Exhibit 10.39


 


***CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT (INDICATED BY ASTERISKS) HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER 17 C.F.R. SECTIONS
200.80(B)(4), 200.83 AND 230.406.


 


AMENDMENT
TO SECTIONS 2.01, 2.02, 2.03, 2.04, 4.01 and 4.03


 


WHEREAS Bioceutix, Inc.
(“Bioceutix”), the successor to MDF Acquisition Corp., acquired from Allergan, Inc.
certain rights of Allergan, Inc. pursuant to a license agreement with
TriStrata Technology, Inc. (“TTI”) with an effective date of July 15,
1999 (the “July 15, 1999 License Agreement”); and


 


WHEREAS Bare Escentuals
and Bioceutix, as wholly owned subsidiaries of MD Beauty Inc., have entered
into a business combination as more fully set forth in the Agreement and Plan
of Merger and documents relating thereto; and


 


WHEREAS TTI was asked to
give its consent to an assignment of the July 15,1999 License Agreement
from Bioceutix to MD Beauty, Inc., which consent was given by a certain “CONSENT
TO ASSIGNMENT AND AMENDMENT TO SECTION 2.10” executed by TTI on January 22,
2002 (hereinafter the “First Amendment”); and


 


WHEREAS TTI and MD Beauty, Inc.
desire to amend further the July 15, 1999 License Agreement, as amended by
the First Amendment, on the further terms and conditions stated herein;


 


NOW THEREFORE, for good
and valuable consideration, the adequacy of which is hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:


 


1.                          Section 2.01
of the July 15, 1999 License Agreement is hereby amended to state:


 


2.01(a) “Excluded
Channel of Trade” with respect to products containing glycolic acid shall mean
the mail order, multi level, and direct door-to-door markets.”


 


2.01(b) “Excluded
Channel of Trade” with respect to products containing gluconolactone shall mean
any market or channel of distribution other than: (i) sales to physicians
for resale to patients; and (ii) orders placed by telephone as a result of
television Infomercials. Notwithstanding anything to the contrary in the July 15,
1999 License Agreement, the First Amendment or this Amendment, no rights are
granted by LICENSOR to LICENSEE to sell products containing gluconolactone
except for: (i) sales to physicians for resale to patients; and (ii) orders
placed by telephone as a result of television infomercials.


 


1

















 


2.                          Section 2.02
of the July 15, 1999 License Agreement is hereby amended to state:


 


2.02
“Licensed Patent Rights” shall mean, subject to the specific exclusions set
forth in Sections 1.03 and 2.03 (as amended herein), those portions of the
patents and patent applications set forth in Schedule A hereto, as Schedule A
may from time to time be amended, and all divisions, continuations,
continuations-in-part, reissues, reexaminations and extensions thereof: (a) covering
only cosmetic and dermatologic preparations containing glycolic acid and/or its
salts for: (1) the treatment of human skin wrinkles and/or fine lines on
the human skin; (2) the treatment of dry skin; (3) as a skin
cleanser; (4) as a hair conditioner; (5) as a shampoo; (b) covering
only cosmetic and dermatologic preparations containing glycolic acid and/or its
salts, in combination with salicylic acid for the treatment of acne; (c) covering
only cosmetic and dermatologic preparations containing glycolic acid and/or its
salts in combination with two percent (2%) or less of hydroquinone for the
treatment of pigmented spots on human skin; and (d) covering only cosmetic
and dermatological preparations containing gluconolactone for alleviating or
improving the signs of dermatological aging of the human skin, including the
reduction of human skin wrinkles.


 


3.                          Section 2.03
of the July 15, 1999 License Agreement is hereby amended to state:


 


2.03
Notwithstanding anything herein to the contrary, “Licensed Patent Rights” shall
not include any rights to a patent or patent application on an invention unless
such rights relate to:


 


(a) glycolic
acid and/or its salts;


 


(b) a
method for using glycolic acid and/or its salts or compositions containing
glycolic acid and/or its salts, for: (1) the treatment of human skin
wrinkles or fine lines on the human skin by topically applying compositions
containing glycolic acid or a salt thereof to human skin; (2) the
treatment of dry skin; (3) as a skin cleanser; (4) as a hair
conditioner, and (5) as a shampoo;


 


(c) a
method for using glycolic acid and/or its salts, in combination with salicylic
acid for the treatment of acne;


 


(d) a
method for using glycolic acid and/or its salts, in combination with two
percent (2%) or less of hydroquinone for the treatment of pigmented spots on
human skin; or


 


2

















 


(e) a
method for using gluconolactone for alleviating or improving the signs of
dermatological aging of the human skin, including the reduction of human skin
wrinkles.


 


4.                          Section 2.04
of the July 15, 1999 License Agreement is hereby amended to state:


 


2.04
“Licensed Products” shall include any cosmetic and/or dermatologic preparation
covered by the Licensed Patent Rights: (a) containing glycolic acid and/or
its salts: (1) for the treatment of human skin wrinkles and/or fine lines
on the human skin; (2) the treatment of dry skin; (3) as a skin
cleanser; (4) as a hair conditioner; (5) as a shampoo; or (b) cosmetic
and dermatologic preparations containing glycolic acid and/or its salts, in
combination with salicylic acid for the treatment of acne; or (c) cosmetic
and dermatologic preparations containing glycolic acid and/or its salts in
combination with two percent (2%) or less of hydroquinone for the treatment of
pigmented spots on human skin; or (d) cosmetic and dermatological
preparations containing gluconolactone for alleviating or improving the signs
of dermatological aging of the human skin, including the reduction of human
skin wrinkles.


 


5.                          Section 4.01
of the July 15, 1999 License Agreement is hereby amended to state:


 


4.01
Provided LICENSEE’s annual royalties paid to LICENSOR exceeds the minimum annual
royalty payment set forth in Section 4.03 of this Amendment in that
calendar year, then in consideration for the licenses granted to LICENSEE
hereunder, LICENSEE and permitted Affiliates of LICENSEE shall pay to LICENSOR
royalties on the annual Net Sales of Licensed Products made by LICENSEE or its
Affiliates of Four Percent (4%) for such year. In the event that LICENSEE’s
annual royalty payments do not exceed the minimum annual royalties set forth in
Section 4.03 of any calendar year, then LICENSEE shall pay to LICENSOR
royalties on Net Sales of Licensed Products according to the following schedule for
each such calendar year, to be reconciled within sixty (60) days after the end
of the calendar year:


 


(a) ***
of Net Sales between *** and *** plus;


 


(b) ***
of Net Sales between *** and *** plus;


 


***PORTIONS OF THIS PAGE
HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


 


3

















 


(c) ***
of Net Sales between *** and ***; and


 


(d) ***
of Net Sales in excess of ***.


 


Payments shall be made
quarterly in accordance with the other provisions of Article IV of the July 15,
1999 License Agreement.


 


6.                          Section 4.03
of the July 15, 1999 License Agreement shall be amended to State:


 


4.03
Notwithstanding the schedule set forth in Section 4.01 above (as
amended), in consideration of the license granted to LICENSEE hereunder,
LICENSEE will pay to LICENSOR a minimum annual royalty of ***, to be paid in
equal amounts on a quarterly basis, on January 1, April 1 July 1,
and October 1, commencing on January 1, 2003. The minimum annual
royalty payment shall increase to *** for the calendar year commencing on January 1,
2005 and shall increase to *** for the calendar year commencing on January 1,
2006, whereupon the minimum annual royalty payment shall remain at that amount
for each subsequent year during the term of this Agreement. Each minimum annual
royalty payment shall be payable quarterly on January 1, April 1, July 1
and October 1 of each year this Agreement is in effect. Such minimum
annual royalty payments are creditable against the royalty from LICENSEE’S sale
of Licensed Products for the same years.


 


7.                          Notwithstanding
anything to the contrary contained in this Amendment, LICENSEE shall make its
first commercial sale of a Licensed Product containing gluconolactone no later
than January 1, 2004. In the event that LICENSEE fails to make its first commercial sale of a Licensed Product
containing gluconolactone before January 1, 2004, the royalty schedule shall
revert to the rate set forth in Section 4.01 of the July 15,1999
License Agreement.


 


8.                          All
other provisions of the July 15, 1999 License Agreement remain in full
force and effect.


 


	
  LICENSOR

  	
  LICENSEE

  
	
  TRISTRATA TECHNOLOGY,
  INC.

  	
  M.D. BEAUTY, INC.

  
	
   

  	
   

  
	
  By:

  	
  /s/ Kenneth C. Yu

  	
   

  	
  By:

  	
  /s/ Jaime Hutter

  	
   

  
						



 


***PORTIONS OF THIS PAGE
HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


 


4

















 


	
  Title:

  	
  President

  	
  Title:  CFO
  & Secretary

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
  March 7, 2003

  	
  Dated:  February 24,
  2003.

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
  /s/ [ILLEGIBLE]

  	
   

  	
  Attest:

  	
  /s/ [ILLEGIBLE]

  	
   

  	 

							



 


 


clean second amendment to
M.D. Beauty Bioceutix license 010603


 


5