EXHIBIT 10.17.1
[ * ] = CERTAIN CONFIDENTIAL INFORMATION
CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
AMENDMENT TO
DISTRIBUTION, MANUFACTURING AND
SUPPLY AGREEMENT
THIS AMENDMENT TO DISTRIBUTION,
MANUFACTURING AND SUPPLY AGREEMENT (the “ Amendment ”) is made
and entered into as of March 18, 2005 (the “
Amendment Date ”) by and between AEROGEN, INC.
, a Delaware corporation, with offices at 2071 Stierlin Court,
Mountain View, CA 94043 (“ Aerogen ”), and
MEDICAL INDUSTRIES AMERICA, INC. , an Iowa corporation, with
offices at 2636 289 th Place, Adel, IA 50003 (“
MIA ”). Aerogen and MIA may be referred to
herein individually as a “ Party ” or
collectively as the “ Parties ”.
WHEREAS , Aerogen and MIA are parties to the
Distribution, Manufacturing and Supply Agreement dated
September 30, 2003 (the “ Agreement ”);
and
WHEREAS , the Parties now desire to amend certain terms
and conditions of the Agreement as provided herein.
NOW, THEREFORE
, in consideration of the foregoing
premises and the covenants contained herein, the Parties hereby
agree as follows:
1.
Capitalized terms used but not
otherwise defined herein shall have the meanings assigned to them
in the Agreement.
2.
In consideration of the full and
final settlement of Aerogen’s portion of all recall-related
liability incurred by MIA as of the Amendment Date in connection
with the recall carried out in response to the FDA Warning Letter
dated August 23, 2004 (the “Recall”),
(a) Aerogen will supply to MIA a quantity of ten thousand
(10,000) OnQ Aerosol Generators at [ * ] pursuant to
Section 5.4(b) of the Agreement (as amended) and
(b) Aerogen will forgive the [ * ] in outstanding
invoice amounts owed to Aerogen by MIA as of the Amendment Date in
connection with OnQ Aerosol Generator purchases prior to the
Amendment Date. With respect to any expenses to be incurred
in connection with additional corrective actions relating to the
Recall that may be required by the FDA after the Amendment Date,
the parties will mutually agree on the nature of such expenses
prior to incurring them. Regardless of any allocation of such
expenses that would be determined by the application of
Section 7.4 of the Agreement, each party will bear such
expenses equally. MIA will be solely responsible for any
other business expenses arising from the Recall in connection with
activities that are not directed or required by the FDA, but arise
from MIA’s business decision to enhance or ameliorate its
relationship with its customers, including, but not limited to
incentives, credits of any kind and free product provided by MIA to
its dealers and customers. The foregoing is not intended to
affect Aerogen’s indemnification responsibility under
Section 11.1 of the Agreement with respect to any third party
claim based on events occurring prior to the Amendment
Date.
3.
MIA acknowledges that a Financing
Event has occurred and therefore Aerogen is entitled pursuant to
Section 3.8(f) of the Agreement to exercise its
Repurchase Option and repurchase the
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Equipment from MIA, and to simultaneously revoke
and terminate the rights granted to MIA under
Section 3.8(a) and 3.8(c) of the Agreement
permitting MIA to assume full authority over the manufacturing of
the OnQ Aerosol Generator at the OnQ Aerosol Generator
Manufacturing Facility, which rights were exercised by MIA’s
letter to Aerogen dated January 13, 2004. On the
Amendment Date, Aerogen shall pay to MIA one dollar ($1.00), upon
receipt of which MIA hereby sells and assigns to Aerogen the entire
right, title and interest in the Equipment, free and clear of any
and all encumbrances. MIA shall take such action as
reasonably requested by Aerogen to document and perfect such sale
and assignment. MIA represents and warrants to Aerogen that
MIA has not sold, leased, mortgaged or otherwise encumbered in any
manner its interest in the Equipment prior to the Amendment
Date. The Parties acknowledge and agree that as a result of
the exercise of the Repurchase Option the OnQ Manufacturing Period
has ended. The Parties further acknowledge and agree that all
obligations pursuant to the side letter between the Parties dated
February 3, 2004 and all subsequent oral and written
agreements related to the subject matter thereof, have been
satisfied in full, and the side letter and all rights and
obligations of the Parties under it are hereby terminated as of the
Amendment Date.
4.
Article 1 of the Agreement is
amended to delete the following sections in their entirety:
(a) Section 1.5; (b) Section 1.10;
(c) Section 1.15; and
(d) Section 1.20.
5.
Section 1.21 of the Agreement
is deleted in its entirety and replaced with the
following:
1.21
“ Sales Quarter ”
means a period of three (3) successive calendar months
commencing on January 1, 2005, and each three
(3) successive calendar month period thereafter during the
Term.
6.
Section 1.22 of the Agreement
is deleted in its entirety and replaced with the
following:
1.22
“ Sales Year ”
means the period of twelve (12) successive calendar months
commencing on January 1, 2005, and each successive twelve (12)
month period thereafter during the Term.
7.
Section 1.24 of the Agreement
is deleted in its entirety and replaced with the
following:
1.24
“ Supply Quarter
” means a period of three (3) successive calendar months
commencing on January 1, 2005, and each three
(3) successive calendar month period thereafter during the
Term.
8.
Section 2.2 of the Agreement is
deleted in its entirety and replaced with the following:
2.2
Sub-Distributors. MIA will provide Aerogen with written notice
regarding any direct or indirect financial affiliation that arises
between MIA (or any of its Affiliates) and any of its existing or
proposed sub-distributors during the Term, with such notice to be
given promptly upon the commencement of negotiations with a
sub-distributor involving any financial interest (including, but
not limited to, equity ownership, credit facilities, rebates,
profit or revenue interest, etc.), with full details of the final
relationship to be provided to Aerogen upon final deal
closure. MIA shall require that any Related Sub-Distributors
make complete and accurate reports to MIA in writing on a quarterly
basis of all Gross Selling Prices for Products sold or
[ * ] = CERTAIN CONFIDENTIAL INFORMATION
CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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otherwise transferred by such Related
Sub-Distributor, and Aerogen shall have the right to inspect and
audit all such reports pursuant to Section 5.7
.
9.
Section 2.4 of the Agreement is
deleted in its entirety and replaced with the following:
2.4
Right of First Negotiation to
Expand the Territory. During the Term, MIA shall have a right
of first negotiation to obtain rights to distribute the Product in
a country that is not listed on Exhibit C ;
provided that Aerogen has not previously granted to a Third
Party distribution rights in such country or is not itself
distributing in such country. MIA shall notify Aerogen of its
intent in writing, and, MIA shall complete and present to Aerogen a
definitive business plan, including a distribution strategy with
either intent to contract or hire sales representatives, or a
letter of intent and a draft definitive agreement with a
sub-distributor. If the marketing rights for the Product in
such country are available for licensing to MIA, then the Parties
shall negotiate in good faith to reach an agreement regarding the
expansion of the Territory to include such country. If the
Parties reach agreement on the expansion of the Territory,
Exhibit C shall be amended to reflect the
additional country(ies) in which MIA may distribute the Product
pursuant to this Agreement.
10.
Section 3.5 of the Agreement is
deleted in its entirety.
11.
The first sentence of
Section 3.7 of the Agreement is deleted in its entirety and
replaced with the following:
Unless otherwise agreed by the
Parties or as provided by this Agreement, Aerogen will be solely
responsible during the Term for the manufacture and supply to MIA
of its requirements of the OnQ Aerosol Generator for incorporation
into the Product, pursuant to the terms of Article 4
.
12.
Sections 3.8, 3.9 and 3.10 of
the Agreement are deleted in their entirety.
13.
The last sentence of
Section 4.1 is deleted in its entirety.
14.
Section 5.3 of the Agreement is
deleted in its entirety and replaced with the following:
5.3
Sales-Based Payments.
In consideration of the
rights granted by Aerogen to MIA under this Agreement, MIA will
make payments to Aerogen equal to a percentage of the G
