EXHIBIT 10
FIRST AMENDMENT TO LICENSE AGREEMENT
THIS FIRST AMENDMENT TO LICENSE AGREEMENT (the "Amendment"), dated
as of December 30, 1998 (the "Effective Date"), is by and between Alliance
Pharmaceutical Corp., a New York corporation, having its principal place of
business at 0000 Xxxxxxx Xxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx 00000 ("Alliance")
and Schering Aktiengesellschaft, a German corporation having its principal
place of business at 00000 Xxxxxx, Xxxxxxx ("Schering").
WHEREAS, Alliance and Schering entered into a license agreement
dated as of September 23, 1997 (the "Agreement"), whereby Alliance licensed
to Schering certain rights to IMAGENT-Registered Trademark-, an ultrasound
contrast agent in development;
WHEREAS, the parties have agreed that the focus of industry-wide
development activities pertaining to ultrasound contrast agents has changed
during the past year and the Agreement needs to be modified to reflect such
industry-wide changes;
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants and agreements contained herein, the parties hereto
intending to be legally bound, do hereby agree as follows:
1. Any capitalized term not otherwise defined herein shall have the meaning
ascribed to it in the Agreement.
2. Section 1.01 of the Agreement is hereby amended so that the definitions
of "Indications" and "MP Indication" read as follows and the following
definition for CAD Indication is added:
"INDICATIONS" means the *
"MP Indication" MEANS the *
"CAD INDICATION" means the *
3. Section 4.02(a) of the Agreement is hereby amended in its entirety to
read as follows:
"(a) the sum of *
----------
* Indicates confidential information which has been omitted and filed
separately with the Securities and Exchange Commission
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, the first such installment being
accrued and earned on December 31, 1997 and payable on March 30,
1998, and subsequent installments accrued and earned on the last
day of March, June, September and December, respectively, and each
payable on the last day of each subsequent June, September,
December and March, respectively, to cover future research."
4. Section 4.02 of the Agreement is hereby amended to add sections (f),
(g), (h), (i) and (j) as follows:
"(f) the sum of *
(g) the sum of *
(h) the sum of *
(i) the sum of *
(j) the sum of *
5. Section 8.01 of the Agreement is hereby amended in its entirety to read
as follows:
"SECTION 8.01. ROYALTIES. In further consideration of the rights and
licenses granted to Schering under Article VI of this Agreement,
Schering shall pay to Alliance the following royalties based on the Net
Sales of the Product in the Territory (the "ROYALTY PERCENTAGE"):
(a) SALES IN THE UNITED STATES AND EUROPE. With respect to sales of
the Product in the United States and Europe collectively;
(i) Subject to Section 8.01(d), Schering shall pay to Alliance a
royalty on Net Sales of the Product in accordance with the
following table:
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Maximum Royalty
Total Net Royalty Payment Average
Sales/Year Percentage (% of Net Sales) (% of Net Sales)
Category ($ millions) (% of Net Sales) (Section 8.01(a)(ii)) (Section 8.01(a)(iv))
-------- ------------ ---------------- --------------------- ---------------------
1. * * *
2. * * * *
3. * * * *
4. * * * *
5. * * * *
(ii) In any calendar year *
shall not exceed the *
, any such amount
exceeding the Maximum Payment shall be reimbursed by
Alliance to Schering. Any *
made in accordance with this Section 8.01(a) shall be made
after the end of the calendar year for which such adjustment
is applicable, and any amount *
Alliance ratably over the next four (4) quarters.
Reasonably detailed accounting records to support such
adjustments shall be provided to Alliance within sixty (60)
days after the end of the calendar year.
(iii) Notwithstanding Section 8.01(a)(i) above, in the event Net
Sales of Product *
(a) Net Sales for *
Net
Sales * of such
total. Schering shall make such adjustments at the end of
the first calendar quarter of the year and shall deliver any
necessary payments (with reasonably detailed records of such
adjustments) to Alliance within sixty (60) days after the
end of the first calendar quarter of such year.
(iv) Notwithstanding Section 8.01(a)(i) above, *
applicable for total Net Sales for the
immediately preceding calendar year. Adjustments from
amounts paid as royalties pursuant to this
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section to amounts actually earned as royalties shall be
made to fourth quarter payments to Alliance (with reasonably
detailed records of such adjustments provided therewith).
(b) SALES IN JAPAN. With respect to sales of the Product in Japan,
Schering shall pay to Alliance a royalty payment equal to *
(c) SALES IN THE TERRITORY EXCLUDING THE UNITED STATES, EUROPE AND
JAPAN. With respect to sales of the Product in the Territory,
excluding sales of the Product in the United States, Europe and
Japan as provided for in Section 8.01(a) and (b), *
(d) MINIMUM PAYMENTS. Notwithstanding anything to the contrary in
Section 8.01 *
on a country-by-country basis *
The rate of *
If this Section 8.01(d) becomes applicable, *
The
minimum payments refered to in this Section 8.01(d) *
(e) THIRD PARTY ROYALTIES. In the event that after the First Commercial
Sale Alliance pays any royalties to Third Parties *
(f) If the Product is sold in any country in which Alliance does not
have valid patent coverage for the Product which would prevent the
sale of a generic form of the
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Product, the royalty obligation set forth in Section 8.01 above
with respect to Net Sales attributable to the sale of the Product
in such country shall be reduced by *
Net Sales attributable to the sale of the Product in such country
unless and until Alliance is granted such valid patent coverage for
the Product in such country; provided that *
(g) ROYALTY TERM. Except where expressly provided otherwise in this
Agreement, all royalties to a Party shall be paid, on a
country-by-country basis, from the date of the First Commercial
Sale of each Product in a particular country until the later of (i)
ten (10) years from the First Commercial Sale in such country and
(ii) the last to expire of any valid Alliance Patents which covers
the use or sale of the Product in such country.
(h) DISCONTINUANCE. Subject to the provisions of Article XIV, Schering
may discontinue Commercialization of a Product at any time.
(i) LICENSE FOLLOWING EXPIRATION. Upon expiration of the royalty term
for a Product in the country as described above, Schering shall
thereafter have an exclusive (even as to Alliance), paid-up license
to Alliance Know-How to make, have made, use, sell, offer for sale,
have sold and import that Product in that country. In such event,
Schering shall retain responsibility for, and indemnify Alliance
from, the payment of all applicable royalties and other obligations
owed to a Third Party with respect to the Product."
6. Section 9.01 of the Agreement is amended as follows:
(a) The phrase "until Schering becomes the Manufacturing Party (as
provided for in Section 9.10 hereof)" is hereby deleted and
replaced with the phrase " *
in the
Territory."
(b) The sentence "Schering hereby agrees to purchase all of its
requirements of Product (to the capacity of Alliance's San Diego
facility)" is hereby added at the end of Section 9.01.
7. Section 9.10 of the Agreement is hereby amended to read in its entirety as
follows:
"SECTION 9.10. MANUFACTURE AND SUPPLY OF THE PRODUCT BY SCHERING.
Schering agrees to become the sole Party responsible for the manufacture
and supply of the Product when *
and, in such event, shall use commercially reasonable efforts to
manufacture and supply the Product (or arrange for such manufacture and
supply) to meet reasonable demand for the Product throughout the
Territory. Alliance shall provide reasonable assistance to Schering
with respect to the transfer of all manufacturing capabilities from
Alliance (or its subcontractors) to Schering. Schering
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agrees to reimburse Alliance for all direct costs reasonably incurred by
Alliance specifically attributable to the transfer of the manufacturing
capabilities; provided however, that an estimate of the expected costs
of such transfer be delivered to Schering in sufficient detail and at
least one (1) month prior to any such transfer."
8. Section 9.11 of the Agreement is amended by adding the following language
at the end of the first sentence thereof:
"; *
."
9. Section 14.02(a) of the Agreement is hereby amended to add the phrase:
"but in any event not before September 30, 1999" at the end of the first
sentence thereof.
10. Except as set forth herein, all other terms of the Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first written above.
ALLIANCE PHARMACEUTICAL CORP. SCHERING AKTIENGESELLSCHAFT
By: \s\ Xxxxxxxx X. Xxxx By: \s\ Xx. Xxxxxxx Duchert
------------------------------ ------------------------------
Name: Xxxxxxxx X. Xxxx Name: Xx. Xxxxxxx Duchert
---------------------------- ----------------------------
Title: President & Chief Title: Head of Strategic
Operating Officer Marketing DG
--------------------------- ---------------------------
By: \s\ Dr. Uhich Xxxx
------------------------------
Name: Dr. Uhich Xxxx
----------------------------
Title: Head Corporate Licensing
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