▇▇▇▇▇▇▇ ▇▇▇▇, Ph.D.
Neose Pharmaceuticals, Inc.
January 18, 1995
Page 1
▇▇▇▇▇▇ Laboratories
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
January 18, 1995
▇▇▇▇▇▇▇ ▇▇▇▇, Ph.D.
Chairman and CEO
Neose Pharmaceuticals, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear ▇▇. ▇▇▇▇:
Once signed by you, this letter shall constitute an amendment (the "Amendment")
to the Research and License Agreement between Neose Pharmaceuticals, Inc.
("Neose") and ▇▇▇▇▇▇ Laboratories ("▇▇▇▇▇▇"), dated December 30, 1992
(the "R & L Agreement) and, to the extent applicable, to the Supply Agreement,
which is Exhibit B to the R & L Agreement (collectively, the "Agreements").
The provisions of this Amendment are hereby made a part of the Agreements; any
conflict between the provisions of this Amendment and the Agreements shall be
resolved in favor of this provisions of this Amendment. All capitalized terms
used in this Amendment and not defined herein shall have the same meanings as
given to them in the Agreements. Any disputes regarding the Agreements or this
Amendment shall be resolved in accordance with Article XII of the Supply
Agreement, as if such Article were set forth herein in its entirety.
The Agreements shall be modified as follows:
1. Mutual Waiver of Possible Breaches. ▇▇▇▇▇▇ and Neose each hereby waive the
right to declare any possible breaches that may have occurred prior to the
date of this Amendment in accordance with the provisions of the R & L
Agreement. Neose hereby waives payment associated with Milestone ▇▇. ▇ ▇▇
▇▇▇ ▇ & ▇ ▇▇▇▇▇▇▇▇▇.
▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇ and No. 5. ▇▇▇▇▇▇ hereby releases Neose from its
obligations to meet Milestones No. 4 and No. 5 as set forth in Section 4.1
and Exhibit A of the R & L Agreement. Such release shall not be construed
as a breach as set forth in Section 10.4 of the R & L Agreement. Neose
hereby waives any right to declare any breach by ▇▇▇▇▇▇ regarding Milestone
No. 4 and Milestone No. 5. Neose will not be entitled to and ▇▇▇▇▇▇ will
not be obligated to pay any Milestone payments for Milestone No. 4 or
Milestone No. 5.
1
▇▇▇▇▇▇▇ ▇▇▇▇, Ph.D.
Neose Pharmaceuticals, Inc.
January 18, 1995
Page 2
3. Grant of License
(a) Upon execution of this Amendment and continuing so long as payment of
the amounts specified in Section 4(b) of this Amendment in accordance
with their terms is made on a timely basis, ▇▇▇▇▇▇ shall have a
temporary license for manufacturing rights under Licensed Patents, and
shall take all responsibility from Neose for the manufacture of human
milk oligosaccharides and/or carbohydrates for ▇▇▇▇▇▇'▇ use in Human
Nutritional Products under Licensed Patents. ▇▇▇▇▇▇ shall manufacture
such human milk oligosaccharides and/or carbohydrates under its
existing Exclusive License granted under Article 8 of the R & L
Agreement. ▇▇▇▇▇▇'▇ right to make and have made human milk
oligosaccharides and/or carbohydrates under its Exclusive License
shall not be contingent on Sections 3.2(a)-(e) of the Supply
Agreement.
(b) Upon payment of the consideration set forth in Section 4(c) of this
Amendment, the Exclusive License granted ▇▇▇▇▇▇ described in (a) above
shall become irrevocable.
4. Consideration. In consideration for the license of manufacturing rights
set forth in Section 3 above, ▇▇▇▇▇▇:
(a) commencing upon execution of this Amendment, shall pay Neose in five
installments of five hundred thousand dollars ($500,000.00) each, such
payments due and payable on January 1, 1995, July 1, 1995, January 1,
1996, July 1, 1996 and January 1, 1997, such payments totaling two
million five hundred thousand dollars ($2,500,000.00). All such
payments shall be credited against the future fee payments set forth
in Section 2.10 and Schedule B of the Supply Agreement. Such credits
shall be applied in four equal amounts, one such credit occurring in
each of the first four years of commercial sales; and
(b) within sixty (60) days of the first commercial sale of a Licensed
Product, shall pay Neose five million dollars ($5,000,000.00), one
million two hundred fifty thousand dollars ($1,250,000.00) of which
shall be credited against future payments set forth in Section 2.10
and Schedule B of the Supply Agreement. Such credits shall be applied
in four equal amounts, one credit occurring in each of the first four
years of commercial sales.
2
▇▇▇▇▇▇▇ ▇▇▇▇, Ph.D.
Neose Pharmaceuticals, Inc.
January 18, 1995
Page 3
5. Fee Negotiation In the event that Neose is able to demonstrate to ▇▇▇▇▇▇,
and ▇▇▇▇▇▇, at its reasonable discretion accepts, material improvements or
cost efficiencies in the proposed methods or processes of manufacture of
human milk oligosaccharides or carbohydrates subject to the Agreements, or
is able to identify a compound or compounds with materially improved
prospects of commercial feasibility compared to the compounds currently
being considered for manufacture by ▇▇▇▇▇▇, then Neose and ▇▇▇▇▇▇ agree to
negotiate in good faith a revision of Schedule B of the Supply Agreement to
reflect an appropriate sharing of the benefits of such improvement,
efficiencies, or compounds.
6. ▇▇▇▇▇▇ Effort ▇▇▇▇▇▇ will expend at least [REDACTED]* dollars ([REDACTED]*)
for internal and external research and development work including scale-up
of manufacturing as well as safety, efficacy and clinical studies over the
period commencing with the execution of this Amendment and ending
[REDACTED*]. This expenditure will replace any other such expenditure under
the Agreements.
7. Scientific Steering Committee and Conferences The Scientific Steering
Committee as defined in the R & L Agreement shall be disbanded. A new
Committee made up of the appropriate Neose and ▇▇▇▇▇▇ employees will be
formed. Members of this Committee will be identified and a definition of a
scope of responsibility for the Committee will be decided at the earliest
date convenient to both Neose and ▇▇▇▇▇▇, but not later than sixty (60)
days following execution of this Amendment.
8. Nonexclusive Right
(a) Prior to commencement of the Supply Agreement, ▇▇▇▇▇▇ may at any time
upon sixty (60) days prior written notice to Neose elect to convert
its Exclusive License to a worldwide, nonexclusive license, with the
right to sublicense, to make, have made, use and sell human milk
oligosaccharides or carbohydrates for use in Human Nutritional
Products under Licensed Patents ("Nonexclusive License"). All payments
made by ▇▇▇▇▇▇ to Neose prior to such election shall be
nonreimbursable, but creditable as set forth in Section 4. Fees due
Neose as set
--------
*[REDACTED] indicates material that has been omitted and for which
confidential treatment has been granted by the Securities and Exchange
Commission (the "Commission"). All such omitted material has been filed
separately with the Commission pursuant to Rule 406.
3
▇▇▇▇▇▇▇ ▇▇▇▇, Ph.D.
Neose Pharmaceuticals, Inc.
January 18, 1995
Page 4
forth in Section 2.10 and Schedule B will be reduced by one-half under
the Nonexclusive License.
(b) ▇▇▇▇▇▇'▇ Exclusive License (i) shall become a Nonexclusive License in
any country in which it fails to make a commercial sale or file a
regulatory submission, if such governmental approval is required prior
to a commercial sale, of a Licensed Product within eighteen (18)
months of the first commercial sale of such Licensed Product in the
United States if Neose gives ▇▇▇▇▇▇ written notice sixty (60) days of
such failure and ▇▇▇▇▇▇ does not cure the failure within thirty (30)
days of notice; or (ii) shall become a Nonexclusive License in any
country in which it discontinues sales of all Licensed Products, such
nonexclusivity becoming effective twelve (12) months after ▇▇▇▇▇▇
discontinues sales of such Licensed Products. Fees due Neose as set
forth in Section 2.10 and Schedule B for such countries will be
reduced by one-half under the Nonexclusive License.
(c) Neose may, at its option, convert ▇▇▇▇▇▇'▇ Exclusive License to a
Nonexclusive License if ▇▇▇▇▇▇ has failed to file an appropriate
regulatory document with the FDA, such document seeking approval to
market a Human Nutritional Product containing a human milk
oligosaccharide or carbohydrate, by December 1, 1997 and Neose gives
▇▇▇▇▇▇ written notice within sixty (60) days of such failure and
▇▇▇▇▇▇ doesn't cure the failure within thirty (30) days of notice. In
such an event, fees due Neose as set forth in Section 2.10 and
Schedule B will be reduced by one-half under the Nonexclusive License.
(d) If ▇▇▇▇▇▇'▇ Exclusive License is converted to a Nonexclusive License
pursuant to Section 8(a) or 8(c) of the Amendment, then
notwithstanding any other provision of the Agreements, after the
notice and/or cure period ends, ▇▇▇▇▇▇ will have no further payment
obligation under Section 4 of the Amendment. Similarly, if ▇▇▇▇▇▇'▇
Exclusive License is converted to a Nonexclusive License pursuant to
Section 8(a) or 8(c) of the Amendment, then notwithstanding any other
provision of the Agreements, after the notice and/or cure period ends,
Neose will have no further obligation to provide ▇▇▇▇▇▇ with access to
technology, compounds or know-how discovered or developed after the
effective date of the Nonexclusive License.
9. Supply Agreement Commencement. In accordance with its terms, the Supply
Agreement as amended by this Amendment, shall begin upon the commencement
date of the first
4
▇▇▇▇▇▇▇ ▇▇▇▇, Ph.D.
Neose Pharmaceuticals, Inc.
January 18, 1995
Page 5
Contract Year. The definition of Contract Year at Section 1.5 shall be
modified so that the first Contract Year commences on the date of the first
commercial sale of a Licensed Product to a third party as evidenced by the
date on the invoice to such third party. Neose's and ▇▇▇▇▇▇'▇ performance
under the Supply Agreement shall be governed in accordance with the
parties' rights and obligations arising as if ▇▇▇▇▇▇ had acquired its
manufacturing rights in accordance with Section 3.2(f) of the Supply
Agreement, except as such rights and obligations have been specifically
modified in this Amendment.
10. Termination
(a) ▇▇▇▇▇▇ shall have the right to terminate the Agreements at any time
and for any reason by providing Neose with sixty (60) days written
notice of its intention to terminate. Upon the effective date of
termination, all rights to the Licensed Patents under the Agreements
except any ▇▇▇▇▇▇ interest in Joint Intellectual Property shall revert
to Neose. Such right to terminate is in addition to and not in place
of ▇▇▇▇▇▇'▇ right to terminate the Agreements or the Exclusive License
as set forth in the Agreements. Any payments under Section 4 of this
Amendment that fall due during the notification period shall be paid
according to the terms and conditions of Section 4 of this Amendment.
Upon termination, pursuant to this Section 10(a), ▇▇▇▇▇▇ shall have no
further payment obligations to Neose.
(b) Neose shall have the right to terminate the R & L Agreement and this
Amendment if ▇▇▇▇▇▇ fails to make the payments set forth in Section 4
of this Amendment, or fails to commercialize a Licensed Product by
[REDACTED]*; upon such termination, all rights to the Licensed Patents
except any ▇▇▇▇▇▇ interest in Joint Intellectual Property shall revert
to Neose. Any such termination by Neose shall be done in accordance
with the notice and cure provision of Section 10.4 of the R & L
Agreement.
11. Liability The terms of this Amendment are neither to be construed as an
assumption by ▇▇▇▇▇▇ of Neose's obligations under the R & L Agreement nor
to accelerate the time frame of any obligations of ▇▇▇▇▇▇ under the R & L
Agreement or the Supply
--------
*[REDACTED] indicates material that has been omitted and for which
confidential treatment has been granted by the Commission. All such omitted
material has been filed separately with the Commission pursuant to Rule 406.
5
▇▇▇▇▇▇▇ ▇▇▇▇, Ph.D.
Neose Pharmaceuticals, Inc.
January 18, 1995
Page 6
Agreement. Further, ▇▇▇▇▇▇ will not incur any liability nor be subject to
any remedy for failure to successfully manufacture or otherwise use in a
Licensed Product any human milk oligosaccharide or carbohydrate, except to
the extent specifically addressed in the R & L Agreement, the Supply
Agreement, or this Amendment.
12. Existing Agreements' Terms All other terms and conditions of the Agreements
shall be effective to the extent they are not inconsistent with this
Amendment as set forth in the introductory paragraph of this Amendment.
6
▇▇▇▇▇▇▇ ▇▇▇▇, Ph.D.
Neose Pharmaceuticals, Inc.
January 18, 1995
Page 7
If you are in agreement with this letter, please sign one copy and return to
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Ph.D., Director, Licensing, ▇▇▇▇ Products Division.
Sincerely,
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
▇▇▇▇ Products Division
Agreed to and accepted this 20th day
of January, 1995.
Neose Pharmaceuticals, Inc.
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇▇▇▇, Ph.D.
Chairman and CEO
7
