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 00-0, Xxxxxxxx 0-Xxxxx, Xxxx-xx, Xxxxx 000,
Xxxxx (hereinafter called "AJICO") and Seragen, Inc., at 00 Xxxxx Xxxxxx,
Xxxxxxxxx, XX 00000, X.X.X. (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 Xxx Xxxxx 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 Xxxxxxx-Xx Xxxxx, 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.
00-0, Xxxxxxxx 0-Xxxxx
Xxxx-xx, Xxxxx 000, Xxxxx
Attention: Pharmaceutical Dept.
In case of SERAGEN: Seragen, Inc.
00 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
X.X.X.
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/ Xxxxxxx Xxxxx, Ph.D. By:/s/ Xxxxxx X. Xxxxxxx
________________________ _____________________
Xxxxxxx Xxxxx, Ph.D. Xxxxxx X. Xxxxxxx
Licensing, Manager Vice Chairman, President
Pharmaceutical Dept. Chief Executive Officer
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Appendix A
Licensed Patent
_______________
U.S.A. Xxx. 4738927
Canada Appl. 424401 (under examination)
U.K. Xxx. 00000
Xxxxxx Xxx. 91539
Swiss Xxx. 00000
Xxxxxxxxxxx Xxx. 00000
Xxxxx Xxx. 00000
Xxxxxx Xxx. 00000
Xxxxxxx Xxx. 3377363. 7-08, Xxx. 218632
Belgium Xxx. 898473
Austria Xxx. 392082
Denmark Appl. 5772/82 (under examination)
Hungary Xxx. 197938
Russia Xxx. 1479005
Australia Xxx. 556353
Korea Xxx. 00000
Xxxxx Xxx. 1713777
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