Exhibit 10.10
ADDENDUM TO LICENSE AND SUPPLY AGREEMENT
THIS ADDENDUM made on this 14th day of August, 2008 (the “Effective Date”) by
and between Meiji Seika Kaisha, Ltd. (“Licensor”) and Cornerstone BioPharma,
Inc. (“Licensee”) with respect to the License and Supply Agreement dated
October 12, 2006 regarding Cefditoren Pivoxil, as amended by Amendment No. 1
dated July 27, 2007 (the “License Agreement”).
WITNESSETH:
WHEREAS, the licensing arrangement contemplated by the License Agreement is
confined to the premise that Licensee will purchase the API from Licensor to
manufacture the Product for sale in the Territory; and
WHEREAS, the parties desire to expand the scope of the licensing arrangement
under the License Agreement so that Licensee may purchase certain Product from
Licensor and sell such Product in the Territory, and also desire to make certain
amendments to the License Agreement; and
WHEREAS, the parties have agreed to implement the aforesaid desire by way of
entering into this Addendum to the License Agreement.
NOW, THEREFORE, it is agreed by the parties as follows:
1. Capitalized terms not defined herein shall have the same meanings ascribed to
them in the License Agreement.
 
[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

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2. In addition to the definitions set forth in Paragraph 1 above, the following
terms shall have the following meanings for the purpose of this Addendum:

(a)   The term “Licensor Supplying 200mg Product” shall mean the Product in the
form of 200mg tablet manufactured by Licensor’s subsidiary in Spain, Tedec-Meiji
Farma, S.A. (“Tedec-Meiji”) and supplied by Licensor to Licensee.

(b)   The term “Licensor Supplying 400mg Product” shall mean the Product in the
form of 400mg tablet manufactured by Tedec-Meiji and supplied by Licensor to
Licensee.

(c)   The term “200mg Product Specifications” shall mean the specifications and
analytical method relating to the Licensor Supplying 200mg Product attached
hereto as Exhibit A.

(d)   The term “400mg Product Specifications” shall mean the specifications and
analytical method relating to the Licensor Supplying 400mg Product attached
hereto as Exhibit B.

3. Paragraph 1 of Article 2 of the License Agreement shall be amended to
include, in addition to the license currently granted therein, an exclusive
license to offer to sell, sell and have sold in the Territory the Licensor
Supplying 200mg Product and the Licensor Supplying 400mg Product under the
Patents, the Technical Information and the Product Registrations.
4. Licensee shall not be required to pay any additional License Fee for the
additional license granted under Paragraph 3 above.

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5. In consideration for the additional license granted under Paragraph 3 above,
Licensee shall pay to Licensor a running royalty of [***] percent ([***]%) of
the Net Sales of the Licensor Supplying 200mg Product and the Licensor Supplying
400mg Product for a period of ten (10) years from the launch date of each of
those Products. For the avoidance of doubt, the royalties under this Paragraph 5
are in lieu of any royalty payments that would otherwise be due and payable in
respect to the Licensor Supplying 200mg Product and the Licensor Supplying 400mg
Product under Paragraph 2 of Article 5 of the License Agreement.
6. Subject to the terms and conditions of this Addendum, Licensor shall sell the
Licensor Supplying 200mg Product and/or the Licensor Supplying 400mg Product for
use in the Territory exclusively to Licensee, and Licensee shall purchase the
Licensor Supplying 200mg Product and/or the Licensor Supplying 400mg Product
exclusively from Licensor until expiration of a period of ten (10) years from
the launch date thereof, subject to Paragraph 7 of this Addendum.
(a) The supply prices of the Licensor Supplying 200mg Product and the Licensor
Supplying 400mg Product are inclusive of API used therein and shall be as listed
below and shall be subject to the adjustment based on Licensee’s ex-factory
price fluctuation and the foreign exchange fluctuation set forth in (b) and
(c) below:
Licensor Supplying 200mg Product
10 tablets/blister x 2 blisters per pack: [***]
Licensor Supplying 400mg Product
4 tablets/blister x 5 blisters per pack: [***]
4 tablets/blister x 7 blisters per pack: [***]
 
[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

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2 tablets/blister x 1 blister per pack (“Sample Pack of Licensor Supplying 400mg
Product”): [***]
Terms of delivery: C.I.P. Memphis, Tennessee, U.S.A. (DDN Obergfel, LLC
warehouse) or such other destination as may be agreed by Licensor and Licensee
(which agreement shall not be unreasonably withheld), by air.
(b) Not less than fifteen (15) days before the first date of each and every six
(6) month period after the first year from the launch date of the Licensor
Supplying 200mg Product and the Licensor Supplying 400mg Product, Licensee shall
provide Licensor with an updated Licensee’s ex-factory prices of those Products.
Effective on the first date of each and every such six (6) month period, the
supply prices of subsequent purchases of the Licensor Supplying 200mg Product
and the Licensor Supplying 400mg Product except for the Sample pack of Licensor
Supplying 400mg Product shall be revised to be the greater of (i) the prices for
the Licensor Supplying 200mg Product and the Licensor Supplying 400mg Product
listed in (a) above or (ii) the supply prices of the Licensor Supplying 200mg
Product and the Licensor Supplying 400mg Product calculated in accordance with
the following formula, subject to the adjustment based on the foreign exchange
fluctuation set forth in (c) below:
Future Supply Price of the Licensor Supplying 200mg Product = {{[0.5] x [(the
updated Licensee’s ex-factory price of the Licensor Supplying 200mg Product
divided by the previous Licensee’s ex-factory price of the Licensor Supplying
200mg Product) – (1)]} + 1} x {current supply price of the Licensor Supplying
200mg Product}
 
[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

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Future Supply Price of the Licensor Supplying 400mg Product = {{[0.5] x [(the
updated Licensee’s ex-factory price of the Licensor Supplying 400mg Product
divided by the previous Licensee’s ex-factory price of the Licensor Supplying
400mg Product) – (1)]} + 1} x {current supply price of the Licensor Supplying
400mg Product}
The supply price of the Sample Pack of Licensor Supplying 400mg Product shall be
only subject to the adjustment based on the foreign exchange fluctuation set
forth in (c) below.
(c) In the event that the exchange rate of the Japanese Yen to the US$ as of the
date on which any firm written order for the Licensor Supplying 200mg Product or
the Licensor Supplying 400mg Product is placed by Licensee (the “Exchange Rate”)
fluctuates more than [***] above or below the exchange rate of Japanese Yen
[***]=US$1, then the supply price of the Licensor Supplying 200mg Product or the
Licensor Supplying 400mg Product in respect of such order shall be adjusted in
accordance with the following formula:
Supply Price of the Licensor Supplying 200mg Product Adjusted by Exchange
Rate={[(current supply price of the Licensor Supplying 200mg Product x Japanese
Yen [***]/US$) + (current supply price of the Licensor Supplying 200mg Product x
the Exchange Rate)] divided by 2} divided by the Exchange Rate
 
[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

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Supply Price of the Licensor Supplying 400mg Product Adjusted by Exchange
Rate={[(current supply price of the Licensor Supplying 400mg Product x Japanese
Yen [***]/US$) + (current supply price of the Licensor Supplying 400mg Product x
the Exchange Rate)] divided by 2} divided by the Exchange Rate.
(d) In the event that the transactions of the Licensor Supplying 200mg Product
or the Licensor Supplying 400mg Product are not commercially reasonable for
Licensor and/or Licensee because they cannot generate a reasonable gross profit
using the supply price of the Licensor Supplying 200mg Product or the Licensor
Supplying 400mg Product which is generated from the calculation method described
in above (b) and/or (c) and Licensor and/or Licensee believe in good faith that
they are unable to continue the transactions of the Licensor Supplying 200mg
Product or the Licensor Supplying 400mg Product for the said reason(s), Licensor
and Licensee shall discuss in good faith measures to be taken to cope with such
situation.
(e) The payment terms for the Licensor Supplying 200mg Product and the Licensor
Supplying 400mg Product for one-year period from the Effective Date shall be
T.T. remittance to the bank designated by Licensor within thirty (30) days after
B/L date, provided that such payment terms are not applicable to the portion of
the quantity greater than 1,500,000 tablets of the Licensor Supplying 400mg
Product (equivalent to 3,000,000 tablets of the Licensor Supplying 200mg
Product) per shipment or if any preceding order remains unsettled and, in such
event, the payment terms for the said portion of any order or for any order
shipped while any preceding order remains
 
[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

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unsettled shall be advance payment by T.T. remittance to the bank designated by
Licensor. With respect to the payment terms for those Products after the above
one-year period, Licensor and Licensee shall discuss in good faith to continue
the same payment terms or revise the payment terms.
(f) Licensee shall place a firm order for the Licensor Supplying 200mg Product
and/or the Licensor Supplying 400mg Product at least four (4) months prior to a
desired shipping date. Licensor shall use commercially reasonable efforts to
ship the Licensor Supplying 200mg Product and/or the Licensor Supplying 400mg
Product within five (5) days of the desired shipping date and in amounts not
less than ninety five percent (95%) of the amount ordered. By the first day of
each month, Licensee shall submit to Licensor a non-binding six (6) months
rolling purchasing forecast of the Licensor Supplying 200mg Product and the
Licensor Supplying 400mg Product which shall be the best estimates of Licensee
but which shall not be binding upon Licensee.
(g) For each year during the five (5) year period from the earlier to occur of
the launch dates of the Licensor Supplying 200mg Product and the Licensor
Supplying 400mg Product, Licensee shall agree to purchase API, the Licensor
Supplying 200mg Product, the Licensor Supplying 400mg Product, and Sample Packs
of Licensor Supplying 400mg Product (collectively, “Qualifying Items”) from
Licensor equivalent to the following total combined gross sales of the
Qualifying Items as the minimum purchase quantity:

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Year 1 - $15,000,000
Year 2 - $20,000,000
Year 3 - $25,000,000
Year 4 - $30,000,000
Year 5 - $35,000,000
If Licensee’s purchases of the Qualifying Items from Licensor are less than the
annual minimum purchase quantity defined above, Licensee shall pay to Licensor
an amount equal to one-half of the difference between the annual minimum
purchase quantity defined above for the applicable year and the actual total
combined gross sales of the Qualifying Items for such year.
In addition to the above mentioned payment, in case it is deemed that Licensee
is not able to achieve the above gross sales in any year of the above five
(5) year period, Licensor and Licensee shall discuss in good faith measures to
be taken to cope with such situation, which may include Licensee changing an
existing co-promotion agreement or entering into a new co-promotion arrangement
to co-promote the Licensor Supplying 200mg Product and the Licensor Supplying
400mg Product with Licensee.
 

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Further, in the event that Licensee launches the Once-Daily Product and/or the
Pediatric Product (as defined in the letter agreement dated July 27, 2007) in
the Territory at any time during the above five (5) year period, then Licensor
and Licensee shall discuss in good faith an appropriate revision of the above
annual minimum purchase quantity applicable for the remainder of the above five
(5) year period after the launch date of the Once-Daily Product and/or the
Pediatric Product to account for API required for manufacture of such Product
pursuant to the License Agreement and, if applicable, for any reduction of
market share for the Licensor Supplying 200mg Product and/or the Licensor
Supplying 400mg Product caused by the Once-Daily Product being prescribed in
lieu of the Licensor Supplying 200mg Product and/or the Licensor Supplying 400mg
Product.
7. So long as Licensor is able to meet Licensee’s requirements for the Licensor
Supplying 400mg Product, Licensee shall refrain from manufacturing by itself or
having a third party manufacture on its behalf the Product in the form of 400mg
tablet.
8. With respect to the warranty and liability in relation to the Licensor
Supplying 200mg Product and the Licensor Supplying 400mg Product, Licensor and
Licensee agree as follows:
(a) Licensor warrants that the Licensor Supplying 200mg Product and the Licensor
Supplying 400mg Product supplied by it are manufactured in accordance with
applicable cGMP Rules and, when delivered to Memphis, Tennessee, U.S.A. (DDN
Obergfel, LLC warehouse) or such other destination agreed by Licensor and
Licensee, conform to the 200mg Product Specifications and the 400mg Product
Specifications, respectively, and shall not be adulterated or misbranded within
the meaning of applicable regulatory acts or the United States Federal Food,
Drug, and Cosmetic Act.

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(b) Licensor shall submit to Licensee with each consignment of the Licensor
Supplying 200mg Product and the Licensor Supplying 400mg Product supplied a
certificate signed by the quality assurance director of Tedec-Meiji setting out
the results of the analysis of that consignment confirming that it is in
conformity with the 200mg Product Specifications and the 400mg Product
Specifications and has been manufactured in accordance with applicable cGMP
rules.
(c) Within thirty (30) days after receiving each shipment of the Licensor
Supplying 200mg Product and the Licensor Supplying 400mg Product, Licensee shall
conduct a diligent inspection of those Products and shall inform Licensor of any
claim relating to quantitative deficiency in such shipment of Products. In the
event Licensee finds there is a quantitative deficiency in any shipment with
respect to the Product volumes indicated on the applicable shipping document(s)
and such quantitative deficiency is caused by Licensor’s shipment of short
quantity, Licensee shall, at its option: (i) only pay for actual quantities
delivered; or (ii) require Licensor to rectify any such deficiency by promptly
shipping the appropriate quantities of any relevant Product to or as directed by
Licensee, in which case Licensee shall be obligated to pay for any such
quantities pursuant to the terms and conditions of this Addendum. If Licensee,
upon such inspection, finds that the Licensor Supplying 200mg Product or the
Licensor Supplying 400mg Product does not conform to the respective
Specifications, Licensee shall so notify Licensor in writing with detailed
reasons accompanied by samples of the defective Licensor Supplying 200mg Product
or Licensor Supplying 400mg Product within the said thirty (30) days period. In
the event that the non-conformance of the Licensor Supplying 200mg Product or
the Licensor Supplying 400mg Product with the respective Specifications is
confirmed by Licensor upon its inspection

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of the said samples, Licensor shall, at its expense, replace the non-conforming
Licensor Supplying 200mg Product or Licensor Supplying 400mg Product or, if the
replacement Licensor Supplying 200mg Product or Licensor Supplying 400mg Product
is not then available, refund the purchase price paid for the non-conforming
Licensor Supplying 200mg Product or Licensor Supplying 400mg Product, at no
additional cost to Licensee. Should there arise disputes between Licensor and
Licensee with respect to the conformance or non-conformance of the Licensor
Supplying 200mg Product or the Licensor Supplying 400mg Product with the
respective Specifications, both parties shall jointly analyze, or if such joint
analysis is not practical, shall have a third party acceptable to Licensor and
Licensee, whose determination shall be binding and conclusive upon the parties,
analyze to see if the Licensor Supplying 200mg Product or the Licensor Supplying
400mg Product actually fails to conform to the respective Specifications. In the
event that the non-conformance of the Licensor Supplying 200mg Product or the
Licensor Supplying 400mg Product to the respective Specifications is finally
confirmed by such joint analysis, or as the case may be, third party analysis,
Licensor shall, at its expense, replace the non-conforming Licensor Supplying
200mg Product or Licensor Supplying 400mg Product or, if the replacement
Licensor Supplying 200mg Product or Licensor Supplying 400mg Product is not then
available, refund the purchase price paid for the non-conforming Licensor
Supplying 200mg Product or Licensor Supplying 400mg Product. Costs arising from
the third party analysis shall be borne by the party whose results were found
incorrect.
(d) In the event that Licensee does not notify Licensor of quantitative
deficiency and/or non-conformance of the Licensor Supplying 200mg Product or the
Licensor Supplying 400mg Product to the respective Specifications within the
thirty (30) days period as provided for in

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Paragraph (c) above, Licensee shall be deemed to have accepted the Product
delivered. Notwithstanding the foregoing, with respect to a claim for a “latent
defect”, Licensee may make a claim for replacement of Licensor Supplying 200mg
Product or the Licensor Supplying 400mg Product for a period of two (2) years
after receipt of the Licensor Supplying 200mg Product or the Licensor Supplying
400mg Product. The term “latent defect” used herein shall mean a defect in the
Licensor Supplying 200mg Product or the Licensor Supplying 400mg Product that
results in the respective Products not conforming to the respective
Specifications and that was not discoverable with reasonable and diligent
inspection of the respective Products, excluding a defect that was caused by
improper storage or mishandling of the respective Products by Licensee or any
third party after receipt of the respective Products by Licensee. Additionally,
Licensor shall be liable for such latent defect under Paragraph (e) below.
(e) Licensor shall indemnify, defend and hold Licensee harmless against any and
all actions, suits, claims, demands, prosecutions, product liabilities, costs
and expenses, arising out of breach of this Addendum by Licensor or out of any
claims or suits by any third party due to a defect in the Licensor Supplying
200mg Product and the Licensor Supplying 400mg Product if and to the extent that
such a defect is attributable to Licensor and/or Tedec-Meiji in the manufacture.
storage, handling or shipment of the respective Products.
(f) Except for the case provided in Paragraph (e) above (or as otherwise
provided in the License Agreement, including Paragraph 5 of Article 11 and
Paragraph 1 of Article 12 thereof), Licensee shall indemnify, defend and hold
Licensor harmless against any and all actions, suits, claims, demands,
prosecutions, product liabilities, costs and expenses, arising out of breach of
this Addendum by Licensee or out of any claims or suits by any third

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party based on or resulting from use, marketing, distribution or sale of the
Licensor Supplying 200mg Product and/or the Licensor Supplying 400mg Product by
Licensee. Notwithstanding the foregoing, if any third party claims that the
Licensor Supplying 200mg Product and/or the Licensor Supplying 400mg Product
caused adverse reactions or other personal injury notwithstanding that the
Product was manufactured in strict compliance with the applicable
Specifications, applicable cGMP rules, and was not adulterated, misbranded,
mishandled or otherwise deteriorated by acts or omissions of Licensee or other
parties and there is no negligence or fault on the part of Licensee in marketing
and selling the Licensor Supplying 200mg Product and/or the Licensor Supplying
400mg Product, Licensee shall have no obligation to indemnify Licensor for such
claims and Licensee shall have the right to deduct fifty percent (50%) of any
reasonable and verifiable costs actually incurred by Licensee in connection with
such claims from the running royalty payment which becomes otherwise due and
payable to Licensor in respect to Licensor Supplying 200mg Product and/or the
Licensor Supplying 400mg Product after occurrence of such claim under
Paragraph 5 of this Addendum.
(g) In the event of any recall of the Licensor Supplying 200mg Product and/or
the Licensor Supplying 400mg Product sold by Licensee, Licensee shall have
primary responsibility for such recall. Licensor shall cooperate with Licensee
in connection with such recall. Costs incurred in connection with such a recall
shall be allocated by the parties consistent with the preceding Paragraphs
(e) and (f).
(h) IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL,
INDIRECT OR SPECIAL DAMAGES SUFFERED BY THE OTHER PARTY WITH RESPECT TO THE
LICENSOR SUPPLYING 200MG PRODUCT AND THE

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LICENSOR SUPPLYING 400MG PRODUCT; provided, however, that this Paragraph shall
not be construed to limit either party’s indemnification obligations under
Paragraphs (e) and (f) above.
9. Article 8 of the License Agreement shall be deleted.
10. Article 16 of the License Agreement shall be amended to read as follows:
“Article 16. Term
This Agreement shall come into full force and effect upon execution hereof by
both parties and shall, unless earlier terminated pursuant to Article 15,
continue to be in full force and effect on a Product-by-Product basis until
expiration of ten (10) years from the launching date of each Product.
Thereafter, this Agreement shall, on a Product-by-Product basis, be
automatically renewed for subsequent one (1) year periods each unless either
party gives to the other party a written notice not to renew in respect of a
Product concerned at least six (6) months prior to the expiration of the initial
term or, as the case may be, the renewal term(s).”

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11. All applicable provisions of the License Agreement shall apply with respect
to the Licensor Supplying 200mg Product and the Licensor Supplying 400mg Product
so that the Licensor Supplying 200mg Product and the Licensor Supplying 400 mg
Product are included in the definition of “Product” under the License Agreement,
except that Paragraphs 1 and 2 of Article 5, Article 7 and Article 13 of the
License Agreement shall not apply with respect to the Licensor Supplying 200mg
Product and the Licensor Supplying 400mg Product.
12. This Addendum shall be read together with the License Agreement and shall
constitute an integral part of the License Agreement.
13. Except to the extent expressly varied or amended by this Addendum, all
provisions of the License Agreement shall remain unchanged and shall continue to
be in full force and effect.
14. The United Nations Convention on Contracts for the International Sale of
Goods is expressly disclaimed.
15. This Addendum shall become effective as of the Effective Date.
[signature page follows]

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[Signature Page to Addendum to License and Supply Agreement]
IN WITNESS WHEREOF, the parties have caused this Addendum to be executed by
their duly authorized representatives.

         
Meiji Seika Kaisha, Ltd.
      Cornerstone BioPharma, Inc.
 
       
/s/ Ryuzo Asada
 
Ryuzo Asada
      /s/ Craig Collard
 
 Craig Collard
Vice President
      President and CEO
International Headquarters
Pharmaceuticals
       

 

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Exhibit A
Specifications and Analytical Methods of Licensor Supplying 200mg Product

                      SPECIFICATIONS TEST ITEM   TEST METHOD   AT BATCH RELEASE
END OF SHELF LIFE
Description of the printed tablets
  Visual inspection   Shape: Elliptic
Colour: white   Shape: Elliptic
Colour: white
 
           
[***]
  [***]   Appearance: Free of visible evidence of foreign matter, contamination,
crack, chipping or other defects   Appearance: Free of visible evidence of
foreign matter, contamination, crack, chipping or other defects
 
           
 
      Printing: printed on one side with the appropriate logo in blue ink,
according to standard   Printing: printed on one side with the appropriate logo
in blue ink, according to standard
 
      [***]   [***]

 
[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

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Exhibit A (continued)

                      SPECIFICATIONS TEST ITEM   TEST METHOD   AT BATCH RELEASE
  END OF SHELF LIFE
[***]
  [***]   [***]   [***]

 
[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

18

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Exhibit B
Specifications and Analytical Methods of Licensor Supplying 400mg Product

                      SPECIFICATIONS TEST ITEM   TEST METHOD   AT BATCH RELEASE
  END OF SHELF LIFE
Description of the printed tablets
  Visual inspection   Shape: elliptic
Colour: white   Shape: elliptic
Colour: white
 
           
[***]
  [***]        
 
           
 
      Coating: film-coated tablets with no visible evidence of fissures, foreign
material or other defects   Coating: film-coated tablets with no visible
evidence of fissures, foreign material or other defects
 
           
 
      Printing: printed on one side with the appropriate logo in blue ink,
according to standard   Printing: printed on one side with the appropriate logo
in blue ink, according to standard
 
           
 
      [***]   [***]

 
[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

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Exhibit B (continued)

                      SPECIFICATIONS TEST ITEM   TEST METHOD   AT BATCH RELEASE
  END OF SHELF LIFE
[***]
  [***]   [***]   [***]

 
[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

20