Exhibit 10.38
Amendment No. 2 to
Amended and Restated Distribution and License Agreement
This Amendment No. 2, dated December 3, 2004, to the Amended
and
Restated Distribution and License
Agreement, dated as of November 16, 2001 (the
"Supply Agreement"), by and between
Pharmion GmbH, a Swiss limited liability
company ("Pharmion"), and Celgene UK
Manufacturing II Limited (formerly, Penn T
Limited), a corporation organized under the
laws of England and Wales ("CUK"),
as amended by Amendment No. 1 to the
Amended and Restated Distribution and
License Agreement, dated March 4, 2003, by
and between Pharmion and CUK
("Amendment No. 1"), and as supplemented by
the Supplementary Agreement to the
Amended and Restated Distribution and
License Agreement, dated June 18, 2003, by
and between Pharmion and CUK (the
"Supplementary Agreement").
WHEREAS, Pharmion desires to reduce its future cost of
purchasing
Products under the Supply Agreement and is
willing to make a one-time payment to
CUK in consideration of such reduction:
and
WHEREAS, in connection with such reduction in cost and one-time
payment, Pharmion and CUK desire to effect
certain other changes in their
relationship and, accordingly, Pharmion and
CUK wish to amend the Supply
Agreement as provided below.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, CUK and
Pharmion hereby agree as follows:
1. DEFINITIONS. All capitalized terms not otherwise expressly
defined
in this Amendment shall have the meanings
ascribed to such terms in the
Agreement.
2. EFFECTIVENESS. This Amendment shall become effective on the
date
hereof.
3. PAYMENT. Concurrently with the execution and delivery of
this
Amendment, and in consideration therefore,
Pharmion shall pay Seventy Seven
Million U.S. Dollars ($77,000,000) to CUK
by wire transfer in immediately
available funds (in accordance with written
instructions heretofore provided by
CUK).
4. TERMINATION OF AMENDMENT NO. 1 AND SUPPLEMENTARY AGREEMENT.
Amendment No. 1 and the Supplementary
Agreement are hereby terminated and,
except for amounts due and owing thereunder
for periods prior to the effective
date of this Amendment, shall be of no
further force or effect.
5. AMENDMENTS TO THE SUPPLY AGREEMENT. The Supply Agreement is
hereby
amended as follows:
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(a) The
heading is amended and restated in its entirety to read as
follows:
"Product Supply Agreement".
(b) All
references to "Penn" are deleted and replaced by "CUK".
(c) The
seventh recital paragraph is hereby amended and restated in its
entirety to read as follows:
"WHEREAS, Pharmion and Celgene Corporation ("Celgene")
have entered into a License Agreement dated March 7, 2001,
pursuant to which Pharmion has acquired a license to register,
distribute, market, use and sell Celgene's formulation of
Thalidomide in a territory including all countries in the
world except the United States, Canada, Mexico, Japan, and all
provinces of China, other than Hong Kong."
(d) Article I
is hereby amended as follows:
(i) The definition of "Celgene Territory" is hereby amended to
provide for the addition of Korea, Taiwan and Hong Kong and
restated in
its entirety to read as follows:
" 'CELGENE TERRITORY' shall mean all the countries of
the world except the United States, Canada, Mexico, Japan, and
all the provinces of China other than Hong Kong."
(ii) A definition for "Contract Purchase Price" reading as
follows is hereby added to Article I:
" 'CONTRACT PURCHASE PRICE' shall, as to each calendar
quarter (or period of less than a quarter either at inception
or termination), be equal to (a) fifteen and one half percent
(15.5%) of Net Sales of Products in the Territory during such
period, less (b) the Initial Invoice Price paid by Pharmion
for units of Products sold during such period (as charged to
Pharmion by CUK in accordance with Section 6.1(a) based upon a
"first-in/first-out" accounting of Pharmion's Products
inventory)."
(iii) A definition for "Initial Invoice Price" reading as
follows is hereby added to Article I:
" 'INITIAL INVOICE PRICE' shall have the meaning set
forth in Section 6.1(a)."
(iv) The definition of "Minimum Royalty" is hereby deleted in
its entirety.
(v) The definition of "Penn Territory" is hereby amended and
restated in its entirety to read as follows:
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" 'CUK TERRITORY' shall mean all countries throughout
the world, with the exception of the United States and
Canada."
(vi) A definition for "Special Authorizations" reading as
follows is hereby added to Article I:
" 'SPECIAL AUTHORIZATIONS' shall have the meaning set
forth in Section 7.3."
(e) The last
sentence of Section 2.1 is hereby amended and restated in its
entirety to read as follows:
"Without limiting the foregoing, during the term of
this Agreement, CUK will not manufacture (or cause to be
manufactured) any formulation of Thalidomide for distribution
or sale by any Person other than Pharmion within the CUK
Territory, provided that, CUK may manufacture formulations of
Thalidomide using the Celgene Technology for distribution or
sale by Celgene (or a distributor or licensee of Celgene)
within Mexico, Japan and all provinces of China other than
Hong Kong."
(f) Section
2.4 is hereby deleted in its entirety.
(g) The last
sentence of Section 3.6 is hereby amended and restated in its
entirety to read as follows:
"Correspondingly, CUK shall not actively export any
Products into the Territory except (a) to Pharmion and (b) to
Celgene (or one of its subdistributors or licensees) as
provided in Section 2.1 with respect to Mexico, Japan and all
provinces of China other than Hong Kong."
(h) Sections
11.3, 12.1 and 13.3 are amended to replace, unless the context
otherwise requires, each reference therein to "Pharmion" with
"Pharmion
and its Affiliates".
(i) Article VI
is hereby amended and restated in its entirety to read as
follows:
"Article VI"
PRODUCT PRICING; PAYMENT
Section 6.1 PURCHASE PRICE. Pharmion shall pay for the purchase
of
Products from CUK in the manner described
below:
(a) INITIAL
INVOICE PRICE. For each shipment of Products, CUK
shall invoice Pharmion and Pharmion shall pay to CUK the then
applicable Minimum Price times the number of units of Product
included in such shipment (the "Initial Invoice Price").
Pharmion shall pay for each shipment of Products at the
Initial Invoice Price within thirty (30) days from the date of
invoice for each shipment, which shall not be earlier than the
date of shipment.
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Such invoicing shall be subject to annual audit by Pharmion,
and adjustment, if appropriate, as provided in Section 15.3.
(b) QUARTERLY
PAYMENTS. Pharmion shall pay the Contract Purchase
Price for Products sold by CUK to Pharmion (except as
specifically provided in Section 7.4(b)), based upon
Pharmion's Net Sales of Products, as follows:
(i) QUARTERLY
PAYMENTS. Payments in respect of the Contract
Purchase Price shall be calculated and paid to CUK
quarterly, and shall be due as to Net Sales within any of
the United Kingdom, Germany or Australia forty-five (45)
days following
