This exhibit contains confidential materials that has been redacted. Those
portions deleted have been marked as follows: [*****].
EXHIBIT 10.1
ADDENDUM TO LICENSE AGREEMENT
DATED OCTOBER 28 1994
This agreement is an Addendum to and supplements that License Agreement
dated October 28, 1994 by and between ▇▇. ▇▇▇ ▇. ▇▇▇▇ ("▇▇▇▇") and ▇▇. ▇▇▇▇▇▇ ▇.
▇▇▇▇▇ ("▇▇▇▇▇") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇▇▇") (referred to as "The Rose
Group")
and
the Sano Corporation (referred to as "Sano").
WHEREAS, The Rose Group has filed a U.S. Patent Application Serial No.
[*****] dated [*****] and a (successor) continuation application thereon (the "
[*****] application") and that The Rose Group has been advised by the United
States Patent and Trademark Office that certain claims made in its Application
Serial No. [*****] filed [*****] have been allowed and a new patent is to be
issued, and
WHEREAS, the claims to be allowed under the [*****] application are
broadly directed to the concept of treating and reducing a drug dependency and
specifically cover the co-administration of any nicotinic [*****] and nicotinic
[*****] acting on nicotinic receptors to reduce a person's dependence on tobacco
or nicotine (the " [*****] Smoking Cessation Claims"), and
WHEREAS, The Rose Group has also filed United States Patent Application
Serial No. [*****] filed [*****] and a (successor) continuation application
thereon (the " [*****] application"), which includes claims that have not yet
been allowed
*THIS PAGE CONTAINS CONFIDENTIAL MATERIAL THAT HAS BEEN REDACTED.
by the U.S Patent and Trademark Office and which are broadly directed to the
concept of treating dependency and fluctuations in activation of receptors
mediating the dependency and specifically cover the co-administration of any
[*****] acting on nicotinic receptors and receptors other than nicotinic
receptors to reduce a persons dependence on tobacco or nicotine (the " [*****]
Smoking Cessation Claims"), and
WHEREAS, these applications are presently included in the Patent Rights
and The Rose Group and Sano have agreed to broaden the Field of the Agreement in
the License Agreement, as hereinafter defined, to encompass the broader concepts
of smoking cessation under any patents and patent applications in the Patent
Rights issued to The Rose Group or any patent application namely, (a
continuation, continuation-in-part, division, reissue, or reexamination
application) in the Patent Rights pertaining to smoking cessation with the
co-administration of an [*****] to reduce a persons dependence on tobacco or
nicotine, or any of them jointly or severally, which includes the [*****]
Smoking Cessation Claims or [*****] Smoking Cessation Claims.
Now, therefore, in consideration of the mutual promise hereinafter set
forth, and other good and valuable consideration, the parties agree as follows:
All of the terms and conditions of the License Agreement remain and are
effective except as modified by the following:
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2
1. The "Field of the Agreement" as set forth in Article 1,
paragraph (f) of the License Agreement is deleted and substituted by the
following new Field:
"Field of the Agreement" shall mean use of smoking cessation
with co-administration of an [*****]and an [*****] to reduce a
persons dependence on tobacco or nicotine (specifically, use
of the co-administration of [*****], the co-administration of
any [*****] with a [*****] acting on nicotinic receptors, or
the co-administration of any [*****] with a [*****] acting on
nicotinic or other receptors for smoking cessation to reduce a
person's dependency on tobacco or nicotine).
2. In addition to any other payments made by, or to be made by Sano to
The Rose Group under the terms and conditions of the License Agreement, Sano
agrees to pay as the following consideration to The Rose Group the following
Addendum payments:
(a) Based on representations from the Rose Group that the
United States patent and Trademark Office has agreed to allow claims
under the [*****] patent which are broadly directed to the concept of
the co-administration of any [*****] and nicotinic [*****] acting on
nicotinic receptors to reduce a person's dependence on tobacco or
nicotine, a total of [*****] as follows:
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3
(i) [*****] within ten days from execution of this
Addendum and [*****] per year thereafter on or before the
anniversary date of the execution of this Addendum until a
Licensed Product is commercially launched for sale by Sano and
remains commercially available for sale to the public; and
(ii) Upon the commercial launch for sale by Sano of a
Licensed Product and whether or not said Licensed Product
remains commercially available for sale to the public, the
greater of $50,000.00 [*****] per year or [*****] of Net Sales
of such Licensed Product
(b) Upon receipt by the Rose Group of a total of [*****]
pursuant to the provisions of Section 2 (a) (i) and (ii) above and without
reducing or otherwise affecting any and all payments due The Rose Group under
the License Agreement including but not limited to royalties which will continue
beyond the Addendum payment of this [*****] under this Addendum, Sano shall
recieve a fully paid license to the [*****] Smoking Cessation Claims
(c) Subject to the provisions of the following paragraph 2(f),
and commencing two years after execution of this Addendum, then in addition to
any other payments made by or to be made by
*THIS PAGE CONTAINS CONFIDENTIAL MATERIAL THAT HAS BEEN REDACTED.
4
Sano to the Rose Group under the terms and conditions of the License Agreement
or this Addendum, Sano will pay to The Rose Group [*****] per year on the
anniversary date of the execution of this Addendum until Sano has paid the Rose
Group a total additional Addendum payment of [*****]
(d) Subject to the provisions of the following paragraph 2(f),
at such time that the United States Patent and Trademark Office allows claims
directed to smoking cessation with the co-administration of an [*****] to reduce
a persons dependence on tobacco or nicotine pursuant to the [****] application
or any of the other applications in the Patent Rights and which allowed claims
expand upon that claim coverage now allowed by the U.S. Patent and Trademark
Office directed to this subject matter, (that is the allowed claims are directed
to smoking cessation with the co-administration of an [*****] or an [*****]
operating on one or more receptor systems other than the nicotine receptor
system, to reduce a persons dependence on nicotine or tobacco) Sano will have
thirty (30) days from the first written notification by Rose Group to either to
assume a license permanently as to the expanded coverage or thereafter remain
with the coverage provided by the now issued U.S. Patent No. [*****] and the now
allowed claims in U.S. Patent Application Serial No. [*****] dated [*****]. If
Sano elects to assume the license on the expanded coverage then, and, at such
time that the Net Sales of a Licensed Product reaches the amounts specified in
the following
*THIS PAGE CONTAINS CONFIDENTIAL MATERIAL THAT HAS BEEN REDACTED.
5
subparagraphs (i), (i), (iii) and (iv), Sano will pay the amounts specified
therein to the Rose Group as follows:
[*****] at such time the Net Sales of a Licensed
Product reach a total of [*****], except that up to
[*****] of the [*****] payments under paragraph 2(c)
shall be creditable against this first [*****]
(ii) [*****] at such time the Net Sales of a Licensed
Product reaches a total of [*****], except that up
to [*****] of the [*****] payments under paragraph
2(c) shall be creditable against this second [*****];
(iii) [*****] at such time the Net Sales of a
Licensed Product reaches a total of [*****] except
that up to [*****] of the [*****] payments under
paragraph 2(c) shall be creditable against this third
[*****];
(iv) [*****] at such time the Net Sales of a Licensed
Product reaches a total of [*****], except that up to
[*****] of the [*****] payments under paragraph 2(c)
shall be creditable against this fourth [*****];
*THIS PAGE CONTAINS CONFIDENTIAL MATERIAL THAT HAS BEEN REDACTED.
6
[*****]
(e) Sano may terminate the broader license under the [*****]
Smoking Cessation Claims at any time after the year [*****] and after the annual
installment payment is made in and for the year [*****] without otherwise
affecting its rights under the [*****] Smoking Cessation Claims and without
otherwise affecting its rights under the License Agreement.
(f) If the Rose Group is unable to obtain allowed claims which
expand upon the now allowed claim coverage within [*****] from the execution of
this Addendum then the payments to be made to The Rose Group under paragraphs
2(c) and 2(d) hereof after the [*****] year will cease, except that if the Rose
Group should be able to obtain allowed claims which expand upon the now allowed
claim coverage then commencing from the allowance of such expanded claims, Sano
will again resume the payments to The Rose Group under paragraphs 2(c) and 2(d)
hereof.
(g) Upon receipt by The Rose Group of the full additional
Addendum payment of [*****] pursuant to the provisions of Sections 2(c) and 2(d)
above and without otherwise affecting all payments due The Rose Group under the
License Agreement (including but not limited to royalties), which will continue
beyond the payment of this [*****], Sano shall receive a fully paid license to
the broader [*****] Smoking Cessation Claim-.
(h) Net Sales of all Licensed Product will at all times
*THIS PAGE CONTAINS CONFIDENTIAL MATERIAL THAT HAS BEEN REDACTED.
7
be based on the Field of the Agreement as defined in this Addendum.
3. All payments to be made to The Rose Group pursuant to this
Addendum shall be made 1/3 (one third) to ROSE, 1/3 (one third) to ▇▇▇▇▇ and
1/3 (one third) to ▇▇▇▇▇▇.
This Addendum being executed this ____ day of _____________ 1996 by
and between:
ACCEPTED: ACCEPTED:
▇▇. ▇▇▇ ▇. ▇▇▇▇, SANO CORPORATION
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ "Sano"
AND ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
"The ▇▇▇▇ Group"
/s/ ▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------- --------------------
▇▇▇ ▇. ▇▇▇▇
Dated: 4/18, 1996 Dated: 5/15, 1996
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Dated: 4/18, 1996
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Dated: April 17, 1996
8