CONFIDENTIAL
Exhibit 10.1
AMENDMENT NO.
1
TO EXCLUSIVE SALES
DISTRIBUTION AGREEMENT
THIS AMENDMENT NO. 1
(“Amendment”) to that certain Exclusive Sales
Distribution Agreement, dated July 1, 2004
(“Agreement”), is dated September 30, 2005
(“Amendment Effective Date”), and is between Orthovita,
Inc., a Pennsylvania corporation with principal offices at 45 Great
Valley Parkway, Malvern, Pennsylvania 19355
(“Orthovita”), and Angiotech BioMaterials Corp.
(formerly known as Cohesion Technologies, Inc.), a Delaware
corporation with principal offices at 2500 Faber Place, Palo Alto,
California 94303 (“Cohesion”).
RECITALS
WHEREAS, Orthovita and Cohesion have
previously entered into the Agreement;
WHEREAS, Orthovita and Cohesion are
in the process of transitioning manufacturing of Products and
Accessories (both as defined in the Agreement) from Cohesion to
Orthovita, and by this Amendment Orthovita and Cohesion wish to set
forth certain understandings and acknowledgements regarding
Cohesion’s supply of Products and Accessories to Orthovita
before November 1, 2005, and to make certain additional
modifications to the Agreement, all as set forth below;
WHEREAS, Orthovita and Cohesion are
negotiating a new license agreement (“License
Agreement”) in connection with Orthovita’s assumption
of responsibility for manufacturing of Products and Accessories;
and
WHEREAS, Orthovita and Cohesion
desire that all other terms and conditions of the Agreement remain
in full force and effect;
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Orthovita and Cohesion hereby agree to amend
the Agreement by and in accordance with this Amendment as
follows:
1.
Definitions; References. Capitalized terms in this Amendment
shall have the same meaning as those in the Agreement, unless
specifically defined otherwise in this Amendment. All Article and
Section references shall refer to the corresponding Article and
Section in the Agreement, unless specifically stated to refer to an
Article or Section of this Amendment.
2.1
Amendment to Section 5.1 . Section 5.1 is hereby
amended and restated in its entirety as follows:
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“5.1
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As of the Effective Date,
Cohesion and Orthovita planned to form three (3) committees
– the “Joint Sales and Marketing Committee,” the
“Joint Clinical Development Committee,” and the
“Joint Commercial Operations Committee.” However, the
Parties have agreed instead to form one “Joint
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CONFIDENTIAL
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Committee,” which shall
fulfill the responsibilities of each of the originally planned
three (3) committees, and each Party has designated its
program director (“Program Director”). The Joint
Committee shall consist of up to three (3) representatives
from each Party, one of which shall be each Party’s Program
Director, for a total of up to six (6) Joint Committee
members. Cohesion and Orthovita shall each retain the right to
change its representative(s) to the Joint Committee, including its
Program Director, from time to time, upon written notice to the
other Party, or to appoint one or more substitutes to serve in the
place of an absent member(s). The Program Directors also shall
serve as co-chairs of the Joint Committee (each a
“Co-Chair”). The Joint Committee representatives of
Cohesion and Orthovita shall be employees that agree to be bound by
the terms of confidentiality and other pertinent provisions of this
Agreement. Each Joint Committee member, including the Program
Directors, shall have expertise in a relevant discipline, such as
business development, research and development, clinical and/or
regulatory affairs, sales or marketing. All committee obligations
set forth in Sections 5.2 through 5.4 shall remain in full force
and effect, and all references in this Agreement to one of the
originally planned three (3) committees shall be deemed to
refer instead to the Joint Committee.”
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2.2
Amendment to Section 5.5 . Section 5.5 is hereby
amended and restated in its entirety as follows:
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“5.5
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The Joint
Committee shall hold meetings at approximately three month
intervals (at mutually agreed times), or more frequently as
necessary or upon prior request by a Program Director. Meetings of
the Joint Committee will be held in person at alternating locations
of the respective Co-Chair’s choosing, or by teleconference
or videoconference at the respective Co-Chair’s discretion.
The initial meeting of the new Joint Committee is expected to be
held during the fourth calendar quarter of 2005 to finalize
transition of manufacturing from Cohesion to Orthovita, to discuss
sale of Cohesion equipment to Orthovita and to address such other
matters as are deemed relevant by either Cohesion or Orthovita, and
will be initiated by the Orthovita Co-Chair. Other employees of
each Party involved in the development, manufacture and/or
commercialization of a Product and/or an Accessory may attend such
meetings as nonvoting participants, and, with the consent of each
Party, consultants, representatives, or advisors involved in the
development, manufacture and/or commercialization of a Product
and/or an Accessory may attend such meetings as nonvoting
observers; provided that such third party representatives are under
obligations of confidentiality and non-use applicable to the
Confidential Information of each Party that are at least as
stringent as those set forth in this Agreement. Each Party shall be
responsible for all of its own expenses of participating in a Joint
Committee meeting.”
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CONFIDENTIAL
2.3
Amendment to Section 6.2 . Section 6.2 is hereby
amended and restated in its entirety as follows:
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“6.2
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In addition to
the CoStasis Price, Orthovita shall pay to Cohesion royalties as a
percentage of total Net Sales for each Calendar Year on a quarterly
basis, in each of **** (as applicable), at the royalty rates set
forth in Exhibit E , and subject to the provisions of this
Section 6.2. All such royalty payments shall be made by
Orthovita within thirty (30) days following the end of the
calendar quarter in which such sales were made and for which such
royalty payment is due, and shall be accompanied by the quarterly
sales report set forth in Section 6.3. Total Net Sales shall
be determined for each Calendar Year of the Term and for each of
**** (as applicable), and Net Sales made in one Calendar Year shall
not count toward the total Net Sales in any other Calendar Year.
For purposes of this Agreement, Orthovita shall account for sales
of CoStasis Products (whether manufactured by Cohesion or by or on
behalf of Orthovita) on a first-in, first-out basis. The Parties
acknowledge and agree that, as of the Amendment Effective Date,
Orthovita has paid royalties at the royalty rates set forth in
Exhibit E on Net Sales of the number of units of CoStasis
Products as set forth on Exhibit H, Column A . Orthovita and
Cohesion agree that, after the Amendment Effective Date, Orthovita
shall be required to pay royalties at the royalty rates set forth
in Exhibit E on Net Sales of CoStasis Products up to that number of
units of CoStasis Products set forth on Exhibit H, Column B
, and thereafter, notwithstanding Exhibit E , Orthovita
shall pay royalties at a rate of **** of Net Sales on sales of
units of CoStasis Products up to that number of units of CoStasis
Products set forth on Exhibit H, Column C . For the
avoidance of doubt, WIP (as defined below) that is purchased by
Orthovita and is converted into final finished CoStasis Product by
or on behalf of Orthovita after the Amendment Effective Date shall
be subject to the royalty and other relevant provisions of this
Agreement as if such product had been sold by Cohesion to Orthovita
in finished form.”
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2.4
Amendment to Section 6.4 . Section 6.4 is hereby
amended and restated in its entirety as follows:
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“6.4
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Within thirty (30) days
after the Effective Date, and subject to satisfactory inspection by
Orthovita representatives, which shall not be unreasonably
withheld, Orthovita shall pay to Cohesion **** to purchase
Cohesion’s existing inventory of Accessories, as listed in
Exhibit B . Within ninety (90) days after receipt of
such payment, Cohesion shall deliver to Orthovita such Accessories
in accordance with instructions provided by Orthovita and with
Sections 6.11 and 6.12. In addition, Cohesion may sell to Orthovita
additional Accessories at the prices set forth in Amended
Exhibit F ; provided that all such additional Accessories
sold to Orthovita by Cohesion shall
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