-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LbJS4v1tfwfQBPMW+OofKViMEenhCRdZRU/mdwC/35kgpMMqZMD95Opw1nqUbBXO Zk8Nq+YEOJaYIqUdn5yXEw== 0000833299-97-000013.txt : 19970611 0000833299-97-000013.hdr.sgml : 19970611 ACCESSION NUMBER: 0000833299-97-000013 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970610 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970610 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SERAGEN INC CENTRAL INDEX KEY: 0000833299 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 042662345 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-19855 FILM NUMBER: 97621406 BUSINESS ADDRESS: STREET 1: 97 SOUTH STREET CITY: HOPKINTON STATE: MA ZIP: 01748 BUSINESS PHONE: 5084352331 MAIL ADDRESS: STREET 1: 97 SOUTH ST CITY: HOPKINTON STATE: MA ZIP: 01748 8-K 1 SERAGEN INC 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. 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 -2- 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) -3- 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) -4- 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 -5- 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) -6- EX-99.1 2 PRESS RELEASE 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 - ------------------------------------------------------------------------------ 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." -7- 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. -8- EX-99.2 3 LICENSE AGREEMENT Exhibit 99.2 LICENSE AGREEMENT between AJINOMOTO CO., INC. and SERAGEN, INC. December 13, 1994 -9- 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. -10- 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 -11- 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. -12- 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." -13- 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 -14- 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. -15- 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 -16- 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 -17- EX-99.3 4 AMENDMENT TO LICENSE AGREEMENT 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 -18- 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. -19- 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. -20- -----END PRIVACY-ENHANCED MESSAGE-----