Exhibit 10.1
LICENSE AGREEMENT
BETWEEN
PRESIDENT AND FELLOWS OF HARVARD COLLEGE
AND
BIOMIMETIC PHARMACEUTICALS, INC.
Re: Harvard Case Nos. 439-87, 536-88, 537-88,
538-88, 614-89, 814-92, and 1013-94
In consideration of the mutual promises and covenants set forth
below, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the
following
meanings:
AFFILIATE: any company, corporation, or business in which LICENSEE
owns or
controls at least fifty percent (50%) of the voting stock or other
ownership.
Unless otherwise specified, the term LICENSEE includes AFFILIATES.
FIELD: all fields of use.
HARVARD: President and Fellows of Harvard College, a nonprofit
Massachusetts
educational corporation having offices at the Office for Technology
and
Trademark Licensing, Holyoke Center Suite 727, 1350 Massachusetts
Avenue,
Cambridge, Massachusetts 02138.
LICENSED PROCESSES: the processes covered by UNIVERSITY PATENT
RIGHTS.
1.5
LICENSED PRODUCTS: products covered by UNIVERSITY PATENT RIGHTS or
products made or services provided in accordance with or by means
of
LICENSED PROCESSES.
1.6
LICENSEE: BioMimetic Pharmaceuticals, Inc. (BMPI), a corporation
organized
under the laws of Tennessee.
1.7
NET SALES: the amount received for sales, leases, or other
transfers of
LICENSED PRODUCTS, less:
(a)
customary trade, quantity or cash discounts and non-affiliated
brokers' or agents' commissions actually allowed and taken;
(b)
amounts repaid or credited by reason of rejection or return; and
(c)
to the extent separately stated on purchase orders, invoices, or
other
documents of sale, taxes levied on and/or other governmental
charges
made as to production, sale, transportation, delivery or use and
paid
by or on behalf of LICENSEE or sublicensees.
(d)
reasonable charges for delivery or transportation provided by third
parties, if separately stated.
NET SALES also includes the fair market value of any non-cash
consideration
received by LICENSEE or sublicensees for the sale, lease, or
transfer of
LICENSED PRODUCTS.
1.8
NON-COMMERCIAL RESEARCH PURPOSES: use of UNIVERSITY PATENT RIGHTS
for
academic research or other not-for-profit scholarly purposes which
are
undertaken at a non-profit or governmental institution that does
not use
the UNIVERSITY PATENT RIGHTS in the production or manufacture of
products
for sale or the performance of services for a fee.
1.9
NON-ROYALTY SCBLICENSE OR DISTRIBUTOR INCOME: Sublicense or option
issue
fees, sublicense maintenance fees, sublicense milestone payments,
and
similar non-royalty payments made by sublicensees or distributors
to
LICENSEE on account of sublicenses or distribution agreements
pursuant to
this Agreement, excluding:
(a)
prepayments or payments of sums designated for research and
development expenses; and
2
(b)
equity investments in the LICENSEE by a sublicensee, except to the
extent that such equity investment represents a premium above the
fair market value of the equity being sold. For the purpose of this
calculation, fair market value shall mean the closing price of the
stock of LICENSEE as reported by the NASDAQ stock market or any
national securities exchange upon which the stock is traded. In the
event the stock is not publicly traded, the Board of Directors of
LICENSEE shall, in good faith and in accordance with its fiduciary
duty, propose a fair market value. If HARVARD does not accept this
value, HARVARD and LICENSEE shall each appoint a single
representative
to jointly establish a mutually acceptable value.
1.10 UNIVERSITY PATENT RIGHTS: HARVARD's ownership interest in the
United States
patents listed in Appendix A to the License Agreement, including
all
divisional, continuations, continuations-in-part, extensions and
renewals,
and the inventions described and claimed therein.
1.11 HARVARD/IMB Patent Rights means HARVARD's ownership interest
in all foreign
patent applications or patents world-wide corresponding to the
United
States Patents listed in Appendix A, and the inventions described
and
claimed therein. Upon written agreement by HARVARD and IMB of their
intent
to grant LICENSEE these Patent Rights which are jointly owned by
HARVARD
and IMB, the HARVARD/IMB Patent Rights shall become part of the
UNIVERSITY
PATENT RIGHTS.
1.12 TERRITORY: All countries in which HARVARD has granted LICENSEE
a license
under UNIVERSITY PATENT RIGHTS.
1.13 The terms "Public Law 96-517" and "Public Law 98-620" include
all
amendments to those statutes.
1.14 The terms "sold" and "sell" include, without limitation,
leases and other
transfers and similar transactions.
ARTICLE II
REPRESENTATIONS
2.1
HARVARD is co-owner by assignment from Drs. Samuel Lynch, Ray
Williams and
William Giannobile of their entire right, title and interest in the
United States patents listed in License Appendix A (H.U. Case #'s
439-
3
87, 536-88, 537-88, 538-88, 614-89, 814-92, and 1013-94), which are
co-owned by the Institute of Molecular Biology (IMB) by assignment
from Dr.
Harry Antoniades.
2.2
HARVARD is committed to the policy that ideas or creative works
produced at
HARVARD should be used for the greatest possible public benefit,
and
believes that every reasonable incentive should be provided for the
prompt
introduction of such ideas into public use, all in a manner
consistent with
the public interest.
2.3
LICENSEE is prepared and intends to diligently develop the
invention and to
bring products to market which are subject to this Agreement.
2.4
LICENSEE is desirous of obtaining an exclusive license in the
TERRITORY in
order to practice the above-referenced invention covered by
UNIVERSITY
PATENT RIGHTS in the United States and in certain foreign
countries, and to
manufacture, use and sell in the commercial market the products
made in
accordance therewith, and HARVARD is desirous of granting such a
license to
LICENSEE in accordance with the terms of this Agreement.
ARTICLE III
GRANT OF RIGHTS
3.1
HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to
the
terms and conditions hereof, in the TERRITORY and in the FIELD an
exclusive
commercial license under UNIVERSITY PATENT RIGHTS, to make and have
made,
to use and have used, to sell and have sold the LICENSED PRODUCTS,
and to
practice the LICENSED PROCESSES, for the life of the UNIVERSITY
PATENT
RIGHTS. Such licenses shall include the right to grant sublicenses,
subject
the terms of paragraph 3.2(e). In order to provide LICENSEE with
commercial
exclusivity for so long as the license under UNIVERSITY PATENT
RIGHTS
remains exclusive, HARVARD agrees that it will not grant licenses
under
UNIVERSITY PATENT RIGHTS to others except as required by HARVARD's
obligations in paragraph 3.2(a) or as permitted in paragraph
3.2(b).
3.2
The granting and exercise of this license is subject to the
following
conditions:
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(a)
HARVARD's "Statement of Policy in Regard to Inventions, Patents and
Copyrights", dated August 10, 1998, Public Law 96-517, Public Law
98-
620, and HARVARD's obligations under agreements with other sponsors
of
research. Any right granted in this Agreement greater than that
permitted under Public Law 96-517, or Public Law 98-620, shall be
subject to modification as may be required to conform to the
provisions of those statutes.
(b)
HARVARD reserves the right to make and use, and grant to others
non-exclusive licenses to make and use for NON-COMMERCIAL RESEARCH
PURPOSES the subject matter described and claimed in UNIVERSITY
PATENT
RIGHTS.
(c)
LICENSEE shall use diligent efforts to effect introduction of the
LICENSED PRODUCTS into the commercial market as soon as
practicable,
consistent with sound and reasonable business practice and
judgment;
thereafter, until the expiration of this Agreement, LICENSEE shall
endeavor to keep LICENSED PRODUCTS reasonably available to the
public.
(d)
At any time after three years from the effective date of this
Agreement, HARVARD may terminate or render this license
non-exclusive
if, in HARVARD's reasonable judgment, the Progress Reports
furnished
by LICENSEE do not demonstrate that LICENSEE:
(i)
has put the licensed subject matter into commercial use in the
country or countries hereby licensed, directly or through a
sublicense, and is keeping the licensed subject matter reasonably
available to the public, or
(ii) is engaged in research, development, manufacturing, marketing
or
sublicensing activity appropriate to achieving 3.2(d)(i),
(e)
In all sublicenses granted by LICENSEE hereunder, LICENSEE shall
include a requirement that the sublicensee use its best efforts to
bring the subject matter of the sublicense into commercial use as
quickly as is reasonably possible. LICENSEE shall further provide
in
such sublicenses that such sublicenses are subject and subordinate
to
the terms and conditions of this Agreement, except: (i) the
sublicensee may not further sublicense without the consent of
HARVARD,
which consent shall not be unreasonably withheld or delayed; and
(ii)
the rate of royalty on NET SALES paid by the sublicensee to the
LICENSEE.
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Copies of all sublicense agreements shall be provided promptly to
HARVARD.
(f)
If LICENSEE, is not making progress satisfactory to HARVARD under
Section 3.2 (c) and (d) above, and, after being notified of
potential
sublicensee(s), does not make reasonable efforts to grant
sublicenses
hereunder with respect to all or any portion of the FIELD or
TERRITORY, then, to that extent, HARVARD may directly license such
potential sublicensee(s) unless, in Harvard's reasonable judgment,
such license would be contrary to sound and reasonable business
practice and the granting of such license would not materially
increase the availability to the public of LICENSED PRODUCTS;
provided
however, that LICENSEE shall have the right of last refusal,
exercised
within sixty (60) days after notice in writing from Harvard, to
sublicense such rights to such sublicensee(s) on terms no less
favorable to such sublicensee(s) than those negotiated by Harvard.
(g)
During the period of exclusivity of this license in the United
States,
LICENSEE shall cause any LICENSED PRODUCT produced for sale in the
United States to be manufactured substantially in the United
States,
unless a waiver to this requirement is granted by the United States
Government.
3.3
All rights reserved to the United States Government and others
under Public
Law 96-517, and Public Law 98-620, shall remain and shall in no way
be
affected by this Agreement.
6
ARTICLE IV
ROYALTIES
4.1. (a)
LICENSEE shall pay to HARVARD a non-refundable license fee in the
sum
of $20,000 upon execution of this Agreement. The $5,000 fee
contained
in the Option Agreement dated June 23, 1999, shall be credited
against
the license fee.
(b)
In further consideration of the rights and license granted
hereunder,
LICENSEE shall also issue to HARVARD, no later than one year from
the
date of the signing of this License Agreement, shares of common
stock
equivalent in value to $200,000.
(c)
HARVARD represents and warrants to LICENSEE that:
(i) HARVARD is acquiring the Shares for its own account for
investment
and not with a view to, or for sale in connection with any
distribution thereof, nor with any present intention of
distributing
or selling the same; and HARVARD has no present or contemplated
agreement, undertaking, arrangement, obligation, indebtedness or
commitment providing for the disposition thereof.
(ii) HARVARD has full power and authority to enter into and to
perform
this Agreement in accordance with its terms.
(iii) HARVARD has sufficient knowledge and experience in investing
in
companies similar to LICENSEE so as to be able to evaluate the
risks
and merits of its investment in LICENSEE and is able financially to
bear the risks thereof,
(d)
Each certificate representing the Shares shall bear a legend
substantially in the following form:
"The shares represented by this certificate have not been
registered
under the Securities Act of 1933, as amended, and may not be
offered,
sold or otherwise transferred, pledged or hypothecated unless and
until such shares are registered under such Act or an opinion of
counsel satisfactory to the Company is obtained to the effect that
such registration is not required and are otherwise subject to
stockholders agreements."
7
The foregoing Legend shall be removed from the certificates
representing any Shares, at the request of the holder thereof, at
such
time as they become eligible for resale pursuant to the Securities
Act
of 1933, as amended.
If at any time LICENSEE proposes to register any of its Common
Stock,
under the Securities Act of 1933, except at LICENSEE's initial
public
offering or any offering pursuant to Forms S-4 or S-8, LICENSEE
shall
offer HARVARD the opportunity to have its Shares registered under
the
registration statement to be filed at such time. HARVARD will be
offered the right to register its Shares under the same terms,
conditions and restrictions as other shareholders with piggyback
registration rights.
(e)
HARVARD's ownership rights to Shares shall not be affected should
the
license pursuant to this Agreement be converted to a non-exclusive
one.
4.2
(a)
LICENSEE shall pay to HARVARD during the term of this Agreement the
following royalty rates on cumulative NET SALES of all LICENSED
PRODUCTS sold by LICENSEE and its AFFILIATES or sublicensees
(excluding sales to distributors under 4.2 b:
** on cumulative NET SALES of all LICENSED PRODUCTS less than or
equal to ten (10) million dollars,
** on cumulative NET SALES of all LICENSED PRODUCTS greater than
ten (10) million dollars.
In the case of sublicenses, LICENSEE shall also pay to HARVARD a
royalty of fifteen percent (15%) of NON-ROYALTY SUBLICENSE INCOME.
(b)
On sales by LICENSEE to a distributor where the distributor pays a
volume price for the LICENSED PRODUCTS and subsequently resells in
a
given territory, LICENSEE shall pay to HARVARD the following
royalty rates on sales of all LICENSED PRODUCTS priced at the point
of
initial sale by LICENSEE to the distributor:
** on cumulative sales of all LICENSED PRODUCTS less than or
equal to ten (10) million dollars,
8
**
REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED
WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
** on cumulative sales of all LICENSED PRODUCTS greater than ten
(10) million dollars.
In the case of distributors, LICENSEE shall also pay to HARVARD a
royalty of ** of NON-ROYALTY SUBLICENSE INCOME.
(c)
If the license pursuant to this Agreement is converted to a non-
exclusive one and if other non-exclusive licenses in the same field
and territory are granted, the above royalties shall not exceed the
royalty rate to be paid by other licensees in the same field and
territory during the term of the non-exclusive license.
(d)
On sales between LICENSEE and its AFFILIATES or sublicensees for
resale, the royalty shall be paid on the NET SALES of the AFFILIATE
or sublicensee.
4.3
Milestone royalty payments:
-
Manufacturing Agreement for PDGF with third party
$20,000
-
Licensing Agreement with IMB
$20,000
-
Initiation of Phase II clinical trials in the U.S for the
first therapeutic product
$40,000
-
Upon FDA approval of an NDA/PMA for the first therapeutic
product
$50,000
-
Upon FDA approval of an NDA/PMA for the
first diagnostic product
$50,000
ARTICLE V
REPORTING
5.1
Prior to signing this Agreement, LICENSEE has provided to HARVARD a
written
research and development plan under which LICENSEE intends to bring
the
subject matter of the licenses granted hereunder into commercial
use upon
execution of this Agreement. Such plan includes projections of
sales and
proposed marketing efforts, as contained in the Confidential
Business Plan
provided by BioMimetic Pharmaceuticals Inc. to HARVARD
9
**
REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED
WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
on April 30, 1999, and subsequent updates to this plan mutually
acceptable
to HARVARD and LICENSEE.
5.2
No later than sixty (60) days after June 30 of each calendar year,
beginning on June 30, 2000, LICENSEE shall provide to HARVARD a
written
annual Progress Report describing progress on research and
development,
regulatory approvals, manufacturing, sublicensing, marketing and
sales
during the most recent twelve (12) month period ending June 30 and
plans
for the forthcoming yea
