UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_______________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
_______________
Date of Report (Date of earliest event reported): June 10, 1997
SERAGEN, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-19855 04-2662345
_______________ ___________ ______________
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
97 South Street, Hopkinton, Massachusetts 01748
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (508) 435-2331
Exhibit Index on page 6.
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Item 5. Other Events.
_______ _______________
This report on Form 8-K pertains to the restructuring (the
"Restructuring") by the Registrant of its existing license agreement with
Ajinomoto Co., Inc. ("Ajinomoto"). The Restructuring is the subject of a
press release that is being issued by the Registrant simultaneously with the
filing of this report.
The Registrant and Ajinomoto are parties to a License Agreement, dated
December 13, 1994 (the "License Agreement"), pursuant to which Ajinomoto has
granted the Registrant worldwide rights to certain Interleukin-2 ("IL-2") gene
patents owned by the Japanese Foundation for Cancer Research and Ajinomoto for
potential use in the development of the Registrant's lead product, IL-2 Fusion
Protein. Prior to the Restructuring, the License Agreement provided for
license fees as follows: a $100,000 initial fee which the Registrant paid at
the time of signing; a $4.3 million fee payable upon the occurrence of certain
specified events, but at the latest by March 31, 1997 (previously extended by
agreement of Ajinomoto to May 31, 1997); and royalties varying from 2% to 4%
on sales of the licensed product by the Registrant or its sublicensees, but
with minimum royalties of $100,000 for the third year of the agreement,
$200,000 for the fourth year of the agreement, and $300,000 for the fifth and
following years of the agreement. In addition, prior to the Restructuring,
the rights granted by Ajinomoto to the Registrant pursuant to the License
Agreement were exclusive.
After negotiations among the Registrant, Ajinomoto and Eli Lilly and
Company ("Lilly") (with which the Registrant is collaborating on the
development of the IL-2 Fusion Protein product for cutaneous T-cell lymphoma
("CTCL")), agreement was reached among the parties regarding the
Restructuring. Under the terms of the Restructuring, the future license fees
payable by the Registrant to Ajinomoto under the License Agreement will be
reduced to the following amounts: a $2.25 million fee payable in the amount
of $800,000 by June 30, 1998, or approval by the Food and Drug Administration
of a Biologic License Application filed by the Registrant for the licensed
product, whichever comes first, in the amount of $800,000 by June 30, 1999,
and in the amount of $650,000 by March 31, 2000; and a royalty of 1% on end
user net sales of the licensed product by the Registrant or its sublicensees.
The Restructuring provides that the license granted by Ajinomoto to the
Registrant will in the future be non-exclusive.
Under the terms of an Amendment to Sales and Distribution Agreement and
Development Agreement, dated April 7, 1997 (the "Lilly Amendment"), between
the Registrant and Lilly, Lilly has agreed to assume $2.15 million of the
Registrant's revised financial obligations to Ajinomoto. Separately, but
pursuant to its undertakings in the Lilly Amendment, Lilly has paid $2.15
million to Ajinomoto for a license granted by Ajinomoto directly to Lilly.
The Lilly Amendment was the subject of a report filed by the Registrant on
Form 8-K with respect to an April 7, 1997 event.
Lilly's assumption of $2.15 million of the Registrant's revised
financial obligations to Ajinomoto is subject to certain offsets, conditions
and limitations. Lilly will be permitted to credit $1.5 million of the amount
paid by Lilly to Ajinomoto on behalf of the Registrant against the next $1.5
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million milestone payment that falls due from Lilly to the Registrant under
the sales and distribution agreement between the Registrant and Lilly. Lilly
is not obligated to pay more than $650,000 of the Registrant's obligations to
Ajinomoto prior to December 31, 1997, or the date on which the $1.5 million
milestone payment due from Lilly to the Registrant under the Registrant's
sales and distribution agreement with Lilly becomes due, whichever comes
later. Lilly is not obligated to make any further payments in respect of the
Registrant's obligations to Ajinomoto if Lilly terminates the sales and
distribution agreement between it and the Registrant as a result of a failure
by the Registrant to meet specified clinical, regulatory and financial
milestones and other requirements. Among the relevant milestones and
requirements referenced in the preceding sentence are the Registrant's
obtaining commitments for $5.0 million of new investment capital by July 1,
1997, and closing on the same by August 1, 1997, and the Registrant's
obtaining $15.0 million total amount of new investment capital by October 1,
1997.
There can be no assurance that the Registrant will be able to meet the
conditions to Lilly's obligations to make payment to Ajinomoto on behalf of
the Registrant that are set forth or referenced in the foregoing paragraph.
Among other things, there can be no assurance that the Registrant will be able
to secure commitments for new capital investment or obtain new capital
investment by the stated deadlines.
Safe Harbor Information
_______________________
Some of the statements contained in this document are forward-looking,
including statements relating directly or by implication to the Registrant's
products, operations, strategic partnerships, and ability to fund its
operations. These statements are based on current expectations and involve a
number of uncertainties and risks, including (but not limited to) the
Registrant's ability to proceed with successful development, testing, and
licensing of its products and the Registrant's ability to enter into
additional strategic partnerships and other collaborative arrangements or to
raise additional capital on satisfactory terms. For further information,
refer to the "Business Outlook" section in the Registrant's Form 10-K as filed
with the Securities and Exchange Commission. Actual results may differ
materially from such expectations.
Item 7. Financial Statements and Exhibits.
_______ ____________________________________
Exhibit Number Description
______________ ___________
99.1 The Registrant's press release dated June 10, 1997
(filed herewith)
99.2 License Agreement, dated December 13, 1994, between
the Registrant and Ajinomoto Co., Inc. (filed
herewith)
99.3 Amendment to License Agreement, dated June 1, 1997,
between the Registrant and Ajinomoto Co., Inc. (filed
herewith)
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99.4 Amendment to Sales and Distribution Agreement and
Development Agreement, dated April 7, 1997, between
the Registrant and Eli Lilly and Company (previously
filed as Exhibit 99.2 to the Registrant's report on
Form 8-K with respect to an April 7, 1997 event and
incorporated herein by reference; certain portions of
the same are the subject of a request for confidential
treatment)
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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 hereunto duly authorized.
SERAGEN, INC.
_____________
(Registrant)
Date: June 10, 1997 /s/ Reed R. Prior
__________________
Reed R. Prior
Chairman of the Board and
Chief Executive Officer
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EXHIBIT INDEX
_____________
Exhibit Sequential
Number Description Page Number
_______ ____________ ___________
99.1 The Registrant's press release dated June 10, 1997
(filed herewith) 7
99.2 License Agreement, dated December 13, 1994, between
the Registrant and Ajinomoto Co., Inc.(filed herewith) 9
99.3 Amendment to License Agreement, dated June 1, 1997,
between the Registrant and Ajinomoto Co., Inc.
(filed herewith) 18
99.4 Amendment to Sales and Distribution Agreement and
Development Agreement, dated April 7, 1997, between
the Registrant and Eli Lilly and Company
(previously filed as Exhibit 99.2 to the Registrant's
report on Form 8-K with respect to an April 7, 1997
event and incorporated herein by reference; certain
portions of the same are the subject of a request for
confidential treatment)
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EXHIBIT 99.1
SERAGEN, INC., 97 South Street, Hopkinton, Massachusetts 01748
FOR IMMEDIATE RELEASE
_____________________
For more information, contact Lora Maurer
Seragen, Inc.
Phone: 508-435-2331
SERAGEN RESTRUCTURES AGREEMENT WITH AJINOMOTO
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HOPKINTON, MA--June 10, 1997--Seragen, Inc. (Nasdaq:SRGN) announced today
that Seragen and Ajinomoto Co., Inc. of Japan have amended their existing
license agreement to reduce substantially and defer Seragen's financial
obligations to Ajinomoto. As part of the restructuring, Eli Lilly and Company
has entered into a separate licensing arrangement with Ajinomoto. In
addition, Lilly has agreed to assume most of Seragen's remaining obligation,
subject to certain conditions. Lilly and Seragen are collaborating on the
development of Interleukin-2 (IL-2) Fusion Protein for cutaneous T-cell
lymphoma (CTCL).
In 1994, Seragen and Ajinomoto signed agreements that granted Seragen
worldwide rights to certain IL-2 gene patents owned by the Japanese Foundation
for Cancer Research and Ajinomoto for potential use in the development of
Seragen's IL-2 Fusion Protein.
"Lilly and Ajinomoto have greatly assisted us in our financial restructuring
efforts," said Seragen's chairman and CEO, Reed Prior. "We appreciate their
willingness to work together to seek a solution that benefits all three
companies, as well as the patients who will ultimately benefit from IL-2
Fusion Protein."
Seragen has disclosed the details of the agreements with both Ajinomoto and
Lilly in a Form 8-K filed with the Securities and Exchange Commission.
"If we meet all the conditions stipulated by this series of agreements,
Seragen will realize a net cash savings in excess of $3 million over the next
three years compared to our previous agreements with Ajinomoto and Lilly,"
explained Mr. Prior. "Furthermore, our overall royalty rate payable to
Ajinomoto upon sales of IL-2 Fusion Protein has been reduced significantly.
We believe this restructuring will help us in our efforts to seek additional
capital and to enter into other partnerships to commercialize our technology."
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Seragen Restructures Agreement with Ajinomoto / page 2 of 2
Seragen is a biopharmaceutical company developing a proprietary portfolio of
therapeutic products. The company's unique receptor-active fusion proteins
consist of a toxin fragment genetically fused to a hormone, or growth factor,
that targets specific receptors on the surface of disease-causing cells.
Seragen's current focus is on cancer and dermatology. The company's most
advanced product, IL-2 Fusion Protein, is in Phase III clinical trials for
cutaneous T-cell lymphoma, in collaboration with Lilly. Seragen is
independently conducting clinical trials of the same product for psoriasis. A
second product, EGF Fusion Protein, is currently in a Phase I/II clinical
trial for non-small cell lung cancer.
Safe Harbor Information
_______________________
Some of the statements contained in this document are forward-looking,
including statements relating directly or by implication to Seragen's
products, operations, strategic partnerships, and ability to fund its
operations. These statements are based on current expectations and involve a
number of uncertainties and risks, including (but not limited to) Seragen's
ability to proceed with successful development, testing, and licensing of its
products and Seragen's ability to enter into additional strategic partnerships
and other collaborative arrangements or to raise additional capital on
satisfactory terms. For further information, refer to the "Business Outlook"
section in Seragen's Form 10-K as filed with the Securities and Exchange
Commission. Actual results may differ materially from such expectations.
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Exhibit 99.2
LICENSE AGREEMENT
between
AJINOMOTO CO., INC.
and
SERAGEN, INC.
December 13, 1994
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LICENSE AGREEMENT
THIS AGREEMENT, made and entered into this 13th day of December, 1994 by and
between Ajinomoto Co., Inc., at 15-1, Kyobashi 1-Chome, Chuo-ku, Tokyo 104,
Japan (hereinafter called "AJICO") and Seragen, Inc., at 97 South Street,
Hopkinton, MA 01748, U.S.A. (hereinafter called "SERAGEN"),
WITNESSETH:
WHEREAS, AJICO and Japanese Foundation For Cancer Research (hereinafter called
"JFCR") are the co-owners of certain patents and patent applications relating
to Interleukin-2 (hereinafter called "IL-2") gene, and AJICO warrants that
JFCR has approved of the grant of this license; and
WHEREAS, SERAGEN desires to obtain from AJICO a license of such patents and
patent applications and AJICO is willing to grant to SERAGEN such license
under acceptance of JFCR in accordance with the terms and conditions set forth
hereunder;
NOW THEREFORE, the parties hereto agree as follows:
Article 1. Definition
_____________________
In this Agreement, the following terms have the following meanings unless the
context clearly requires otherwise:
1. "License Patent" shall mean (i) patents and applications for patents
relating to IL-2 gene which are listed in Appendix A attached hereto, and
(ii) any patents issuing on any division, reissues, reexaminations,
continuations, renewals, extensions and foreign counterpart of patents
applied for or granted under (i) hereabove.
2. "License Product" shall mean DT/IL-2 fusion protein which is produced by
the fused genes which are comprised of a gene encoding IL-2 or its partial
fragments and a gene encoding diphtheria toxin or its partial fragments, to
be used as a pharmaceutical for human use and which is covered by the
Licensed Patent.
3. "Territory" shall mean any and all countries in the world.
4. "Seragen Territory" shall mean the United States, Canada, United Kingdom,
Germany, France, Spain and Italy.
5. "Bulk Net Sales" shall mean the total gross price of the Licensed Product
in the form which will become the finished pharmaceutical dosage form
subject to only addition of filling, sealing, packaging and labeling works,
less only accepted returns from customers, discounts actually given,
breakage, insurance, freight transportation charges and excise or other
sales taxes to the extent that they are included in the gross price.
6. "End-User Net Sales" shall mean the total gross invoice price of the
Licensed Product in the finished pharmaceutical dosage form, less only
accepted returns from customers, discounts actually given, breakage,
insurance, freight transportation charges and excise or other sales taxes
to the extent that they are included in the gross invoice price.
7. "Effective Date" shall mean the date first above written.
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8. "Annual Period" shall mean a twelve-month period commencing on April 1,
except for the 1st Annual Period which shall commence on the date of
execution of this Agreement and shall end on March 31, 1995.
Article 2. Grant of License
___________________________
AJICO hereby grants to SERAGEN an exclusive and non-transferable license, with
the right to sublicense, to manufacture and sell the License Product in the
Territory under the License Patent. SERAGEN shall notify AJICO in writing of
the name of the sublicensee and the type and territorial scope of such
sublicense within two (2) weeks after execution of such sublicense agreement.
Article 3. Consideration
________________________
1. As partial consideration for the license granted under this Agreement,
SERAGEN shall pay to AJICO an initial payment of Four Million Four Hundred
Thousand U.S. Dollars (US$4,400,000) in accordance with the following
schedule:
a) One Hundred Thousand U.S. Dollars (US$100,000) within thirty (30) days
after the Effective Date,
b) Four Million Three Hundred Thousand U. S. Dollars (US$4,300,000)within
sixty (60) days of any of the following events, whichever comes
earlier, provided that this payment shall be made by SERAGEN to AJICO
by March 31, 1997 at the latest:
i) Seragen closing on a partnership agreement with any entity
including Eli Lilly and Company subsequent to the Effective
Date in which Seragen receives more than Twenty Million U.S.
Dollars (US$20,000,000) in cash upon closing,
ii) The issuance of equity securities by Seragen subsequent to
the Effective Date with net proceeds to the company in excess
of Twenty Million U.S. Dollars (US$20,000,000),
iii) Receipt of a total of Twenty Million U.S. Dollars
(US$20,000,000) from a combination of (i) and (ii) hereof.
2. As additional consideration for the license granted under this Agreement,
SERAGEN shall pay to AJICO the following royalty on the Licensed Product
sold by SERAGEN and its sublicensees:
Clinical Indication Royalty
___________________ _______
Cancer 4% on Bulk Net Sales
Psoriasis 4% on End-User Net Sales in Seragen
Territory
4% on Bulk Net Sales outside of Seragen
Territory
Rheumatoid Arthritis If SERAGEN promotes:
(which includes systemic 4% on End-User Net Sales in Seragen
lupus erythematosus) Territory
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4% on Bulk Net Sales outside of Seragen
Territory
If SERAGEN's Sublicensees promote:
2% on the first US$50 million of annual
End-User Net Sales
3% on the second US$50 million of
annual End-User Net Sales
4% on annual End-User Net Sales over
US$100 million
Recent Onset
Type-1 Diabetes 4% on Bulk Net Sales
HIV 4% on Bulk Net Sales
All other Indication 4% on End-User Net Sales
3. SERAGEN guarantees that the running royalties to be paid by SERAGEN to
AJICO under Article 3.2 hereabove shall not be less than the following
minimum royalties:
for the 3rd Annual Period: US$100,000
for the 4th Annual Period: US$200,000
for the 5th Annual Period
and each following Annual Period: US$300,000
The minimum royalty of each Annual Period is fully creditable against the
running royalties of respective Annual Period.
Article 4.Payment, Records and Taxes
____________________________________
1. The royalties provided for in Article 3 shall be computed for calendar
quarters ending on the last day of March, June, September and December of
each year during the life of this Agreement and shall be paid to AJICO
within thirty (30) days after the respective last day of the preceding
calendar quarter mentioned above with the account report of the total
amount of the Licensed Product sold by SERAGEN and its sublicensees and the
amount of royalty during each quarter year period. In the event that the
total royalty for a specific Annual Period does not reach to the minimum
royalties specified in Article 3.3, the balance shall be paid within thirty
(30) days after the end of such Annual Period.
2. All payments under this Agreement shall be made in United States currency
at the exchange rate prevailing on the date of remittance by telegraphic
transfer to AJICO's account at the bank designated by AJICO.
3. SERAGEN shall keep true and accurate records, files and books of account in
accordance with generally accepted accounting principles consistently
applied and containing all the data reasonably required for the computation
and verification of the payment to be made. SERAGEN shall permit AJICO or
its duly authorized representatives, at AJICO's expense, to inspect such
records, files and books of account at any time during usual business
hours.
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4. SERAGEN shall withhold from any royalties paid to AJICO hereunder the
appropriate amount of income taxes to be imposed in the Territory and pay
such taxes on behalf of AJICO, and submit to AJICO an official receipt
showing the payment thereof. All charges including bank commissions for
remittance of the royalty shall be borne by SERAGEN.
5. All payment under this Agreement shall not be refundable in any event,
including invalidity of the Licensed Patent and termination of this
Agreement.
Article 5. Progress Report
___________________________
Upon request of AJICO made from time to time during the term of this
Agreement, SERAGEN shall provide AJICO with a progress report stating the
situation of development (including preclinical and clinical trials) relating
to the Licensed Product made by SERAGEN.
Article 6. Patent Infringement
_______________________________
1. Except as provided for in this Article 6.2, if any litigation involving the
Licensed Patent is contemplated or brought against either party hereto,
such party shall promptly notify the other party and the parties shall
promptly meet to discuss the appropriate action to be taken.
2. The parties hereto acknowledge and recognize that there are two patents
(USP No. 4,468,464 and USP No. 4,237,224) and there may be their divisions
and continuations in U.S.A. which are owned by Stanford Research Institute
and further there is a patent application (US Appl. No. 849,692 (November
8, 1977)) in U.S.A. and its counterparts in other countries which are owned
by Genentech, Inc., and that the exploitation of the Licensed Patent may
constitute an infringement of said patents. SERAGEN shall, at its own
responsibility and cost, take necessary steps to settle the matter.
Article 7. Warranty
____________________
1. AJICO represents and warrants that it has a sole and exclusive right to
enter into this Agreement with SERAGEN and that Hoffman-La Roche, Inc.
(hereinafter called "ROCHE") will not take any action against SERAGEN for
the grant of licenses by AJICO hereunder, nor will ROCHE take any action
based on the Licensed Patent against SERAGEN for exercising any right
granted hereunder, and hereby agrees to and shall defend any such action,
if brought. In this regard, SERAGEN hereby agrees that this Agreement was
executed between AJICO and SERAGEN based on the mutual acknowledgment and
understanding of the following agreement between AJICO and ROCHE, and that
the negotiations between SERAGEN and ROCHE with respect to the proposal by
ROCHE to SERAGEN for such an arrangement provided below has not been
concluded as of the date of this Agreement, and, therefore, that this
Agreement shall be construed, interpreted and applied in accordance with
such acknowledgment and understanding:
"Roche shall have the right to conclude a certain non-royalty bearing,
non-assert arrangement relating to IL-2 Fusion Protein having the
biological activity as an antagonist, e.g., as a killer of cells with
Seragen. Except for such arrangement between Roche and Seragen, AJICO
will have a sole and exclusive right to commercialize IL-2 Fusion
Proteins having the biological activity as an antagonist by itself and
to enter into license arrangements with third parties including
Seragen under the PATENTS. Roche and AJICO agree that neither party
will take any action based on rights covered by the Agreement against
the other party or their contractual partner(s) for arrangements made
pursuant to this section."
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2. SERAGEN represents and warrants that it has lawful right to enter into this
Agreement and to perform all of its obligations hereunder.
3. Each party guarantees that its sublicensees shall also comply with the
obligation each party undertakes under this Agreement, as the case may be.
4. Unless otherwise provided in this Article 7, the grant of licenses by AJICO
hereunder shall not imply any warranty of the validity of the Licensed
Patent, and AJICO shall not be held liable with respect to any claim made
by a third party on account of or arising from the use of the Licensed
Patent and development or commercialization of the Licensed Product by
SERAGEN and its sublicensees, and SERAGEN shall hold AJICO harmless from
such claims.
Article 8. Confidentiality
___________________________
1. During the term of this Agreement and five (5) years thereafter, each party
shall hold in confidence and shall not disclose to any third party without
prior written consent of the other party the contents of this Agreement and
any information received from the other party which is marked or identified
"confidential" by the other party at the time of disclosure (hereinafter
collectively called "Confidential Information").
The above obligation shall not apply to the following:
a) information which, at the time of disclosure, is in the public domain;
b) information which, after disclosure, is published or otherwise becomes
generally available to the public without fault of the recipient;
c) information which was in the possession of the recipient at the time of
disclosure and was not acquired, directly or indirectly, from the other
party; and
d) information which the recipient lawfully received from a third party.
2. Notwithstanding the provisions of Article 8.1 hereabove, each party shall
have a right to disclose the Confidential Information to a governmental
agency or other competent body as and when required by law and regulations,
and its sublicensees (including possible sublicensees), and SERAGEN shall
have the right to inform its investors and potential investors of the fact
that this Agreement has been executed and, further, AJICO shall have the
right to disclose the contents of this Agreement to JFCR.
Article 9. Term
________________
This Agreement shall become effective on the Effective Date and shall remain
in full force until the date of expiration of the last-to-expire Licensed
Patent on a country-by-country basis, until sooner terminated as provided in
Article 10 below.
Article 10. Termination
_______________________
1. In the event that either party hereto, at any time during the term of this
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Agreement, commits any breach of any provision hereunder, and fails to
rectify such breach within sixty (60) days from the receipt of written
notice from the other party, such other party may terminate this Agreement
forthwith by written notice to the breaching party, and then any right of
such breaching party under this Agreement shall cease forthwith. Any
termination as provided hereunder shall not prejudice any other relief to
the other party including any action or claim for damages and/or
injunction.
2. Should either party hereto become insolvent or make an assignment for the
benefit of creditors, or should proceedings in voluntary or involuntary
bankruptcy be instituted on behalf or against either party, or should a
receiver or trustee of either party's property be appointed, or should
either party be amalgamated with or become a subsidiary of any other
company or be purchased by a person, firm, company, corporation or
organization, then the other party has the right to terminate this
Agreement forthwith.
3. SERAGEN shall have the right at any time to terminate this Agreement by
providing one hundred eighty (180) days written notice to AJICO of its
intention to do so, in which event this Agreement shall terminate at the
end of such one hundred eighty (180) days.
Article 11. NOTICE
___________________
All notices, documents, statements, reports and other writing requested or
permitted to be given by the terms of this Agreement shall be sent either by
prepaid, registered or certified mail, telegram, telecopier or telex, properly
at its address set forth below. Each notice shall be deemed to be give upon
receipt.
In case of AJICO: Ajinomoto Co., Inc.
15-1, Kyobashi 1-Chome
Chuo-ku, Tokyo 104, Japan
Attention: Pharmaceutical Dept.
In case of SERAGEN: Seragen, Inc.
97 South Street
Hopkinton, Massachusetts 01748
U.S.A.
Attention: President
Article 12. Force Majeure
__________________________
If performance of this Agreement is interfered with, for any length of time,
by an act of God, war, civil commotion, epidemics or other similar occurrence
which is beyond the control of either party, neither party shall be held
responsible for non-performance of this Agreement for such length of time. If
either party fails to remedy such non-performance within six (6) months after
notice in writing of the non-performance by the other party, the other party
shall have the right to terminate this Agreement sixty (60) days following the
end of said six (6) months by giving written notice to the defaulting party.
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Article 13. Assignment
________________________
The rights and licenses herein granted pursuant to this Agreement are
indivisible, non-transferable and non-assignable by agreement, operation of
law or otherwise, and any purported assignment or transfer shall be void and a
breach of this Agreement, except for a transfer or assignment in connection
with the entire sale of the business relating to the Licensed Product with the
prior written approval by AJICO. Such approval will not be unreasonably
withheld.
Article 14. Arbitration and Governing Law
__________________________________________
Any dispute arising out of or relating to this agreement or breach thereof
shall be finally settled by arbitration pursuant to the Japan-American Trade
Arbitration Agreement of September 16, 1952, by which each party hereto is
bound. Such arbitration shall be held in Boston if requested by AJICO and in
Tokyo if requested by SERAGEN. In the vent of any dispute, controversy or
difference, this Agreement shall be construed, interpreted and applied in
accordance with the laws of the venue of such arbitration.
Article 15. Entire Agreement
_____________________________
This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes and cancels any previous
agreement, negotiations, commitments and writings in respect thereto,
including the Letter of Intent executed between AJICO and SERAGEN as of
November 19, 1993, except that the Non-Disclosure Agreement between the
parties dated effective August 16, 1993 and amended effective September 19,
1994 shall remain in full force and effect. Any modification of this
Agreement must be in writing and signed by the duly authorized representative
of each party.
Article 16. Language
_____________________
This Agreement is executed in duplicate in English language. In the event
this Agreement is translated into any languages other than English, this
version in English shall be controlling on all questions of interpretation and
performance.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
Ajinomoto Co., Inc. Seragen, Inc.
By:/s/ Masaaki Izawa, Ph.D. By:/s/ George W. Masters
________________________ _____________________
Masaaki Izawa, Ph.D. George W. Masters
Licensing, Manager Vice Chairman, President
Pharmaceutical Dept. Chief Executive Officer
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Appendix A
Licensed Patent
_______________
U.S.A. Pat. 4738927
Canada Appl. 424401 (under examination)
U.K. Pat. 91539
France Pat. 91539
Swiss Pat. 91539
Netherlands Pat. 91539
Italy Pat. 91539
Sweden Pat. 91539
Germany Pat. 3377363. 7-08, Pat. 218632
Belgium Pat. 898473
Austria Pat. 392082
Denmark Appl. 5772/82 (under examination)
Hungary Pat. 197938
Russia Pat. 1479005
Australia Pat. 556353
Korea Pat. 75039
Japan Pat. 1713777
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EXHIBIT 99.3
Amendment to the License Agreement
This Amendment made and entered into on 1st day of June, 1997, by and between
Ajinomoto Co., Inc., a corporation duly organized and existing under the
laws of Japan, at 15-1, Kyobashi 1-Chome, Chuo-Ku, Tokyo 104, Japan
(hereinafter called "AJICO") and Seragen, Inc. a corporation duly organized
and existing under the laws of the State of Delaware, at 97 South St.,
Hopkinton, MA 01748, U.S.A. (hereinafter called "SERAGEN"),
WITNESSETH:
WHEREAS, AJICO and SERAGEN have entered into the License Agreement on the
13th day of December, 1994 (hereinafter called "Agreement"); and
WHEREAS, due to SERAGEN's financial circumstance, SERAGEN asked a
postponement of the $ 4.3 million payment which was due on March 31, 1997
and amendments to the Agreement including change of royalty rate and
payment terms; and
WHEREAS, AJICO understood and agreed to necessary amendments to the
Agreement in order to cooperate SERAGEN to restore its business; and
WHEREAS, AJICO and SERAGEN concurrently understood and agreed that AJICO
would enter into another license agreement with Eli Lilly Company;
NOW, THEREFORE, the parties hereto agree as follows:
Article 1. Definition
_____________________
Paragraph 4 shall be deleted.
Paragraph 5 shall be replaced by the following.
5. "BLA" shall mean a registration dossier to manufacture, use, and sell
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the Licensed Product in a particular country for an approval by the health
regulatory authorities in such country. Such dossier is intended to
correspond to or be similar to a "Biologic License Application" (BLA) in
the United States.
The following paragraph shall be added.
9. "Partners" shall mean a corporation or other business entity which is
contractually part of the development, use, distribution or sale of the
Licensed Product with SERAGEN and is added to in Appendix B with prior
written notification to AJICO.
Article 2. Grant of License
___________________________
Article 2 shall be replaced by the following.
AJICO hereby grants to SERAGEN a non-exclusive and non-transferable license
to make, have made, use, and sell the Licensed Product in the Territory
under the Licensed Patent.
The license so granted includes the right to sublicense only to the Partners.
Article 3. Consideration
________________________
Article 3 shall be replaced by the following.
1. As partial consideration for the license granted under this Agreement,
SERAGEN shall pay to AJICO an initial payment of the amount of two million,
two hundred and fifty thousand U.S. Dollars (US$2,250,000) in accordance
with the following schedule:
i) $800,000 on or before June 30, 1998 or FDA approval of BLA for
the Licensed Product filed by SERAGEN, whichever comes
earlier
ii) $800,000 on or before June 30, 1999
iii) $650,000 on or before March 31, 2000
2. As additional consideration for the license granted under this Agreement,
SERAGEN shall pay to AJICO the royalty of one percent (1%) of the End-User Net
Sales of the Licensed Product sold in each instance by SERAGEN and its
sublicensees.
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Article 4. Payment, Records and Taxes
_____________________________________
2nd sentence of Article 4.1 shall be deleted.
Article 10. Termination
_______________________
The following paragraph shall be added.
4. In the event that SERAGEN fails to make on of the payments stipulated
in Article 3.1 by the due date or SERAGEN falls in a situation of insolvency,
a filing of bankruptcy, an appointment of trustee or similar situation, AJICO
shall have the right to terminate this Agreement forthwith and SERAGEN's
obligations accrued under this Agreement shall become due and SERAGEN shall
pay all of the initial payments under Article 3.1 immediately according to
AJICO's notification.
In all other respects, the Agreement shall remain unchanged in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have executed this AMENDMENT in
duplicate originals by their duly authorized representatives as of the date
first above written.
Ajinomoto Co., Inc. Seragen, Inc.
By:/s/Keiichiro Aihara By:/s/Reed R. Prior
___________________ ________________
Keiichiro Aihara Reed R.Prior
Director Chairman & CEO
and General Manager
Pharmaceutical Dept.
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