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CONFIDENTIAL
EXHIBIT 10.1
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
FOR PORTIONS OF THIS EXHIBIT. THE COPY
FILED HEREWITH OMITS THE INFORMATION
SUBJECT TO THE CONFIDENTIALITY REQUEST.
OMISSIONS ARE DESIGNATED AS *. A COMPLETE
VERSION OF THIS EXHIBIT HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
PATENT AND TECHNOLOGY LICENSE AGREEMENT
This thirty-seven (37) page AGREEMENT ("AGREEMENT") is made on
this
12th day of August, 2004, by and between
THE BOARD OF REGENTS ("BOARD") of THE
UNIVERSITY OF TEXAS SYSTEM ("SYSTEM"), an
agency of the State of Texas, whose
address is 201 West 7th Street, Austin,
Texas 78701, on behalf of THE UNIVERSITY
OF TEXAS M. D. ANDERSON CANCER CENTER
("UTMDACC"), a component institution of
SYSTEM, and CALLISTO PHARMACEUTICALS, INC.,
a Delaware corporation having a
principal place of business located at 420
Lexington Avenue, Suite 1609, New
York, New York 10170 ("LICENSEE").
TABLE OF CONTENTS
RECITALS
Page 2
I. EFFECTIVE DATE
Page 3
II. DEFINITIONS
Page 3
III. LICENSE
Page 5
IV. CONSIDERATION, PAYMENTS AND REPORTS
Page 7
V. SPONSORED RESEARCH
Page 12
VI. PATENTS AND INVENTIONS
Page 12
VII. INFRINGEMENT BY THIRD PARTIES
Page 13
VIII. PATENT MARKING
Page 14
IX. INDEMNIFICATION AND INSURANCE
Page 14
X. USE OF BOARD AND UTMDACC'S NAME
Page 16
XI. CONFIDENTIAL INFORMATION AND
PUBLICATION
Page 17
XII. ASSIGNMENT
Page 19
XIII. TERM AND TERMINATION
Page 19
XIV. WARRANTY: SUPERIOR-RIGHTS
Page 22
XV. GENERAL
Page 24
SIGNATURES
Page 26
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RECITALS
A. In 1988, BOARD, The
University of Texas System Cancer Center (now
UTMDACC) and Argus Pharmaceuticals, Inc. ("ARGUS") entered into
an
Exclusive License Agreement (ORIGINAL LICENSE) for certain
technologies
relating to LICENSED SUBJECT MATTER developed at UTMDACC.
B. In
2004, the BOARD, UTMDACC and ARONEX (as successor in interest
to
ARGUS), reached an agreement to return rights to certain of the
licensed technologies to BOARD ("RETURNED TECHNOLOGY") by amending
the
ORIGINAL LICENSE to exclude the RETURNED TECHNOLOGY from Schedule I
and
by granting the BOARD a limited license to U.S. Application No.
09/122,427. The parties also agreed that ARONEX would provide
certain
information relating to the RETURNED TECHNOLOGY to UTMDACC/BOARD,
which
information could be disclosed to third party licensees of the
RETURNED
TECHNOLOGY subject to certain restrictions. BOARD, UTMDACC and
ARONEX'
agreement is embodied in Amendment No. 6 to the ORIGINAL
LICENSE
("AMENDMENT NO. 6"), excerpts of which are attached hereto as
Exhibit
II ("EXCERPTS").
C.
BOARD, through UTMDACC, desires to have the LICENSED SUBJECT
MATTER
developed in the LICENSED FIELD and used for the benefit of
LICENSEE,
BOARD, SYSTEM, UTMDACC, the inventor(s), and the public as outlined
in
BOARD'S Intellectual Property Policy.
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D.
LICENSEE wishes to obtain a license from BOARD to practice
LICENSED
SUBJECT MATTER.
NOW, THEREFORE, in consideration of the mutual covenants and
promises
herein contained, the parties agree as
follows:
I. EFFECTIVE DATE
1.1 This
AGREEMENT is effective as of the date written above ("EFFECTIVE
DATE").
II. DEFINITIONS
As used in this AGREEMENT, the following terms have the
meanings
indicated:
2.1 AFFILIATE means any business
entity more than fifty percent (50%) owned
by LICENSEE, any business entity which owns more than fifty
percent
(50%) of LICENSEE, or any business entity that is more than
fifty
percent (50%) owned by a business entity that owns more than
fifty
percent (50%) of LICENSEE.
2.2 ARONEX
PATENT shall mean U. S. Patent Application No. 09/122,427 (MDA
94-031 CON), its foreign equivalents, and any divisionals,
continuations, resissues, reexaminations or extensions thereof.
2.3 LICENSED
FIELD with respect to LICENSED SUBJECT MATTER other than the
subject matter of the ARONEX PATENT shall mean all fields of
use.
LICENSED FIELD with respect to the subject matter of the ARONEX
PATENT
shall mean: (1) compositions containing, as an active
ingredient,
Anthracyclines or related DNA-binding agents, such as those
exemplified
by Annamycin, its derivatives or analogs; (2) methods of
delivering
said compositions to a patient, tissue or other target; and (3)
methods
for manufacturing such compositions.
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2.4 LICENSED
PRODUCTS means any product or service sold by LICENSEE
comprising LICENSED SUBJECT MATTER pursuant to this AGREEMENT and
that
is covered by: (i) a claim in a pending patent application, which
claim
was filed in good faith, is being diligently prosecuted, and has
not
been
abandoned and finally disallowed without the possibility of
appeal
or refiling; or (ii) a claim in an issued, unexpired patent that
has
not been withdrawn, canceled or disclaimed, or held invalid by
a
non-appealed or unappealable decision by a court or other
appropriate
body of competent jurisdiction.
2.5 LICENSED
SUBJECT MATTER means inventions and discoveries covered by
PATENT RIGHTS or TECHNOLOGY RIGHTS within LICENSED FIELD.
2.6 LICENSED
TERRITORY means the whole world.
2.7 NET SALES
means the gross revenues received by LICENSEE from a SALE
less sales discounts actually granted, sales and/or use taxes
actually
paid, import and/or export duties actually paid, outbound
transportation actually prepaid or allowed, and amounts
actually
allowed or credited due to returns (not exceeding the original
billing
or invoice amount), all as recorded by LICENSEE in LICENSEE'S
official
books and records in accordance with generally accepted
accounting
practices and consistent with LICENSEE'S published financial
statements
and/or regulatory filings with the United States Securities and
Exchange Commission.
2.8 PATENT
RIGHTS means BOARD's rights in information or discoveries
described in invention disclosures, or claimed in any patents,
and/or
patent applications, whether domestic or foreign, and all
divisionals,
continuations, continuations-in-part, reissues, reexaminations
or
extensions thereof, and any letters patent that issue thereon
as
defined in Exhibit I attached hereto. Notwithstanding the
foregoing,
with respect to the ARONEX PATENT, PATENT RIGHTS shall not exceed
the
scope of rights returned to the BOARD under Section 11 of AMENDMENT
NO.
6.
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2.9 SALE OR
SOLD means the transfer or disposition of a LICENSED PRODUCT
for value to a party other than LICENSEE or AFFILIATE.
2.10 TECHNOLOGY
RIGHTS means BOARD's rights in any technical information,
know-how, processes, procedures, compositions, devices,
methods,
formulae, protocols, techniques, software, designs, drawings or
data
created by the inventor(s) listed in Exhibit I at UTMDACC before
the
EFFECTIVE DATE, which are not claimed in PATENT RIGHTS but that
are
necessary for practicing PATENT RIGHTS. Notwithstanding the
foregoing,
with respect to the ARONEX PATENT, TECHNOLOGY RIGHTS shall not
exceed
the scope of rights returned to the BOARD under Section 11 of
AMENDMENT
NO. 6.
III. LICENSE
3.1 BOARD,
through UTMDACC, hereby grants to LICENSEE a royalty-bearing,
exclusive license under LICENSED SUBJECT MATTER to manufacture,
have
manufactured, use, import, offer to sell and/or sell LICENSED
PRODUCTS
within LICENSED TERRITORY for use within LICENSED FIELD. This grant
is
subject to Sections 14.2, 14.3 and 14.4 hereinbelow, the payment
by
LICENSEE to UTMDACC of all consideration as provided herein, the
timely
payment of all amounts due under any related sponsored research
agreement between UTMDACC and LICENSEE in effect during this
AGREEMENT,
and is further subject to the following rights retained by BOARD
and
UTMDACC to:
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(a) Publish the
general scientific findings from research related to
LICENSED SUBJECT MATTER, subject to the terms of Article
XI-Confidential Information and Publication; and
(b) Use LICENSED
SUBJECT MATTER for research, teaching, patient care,
and other educationally-related purposes.
3.2 LICENSEE
may extend the license granted herein to any AFFILIATE
provided that the AFFILIATE consents in writing to be bound by
this
AGREEMENT to the same extent as LICENSEE. LICENSEE agrees to
deliver
such contract to UTMDACC within thirty (30) calendar days
following
execution thereof.
3.3 LICENSEE
may grant sublicenses under LICENSED SUBJECT MATTER consistent
with the terms of this AGREEMENT provided that LICENSEE is
responsible
for its sublicensees relevant to this AGREEMENT, and for
diligently
collecting all amounts due LICENSEE from sublicensees. If a
sublicensee
pursuant hereto becomes bankrupt, insolvent or is placed in the
hands
of a receiver or trustee, LICENSEE, acting under applicable law and
in
a timely manner, agrees to use its best reasonable efforts to
collect
all consideration owed to LICENSEE, including having the
sublicensee
agreement confirmed or rejected by a court of proper jurisdiction,
if
commercially reasonable.
3.4 LICENSEE
must deliver to UTMDACC a true and correct copy of each
sublicense granted by LICENSEE, and any modification or
termination
thereof, within thirty (30) calendar days after execution,
modification, or termination.
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3.5 If this
AGREEMENT is terminated pursuant to Article XIII-Term and
Termination, BOARD and UTMDACC agree to accept as successors to
LICENSEE, existing sublicensees in good standing at the date of
termination provided that each such sublicensee consents in writing
to
be bound by all of the terms and conditions of this AGREEMENT.
IV. CONSIDERATION, PAYMENTS AND REPORTS
4.1 In
consideration of rights granted by BOARD to LICENSEE under this
AGREEMENT, LICENSEE agrees to pay to UTMDACC (except for those
payments
made directly to third parties as provided in subsection 4.1(a))
the
following:
(a) All out-of-pocket
expenses incurred after the EFFECTIVE DATE of
this agreement in filing, prosecuting, enforcing and
maintaining
PATENT RIGHTS. Said expenses will be paid directly by LICENSEE
to
the appropriate patent office, patent attorney or agent, or
other
relevant party or entity. In addition, LICENSEE shall pay to
UTMDACC out-of-pocket expenses incurred by UTMDACC prior to the
EFFECTIVE DATE in filing, prosecuting, enforcing and
maintaining
PATENT RIGHTS in the amount of $31,497.00. Said out-of-pocket
expenses shall be paid to UTMDACC within thirty (30) calendar
days
of the date this AGREEMENT is executed by all parties and
LICENSEE
has received an invoice for the amount from UTMDACC;
(b) A license fee in
the amount of one hundred thousand dollars
($100,000.00). This fee will not reduce the amount of any other
payment provided for in this Article IV, and is due and payable
within thirty (30) calendar days after the AGREEMENT has been
fully executed by all parties and LICENSEE has received an
invoice
for the amount from UTMDACC;
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(c) A running royalty
equal to * percent (*%) of LICENSEE's NET SALES
up to and including * dollars ($*) and a running royalty equal
to
* percent (*%) of LICENSEE's NET SALES for LICENSEE'S NET SALES
in
excess of * dollars ($*);
(d) Milestone payments
upon occurrence of the following events:
(i) upon
acceptance of a first New Drug Application (NDA) by the
Food and Drug Administration for a LICENSED PRODUCT, *
dollars ($*); and
(ii) upon approval of
the first NDA for any LICENSED PRODUCT, *
dollars ($*);
(e) For any sublicense
pursuant to Sections 3.3 and 3.4 hereinabove,
which sublicense is executed prior to completion by LICENSEE of
a
Phase IIb clinical trial of a LICENSED PRODUCT, * percent (*%)
of
all royalties, up front payments, and milestone payments
received
by LICENSEE therefrom; and
(f) For any sublicense
pursuant to Sections 3.3 and 3.4 hereinabove,
which sublicense is executed on or after completion by LICENSEE
of
a Phase IIb clinical trial of a LICENSED PRODUCT
(i) * percent
(*%) of royalties received by LICENSEE therefrom,
and
(ii) * percent (*%) of
any milestone payments and up front
payments received by LICENSEE therefrom.
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4.2 LICENSEE,
in furtherance of the objectives of this AGREEMENT, agrees to
make good faith expenditures towards the clinical development of
at
least one LICENSED PRODUCT, in a minimum amount of * dollars ($*),
such
expenditures to be committed within five (5) years following
the
EFFECTIVE DATE, or two (2) years following the receipt of GMP
grade
Annamycin from a third party, whichever time period is shorter.
Upon
written request, LICENSEE shall provide UTMDACC written
documentation
of such expenditures at the conclusion of the applicable time
period.
4.3 Unless
otherwise provided, all such payments are payable within thirty
(30) calendar days after March 31, June 30, September 30, and
December
31 of each year during the term of this AGREEMENT, at which
time
LICENSEE will also deliver to UTMDACC a true and accurate
report,
giving such particulars of the business conducted by LICENSEE and
its
sublicensees, if any exist, during the preceding three calendar
months
under this AGREEMENT as necessary for UTMDACC to account for
LICENSEE's
payments hereunder. This report will include pertinent data,
including,
but not limited to:
(a) the accounting
methodologies used to account for and calculate the
items included in the report and any differences in such
accounting methodologies used by LICENSEE since the previous
report;
(b) a list of LICENSED
PRODUCTS produced for the three (3) preceding
calendar months categorized by the technology it relates to
under
PATENT RIGHTS;
(c) the total
quantities of LICENSED PRODUCTS produced by the category
listed in Section 4.3(b);
(d) the total SALES by
the category listed in Section 4.3(b);
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(e) the calculation of
NET SALES by the category listed in Section
4.3(b);
(f) the royalties so
computed and due UTMDACC by the category listed
in Section 4.3(b);
(g) all consideration
received from each sublicensee or assignee and
payments due UTMDACC; and
(h)
all other amounts due
UTMDACC herein.
Simultaneously with the delivery of each such report, LICENSEE
agrees
to pay UTMDACC the amount due, if any, for the period of such
report.
These reports are required even if no payments are due.
4.4 During the
term of this AGREEMENT and for one year thereafter, LICENSEE
agrees to keep complete and accurate records of its and its
sublicensees' SALES and NET SALES and Section 4.2 expenditures
in
sufficient detail to enable the royalties and other payments
due
hereunder and LICENSEE's compliance with this AGREEMENT to be
determined. LICENSEE agrees to permit UTMDACC or its
representatives,
at UTMDACC's expense, to periodically examine LICENSEE'S books,
ledgers, and records during regular business hours for the purpose
of
and to the extent necessary to verify any report required under
this
AGREEMENT. If any amounts due UTMDACC are determined to have
been
underpaid in an amount equal to or greater than ten percent (10%)
of
the total amount due during the period so examined, then LICENSEE
will
pay the cost of the examination plus accrued interest at eight
percent
(8%) per annum or the maximum rate allowed by law, whichever is
lower.
In the event that LICENSEE has overpaid any payment due
UTMDACC,
UTMDACC will return any such overpayment to LICENSEE less
demonstrable
costs of the audit.
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4.5 Within
thirty (30) calendar days following each anniversary of the
EFFECTIVE DATE, LICENSEE will deliver to UTMDACC a written
progress
report as to LICENSEE's (and any sublicensee's) efforts and
accomplishments during the preceding year in diligently
commercializing
LICENSED SUBJECT MATTER in the LICENSED TERRITORY and LICENSEE's
(and
sublicensees') commercialization plans for the upcoming year.
4.6 All
amounts payable hereunder by LICENSEE will be paid in United
States
funds without deductions for taxes, assessments, fees, or charges
of
any kind. Checks are to be made payable to The University of Texas
M.
D. Anderson Cancer Center, and sent by United States mail to
Box
297402, Houston, Texas 77297, Attention: Manager, Sponsored
Programs or
by wire transfer to:
BANK ONE TEXAS
910 TRAVIS
HOUSTON, TEXAS
77002
SWIFT: BONEUS44HOU
ABA ROUTING NO:
111000614
ACCOUNT NAME: UNIV. OF TEXAS
M. D. ANDERSON CANCER CENTER
ACCOUNT NO:
1586838979
REFERENCE:
include title and EFFECTIVE DATE of AGREEMENT and
type of payment (e.g., license documentation fee, milestone
payment,
royalty [including applicable patent/application identified by
MDA
reference number and patent number or application serial number],
or
maintenance fee, etc.).
4.7 No payments due or royalty
rates owed under this AGREEMENT will be
reduced as the result of co-ownership of LICENSED SUBJECT MATTER
by
BOARD and another party, including, but not limited to,
LICENSEE.
4.8 LICENSEE
shall not be obligated to pay multiple royalties to UTMDACC
for a single LICENSED PRODUCT in the event said LICENSED PRODUCT
is
covered by more than one patent application and/or patent that is
(1)
included in the PATENT RIGHTS; and/or (2) directed to a PRIEBE
INVENTION. As used herein "PRIEBE INVENTION" shall mean an
invention
that: (1) cannot be practiced without infringing a claim of an
issued
patent or pending patent application under the PATENT RIGHTS, (2)
is
made by Dr.
Waldemar Priebe or those working in his laboratory at
UTMDACC and under his direction while both are employed by UTMDACC;
(3)
is conceived and reduced to practice within three (3) years of
the
EFFECTIVE DATE; (4) directly relates to Anthracycline or
related
DNA-binding agents, such as those exemplified by Annamycin, its
derivatives or analogs; (5) is limited to the LICENSED FIELD; and
(6)
is not previously obligated to a third party, including, but
not
limited to, any obliga
