Document:

Exhibit
10.2

 

CHANGE OF
CONTROL AGREEMENT

 

THIS AGREEMENT, is made and entered into as of this
25th day of August 2008, by and between Arctic Cat, Inc. (the “Company”)
and Claude J. Jordan (the “Executive”).

 

 WHEREAS, the Company
considers the establishment and maintenance of a sound and vital management to
be essential to protecting and enhancing the best interests of the Company and
its shareholders; and

 

WHEREAS, Executive has made and is expected to make, due to
Executive’s intimate knowledge of the business and affairs of the Company, its
policies, methods, personnel and problems, a significant contribution to the
profitability, growth and financial strength of the Company; and

 

WHEREAS, the Company recognizes that the possibility of a
Change in Control may exist and that such possibility, and the uncertainty and
questions which it may raise among management, may result in the departure of
Executive or distraction in the performance of Executive’s duties to the
detriment of the Company and its shareholders; and

 

WHEREAS, Executive is willing to remain in the employ of the
Company upon the understanding that the Company will provide income security if
Executive’s employment is terminated under certain terms and conditions;

 

WHEREAS, it is in the best interests of the Company and its
shareholders to reinforce and encourage the continued attention and dedication
of management personnel, including Executive, to their assigned duties without
distraction and to ensure the continued availability to the Company of
Executive in the event of a Change in Control; and

 

WHEREAS, the Company and Executive acknowledge that they have
signed an Employment Agreement of even date herewith, and that this Agreement
shall supersede such Employment Agreement with respect to termination upon a
Change of Control as defined herein and any compensation paid to Executive upon
such termination.

 

THEREFORE, in consideration of the foregoing and other
respective covenants and agreements of the parties herein contained, the
parties hereto agree as follows:

 

1.             Term
of Agreement. The term of this Agreement shall commence on the date of this
Agreement, and shall continue in effect through December 31, 2009, and
shall automatically be extended for successive one-year periods thereafter
unless the Board of Directors of the Company (“the “Board”) shall have
determined, and Executive is notified in writing, prior to December 31,
2008 and each December 31 thereafter, that the term of this Agreement
shall not be extended or further extended from such date; provided, however,
that if a Change in Control shall have occurred during the original or any
extended term of this Agreement, this Agreement shall continue in effect for a
period of 36 months from the date the occurrence of a Change in Control or, if
an event triggering the Company’s severance payment obligations to Executive
under Section 4(d) has occurred during such 36-month period, this
Agreement shall continue in effect until the benefits payable to Executive
hereunder have been paid in full.  In the
event that more than one Change in Control shall occur during the original or
any extended term of this Agreement, the 36-month period shall follow the last
Change in Control.  This Agreement shall
neither impose nor confer any further rights or obligations on the Company or
Executive on the day after the end of the term of this Agreement.

 

2.             Change
in Control. No benefits shall be payable hereunder unless there shall have
been a Change in Control, as set forth below.

 

For purposes of this Agreement, a “Change in Control” of the Company
shall mean any of the following events:

 

(i)            if any “person” (as
such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) becomes a “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of 

 

 

1

 

the Company
representing 20% or more of the combined voting power of the Company’s then
outstanding securities, provided, however, it shall not be deemed
a Change in Control if such person becomes the beneficial owner of 20% or more
of the combined voting power as a result of an issuance of stock by the Company
which issuance has been approved by the Incumbent Directors (as defined below)
in response to an Unfriendly Change in Control (as defined in Section 5)
and provided further, however, that no Change in Control shall be
deemed to have occurred pursuant to this Section 2(i) as a result of
Suzuki Motor Corporation’s (“Suzuki”) ownership of more than 20% of the
combined voting power of the Company’s outstanding securities unless and until
such time as Suzuki owns more than 40% of the combined voting power of the
Company’s outstanding securities;

 

(ii)           if the Incumbent
Directors cease for any reason to constitute at least a 75% of the Board.  The term “Incumbent Directors” shall mean
those individuals who are members of the Board on the effective date of this
Agreement and any individual who subsequently becomes a member of the Board
(other than a director designated by a person who has entered into agreement
with the Company to effect a transaction contemplated by Section 2(iii))  whose election or nomination for election by
the Company’s shareholders was approved by a vote of at least 75% of the then
Incumbent Directors; or

 

(iii)          (A) the
Company consummates a merger, consolidation, share exchange, division or other
reorganization of the Company with any corporation or entity, other than an
entity owned at least 80% by the Company, unless immediately after such
transaction, the shareholders of the Company, other than Suzuki, immediately
prior to such transaction beneficially own, directly or indirectly 51% or more
of the combined voting power of resulting entity=s outstanding voting securities as well
as 51% or more of the Total Market Value of the resulting entity, or in the
case of a division, 51% or more of the combined voting power of the outstanding
voting securities of each entity resulting from the division as well as 51% or
more of the Total Market Value of each such entity, in each case in
substantially the same proportion as such shareholders owned shares of the
Company prior to such transaction; (B) the shareholders of the Company
approve an agreement for the sale or disposition (in one transaction or a
series of transactions) of assets of the Company, the total consideration of
which is greater than 51% of the Total Market Value of the Company, or (C) the
Company adopts a plan of complete liquidation or winding-up of the
Company.  ATotal Market Value@ shall mean the aggregate market value of
the Company=s or the resulting entity=s outstanding capital stock (on a fully
diluted basis) plus the aggregate market value of the Company=s or the resulting entity=s other outstanding equity securities as
measured by the exchange rate of the transaction or by such other method as the
Board determines where there is not a readily ascertainable exchange rate; or

 

(iv)          if a change in
control otherwise occurs which would be required to be reported in response to
the current Item 6(e) of Schedule 14A of Regulation 14A promulgated under
the Exchange Act, whether or not the Company is then subject to such reporting
requirement.

 

3.             Termination
Following Change in Control. If a Change in Control shall have occurred and
Executive is thereafter terminated while this Agreement is in effect, Executive
shall be entitled to the benefits provided in subsection 4(d) unless such
termination is (A) because of Executive’s death, (B) by the Company
for Cause or Disability, or (C) by Executive other than for Good Reason.

 

(a)           Disability.  For purposes of this Agreement, the term “Disability”
shall have two different meanings.  For
purposes of benefits due under any Company-sponsored disability insurance
policy (whether short-term, long-term, or any applicable salary continuation
policy provided during any elimination period), the definition of Disability
shall conform to the definition provided in such policy.   For purposes of any payment made to
Executive in excess of the benefits due under any such Company-sponsored
disability insurance policy, the definition of Disability shall be at least as
restrictive as the applicable definition provided in Code Section 409A.  The Executive’s employment shall terminate
upon the Disability of the Executive unless waived by the Company, where the
definition of Disability shall conform to the definition of disability set
forth in any Company-sponsored disability insurance policy.

 

 

2

 

(b)           Cause.  For purposes of this Agreement, the Company
shall have the right to immediately terminate the employment of Executive for “Cause”
if the Executive shall:

 

(i)            Willfully or
materially breach this Agreement or continually fail to perform the duties that
the Executive is required to perform under the terms of this Agreement;

 

(ii)           Willfully violate
other reasonable and substantial rules governing Executive performance,
including, without limitation, prohibitions against unauthorized use of drugs
or alcohol without treatment;

 

(iii)          Violate or
willfully refuse to obey  reasonable
instructions of the Chief Executive Officer and/or the Board of Directors, provided that such instructions are not in violation of this
Agreement;

 

(iv)          Willfully engage in
conduct that is demonstrably and materially injurious to the Company,
monetarily or otherwise;

 

(v)           In the performance
of Executive’s duties under this Agreement, engage in any act of misconduct,
including misconduct involving moral turpitude, which is injurious to the
Company; or

 

(vi)          Be convicted of or
plead guilty to any criminal charge or indictment, the nature of which the
Company determines, in its sole discretion, has a detrimental impact on the
general reputation of the Company.

 

An act or failure to act is considered “willful” if done or not done
with an absence of good faith and without a reasonable belief that the act or
failure to act was in the best interests of the Company. In the event of
termination for “Cause”, Executive shall not be entitled to any severance
payments or any other payments under this Agreement. Executive shall not be
terminated for Cause unless and until the Company shall have delivered to
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Board at a meeting of
the Board called and held for such purpose (after reasonable notice to
Executive and an opportunity for Executive, together with Executive’s counsel,
to be heard before the Board), finding that, in the good faith opinion of the
Board, Executive’s conduct was Cause and specifying the particulars thereof in
detail.

 

(c)           Good Reason.
Executive shall be entitled to terminate his or her employment for Good Reason
following a Change in Control, and in such case shall be entitled to the
benefits provided in subsection 4(d) of this Agreement. For purposes of
this Agreement, “Good Reason” shall mean, without Executive’s express written
consent, any of the following:

 

(i)            the authority,
powers, functions, responsibilities or duties assigned to Executive, as
compared to those in effect immediately prior to the Change in Control, are
materially and adversely diminished (except for any diminution that occurs
solely as a result of the fact that the Company ceases to be a public company);

 

(ii)           a reduction by the
Company in Executive’s annual base salary in effect immediately prior to a
Change in Control;

 

(iii)          the relocation of
the Company’s principal executive offices to a location more than twenty-five
miles from Thief River Falls, Minnesota, or from Minneapolis/St. Paul,
Minnesota or the Company requiring Executive to be based anywhere other than
the Company’s principal executive offices except for requiring travel on the
Company’s business to an extent substantially consistent with Executive’s
business travel obligations prior to the Change in Control;

 

(iv)          the failure by the
Company to continue to provide Executive with benefits at least as favorable to
those enjoyed by Executive under any of the Company’s pension, life insurance,
medical, health and accident, disability, deferred compensation, incentive
awards, bonus, stock options, or savings plans in which Executive was
participating immediately prior to the Change in Control, the taking of any
action by the Company which would directly or indirectly 

 

 

3

 

materially reduce
any of such benefits or deprive Executive of any material fringe benefit
enjoyed immediately prior to the Change in Control, or the failure by the
Company to provide Executive with the number of paid vacation or sick days to
which Executive is entitled immediately prior to the Change in Control,
provided, however, that the Company may amend any such plan or programs as long
as such amendments do not reduce any benefits to which Executive would be
entitled;

 

(v)           the failure of the
Company to obtain a satisfactory agreement from any successor to assume and
agree to perform this Agreement, as contemplated in Section 8;

 

(vi)          the taking of any
action by the Company that would materially adversely affect the physical
conditions existing at the time of the Change in Control in or under which
Executive performs his employment duties;

 

(vii)         any material breach
of this Agreement by the Company; or

 

(viii)        any
purported termination of Executive’s employment which is not made pursuant to a
Notice of Termination satisfying the requirements of this Agreement; for
purposes of this Agreement, no such purported termination shall be effective.

 

(d)           Notice of
Termination. Any purported termination of Executive’s employment by the
Company or by Executive shall be communicated by written Notice of Termination
to the other party hereto in accordance with Section 7. For purposes of
this Agreement, a “Notice of Termination” shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth a summary of the facts and circumstances claimed to provide a
basis for termination of Executive’s employment.

 

(e)           Date of
Termination. For purposes of this Agreement, “Date of Termination” shall
mean:

 

(i)            if Executive’s
employment is terminated for Disability as defined by any Company-sponsored
disability insurance policy, 30 days after Notice of Termination is given; and

 

(ii)           if Executive’s
employment is terminated pursuant to subsections (b) or (c) above or
for any other reason (other than death or Disability), the date specified in
the Notice of Termination (which, in the case of a termination pursuant to
subsection (b) above shall not be less than 10 days, and in the case of a
termination pursuant to subsection (c) above shall not be less than 10 nor
more than 30 days, respectively, from the date such Notice of Termination is
given).

 

(f)            Dispute of
Termination. If, within 10 days after any Notice of Termination is given,
the party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, the Date of Termination shall be the
date on which the dispute is finally determined, either by mutual written
agreement of the parties, or by a final judgment, order or decree of a court of
competent jurisdiction (which is not appealable or the time for appeal
therefrom having expired and no appeal having been perfected); provided, that
the Date of Termination shall be extended by a notice of dispute only if such
notice is given in good faith and the party giving such notice pursues the
resolution of such dispute with reasonable diligence. Notwithstanding the
pendency of any such dispute, the Company shall continue to pay Executive full
compensation in effect when the notice giving rise to the dispute was given
(including, but not limited to, base salary and a year-end bonus in an amount
at least equal to the year-end bonus paid with respect to the fiscal year
immediately preceding the Change in Control) and continue Executive as a
participant in all compensation, benefit and insurance plans in which Executive
was participating when the notice giving rise to the dispute was given, until
the dispute is finally resolved in accordance with this subsection. Amounts
paid under this subsection are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts under
this Agreement.

 

4.             Compensation
Upon Termination or During Disability. Following a Change in Control, upon
termination of Executive’s employment or during a period of Disability,
Executive shall be entitled to the following benefits:

 

(a)           During any period
that Executive fails to perform full-time duties with the Company as a result
of a Disability as defined by any Company-sponsored disability insurance
policy, the Company shall 

 

 

4

 

pay Executive the
base salary of Executive at the rate in effect at the commencement of any such
period plus a pro rata portion of an amount equal to the year-end bonus paid to
Executive for the fiscal year immediately preceding the Change in Control in
accordance with the Company’s regular payroll practices, until such time as
Executive is determined to be eligible for long term disability benefits in
accordance with any Company-sponsored disability insurance policy then in
effect.

 

(b)           If Executive’s
employment shall be terminated by the Company for Cause or by Executive other
than for Good Reason or Disability, the Company shall pay to Executive his full
base salary through the Date of Termination at the rate in effect at the time
Notice of Termination is given and the Company shall have no further obligation
to Executive under this Agreement, except with respect to any accrued benefits
to which Executive is entitled under any Company pension or welfare benefit
plan, insurance program or as may otherwise be required by law.

 

(c)           If Executive’s
employment shall be terminated by the Company or by Executive for Disability,
or by reason of death, the Company shall pay to Executive (or Executive’s
designated beneficiaries or estate, if no beneficiary is designated) any and
all benefits to which Executive is entitled under any Company-sponsored
insurance program then in effect within thirty (30) days of such Disability or
death.  Any payment made to Executive in
excess of those provided by any Company-sponsored disability insurance policy
shall be paid in accordance with the requirements of and subject to the
applicable definitions of Code Section 409A.

 

(d)           If Executive’s
employment by the Company shall be terminated (A) by the Company other
than for Cause or Disability or (B) by Executive for Good Reason, then
Executive shall be entitled to each of the benefits provided by (i), (ii), (iii) and
(iv) below, subject to the provisions of (v) and (vi) below.  All payments pursuant to this Section 4(d) shall
be paid six (6) months after the Date of Termination or over the course of
a specified period of time with respect to and as provided in subsection (iii);
provided that an amount of such payments
permitted by Section 409A of the Code, inclusive of Section 401(a)(17)
of the Code, shall be paid to Executive in equal portions over the course of
the first six (6) months after the Date of Termination in accordance with
the Company’s normal payroll practices.

 

(i)            the Company shall
pay Executive Executive’s full base salary through the Date of Termination at
the rate in effect at the time the Notice of Termination is given and any other
form or type of compensation otherwise payable for such period;

 

(ii)           in lieu of any
further salary payments for periods subsequent to the Date of Termination, the
Company shall pay as a severance payment (the “Severance Payment”) an amount
equal to 2.99 times the average of the annual compensation which was paid to
Executive by the Company (or any corporation (“Affiliate”) affiliated with the
Company within the meaning of section 1504 of the Internal Revenue Code of 1986
(the “Code”)) and included in Executive’s gross income for Federal income tax
purposes for the five calendar years (or, if Executive has been employed by the
Company for less than five, the number of complete calendar years of
employment) (the “Base Period”) preceding the earlier of the calendar year in
which a Change in Control of the Company occurred or the calendar year of the
Date of Termination. Such average shall be determined in accordance with
regulations promulgated under section 280G(d) of the Code. Compensation
paid to Executive by the Company (or an Affiliate) shall include every type and
form of compensation included in Executive’s gross income in respect of
Executive’s employment by the Company (or an Affiliate), including compensation
income recognized as a result of the exercise of stock options or sale of the
stock so acquired, except to the extent otherwise provided in regulations
promulgated under section 280G(d) of the Code.

 

(iii)          For a 36 month
period after the Date of Termination, the Company shall arrange to provide
Executive with life, disability, accident and health insurance benefits
substantially similar to those which Executive is receiving or entitled to
receive immediately prior to the Notice of Termination.  Executive shall be responsible for the
payment of his or her portion of the premiums for such benefits (recognizing
that Executive shall remain responsible for payment of the same relative
percentage of total premiums as Executive paid prior to the Date of
Termination). Benefits otherwise receivable by Executive pursuant to this
paragraph (iii) shall be reduced to the extent comparable benefits are
actually received by Executive during such 36 

 

 

5

 

month period, and
any such benefits actually received by Executive shall be reported to the
Company.

 

(iv)          Except to the extent
such payment would constitute a “parachute payment” within the meaning of Section 280G(b)(2) of
the Code as determined under subsection (d)(v) hereof, the Company shall
also pay to Executive all legal fees and expenses incurred by Executive in the
event Executive has a bona fide claim for wrongful termination (including all
such fees and expenses, if any, incurred in contesting or disputing any such
termination or in seeking to obtain or enforce any right or benefit provided by
this Agreement).

 

(v)           The Severance
Payment shall be reduced by the value of benefits actually provided in (iii) above
and by the amount of any other payment or the value of any benefit received or
to be received by Executive in connection with the termination of employment or
contingent upon a Change in Control of the Company (whether payable pursuant to
the terms of this Agreement, any other plan, agreement or arrangement with the
Company or an Affiliate) unless (1) Executive shall have effectively
waived receipt or enjoyment of such payment or benefit prior to the date of
payment of the Severance Payment, (2) in the opinion of tax counsel
selected by the Company and acceptable to Executive, such other payment or
benefit does not constitute a “parachute payment” within the meaning of section
280G(b)(2) of the Code, or (3) in the opinion of such tax counsel,
the Severance Payment (in its full amount or as partially reduced, as the case
may be) plus all other payments or benefits which constitute “parachute
payments” within the meaning of section 280G(b)(2) of the Code are
reasonable compensation for services actually rendered, within the meaning of
section 280G(b)(4) of the Code, and such payments are deductible by the
Company. The value of any non-cash benefit or any deferred cash payment shall
be determined by the Company in accordance with the principles of sections
280G(d)(3) and (4) of the Code.

 

(vi)          If it is established
pursuant to a final determination of a court or an Internal Revenue Service
proceeding that, notwithstanding the good faith of Executive and the Company in
applying the terms of this Subsection 4(d), the aggregate “parachute payments”
paid to or for Executive’s benefit are in an amount that would result in any
portion of such “parachute payments” not being deductible by the Company or its
Affiliates by reason of section 280G of the Code, then Executive shall have an
obligation to pay the Company upon demand an amount equal to the sum of (1) the
excess of the aggregate “parachute payments” paid to or for Executive’s benefit
over the aggregate “parachute payments” that would have been paid to or for
Executive’s benefit without any portion of such “parachute payments” not being
deductible by reason of section 280G of the Code; and (2) interest on the
amount set forth in clause (1) of this sentence at the applicable Federal
rate (as defined in section 1274(d) of the Code) from the date of
Executive’s receipt of such excess until the date of such payment.

 

(e)           Executive shall not
be required to mitigate the amount of any payment provided for in this Section 4
by seeking other employment or otherwise, nor shall the amount of any payment
or benefit provided for in this Section 4 be reduced by any compensation
earned by Executive as the result of employment by another employer or by
retirement benefits after the Date of Termination, or otherwise except as
specifically provided in this Section 4.

 

5.             Funding
of Payments. In order to assure the performance by the Company or its
successor of its obligations under this Agreement, the Company may at any time
deposit in trust an amount equal to the maximum payment that will be due
Executive under the terms hereof; provided, however, that the
Company shall deposit in trust the amount equal to the maximum payment due
Executive immediately upon an Unfriendly Change in Control.  Under a written trust instrument, the Trustee
shall be instructed to pay to Executive (or Executive’s legal representative,
as the case may be) the amount to which Executive shall be entitled under the
terms hereof, and the balance, if any, of the trust not so paid or reserved for
payment shall be repaid to the Company. If the Company deposits funds in trust,
payment shall be made by the Trustee to Executive in accordance with the
provisions of this Agreement.  If and to
the extent there are not amounts in trust sufficient to pay Executive under
this Agreement, the Company shall remain liable for any and all payments due to
Executive. In accordance with the terms of such trust, at all times during the
term of this Agreement, Executive shall have no rights, other than as an
unsecured general creditor of the Company, to any amounts held in trust and all
trust assets shall be general assets of the Company and 

 

 

6

 

subject to the claims of creditors of the Company. For purposes of this
Agreement, the term “Unfriendly Change of Control” shall be a Change in Control
which has not been approved by a majority of the Incumbent Directors in office
immediately prior to the Change in Control.

 

6.             Successors;
Binding Agreement.

 

(a)           The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. Failure of the Company to
obtain such assumption and agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement.

 

(b)           This Agreement shall
inure to the benefit of and be enforceable by Executive’s personal or legal
representatives, successors, heirs and designated beneficiaries. If Executive
should die while any amount would still be payable to Executive hereunder if
Executive had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to
Executive’s designated beneficiaries, or, if there is no such designated
beneficiary, to Executive’s estate.

 

7.             Notice.
For the purpose of this Agreement, notices and all other communications
provided for shall be in writing and shall be deemed to have been duly given
when delivered or mailed by united States first class mail, postage pre-paid,
addressed to the last known residence address of Executive or in the case of
the Company, to its principal office to the attention of its then Chief
Executive Officer, with a copy to its Secretary, or to such other address as
either party may have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective only upon receipt.

 

8.             Compliance
with Code 409A. If and to the extent that any provision of this Agreement
is required to comply with Code Section 409A, the Company shall have the
authority, without the consent of the Executive to interpret and/or amend such
provision to maintain to the maximum extent practicable the original intent of
the applicable provision without violating the provisions of Code 409A.

 

9.             Miscellaneous.
No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by
the parties. No waiver by either party hereto at any time of any breach by the
other party to this Agreement of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at
any prior or similar time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be
governed by the laws of the State of Minnesota. The invalidity or
unenforceability or any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.

 

IN
WITNESS WHEREOF, the undersigned officer, on behalf of Arctic Cat Inc., and
Executive have hereunto set their hands as of the date first above written.

 

 

	
   

  	
  ARCTIC CAT INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Its

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXECUTIVE

  

 

 

7Exhibit 10.25

 

CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

LICENSE AGREEMENT

 

THIS LICENSE AGREEMENT (“Agreement”) is entered as of December 13,
2004 (the “Effective Date”) by and
among THE REGENTS OF THE UNIVERSITY OF
COLORADO, a body corporate, having its principal office at 201
Regent Hall, Regent Drive, Boulder, CO 80309 (“CU”), the University of Salford, a not for profit company
organized under the laws of England and Wales having its principal office at
Salford, Greater Manchester, UK, M5 4WT (“Salford”),
Cancer Research Technology Limited, a company registered in England and Wales
with registered number 1626049 having its principal office at Sardinia House,
Sardinia Street, London, WC2A 3NL, UK (“CRT”),
and ALLOS THERAPEUTICS, INC., a
Delaware corporation having a place of business located at 11080 Circle Point
Road, Suite 200, Westminster, Colorado 80020 (“Allos”).

 

BACKGROUND

 

WHEREAS, CU, Salford and CRT
(collectively, the “Licensors”)
are joint owners of patents, patent applications and related intellectual
property covering or relating to Patent Compounds which include RH-1 (as each
defined below);

 

WHEREAS, the National Cancer
Institute Division of Cancer Treatment and Diagnosis (“NCI”) has access to RH-1 pursuant to a
government program in which Salford and CU have participated for the purpose of
conducting certain non-clinical studies using RH-1, and has generated data and
information owned by one or more of the Licensors;

 

WHEREAS,  the PICR  (as
defined below) is a party to a Technology Transfer Agreement (the “TTA”), dated January 1, 1995, between
PICR, CR-UK (as defined below, as successor in interest to Cancer Research
Campaign) and CRT (formerly named Cancer Research Campaign Technology Limited),
pursuant to which PICR has assigned to CRT all of PICR’s right, title and
interest in the intellectual property rights in and to the Patent Compounds and
under which PICR is obligated to assign rights to any of its future
developments, improvements or inventions relating to the Patent Compounds, in
each case insofar as wholly funded by CR-UK or Cancer Research Campaign, and
subject to the termination provisions of that agreement; and

 

WHEREAS, Allos desires to obtain,
and the Licensors are willing to grant, an exclusive license under the
Licensors’ intellectual property relating to the Patent Compounds, on the terms
and subject to the conditions of this Agreement.

 

NOW, THEREFORE,  in consideration of the foregoing premises and the mutual
covenants set forth below, the parties hereby agree as follows:

 

 

AGREEMENT

 

1.                                      DEFINITIONS.

 

1.1          “Affiliate”
means a corporation, or entity, which, directly or indirectly, or through one
or more intermediaries, controls, is controlled by, or is under common control
with a party.  For the purposes of this
definition, the word “control” (including, with correlative meaning, the terms “controlled
by” or “under common control with”) means the actual power, either directly or
indirectly through one or more intermediaries, to direct or cause the direction
of the management and policies of such entity, whether by the ownership of at
least fifty percent (50%) of the voting stock of such entity, or by contract or
otherwise.

 

1.2          “Allos Improvements”
means any invention, discovery, use, process, method, composition, formula,
technique, information and data, whether or not patentable, that constitutes an
improvement to the Licensed Technology and is generated, developed, conceived
or reduced to practice during the term of this Agreement, by employees or
others acting on behalf of Allos, either alone or jointly with others,
excluding, however, employees of Salford, CRT, CU, PICR and CR-UK.

 

1.3          “CR-UK”
means Cancer Research UK, a company registered in England and Wales with
registered number 4325234 and charity registered in England under charity
number 1089464 by which CRT is wholly-owned.

 

1.4          “Commercially Reasonable Efforts” means the level of efforts and resources
required to carry out a research, development or commercialization activity
with respect to a given product in a manner consistent with accepted business
practices and legal requirements, sound scientific judgment and comparable to
efforts in the pharmaceutical industry made by a similarly situated company
applicable to development of compounds at an equivalent stage of development
and similar market potential.

 

1.5          “Competent Authority”
means any local or national agency, authority, department, inspectorate,
minister, ministry official or public or statutory person (whether autonomous
or not) of any government of any country having jurisdiction over this
Agreement or any of the parties or over the development or marketing of
medicinal products in the Field of Use.

 

1.6          “CRT Improvements”
means any invention, the practice of which would also require the practice of
an invention claimed in or covered by the Licensed Patents listed in Appendix B and
which is a modification of or improvement to the inventions claimed in or
covered by the Licensed Patents listed in Appendix B, made by CRT, CR-UK or PICR
researchers (if such invention is assigned to CRT under the TTA) to whom CRT
permits access to the Licensed Technology in the exercise of its reserved
rights hereunder, but excluding, for the avoidance of doubt, any research
performed by other entities that generate intellectual property that may be
owned by CRT.

 

1.7          “CU Improvements”
means any invention, the practice of which would also require the practice of
an invention claimed in or covered by the Licensed Patents and which is a
modification of or improvement to the inventions claimed in or covered by the
Licensed Patents, 

 

2

 

made by CU researchers to
whom CU permits access to the Licensed Technology in the exercise of its
reserved rights hereunder.

 

1.8          “Current RH-1
Formulation” means RH-1 as formulated with [*].

 

1.9          “[*]”  means any form of [*] being used, as of
the Effective Date, in the on-going Phase I human clinical trial being
sponsored by CR-UK.

 

1.10        “Data Option
Agreement”  means the
agreement executed and effective as of the Effective Date by and between Allos
and CR-UK pursuant to which CR-UK grants to Allos an option to acquire
exclusive rights to certain clinical data generated by CR-UK in connection with
a clinical trial that is currently being conducted by CR-UK.

 

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

 

1.12        “Field of Use”
means all therapeutic and diagnostic uses, including human and veterinary
diseases.

 

1.13        “Improvements”
means, collectively, the CRT Improvements, the CU Improvements and the Salford
Improvements.

 

1.14        “IND”
means an Investigational New Drug Application filed with the FDA, or the
equivalent application or filing filed with any equivalent agency or
governmental authority outside the United States (including any supra-national
agency such as in the European Union) necessary to commence human clinical
trials in such jurisdiction.

 

1.15        “Jointly”
means (a) with the written consent of all the Licensors or (b) with
the written consent of one or more Licensors (“Lead Licensors”) in circumstances where the consent of the
remaining Licensors has been sought in writing by the Lead Licensors on forty
(40) day’s notice and no response has been received from the remaining
Licensors.

 

1.16        “Licensed Know-How”
means any proprietary data, information, technique, know-how, or trade secret
owned or controlled by the Licensors as of the Effective Date that is necessary
or useful (a) for the practice of the Licensed Patents, or (b) to
make, use or sell Licensed Products, as more specifically described in Appendix A.

 

1.17        “Licensed
Patents” means the United States and foreign patents and/or patent
applications claiming or covering any Licensed Product, any Improvements or
both, including the patents listed in Appendix B, together with all
continuations, continuations-in-part and divisionals thereof, and all
corresponding reexaminations, reissues and extensions thereof and all foreign
counterparts of any of the foregoing.

 

1.18        “Licensed Product”
means a product containing any formulation of the Patent Compounds.

 

1.19        “Licensed Technology”
means the Licensed Know-How, the Licensed Patents and the Improvements,
including all intellectual property rights therein.

 

3

 

1.20        “NDA”
means a New Drug Application filed with the FDA, or the equivalent application
or filing filed with any equivalent agency or governmental authority outside
the United States (including any supra-national agency such as in the European
Union), the filing of which is necessary to market and sell Licensed Product in
such jurisdiction.

 

1.21        “Net Sales”
means, the gross amount billed or invoiced by Allos, its Affiliates or
sublicensees or its Affiliates to any other Third Parties for a Licensed
Product, less:

 

(a)           discounts, including cash and quantity discounts,
chargeback payments and rebates granted to managed health care organizations or
to federal, state and local governments, their agencies, purchasers and
reimbursers or to trade customers;

 

(b)           credits or allowances actually granted upon claims for
damaged goods, rejections or returns of a Licensed Product, including recalls;

 

(c)           freight, postage, shipping, transportation and
insurance charges actually allowed or paid for delivery of a Licensed Product
to the extent billed; and

 

(d)           sales (such as value-added tax or its equivalent) and
excise taxes, other consumption taxes, customs duties and compulsory payments
to governmental authorities and any other governmental charges imposed upon the
importation, use or sale of a Licensed Product (excluding any taxes paid on the
income from such sales).

 

Notwithstanding the
foregoing, amounts received by Allos, its Affiliates or sublicensees or its
Affiliates for the sale of a Licensed Product among Allos, its Affiliates and
sublicensees or their Affiliates for resale shall not be included in the
computation of Net Sales hereunder.  Where a transfer or other disposition of
Licensed Product is made by Allos, its Affiliates or sublicensees or
their Affiliates to any other Third Parties, for consideration other than
monetary, such consideration shall be valued at the fair market value thereof
as at the date of sale and shall constitute Net Sales.

 

If Allos, its Affiliate
or sublicensee or its Affiliate sells a Licensed Product in the form of a
combination product containing one or more active therapeutic ingredients in
addition to the Licensed Product (other than an ingredient triggering a royalty
deduction under Section 4.7),
Net Sales for such combination product will be calculated by multiplying actual
Net Sales thereof by the fraction A/(A+B) where A is the invoice price of the
Licensed Product if sold separately, and B is the total invoice price of the
other active ingredient or ingredients in the combination, if sold
separately.  If, on a country-by-country
basis, the other active ingredient or ingredients in the combination are not
sold separately in said country, Net Sales shall be calculated by multiplying
actual Net Sales thereof by the fraction A/C where A is the invoice price of
the Licensed Product if sold separately, and C is the invoice price of the
combination product.  If, on a
country-by-country basis, the Licensed Product is not sold separately in such
country, Net Sales shall be determined by the Allos and the Licensors in good
faith on the basis of the fair market value of the Licensed Product.

 

1.22        “Option”
has the meaning set forth in Section 3.2.

 

4

 

1.23        “Patent Compounds”
means RH-1 and other compounds claimed in the Licensed Patents listed in Appendix B.

 

1.24        “Patent Costs”
means fees (including all application filing fees charged by any U.S. or
foreign patent office) and reasonable expenses paid to legal counsel, and
filing, maintenance and other reasonable out-of-pocket expenses incurred in
connection with the prosecution and maintenance of any Licensed Patents,
including the expenses incurred in connection with opposition proceedings
before the U.S. Patent and Trademark Office or the equivalent proceeding in any
foreign patent office.

 

1.25        “Phase 1 Trial”
means a clinical study that is designed to determine the metabolism and
pharmacologic actions of a pharmaceutical product in humans or, the side
effects associated with increasing doses, or, if possible, to gain early
evidence on effectiveness.

 

1.26        “Phase 2 Trial”
means a controlled clinical study designed to evaluate the effectiveness of a
pharmaceutical product for a particular indication or indications in patients
with the disease or condition under study or to determine the common short-term
side effects and risks associated with the drug.

 

1.27        “Phase 3 Trial”
means a randomized, controlled, two-arm clinical study of a pharmaceutical
product designed to gather the additional information about effectiveness and
safety that is needed to evaluate the overall benefit-risk relationship of the
drug or to provide an adequate basis for physician labeling.

 

1.28        “PICR”  means the Paterson Institute for Cancer
Research: Christie Hospital National Health Service Trust, Wilmslow Road,
Manchester M20 9BX, a not for profit organisation organized under the laws of
England and Wales.

 

1.29        “RH-1”
means the Licensors’ proprietary benzoquinone compound,
2,5-diaziridinyl-3-(hydroxymethyl)-6-methyl-1,4-benzoquinone (as claimed in the
Licensed Patents listed in Appendix
B), and its racemates, isomers, prodrugs, active metabolites,
analogs and any pharmaceutically acceptable salt or complex thereof.

 

1.30        “Salford
Improvements” means any invention, the practice of which would also
require the practice of an invention claimed in or covered by the Licensed
Patents and which is a modification of or improvement to the inventions claimed
in or covered by the Licensed Patents, made by Salford researchers to whom
Salford permits access to the Licensed Technology in the exercise of its
reserved rights hereunder.

 

1.31        “Sublicense Revenue”
means any and all revenues and non-monetary consideration (to be valued at the
fair market value thereof at the date of receipt, except for equity, which
shall be valued on the date of disposal by Allos) received by Allos or its
Affiliates from a Third Party as consideration for the grant of, or any rights
in relation to a sublicense under the rights granted to Allos by the Licensors
pursuant to Section 2.1,
excluding sums received:  (a) as royalties;
and excluding for the avoidance of doubt sums received; (b) for the
purchase of an equity interest in Allos equal to or less than the fair market
value of such shares at the time of issuance by Allos (provided that the value
of such equity interest represents not more than [*] of the total up front
consideration for the grant of the sublicense); (c) as fair 

 

5

 

consideration for
research and development work performed for any Third Party by or on behalf of
Allos; (d) as fair consideration for any other property, rights or
services that have been or are expected to be furnished by Allos to such
sublicensee; or (e) in the form of a loan, as credit or pursuant to a
credit line to Allos.  Notwithstanding
the foregoing, if Allos receives revenue in consideration for the grant of, or
any rights in relation to a sublicense under the licenses granted to Allos
hereunder and such sublicense also includes the grant of a license or
sublicense to other technology controlled by Allos but not acquired from the
Licensors, then the foregoing amount shall be adjusted by a percentage that
fairly represents, as reasonably determined by the parties, the contribution of
the Licensed Technology to the total revenue received by Allos.  In addition, with respect to any payments
made by a sublicensee for milestones achieved that correspond to any of the
milestone events described in Section 4.4
below, only those portions of such milestone payments that exceed
the corresponding milestone payments to be made by Allos under Section 4.4 will be considered
Sublicense Revenue for purposes of this Agreement.

 

1.32       “Term”
has the meaning set forth in Section 8.1.

 

1.33       “Territory”
means worldwide.

 

1.34       “Third Party”
means any entity other than a party to this Agreement or an Affiliate of such
party.

 

1.35       “Tobacco Company”
means a corporation, company, partnership, other organization or person with a
material ownership interest in the tobacco industry (other than ownership
interests in investment firms or funds held as part of a portfolio of
investments).

 

1.36       “TTA” has
the meaning given in the Background to this Agreement.

 

1.37       “Valid Claim”
means (a) an unexpired claim of an issued patent within the Licensed
Patents that has not been found to be unpatentable, invalid or unenforceable by
a court or other authority in the subject country, from which decision no
appeal is taken or can be taken; or (b) a claim of a pending application
within the Licensed Patents, which claim has been pending for no more than [*]
as of the date upon which pendency is determined.

 

2.                                      LICENSE GRANTS;
TECHNOLOGY TRANSFER.

 

2.1          Grants
to Allos.

 

(a)           By CRT.  CRT hereby
grants to Allos, during the Term and subject to the terms and conditions of
this Agreement:

 

(i)           an exclusive (even as to CRT, but subject to CRT’s
reserved rights under Section 2.3),
royalty-bearing license, with the right to grant sublicenses in accordance with
Section 2.2, under CRT’s
interest in the Licensed Technology (excluding for this purpose CRT’s interest
in CRT Improvements), to make, have made, use, sell, offer for sale and import
Licensed Products in the Territory and within the Field of Use; and

 

(ii)         a non-exclusive royalty-free license, with the right
to grant sublicenses in accordance with Section 2.2,
under CRT’s interest in the Licensed Technology, 

 

6

 

including CRT’s
intellectual property rights in and to CRT Improvements, to make, have made,
use, sell, offer for sale and import Licensed Products in the Territory and
within the Field of Use; provided, however,
that Allos shall have the option to include any CRT Improvement under the
exclusive license set forth in Section 2.1(a)(i) above
by providing written notice to CRT within [*] after the disclosure by CRT to
Allos of such CRT Improvement and reimbursing CRT for any patent costs incurred
in connection with such CRT Improvement.

 

(b)           By CU.  CU hereby
grants to Allos, during the Term and subject to the terms and conditions of
this Agreement, an exclusive (even as to CU, but subject to CU’s reserved
rights under Section 2.3),
royalty-bearing license, with the right to grant sublicenses in accordance with
Section 2.2, under CU’s
interest in the Licensed Technology, including CU’s intellectual property
rights in and to CU Improvements, to make, have made, use, sell, offer for sale
and import Licensed Products in the Territory and within the Field of Use.

 

(c)           By Salford.  Salford
hereby grants to Allos, during the Term and subject to the terms and conditions
of this Agreement, an exclusive (even as to Salford, but subject to Salford’s
reserved rights under Section 2.3),
royalty-bearing license, with the right to grant sublicenses in accordance with
Section 2.2, under Salford’s
interest in the Licensed Technology, including Salford’s intellectual property
rights in and to Salford Improvements, to make, have made, use, sell, offer for
sale and import Licensed Products in the Territory and within the Field of Use.

 

The foregoing rights
include the right to use the Licensed Products to conduct clinical trials and
to develop and seek regulatory approval in all jurisdictions within the
Territory.

 

2.2          Sublicensing.  Allos may sublicense to Affiliates
or any Third Party other than a Tobacco Company the licenses granted in Section 2.1 without the prior written
consent of any of the Licensors; provided
that the terms and conditions of such sublicenses are consistent with the terms
and conditions of this Agreement and such sublicense prohibits further
sublicensing of such licenses without the written consent of the Licensors.  Allos agrees to use all commercially
reasonable efforts to enforce against breaches of such sublicenses where such
breach could be reasonably expected to prejudice the Licensors or the
intellectual property rights in the Licensed Technology. Allos shall forward to
all Licensors a copy of each fully executed sublicense agreement within thirty
(30) days of the execution of such agreement. 
The Licensors acknowledge that any obligations of Allos under this
Agreement, including an obligation to cure a breach pursuant to Section 8.3 hereof, may be performed
by a sublicensee on behalf of Allos but all such obligations remain the
obligations of Allos under this Agreement.

 

2.3          Reservation of Rights.  No right or license under the Licensed Technology is
granted or shall be granted by implication. 
All such rights or licenses are or shall be granted only as expressly
provided in the terms of this Agreement. 
The Licensors shall retain the non-transferable right to practice the
Licensed Technology solely for their own non-clinical, internal, non-commercial
research, teaching and education.  For
avoidance of doubt, no Licensor may undertake research sponsored by a Third
Party commercial entity relating to the Licensed Technology in connection with
which such Third Party receives a license or an option to resulting
intellectual property; provided, however, that
the foregoing will not prevent any Licensor from receiving a general
sponsorship or general research funding from a commercial 

 

7

 

entity where such entity
does not receive a license or option to intellectual property created through
use of such sponsorship or research funding. 
Any rights reserved by CRT hereunder may be exercised or sublicensed to
CR-UK, PICR or both subject to the terms of this Agreement, including, without
limitation, the grant of exclusive rights in CRT Improvements to Allos under Section 2.1(a) hereof.  Neither the Licensors nor CR-UK, PICR or any
Affiliate of a Licensor may conduct or initiate any study involving the
administration of RH-1 in humans (except the on-going Phase 1 Trial currently
being conducted by CR-UK as described more fully in the Data Option Agreement),
or authorize a Third Party to do so, without Allos’ prior written consent.

 

2.4          Technology Transfer.

 

(a)           Drug Inventory.  Concurrently
with the Effective Date, the Licensors will use their reasonable efforts to
facilitate the transfer from NCI of its inventory of RH-1 available as of the
Effective Date (including all API and drug product in final form) pursuant to a
material transfer agreement that will permit Allos to use such RH-1 inventory
for its own internal research purposes and make available such RH-1 inventory
to the Licensors for their own (or CR-UK and/or PICR) internal research
purposes pursuant to Section 2.3
and to Third Parties for non-clinical and clinical studies conducted on behalf
of Allos under an agreement between Allos and such Third Party.  Allos agrees to abide by the terms of such
material transfer agreement.  Allos
acknowledges that CR-UK and PICR may retain its existing inventory of RH-1
product for use in research permitted under Section 2.3
hereof or pursuant to Section 2.4(a) of
the Data Option Agreement.  Following the
Effective Date, Licensor may itself or through a Third Party, synthesize
quantities of RH-1 for use in research permitted under Section 2.3 hereof or pursuant to Section 2.4(a) of the Data Option
Agreement.  The Licensors agree that any
manufacturing or supply agreements with a Third Party relating to RH-1 will
include a provision transferring all rights to Improvements to the applicable
Licensor that is a party to such agreement.

 

(b)           Other Materials; Improvements. 
As soon as practicable after the Effective Date, but within no more than
thirty (30) days, each of CRT, CU and Salford will transfer, and the Licensors
will use their reasonable efforts to facilitate the transfer from the NCI, all
Licensed Know-How, including without limitation, all relevant supporting
manufacturing documentation and all relevant pharmacology, toxicology and any
other pre-clinical and clinical information, in each case that is necessary or
useful for the further clinical development of RH-1, including without
limitation, the filing of an IND.  In
addition, during the Term, each of CRT, CU and Salford will be individually
responsible to disclose to Allos its own Improvements made, conceived or reduced
to practice in connection with the exercise of the rights each party retains
under Section 2.3 hereof, as
applicable, in reasonable, written detail and for the delivery to Allos of all
data, information and documents related thereto, promptly after CRT, CU or
Salford, as the case may be, has notice of the creation, conception or
reduction to practice of any such Improvement. 
No individual Licensor shall be liable to Allos for the failure by any
other Licensor to comply with the foregoing obligations.

 

2.5          Government and University Rights.  Notwithstanding
any use of descriptive terms within this Agreement such as “exclusive”, this
Agreement is subject to all of the terms and conditions of Title 35 U.S.C. §§
200 et al (the “Bayh-Dole Act”) and 37 C.F.R. 401, as such may be amended.  Further, Allos agrees to take all reasonable
action necessary to enable CU to satisfy its obligations thereunder.

 

8

 

3.                                      DEVELOPMENT.

 

3.1          Diligence. 
Allos shall use Commercially Reasonable Efforts to develop and obtain
regulatory approval of Licensed Products. 
At least once in every calendar year during the Term, Allos will either (a) issue
an annual report which describes its development activities during the twelve
(12) month time period preceding the report or (b) convene a meeting or
teleconference with representatives of the Licensors at which Allos’
development activities will be discussed.

 

3.2          Development Milestone.  Pursuant to the Data Option Agreement, Allos has an
exclusive option to obtain an exclusive license to certain clinical trial data
generated by CR-UK (the “Option”).  If Allos exercises the Option as provided in
the Data Option Agreement, Allos will provide a copy of its notice of exercise
to each of the Licensors.  If Allos exercises its Option, Allos
will use  Commercially Reasonable
Efforts to file an IND within [*] of Option exercise; provided that Allos shall not be in breach
of the foregoing development milestone if, in the good faith opinion of Allos,
the available data do not support an IND filing within such timeframe; in which
case, Allos shall:  (a) initiate
additional pre-clinical studies; or (b) use Commercially Reasonable
Efforts to take such other actions it deems necessary to support an IND filing.

 

3.3          Sponsored Research. 
Allos will give good faith consideration to conducting any
Allos-sponsored Phase 1 Trial or Phase 2 Trial for any Patent
Compounds, at the University of Colorado Health Sciences Center (the “UCHSC”) or at a site affiliated with CR-UK
or Salford.

 

4.                                      COMPENSATION.

 

4.1          Up Front Fees.  As partial consideration for the licenses granted
pursuant to Section 2.1, on
the Effective Date Allos shall pay an amount equal to [*], to be allocated
among the Licensors as follows: (a) CU shall receive [*]; (b) CRT
shall receive [*]; and (c) Salford shall receive [*].

 

4.2          Patent Costs Reimbursement. 
Allos shall pay to CU on the Effective Date an amount equal to [*] as
reimbursement for Patent Costs incurred prior to the Effective Date.

 

4.3          Option Exercise Fee.  As partial consideration for the licenses granted
pursuant to Section 2.1, upon
the exercise of the Option (as defined in Section 3.2),
Allos will pay directly to the Licensors a one-time payment equal to [*] to be
allocated among the Licensors by Allos in accordance with Section 4.8 below.

 

9

 

4.4          Milestone Payments. 
Allos shall pay to the Licensors the following one-time milestone
payments within [*] of the date of the first occurrence of the indicated event:

 

	
  Milestone

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  Total

  	
   

  	
  $

  	
  9,200,000

  	
   

  
					

 

Allos shall notify
each of the Licensors in writing promptly after it achieves a milestone
event.  [*].  The milestone payments will be allocated
among the Licensors by Allos in accordance with Section 4.8 below.

 

4.5          Sublicense Fees. 
Allos shall pay to the Licensors a percentage of Sublicense Revenue
received by Allos, payable within [*] of the receipt of such
consideration,  according to the
following schedule:  (a) [*] of all
Sublicense Revenue received from a sublicensee in connection with a sublicense
entered into within [*] of the Effective Date; (b) [*] of all Sublicense
Revenue received from a sublicensee in connection with a sublicense entered
into after [*] from the Effective Date, but prior to the [*] of the Effective
Date; and (c) [*] of all Sublicense Revenue received from a sublicensee in
connection with a sublicense entered into on or after the [*] of the Effective
Date.  The payments will be allocated among
the Licensors by Allos in accordance with Section 4.8
below.

 

4.6          Royalty Payments. 
Subject to Section 8.1,
Allos shall pay to the Licensors (to be allocated among the Licensors in
accordance with Section 4.8
below) royalties on annual Net Sales of Licensed Products in the Territory as
follows:

 

(a)           [*] of the Net Sales for the portion of Net Sales in a
calendar year below or equal to [*];

 

(b)           [*] of the Net Sales for the portion of Net Sales in a
calendar year above [*] but below or equal to [*]; and

 

(c)           [*] of the Net Sales for the portion of Net Sales in a
calendar year above [*].

 

10

 

For the avoidance of
doubt, Allos will retain the obligation to pay royalties on Net Sales of the
Licensed Products by its Affiliate, an authorized sublicensee of Allos (or any
Affiliate of such sublicensee) based on the formula specified in this Section 4.6.

 

4.7          Royalty Adjustments.

 

(a)           If, during the Term, Allos pays royalties to any Third
Party (excluding any amounts to be paid under this Agreement or the Data Option
Agreement) under patents owned or controlled by such Third Party in any country
in the Territory which Allos is required to obtain a license in order to make,
have made, use, sell, offer to sell or import the Patent Compounds, other than
those licenses that may be required with respect to the Current
RH-1-Formulation pursuant to Section 4.7(b) below,
that, in the good faith opinion of Allos, must be used to make the Patent
Compounds commercially feasible, Allos shall, for the period and in respect of
the country (or countries) in respect of which such payment is made, be
entitled to offset against royalties otherwise due under Section 4.6 above in such country (or
countries) an amount equal to [*] of any royalties paid by Allos to such Third
Party under such license; provided, however,
in no event shall such deduction reduce the royalties otherwise payable during
any calendar year in such country (or countries) by more than [*] of the total
amount that would be otherwise owed under Section 4.6
but for such deduction.

 

(b)           If, during the Term, Allos pays royalties to any Third
Party (excluding any amounts to be paid under this Agreement or the Data Option
Agreement) under patents owned or controlled by such Third Party in any country
in the Territory which Allos is required to obtain a license in order to make,
have made, use, sell, offer to sell or import [*] for use with the Patent
Compounds in the Current RH-1 Formulation or the combination of the [*] with
the Patent Compounds in the Current RH-1 Formulation (or both), Allos shall,
for the period and in the country (or countries) in respect of which such
payment is made, be entitled to reduce the royalties otherwise payable to the
Licensors hereunder during any calendar year in such country (or countries) by
[*] of the total amount that would be otherwise owed under Section 4.6 in each royalty tier.

 

(c)           If during the Term in the reasonable opinion of Allos,
a license is required under the patents described in Section 4.7(b) above, and as a result Allos elects
to develop an alternative formulation of RH-1 other than the Current RH-1
Formulation, the royalty rates set forth in Section 4.6
applicable to Allos’ subsequent Net Sales of the alternative formulation shall
be reduced by [*] in each royalty tier and in all countries of the Territory.

 

(d)           For the sake of clarity, the royalty reductions
described in Sections 4.7(a), 4.7(b) and
4.7(c) above are [*] shall
Allos be entitled to reduce the royalties otherwise owed under Section 4.6 in relation to any
Licensed Product [*] the mechanisms described in Sections 4.7(a), 4.7(b) or 4.7(c).

 

4.8          Revenue Sharing of Royalty and
Milestone Payments by Licensors.  With respect
to the (a) Option exercise fee payment (pursuant to Section 4.3), (b) milestone
payments (pursuant to Section 4.4),
(c) sublicense fee payments (pursuant to Section 4.5)
and (d) royalty payments (pursuant to Section 4.6)
made by Allos, CU shall receive [*] of
all such payments, CRT shall receive [*] of all such payments and Salford shall receive [*] of all such
payments.

 

11

 

5.                                      PAYMENTS; REPORTING.

 

5.1          Payment Terms.  All payments due under this Agreement shall be payable
in U.S. dollars by check or by wire transfer in immediately available funds to
a bank and account designated in writing by the Licensors.  Royalties payable to the Licensors pursuant
to Section 4.6 shall be due
and payable [*] after the end of each calendar quarter and shall be accompanied
by a report as set forth in Section 5.4.  When conversion of royalty payments from any
foreign currency is required, such conversion shall be at an exchange rate
calculated using the average of the rates of exchange for the currency of the
country from which the royalties are payable as published by The Wall Street Journal on the last
business day of each month during the calendar quarter for which a payment is
due.

 

Payments to be made to each of the Licensors shall be
made to the following addresses, unless written notice of a change is provided
to Allos in accordance with Section 11.4:

 

In the
case of CRT:

 

[*]

 

In the case of CU:

 

[*]

 

In the case of
Salford:

 

[*]

 

5.2          Sufficiency of Payments. 
The fees, reimbursements, milestones and royalty payments set forth in
this Agreement constitute the entire consideration due and payable by Allos for
the rights to practice the Licensed Technology as permitted herein.

 

5.3          Taxes.  The Licensors
will be responsible for any and all taxes levied on account of any payments
made to it under this Agreement.  If any
taxes are required to be withheld by Allos from any allocated payment to be
made to a Licensor pursuant to Section 4.8,
Allos will:  (a) deduct such taxes
from such payment; (b) timely pay the taxes to the proper taxing
authority; (c) send proof of payment to the applicable Licensor and
certify its receipt by the taxing authority; and (d) give such Licensor
reasonable assistance in claiming exemption from (or if that is not possible) a
credit for the deduction or withholding under any applicable double taxation
agreement or similar agreement from time to time in force.

 

5.4          Reports. 
Following the first commercial sale of a Licensed Product, within thirty
(30) days after the end of each calendar quarter, Allos shall furnish to each
of the Licensors a written report showing in reasonably specific detail, on a
country-by-country basis:  (a) the
gross sales of each Licensed Product sold by Allos, its Affiliates and its
sublicensees (and their Affiliates) during the reporting period; (b) the
calculation of the Net Sales from such gross sales; and (c) the
calculation of royalties due from such Net Sales including, without limitation,
details of the duration, territory and amount of any deductions made pursuant
to Section 4.7.  Allos shall notify each of the Licensors in
writing promptly after it achieves the first commercial sale 

 

12

 

of a Licensed
Product.  With respect to sales of
Licensed Products invoiced in a currency other than United States dollars, the
gross sales, the Net Sales and royalties payable shall be expressed in the
domestic currency of the party making the sale together with the United States
dollar equivalent of the royalty payable, determined as provided in Section 5.1 above.  Allos shall keep complete and accurate
records in sufficient detail to properly reflect all gross sales and the Net
Sales and to enable the royalties payable hereunder to be determined. Such
records shall be retained for at least five (5) years after the close of
the period to which they pertain, or for such longer time as may be required to
finally resolve any question or discrepancy raised by the Licensors.

 

5.5          Audits.  Upon the written request of all of the Licensors acting
Jointly, and not more than once in each calendar year, Allos shall permit an
independent certified public accounting firm of nationally recognized standing,
selected by the Licensors and reasonably acceptable to Allos, at the Licensors’
expense (except as provided below), to have access during normal business hours
to such of the records of Allos as may be reasonably necessary to verify the
accuracy of the royalty reports provided under this Agreement.  The accounting firm shall disclose to the
Licensors the findings of the accuracy of any report made or payment submitted
by Allos during the audited period, but shall not disclose to any of the
Licensors any confidential information of Allos not necessary for such
purpose.  If the accounting firm
concludes that additional royalties were owed during the audited period, Allos
shall pay the additional royalties within thirty (30) days of the date the
Licensors deliver to Allos the accounting firm’s written report so
concluding.  The expense of such audit
shall be borne by the Licensors; provided,
however, that if an error of more than [*] is discovered, then such
expenses shall be paid by Allos.

 

6.                                      CONFIDENTIALITY.

 

6.1          Confidential Information. 
Except to the extent expressly authorized by this Agreement or otherwise
agreed in writing by the parties, during the Term and for a period of five (5) years
thereafter, the receiving party shall keep confidential and shall not publish
or otherwise disclose and shall not use for any purpose other than as expressly
provided in this Agreement any information that is not published or otherwise
publicly available disclosed to it by, or obtained directly or indirectly from,
another party pursuant to this Agreement (“Confidential
Information”).  Each party may
use such Confidential Information only to the extent required to accomplish the
purposes of this Agreement.  Each party
will use at least the same standard of care as it uses to protect proprietary
or confidential information of its own to ensure that its employees, agents,
consultants and other representatives do not disclose or make any unauthorized
use of the Confidential Information, but in no event less than reasonable
care.  Each party will promptly notify
the other upon discovery of any unauthorized use or disclosure of Confidential
Information.  The parties hereto
acknowledge that Licensed Know-How constitutes Confidential Information that is
subject to the obligations of this Section 6.1
and Section 6.4 below.

 

6.2          Exceptions. 
The nonuse and nondisclosure obligations set forth in Section 6.1 shall not apply to any
information that the receiving party can prove by competent written evidence:

 

13

 

(a)           is now, or hereafter becomes, through no act or
failure to act on the part of the receiving party, generally known or available
to the public;

 

(b)           is known by the receiving party at the time of
receiving such information;

 

(c)           is hereafter furnished to the receiving party, as a
matter of right and without restriction on disclosure, by a third party who is
under no restriction on disclosure;

 

(d)           is independently discovered or developed by the
receiving party without the use of Confidential Information belonging to the
disclosing party; or

 

(e)           is the subject of a written permission to disclose
provided by the disclosing party.

 

6.3            Authorized Disclosures. 
Each party may disclose Confidential Information belonging to the other
party to the extent such disclosure is reasonably necessary in the following
instances:

 

(a)           filing or prosecuting patents as permitted by this
Agreement;

 

(b)           relevant regulatory filings;

 

(c)           prosecuting or defending litigation as permitted by
this Agreement; and

 

(d)           complying with applicable court orders or governmental
regulations.

 

Notwithstanding the
foregoing, in the event a party is required to make a disclosure of another
party’s Confidential Information pursuant to Section 6.3(c) or
(d), it will, except where
impracticable, give reasonable advance notice to the other party of such
disclosure and use efforts to secure confidential treatment of such information
at least as diligent as such party would use to protect its own confidential
information, but in no event less than reasonable efforts.  In any event, the parties agree to take all
reasonable action to avoid disclosure of Confidential Information
hereunder.  The parties will consult with
each other on the provisions of this Agreement to be redacted in any filings
made by the parties with the United States Securities and Exchange Commission
or as otherwise required by law.

 

6.4          Publication.  The Licensors shall be free to use the results of
activities conducted in connection with the exercise of their reserved rights set
forth in Section 2.3 for
their own non-clinical, internal non-commercial teaching, research, educational
and publication purposes so long as such use does not violate this Article 6.  Each of CRT, CU and Salford agree to submit
to Allos for its review and comment, a copy of any material resulting from such
activities proposed for disclosure or publication, such as by oral
presentation, manuscript or abstract, at least [*] prior to the estimated date
of publication, and if no response is received within [*] of the date submitted
to Allos, it will be conclusively presumed that the publication may proceed
without delay.  The publishing party
shall at Allos’ request within such [*] review period delay publication for up
to a further [*] if (a) Allos feels that the conclusions are not supported
by the data or that the proposed publication or disclosure would adversely
affect Allos’ regulatory strategy or the regulatory approval of any Licensed
Product, in which case the relevant parties 

 

14

 

shall make a good faith
attempt to resolve such issues during this period; provided, however, that the publishing party may then
proceed with such publication without further delay and/or (b) if Allos
determines that the proposed publication or disclosure contains patentable
subject matter that requires protection or Allos Confidential Information which
requires deletion, such delay for the purpose of preparing and filing
appropriate patent applications and/or making such deletions; provided that in each case  Allos will, with CU’s or CR-UK’s and/or
PICR’s assistance if appropriate (which CRT shall use reasonable endeavours to
procure), use its best efforts to avoid any delays that would result in missing
the submission deadline for the publication’s proposed publication date.  For the avoidance of doubt, publication may
not be delayed pursuant to this Section 6.4
for more than [*] after the date the publication is submitted to Allos.

 

6.5          Publicity. 
Except as otherwise required by applicable law, regulation or order of a
governmental agency or court of competent jurisdiction, neither party shall use
the name of another party, its Affiliates or clinical trial sites, or the
directors, officers or employees of a party, its Affiliates or a clinical trial
site in any advertising, news release or other publication, without the prior
express written consent of such party. 
Notwithstanding the foregoing, the parties intend to issue a joint press
release announcing the execution of this Agreement.  Following the initial joint press release to
be agreed in writing announcing this Agreement, each party shall be free to
disclose, without any other party’s prior written consent, the existence of
this Agreement, the identity of the other parties, and those terms of the
Agreement and information regarding the parties’ activities hereunder that have
already been publicly disclosed in accordance herewith.  Except as provided in the foregoing sentence,
or as may be required by applicable law or regulation, none of the Licensors
shall make any subsequent public announcements regarding this Agreement and
under no circumstances shall make any public disclosure of its financial terms,
without the prior written consent of Allos. 
Allos shall be free to issue subsequent public announcements relating to
this Agreement without the prior consent of the other parties so long as Allos
does not use in any such announcement the name of any other party or such party’s
directors, officers or employees without their consent.

 

7.                                      PATENT PROSECUTION AND
ENFORCEMENT.

 

7.1          Allos Improvements.  All Allos Improvements arising during the Term and all
intellectual property rights pertaining thereto, shall be solely owned by
Allos.  Allos shall control the filing,
prosecution and maintenance of patents claiming any Allos Improvements at its
own cost and using counsel of its choice and in such countries as Allos
determines is appropriate.

 

7.2          Patent Prosecution and Maintenance. 
Allos shall control the preparation, filing, prosecution, and
maintenance of any and all patent applications or patents included in the
Licensed Patents on or after the Effective Date, using patent counsel
reasonably acceptable to the Licensors. 
Allos shall be responsible for the payment of all Patent Costs incurred
after the Effective Date relating to the filing, prosecution, and maintenance
of the Licensed Patents.  Allos shall
seek reasonable claims to protect the Licensed Patents consistent with Allos’
overall patent strategy.  Allos’ patent
counsel shall keep the Licensors advised as to the status of the Licensed
Patents by providing the Licensors, in a timely manner at least [*] prior to
their due date, with copies of all official documents and correspondence
relating to the filing, prosecution, maintenance, and validity of the Licensed
Patents.  The Licensors shall have [*] to
review and comment on patent-related documents prior to the filing of such
documents and correspondence 

 

15

 

and shall provide such
other reasonable assistance from time to time at the request of Allos as
necessary to file, prosecute and maintain such applications, at Allos’
expense.  Allos shall not abandon
prosecution of any patent application without first notifying the Licensors [*]
prior to any bar date, of Allos’ intention and reasons therefore, and providing
the Licensors with reasonable opportunity to assume responsibility for
prosecution, maintenance and associated costs of such patents and patent
applications.

 

7.3          Enforcement of Patents.  Allos, CRT, CU and Salford shall promptly notify the
other parties of any infringement known to it of the Licensed Patents and shall
provide the other parties with the available evidence, if any, of such
infringement.  Allos, at its sole
expense, shall have the right to determine the appropriate course of action to
enforce the Licensed Patents or otherwise abate the infringement thereof or to
take (or refrain from taking) appropriate action to enforce the Licensed
Patents.  Allos shall make Commercially
Reasonable Efforts to enforce the Licensed Patents taking into account all
factors associated with such actions. 
Allos shall have the right to control any litigation or other
enforcement action relating to the Licensed Patents in the Field of Use and to
enter into, or permit, the settlement of any such litigation or other
enforcement action with respect to the Licensed Patents; provided, however, that Allos shall not
enter into any settlement that adversely affects the enforceability or validity
of any of the Licensed Patents and shall consider, in good faith, the interests
of the Licensors in any such settlement. 
Within ninety (90) days after notice of a material and continuing
infringement of the Licensed Patents, Allos shall notify each of the Licensors
whether or not Allos intends to take action against the alleged infringer.  If Allos notifies the Licensors that it does
not intend to take action, or if within one hundred eighty (180) days after
receipt of notice Allos does not abate such infringement or file suit to
enforce the Licensed Patents against each infringing party, the Licensors shall
have the right to take whatever action they Jointly deem appropriate to enforce
the Licensed Patents, including bringing and controlling at its own expense a
legal action in which, if legally necessary, Allos may be a named
plaintiff.  If the Licensors Jointly or
individually control any such enforcement action, such party shall not settle
the action or otherwise consent to a judgment in such action that results in
any grant to the Third Party of rights under the Licensed Patents, without the
prior written consent of Allos.  All
monies recovered upon the final judgment or settlement of any such suit to enforce
the Licensed Patents shall be allocated among the parties as follows: (a) first
to pay the reasonable expenses of the party (or parties) controlling the
enforcement action or rendering assistance to such party (or parties); and (b) second
the remainder will be considered “Net Sales” and an appropriate royalty will be
paid to the Licensors pursuant to Section 4.6
above; and (c) the remainder will be retained by the party
controlling the enforcement (or divided evenly among all parties controlling
such action, as applicable).  Each party
shall reasonably cooperate with the other party in the planning and execution
of any action to enforce the Licensed Patents; provided,
however, the party (or parties) controlling the enforcement action
shall reimburse the other parties their reasonable expenses, including legal
fees, incurred in connection with such cooperation.

 

7.4          Defense of Actions by Third Parties. 
If a declaratory judgment action alleging invalidity or non-infringement
of any of the Licensed Patents shall be brought against Allos or raised by way
of counterclaim or affirmative defense in an infringement suit brought by Allos
under Section 7.3, pursuant
to this Agreement and the provisions of Chapter 29 of Title 35, U.S. Code or
other statutes, Allos may:

 

16

 

(a)           defend the suit in its own name, at its own expense,
and on its own behalf for presumably valid claims in the Licensed Patents in
any such suit, ultimately to enjoin infringement and to collect for its use,
damages, profits, and awards of whatever nature recoverable for such
infringement subject to Section 7.3;
and

 

(b)           settle any claim or suit for declaratory judgment
involving the Licensed Patents, except that Allos shall have no right to deny
the validity of any patent, patent claim, or patent application included in the
Licensed Patents in any compromise or settlement of any claim or suit for
declaratory judgment without the express prior written consent of the
Licensors.

 

If Allos elects not to
defend against such declaratory judgment action, the Licensors, acting Jointly
or individually, may do so at its own expense and shall be entitled to retain
the entire amount of any recovery or settlement.

 

7.5          Patent Marking. 
Allos, its Affiliates and sublicensees (and its Affiliates) shall mark
each Licensed Product sold by them with the appropriate marking, giving notice
to the public that such Licensed Product is patented (indicating the number of
such issued patent of the Licensed Patents) or that a patent is pending, as
applicable.

 

8.                                      TERM AND TERMINATION.

 

8.1          Term.  This Agreement shall commence as of the
Effective Date, and unless terminated earlier as provided in this Article 8, shall expire on a
country-by-country basis on the later of: 
(a) expiration date of the last to expire Valid Claim that would be
infringed by the manufacture, use or sale of a Licensed Product in such country
absent the license hereunder; or (b) the expiration of any market
exclusivity available to a Licensed Product from a Competent Authority in such
country; or (c) [*] from the first arms length sale of a Licensed Product
by Allos, its Affiliate or sublicensee or its Affiliate in the United States or
European Union to any other Third Parties (the “Term”).  Insofar as part
(c) of this Section 8.1
is the sole reason that this Agreement has not expired in any country or
countries, the Net Sales in such country or countries shall be subject to a
reduced royalty equal to [*] of the total amount that otherwise would be owed
under Section 4.6 but for
such reduction.

 

8.2          Termination by Allos. 
Allos may terminate this Agreement, in its sole discretion, upon thirty
(30) days prior written notice to each of the Licensors.

 

8.3          Termination for Cause.

 

(a)           The Licensors, acting Jointly, may elect to terminate
this Agreement upon written notice to Allos if Allos breaches any material
provision of this Agreement and fails to cure or commence action to cure such
breach within the sixty (60) day period following receipt of written notice
from the Licensors specifying the nature of the breach in reasonable
detail.  In the case of a non-monetary
breach, the cure period may be extended for such longer period as may
reasonably be necessary if cure is not reasonably possible within the initial
sixty (60) day period, provided that Allos continues its diligent efforts to
cure.

 

(b)           Allos may terminate this Agreement upon written notice
to each of the Licensors if CRT, CU or Salford breaches any material provision
of this Agreement and fails to 

 

17

 

cure or commence action
to cure such breach within the sixty (60) day period following receipt of
written notice from Allos specifying the nature of the breach in reasonable
detail.  The cure period may be extended
for such longer period as may reasonably be necessary if cure is not reasonably
possible within the initial sixty (60) day period, provided that the breaching
party continues its diligent efforts to cure.

 

Failure to exercise a termination right under this
Agreement shall not preclude the Licensors or Allos from pursuing any other
damages, compensation or relief that it may be entitled to in connection with a
material breach of this Agreement.

 

8.4          Effect of Termination or Expiration. 
Expiration or termination of this Agreement shall not relieve the
parties of any obligation accruing prior to such expiration or
termination.  Upon expiration of this
Agreement in a particular country pursuant to Section 8.1
above and payment of all amounts owed by Allos prior to such expiration, Allos
shall have a fully paid-up, royalty free license under the Licensed Know-How to
make, use, sell, offer for sale and import Licensed Products in such
country.  Upon termination of this
Agreement by Allos under Section 8.2 or
Section 8.3(b), above, or by
the Licensors under Section 8.3(a),
above, the license granted to Allos under Section 2.1
shall terminate.  Upon any early
termination of this Agreement, Allos shall provide to each of the Licensors a
written statement of the amount of inventory of all Licensed Product in process
of manufacture and in stock, and shall have the right to dispose of such
Licensed Product for a period of one (1) year from the date of
termination, subject to the payment of royalties at the rate and at the time
provided pursuant to Articles 4
and 5.  The provisions of Sections 5.3, 5.4, 6.1, 6.2, 6.3, 8.4, 9.4, 9.5, 10.1, 10.2
and Article 11, and any other
provision of this Agreement that by its nature is intended to survive, shall
survive any termination or expiration of this Agreement.  In the event that this Agreement is
terminated by the Licensors for any reason, any sublicense granted by Allos
shall remain in full force and effect, provided that the sublicensee is in good
standing (that is the sublicensee is not in material breach of any of the
provisions of this Agreement) and the sublicensee agrees to be bound to the
Licensors pursuant to the terms and conditions of such sublicense
agreement.  Nothing in this Section shall
confer any liability on the Licensors for any dispute between Allos and such
sub-licensee and notwithstanding the foregoing, the Licensors shall not be
obliged to enter into such direct license in circumstances in which the
sublicensee reserves any right to maintain a claim against one or more of the
Licensors.

 

9.                                      REPRESENTATIONS AND
WARRANTIES.

 

9.1          Mutual Representations
and Warranties.  Each party represents and warrants to the
others that:

 

(a)           Corporate Power.  It is duly
organized and validly existing under the laws of its jurisdiction of
incorporation or formation, and has full corporate or other power and authority
to enter into this Agreement and to carry out the provisions hereof.

 

(b)           Due Authorization.  It is duly
authorized to execute and deliver this Agreement and to perform its obligations
hereunder, and the person or persons executing this Agreement on its behalf has
been duly authorized to do so by all requisite corporate or partnership action.

 

18

 

(c)           Binding Agreement.  This
Agreement is legally binding upon it and enforceable in accordance with its
terms.

 

9.2          Intellectual Property
Representations.

 

(a)           (i) each of CRT, CU and Salford, acting
individually and in its own capacity, represents and warrants to Allos
that:  it has sufficient legal and/or
beneficial title under its interest in the Licensed Patents and Licensed
Know-How necessary to grant the licenses set forth in this Agreement; and (ii) each
of CU and Salford acting individually and in its own capacity, represents and
warrants to Allos that it has not granted, and to its knowledge no Third Party
has granted, any right to any Third Party that would conflict with the rights
granted to Allos hereunder and (iii) CRT warrants that it has not granted
any right to any Third Party that would conflict with the rights granted to
Allos hereunder .

 

(b)           Each of CRT, CU and Salford, acting individually and
in its own capacity, represents and warrants to Allos that:  (i) no written notice has been received
from a Third Party threatening or instituting actions which challenge its
rights under the Licensed Patents; and (ii) no written notice from a Third
Party has been received by it alleging that the manufacture, use or sale of
Patent Compounds infringes the proprietary rights of such Third Party.

 

9.3          Regulatory  Representations.  Each of CU and Salford, acting individually
and in its own capacity, represents and warrants to Allos that, to the best of
its knowledge:  (a) it has complied
in all material respects with all applicable laws and regulations in connection
with the preparation and submission of any filings directly related to RH-1
with any regulatory authority; (b) it has filed with applicable regulatory
authorities all required and material notices, supplemental applications and
annual or other reports, including adverse experience reports, with respect to
RH-1; (c) there is no pending or overtly threatened action by the
regulatory authorities that will have a material adverse effect on the
regulatory approval of the RH-1 or any Licensed Products; and (d) in
connection with the generation of data relating to RH-1, it has not engaged or
utilized the services of any person who has been or is threatened with
debarment under the Generic Drug Enforcement Act or subject to any other
comparable administrative, institutional or other sanction for misconduct.

 

9.4          Disclaimer. 
Except as expressly set forth in this Agreement, CRT, CU AND SALFORD MAKE NO OTHER REPRESENTATIONS OR WARRANTIES OF ANY
KIND, EITHER EXPRESS OR IMPLIED, AND ASSUME NO RESPONSIBILITIES WHATSOEVER,
WITH RESPECT TO THE USE, SALE, OR OTHER DISPOSITION BY ALLOS, ITS AFFILIATES,
SUBLICENSEE(S) OR THEIR VENDEES OR OTHER TRANSFEREES OF LICENSED PRODUCT
INCORPORATING OR MADE BY USE OF THE INTELLECTUAL PROPERTY LICENSED UNDER THIS
AGREEMENT.  EACH OF CRT, CU AND SALFORD
EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION THE WARRANTIES OF TITLE, MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS
OF THIRD PARTIES, OR THOSE ARISING FROM A COURSE OF DEALING, USAGE OR TRADE
PRACTICES.

 

9.5          Limitation of Liability.  Subject to Allos’ right to terminate this Agreement as
provided in Section 8.3 herein,
no Licensor shall be liable for any breach committed solely by any other
Licensor.  EXCEPT IN CONNECTION WITH
LIABILITY FOR BREACH OF ARTICLE 6

 

19

 

(CONFIDENTIALITY), NO
PARTY SHALL BE ENTITLED TO RECOVER FROM ANOTHER PARTY ANY SPECIAL, INCIDENTAL,
INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT
OR ANY LICENSE GRANTED HEREUNDER; PROVIDED,
HOWEVER, THAT THIS SECTION 9.5
SHALL NOT BE CONSTRUED TO LIMIT A PARTY’S INDEMNIFICATION OBLIGATIONS UNDER ARTICLE 10.

 

10.                               INDEMNIFICATION.

 

10.1        By Allos. 
Allos shall indemnify, defend and hold harmless CRT, CU, Salford and
PICR and their respective directors, officers, employees and agents from all
losses, liabilities, damages and expenses (including reasonable attorneys’ fees
and costs) (collectively “Losses”)
that they may suffer as a result of any claims, demands, actions or other
proceedings (collectively, “Claims”)
made or instituted by a Third Party against any of them to the extent that such
Claims arise or relate to the possession, research, development, manufacture,
use, sale, offering for sale, importation or administration of Licensed Product
by Allos, its Affiliates and sublicensees; except to the extent such Claims are
based on the negligence or intentional misconduct of a party seeking
indemnification under this provision.

 

10.2        Insurance. 
Allos, at its own expense, shall maintain product liability insurance on
a “loss occurring” basis in an amount consistent with industry standards while
any Licensed Product is being marketed and sold by Allos during the Term and
for [*] after termination of this Agreement. 
Allos shall provide a certificate of insurance evidencing such coverage
to the Licensors upon request.

 

11.                               MISCELLANEOUS.

 

11.1        Assignment.  This Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties hereto.  The Agreement may not be assigned by any
party without the express written consent of the other parties; provided, however, that Allos may assign
the Agreement without such consent to any successor in interest (other than a
successor that is a Tobacco Company, which assignment will require CRT’s prior
written consent) in connection with a merger, consolidation or sale of all or
substantially all of its assets to which this Agreement relates.  Each of the Licensors may assign this
Agreement to an entity that may contract with such Licensor to manage its
licensing function, upon written notice to Allos; provided, however, that such an assignment shall not relieve
such Licensor of its obligations under this Agreement.

 

11.2        Governing Law.  This Agreement shall be governed by
and construed in accordance with the laws of the State of Colorado, without the application of any principle
that leads to the application of the laws of any other jurisdiction.

 

11.3        Dispute Resolution.  In the event of any dispute arising out of or relating
to this Agreement, the affected party shall promptly notify the other party (“Notice Date”), and the parties shall
attempt in good faith to resolve the matter. 
Any disputes not so resolved shall be referred to senior executives, who
shall meet at a mutually acceptable time and location within thirty (30) days
of the Notice Date and shall attempt to negotiate a settlement.  If the senior executives fail to meet within
thirty (30) days of the Notice Date, or if the matter remains 

 

20

 

unresolved for a period
of sixty (60) days after the Notice Date, then either party may at any time
thereafter pursue any remedy available to it at law or in equity through a
court of competent jurisdiction in the State of Colorado.

 

11.4        Notices.  Any notice to be given under this Agreement must be in
writing and delivered either in person, by any method of mail (postage prepaid)
requiring return receipt, or by overnight courier, or by facsimile confirmed
thereafter by any of the foregoing, to the party to be notified at its
address(es) given below, or at any address such party has previously designated
by prior written notice to the other. 
Notice shall be deemed sufficiently given for all purposes upon the
earlier of:  (a)  if mailed, three (3) days
after the date of postmark; or (c) if delivered by overnight courier, the
next business day the overnight courier regularly makes deliveries.

 

	
  If to CU:

  	
   

  	
  If to Allos:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Office of Technology Transfer

  	
   

  	
   

  	
  Allos Therapeutics, Inc.

  
	
   

  	
  University of Colorado, 588 SYS

  	
   

  	
   

  	
  11080 Circle Point Road, Suite 200

  
	
   

  	
  Suite 390, 4001 Discovery
  Drive

  	
   

  	
   

  	
  Westminster, Colorado 80020

  
	
   

  	
  Boulder, CO 80309-0589

  	
   

  	
   

  	
   

  
	
   

  	
  Attn: License Administrator

  	
   

  	
   

  	
  Attn: Senior Director, Corporate Development

  
	
   

  	
  Fax: +1 (303)
  735-3831

  	
   

  	
   

  	
  Fax: +1 (303)
  426-4731

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  If to CRT

  	
   

  	
  If to Salford:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Cancer Research Technology Ltd.

  	
   

  	
   

  	
  University of Salford

  
	
   

  	
  Sardinia House, Sardinia Street

  	
   

  	
   

  	
  Salford

  
	
   

  	
  London, WC2A 3NL, UK

  	
   

  	
   

  	
  Greater Manchester, UK, M5 4WT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attn: Chief Executive Officer

  	
   

  	
   

  	
  Attn: Enterprise Development Manager (Technology
  Transfer)

  
	
   

  	
  Fax: +44 207 269
  3641

  	
   

  	
   

  	
  Fax: +44 161 295
  5494

  

 

11.5        Independent Contractors. 
The relationship of the parties, as established by this Agreement, is
solely that of independent contractors. 
This Agreement does not create any partnership, joint venture, employer-employee
or similar business relationship between the parties, except as expressly set
forth herein.  No party is a legal
representative of any other party, and no party can assume or create any
obligation, representation, warranty or guarantee, express or implied, on
behalf of another party for any purpose whatsoever.

 

11.6        No Third Party Beneficiaries. 
This Agreement is neither expressly nor impliedly made for the benefit
of any party other than those executing it.

 

11.7        Non-Waiver. 
The failure of a party to insist upon strict performance of any
provision of this Agreement or to exercise any right arising out of this
Agreement shall neither impair that provision or right nor constitute a waiver
of that provision or right, in whole or in part, in that instance or in any
other instance.  Any waiver by a party of
a particular provision or 

 

21

 

right shall be in
writing, shall be as to a particular matter and, if applicable, for a
particular period of time and shall be signed by such party.

 

11.8        Force Majeure. 
Except with regard to the payment of money, a party shall not be held
liable or responsible to another party nor be deemed to have defaulted under or
breached this Agreement for failure or delay in fulfilling or performing any
term of this Agreement to the extent, and for so long as, such failure or delay
is caused by or results from causes beyond the reasonable control of the
affected party including but not limited to fires, earthquakes, floods,
embargoes, wars, acts of war (whether war is declared or not), acts of
terrorism, insurrections, riots, civil commotions, strikes, lockouts or other
labor disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority or another party.

 

11.9        Government Immunity. 
Nothing in this Agreement is intended or shall be construed as a waiver,
either express or implied, of any of the immunities, rights, benefits, defenses
or protections provided to CU under governmental or sovereign immunity laws
from time to time applicable to CU, including, without limitation, the Colorado
Governmental Immunity Act (C.R.S. §§ 24-10-101, et seq.) and the Eleventh
Amendment to the United States Constitution.

 

11.10      Severability. 
If, for any reason, any part of this Agreement is adjudicated invalid,
unenforceable or illegal by a court of competent jurisdiction, such
adjudication shall not affect or impair, in whole or in part, the validity or
enforceability of any remaining portions of this Agreement.  All remaining portions shall remain in full
force and effect as if the original Agreement had been executed without the
invalidated or unenforceable part, and such invalidated or unenforceable part
of this Agreement shall be replaced, reformed or narrowed so that the original
business purpose can be accomplished to the fullest extent permitted by
applicable law.

 

11.11      Entire Agreement; Modification. 
The terms and provisions contained in this Agreement constitute the
entire Agreement between the parties and shall supersede all previous
communications, representations, agreements or understandings, either oral or
written, between the parties hereto with respect to the subject matter hereof,
and no agreement or understanding varying or extending this Agreement will be
binding upon either party hereto, unless in writing which specifically refers
to this Agreement, signed by duly authorized officers or representatives of the
respective parties, and the provisions of this Agreement not specifically
amended thereby shall remain in full force and effect according to their terms.

 

11.12      Counterparts. 
This Agreement 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.

 

<< Signature Page Follows >>

 

22

 

IN
WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed by their
respective duly authorized officers as of the Effective Date.

 

	
  THE
  REGENTS OF THE UNIVERSITY OF 

  COLORADO

  	
   

  	
  ALLOS
  THERAPEUTICS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ David N.
  Allen

  	
   

  	
  By: 

  	
  /s/ Michael E.
  Hart

  
	
  Name: 

  	
  David N. Allen

  	
   

  	
  Name: 

  	
  Michael E. Hart

  
	
  Title: 

  	
  Assoc. VP

  	
   

  	
  Title: 

  	
  President &
  CEO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CANCER
  RESEARCH TECHNOLOGY LTD.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ KS Blundt

  	
   

  	
   

  	
   

  
	
  Name: 

  	
  KS Blundt

  	
   

  	
   

  	
   

  
	
  Title: 

  	
  COO

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  UNIVERSITY
  OF SALFORD

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ R Corner

  	
   

  	
   

  	
   

  
	
  Name: 

  	
  Mr R Corner

  	
   

  	
   

  	
   

  
	
  Title: 

  	
  Director of
  Finance

  	
   

  	
   

  	
   

  
									

 

 

LICENSE AGREEMENT

SIGNATURE PAGE

 

 

APPENDIX A

 

LICENSED
KNOW-HOW

 

[*]  

 

	
  ·

  	
  [*]

  
	
   

  	
   

  
	
  ·

  	
  [*]

  
	
   

  	
   

  
	
  ·

  	
  [*]

  
	
   

  	
   

  
	
  ·

  	
  [*]

  
	
   

  	
   

  
	
  ·

  	
  [*]

  

 

A-1

 

APPENDIX B

 

LICENSED
PATENTS

 

	
  Patent/Application number

  	
   

  	
  Country

  	
   

  	
  Title

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  

 

B-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}]]