AMENDMENT NO. 1 TO LICENSE AGREEMENT AND ASSET PURCHASE AGREEMENT
Exhibit 10.2
[Portions of this Exhibit have been omitted pursuant to a request for confidentiality under Rule
24b-2 of the Securities Exchange Act of 1934, as amended. A copy of this Exhibit with all sections
intact has been filed separately with the Securities and Exchange Commission.]
AMENDMENT NO. 1 TO LICENSE AGREEMENT
AND ASSET PURCHASE AGREEMENT
AND ASSET PURCHASE AGREEMENT
This AGREEMENT (“Amendment”), dated November 30, 2009 (the “Amendment Effective Date”) is made by
and between BioSante Pharmaceuticals, Inc., 000 Xxxxxxx Xxxxxxxxx, Xxxxxxxxxxxx, XX 00000 (“BPA”),
and Azur Pharma International II Limited, a Bermuda limited liability company, Xxxxxxxxx Xxxxx, 0
Xxxxxx Xxxxxx, Xxxxxxxx XX 11, Bermuda and such of its Affiliates as it may designate from time to
time under one or more provisions of this Agreement (“Company”).
WHEREAS, BPA and Company are parties to that certain License Agreement dated as of December 3, 2008
(as amended by the Amendment, the “License Agreement”).
WHEREAS, BPA and Company wish to amend certain provisions of the License Agreement as set forth
below.
WHEREAS, BPA and Company are parties to that certain Asset Purchase Agreement dated as of December
3, 2008 (as amended by the Amendment, the “Asset Purchase Agreement”).
WHEREAS, BPA and Company wish to amend certain provisions of the Asset Purchase Agreement as set
forth below.
NOW THEREFORE, BPA and Company (collectively, the “Parties” and each individually, a “Party”) agree
as follows:
1. Definitions. Except as otherwise set forth in this Amendment, capitalized terms shall
have the definitions set forth in the License Agreement or Asset Purchase Agreement, as the case
may be.
2. Royalties and Milestone Payments; Amendment to License Agreement.
(a) Within seven (7) days of the Amendment Effective Date, Company shall pay BPA $1,000,000.00
(“Payment One”).
(b) Company may in its sole and absolute discretion pay BPA an additional amount of either
$525,000.00 (“Payment Two”) or $1,050,000 (“Payment Two A”) no later than January 11, 2010. For
clarity, the benefits to Company under this Amendment for making Payment Two shall also apply if
Company makes Payment Two A.
(c) If Company has made Payment Two A, then Company may in its sole and absolute discretion
pay BPA an additional amount of either $550,000.00 (“Payment Three”) or $1,100,000.00 (“Payment
Three A”) no later than February 22, 2010. For clarity, the benefits
to Company under this Amendment for making Payment Three shall also apply if Company makes
Payment Three A.
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(d) In consideration of the above payments, and depending on what payments are made, the
royalty required by Section 3(a)(ii) of the License Agreement and the milestones required by
Sections 3(a)(iii)(1), 3(a)(iii)(2), 3(a)(iii)(4), and 3(a)(iii)(5) of the License Agreement shall
modified from the current rates and amounts to the rates and amounts shown in the attached Table 1.
After Payment One, the royalties will be reduced to the rates under the heading “After Payment
One.” If Payment Two is made, such royalties shall be reduced to the rates shown in the Table 1
below under the heading “After Payment Two.” If Payment Two A is made, such royalties and such
milestones shall be reduced to the rates and amounts under the heading “After Payment Two A.” If
Payment Three is made, then such royalties shall be reduced to the rates under the heading “After
Payment Three.” If Payment Three A is made, such royalties and such milestones shall be reduced to
the rates and amounts under the heading “After Payment Three A.”
For clarity, the milestones required by Sections 3(a)(iii)(3), (6), and (7) of the License
Agreement are not modified by this Amendment and will still be required in accordance with the
terms of the License Agreement if the specified Net Sales of those subsections are achieved.
(e) If Company pays BPA Payment Two, the second Section 3(a)(ii)(2) of the License Agreement
(beginning “In the event that one of more generic versions. . . .”) is deleted in its entirety and
replaced with the following:
“In the event that one or more generic versions of the Product that is approved under 21
U.S.C. 355(j) (or any successor legislation) or which has an “AB” rating with respect to
that Product, is sold by a Third Party in the Territory, for the remainder of the Royalty
Term the Royalty payable pursuant to Section 3(a)(ii) shall be reduced from the royalties
shown in Table 1 under the heading “After Payment Two” by the same percent reduction as
occurs under the Antares License Agreement as the result of such generic entry.”
(f) If Company pays BPA both Payment Two and Payment Three, the second Section 3(a)(ii)(2) of
the License Agreement (beginning “In the event that one of more generic versions. . . .”) is
deleted in its entirety and replaced with the following:
“In the event that one or more generic versions of the Product that is approved under 21
U.S.C. 355(j) (or any successor legislation) or which has an “AB” rating with respect to
that Product, is sold by a Third Party in the Territory, for the remainder of the Royalty
Term the Royalty payable pursuant to Section 3(a)(ii) shall be reduced by such amount below
4.5% of Net Sales as the royalty payable by BPA to Antares is reduced.”
(g) In each case, the royalties and milestones set forth in Table 1 shall take effect as of the
first day of the calendar month following the month in which the payment is made.
(h) Section 3 of the License Agreement is amended by adding a new Section 3(b) as follows:
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“Notwithstanding anything in this Agreement to the contrary, (i) the royalties hereunder shall
never be less than the royalties required by the Antares License Agreement, which are 4.5% of
Net Sales with a reduction to 3.5% of Net Sales in the case of generic competition and (ii) if
Company has made Payment Three or Payment Three A, the royalties hereunder shall never be greater
than the royalties required by the Antares License Agreement (which as stated above is 4.5% of Net
Sales with a reduction to 3.5% of Net Sales in the case of generic competition). Further, when
Company sends royalty reports to BPA it shall at the same time send a copy of those royalty reports
to Antares. Additionally, if Company makes Payment Three or Payment Three A then it shall going
forward remit royalty payments and send royalty reports directly to Antares (with a copy of the
reports and check or payment advice to BPA), and BPA agrees that with respect to Company’s royalty
obligations to BPA under this License Agreement the receipt of those payments by Antares shall be
deemed equivalent to their receipt by BPA.”
3. Additional Modifications to License Agreement in the Event of Payment Three.
If Company pays BPA both Payment Two and Payment Three, then the License Agreement shall be further
amended as follows upon receipt of Payment Three:
(a) Section 7 of the License Agreement is amended as follows: Sections 7(a) and 7(b) are
retained without modification. Sections 7(c), 7(d), and 7(e) are deleted in their entirety and
replaced with the following:
“(c) Company shall provide BPA an annual summary report of its commercialization of
the Product, including copies of the Company’s sales and marketing plans and one
copy of each advertising, detailing or promotional material used during the year.
(d) With each annual summary required by Section 7(c) above, Company shall also
provide BPA with copies of all material correspondence and documents to and from FDA
and all notices received from FDA concerning the Product. However, any such
materials concerning safety or adverse events, or matters that may interrupt
manufacture or require any recall, shall promptly be provided by Company to BPA and
not delayed until the annual submission.”
(b) Section 16(b)(iii)(a) to (c) of the License Agreement shall be deleted in its entirety and
replaced with the following:
“Notwithstanding the provisions of the foregoing Sections (a) and (b) if a Paragraph IV
Certification (as defined in C.F.R. Title 21) is filed referencing the Product the following
provisions shall apply:
(a) in the event that either BPA or Company receives a Paragraph IV Certification (as
defined in C.F.R. Title 21) it shall inform the other Party verbally and in writing (by
facsimile or by e-mail) as soon as practicable and in any event not later than two (2)
Business Days of receipt of the foregoing certification or notice;
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(b) during the following twenty-one (21) day period, Company shall consult with BPA as
to the commercial reasonableness of suing such Third
Party for patent infringement within the requisite forty-five (45) day period
(“Infringement Suit”);
(c) if upon, expiration of the twenty-one (21) day period, Company elects at its
discretion to file an Infringement Suit, the following applies:
i as between BPA and Company, Company shall have sole discretion to direct the strategy
of the Infringement Suit (with Company recognizing that Antares as patent owner may itself
exercise such control);
ii Company shall keep BPA informed at all times of the Infringement Suit including
providing copies of any communications received in connection with such litigation to BPA
promptly after receipt thereof. Company shall consult with and consider any comments made by
BPA (including the development and implementation of a litigation strategy) and permit BPA
the opportunity to review and comment on any proposed written communication, filing pleadings
or other documents or submissions filed with the court in the course of such Infringement
Suit;
iii BPA shall cooperate with Company to enforce the Patents and the Know-How, including
initiation or maintenance as a party to the Infringement Suit to enforce such rights;
iv Company shall be responsible for Company’s own external costs and expenses,
including legal fees, associated with the Infringement Suit, and shall also be
responsible for such reasonable costs of BPA as BPA incurs at the request of Company
if BPA joins in the suit at Company’s request. Any recovery realized as a result of
any infringement action described in this Section 16(b)(iii) (after reimbursement of
the Parties’ reasonable attorneys’ fees for outside counsel and litigation expenses)
shall be treated as Net Sales of Product in the year of receipt in accordance with
Section 3(a) with Company receiving such amounts and paying to BPA the applicable
royalty under Section 3(a)(ii), but shall not be treated as Net Sales for the
purpose of any milestone payments under Section 3(a)(iii).”
(c) Section 16(e) of the License Agreement shall be deleted in its entirety and replaced with
the following:
“(e)(i) Each Party shall promptly notify the other Party in writing of any
allegation made, threatened or brought against either of them alleging infringement
or other unauthorized use of the intellectual property of a Third Party arising from
(i) the development, manufacture, importation, use, offer for sale, sale or other
commercialization of the Product in the Territory or (ii) from the development or
manufacture outside the Territory as relates to the importation, use, offer for
sale, sale or other commercialization of the Product in
the Territory (“Infringement
Claim”). The provisions of this Section 16(e) are in addition to and separate from
the provisions of Section 11(a)(xiii).
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(e)(ii) BPA shall at Company’s request consult with Company on the response to an
Infringement Claim, and shall at Company’s request cooperate with Company (at
Company’s expense) in Company’s response and defense of such claim, but shall
otherwise have no obligation in respect to an Infringement Claim.
(e)(iii) Company shall have sole discretion as to the manner in which it will defend
an Infringement Claim, including with regard to any actions Company proposes to take
in order to mitigate any loss or liability with respect to any Infringement Claim,
such actions may include Company ceasing to sell the Product, DPT ceasing to
manufacture and supply Company with Product, Company ceasing to supply BPA with
Product (for use outside the Territory) and/or the Company electing to modify the
Product.”
(d) Section 16(f) of the License Agreement shall be deleted in its entirety and replaced with
the following:
“Any licenses from Third Parties that may be required for Company’s activities under
this License Agreement shall be the sole responsibility of Company in its sole
discretion and at its sole expense. BPA shall at Company’s request consult with
Company with respect to any such potential license.”
(e) Section 9(d) of the License Agreement shall be deleted in its entirety and replaced with
the following:
“Subject to compliance with all applicable laws and regulatory requirements, Company
agrees to supply BPA with Product at cost plus 7.5% for use in Israel and Canada and
BPA shall have the right to place orders for reasonable quantities of Product for
sale by BPA or BPA’s licensees in Israel and Canada when Product is being made by or
for Company; provided, however, if BPA and BPA’s licensees intend to order
sufficient quantities of Product to comprise a complete manufacturing batch of
Product, BPA and its licensees shall place their own order for the Product
independently of Company’s orders. Company shall give BPA reasonable advance notice
for each manufacturing run to enable BPA to exercise its rights under this Section
9(d). Product shall be packaged in the normal US packaging and Company shall not be
responsible for any changes in packaging or other activities that are not part of
the normal manufacturing practices of Company. BPA shall pay Company’s actual out
of pocket cost for such manufacture plus 7.5% of such cost (which shall only be
payable if such product is purchased from Company) including any surcharges imposed
by the manufacturer for partial batches and special packaging and labeling
requirements. BPA shall make payments for its orders either directly to the
manufacturer or to Company, as applicable, and shall take delivery either directly
from manufacturer or Company, with the details of same to be negotiated in good
faith between BPA and Company (subject to the default rules of the Uniform
Commercial Code if
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agreement on the details is not reached). In the event that the
manufacturer is not able to fill the entire quantity ordered by Company and BPA,
Company shall be entitled to direct DPT to satisfy the needs of Company and its
customers as
reasonably demonstrated by Company to BPA, and if there is sufficient capacity
remaining to supply all or part of the requirement of BPA and its licensees. In no
event shall Company have any responsibility for any matters relating to the supply
of the Product such as failed lots, quality issues, delays in supply, or product
liability or otherwise have any liability with regard to the supply of such product,
and BPA hereby indemnifies and holds harmless Company with regard to any claim which
may be made by any Third Party and for its part confirms that Company has no
liability to BPA based on or arising out of the supply of Product under this Section
9(d) (except for Company’s obligation to supply as set forth in the first sentence
of this Section 9(d)).”
(f) Section 9 of the License Agreement is amended by adding a new Section 9(f) as follows:
“For countries outside the Territory other than Israel and Canada, Company may at
its sole discretion agree that it shall supply BPA with Product for use in such
countries on such terms as may be agreed including (i) to the extent applicable, the
provisions set out in Section 9(d), (ii) Company shall be permitted to allocate
limited manufacturing capacity or limited supply of Product to itself and its own
customers ahead of any orders for Product placed by BPA for such countries, and
(iii) the Parties shall in such event confer in an effort to arrange to fill BPA’s
orders for such countries in a way that will not disrupt manufacturing or supply for
Company.”
4. Modification to Asset Purchase Agreement in the Event Company Makes Payment 3 Three A.
If Company pays BPA both Payment Two A and Payment Three A, then the Asset Purchase Agreement shall
be amended as follows upon receipt of Payment Three:
(a) Section 13 of the Asset Purchase Agreement shall be deleted in its entirety and replaced
with the following:
“In the event that the License Agreement between BPA and the Company is terminated
for material breach by Company, or Company knowingly takes any action (or refuses or
omits to take any action) that would cause a breach of the Antares License Agreement
likely to result in the termination of the Antares License Agreement by Antares on
account of such breach, Company assigns all right, title and interest in and to the
NDA, the Trademark (together with all goodwill associated therewith), and the Domain
Names to BPA, shall promptly transfer all documentation related to such NDA,
Trademark, and Domain Names to BPA, and agrees to take all such further action and
promptly execute such further documents as may be reasonably necessary or desirable
to give full effect to such assignment, including without limitation submitting a
letter to the FDA
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requesting transfer and any related documents with the FDA to
effect such transfer, providing an assignment of the Trademark in recordable form,
and providing an assignment to transfer ownership of the Domain Name with the
registrar. After such transfer of the NDA to BPA, Company agrees to cooperate with
BPA, at Company’s own expense other than its reasonable out of pocket expenses,
which shall be reimbursed by BPA upon request, for a reasonable transition period
not to exceed six (6) months, regarding (i) FDA regulatory obligations for the
Product, including without limitation the preparation and submission of annual
reports, the reporting of adverse events, and cooperating with governmental
regulatory agencies; (ii) communication with Third Parties regarding the Product,
including without limitation responding to complaints and medical inquiries; (iii)
investigating all complaints and adverse drug experiences related to the Product;
and (iv) giving such notice as BPA may request to the FDA and to DPT or any other
contract manufacturer of Product.”
5. Agreements otherwise remain in effect. All provisions of the License Agreement and
Asset Purchase Agreement that are not amended in this Agreement remain in effect, except to the
extent that any provisions may have lapsed, been satisfied, or become moot without regard to this
Agreement.
[signature page follows]
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IN WITNESS THEREOF, BPA and the Company have caused this Agreement to be executed by their duly
authorized representatives as of the day and year first written above.
| BioSante Pharmaceuticals, Inc. |
||||
| By | /s/ Xxxxxxx X. Xxxxx | |||
| Xxxxxxx X. Xxxxx | ||||
| Chief Executive Officer and President | ||||
| Azur Pharma International II Limited |
||||
| By: | /s/ Xxxxx Xxxxxx | |||
| Xxxxx Xxxxxx | ||||
| Director | ||||
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TABLE 1
| After | After | After | After | After | ||||||||||||||||||||
| Event | Current | Payment One | Payment Two | Payment Two A | Payment Three | Payment Three A | ||||||||||||||||||
Net Sales of the
Product in the
Territory in a
calendar year under
$10,000,000 or over $17,500,000 |
Royalty 10% | Royalty 7.25% | Royalty 5.875% | Royalty 5.875% | Royalty 4.5% | Royalty 4.5% | ||||||||||||||||||
Net Sales of the
Product in the
Territory in a
calendar year Sales
between $10,000,000
and $17,500,000 |
Royalty 20% | Royalty 12.75% | Royalty 8.625% | Royalty 8.625% | Royalty 4.5% | Royalty 4.5% | ||||||||||||||||||
Milestone at
$XXXXXXX in Net
Sales of the
Product in the
Territory in a
calendar year |
$XXXXXXXX | $XXXXXXXX | $XXXXXXXX | $XXXXXXXX | $XXXXXXXX | $XXXXXXXX | ||||||||||||||||||
Milestone at
$XXXXXXX in Net
Sales of the
Product in the
Territory in a
calendar year |
$XXXXXXXX | $XXXXXXXX | $XXXXXXXX | $XXXXXXXX | $XXXXXXXX | $XXXXXXXX | ||||||||||||||||||
Milestone at
$XXXXXXX in Net
Sales of the
Product in the
Territory in a
calendar year |
$XXXXXXXX | $XXXXXXXX | $XXXXXXXX | $XXXXXXXX | $XXXXXXXX | $XXXXXXXX | ||||||||||||||||||
Milestone at
$XXXXXXX in Net
Sales of the
Product in the
Territory in a
calendar year |
$XXXXXXXX | $XXXXXXXX | $XXXXXXXX | $XXXXXXXX | $XXXXXXXX | $XXXXXXXX | ||||||||||||||||||
[Portions of this Section have been omitted pursuant to a request for confidentiality under Rule
24b-2 of the Securities Exchange Act of 1934, as amended. A copy of this Exhibit with all sections
intact has been filed separately with the Securities and Exchange Commission.]
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