[ *** ] = 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 406 of the Securities
Exchange Act Of 1933, as amended.
This Second
Amendment (the “ Amendment ”) is entered into as
of February 10, 2006 (the “ Second Amendment Date
”) to modify the terms of the License Agreement (the “
License Agreement ”) dated as of March 15, 2004
(as first amended April 5, 2005), by and between DAIICHI
ASUBIO PHARMA CO., LTD., a corporation organized and existing under
the laws of Japan and having its registered office at 9-11, Akasaka
2-chome, Minato-ku, Tokyo 107-8541, Japan (hereinafter referred to
as “ DAP ”) and REPLIDYNE, INC., a corporation
organized and existing under the laws of the State of Delaware,
having its principal business office at 1450 Infinite Drive,
Louisville, Colorado 80027, U.S.A. (hereinafter referred to as
“ REPLIDYNE ”). DAP and REPLIDYNE are sometimes
referred to collectively herein as the “Parties” or
individually as a “Party.”
WHEREAS , DAP and REPLIDYNE have entered into the
License Agreement regarding the development and commercialization
of Faropenem Medoxomil for the United States and Canadian
markets;
WHEREAS , REPLIDYNE has reached an agreement in
principle with Forest Laboratories, Inc. and its affiliates
(“ Forest ”) for the sublicense of certain
rights under the License Agreement and has discussed the proposed
arrangement with DAP;
WHEREAS , in order to finalize the agreement with
Forest, REPLIDYNE and DAP have agreed to modify the terms of the
License Agreement to be consistent with certain terms in the
REPLIDYNE/Forest agreement; and
WHEREAS , in light of those developments, the parties
agree to revise certain terms of the License Agreement as indicated
below.
NOW,
THEREFORE , for and in
consideration of the premises and covenants contained herein, DAP
and REPLIDYNE agree to amend the License Agreement as written
below.
1. Section 1.25 “Field” shall be
replaced in its entirety. The new Section 1.25 shall be
written as follows:
“1.25
“Field” means all uses of the Drug Product to
treat, ameliorate or prevent infectious diseases in humans and all
other pharmaceutical uses and indications for the Drug
Product.
2. Section 2.1 “License Grant”
shall be revised to add at the end such section the following new
paragraph:
1
“Notwithstanding
the foregoing, in the event REPLIDYNE is granted the license under
Section 8.2 of the Supply Agreement dated as of
December 20, 2004 by and among DAP, Replidyne and Nippon Soda
Co., Ltd., DAP hereby grants to REPLIDYNE a non-exclusive,
worldwide license under the DAP Patents, DAP Improvements and DAP
Know-How (which for this purpose shall include all items relating
specifically to the manufacture of Drug Substance) to manufacture
Drug Substance anywhere in the world, with the right to sublicense
to the Manufacturing Designee (as defined in the Supply Agreement),
for the compensation provided in Section 8.3 of the Supply
Agreement.”
3. Section 2.7 “Sales Outside the
Territory” shall be replaced in its entirety. The new Section
2.7 shall be written as:
“ 2.7 Sales Outside the Territory
. To the extent not otherwise prohibited by law, REPLIDYNE
shall not sell Drug Products to customers outside the Territory or
to any party in the Territory which REPLIDYNE has reasonable
grounds to believe is likely to export Drug Products outside the
Territory. If REPLIDYNE becomes aware that a Third Party in the
Territory is exporting Drug Products acquired from REPLIDYNE to a
country outside the Territory, then REPLIDYNE shall use
Commercially Reasonable Efforts within its legal rights and the
remedies afforded by Applicable Laws to deter such Third Party from
continuing such exportation. All inquiries or orders received by
REPLIDYNE for Drug Products to be delivered to outside Territory
shall be referred to DAP. DAP agrees, on behalf of itself and any
of its licensees, to prevent exports of Drug Product from outside
the Territory into the Territory on the same terms as set forth
above.”
4. Section 5.3 “Launch” shall be
replaced in its entirety. The new Section 5.3 shall be written
as:
“
5.3 Launch . REPLIDYNE shall use
Commercially Reasonable Efforts to Launch the initial form of the
Drug Product in the United States within six (6) months after
obtaining Regulatory Approval and FDA approval of labeling and
product launch promotional materials for such Drug Product (the
“Six Months Period” ); provided that:
(a) FDA approves the Drug Product for use in acute sinusitis
and either community acquired pneumonia or acute exacerbations of
chronic bronchitis; (b) FDA approves dating for the Drug
Product of at least eighteen (18) months; and (c) REPLIDYNE or
its sublicensee has available launch supplies of Drug Product
having such dating. REPLIDYNE shall be required to order Drug
Substance for such launch supplies when it is commercially
reasonable to do so.
If
REPLIDYNE determines that seasonality considerations indicate that
another Launch time is preferable, the Six Months Period may be
extended by up to an additional three
(3) months.”
5. Section 6.1 “License Fees”
shall be replaced in its entirety. The new Section 6.1 shall
be written as:
“
6.1 License Fees . In consideration of
the rights and benefits granted hereunder, REPLIDYNE shall pay to
DAP the following license fees in Japanese Yen (hereinafter
referred to as “JPY” ):
[ *** ] = 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 406 of the Securities
Exchange Act of 1933, as amended.
2
(a) Four
hundred million Japanese Yen (JPY 400,000,000) within thirty
(30) days after execution of this Agreement;
(b) Three
hundred seventy-five million Japanese Yen (JPY 375,000,000)
within ninety (90) days after the NDA filing in the Territory
[ *** ] ;
(c) One
hundred twenty-five million Japanese Yen (JPY 125,000,000)
within ninety (90) days after the NDA approval in the
Territory of [ *** ] for any single indication,
provided that REPLIDYNE shall pay DAP an additional
Two hundred fifty million Japanese Yen (JPY 250,000,000)
within ninety (90) days of the earlier of (i) NDA
approval in the Territory of [ *** ] which approval includes
the acute bacterial sinusitis indication and either community
acquired pneumonia or acute exacerbations of chronic bronchitis or
(ii) Launch of [ *** ] irrespective of which indications are
approved in addition to (f) below;
(f) Five
hundred million Japanese Yen (JPY 500,000,000) within ninety
(90) days after the Launch, provided, however ,
[ *** ] ; and
6. Section 6.2.4 “Reduction of Royalty
Rate” shall be replaced in its entirety. The new Section
6.2.4 shall be written as:
“
6.2.4 Reduction of Royalty Rate. Upon
the expiration date of all valid claims of the DAP Patents in a
given country that would be infringed by the manufacture, use or
sale of the Drug Product actually sold by REPLIDYNE in such country
but for the license granted herein, the royalty rate in such
country shall be reduced to [ *** ] percent ( [ *** ]
%) of the royalty rates pursuant to Sections 6.2.1 and
6.2.2(a). Additionally, if during the Term of this Agreement any
product containing any form of faropenem as an active ingredient is
sold in any country in the Territory by a company other than
REPLIDYNE, its Affiliates or sublicensees, then the royalty rate on
Net Sales of branded Drug Product ( i.e. , sold using the
Trademark) for such country shall be reduced to [ *** ]
percent ( [ *** ] %) of the royalty rates pursuant to
Sections 6.2.1 and 6.2.2(a); provided that if such other
product is sold before the expiration of all valid claims of the
DAP Patents in such country and such other product infringes at
least one such claim, REPLIDYNE is using Commercially Reasonable
Efforts to assert any relevant Patents to terminate such
sales.
If the launch
of a generic equivalent to a Drug Product by a Third Party [ ***
] , then, the licenses granted to REPLIDYNE pursuant to this
Agreement shall be deemed to include the sale and distribution by
REPLIDYNE and its sublicensees of such Drug Product as a generic
Drug Product ( i.e. , without use of the
[ *** ] = 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 406 of the Securities
Exchange Act of 1933, as amended.
3
Trademark) in
such country of the Territory. REPLIDYNE shall pay to DAP, on each
such generic Drug Product an amount equal to [ *** ] percent
( [ *** ] %) of the profits on such sales. REPLIDYNE shall
not exercise the foregoing license if it appears the generic
equivalent to the Drug Product [ *** ] . However, Replidyne
or its sublicensee may nevertheless exercise the foregoing license
if, [ *** ] . If sales of the generic equivalent of Drug
Product terminate for any reason, then Replidyne and its
sublicensees shall promptly cease the sale and distribution of the
generic product or, to the extent to do so would be prohibited by
law or would violate best industry practices, cease the active
promotion for sale of the generic product. For purposes of this
paragraph “profits” means an amount equal to
(a) Net Sales of such generic Drug Product, minus
(b) Cost of Goods (as defined in Section 6.2.8 )
and distribution, selling and marketing costs of REPLIDYNE or its
sublicensees for such generic Drug Product in such country of the
Territory.”
7. Section 6.2.7 “Inspection of
Records” shall be replaced in its entirety. The new Section
6.2.7 shall be written as:
“
6.2.7 Inspection of Records . REPLIDYNE
shall keep and maintain accurate and complete records with respect
to Net Sales, Cost of Goods, royalties and the calculation thereof
with respect to Drug Products manufactured, distributed and sold by
REPLIDYNE in sufficient detail to enable the determination of the
royalties payable to DAP. At DAP’s request, REPLIDYNE shall
make such records for the preceding three (3) year period
available for inspection and audit at a mutually convenient time
within normal business hours by an independent auditor appointed by
DAP subject to the reasonable approval of REPLIDYNE, and who shall
enter into a confidentiality agreement in favor of REPLIDYNE, for
the purpose of verifying the reports and payments submitted to DAP.
Said inspection and audit shall be limited to no more than one
(1) time during each twelve (12) month period. DAP shall bear
the cost of any such inspection and audit, provided that if the
inspection and audit shows an underpayment of royalties of more
than five percent (5%) of the amount paid for the audited period,
then REPLIDYNE shall promptly reimburse DAP for all costs incurred
in connection with such inspection and audit and shall promptly pay
the amount of the underpayment.”
8. A
new Section 6.2.8 shall be added to Article 6 and be
written as:
“
6.2.8 [ *** ] Sharing . If [ ***
] for all Drug Product in the Territory exceeds on a calendar
quarter basis (i) [ *** ] percent ( [ *** ] %) of Net
Sales at any time prior to the [ *** ] anniversary of the
Launch or (ii) [ *** ] percent ( [ *** ] %) of Net
Sales during any calendar quarter thereafter (the “ [ ***
] Threshold ”), the royalty payable by REPLIDYNE to DAP
under Section 6.2.1 for such calendar quarter shall be
reduced by an amount equal to [ *** ] percent ( [ ***
] %) of the amount by which the [ *** ] for such
calendar quarter exceeds the [ *** ] Threshold, but in no
event by more than [ *** ] percent ( [ *** ] %) of
Net Sales for such calendar quarter; provided that during
the [ *** ] months following Launch, there shall be no
reduction in the royalties payable by Replidyne to DAP except to
the extent the total reduction determined as described above
exceeds [ *** ] US Dollars ($ [ *** ] ) in such [
*** ] month
[ *** ] = 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 406 of the Securities
Exchange Act of 1933, as amended.
4
period. For
purposes of this section, [ *** ] . If the royalty payable
by REPLIDYNE to DAP under Section 6.2.1 for such
calendar
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