Exhibit 10
FIRST AMENDMENT TO PROMOTION AGREEMENT
BETWEEN MGI PHARMA, INC.
AND SCHEIN PHARMACEUTICAL, INC.
This Amendment ("Amendment") is made March 24, 1998 by and between MGI
PHARMA, INC., a Minnesota corporation, ("MGI") and SCHEIN PHARMACEUTICAL,
INC. ("Schein").
In consideration of the continuing performance by MGI and Schein of
their respective promises and obligations under the Promotion Agreement dated
March 11, 1997 (the "Agreement") and for other good and valuable consideration,
the receipt and sufficiency of which is acknowledged, MGI and Schein agree as
follows:
1. Section 7.7 of the Agreement is hereby amended in its entirety to
read:
7.7 Costs of Co-Promotion.
(a) Except as otherwise expressly set forth in this Agreement,
the parties shall each bear the costs and expenses of their respective
sales forces (including salaries, commissions and the like) and their
own internal marketing costs.
(b) For the period beginning on the Co-Promotion Date and
continuing until the earlier of December 31, 1998 or the date on which
the Profits paid to MGI for sales of Products during four (4)
consecutive quarters exceed *** except as otherwise expressly set
forth in this Agreement, (i) Schein shall pay all of Schein's out-of-
pocket expenses incurred in co-promoting the Product, excluding the
expenses set forth in Section 7.7(a), and (ii) Schein shall reimburse
MGI fifty percent (50%) of MGI's out-of-pocket expenses incurred in co-
promoting the Product, excluding the expenses set forth in Section
7.7(a).
(c) Beginning on the earlier of January 1, 1999 or the date on
which the Profits paid to MGI for sales of Products during four (4)
consecutive quarters exceed *** except as otherwise expressly set
forth in this Agreement, Schein and MGI shall share equally all out-of-
pocket expenses incurred in co-promoting the Product, excluding the
expenses set forth in Section 7.7(a).
*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.
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(d) Upon request, MGI and Schein shall provide each other with
invoices and other written documentation in order to document their
respective out-of-pocket expenses.
(e) MGI will implement a bonus system for the Product for
MGI's sales force that is proportional to MGI's total bonus system for
its sales force, based on a ratio, the numerator of which is *** and
the denominator of which is MGI's total details for such calendar year.
2. Sections 9.1(a) and (b) of the Agreement are hereby amended in their
entirety to read:
(a) The parties agree that the quarterly baseline for Net
Oncology Sales of the Product in the Field and in the Territory (the
"Baseline") shall be *** The Baseline shall be used during the term of
this Agreement as a factor in the formula used to determine Profits
pursuant to this Section 9.1.
(b) The intent of the parties is to share the Profits from all
sales of Product to the Field, according to the percentages set forth
in Section 9.2. *** Within thirty (30) days after completion of
Schein's market research, or not later than April 30, 1998, the parties
shall review the research and, if such research supports an increase in
the multiplier, the parties shall amend this Agreement in writing as
appropriate to implement the increased multiplier, and any such
increased multiplier shall be retroactive to the Effective Date. In the
event that either party determines that the definition of Net Oncology
Sales or the provisions of Section 9.1 are operating in a materially
unfair manner to such party according to the intent of this Agreement,
the parties agree to attempt to resolve such unfairness according to
the provisions of Section 4.4.
3. Section 9.2 of the Agreement is hereby amended in its entirety to
read:
*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.
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9.2 Promotion Fee. For sales of the Product made during the
first six (6) quarters following the Co-Promotion Date, MGI shall
receive the greater of (i) one hundred twenty five thousand dollars
($125,000) per quarter, for a total of five hundred thousand dollars
($500,000) per year or (ii) *** of the Profits from such sales. For
sales of the Product made during any renewal terms or extensions of
this Agreement, MGI shall receive *** of Profits up to the level of the
Incremental Sales Volume achieved during the four (4) quarters ending
December 31, 1999, plus *** of the Profits above such level of
Incremental Sales Volume. In addition, subject to Section 12.4(b), upon
any termination or expiration of this Agreement, MGI shall be entitled
to receive for sales of Product made during the first twelve (12)
months following such termination or expiration, a payment equal to ***
of Profits that would have been payable to MGI hereunder had the
Agreement not expired or been terminated, provided however that such
payment shall not exceed an amount greater than *** times the total
payments received by MGI from Schein in the twelve (12) month period
immediately preceding the termination or expiration of this Agreement.
4. Section 12.1 of the Agreement is hereby amended in its entirety to
read:
12.1 Term. Unless earlier terminated in accordance with
Section 12.2 or 12.3, this Agreement shall be in effect from the
Effective Date through December 31, 1999. This Agreement shall
thereafter renew automatically for additional one (1) year periods
unless either party provides the other party with one (1) year's
advance written notice of its non-renewal of this Agreement.
5. Schein shall pay to MGI any retroactive amounts required by this
Amendment within thirty (30) days of the date first written above.
6. The parties hereby agree that the Co-Promotion Date, as defined in
the Agreement, shall be July 1, 1997.
7. Neither this Amendment nor the Agreement may be amended except in
writing signed by the parties. Except as specifically amended in this Amendment,
all of the terms, covenants and conditions of the Agreement remain in full force
and effect. In the event of any conflict between the terms of this Amendment and
of the Agreement, the terms of this Amendment shall prevail.
*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.
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8. Capitalized terms not defined herein have the meanings assigned to
them in the Agreement.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first written above.
MGI PHARMA, INC.
BY /s/ Xxxxx X. Xxxx
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NAME Xxxxx X. Xxxx
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TITLE Chief Operating Officer
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SCHEIN PHARMACEUTICAL, INC.
BY /s/ Xxxxxx Xxxxxxx
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NAME Xxxxxx Xxxxxxx
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TITLE Chairman and CEO
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