AMENDMENT TO LICENSE
AGREEMENT
THIS AMENDMENT TO
LICENSE AGREEMENT (this “Amendment”) is made on the
21st day of April, 2009 (the “Amendment Date”), by and
among DUSA Pharmaceuticals, Inc., a company incorporated in the
State of New Jersey, having its principal offices at 25 Upton
Drive, Wilmington, Massachusetts (“DUSA”), and
River’s Edge Pharmaceuticals, LLC, a Georgia limited
liability company, having its principal offices at 5400 Laurel
Springs Parkway, Building 504, Suwanee, Georgia 30024
(“River’s Edge”).
WHEREAS, DUSA and
River’s Edge previously entered into that certain License
Agreement, dated July 3, 2008, (the “License
Agreement”) concurrently with amending a certain Settlement
Agreement and Mutual Release by entering the First Amendment to the
Settlement Agreement also dated July 3, 2008; and
WHEREAS, the
Parties wish to amend the terms of the License Agreement to extend
the term thereof, to broaden the scope of the Licensed Products,
and to amend payment and other terms as hereafter
agreed.
NOW, THEREFORE,
the Parties, in furtherance of the foregoing and for good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, intending to be legally bound, agree as
follows:
1. All
capitalized terms used, but not specifically defined herein, shall
have the meaning provided for such terms in the License
Agreement.
2. Section 1.8
of the License Agreement is hereby deleted in its entirety and
replaced with the following:
“ DUSA
Know-How ” shall mean all Know-How owned or controlled by
DUSA or its Affiliates as of the Amendment Date which is reasonably
necessary for the manufacture, use, offer for sale, sale or
importation of Licensed Products. Notwithstanding anything herein
to the contrary, DUSA Know-How shall exclude: (i) DUSA patent
rights relating to any product other than the Licensed Products;
and (ii) Know-How owned or controlled by DUSA or its
Affiliates relating to any product other than the Licensed
Products.
3. Section 1.12
of the License Agreement is hereby deleted in its
entirety.
4. Section 1.13
of the License Agreement is hereby deleted in its entirety and
replaced with the following:
“
First Commercial Sale ” means the first arms-length
commercial sale by River’s Edge or its Affiliates or
Sublicensees of a Licensed Product to a Third Party in any country
in the Territory before or after the Effective Date.
5. Section 1.17
of the License Agreement is hereby deleted in its entirety and
replaced with the following:
“
Licensed Products ” shall mean any product or products
containing niacinimide, zinc, copper and folic acid, including
without limitation, any product that was sold by DUSA under its
trademark, Nicomide ® , or any product that is, or may be listed in
drug database services as substitutable for, and/or listed in place
of the product, or any product which is covered under the claims of
U.S. Patent No. 6,979,468 entitled “Oral Composition and
Method for the Treatment of Inflammatory Cutaneous Disorders”
(the, “468 Patent”), including without limitation, a
product sold pursuant to appropriate labeling under the Dietary
Supplement Health and Education Act (hereafter,
“DSHEA”).
6. Section 1.21
of the License Agreement is hereby deleted in its entirety and
replaced with the following:
“
Patent Rights ” shall mean DUSA’s rights that it
now owns, or has acquired as of the Amendment Date of this
Agreement, in information inventions or discoveries encompassing
the compositions or use of the Licensed Products claimed in the
patent listed on Exhibit 1 and any reissues, reexaminations or
extensions thereof.
7. Section 1.26
of the License Agreement is hereby redesignated at
Section 1.27, and new Section 1.26 is hereby replaced
with the following:
“
Trademark ” shall mean the mark Nicomide
® , registered with the United States Patent and
Trademark Office.
8. Section 2.1.1
of the License Agreement is hereby deleted in its entirety and
replaced with the following:
“Subject
to the terms and conditions of this Agreement, DUSA hereby grants
to River’s Edge and its Affiliates an exclusive right and
license to the DUSA Technology, without the right to sublicense
unless expressly agreed to in writing by DUSA, to make, use,
market, sell, and distribute the Licensed Products in the
Territory.” Notwithstanding the foregoing in this
Section 2.1.1 and subject to Tiber Laboratories LLC becoming
bound to all of the terms and conditions of this License Agreement
as amended pursuant to Section 13.2, River’s Edge may
sublicense its rights granted hereunder to Tiber Laboratories
LLC.
9. Section 2.1.2
of the License Agreement is hereby deleted in its entirety and
replaced with the following:
“DUSA
also hereby grants to River’s Edge an exclusive license to
all rights, title and interest that it owns or controls to the
Trademark and trade dress used in connection with the sale by DUSA
of the Nicomide Ò
, without the right to
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sublicense
unless expressly agreed to in writing by DUSA; except that
River’s Edge shall have no rights or interest in the product
label currently used by DUSA, or in the copyright owned by DUSA
relating to the Licensed Product. DUSA reserves all rights not
expressly granted herein. This Section 2.1.2 shall be subject
to the limitations, representations, warranties, covenants and
acknowledgments of the Parties in Sections 7.3 and 8 of this
Agreement.“ Notwithstanding the foregoing in this
Section 2.1.2 and subject to Tiber Laboratories LLC becoming
bound to all of the terms and conditions of this License Agreement
as amended pursuant to Section 13.2, River’s Edge may
sublicense its rights granted hereunder to Tiber Laboratories
LLC.
10. Section 3
of the License Agreement is hereby deleted in its entirety and
replaced with the following:
As
consideration to DUSA for the license and other rights granted to
River’s Edge under this Agreement, River’s Edge shall
pay to DUSA (a) all amounts due for the full month in which
the Amendment Date occurs based on the formula stated in
Section 3 of the License Agreement prior to this Amendment,
and (b) the following sums specified in Sections 3.1 and 3.2
below:
3.1
Guaranteed Minimum Royalty . Subject to Section 11.4,
River’s Edge shall pay to DUSA a guaranteed minimum royalty
of Two Million Six Hundred Thousand Dollars ($2,600,000), in
thirteen (13) equal installments of Two Hundred Thousand
Dollars ($200,000) per month to be payable as set forth in
Section 4 below, which amount shall be paid in any and all
events, including without limitation, if this Agreement is
terminated for any reason (other than an action or documented
request by a government agency under Section 11.4) or if
River’s Edge ceases to sell the Licensed Products for any
reason whatsoever (other than an action or documented request by a
government agency under Section 11.4) (the “Fixed
Payment”). The first installment of the Fixed Payment shall
be immediately due and payable upon the execution of this Amendment
by both Parties. The next twelve (12) monthly installments
shall be due and payable commencing on the first day of the second
calendar month following the first installment payment, and then on
the first calendar day of each month thereafter until the Fixed
Payment is paid in full (collectively the “Fixed Payment
Period”).
3.2 Margin
Payments . Commencing with the month following the final
installment of the Fixed Payment, and continuing in each calendar
month thereafter, until the earlier of (1) sixteen
(16) consecutive calendar months (subject to 3.3 below), or
(2) payment by River’s Edge to DUSA of Five Million
Dollars ($5,000,000), in the aggregate, including the Fixed
Payment, (the “Margin Royalty Period”). River’s
Edge shall pay to DUSA a share of all revenues received by
River’s Edge or its Affiliates with respect to the Licensed
Products. The share of such revenues under this Section 3.2
shall be fifty percent (50%) of the amount remaining after the Cost
of Goods is
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subtracted from
Net Revenues of the Licensed Products resulting from activities in
the prior calendar month as described below. The timing of payments
shall be made in accordance with Section 4 below.
For the
purposes of clarity, if the first monthly installment of the Fixed
Payment due under Section 3.1 is made on March 15, 2009,
the second such installment shall be made on May 1, 2009, the
third such installment shall be made on June 1, 2009, etc. If
the first payment in the Margin Royalty Period is due May 15,
2010, the DUSA share of the Net Revenues will be calculated on Net
Revenues received during March 2010.
3.3 Subject to
Section 11.4, if River’s Edge has not made payments to
DUSA which in the aggregate, including the Fixed Payment, total
Five Million Dollars ($5,000,000) on or before the sixteenth
(16 th
) payment during the Margin Royalty
Period, then River’s Edge shall have the option of either
terminating the Agreement under Section 11.4 (as amended by
Section 22 hereof) or continuing to pay the Margin Royalty
payments under Section 3.2 hereof as amended until the total
of Five Million Dollars ($5,000,000) has been paid (but no later
than the date that this Agreement expires under Section 11.1),
at which time the license for the Licensed Products and Trademark
shall be fully paid up and no further royalties or license fees
shall be due to DUSA under this Agreement. At such time as Five
Million Dollars ($5,000,000) has been paid hereunder, River’s
Edge shall be the owner of all rights, title and interest in and to
the DUSA Technology and Trademark relating to the Licensed
Products; and DUSA shall deliver duly executed assignments of the
Patent and Trademark in forms appropriate for recording with the
U.S. Patent and Trademark Office and a bill of sale evidencing
River’s Edge’s ownership of the DUSA Technology and
Trademarks. Upon the transfer of ownership hereunder and except as
set forth in Section 11.6.2, this Agreement and the
parties’ rights and obligations hereunder shall terminate. If
River’s Edge elects to continue the Margin Royalty payments
this Agreement and Licenses granted hereunder shall continue and
River’s Edge will continue to use commercially reasonable
efforts to market and distribute the Licensed Product.
3.4 The Parties
hereby acknowledge and agree that the Patent Rights, Trademark and
DUSA Know-How licensed pursuant to this Agreement justify royalties
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