Exhibit 10.2
[Portions of this Exhibit have been omitted pursuant to a request for
confidentiality under Rule 24b-2 of the Securities Exchange Act of 1934, as
amended. A copy of this Exhibit with all sections intact has been filed
separately with the Securities and Exchange Commission.]
AMENDMENT NO. 1 TO LICENSE AGREEMENT
AND ASSET PURCHASE AGREEMENT
This AGREEMENT (“Amendment”), dated November 30, 2009 (the “Amendment Effective
Date”) is made by and between BioSante Pharmaceuticals, Inc., 111 Barclay
Boulevard, Lincolnshire, IL 60069 (“BPA”), and Azur Pharma International II
Limited, a Bermuda limited liability company, Clarendon House, 2 Church Street,
Hamilton HM 11, Bermuda and such of its Affiliates as it may designate from time
to time under one or more provisions of this Agreement (“Company”).
WHEREAS, BPA and Company are parties to that certain License Agreement dated as
of December 3, 2008 (as amended by the Amendment, the “License Agreement”).
WHEREAS, BPA and Company wish to amend certain provisions of the License
Agreement as set forth below.
WHEREAS, BPA and Company are parties to that certain Asset Purchase Agreement
dated as of December 3, 2008 (as amended by the Amendment, the “Asset Purchase
Agreement”).
WHEREAS, BPA and Company wish to amend certain provisions of the Asset Purchase
Agreement as set forth below.
NOW THEREFORE, BPA and Company (collectively, the “Parties” and each
individually, a “Party”) agree as follows:
1. Definitions. Except as otherwise set forth in this Amendment, capitalized
terms shall have the definitions set forth in the License Agreement or Asset
Purchase Agreement, as the case may be.
2. Royalties and Milestone Payments; Amendment to License Agreement.
(a) Within seven (7) days of the Amendment Effective Date, Company shall pay BPA
$1,000,000.00 (“Payment One”).
(b) Company may in its sole and absolute discretion pay BPA an additional amount
of either $525,000.00 (“Payment Two”) or $1,050,000 (“Payment Two A”) no later
than January 11, 2010. For clarity, the benefits to Company under this Amendment
for making Payment Two shall also apply if Company makes Payment Two A.
(c) If Company has made Payment Two A, then Company may in its sole and absolute
discretion pay BPA an additional amount of either $550,000.00 (“Payment Three”)
or $1,100,000.00 (“Payment Three A”) no later than February 22, 2010. For
clarity, the benefits to Company under this Amendment for making Payment Three
shall also apply if Company makes Payment Three A.

 

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(d) In consideration of the above payments, and depending on what payments are
made, the royalty required by Section 3(a)(ii) of the License Agreement and the
milestones required by Sections 3(a)(iii)(1), 3(a)(iii)(2), 3(a)(iii)(4), and
3(a)(iii)(5) of the License Agreement shall modified from the current rates and
amounts to the rates and amounts shown in the attached Table 1. After Payment
One, the royalties will be reduced to the rates under the heading “After Payment
One.” If Payment Two is made, such royalties shall be reduced to the rates shown
in the Table 1 below under the heading “After Payment Two.” If Payment Two A is
made, such royalties and such milestones shall be reduced to the rates and
amounts under the heading “After Payment Two A.” If Payment Three is made, then
such royalties shall be reduced to the rates under the heading “After Payment
Three.” If Payment Three A is made, such royalties and such milestones shall be
reduced to the rates and amounts under the heading “After Payment Three A.”
For clarity, the milestones required by Sections 3(a)(iii)(3), (6), and (7) of
the License Agreement are not modified by this Amendment and will still be
required in accordance with the terms of the License Agreement if the specified
Net Sales of those subsections are achieved.
(e) If Company pays BPA Payment Two, the second Section 3(a)(ii)(2) of the
License Agreement (beginning “In the event that one of more generic versions. .
. .”) is deleted in its entirety and replaced with the following:
“In the event that one or more generic versions of the Product that is approved
under 21 U.S.C. 355(j) (or any successor legislation) or which has an “AB”
rating with respect to that Product, is sold by a Third Party in the Territory,
for the remainder of the Royalty Term the Royalty payable pursuant to
Section 3(a)(ii) shall be reduced from the royalties shown in Table 1 under the
heading “After Payment Two” by the same percent reduction as occurs under the
Antares License Agreement as the result of such generic entry.”
(f) If Company pays BPA both Payment Two and Payment Three, the second
Section 3(a)(ii)(2) of the License Agreement (beginning “In the event that one
of more generic versions. . . .”) is deleted in its entirety and replaced with
the following:
“In the event that one or more generic versions of the Product that is approved
under 21 U.S.C. 355(j) (or any successor legislation) or which has an “AB”
rating with respect to that Product, is sold by a Third Party in the Territory,
for the remainder of the Royalty Term the Royalty payable pursuant to
Section 3(a)(ii) shall be reduced by such amount below 4.5% of Net Sales as the
royalty payable by BPA to Antares is reduced.”
(g) In each case, the royalties and milestones set forth in Table 1 shall take
effect as of the first day of the calendar month following the month in which
the payment is made.
(h) Section 3 of the License Agreement is amended by adding a new Section 3(b)
as follows:

 

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“Notwithstanding anything in this Agreement to the contrary, (i) the royalties
hereunder shall never be less than the royalties required by the Antares License
Agreement, which are 4.5% of Net Sales with a reduction to 3.5% of Net Sales in
the case of generic competition and (ii) if Company has made Payment Three or
Payment Three A, the royalties hereunder shall never be greater than the
royalties required by the Antares License Agreement (which as stated above is
4.5% of Net Sales with a reduction to 3.5% of Net Sales in the case of generic
competition). Further, when Company sends royalty reports to BPA it shall at the
same time send a copy of those royalty reports to Antares. Additionally, if
Company makes Payment Three or Payment Three A then it shall going forward remit
royalty payments and send royalty reports directly to Antares (with a copy of
the reports and check or payment advice to BPA), and BPA agrees that with
respect to Company’s royalty obligations to BPA under this License Agreement the
receipt of those payments by Antares shall be deemed equivalent to their receipt
by BPA.”
3. Additional Modifications to License Agreement in the Event of Payment Three.
If Company pays BPA both Payment Two and Payment Three, then the License
Agreement shall be further amended as follows upon receipt of Payment Three:
(a) Section 7 of the License Agreement is amended as follows: Sections 7(a) and
7(b) are retained without modification. Sections 7(c), 7(d), and 7(e) are
deleted in their entirety and replaced with the following:
“(c) Company shall provide BPA an annual summary report of its commercialization
of the Product, including copies of the Company’s sales and marketing plans and
one copy of each advertising, detailing or promotional material used during the
year.
(d) With each annual summary required by Section 7(c) above, Company shall also
provide BPA with copies of all material correspondence and documents to and from
FDA and all notices received from FDA concerning the Product. However, any such
materials concerning safety or adverse events, or matters that may interrupt
manufacture or require any recall, shall promptly be provided by Company to BPA
and not delayed until the annual submission.”
(b) Section 16(b)(iii)(a) to (c) of the License Agreement shall be deleted in
its entirety and replaced with the following:
“Notwithstanding the provisions of the foregoing Sections (a) and (b) if a
Paragraph IV Certification (as defined in C.F.R. Title 21) is filed referencing
the Product the following provisions shall apply:
(a) in the event that either BPA or Company receives a Paragraph IV
Certification (as defined in C.F.R. Title 21) it shall inform the other Party
verbally and in writing (by facsimile or by e-mail) as soon as practicable and
in any event not later than two (2) Business Days of receipt of the foregoing
certification or notice;

 

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(b) during the following twenty-one (21) day period, Company shall consult with
BPA as to the commercial reasonableness of suing such Third Party for patent
infringement within the requisite forty-five (45) day period (“Infringement
Suit”);
(c) if upon, expiration of the twenty-one (21) day period, Company elects at its
discretion to file an Infringement Suit, the following applies:
i as between BPA and Company, Company shall have sole discretion to direct the
strategy of the Infringement Suit (with Company recognizing that Antares as
patent owner may itself exercise such control);
ii Company shall keep BPA informed at all times of the Infringement Suit
including providing copies of any communications received in connection with
such litigation to BPA promptly after receipt thereof. Company shall consult
with and consider any comments made by BPA (including the development and
implementation of a litigation strategy) and permit BPA the opportunity to
review and comment on any proposed written communication, filing pleadings or
other documents or submissions filed with the court in the course of such
Infringement Suit;
iii BPA shall cooperate with Company to enforce the Patents and the Know-How,
including initiation or maintenance as a party to the Infringement Suit to
enforce such rights;
iv Company shall be responsible for Company’s own external costs and expenses,
including legal fees, associated with the Infringement Suit, and shall also be
responsible for such reasonable costs of BPA as BPA incurs at the request of
Company if BPA joins in the suit at Company’s request. Any recovery realized as
a result of any infringement action described in this Section 16(b)(iii) (after
reimbursement of the Parties’ reasonable attorneys’ fees for outside counsel and
litigation expenses) shall be treated as Net Sales of Product in the year of
receipt in accordance with Section 3(a) with Company receiving such amounts and
paying to BPA the applicable royalty under Section 3(a)(ii), but shall not be
treated as Net Sales for the purpose of any milestone payments under
Section 3(a)(iii).”
(c) Section 16(e) of the License Agreement shall be deleted in its entirety and
replaced with the following:
“(e)(i) Each Party shall promptly notify the other Party in writing of any
allegation made, threatened or brought against either of them alleging
infringement or other unauthorized use of the intellectual property of a Third
Party arising from (i) the development, manufacture, importation, use, offer for
sale, sale or other commercialization of the Product in the Territory or
(ii) from the development or manufacture outside the Territory as relates to the
importation, use, offer for sale, sale or other commercialization of the Product
in the Territory (“Infringement Claim”). The provisions of this Section 16(e)
are in addition to and separate from the provisions of Section 11(a)(xiii).

 

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(e)(ii) BPA shall at Company’s request consult with Company on the response to
an Infringement Claim, and shall at Company’s request cooperate with Company (at
Company’s expense) in Company’s response and defense of such claim, but shall
otherwise have no obligation in respect to an Infringement Claim.
(e)(iii) Company shall have sole discretion as to the manner in which it will
defend an Infringement Claim, including with regard to any actions Company
proposes to take in order to mitigate any loss or liability with respect to any
Infringement Claim, such actions may include Company ceasing to sell the
Product, DPT ceasing to manufacture and supply Company with Product, Company
ceasing to supply BPA with Product (for use outside the Territory) and/or the
Company electing to modify the Product.”
(d) Section 16(f) of the License Agreement shall be deleted in its entirety and
replaced with the following:
“Any licenses from Third Parties that may be required for Company’s activities
under this License Agreement shall be the sole responsibility of Company in its
sole discretion and at its sole expense. BPA shall at Company’s request consult
with Company with respect to any such potential license.”
(e) Section 9(d) of the License Agreement shall be deleted in its entirety and
replaced with the following:
“Subject to compliance with all applicable laws and regulatory requirements,
Company agrees to supply BPA with Product at cost plus 7.5% for use in Israel
and Canada and BPA shall have the right to place orders for reasonable
quantities of Product for sale by BPA or BPA’s licensees in Israel and Canada
when Product is being made by or for Company; provided, however, if BPA and
BPA’s licensees intend to order sufficient quantities of Product to comprise a
complete manufacturing batch of Product, BPA and its licensees shall place their
own order for the Product independently of Company’s orders. Company shall give
BPA reasonable advance notice for each manufacturing run to enable BPA to
exercise its rights under this Section 9(d). Product shall be packaged in the
normal US packaging and Company shall not be responsible for any changes in
packaging or other activities that are not part of the normal manufacturing
practices of Company. BPA shall pay Company’s actual out of pocket cost for such
manufacture plus 7.5% of such cost (which shall only be payable if such product
is purchased from Company) including any surcharges imposed by the manufacturer
for partial batches and special packaging and labeling requirements. BPA shall
make payments for its orders either directly to the manufacturer or to Company,
as applicable, and shall take delivery either directly from manufacturer or
Company, with the details of same to be negotiated in good faith between BPA and
Company (subject to the default rules of the Uniform Commercial Code if

 

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agreement on the details is not reached). In the event that the manufacturer is
not able to fill the entire quantity ordered by Company and BPA, Company shall
be entitled to direct DPT to satisfy the needs of Company and its customers as
reasonably demonstrated by Company to BPA, and if there is sufficient capacity
remaining to supply all or part of the requirement of BPA and its licensees. In
no event shall Company have any responsibility for any matters relating to the
supply of the Product such as failed lots, quality issues, delays in supply, or
product liability or otherwise have any liability with regard to the supply of
such product, and BPA hereby indemnifies and holds harmless Company with regard
to any claim which may be made by any Third Party and for its part confirms that
Company has no liability to BPA based on or arising out of the supply of Product
under this Section 9(d) (except for Company’s obligation to supply as set forth
in the first sentence of this Section 9(d)).”
(f) Section 9 of the License Agreement is amended by adding a new Section 9(f)
as follows:
“For countries outside the Territory other than Israel and Canada, Company may
at its sole discretion agree that it shall supply BPA with Product for use in
such countries on such terms as may be agreed including (i) to the extent
applicable, the provisions set out in Section 9(d), (ii) Company shall be
permitted to allocate limited manufacturing capacity or limited supply of
Product to itself and its own customers ahead of any orders for Product placed
by BPA for such countries, and (iii) the Parties shall in such event confer in
an effort to arrange to fill BPA’s orders for such countries in a way that will
not disrupt manufacturing or supply for Company.”
4. Modification to Asset Purchase Agreement in the Event Company Makes Payment 3
Three A.
If Company pays BPA both Payment Two A and Payment Three A, then the Asset
Purchase Agreement shall be amended as follows upon receipt of Payment Three:
(a) Section 13 of the Asset Purchase Agreement shall be deleted in its entirety
and replaced with the following:
“In the event that the License Agreement between BPA and the Company is
terminated for material breach by Company, or Company knowingly takes any action
(or refuses or omits to take any action) that would cause a breach of the
Antares License Agreement likely to result in the termination of the Antares
License Agreement by Antares on account of such breach, Company assigns all
right, title and interest in and to the NDA, the Trademark (together with all
goodwill associated therewith), and the Domain Names to BPA, shall promptly
transfer all documentation related to such NDA, Trademark, and Domain Names to
BPA, and agrees to take all such further action and promptly execute such
further documents as may be reasonably necessary or desirable to give full
effect to such assignment, including without limitation submitting a letter to
the FDA

 

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requesting transfer and any related documents with the FDA to effect such
transfer, providing an assignment of the Trademark in recordable form, and
providing an assignment to transfer ownership of the Domain Name with the
registrar. After such transfer of the NDA to BPA, Company agrees to cooperate
with BPA, at Company’s own expense other than its reasonable out of pocket
expenses, which shall be reimbursed by BPA upon request, for a reasonable
transition period not to exceed six (6) months, regarding (i) FDA regulatory
obligations for the Product, including without limitation the preparation and
submission of annual reports, the reporting of adverse events, and cooperating
with governmental regulatory agencies; (ii) communication with Third Parties
regarding the Product, including without limitation responding to complaints and
medical inquiries; (iii) investigating all complaints and adverse drug
experiences related to the Product; and (iv) giving such notice as BPA may
request to the FDA and to DPT or any other contract manufacturer of Product.”
5. Agreements otherwise remain in effect. All provisions of the License
Agreement and Asset Purchase Agreement that are not amended in this Agreement
remain in effect, except to the extent that any provisions may have lapsed, been
satisfied, or become moot without regard to this Agreement.
[signature page follows]

 

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IN WITNESS THEREOF, BPA and the Company have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
written above.

            BioSante Pharmaceuticals, Inc.
      By   /s/ Stephen M. Simes         Stephen M. Simes        Chief Executive
Officer and President        Azur Pharma International II Limited
      By:   /s/ Kevin Insley         Kevin Insley        Director   

 

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TABLE 1

                                                              After   After  
After   After   After Event   Current   Payment One   Payment Two   Payment Two
A   Payment Three   Payment Three A
Net Sales of the Product in the Territory in a calendar year under $10,000,000
or over $17,500,000
  Royalty 10%   Royalty 7.25%   Royalty 5.875%   Royalty 5.875%   Royalty 4.5%  
Royalty 4.5%
Net Sales of the Product in the Territory in a calendar year Sales between
$10,000,000 and $17,500,000
  Royalty 20%   Royalty 12.75%   Royalty 8.625%   Royalty 8.625%   Royalty 4.5%
  Royalty 4.5%
Milestone at $XXXXXXX in Net Sales of the Product in the Territory in a calendar
year
  $XXXXXXXX   $XXXXXXXX   $XXXXXXXX   $XXXXXXXX   $XXXXXXXX   $XXXXXXXX
Milestone at $XXXXXXX in Net Sales of the Product in the Territory in a calendar
year
  $XXXXXXXX   $XXXXXXXX   $XXXXXXXX   $XXXXXXXX   $XXXXXXXX   $XXXXXXXX
Milestone at $XXXXXXX in Net Sales of the Product in the Territory in a calendar
year
  $XXXXXXXX   $XXXXXXXX   $XXXXXXXX   $XXXXXXXX   $XXXXXXXX   $XXXXXXXX
Milestone at $XXXXXXX in Net Sales of the Product in the Territory in a calendar
year
  $XXXXXXXX   $XXXXXXXX   $XXXXXXXX   $XXXXXXXX   $XXXXXXXX   $XXXXXXXX

[Portions of this Section have been omitted pursuant to a request for
confidentiality under Rule 24b-2 of the Securities Exchange Act of 1934, as
amended. A copy of this Exhibit with all sections intact has been filed
separately with the Securities and Exchange Commission.]

 

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