Exhibit 10.1


 


AGREEMENT
ON MILESTONE PAYMENTS AND ROYALTIES


 


This AGREEMENT ON MILESTONE PAYMENTS AND ROYALTIES is entered into by and between ArQule, Inc.
and Daiichi Sankyo Co., Ltd. (collectively, the “Parties”).


 


WHEREAS, the Parties have entered into that certain Collaborative Research, Development and License
Agreement (the “Agreement”) on November 7,
2008;


 


WHEREAS, Section 5.4 of the
Agreement provides that the Parties shall
negotiate in good faith and reach agreement on an amendment to the Agreement or
a separate agreement to be executed by the Parties setting forth certain
milestone payments and royalties to be paid under the License Agreement for
each Licensed Product that is Developed and Commercialized under the Agreement
and/or a License Agreement and additional provisions relating thereto; and


 


WHEREAS, the Parties have
agreed upon the milestone events, the amount of milestone payments and sales
milestone payments, and the royalty rates at this time, and to negotiate other
provisions later.


 


NOW, THEREFORE, in
consideration of the mutual promises set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which is acknowledged by
the Parties, the Parties hereto, intending to be legally bound, hereby  agree as follows:


 


1.             Terms which are defined in the Agreement are used herein
as so defined.


 


2              The Parties agree that the timing of milestone payments
and the amount of milestone payments and sales milestone payments and the royalty rates to be included in each License
Agreement are as attached hereto as Exhibit A.


 


3              The Parties agree that any term and condition described
in Exhibit A of this agreement and
Schedule 3 of the Agreement (except as modified
in Exhibit A of this agreement) shall be included in each License Agreement.


 


4              Notwithstanding Section 5.4 of the Agreement, the
Parties agree to negotiate such
additional provisions relating to royalty reports, payment mechanisms and
dates, audit rights, overdue payments, taxes, currency conversion rates and
other provisions as are usual and customary for inclusion in provisions relating
to milestones and royalties at the time of
negotiation of each License Agreement. For
purpose of clarity, such additional provisions shall supplement and shall not
materially expand, limit or change any term and condition agreed in this
agreement or set forth in Schedule 3 of the License Agreement (except as
modified in Exhibit A of this agreement).


 


This agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.


 


*   *   *  
*   *   *   *   *


 






[*]
= CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.  OMITTED TEXT IS INDICATED BY
AN “*”.


 

















 


	
   

  	
  ArQule, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Paolo Pucci

  
	
   

  	
   

  	
  Name: Paolo Pucci

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Daiichi
  Sankyo Co., Ltd.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Takashi Shoda

  
	
   

  	
   

  	
  Name: Takashi
  Shoda

  
	
   

  	
   

  	
  Title: President
  and Chief Executive Officer

  



 





















 


Exhibit A


 


Milestone Payments and Royalties


 


A. Development and Regulatory Milestones


 


	
  Milestone Event

  	
   

  	
  Milestone Payment

  	
   

  
	
  1. *

  	
   

  	
  $* million

  	
   

  
	
  2. *

  	
   

  	
  $* million

  	
   

  
	
  3. *

  	
   

  	
  $* million

  	
   

  
	
  4. *

  	
   

  	
  $* million

  	
   

  
	
  5. *

  	
   

  	
  $* million

  	
   

  
	
  6. *

  	
   

  	
  $* million

  	
   

  
	
  7. *

  	
   

  	
  $* million

  	
   

  
	
  8. *

  	
   

  	
  $* million

  	
   

  
	
  9. *

  	
   

  	
  $* million

  	
   

  
	
  10. *

  	
   

  	
  $* million

  	
   

  
	
  11. *

  	
   

  	
  $* million

  	
   

  
	
  12. *

  	
   

  	
  $* million

  	
   

  
	
  13. *

  	
   

  	
  $* million

  	
   

  
	
  14. *

  	
   

  	
  $* million

  	
   

  
	
  15. *

  	
   

  	
  $* million

  	
   

  
	
  16. *

  	
   

  	
  $* million

  	
   

  
	
  17. *

  	
   

  	
  $* million

  	
   

  
	
  19. *

  	
   

  	
  $* million

  	
   

  
	
  20. *

  	
   

  	
  $* million

  	
   

  
	
  21. *

  	
   

  	
  $* million

  	
   

  
	
  22. *

  	
   

  	
  $* million

  	
   

  



 

















 


B. Sales Milestones


 


	
  Milestone Event

  	
   

  	
  Milestone Payment

  	
   

  
	
  Annual Net Sales in a Calendar Year of $* million

  	
   

  	
  $* million

  	
   

  
	
  Annual Net Sales in a Calendar Year of $* million

  	
   

  	
  $* million

  	
   

  
	
  Annual Net Sales in a Calendar Year of $* billion

  	
   

  	
  $* million

  	
   

  
	
  Annual Net Sales in a Calendar Year of $* billion

  	
   

  	
  $* million

  	
   

  



 


C. Royalties


 


	
  Annual Net Sales Increment in
  the Territory

  	
   

  	
  Royalty Rate  

  applicable for such tier

  	
   

  
	
  Up
  to $* million

  	
   

  	
  *%

  	
   

  
	
  Above $* million, but less than or equal to $*
  billion

  	
   

  	
  *%

  	
   

  
	
  Above $* billion

  	
   

  	
  *%