Document:

exv10w46

 

Exhibit 10.46

[*Confidential treatment has been requested as to certain portions of this document. Each such
portion, which has been omitted herein and replaced with an asterisk [***], has been filed
separately with the Securities and Exchange Commission.]

FIRST AMENDMENT

DATED AS OF DECEMBER 4, 2006

TO

PRODUCT DEVELOPMENT AND LICENSE AGREEMENT

BY AND BETWEEN

NASTECH PHARMACEUTICAL COMPANY INC.

AND

PROCTER & GAMBLE PHARMACEUTICALS, INC.

DATED AS OF JANUARY 27, 2006

 

 

[*Confidential treatment has been requested as to certain portions of this document. Each such
portion, which has been omitted herein and replaced with an asterisk [***], has been filed
separately with the Securities and Exchange Commission.]

FIRST AMENDMENT

TO

PRODUCT DEVELOPMENT AND LICENSE AGREEMENT

     This First Amendment to the Product Development and License Agreement (the “First Amendment”)
is entered into as of December 4, 2006 by and between PROCTER & GAMBLE PHARMACEUTICALS, INC., a
corporation organized under the laws of Ohio (“P&G”), and NASTECH PHARMACEUTICAL COMPANY INC., a
corporation organized under the laws of Delaware (“Nastech”), as an amendment to the Product
Development and License Agreement (the “Agreement”) entered into as of January 27, 2006 by and
between P&G and Nastech. All capitalized terms used herein shall have the meanings given in the
Agreement.

     WHEREAS, P&G and Nastech wish to amend the Agreement in the manner set forth herein.

     NOW, THEREFORE, for and in consideration of the mutual covenants contained herein, the parties
hereto agree as follows:

     1. Amendment.

     1.01. Article I of the Agreement is hereby amended by adding the following as definitions
therein:

     “[***] TERM” means the period commencing upon [***].

     “[***] TERM FUNDING” means amounts payable by P&G [***].

     “FIRST AMENDMENT” means the First Amendment to the Product Development and License Agreement,
dated as of December 4, 2006, as the same may be amended, modified or extended.”

     “PHASE II POC STUDY” means a proof-of-concept study to be conducted substantially in
accordance to the protocols outlined in the Development Plan [***].

     “[***] STUDY” means [***].”

     “THIRD PARTY DEVELOPMENT COSTS” means costs which are included in the Development Plan budget
and which are incurred for services performed by Third Parties.

     1.02 [***].

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[*Confidential treatment has been requested as to certain portions of this document. Each such
portion, which has been omitted herein and replaced with an asterisk [***], has been filed
separately with the Securities and Exchange Commission.]

     1.03. Section 2.8.4 shall be added to the Agreement, which Section shall read in its entirety
as follows:

          “2.8.4 The following provisions shall apply notwithstanding anything to the contrary in this
Section 2.8:

                    (a) [***].

          (b) [***]”

     1.04 Section 4.10 shall be added to the Agreement, which Section shall read in its entirety as
follows:

     “4.10 [***]”

     1.05. Section 13.4 to the Agreement shall be amended to read in its entirety as follows:

     “13.4 TERMINATION BY P&G WITHOUT CAUSE. P&G may terminate for any reason as follows:

     (I) [***];

     and, should subsection (I) not be applicable, (II) (i) upon [***] prior written notice to
Nastech and without penalty to P&G if P&G terminates anytime up to the date of filing of the
initial NDA (for clarity’s sake, the parties acknowledge that P&G will not be liable for the
milestone due upon the acceptance for filing of the first NDA if such termination notice is given)
or (ii) upon [***] prior written notice to Nastech and without penalty to P&G if P&G terminates on
or after the date of filing of the initial NDA in which case Section 8.3.1(ii) shall apply. The
effective date of termination under this Section 13.4 shall only occur upon expiration of such
notice period or earlier if agreed to by Nastech. During the notice period, the parties will
collaborate and use their continued reasonable efforts for an orderly transition, which with
respect to P&G shall, unless otherwise agreed, include the continuation of all activities and work
initiated prior to the written notice, and reasonable efforts to assist Nastech in the initiation
of all new activities and work as provided for by the applicable Development Plan for such notice
period, provided that P&G shall continue to fund all activities and work provided for by
the Development Plan during such notice period.

2

 

[*Confidential treatment has been requested as to certain portions of this document. Each such
portion, which has been omitted herein and replaced with an asterisk [***], has been filed
separately with the Securities and Exchange Commission.]

If P&G terminates this Agreement under this Section 13.4, then all licenses granted to P&G shall
terminate upon termination of the Agreement. P&G shall, within [***] after the effective date of
such termination, return or cause to be returned to Nastech all Confidential Information and
Nastech Know-How in tangible form and substances or compositions delivered or provided by Nastech,
as well as any other material provided by Nastech in any medium.”

     1.06 Schedules 4.2.1, 4.4 and 4.5 to the Agreement are hereby replaced in their entirety by
Schedules 4.2.1, 4.4 and 4.5 attached to this First Amendment.

     2. Miscellaneous.

     2.01. Each reference in the Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or
words of like import, and each reference to the Agreement in documents related to the Agreement,
shall mean and be a reference to the Agreement as amended hereby. Except as specifically amended
hereby, the Agreement and all such related documents, and all other documents, agreements,
instruments or writings entered into in connection therewith, shall remain in full force and effect
and are hereby ratified, confirmed and acknowledged by each party.

     2.02. The parties acknowledge and agree that this First Amendment shall be governed by the
laws of the State of New York as to all matters including, but not limited to, matters of validity,
construction, effect, performance and liability, without consideration of conflicts of laws
provisions contained therein.

     2.03. This Amendment may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument, and any party hereto may execute this
Amendment by signing any such counterpart.

REMAINDER OF PAGE INITIALLY LEFT BLANK

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[*Confidential treatment has been requested as to certain portions of this document. Each such
portion, which has been omitted herein and replaced with an asterisk [***], has been filed
separately with the Securities and Exchange Commission.]

          IN WITNESS WHEREOF, the parties, through their authorized officers, have duly executed this
First Amendment as of the date first written above.

	 	 	 	 	 	 	 	 	 
	 	 	NASTECH PHARMACEUTICAL COMPANY INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 /s/ Steven C. Quay	 	 
	 	 	 	  	 	 
	 	 	Name:	 	Steven C. Quay	 	 
	 	 	Title:	 	Chief Executive Officer and President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	PROCTER & GAMBLE PHARMACEUTICALS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 /s/ Mark A. Collar	 	 
	 	 	 	  	 	 
	 	 	Name:	 	Mark A. Collar	 	 
	 	 	Title:	 	President	 	 
	 

	 	 	 	 	 	P&G Pharmaceuticals, Inc.	 	 

4

 

[*Confidential treatment has been requested as to certain portions of this document. Each such
portion, which has been omitted herein and replaced with an asterisk [***], has been filed
separately with the Securities and Exchange Commission.]

SCHEDULE 4.2.1

ROYALTY SCHEDULE

[***]

5

 

[*Confidential treatment has been requested as to certain portions of this document. Each such
portion, which has been omitted herein and replaced with an asterisk [***], has been filed
separately with the Securities and Exchange Commission.]

SCHEDULE 4.4

MILESTONES: SALES & POST-APPROVAL

[***]

6

 

[*Confidential treatment has been requested as to certain portions of this document. Each such
portion, which has been omitted herein and replaced with an asterisk [***], has been filed
separately with the Securities and Exchange Commission.]

SCHEDULE 4.5

MILESTONES: DEVELOPMENT AND COMMERCIALIZATION

[***]

7exv10w6

 

Exhibit 10.6

SECURED CONVERTIBLE PROMISSORY NOTE

$238,500

March 5, 2007

     FOR VALUE RECEIVED, the undersigned, Sutura, Inc., a Delaware corporation (the “Maker”),
hereby promises to pay to the order of Pandora Select Partners, L.P., a British Virgin Islands
limited partnership, or its assigns (the “Payee”), at such place as the Payee may designate in
writing, the principal sum of Two Hundred Thirty-Eight Thousand Five Hundred Dollars ($238,500)
under the terms set forth herein. This Note is one of a series of four Notes (together, the
“Series Notes") being issued by Maker on the date hereof. This Note is being issued by Maker and
purchased by Payee in accordance with the provisions of Section 6.4 of that certain Purchase
Agreement dated December 13, 2006 among Maker, the Payee and the other purchasers named therein.

1. Interest. The unpaid principal balance hereof from time to time outstanding shall bear
interest from the date hereof at the rate of eight percent (8%) per annum.

2. Payment. Except as otherwise provided herein, and subject to any default hereunder, the
principal and interest hereof is payable as follows:

     (a) Interest only is payable in cash or stock (as provided below) quarterly in arrears on the
last day of each calendar quarter, beginning March 31, 2007.

          (i) The parties hereby agree that the Company may pay interest due hereunder, or any portion
thereof, by issuing to the Payee fully paid and nonassessable shares of Maker’s Common Stock, par
value $0.001 per share, in lieu of cash. The number of shares of Common Stock issuable upon payment
of any portion of an interest payment hereunder in stock shall be computed by dividing each such
applicable portion of the interest payment to be paid in shares of Common Stock by the Interest
Conversion Rate (as defined below ) in effect at such time.

          (ii) The Interest Conversion Rate shall be equal to the greater of (i) $0.045 per share;
or (ii) the average of the daily closing bid prices for the Company’s Common Stock over a period of
30 consecutive Trading Days. The last day of such 30 day period will be the Trading Day immediately
prior to the day in which a interest payment is due. A “Trading Day” is (x) a day on which the
Common Stock is traded on the New York Stock Exchange, the American Stock Exchange, the NASDAQ
National Market, the NASDAQ SmallCap Market or OTC Bulletin Board (all “Trading Markets”), or (y)
if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted
in the over-the-counter market as reported by the Pink Sheets, LLC (or any similar organization or
agency succeeding to its function of reporting prices).

          (iii) Any Common Stock issued in payment of any portion of the interest payments shall
have those registration rights set forth in the Registration Rights Agreement.

 

 

     (b) On
June 30, 2008 (the “Maturity Date"), the remaining outstanding principal balance
of this Note will be due and payable in cash, together with all then-accrued but unpaid interest.

     (c) Except as provided herein, the Maker will have no right of early prepayment on this Note.

3. Conversion.

     (a) At any time while any portion of the principal or interest of this Note is outstanding,
the Payee may give the Maker written notice (the “Payee Notice”) of its intention to convert all or
any portion of the outstanding principal and/or accrued but unpaid interest on this Note into
shares of the Maker’s Common Stock based on a conversion rate as described below (the “Conversion
Rate”). The number of shares of Common Stock issuable upon payment of any portion of the
outstanding principal and/or accrued but unpaid interest on this Note            shall be computed
by dividing each such applicable portion of the payment to be paid in shares of Common Stock by the
Conversion Rate in effect at such time. Upon receipt of the Payee Notice, the Maker shall
immediately cause certificates dated the Payee Notice date and representing these shares to be
delivered to Payee within 20 days of, and payment shall be deemed to have been made on, the date of
the Payee Notice.

     (b) The Conversion Rate shall initially be equal to $0.045.

     (c) The Conversion Rate (and, as applicable, the factors above used to compute it) shall be
adjusted proportionally for any subsequent stock dividend or split, stock combination or other
similar recapitalization, reclassification or reorganization of or affecting Maker’s Common Stock.
In case of any consolidation or merger to which the Maker is a party other than a merger or
consolidation in which the Maker is the continuing corporation, or in case of any sale or
conveyance to another corporation of the property of the Maker as an entirety or substantially as
an entirety, or in the case of any statutory exchange of securities with another corporation
(including any exchange effected in connection with a merger of a third corporation into the
Maker), then instead of receiving shares of Maker’s Common Stock, Payee shall have the right
thereafter to receive the kind and amount of shares of stock and other securities and property
which the Payee would have owned or have been entitled to receive immediately after such
consolidation, merger, statutory exchange, sale or conveyance had the same portion of this Note
been paid or converted immediately prior to the effective date of such consolidation, merger,
statutory exchange, sale or conveyance and, in any such case, if necessary, appropriate adjustment
shall be made in the application of the provisions set forth in this Section with respect to the
rights and interests thereafter of the Payee, to the end that the provisions set forth in this
Section shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in
relation to any shares of stock and other securities and property thereafter deliverable in
connection with this Note. The provisions of this subsection shall similarly apply to successive
consolidations, mergers, statutory exchanges, sales or conveyances.

     (d) Any Common Stock issued in payment of all any portion of the outstanding principal and/or
accrued but unpaid interest on this Note shall have those registration rights set

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forth in the Registration Rights Agreement of even date herewith by and among Maker, Payee and
certain other parties thereto.

4. Security. The full and timely payment of this Note shall be secured by that certain
Fourth Amended Security Agreement and Fourth Amended Patent and Trademark Security Agreement, each
dated as of December 13, 2006 (together, the “Security Agreements”), covering all of Maker’s
assets. The security interest granted under the Security Agreements shall be a first priority
security interest subordinate to no other secured rights, but shared with the other holders of the
Series Notes and the secured parties under the Security Agreements.

5. Default. The occurrence of any one or more of the following events shall constitute an
event of default, upon which Payee may declare the entire principal amount of this Note, together
with all accrued but unpaid interest, to be immediately due and payable:

     (a) The Maker shall fail to make any required payment of principal or interest when due, and
such failure shall continue through five days after Payee gives written notice of such failure to
Maker.

     (d) The Maker shall fail to materially perform or comply with any covenant, agreement, term or
provision contained in any of the Security Agreements, and such failure shall continue through five
days after Payee gives written notice of such default to Maker.

     (e) The Maker shall be in default of any term or provision of any of the promissory notes sold
pursuant that certain Purchase Agreement dated September 7, 2005 among Maker, the Payee and the
other purchasers named therein (the “September 2005 Notes"), or any of the promissory notes sold
pursuant to that certain Purchase Agreement dated March 25, 2005 among Maker, the Payee and the
other purchasers named there (the “March 2005 Notes"), or any of the promissory notes sold pursuant
to that certain Purchase Agreement dated September 17, 2004 among Maker, the Payee and the other
purchasers named therein (the “September 2004 Notes"), "), or any of the promissory notes sold
pursuant to that certain Purchase Agreement dated December 13, 2006 among Maker, the Payee and the
other purchasers named therein (the “December 2006 Notes"), and such default is not cured within
five days after written notice from Payee to Sutura.

     (f) The Maker shall become insolvent or shall fail to pay, or become unable to pay, its debts
as they become due; or any bankruptcy, reorganization, debt arrangement or other proceeding under
any bankruptcy or insolvency law shall be instituted by or against the Maker.

     (g) Any representation or warranty of the Maker contained in any of the Security Agreements
shall be untrue in any material respect.

     (h) The Maker incurs an event of default under the terms of any of the other Series Notes.

     Without limiting the above, the Maker acknowledges that payments on the various scheduled due
dates in Sections 2 are of essence and that any failure to timely pay any installment of principal
or interest (within any permitted grace period above) permits Payee to declare this Note
immediately due in cash in its entirety without any prior notice of any kind to

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Maker, except for the specific notices provided above. Further, the Maker agrees that any
event of default under this Note shall constitute an event of default under each of the other
Series Notes, the December 2006 Notes, the September 2005 Notes, the March 2005 Notes and the
September 2004 Notes.

6. Mandatory Prepayments. If Maker or its controlling stockholders enter into a definitive
agreement relating to a Sale Transaction, the Maker shall give Payee at least fifteen days prior
written notice of the proposed date for consummation of the Sale Transaction. The Maker’s notice
shall include a description of the proposed price, terms and conditions of the Sale Transaction.
Despite any other provisions hereof, the entire principal balance of this Note, and all accrued but
unpaid interest, shall be due and payable immediately prior to (and as a condition of) the closing
on the Sale Transaction. However, within fifteen days after receipt of Maker’s notice, Payee may
give written notice to Maker that Payee elects to convert all or any portion of the outstanding
principal and/or accrued but unpaid interest on this Note into shares of the Maker’s Common Stock
(in which case, the Payee’s notice will constitute a Payee Notice under Section 3 above and the
portion of this Note not so converted will be retired in cash as otherwise provided in this
Section).

     The Maker shall not consummate any Sale Transaction, the price, terms and conditions of which
materially deviate from those described in Maker’s notice to the Payee, without first giving the
Payee a new notice specifying such changes. Such new notice will commence a new 15-day period
during which time Payee may give its notice to Maker as provided above. Nothing in this Section
will restrict the Maker’s ability to effect a Sale Transaction if Maker complies with the foregoing
provisions hereof.

7. Limitations on Conversion. Notwithstanding anything to the contrary contained herein,
the number of shares of Common Stock that may be acquired by the Payee upon any conversion of this
Note (or otherwise in respect hereof) shall be limited to the extent necessary to insure that,
following such conversion (or other issuance), the total number of shares of Common Stock then
beneficially owed by Payee and its affiliates and any other persons whose beneficial ownership of
Common Stock would be aggregated with the Payee’s for purposes of Section 13(d) of the Exchange Act
does not exceed 9.99% of the total number of issued and outstanding shares of Common Stock
(including for such purpose the shares of Common Stock issuable upon such conversion or payment).
For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. This provision shall not
restrict the number of shares of Common Stock which Payee may receive or beneficially own in order
to determine the amount of securities or other consideration that Payee may receive in the event of
a merger, sale or other transaction as contemplated in Section 3(c) of this Note.

8. Applicable Law. THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THE NOTE SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS
PRINCIPLES THEREOF.

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9. Waivers. The Maker hereby waives presentment for payment, notice of dishonor, protest
and notice of payment and all other notices of any kind in connection with the enforcement of this
Note.

10. No Setoffs. The Maker shall pay principal and interest under the Note without any
deduction for any setoff or counterclaim.

11. Costs of Collection. If this Note is not paid when due, the Maker shall pay Payee’s
reasonable costs of collection, including reasonable attorney’s fees.

	 	 	 	 	 
	 	 	SUTURA, INC.
	 
	 	 	 	 
	 

	 	By	 	 
	 

	 	 	 	 
	 

	 	 	 	David Teckman, President and
	 

	 	 	 	Chief Executive Officer

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