exv10w10





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.



 









 





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.



4









 






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.



5









 






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:



7









 





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.


 

 






8









 





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.



9









 





(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



10









 







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).”



14









 





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
	 	 	 	 






 









 





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.



17









 





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









 





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.



19









 





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