EXHIBIT 10.3

 

[ * ] = Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

THIRD AMENDMENT TO

LICENSE AGREEMENT

 

This THIRD AMENDMENT TO LICENSE AGREEMENT (this “Third Amendment”), dated as of
May 10, 2011 is entered into between SRI INTERNATIONAL, a California
not-for-profit corporation (“SRI”), SLOAN-KETTERING INSTITUTE FOR CANCER
RESEARCH, a New York not-for-profit corporation (“SKI”), SOUTHERN RESEARCH
INSTITUTE, an Alabama not-for-profit corporation (“SoRI” and, together with SRI
and SKI, the “Licensor”), and ALLOS THERAPEUTICS, INC., a Delaware corporation
(“Allos”). Allos and Licensor are each sometimes individually referred to herein
as a “Party” and collectively as the “Parties”.

 

WITNESSETH

 

WHEREAS, the Parties entered into that certain License Agreement dated as of
December 23, 2002 (the “Original Agreement”), pursuant to which Allos obtained
from Licensor an exclusive license to certain patent rights and know-how
relating to a proprietary compound known as PDX in exchange for certain rights
and consideration provided to Licensor;

 

WHEREAS, the Parties entered into a First Amendment to the Original Agreement
dated as of May 9, 2006 (the “First Amendment”) and a Second Amendment dated as
of November 6, 2007 (the “Second Amendment”) (the Original Agreement, the First
Amendment and the Second Amendment are sometimes collectively referred herein as
the “License Agreement”);

 

WHEREAS, the Parties now desire to further amend the License Agreement to modify
the terms and conditions relating to certain sublicensing provisions;

 

NOW, THEREFORE, in consideration of the foregoing premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto agree as follows:

 

AGREEMENT

 

1.              All capitalized terms used but not defined herein shall have the
meanings assigned to them in the License Agreement.

 

2.              Section 1.24 of the License Agreement is hereby deleted in its
entirety and replaced with the following:

 

1.24                           “Sublicense Revenue” shall mean any and all
revenues received by Allos from a Third Party as consideration for the grant of
a sublicense to the rights granted to Allos by Licensor under Section 2.1,
(a) excluding sums received: (i) as royalties; (ii) for the purchase of an
equity interest in Allos at fair market value, specifically excluding any
premium to the then-current share price paid by the sublicensee, which premium
shall count

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

towards Sublicense Revenue; (iii) for research and development work performed by
or on behalf of Allos as demonstrated by actual expense incurred by Allos;
(iv) for purchase of a supply of Product to the extent the purchase price
received by Allos for the supply of Product does not exceed [ * ] of the actual
out-of pocket cost to Allos for the manufacture and supply of Product; (v) for
repayment of any loans, credit or credit line extended by Allos to a Permitted
Sublicensee; (vi) in the form of a loan, as credit or pursuant to a credit line
to Allos; and (vii) as reimbursement for actual costs incurred by Allos with
respect to services provided or procured by Allos to the extent directly related
to the development and commercialization of a Product, which services may
include (without limitation) trademark or patent procurement or maintenance,
Product storage or distribution, market analysis services, co-promotion, medical
exhibit hosting or presentation, creation or distribution of marketing
materials, planning or implementation of marketing campaigns (including
advertising), patient or physician support services, or engagement of or
interaction with knowledge leaders or advisory boards; and (b) including (i) the
amount of any milestone payment received by Allos from a Permitted Sublicensee
pursuant to a Sublicense, plus, if and to the extent applicable, any amount
deducted by such Permitted Sublicensee from the original milestone payment
amount due pursuant to such Sublicense as an offset against any amounts owing
but unpaid by Allos to such Sublicensee pursuant to such Sublicense (for
example, if a $5,000,000 milestone payment is due under the Sublicense but the
Permitted Sublicensee deducts $500,000 from such milestone payment as an offset
against sums owed by Allos to such Permitted Sublicensee, the Sublicense Revenue
will equal $5,000,000 even though Allos only received $4,500,000 from the
Permitted Sublicensee); and (ii) if Allos supplies Product to any Permitted
Sublicensee, the portion of the purchase price received by Allos from such
Permitted Sublicensee for the supply of Product, if any, that exceeds [ * ] of
the actual out-of pocket cost to Allos for the manufacture and supply of such
Product.  Notwithstanding the foregoing, if Allos receives a payment based upon
EU Approval for sale of Product, then the first $[ * ] of such payment shall not
be included in Sublicense Revenue.

 

3.              The third sentence of Section 2.2 of the License Agreement is
hereby deleted and replaced with the following:

 

“Each sublicense permitted under this Section 2.2 shall be subject to terms and
conditions that are not materially different from the terms and conditions of
this Agreement (other than remuneration to be received by Allos, the terms of
which can be materially different from this Agreement) but in each case solely
to the extent such language is applicable to the

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

rights granted in such Sublicense to such sublicensee (each a “Permitted
Sublicensee”).”

 

4.              Section 2.6.3 of the License Agreement is hereby deleted and
replaced with the following:

 

2.6.3                        Except for commercial manufacturing, Allos may give
Licensor first consideration to provide any technical assistance, and to provide
any contract research or development services to Allos, regarding the research
and development of potential and actual Products; provided that Licensor has the
capability to provide such technical assistance and/or contract research or
development services and the resources to accomplish Allos’ objectives, and can
offer pricing that is competitive with any Third Party options.

 

5.              The following sentence is hereby added to the end of
Section 2.8.4 of the License Agreement:

 

“For clarity, the preceding sentence shall not apply [ * ].”

 

6.              The second paragraph of Section 3.1.1 of the License Agreement
is hereby amended by replacing clause (a) with the following:

 

(a) the period of time until expiration of the last to expire patent or
unappealable revocation of the last patent in the Licensed Patent Rights in any
country in the Territory or”

 

7.              The following new Section 3.1.4 is hereby added after
Section 3.1.3 of the License Agreement:

 

3.1.4                        For sales under an approved Sublicense with
Mundipharma International Corporation Limited (“Mundipharma”), the royalty rates
under Section 3.1.1 (as such royalty rates may have been reduced pursuant to
Section 3.1.2) for Product sold in a particular country in the Licensed
Territory (as defined below) during a particular calendar quarter shall be
reduced, on a calendar quarter-by-calendar quarter and country-by-country basis,
in accordance with the following if, following the launch of a Generic Product
(as defined below) in such country (or, with respect to the EEA (as defined
below), following the launch of a Generic Product in any one or more
country(ies) in the EEA), the sum of the Percentage Price Reduction (as defined
below) in such country plus the Percentage Market Penetration (as defined below)
in such country reaches the following

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

percentage thresholds: (i) during any calendar quarter in which the sum of the
Percentage Price Reduction and the Percentage Market Penetration in a country in
the Licensed Territory is equal to or greater than [ * ] but less than [ * ],
the royalty rates for such calendar quarter for Product sold in such country
shall be reduced to [ * ] of the royalty rates then applicable; (ii) during any
calendar quarter in which the sum of the Percentage Price Reduction and the
Percentage Market Penetration in a country in the Licensed Territory is equal to
or greater than [ * ] but less than [ * ], the royalty rates for such calendar
quarter for Product sold in such country shall be reduced to [ * ] of the
royalty rates then applicable; (iii) during any calendar quarter in which the
sum of the Percentage Price Reduction and the Percentage Market Penetration in a
country in the Licensed Territory is equal to or greater than [ * ] but less
than [ * ], the royalty rates for such calendar quarter for Product sold in such
country shall be reduced to [ * ] of the royalty rates then applicable; and
(iv) during any calendar quarter in which the sum of the Percentage Price
Reduction and the Percentage Market Penetration in a country in the Licensed
Territory is equal to or greater than [ * ], the royalty rates for such calendar
quarter for Product sold in such country shall be reduced to [ * ].  For
clarity, the foregoing percentage thresholds shall apply on a calendar
quarter-by-calendar quarter basis and the royalty reductions applicable to Net
Sales in a particular country may fluctuate from one calendar quarter to the
next depending upon the then-existing sum of the Percentage Price Reduction and
Percentage Market Penetration in such country; and, for further clarity, in the
event that none of the foregoing percentage thresholds is met in a country in a
calendar quarter, each of (i), (ii), (iii) and (iv) shall cease to apply and the
royalty rates payable pursuant to 3.1.1 (as such royalty rates may have been
reduced pursuant to Section 3.1.2) shall be reinstated for Product sold in such
country during such calendar quarter.

 

The following terms shall have the following meanings for purposes of this
Section 3.1.4:

 

“EEA” means (i) the European Union member states as then constituted; provided,
as of the effective date of the Third Amendment, the European Union member
states are Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark,
Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia,
Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania,
Slovakia, Slovenia, Spain, Sweden, and the United Kingdom, plus (ii) Iceland,
Liechtenstein and Norway.

 

“Generic Product” means any pharmaceutical product in a particular regulatory
jurisdiction that (a) contains the same active

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

pharmaceutical ingredients as the Product; (b) is bioequivalent to the Product
as determined by the applicable Regulatory Authority in such jurisdiction;
(c) has one or more Regulatory Authority approved indications in such
jurisdiction equivalent to the Regulatory Authority approved indication for the
Product in such jurisdiction (provided that the references to “such
jurisdiction” in this subsection (c) means, with respect to Regulatory Authority
approved indications in the EEA, any one or more country(ies) in the EEA); and
(d) is sold in such jurisdiction by a third party that is not a Sublicensee or a
sublicensee of a Sublicensee or its Affiliates, and is not otherwise authorized
by a Sublicensee or any of its Affiliates, sublicensees or distributors to sell
such product.

 

“Governmental Authority” means any multi-national, federal, state, local,
municipal, provincial or other governmental authority of any nature (including
any governmental division, prefecture, subdivision, department, agency, bureau,
branch, office, commission, council, court or other tribunal).

 

“Licensed Territory” means all countries of the world excluding the United
States of America (and all possessions and territories thereof) and Canada.

 

“Non-Governmental Authority” means any public body (including the National
Institute of Clinical Excellence and the Scottish Medicines Consortium in the
UK; the Institute for Quality and Efficiency in Healthcare in Germany; the
Technical Scientific Commission in Italy; the Directorate of Pharmacy and
Healthcare Products in Spain; and the National Union of Health Insurance Funds
and the National Authority of Health in France) or non-Governmental Authority
(including “Sick Funds” in Germany) with the authority to control, approve,
recommend or otherwise determine pricing and reimbursement of pharmaceutical
products, including those with authority to enter into risk sharing schemes
and/or to impose retroactive price reductions, discounts, or rebates.

 

“Percentage Market Penetration” means the percentage obtained by dividing [ * ]
by the [ * ].

 

“Percentage Price Reduction” means the percentage by which [ * ] is reduced, as
compared to the [ * ] as a result of (x) [ * ] or (y) [ * ].

 

“Regulatory Authority” means, in a particular country or jurisdiction, any
applicable Governmental Authority or Non-Governmental Authority involved in
granting Regulatory Approval

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

(approvals necessary to market and commercially sell Product, including pricing
and reimbursement approvals) in such country or jurisdiction.

 

8.              The third sentence of Section 4.1 of the License Agreement is
hereby deleted and replaced with the following:

 

“With respect to sales of Products invoiced in a currency other than United
States dollars, the gross sales, the Net Sales and royalties payable shall be
expressed in the currency invoiced together with the United States dollar
equivalent of the royalty payable, calculated using the average closing buying
rate for such currency quoted in the continental terms method of quoting
exchange rates (local currency per US$1) by Bank of America NT&SA in London,
England on each of the last business day of each month in the quarter prior to
the date of payment; provided, however, that to the extent the selling party is
a Permitted Sublicensee, such Permitted Sublicensee shall use the currency
converting methodology used consistently throughout its business, which
methodology will be explained in the report.”

 

9.              Section 4.2.3 of the License Agreement is hereby deleted in its
entirety and replaced with the following:

 

4.2.3                        Allos shall include in each Sublicense granted by
it pursuant to this Agreement a provision requiring the Permitted Sublicensee to
make reports to Allos, to keep and maintain records of sales made pursuant to
such Sublicense and to grant access to such records for an audit conducted by an
independent certified public accounting firm of nationally recognized standing
selected by Allos and reasonably acceptable to such Permitted Sublicensee, which
audit by Allos shall be substantially similar to Licensor’s right to audit Allos
under this Agreement.  Allos shall promptly provide copies of all such audits to
Licensor and, to the extent Allos has not exercised its right to audit a
Permitted Sublicensee, Allos will perform an audit at Licensor’s reasonable
request and expense.  Upon the expiration of [ * ] following the end of any
year, the calculation of royalties and sublicense fees payable with respect to
such year shall be binding and conclusive upon Licensor, Allos, and its
Affiliates and Permitted Sublicensees.

 

10.       The following sentence is hereby added to the end of Section 5.1 of
the License Agreement:

 

“Notwithstanding anything to the contrary in this Agreement, Allos shall not be
obligated to pay to Licensor royalty payments on account of any Net Sales
invoiced by a Permitted Sublicensee until [ * ] after Allos’

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

receipt of the royalties owed by such Permitted Sublicensee on account of such
Net Sales; Allos’ report pursuant to Section 4.1 on account of such Net Sales
shall be due at the same time as such royalty payment.”

 

11.       The last sentence of Section 6.3 is hereby deleted and replaced with
the following:

 

“In addition, Allos shall provide Licensor with written notice of all approvals
obtained promptly after obtaining such approvals.”

 

12.       The last sentence of Section 9.5 of the License Agreement is hereby
deleted and replaced with the following:

 

“Upon termination of this Agreement by Allos under Article 9.2, above, or by
Licensor under Article 9.4, above, the license granted to Allos under
Article 2.1, herein, shall terminate, subject to Article 9.6 and Licensor shall
automatically have a fully-paid, non-exclusive, worldwide license (including the
right to grant sublicenses) under the Allos Improvements, to make, have made,
use, offer for sale, sell and import Products; provided, however, that if  this
Agreement terminates under Article 9.2, above, or Article 9.4, above, and at the
time of termination, the Sublicense with Mundipharma (the “Mundipharma
Sublicense”) is in effect and Mundipharma is not in breach of the Mundipharma
Sublicense, if Mundipharma elects to terminate the Mundipharma Sublicense for
reason of the termination of this Agreement, then (a) Mundipharma will assume
all rights and responsibilities of Allos under this Agreement, including the
royalties and sublicense fees provisions in Section 3.1, to the extent
applicable to the rights granted to Mundipharma in the Mundipharma Sublicense
(i.e., in respect of the Licensed Territory only) and, at the time a milestone
payment would have been paid by Mundipharma to Allos pursuant to Section 7.3 of
the Mundipharma Sublicense (had the Mundipharma Sublicense not been terminated),
Mundipharma shall pay to Licensor (in addition to the royalties and sublicense
fees required under Section 3.1) [ * ] of such milestone payment amount [ * ]
and (b) Licensor’s license to the Allos Improvements, as set forth in this
Section 9.5, shall not include any territories, indications, products or other
areas which are included in the scope of the rights granted by Allos to
Mundipharma in connection with the Mundipharma Sublicense.”

 

13.       The first sentence of Section 9.7 of the License Agreement is herby
deleted and replaced with the following:

 

“Notwithstanding anything to the contrary in this Agreement, if this Agreement
is terminated pursuant to the provisions of Article 9.2 or by Licensor pursuant
to 9.4, herein, upon Licensor’s request not more than

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

one hundred twenty (120) days after such termination, (a) within ninety (90)
days after such request, Allos shall provide Licensor with copies of all data
and information generated by Allos’ research and development activities, and all
regulatory submissions and approvals, if any, regarding actual or potential
Products; provided, however that if such termination occurs after the initiation
of a Phase II Trial, Licensor shall reimburse Allos for its reasonable costs to
assemble and provide the data to Licensor, (b) Licensor shall have the right to
use and reference all such data, information and submissions without
restriction, and (c) Allos shall execute all such documents and instruments
reasonably necessary to enable Licensor to use and reference all such data,
information and submissions; further provided that if this Agreement is
terminated by Licensor pursuant to Article 9.4 and there are Surviving
Sublicenses, the foregoing will not apply to any data, information or regulatory
submissions and approvals that are included within the rights granted by Allos
to such Permitted Sublicensee in connection with such Surviving Sublicense.”

 

14.       Section 14.5 of the License Agreement is hereby deleted in its
entirety and replaced with the following:

 

14.5         Assignment.  Allos shall not assign its rights or obligations under
this Agreement, in whole or in part, by operation of law or otherwise, without
the prior written consent of Licensor; provided however, Licensor hereby
consents to a partial assignment of this Agreement to Mundipharma, to the extent
applicable to the rights granted to Mundipharma in the Mundipharma Sublicense
(i.e., in respect of the Licensed Territory only), in the event the Mundipharma
Sublicense is terminated and, pursuant to the terms of Section 12.6(c) of the
Mundipharma Sublicense, Mundipharma is entitled to continue exercising
post-termination rights (to the extent of the pre-termination rights granted
Mundipharma in the Mundipharma Sublicense), so long as Mundipharma assumes in
writing all rights and responsibilities of Allos under this Agreement, including
the royalties and sublicense fees provisions in Section 3.1, to the extent
applicable to the post-termination rights granted Mundipharma in the Mundipharma
Sublicense (i.e., in respect of the Licensed Territory only) and provided that,
at the time a milestone payment would have been paid by Mundipharma to Allos
pursuant to Section 7.3 of the Mundipharma Sublicense (had the Mundipharma
Sublicense not been terminated), Mundipharma shall pay to Licensor (in addition
to the royalties and sublicense fees required under Section 3.1) [ * ] of such
milestone payment amount [ * ].  Notwithstanding the foregoing, Allos shall be
entitled to assign its rights and obligations under this Agreement to the
purchaser of Allos’ entire business to which this Agreement pertains, without
Licensor’s prior written consent.  Any purported assignment in violation of this
article shall be null and void.

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

15.       Licensor hereby represents and warrants to Allos that: (a) it has
taken all necessary corporate action to authorize the execution and delivery of
this Third Amendment; and (b) this Third Amendment has been duly executed and
delivered on behalf of Licensor, and constitutes a legal, valid, binding
obligation, enforceable against Licensor in accordance with its terms.

 

16.       This Third Amendment shall be made part of the Agreement and be
governed by all of its terms.

 

17.       This Third Amendment may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Each Party may execute this Third Amendment by
facsimile transmission or in Adobe™ Portable Document Format (PDF) sent by
electronic mail.  In addition, facsimile or PDF signatures of authorized
signatories of any Party will be deemed to be original signatures and will be
valid and binding, and delivery of a facsimile or PDF signature by any Party
will constitute due execution and delivery of this Third Amendment.

 

18.       This Third Amendment shall be effective upon its execution by each of
SRI, SKI, SoRI and Allos.

 

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[ * ] = Certain confidential information contained in this document, marked by
brackets, is filed with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

IN WITNESS WHEREOF, the parties have caused this Third Amendment to be executed
by their duly authorized representatives as of the date first set forth above.

 

SRI INTERNATIONAL

 

ALLOS THERAPEUTICS, INC.

 

 

 

 

 

 

 

 

By:

/s/ John McIntire

 

By:

/s/ Paul L. Berns

 

 

 

 

 

Name:

John McIntire

 

Name:

Paul L. Berns

 

 

 

 

 

Title:

Deputy General Counsel

 

Title:

President and Chief Executive Officer

 

 

 

 

 

 

 

 

SLOAN-KETTERING INSTITUTE FOR

 

SOUTHERN RESEARCH INSTITUTE

CANCER RESEARCH

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Andrew D. Maslow

 

By:

/s/ David W. Mason

 

 

 

 

 

Name:

Andrew D. Maslow

 

Name:

David W. Mason

 

 

 

 

 

Title:

Director,

 

Title:

Director CIP & Assistant

 

Office of Technology Development

 

 

Corporate Secretary

 

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