EXHIBIT 99.2
AMENDMENT TO LICENSE AGREEMENT
* Represents language that is redacted and subject to confidential
treatment
This Amendment ("Amendment") to License Agreement is made and entered
into as of the date of the last signature on the signature page below (the
"Effective Date of Amendment"), by and between GENTA INCORPORATED, a Delaware
corporation (the "Licensee"), and THE TRUSTEES OF UNIVERSITY OF PENNSYLVANIA, a
Pennsylvania nonprofit corporation (the "University"), with reference to the
following background:
BACKGROUND
WHEREAS, the Licensee and the University are parties to a License
Agreement, dated August 1, 1991 (the "License Agreement"; capitalized terms used
herein and not otherwise defined shall have the meanings ascribed to them in the
License Agreement); and
WHEREAS, the Licensee and the University have determined that it is
desirable to amend and restate certain provisions of the License Agreement as
set forth herein, and incorporate additional provisions to the License Agreement
as set forth herein, to reflect further agreements between them.
NOW, THEREFORE, the parties hereto, intending to be legally bound, and
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, hereby agree as follows:
1. Amendment and Restatement of Certain Provisions of License Agreement.
(a) The definitions of Licensed Patents and Net Sales Price of Section
1.1 of the License Agreement are hereby amended and restated in its
entirety to read as follows:
"Net Sale Price" means the gross amount invoiced for Sales of Licensed
Product by Licensee or its sublicensee to a third party, less qualifying
costs directly attributable to such sale and borne by Licensee or its
sublicensee. Such qualifying costs shall be limited to the following:
1. Discounts, in amounts customary in the trade, for quantity
purchases, prompt payments and for wholesalers and distributors
actually identified on the invoice.
2. Credits or refunds, not exceeding the original invoice amount, for
claims or returns.
3. Prepaid outbound transportation expenses and transportation
insurance premiums actually identified on the invoice.
4. Sales and use taxes and other fees imposed by a governmental agency
actually identified on the invoice.
If the Licensed Product is sold for consideration other than solely cash,
the fair market value of such other consideration shall be included in the
Net Sales Price.
"Licensed Patents" means (i) United States Patent Application Serial Number
07/288,692 filed 22 December 1988 entitled "Anti-Sense Oligonucleotides for
Inhibiting the Growth of Lymphoma and Leukemia Cells"; (ii) all patent
applications filed for University Inventions or Joint Inventions (as
defined in the Research Agreement) for which Licensee has exercised its
option to license and has licensed from the University pursuant to Section
5.4 of the Research Agreement; (iii) all patents issuing upon the foregoing
applications in (i) and (ii); (iv) all continuations,
continuations-in-part, additions, divisions, renewals, extensions,
reexaminations, and reissues of any of the foregoing in (i) and (ii)
claiming inventions in the Field; and (v) all United States and foreign
counterparts of any of the foregoing.
(b) Section 3.2 of the License Agreement is hereby amended and
restated in its entirety to read as follows:
3.2 In further consideration of the rights and licenses
granted hereunder, Licensee shall pay to the University
a royalty of * on the Net Sales Price of all Licensed
Products.
(c) Section 3.3(a) is hereby amended and restated in its entirety to
read as follows:
(a) * of all license fees, advances (other than research
funding) and other payments received by Licensee in
consideration for any sublicense granted by Licensee to
Licensed Products. Any non-cash consideration received
by Licensee shall be valued at its fair market value as
of the date of receipt. Licensee shall not owe
royalties to the University on the amount of any
sponsored research funding or milestone payments
resulting from the progress of research and development
received from the sublicensee.
(d) Section 3.7 of the license Agreement is hereby amended and restated in
its entirety to read as follows:
2
3.7 Reports. Licensee shall deliver to the University
within sixty (60) days after the end of each Calendar
Quarter a report, certified by the chief financial officer
of Licensee, setting forth in reasonable detail the
calculation of the royalties payable to the University for
such Calendar Quarter, including without limitation, the
Licensed Products sold by Licensee and any sublicensee in
each country during such Calendar Quarter, the Net Sales
Price thereof, all relevant compensation received from
sublicensees, and the amount of Minimum Royalties available
for credit for the corresponding Calendar Quarter. Licensee
can reconcile unrecovered but documented qualifying costs of
the Net Sales Price from the previous Calendar Quarter in
the subsequent Calendar Quarter.
(e) Section 3.10 of the License Agreement is hereby amended and
restated in its entirety to read as follows:
3.10 Duration of Royalty Obligations. Licensee's
royalty obligations for Licensed Product shall terminate on
the later twelve (12) years from (i) the date of first
commercial sale of a Licensed Product, or (ii) the date of
expiration of the last to expire Licensed Patent with a
Valid Claim covering the Licensed Product.
(f) Section 3.12 (Royalty Reduction) of the License Agreement is
hereby deleted.
2. Additional Consideration. In addition to the consideration granted under
the License Agreement, and as further consideration for the terms and conditions
set forth in this Amendment, the Licensee shall issue to the University one
hundred sixty-two thousand three hundred thirty-eight (162,338) shares of the
licensee's common stock ("Common Stock") representing an aggregate fair market
value equal to one million three hundred and seventy-five thousand United States
dollars ($1,375,000) at $8.47 per share.
3. Additional Fee. Upon the Licensee's receipt of a notice of intent to
approve a Licensed Product issued by the Food and Drug Administration of the
United States (the "Notice"), the Licensee shall issue to the University, as a
one-time nonrefundable fee, such number of shares of Common Stock representing
an aggregate fair market value equal to one million three hundred and
seventy-five thousand United States dollars ($1,375,000). The fair market value
of the shares of Common Stock to be issued in accordance with this Section 3
shall be determined by valuing each share of Common Stock at the average closing
price of the Common Stock as quoted on the Nasdaq National Market for the five
(5) consecutive Trading Days immediately preceding the date of receipt of the
Notice. For purposes hereof, "closing price" shall mean, for each trading day,
the reported per share closing price of the Common Stock on the Nasdaq National
3
Market during such Trading Day. "Trading Day" shall mean a day on which the
Nasdaq National Market is open for the transaction of business.
4. Lock-up. The University hereby agrees that from the Effective Date of
Amendment until May 30, 2001 (the "Lock-up Period"), it shall not offer, pledge,
sell, contract to sell, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock issued to the University pursuant to the
terms of this Amendment, without the prior written consent of the Licensee. The
University hereby authorizes the Licensee to cause the transfer agent to decline
to transfer and/or to note stop transfer restrictions on the transfer books and
records of the Licensee with respect to the shares of Common Stock subject to
the Lock-up Period hereunder.
5. Continuing Effect. Except as specifically modified by this Amendment,
all of the provisions of the License Agreement are hereby ratified and confirmed
to be in full force and effect, and shall remain in full force and effect.
6. Entire Agreement; Successors and Assigns. The License Agreement and this
Amendment constitute the entire agreement between the parties hereto with
respect to subject matter hereof and thereof. Said documents supersede all other
agreements and understandings between the parties with respect to the subject
matter hereof and thereof, whether written or oral. This Amendment shall be
binding upon and shall inure to the benefit of the parties and their respective
heirs, administrators, executors, affiliates, successors and permitted assigns.
7. Headings. The section headings contained in this Amendment are for
reference purposes only and shall not affect in any way the meaning or
interpretation of the Amendment.
8. Counterparts. This License Amendment may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become a binding agreement when one or more counterparts have been signed
by each party and delivered to the other party.
9. Miscellaneous. This Amendment shall be governed by the laws of the State
of Delaware, without regard to its principles of conflicts of laws. This
Amendment supercedes all prior understandings and agreements, whether written or
oral, among the parties hereto relating to the essence of this Amendment. This
Amendment may be amended only by a written instrument executed by each of the
parties.
[Signatures appear on following page]
4
IN WITNESS WHEREOF, each of the parties has caused this Amendment to be
executed as of the date hereof by a duly authorized corporate officer.
GENTA INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
-------------------------------------------
Title: President and Chief Executive Officer
------------------------------------------
Date: December 26, 2000
-------------------------------------------
THE TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
-------------------------------------------
Title: Managing Director, Center for Technology
Transfer
Date: December 19, 2000
-------------------------------------------
5
