PLATFORM AGREEMENT

Exhibit 10.1

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934.

PLATFORM AGREEMENT

THIS PLATFORM AGREEMENT (“ Agreement ”), dated as of June 23, 2009 (the “ Effective Date ”), is by and between CALANDO PHARMACEUTICALS, INC., a Delaware corporation having its principal place of business at 129 North Hill Avenue, Pasadena, California 91106 (hereinafter referred to as “ Calando ”), and CERULEAN PHARMA INC., a Delaware corporation, having its principal place of business at 161 First Street, Cambridge, Massachusetts 02142 (hereinafter referred to as “ Cerulean ”).

INTRODUCTION

WHEREAS, Calando possesses certain proprietary cyclodextrin-based polymer drug delivery systems; and

WHEREAS, Cerulean is engaged in the research, development and commercialization of nanopharmaceuticals and desires to license such drug delivery systems upon the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Calando and Cerulean agree as follows:

SECTION 1. DEFINITIONS

As used in this Agreement, the following terms, whether used in the singular or plural, shall have the following meanings:

1.1 “ Affiliate ” means any entity which directly or indirectly controls, is controlled by or is under common control with another entity. For purposes of this Section 1.1, “control” means (a) in the case of corporate entities, direct or indirect ownership of at least fifty percent (50%) of the stock or shares entitled to vote for the election of directors and (b) in the case of non-corporate entities, direct or indirect ownership of at least fifty percent (50%) of the equity interest with the power to direct the management and policies of such non-corporate entities. The Parties acknowledge that, in the case of certain entities organized under the laws of certain countries, the maximum percentage ownership permitted by law for a foreign investor may be less than fifty percent (50%), and in such case such lower percentage shall be substituted in the preceding sentence; provided , that such foreign investor has the power to direct the management and policies of such entity.

1.2 “ Annual Net Sales ” means the worldwide aggregate Net Sales of a Licensed Product during a calendar year.

1.3 “ Arrowhead ” means Arrowhead Research Corporation, a Delaware corporation.

 

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1.4 “ Assigned IP ” means (a) the Assigned Patent Rights; (b) the Patent Files; (c) all inventions disclosed in the Assigned Patent Rights (other than those disclosed as prior art of a Third Party); and (d) the right to recover for past infringement of the Assigned Patent Rights.

1.5 “ Assigned Patent Rights ” means the Patent Rights set forth in Exhibit A and all Counterparts thereof.

1.6 “ Calando Indemnitees ” means Calando, its Affiliates, and the agents, directors, officers and employees of Calando and its Affiliates.

1.7 “ Calando Liabilities ” means any and all liabilities or obligations (whether known or unknown, absolute or contingent, liquidated or unliquidated, due or to become due and accrued or unaccrued, and whether claims with respect thereto are asserted before or after the Effective Date) of Calando.

1.8 “ Caltech ” means California Institute of Technology.

1.9 “ Caltech Agreement ” means that License Agreement between Caltech and Calando (formerly known as Insert Therapeutics, Inc.), dated May 22, 2000, as amended on December 10, 2001, January 13, 2003 and June 19, 2009.

1.10 “ Caltech Joint Patent Rights ” means the subset of the Licensed Patent Rights set forth in Exhibit B and all Counterparts thereof.

1.11 “ Caltech Sole Patent Rights ” means the subset of the Licensed Patent Rights set forth in Exhibit C and all Counterparts thereof.

1.12 “ Cerulean Indemnitees ” means Cerulean, its Affiliates, and the agents, directors, officers and employees of Cerulean and its Affiliates.

1.13 “ Change of Control ” means (a) the closing of a merger, tender offer, share exchange, reorganization, consolidation or other similar transaction involving Cerulean in which the persons who beneficially own Cerulean’s voting securities immediately prior to such transaction would, immediately after such transaction, beneficially own less than fifty percent (50%) of the voting securities of the surviving entity; or (b) a sale or other transfer to a Third Party of all or substantially all of Cerulean’s assets or business relating to this Agreement. For purposes hereof, “beneficial ownership” shall have the meaning provided in Rule 13d-3 under the Securities Exchange Act of 1934.

1.14 “ Clinical Trial ” means any clinical trial of a Licensed Product or any other administration of a Licensed Product prior to receipt of a Regulatory Approval.

1.15 “ Collective Patent Rights ” means the Assigned Patent Rights and the Licensed Patent Rights.

1.16 “ Combination Therapy ” means a Licensed Product and a separate pharmaceutical product sold by Cerulean or its Affiliates in combination for co-administration.

 

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1.17 “ Commercially Reasonable Efforts ” means, with respect to a Licensed Product, taking such actions, exerting such effort and employing such resources as would normally be taken, exerted or employed by a comparably-sized company in the biotechnology industry for a product of similar market potential at a similar stage of its product life as such Licensed Product, taking into account the phase of development of, and technical risks relating to, the product, the development and proprietary positions of third parties, the regulatory structure involved, the likely cost of goods, the competitiveness and size of the relevant marketplace, and the potential profitability of the product, when utilizing sound and reasonable scientific, business and medical practice and judgment.

1.18 “ Confidential Information ” means, with respect to a Party (the “ Disclosing Party ”) all proprietary information, patentable or otherwise, of the Disclosing Party (whether owned by the Disclosing Party or disclosed by a Third Party to the Disclosing Party under an obligation of confidentiality) which is disclosed by or on behalf of such Party to the other Party (the “ Receiving Party ”) pursuant to and in contemplation of this Agreement, including information pertaining to chemical substances, therapeutic agents, pharmaceutical compositions, drug delivery systems, formulations, processes, techniques, methodologies, data, reports, know-how, expertise, sources of supply, patent positioning and business plans. Confidential Information of the Disclosing Party includes “Proprietary” Information of the “Discloser”, each as defined in the Prior Confidentiality Agreement. The elements of Assigned IP described in Sections 1.4(a), (b) and (c) shall be treated as Confidential Information of Cerulean, except to the extent they have been or are later disclosed by the publication of any patent or patent application. Any sublicense agreements disclosed by a Party to the other Party pursuant to Section 3.3 shall be treated as Confidential Information of the Party entering into such sublicense agreement.

1.19 “ Control ” or “ Controlled ” means, with respect to an entity and an item of Know-How or any intellectual property right, the possession of the right (whether by ownership, license or otherwise (other than pursuant to a license granted under this Agreement)) by such entity or its Affiliates, to assign, or grant a license, sublicense or other right to or under, such Know-How or intellectual property right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party.

1.20 “ Counterparts ” means:

(a) with respect to a patent, the following items, collectively: any patent applications from which such patent issued, and all patents and patent applications described in clause (b) with respect to each such patent application;

(b) with respect to a patent application (including any provisional application), the following items, collectively: (i) all divisionals, continuations and continuations-in-part of such patent application; (ii) any patents (including certificates of correction) issuing from such patent application or any patent application described in clause (i); (iii) all patents and patent applications based on, corresponding to or claiming the priority date(s) of any of the patents and patent applications described in clauses (i) or (ii); (iv) any substitutions, extensions (including supplemental protection certificates), registrations, confirmations, reissues, re-examinations and renewals of any of the patents described in clauses (ii) or (iii); and (iv) foreign counterparts of any of the foregoing.

 

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1.21 “ Covered ” means, with respect to a particular Licensed Product and patent, that, but for a license granted to a Party under a Valid Claim included in such patent, or, with respect to an Assigned Patent Right, but for the assignment of such patent, the manufacture, use, offer for sale, sale or importation of such Licensed Product would infringe such Valid Claim.

1.22 “ Cyclodextrin System ” means any cyclodextrin-based polymer drug delivery system developed by Calando prior to the Effective Date and any improvements thereto developed during the Term.

1.23 “ Cytolysin/Tubulysin Agreement ” means the Joint Development Agreement Relating to Cytolysin/Tubulysin between Calando and R&D dated January 31, 2009.

1.24 “ FDA ” means the United States Food and Drug Administration or any successor agency thereto.

1.25 “ Field ” means the treatment and/or prevention of disease in humans.

1.26 “ First Commercial Sale ” means, with respect to a Licensed Product in a country, the first bona fide sale of a Licensed Product following the first receipt of a Regulatory Approval for such Licensed Product to permit use or consumption of such Licensed Product by the general public in such country. Transfers of Licensed Products for Clinical Trial purposes shall not be considered a First Commercial Sale.

1.27 “ IND ” means a United States investigational new drug application or its equivalent or any corresponding application of another country.

1.28 “ IT-101 ” means the product licensed to Cerulean as the “Licensed Product” pursuant to the IT-101 Agreement.

1.29 “ IT-101 Agreement ” means the IT-101 Agreement entered into by the Parties on the Effective Date.

1.30 “ Know-How ” means any ideas, concepts, discoveries, developments, information and inventions, whether or not patentable, including materials, products, laboratory, pre-clinical and clinical data, expertise, know-how, processes, techniques, and any other scientific or technical information.

1.31 “ Knowledge ” means (a) with respect to Calando, the actual knowledge of the following individuals (together with any knowledge that a person in such person’s position would be expected to obtain given the exercise of reasonably prudent scientific and business diligence in accordance with the standards of companies in the biotechnology industry): [***] (collectively, the “ Calando Representatives ”); and (b) with respect to Cerulean, the actual knowledge of the following individuals (together with any knowledge that a person in such person’s position would be expected to obtain given the exercise of reasonably prudent scientific and business diligence in accordance with the standards of companies in the biotechnology industry): [***] .

 

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1.32 “ Licensed IP ” means, collectively, the Licensed Know-How and Licensed Patent Rights.

1.33 “ Licensed Know-How ” means all Know-How Controlled by Calando as of the Effective Date or during the Term which both (a) relates to the Cyclodextrin System and/or Calando’s research and development of Licensed Products or IT-101 and (b) is necessary or reasonably useful to (i) conduct research and development on the Cyclodextrin System, including making improvements thereto, or (ii) research, develop, make, have made, use, market, offer to sell, distribute, sell and/or import Licensed Products or IT-101. Without limiting the generality of the foregoing, Licensed Know-How shall include all Know-How developed, applied or acquired by Calando prior to the Effective Date that (A) pertains to the use of the Cyclodextrin System, (B) is a process for manufacturing the cyclodextrin polymer, or precursors thereto, employed in the Cyclodextrin System, (C) is a process for conjugating or complexing therapeutic agents to the cyclodextrin polymer employed in the Cyclodextrin System, or (D) is data generated by Calando in its research and development of Licensed Products or IT-101.

1.34 “ Licensed Patent Rights ” means all Patent Rights Controlled by Calando as of the Effective Date or during the Term which both (a) relate to the Cyclodextrin System and/or Calando’s research and development of Licensed Products or IT-101 and (b) are necessary or reasonably useful to (i) conduct research and development on the Cyclodextrin System, including making improvements thereto, or (ii) research, develop, make, have made, use, market, offer to sell, distribute, sell and/or import Licensed Products or IT-101. Without limiting the generality of the foregoing, Licensed Patent Rights shall include the Caltech Joint Patent Rights, the Caltech Sole Patent Rights and the RNAi Patent Rights. For the sake of clarity, the Licensed Patent Rights exclude the Assigned Patent Rights.

1.35 “ Licensed Product ” means any Product, other than IT-101, in which no therapeutic agent is a Retained Therapeutic Agent.

1.36 “ NDA ” means a United States new drug application or its equivalent or any corresponding application of another country.

1.37 “ Net Sales ” means, with respect to a Licensed Product, the gross amount invoiced by Cerulean or its Affiliates on sales or other dispositions of such Licensed Product to a Third Party less the sum of (a) commercially reasonable trade, cash and quantity discounts, (b) credit or allowances given or made for recall, rejection or return of previously sold Licensed Products, (c) commercially reasonable rebates, chargebacks or retroactive price reductions, (d) out-of-pocket charges for insurance, postage, handling, freight and other transportation costs which are invoiced by Cerulean or its Affiliates, (e) government-mandated rebates and (f) customs, duties, surcharges, sales, transfer and other excise taxes levied on the sale, transportation, delivery or use of such Licensed Product, including any tax such as a value added or similar tax or government charge, borne by the seller thereof, other than franchise or income tax of any kind whatsoever.

Net Sales shall not include any transfers of a Licensed Product for clinical trial purposes or any transfers of reasonable quantities of a Licensed Product as samples or as donations.

 

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Net Sales shall not include any transfer between Cerulean and any of its Affiliates for resale. If Cerulean or an Affiliate sells a Licensed Product to a distributor or other Third Party, Net Sales shall be based on the gross amount invoiced by Cerulean or the Affiliate from the sale of Licensed Product to such distributor or Third Party.

If Cerulean or any of its Affiliates makes a sale of a Licensed Product for other than monetary value, such Licensed Product shall be deemed sold hereunder. The gross revenues to be included in Net Sales for any such deemed sales shall be the average price of “arms length” sales by Cerulean and its Affiliates during the calendar quarter in which such deemed sale occurs or, if no such “arms length” sales occurred during such period, during the last calendar quarter in which such “arms length” sales occurred.

If the Licensed Product is sold in combination with another pharmaceutical product as part of a Combination Therapy in a country, then, for the purpose of calculating royalties owed under this Agreement on sales of such Licensed Product, Net Sales shall be the lesser of:

(i) Net Sales of such Licensed Product in such country, or

(ii) the product of:

(A) Net Sales of such Combination Therapy (calculated applying the definition of Net Sales hereunder to such Combination Therapy in the same manner as applied to Licensed Product) in such country, and

(B) the fraction A/(A+B), where A is the average invoice price of such Licensed Product in such country, and B is the average invoice prices of the other pharmaceutical product(s) in such Combination Therapy in such country; provided , however , that, if in a specific country the other pharmaceutical product(s) in such Combination Therapy are not sold separately in such country but the Licensed Product is sold separately in such country, the fraction shall be A/C, where A is the average invoice price of the Licensed Product in such country and C is the invoice price of the Combination Therapy; provided , further , however , that, if in a specific country the Licensed Product is not sold separately in such country but the other pharmaceutical products are sold separately in such country, the fraction shall be C-B/C, where B is the average invoice price of the other pharmaceutical product(s) in the Combination Therapy in such country and C is the invoice price of the Combination Therapy in such country; and provided , further , however , that, if in a specific country neither the Licensed Product nor any of the other pharmaceutical products are sold separately in such country, then the fraction shall be negotiated in good faith by the Parties.

1.38 “ Party ” means Calando or Cerulean; “ Parties ” means Calando and Cerulean.

1.39 “ Patent Files ” means, with regard to the Assigned Patent Rights, the following as in existence on the Effective Date: (a) the complete file histories; (b) all correspondence between Calando and Calando’s outside counsel related to the subject matter of such rights; (c) all internal Calando correspondence related to the subject matter of such rights; (d) copies of prior art searches and search results related to the subject matter of such rights; (e) copies of publications identified in prior art searches; and (f) all opinions or other analyses related to the subject matter of such rights.

 

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1.40 “ Patent Right ” means any patent application (including any provisional application) or patent, and any Counterpart thereof.

1.41 “ Phase 3 Clinical Trial ” means a human clinical trial that is prospectively designed to demonstrate statistically whether a Licensed Product is safe and effective to prevent or treat a particular indication in a manner sufficient to obtain Regulatory Approval to market such Licensed Product, or that is otherwise described in 21 CFR 312.21(c) or its foreign counterpart.

1.42 “ Prior Confidentiality Agreement ” means the Mutual Confidentiality Agreement between the Parties dated February 4, 2009.

1.43 “ Product ” means a pharmaceutical composition containing a therapeutic agent(s) conjugated or complexed to the Cyclodextrin System.

1.44 “ R&D ” means R&D Pharmaceuticals, GmbH.

1.45 “ R&D SGE Agreement ” means the Joint Development Agreement relating to Second Generation Epothilones between Calando and R&D dated January 31, 2009.

1.46 “ Regulatory Approval ” means, with respect to a Licensed Product in a country or regulatory jurisdiction, any and all approvals (including any applicable governmental price and reimbursement approvals), licenses, registrations, or authorizations of the relevant Regulatory Authority necessary for the manufacture, use, storage, import, transport, promotion, marketing and sale of such Product in such country, including approvals of NDAs.

1.47 “ Regulatory Authority ” means any applicable government regulatory authority involved in granting approvals for the marketing and/or pricing of a pharmaceutical product in a country or regulatory jurisdiction, including the FDA and foreign equivalents thereof.

1.48 “ Relevant Agreement ” means each agreement, other than a confidentiality agreement, between Calando and an Affiliate of Calando or a Third Party currently in effect, whether or not relating to the Cyclodextrin System or Licensed Products, including any agreement regarding evaluation, research, development, collaboration, material transfer, manufacture, license, joint venture, non-competition, clinical trial, lease of real property or equipment, line of credit, bank loan or other loan.

1.49 “ Required Third Party Payments ” means payments (including upfront payments, annual maintenance fees, milestones and earned royalties) made by Cerulean or any of its Affiliates to a Third Party to license Know-How or Patent Rights in order to research, develop, make, have made, use, market, offer to sell, distribute, sell and import Licensed Products in the Field.

1.50 “ Requisite Debt Holder Consent and Release ” means that each holder of a promissory note of which Calando is the maker (each a “ Note ” and, collectively, the “ Notes ”) has irrevocably, in writing, (a) consented to the transactions contemplated by this Agreement and (b) released Cerulean and its Affiliates from, and agreed not to assert against Cerulean or its Affiliates or any of their respective assets (including the Licensed IP, Assigned IP and the

 

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Inventory), any Liens, claims, rights or other interests it has or may have (i) in connection with or as a result of the transactions contemplated hereby, (ii) in, against or relating to any of the Licensed IP, Assigned IP and the Inventory and/or (iii) relating to the Notes or any stock into which the Notes can be converted.

1.51 “ Requisite Stockholder Approval ” means the approval of the license of the Licensed Patent Rights and Licensed Know-How and sale of the Assigned IP and the Inventory by Calando to Cerulean as contemplated by this Agreement by (a) a majority of the votes represented by the outstanding shares of capital stock of Calando entitled to vote thereon and (b) a majority of the votes represented by the outstanding shares of capital stock of Calando entitled to vote thereon, other than shares of such capital stock held by Arrowhead.

1.52 “ Retained Product ” means any Product in which each therapeutic agent is a Retained Therapeutic Agent.

1.53 “ Retained Therapeutic Agent ” means cytolysin (as defined in the Cytolysin/Tubulysin Agreement), tubulysin (as defined in the Cytolysin/Tubulysin Agreement), any SGE or any nucleic acid.

1.54 “ RNAi Patent Rights ” means the subset of the Licensed Patent Rights set forth in Exhibit D and all Counterparts thereof.

1.55 “ SGE ” has the meaning given such term in the R&D SGE Agreement.

1.56 “ Sublicense Income ” means all amounts received by Cerulean or any of its Affiliates to the extent attributable to a license or sublicense granted to a Third Party of any of the Assigned Patent Rights, Licensed Patent Rights or Licensed Know-How (such Third Party, a “ Sublicensee ”), including upfront payments, annual maintenance fees, milestone payments (including for development, performance and sales milestones) and earned royalties, but:

(a) amounts received by Cerulean or its Affiliates as payments for performing research, development (other than development milestone payments referenced in the foregoing paragraph of this Section 1.56), manufacturing or commercialization activities undertaken by Cerulean or any of its Affiliates for, or in collaboration with, such Sublicensee will be excluded; provided , that such deduction to Sublicense Income is an amount no greater than the fully-burdened cost for Cerulean or its Affiliates in connection with such activities and all out-of-pocket costs paid by Cerulean or its Affiliates to Third Parties in connection with such activities;

(b) amounts received by Cerulean or its Affiliates from such Sublicensee as the purchase price for Cerulean’s or any of its Affiliates’ debt or equity securities will be excluded; provided , that , with respect to any such securities which are publicly traded on any securities exchange or NASDAQ, such deduction to Sublicense Income is an amount no greater than the fair market value of such debt or equity securities;

(c) if such Sublicensee will also pay an earned royalty on its sale of a Licensed Product, then amounts paid by such Sublicensee to Cerulean or its Affiliates as a transfer price to purchase the relevant Licensed Product or any component thereof will be excluded; and

 

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(d) if such Sublicensee will not also pay an earned royalty on its sale of a Licensed Product, then amounts paid by such Sublicensee to Cerulean or its Affiliates as a transfer price to purchase the relevant Licensed Product or any component thereof will be excluded, but only up to the actual cost of goods of such Licensed Product or component.

1.57 “ Third Party ” means any person other than the Parties and their Affiliates.

1.58 “ Valid Claim ” means a claim of an unexpired issued patent which has not been withdrawn, cancelled or disclaimed nor held invalid or unenforceable by a court of competent jurisdiction in an unappealed or unappealable decision.

1.59 Other Defined Terms . The word “person” means any entity or individual. Each of the following definitions is set forth in the section of this Agreement indicated below:

 

 

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SECTION 2. ASSET SALE AND TRANSFER

2.1 Inventory .

(a) Calando hereby irrevocably and unconditionally sells, transfers, conveys, assigns and delivers to Cerulean, and Cerulean hereby purchases from Calando, all right, title and interest in and to, [***] , for an aggregate purchase price of [***] U.S. Dollars (US $ [***] ), and [***] , for an aggregate purchase price of [***] U.S. Dollars (US $ [***] ) (such material, collectively, the “ Inventory ”). The total purchase price of [***] U.S. Dollars (US $ [***] ) (the “ Inventory Price ”) shall be paid by Cerulean to Calando on the Effective Date via wire transfer of immediately available funds to an account designated by Calando.

(b) The Parties agree and acknowledge that Cerulean’s payment for the Inventory is in addition to the Initial Payment and is inclusive of all excise, sales, use, transfer and other taxes and duties (if any) imposed with respect to the Inventory or its sale by any governmental authority (all of which shall be the responsibility of, and will be paid by, Calando).

 

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(c) Title to and possession of the Inventory will be delivered to Cerulean, free and clear of any encumbrances, on the Effective Date in its current location and condition at the premises of [***] (or one of its Affiliates) in [***] . Cerulean shall be responsible for all expenses and fees related to the storage, removal and transportation of the Inventory from and after the Effective Date, while Calando shall be responsible for all expenses and fees related to the storage, removal and transportation of the Inventory prior to the Effective Date. Risk of loss or damage, liability for, and responsibility to insure the Inventory will pass to Cerulean on the Effective Date.

2.2 Patent Rights .

(a) Calando hereby irrevocably and unconditionally sells, transfers, conveys, assigns and delivers to Cerulean, and Cerulean hereby purchases from Calando, all right, title and interest in and to the Assigned IP.

(b) The Parties agree and acknowledge that Cerulean’s payment for the Assigned IP is included in the Initial Payment and shall be allocated to the Assigned IP for tax purposes.

2.3 Calando Closing Conditions . Unless waived by Cerulean, as of the Effective Date, Calando shall have:

(a) obtained the Requisite Stockholder Approval and the Requisite Debt Holder Consent and Release;

(b) delivered to Cerulean a certificate of good standing of Calando in its jurisdiction of organization and the various foreign jurisdictions in which it is qualified, certified charter documents and a certificate as to the incumbency of officers and the adoption of authorizing resolutions;

(c) provided Cerulean with a guarantee and indemnification from Arrowhead, in form and substance reasonably acceptable to Cerulean, in which Arrowhead (i) guarantees Calando’s performance under this Agreement, (ii) makes the same representations and warranties to Cerulean as Calando makes to Cerulean under Section 9.1 or clauses (i)-(k) of Section 9.2, and (iii) agrees to indemnify Cerulean to the same extent as Calando indemnifies Cerulean pursuant to Section 10.2 from any Losses relating to or in connection with a Third Party claim arising out of any breach by Arrowhead of its representations or warranties as described in clause (ii), and for which indemnification Calando and Arrowhead shall be jointly and severally liable to Cerulean and the Cerulean Indemnitees (the “ Arrowhead Guarantee ”);

(d) provided to Cerulean a letter agreement executed by Calando and Caltech in the form attached as Exhibit E (the “ Caltech Side Letter ”);

(e) executed and delivered to Cerulean a bill of sale substantially in the form attached hereto as Exhibit F (the “ Bill of Sale ”), a patent assignment in the form attached hereto as Exhibit G (the “ Patent Assignment ”), and such other instruments of conveyance as Cerulean may reasonably request in order to effect the sale, transfer, conveyance and assignment to Cerulean of valid ownership to the Assigned IP and Inventory;

 

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(f) made the Patent Files available to Cerulean, it being understood that Calando and Cerulean shall each be obligated to Calando’s outside patent counsel for Twenty-Three Thousand U.S. Dollars, which amount represents fifty percent (50%) of the cost of certain foreign patent filings required to be made in June 2009 in respect of the Assigned Patent Rights;

(g) recertified the Inventory prior to the Effective Date in accordance with the testing procedures proscribed by Cerulean, and provided Cerulean with the results thereof;

(h) supplied Cerulean with documentation, in form and substance reasonably acceptable to Cerulean, pursuant to which the appropriate Affiliate of [***] acknowledges that the ownership of the Inventory has been transferred to Cerulean and releases such Inventory from any claim, liability, mortgage, pledge, security interest, encumbrance, license, charge, encumbrance or other lien of any kind (whether arising by contract or by operation of law) (each, a “ Lien ”);

(i) made available to Cerulean copies of all laboratory notebooks, raw data, summary data and reports pertaining to the Cyclodextrin System or the Licensed Products, or the research, development or manufacture of the Cyclodextrin System or the Licensed Products, it being understood that the terms and conditions of Section 8.7 shall apply with respect to the laboratory notebooks; and

(j) supplied Cerulean with letters of access, in form and substance reasonably acceptable to Cerulean, addressed to all Third Party contractors and vendors identified by Cerulean pertaining to the research, development or manufacture of the Cyclodextrin System or the Licensed Products.

2.4 Cerulean Closing Conditions . As of the Effective Date, Cerulean shall have:

(a) delivered to Calando a certificate of good standing of Cerulean in its jurisdiction of organization and the various foreign jurisdictions in which it is qualified and a certificate as to the incumbency of officers and the adoption of authorizing resolutions;

(b) executed and delivered to Calando the CalTech Side Letter; and

(c) executed and delivered to Calando the Bill of Sale and the Patent Assignment.

2.5 Non-Assumption of Liabilities . Notwithstanding anything to the contrary, Cerulean shall not assume, or become responsible for, and Calando shall remain responsible for, the Calando Liabilities.

SECTION 3. LICENSES

3.1 Grant to Cerulean . Calando hereby grants to Cerulean an exclusive (even as to Calando, but subject to Section 12.2(b)), transferable (as permitted pursuant to Section 13.1), irrevocable and perpetual (subject to each Party’s termination rights in Section 12), royalty-bearing, worldwide license, with the right to grant sublicenses, under the Licensed Patent Rights and under all intellectual property rights in the Licensed Know-How, solely in order to (a)

 

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conduct research and development on the Cyclodextrin System, including making improvements thereto, in order to research, develop, make, have made, use, market, offer to sell, distribute, sell and import Licensed Products in the Field, (b) research, develop, make, have made, use, market, offer to sell, distribute, sell and import Licensed Products in the Field, and (c) use, copy, modify and distribute the Licensed Know-How for such purposes.

3.2 Grant to Calando . Cerulean hereby grants to Calando an exclusive (even as to Cerulean), transferable (as permitted pursuant to Section 13.1), irrevocable, perpetual, royalty-free, worldwide license, with the right to grant sublicenses, under the Assigned Patent Rights solely to the extent necessary to research, develop, make, have made, use, market, offer to sell, distribute, sell and import Retained Products.

3.3 Sublicenses . All sublicenses granted pursuant to Section 3.1 or 3.2 shall be consistent with the terms and conditions of this Agreement and the Party granting such sublicense shall incorporate terms and conditions into its sublicense agreements sufficient to enable such Party to comply with this Agreement. Such Party shall furnish the other Party with a copy of each executed sublicense agreement within ten (10) business days after its execution.

3.4 Section 365(n) of the Bankruptcy Code . All rights and licenses granted under or pursuant to any section of this Agreement are and shall otherwise be deemed to be for purposes of Section 365(n) of the Bankruptcy Code licenses of rights of “intellectual property” as defined in Section 101(35A) of the United States Bankruptcy Code (Title 11, U.S.C.), as amended (the “ Bankruptcy Code ”). The Parties shall retain and may fully exercise all of their respective rights and elections under the Bankruptcy Code. Upon the bankruptcy of a Party, the non-bankrupt Party shall further be entitled to a complete duplicate of, or complete access to, any such intellectual property, and such, if not already in its possession, shall be promptly delivered to the non-bankrupt Party, unless the bankrupt Party elects to continue, and continues, to perform all of its obligations under this Agreement.

3.5 Patent Marking . Cerulean and Calando shall mark the appropriate U.S. patent number(s) on Licensed Products or on Retained Products, respectively, made or sold in the United States in accordance with all applicable government laws, rules and regulations.

SECTION 4. POST-CLOSING ASSISTANCE AND COVENANTS

4.1 Technology Transfer .

(a) Within the first twelve (12) months following the Effective Date, Calando shall, and shall cause its employees to, provide to Cerulean, upon Cerulean’s request, such scientific, technical and other assistance as is reasonably necessary for Cerulean to exploit the Licensed Know-How; provided , however , that this Section 4.1(a) shall not require Calando to maintain employment of any employees; provided , further , that Calando shall use commercially reasonable efforts to assist Cerulean in entering into employment or consulting arrangements (at Cerulean’s sole cost) with any former employees of Calando. In addition, Calando shall reasonably assist Cerulean in interacting with Calando’s Third Party contractors and vendors to facilitate Cerulean’s ability to develop the Licensed Products and exploit the Licensed Know-How; provided , that Calando makes no representations or warranties as to such Third Party

 

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contractors’ or vendors’ intentions to conduct business with Cerulean following the Effective Date. To the extent that Cerulean hires or engages the services of any former employee of Calando or any Third Party contractor or vendor of Calando for purposes contemplated under this Agreement, Calando hereby waives any obligations of confidentiality or non-use or any non-competition restrictions imposed on such employees, contractors or vendors to the extent that they pertain to Licensed Products or the use of the Cyclodextrin System in connection with Licensed Products.

(b) Cerulean shall reimburse Calando (i) for the assistance described in Section 4.1(a) at the rate of [***] U.S. Dollars (US $ [***] ) for each hour of scientific, technical or other work in providing such assistance (each, an “ FTE Hour ”) and (ii) for all reasonable out-of-pocket expenses incurred by Calando in providing such assistance, to the extent such assistance and expenses have been approved by Cerulean in writing in advance of incurrence. Within thirty (30) days after the end of each calendar month during such twelve (12) month period, Calando shall provide to Cerulean a report of the number of FTE Hours actually devoted, and the expenses actually incurred, by Calando for such assistance during such just-ended calendar month, and an invoice for the amount to be reimbursed by Cerulean as provided hereunder. Cerulean shall pay such invoice within fifteen (15) days after receipt. For the sake of clarity, there shall be no double payments for any assistance which may be provided under both this Agreement and the IT-101 Agreement.

(c) Calando shall keep true and accurate books of accounts and other records containing all information and data which may be necessary to ascertain and verify the amounts payable under this Section 4.1. During the first eighteen (18) months after the Effective Date, Cerulean shall have a one-time right to have an independent certified public accountant inspect such books and records of Calando. Any such independent certified accountant shall be reasonably acceptable to Calando, shall execute a standard form of confidentiality agreement with Calando, and shall be permitted to share with Cerulean solely its findings with respect to the accuracy of the amounts reported as payable under this Section 4.1.

4.2 Caltech Agreements .

(a) Calando shall not amend, restate, alter, waive or otherwise change any of the terms and conditions of the Caltech Agreement or Caltech Side Letter without the prior written approval of Cerulean, which approval shall not be unreasonably withheld, conditioned or delayed. Calando shall provide Cerulean with a copy of any proposed or executed amendment, restatement, alteration, waiver or other change of the terms and conditions of the Caltech Agreement or Caltech Side Letter. Further, Calando shall not assign (other than in connection with a Sale Event) or terminate the Caltech Agreement or Caltech Side Letter without the prior written approval of Cerulean, which approval shall not be unreasonably withheld, conditioned or delayed.

(b) Calando shall use commercially reasonable efforts to satisfy all of its obligations under and to take all steps necessary to maintain in full force and effect the Caltech Agreement or Caltech Side Letter. Calando shall provide Cerulean with written notice of any claim of a breach under, or any threat or notice of termination of, the Caltech Agreement or Caltech Side Letter.

 

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4.3 SGE Agreement . Upon Cerulean’s request, Calando shall use commercially reasonable efforts to assist Cerulean in the negotiation of an agreement among Calando, Cerulean and R&D, pursuant to which Cerulean shall obtain rights to the SGEs on terms and conditions comparable to those in this Agreement.

4.4 Further Assurances . At any time and from time to time hereafter, each Party, at the other Party’s request and without further consideration, shall execute and deliver, or cause to be duly executed and delivered (including by its Affiliates and employees), such further instruments and do and cause to be done such further acts and things, including the filing of such assignments, agreements, documents and instruments, as may be necessary or as the requesting Party may reasonably request in connection with this Agreement or to carry out more effectively the provisions and purposes hereof, or to better assure and confirm the rights and remedies of the Parties under this Agreement, including to more effectively transfer, convey and assign to Cerulean, and to confirm Cerulean’s title to, all of the Assigned IP and Inventory, to put Cerulean in actual possession and control thereof, to assist Cerulean in exercising all rights with respect thereto and to carry out the purpose and intent of this Agreement. Other than those obligations expressly set forth herein, Cerulean shall not assume or agree to perform, pay or discharge, and Calando shall remain unconditionally liable, for the Calando Liabilities.

SECTION 5. FEES AND ROYALTIES

5.1 Fees . In addition to the Inventory Price, Cerulean shall pay on the Effective Date a one-time, non-refundable, non-creditable purchase and license fee in the amount of [***] U .S. Dollars (US $ [***] ) (the “ Initial Payment ”). In addition, Cerulean shall reimburse Calando for [***] U.S. Dollars ($ [***] ), which amount represents the cost incurred by Calando in recertifying the Inventory and certain of the inventory being transferred under the IT-101 Agreement. The foregoing amounts shall be distributed as follows: (a)  [***] U.S. Dollars ($ [***] ) shall be paid by Cerulean directly to the applicable Third Party as set forth in Exhibit H , on behalf of Calando, on the Effective Date; (b)  [***] U.S. Dollars [***] Cents ($ [***] ), which amount represents the legal fees incurred by Calando in connection with its negotiation of this Agreement and the IT-101 Agreement, shall be paid by Cerulean directly to Calfee, Halter & Griswold LLP, on behalf of Calando, on the Effective Date; and (c)  [***] U.S. Dollars [***] Cents ($ [***] ) shall be paid by Cerulean to Calando via wire transfer of immediately available funds to an account designated by Calando, on the Effective Date.

5.2 Development Milestones .

(a) For each Licensed Product developed by Cerulean or an Affiliate of Cerulean that reaches the following development milestones, Cerulean shall pay the applicable non-refundable milestone payment set forth below, subject to Sections 5.2(b) and 5.2(c), within thirty (30) days of the occurrence of such event to Calando via wire transfer of immediately available funds to an account designated by Calando:

 

 

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