith S. Ehrlich
-----------------------------------------
Name: Keith S. Ehrlich
Vice President, Treasurer and Chief Financial
Officer
-6-
5
0000855654
IMMUNOGEN CORPORATION
1
U.S. DOLLARS
3-MOS
JUN-30-1996
OCT-01-1995
DEC-31-1995
1
877,406
0
0
0
0
1,880,483
14,549,927
9,465,785
8,648,325
3,650,641
0
150,742
0
0
0
8,648,325
0
315,133
0
0
8,851,388
0
592,272
(8,536,255)
747
0
0
0
0
(8,537,002)
(.65)
(.65)
