EXHIBIT 10.38
AMENDMENT NO. 1 TO AMENDED AND
RESTATED PURCHASE AND LICENSE AGREEMENT
This AMENDMENT NO. 1 TO AMENDED AND RESTATED PURCHASE AND LICENSE
AGREEMENT (the "Amendment") is entered into as of December 30, 1999, by and
among Dura Pharmaceuticals, Inc. ("Dura"), DJ Pharma, Inc. ("DJ Pharma") and
Dura (Bermuda) Trading Company LTD. ("Dura Bermuda") (the latter solely with
respect to the Keftab Products), and amends and restates certain provisions of
that certain Amended and Restated Purchase and License Agreement entered into as
of January 25, 1999, and effective as of October 1, 1998 (the "Agreement"),
among Dura, DJ Pharma and Dura Bermuda (the latter solely with respect to the
Keftab Products). Capitalized terms used but not defined herein shall have the
meanings given to them in the Agreement.
RECITALS
A. Pursuant to the Agreement, DJ Pharma received certain rights to
certain products from Dura and Dura Bermuda and assumed certain obligations to
Dura and DJ Pharma in connection therewith.
B. * between DJ Pharma, on the one hand, and Dura and Dura Bermuda, on
the other hand, *.
C. DJ Pharma, Dura and Dura Bermuda are entering into this Amendment to
* and to * under the Agreement.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, Dura, DJ Pharma and Dura Bermuda hereby agree
as follows:
1. AMENDMENTS TO AGREEMENT. The Agreement is hereby amended and
restated as follows:
1.1 SECTION 2.1. Section 2.1 of the Agreement is hereby
amended and restated in its entirety to read as follows:
"2.1 FOR PURCHASE AND LICENSING RIGHTS WITH RESPECT TO THE
PRODUCTS. In consideration for the purchase and licensing rights as set
forth in Section 1 hereof, DJ Pharma shall (i) * (as hereinafter
defined) and (ii) pay to Dura with respect to the Rondec Products and
CCA Products and to Dura Bermuda with respect to the Keftab Rights the
following licensing fees during the Licensing Period:
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*Certain confidential portions of this Exhibit were omitted by means of marking
such portions with an asterisk (the "Mark"). This Exhibit has been filed with
the Secretary of the Commission without the Mark pursuant to the Company's
application requesting confidential treatment under Rule 24b-2 under the
Securities Exchange Act of 1934, as amended.
(a) for * (as hereinafter defined) * aggregate Net
Sales (as hereinafter defined) of the Products during such *;
(b) for * (as hereinafter defined) * during such
*;
(c) * during *;
(d) * during *; and
(e) * during * and the *.
Notwithstanding the foregoing, * under Sections 2.1(a)-(e) hereof,
after subtracting therefrom the costs of all Products sold by DJ Pharma
during the respective calendar year as permitted by Section 2.2, *
during the respective calendar year: (i) * (ii) * (iii) * and (iv) *.
For example, (a) in the event that * and the *, but (b) * under
Sections 2.1(e) and 2.2 *. Notwithstanding the foregoing, *
(collectively, the " * ") in any way *
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*Certain confidential portions of this Exhibit were omitted by means of marking
such portions with an asterisk (the "Mark"). This Exhibit has been filed with
the Secretary of the Commission without the Mark pursuant to the Company's
application requesting confidential treatment under Rule 24b-2 under the
Securities Exchange Act of 1934, as amended.
*, including, without limitation, *.
For purposes of this Agreement: (A) a "Contract Quarter" shall mean
each quarter in the Contract Year commencing October 1, 1998 and ending
September 30, 1999; (B) the first "Contract Year" shall mean the period
of twelve (12) consecutive months commencing on October 1, 1998, and
each subsequent Contract Year shall begin on the respective anniversary
thereof; and (C) "Net Sales" shall mean (i) the gross amount of sales
invoiced to third parties by DJ Pharma less the reasonable and
customary accrual-basis deductions from such gross amounts including:
(a) normal and customary trade and quantity discounts, allowances and
credits actually allowed or paid; (b) credits or allowances given or
made for return of previously sold products; (c) sales or excise taxes,
as adjusted for rebates and refunds; and (d) chargeback payments and
rebates granted to managed health care organizations, employer groups
or to federal, state and local governments, their agencies, purchasers
and reimbursers or to trade customers, including, but not limited to,
wholesalers and chain and pharmacy buying groups, which are
specifically identified to the sale of the Products by DJ Pharma. All
amounts under this Section shall be determined from the books and
records of DJ Pharma which shall be maintained in accordance with
GAAP."
1.2 SECTION 2.8. A new Section 2.8 is hereby added to the
Agreement as follows:
"2.8 PRODUCT RETURNS. DJ Pharma shall process, and hereby
assumes and agrees to be responsible for and to perform and satisfy all
obligations associated with the processing of, all Products that were
sold by Dura prior to October 1, 1998, and that are returned in
compliance with Dura's returned goods policy for credit after the
Closing. Dura shall reimburse DJ Pharma for certain of the costs it
incurs in performing the foregoing obligations as follows:
(a) CREDITS. Dura shall reimburse DJ Pharma for * of
the credits DJ Pharma issues with respect to all of the Products that
were sold by Dura prior to October 1, 1998, and that are returned in
compliance with Dura's returned goods policy for credit after the
Closing.
(b) EXCHANGES. Dura shall reimburse DJ Pharma for *
pursuant to the Dura Supply Agreement for all of the Products that are
delivered by DJ Pharma in exchange for Products that were sold by Dura
prior to October 1, 1998, and that are returned in compliance with
Dura's returned goods policy for exchange after the
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*Certain confidential portions of this Exhibit were omitted by means of marking
such portions with an asterisk (the "Mark"). This Exhibit has been filed with
the Secretary of the Commission without the Mark pursuant to the Company's
application requesting confidential treatment under Rule 24b-2 under the
Securities Exchange Act of 1934, as amended.
Closing * (calculated based on the wholesale list price for such
Products at the time DJ Pharma ships the replacement Products), * at
the time DJ Pharma ships the replacement Products, and * (calculated
based on the wholesale list price for such Products at the time DJ
Pharma ships the replacement Products), * at the time DJ Pharma ships
the replacement Products.
(c) CERTAIN OTHER COSTS. Dura shall reimburse DJ
Pharma for * for the services rendered in connection with all of the
Products that were sold by Dura prior to October 1, 1998, and that are
returned in compliance with Dura's returned goods policy for credit or
exchange after the Closing * time DJ Pharma ships the replacement
Products for all of the Products that were sold by Dura prior to
October 1, 1998, and that are returned in compliance with Dura's
returned goods policy for exchange after the Closing.
(d) NO OTHER OBLIGATIONS. Neither Dura nor Dura
Bermuda shall have any obligation or liability to DJ Pharma in
connection with DJ Pharma's performance of its obligations under this
Section except as expressly set forth in subsections (a) - (c) above,
including, without limitation, any obligation to reimburse DJ Pharma
for any of the internal or indirect costs it may incur in performing
its obligations under this Section.
(e) DJ PHARMA COOPERATION. In addition to maintaining
accurate books and accounts of record in sufficient detail to permit
Dura and Dura Bermuda to verify all payments that they may be required
to make pursuant to this Section as required by Section 2.4 above, DJ
Pharma shall also cooperate with Dura and Dura Bermuda as reasonably
requested *.
2. ACKNOWLEDGMENTS.
2.1 ACKNOWLEDGMENT BY DJ PHARMA. DJ Pharma hereby acknowledges
and agrees that as of the date of this Amendment it does not know of, nor does
it have any intent to assert now or at any time in the future, any claims or
causes of
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*Certain confidential portions of this Exhibit were omitted by means of marking
such portions with an asterisk (the "Mark"). This Exhibit has been filed with
the Secretary of the Commission without the Mark pursuant to the Company's
application requesting confidential treatment under Rule 24b-2 under the
Securities Exchange Act of 1934, as amended.
action against Dura, Dura Bermuda or any of their directors, officers,
employees, agents, stockholders, partners, attorneys, assignees, parents or
subsidiaries, individually or collectively, for any breach or other failure to
perform any obligation owing to DJ Pharma, whether legal, equitable, statutory
or otherwise, including without limitation any and all obligations owing under
the Agreement and all related agreements.
2.2 ACKNOWLEDGMENT BY DURA AND DURA BERMUDA. Dura and Dura
Bermuda each hereby acknowledges and agrees that as of the date of this
Amendment it does not know of, nor does it have any intent to assert now or at
any time in the future, any claims or causes of action against DJ Pharma or any
of its directors, officers, employees, agents, stockholders, partners,
attorneys, assignees, parents or subsidiaries, individually or collectively, for
any breach or other failure to perform any obligation owing to Dura or Dura
Bermuda, whether legal, equitable, statutory or otherwise, including without
limitation any and all obligations owing under the Agreement and all related
agreements.
3. MISCELLANEOUS.
3.1 ENTIRE AGREEMENT; CONFLICTS. This Amendment constitutes
the entire agreement among Dura, DJ Pharma and Dura Bermuda with respect to the
amendment to the Agreement set forth herein. This Amendment supersedes all prior
or contemporaneous understanding or agreements, whether written or oral, between
Dura, DJ Pharma and Dura Bermuda with respect to such amendment. In the event of
any conflict between the terms of this Amendment and the terms of the Agreement,
the terms of this Amendment shall govern and control.
3.2 GOVERNING LAW. This Amendment shall be governed and
construed in accordance with the laws of the State of California excluding any
choice of law rules which may direct the application of the law of another
state.
3.3 CAPTIONS. All section titles or captions contained in this
Amendment are for convenience only, shall not be deemed a part of this Amendment
and shall not affect the meaning or interpretation of this Amendment.
3.4 NO THIRD PARTY RIGHTS. No provision of this Amendment
shall be deemed or construed in any way to result in the creation of any rights
or obligation in any other individual, group, entity or organization not a party
to this Amendment.
3.5 NO IMPLIED WAIVERS. No failure on the party of any party
to exercise and no delay in exercising any right, power, remedy or privilege
under this Amendment shall impair, prejudice or constitute a waiver of any such
right, power, remedy or privilege, nor shall any such waiver or any single or
partial exercise of any such right, power, remedy or privilege preclude any
other or further exercise thereof or the exercise of any other right, power,
remedy or privilege. No waiver by any party of any default, right, power, remedy
or privilege shall be effective unless in writing, nor
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shall any such waiver operate as a waiver of any other or the same default,
right, power, remedy or privilege respectively on a future occasion.
3.6 AMENDMENTS AND MODIFICATIONS. No amendment, modification,
termination or discharge of any provision of this Amendment, nor consent by
Dura, DJ Pharma or Dura Bermuda to any departure therefrom, shall in any event
be effective unless the same shall be in writing specifically identifying this
Amendment and the provision intended to be amended, modified, terminated or
discharged and signed by Dura, DJ Pharma and Dura Bermuda, and each amendment,
modification, termination or discharge shall be effective only in the specific
instance and for the specific purpose for which given. No provision of this
Amendment shall be varied, contradicted or explained by any other agreement,
course of dealing or performance or usage of trade or any other matter not set
forth in an agreement in writing and signed by Dura, DJ Pharma and Dura Bermuda.
3.7 SEVERABILITY. If any provision of this Amendment should be
held to be invalid, illegal or unenforceable in any respect in any jurisdiction,
then, to the fullest extent permitted by law, (a) all other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intentions of the parties hereto
as nearly as may be possible and (b) such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
such provision in any other jurisdiction.
3.8 COUNTERPARTS. This Amendment may be executed in any number
of counterparts, each of which counterparts, when so executed and delivered,
shall be deemed to be an original, and all of which counterparts, taken
together, shall constitute one and the same instrument.
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IN WITNESS WHEREOF, Dura, DJ Pharma and Dura Bermuda have each caused
this Amendment to be executed by their duly authorized representatives as of the
date first written above.
DURA PHARMACEUTICALS, INC.
By: /s/ Erle Mast
-----------------------
Its: Vice President Finance
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DURA (BERMUDA) TRADING
COMPANY LTD.
By: /s/ Kevin Insley
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Its: President
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DJ PHARMA, INC.
By: /s/ Jerry E. Canning
-----------------------
Its: Vice President, Finance
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[SIGNATURE PAGE TO AMENDMENT NO. 1 TO AMENDED
AND RESTATED PURCHASE AND LICENSE AGREEMENT]
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