Exhibit 10.17


 


SECOND
AMENDMENT TO PATENT SUBLICENSE AGREEMENT


 


This agreement is entered into this     
day of March 2009 by and between Osmotics Corporation (“Osmotics”) and
Ceragenix Pharmaceuticals, Inc. (“Ceragenix”) (collectively the “Parties”).


 


WHEREAS, on August 15, 2006, the Parties
entered into a certain sublicense agreement (the “Sublicense Agreement”)
covering rights conveyed to Ceragenix from the Regents of the University of
California for Barrier Repair Technology;


 


WHEREAS, the Sublicense Agreement provided
Ceragenix with the option to acquire from Osmotics, Triceram®, a non
prescription product using the Barrier Repair Technology;


 


WHEREAS, in November 2007, Ceragenix
entered into an exclusive supply and distribution agreement with Dr. Reddy’s
Laboratories, Inc. (the “DRL Agreement”) for the commercialization of
EpicCeram®. Among other things, the DRL Agreement required Ceragenix to
exercise the purchase option for Triceram® by November 14, 2008;


 


WHEREAS, on January 11, 2008, Ceragenix
loaned to Osmotics $50,000 pursuant to a promissory note bearing interest at
9.5% per annum due no later than April 11, 2008 (the “Promissory Note”);


 


WHEREAS, the Promissory Note provided
Ceragenix the option to apply the unpaid Promissory Note balance to the purchase
price of Triceram®;


 


WHEREAS, on April 11, 2008, the
Promissory Note was amended to extend the maturity date of the note to November 16,
2008 and required that the outstanding principal and accrued interest balance
be applied to the purchase price of Triceram;


 


WHEREAS, on April 11, 2008, the Parties
amended the Sublicense Agreement (the “First Amendment”) to modify the payment
terms for Triceram® to a 12 month note bearing interest at 9.5% per annum with
accrued interest due and payable in a lump sum with the last principal payment;


 


WHEREAS, Ceragenix did not exercise its
purchase option for Triceram® by November 14, 2008, and as a result, the
Promissory Note remains unpaid with an outstanding principal and accrued
interest balance of $28,332 as of February 28, 2009; and


 


WHEREAS, Ceragenix wishes to revise the
payment terms for exercising the Triceram® purchase option.


 


NOW, THEREFORE, in exchange for full and fair
consideration, the Parties agree to make the following amendment to the
Sublicense Agreement.


 

















 


Section 2.03(b) of the Sublicense Agreement shall now state
the following “The Exercise Price shall be $487,668 .” ($516,000 less the
outstanding balance of the Promissory Note of $28,332)


 


Section 2.03(c)(i) of the Sublicense Agreement shall now
state the following “On the Transfer Date, the balance owed for the Exercise
Price shall be converted into a note bearing interest at 9.5% per annum. The
first payment under the note shall be in the amount of $16,202 and due on March 15,
2009. Monthly installments of $10,000 per month shall commence on April 1,
2009, until such time that Ceragenix receives in aggregate $3,500,000 in Net
Proceeds. Net Proceeds are defined as proceeds received from a single (or
multiple) debt or equity financing transactions (gross proceeds less
commissions and any other capitalized offering costs) combined with any upfront
or milestone payments received from licensing or commercialization transactions
for its Ceragenin technology. For purposes of this agreement, Net Proceeds for
Ceragenin transactions shall exclude licensing fees payable to Brigham Young
University and mandatory payments required under Ceragenix’s convertible debt
agreements. After receiving $3,500,000 in Net Proceeds, the monthly installment
under the note shall be increased to $40,000. In the event of a change in
control of Ceragenix and either one half of the then existing Board members are
replaced or the Chief Executive Officer or Chief Financial Officer are
replaced, or Ceragenix receives at least $10,000,000 in Net Proceeds, then the
outstanding balance of the note shall become immediately due and payable.”


 


Section 2.03(c)(ii) of the Sublicense Agreement shall now
state “Osmotics shall cease all sales of Triceram® except for sales to Korea
which shall continue until such time that EpiCeram® becomes commercially
available in Korea.”


 


Section 2.03(c)(iii) of the Sublicense Agreement shall now
state “Osmotics shall be allowed to sell through existing Triceram® inventory
on hand to existing customers but shall be prohibited from any future
manufacture or marketing of Triceram® other than for sales in Korea.”


 


Section 3.01 (a) requiring Osmotics to pay Ceragenix 1⁄2 of the
License Maintenance Fee is deleted.


 


Section 3.01 (b) of the Sublicense Agreement shall now state
the following “Osmotics agrees to pay Ceragenix a royalty of 5% of net sales
(as defined in the UCSF Agreement).”


 


Section 4.04 requiring Osmotics to equally bear the cost of
maintenance of the patents is hereby deleted.


 


 


	
  OSMOTICS CORPORATION

  	
  CERAGENIX PHARMACEUTICALS

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
  Francine Porter, CEO

  	
  Jeffrey Sperber, Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  (On behalf of Board of Directors)