AMENDMENT NO. 1 TO DEVELOPMENT AND MANUFACTURING AGREEMENT
Exhibit 10.1
AMENDMENT NO. 1 TO DEVELOPMENT AND MANUFACTURING AGREEMENT
This Amendment No. 1 to Development and Manufacturing Agreement (this “Amendment”) is dated
June 16, 2009 (the “Amendment Date”), by and between Cornerstone BioPharma, Inc. a Nevada
corporation with its principal offices located at 0000 Xxxxxxxx Xxxxx Xxxxx, Xxxxx 000, Xxxx, XX
00000 (“Company”), NEOS Therapeutics, L.P., a Texas limited partnership (“Manufacturer”) with its
principal offices located at 0000 X. Xxx. 000, Xxxxx 000, Xxxxx Xxxxxxx, XX 00000 and Coating
Place, Inc., a Wisconsin corporation (“Supplier”) with its principal offices located at 000 Xxxxx
Xxxxxx, X.X. Xxx 000000, Xxxxxx, XX, 00000. Manufacturer, Supplier and Company sometimes are
referred to herein individually as a “Party” and collectively as the “Parties.”
The effective date of this Amendment (the “Effective Date”) shall be [***].
WHEREAS, the Parties previously entered into that certain Development and Manufacturing
Agreement dated as of February 27, 2008 (the “Development Agreement”), as supplemented by an
Addendum dated as of June 19, 2008 (the “Addendum”, together with the Development Agreement, are
referred herein to as the “Agreement”); and
WHEREAS, the Parties desire to amend certain terms of the Agreement by way of this Amendment.
NOW, THEREFORE, in consideration of the promises made herein and other good and valuable
consideration, the receipt and sufficiency of all of which are hereby acknowledged, the Parties,
intending to be legally bound, agree as follows:
1. All capitalized terms used in this Amendment and not otherwise defined herein shall have
the meanings given to them in the Agreement.
2. The following Definitions are hereby added to Section 1 of the Agreement:
“Billable Rate” means the rate at which work is billed and is less than or
equal to [***] per hour unless mutually agreed upon in writing by the
Parties in advance of work performed.
“Gross Revenues” means the gross amounts invoiced by Company and its
affiliates and/or sublicensees on sales of the Product. Transfers of
Product among Company and its affiliates and/or sublicensees for the purpose
of subsequent resale to third parties will not generate gross revenues with
respect to such transfers but the gross amounts invoiced in connection with
the subsequent resale of the Product to third parties will be included in
the calculation of Gross Revenues.
“Net Sales” means the Company’s Gross Revenues less customary reductions,
including but not limited to the following: discounts, launch
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or stocking discounts, returns, rebates, chargebacks, transportation and
insurance expenses, and tariffs, duties, excises and sales taxes imposed
upon and paid directly with respect to such sales, all calculated in
accordance with GAAP.
3. The Definition in Section 1 for “Manufacturer Adjusted COGs” is hereby deleted in its
entirety and replaced with the following:
“Manufacturer Adjusted COGs” means [***]. Manufacturer may increase
Manufacturer Adjusted COGs up to [***] with at least [***] days written
notice to Company and Supplier prior to the increase. If, for any reason,
the Manufacturer desires to take an increase on Manufacturer Adjusted COGs
by an amount greater than [***], Manufacturer shall provide written notice
to Company and Supplier with appropriate justification for same, and Company
and Supplier must agree in writing to the increase. If the requested
increase is approved by Company and Supplier, such increase will not take
effect until [***] days after the date Manufacturer’s written notice to
Company and Supplier was delivered.
4. The Definition in Section 1 for “Net Profits” is hereby deleted in its entirety and
replaced with the following:
“Net Profits” means [***], all calculated in accordance with GAAP.
5. The Definition in Section 1 for “Supplier Adjusted COGs” is hereby deleted in its entirety
and replaced with the following:
“Supplier Adjusted COGs” means [***]. Supplier and Company further agree
that in no event will Supplier Adjusted COGS be greater than Supplier’s true
cost of manufacture of the Drug Resin Complex plus Supplier’s standard
xxxx-up which shall be evidenced to Company via documentation for comparable
Drug Resin Complexes, but in no event shall exceed [***] of Supplier’s true
cost of manufacture. If for any reason the Supplier desires to take an
increase Supplier Adjusted COGs by an amount greater than [***], Supplier
shall provide written notice to Company and Manufacturer with appropriate
justification for same, and Company and Manufacturer must agree in writing
to the increase. If the requested increase is approved by Company and
Manufacturer, such increase will not take effect until [***] days after the
date Supplier’s written notice to Company and Manufacturer was delivered.
6. The Definition in Section 1 for “Territory” is hereby deleted in its entirety and replaced
with the following:
“Territory” means the United States of America, including each of the states
and commonwealths, the District of Columbia and the
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Commonwealth of Puerto Rico. Company has the right to expand the Territory
at any time to any country worldwide. For purposes of the Agreement, the
Development Work and Product Development Plan are specific to the Territory
described in the first sentence of this definition.
7. Section 3.2 of the Agreement is hereby deleted in its entirety and replaced with the
following:
“Product Development Plan. The Parties agree to jointly develop a plan of
action and milestones to perform the Development Work (“the Product
Development Plan”), which will be negotiated in good faith, duly executed by
the Parties, and attached hereto as Exhibit A to this Agreement. All
development activities shall be performed and well documented by
Manufacturer in compliance with all applicable Laws. Manufacturer and
Supplier shall use commercially reasonable efforts to complete the
development of the Product in a timely fashion consistent with the Product
Development Plan, and keep Company informed of the progress and status of
the development activities. Upon successful completion of the Development
Work, the Parties’ mutually agreed specifications for the Product (the
“Specifications”) will be attached hereto as Exhibit B. Except as set forth
in Section 3.4, hourly resource requirements and fees for the development
activities for the Product shall be as provided in the Product Development
Plan. Manufacturer shall invoice Company for each of its completed steps of
the Product Development Plan monthly and at a Billable Rate. Invoices shall
contain details regarding the steps completed and the amount being charged
for such completed work. Attached to the invoice shall be a copy of the
Product Development Plan with updated timelines based off the billed
Development Work. Payments of invoices shall be in accordance with Section
7.5(a).”
8. The following sentence is hereby added to Section 6.4 of the Agreement following the last
sentence:
“For purposes of clarity, the parties acknowledge and agree that the [***].”
9. Section 7.2 of the Agreement is hereby deleted in its entirety and replaced with the
following:
“Cost Determination. [***], all calculated in accordance with GAAP.”
10. Section 7.5(a) of the Agreement is hereby deleted in its entirety and replaced with the
following:
“Supplier and Manufacturer will render invoices directly to Company for
Supplier Adjusted COGs and Manufacturer Adjusted COGs, respectively,
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in connection with their shipments of Drug Resin Complex and Product,
respectively, hereunder. Invoices shall be due and payable by Company
within [***] days after receipt of invoice for first commercial batch and
[***] days after receipt of invoice for all subsequent batches.”
11. Section 7.5(b) of the Agreement is hereby deleted in its entirety and replaced with the
following:
“After Product is launched, a third of Net Profits shall be paid by Company
to Supplier and a third of the Net Profits shall be paid by Company to
Manufacturer, which payments shall be accompanied by a report detailing the
calculation of such Net Profits and paid within [***] days of the end of the
calendar quarter in which the first sale of the Product occurs and [***]
days after the end of each calendar quarter thereafter.”
12. A new Section 7.6 shall be added to the Agreement to read in its entirety as follows:
7.6 [***].
13. The following new language is added to Section 9.7 of the Agreement following the last
sentence:
“Any additional patent applications that are divisional or continuations of
the Manufacturer’s patent applications that have valid claims relating to
the Product or any additional patent applications that are filed by the
Manufacturer that have claims that have valid claims covering the Product
will also be included under this Agreement.”
14. The following new language is added to Section 9.9 of the Agreement following the last
sentence:
“Any additional patent applications that are divisional or continuations of
the Supplier’s patent applications that have valid claims relating to the
Product or any additional patent applications that are filed by the Supplier
that have valid claims covering the Product will also be included under this
Agreement.”
15. The first sentence of Section 11.3 of the Agreement is hereby deleted in its entirety and
replaced with the following:
“This Agreement may be terminated immediately by written notice of any Party
to the other Parties hereto if the Product is not commercially launched
within the Territory by the seventh anniversary of this Agreement.”
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16. The following new language shall replace the Company’s mailing information for “If to
Company, to:” in Section 14 of the Agreement:
Cornerstone BioPharma, Inc.
0000 Xxxxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxx, XX 00000
Attention: President
With a copy to General Counsel
0000 Xxxxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxx, XX 00000
Attention: President
With a copy to General Counsel
17. Manufacturer and Company hereby agree to amend that certain Amended and Restated Products
Development Agreement dated as of August 27, 2008, between Company and Manufacturer (the “Products
Development Agreement”) to provide that, notwithstanding anything to the contrary in the Products
Development Agreement, Company may, via written notice to Manufacturer elect to have any three of
the four products covered by the Products Development Agreement manufactured by a third party and
not by Manufacturer; provided that Manufacturer’s technology is not used or incorporated in the
development or manufacturing of such product.
18. Except as specifically amended herein, all other terms and conditions of the Agreement and
the Products Development Agreement remain in full force and effect.
19. This Amendment shall be governed by the laws of the State of New York without reference to
any rules of conflict of laws. Any dispute arising in relation to this Amendment shall be resolved
in the same manner as a dispute under the Agreement.
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SIGNATURE PAGE TO AMENDMENT NO. 1
In WITNESS of the agreement to the terms and conditions contained herein, the Parties have
caused the following signatures to be affixed hereto to become effective as of the Effective Date:
CORNERSTONE BIOPHARMA, INC. (COMPANY) | ||||||
BY:
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/s/ Xxxxx X. Xxxxxxx
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|||||
PRINT NAME: | Xxxxx X. Xxxxxxx | |||||
TITLE:
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President and Chief Executive Officer | |||||
DATE:
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June 16, 2009 | |||||
NEOS THERAPEUTICS, L.P. (MANUFACTURER) | ||||||
BY:
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/s/ Xxxx Xxxxxxx
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|||||
PRINT NAME: | Xxxx Xxxxxxx | |||||
TITLE:
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President | |||||
DATE:
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June 16, 0000 | |||||
XXXXXXX XXXXX, INC. (SUPPLIER) | ||||||
BY:
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/s/ Xxx X. Xxxxxxx
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|||||
PRINT NAME: | Xxx X. Xxxxxxx | |||||
TITLE:
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President | |||||
DATE:
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June 16, 2009 |
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