Exhibit 10.5
SECOND AMENDMENT TO MASTER
RESTRUCTURING AGREEMENT
This Second Amendment to Master Restructuring Agreement is made as of
October 1, 2002 by and between CURIS, INC., a Delaware corporation ("Curis"),
and STRYKER CORPORATION, a Michigan corporation ("Stryker").
WHEREAS, Curis, as the successor by merger to Creative Biomolecules, Inc.,
and Stryker are parties to that certain Master Restructuring Agreement dated as
of October 15, 1998 as amended by that certain First Amendment to Master
Restructuring Agreement dated as of November 2, 2001 (the "Agreement;"
capitalized terms used but not defined herein shall have the meaning provided
therefor in the Agreement) and that certain License and Sublicense Agreement
entered into as of October 31, 1996 (the "PDGF License and Sublicense");
WHEREAS, Curis and Stryker desire to amend and supplement the Agreement and
certain of the Related Agreements referred to therein and the PDGF License and
Sublicense in certain respects as more fully set forth herein;
NOW, THEREFORE, in consideration of the mutual promises and agreements set
forth herein and in the Agreement, the parties hereto agree as follows:
1. On the date hereof (the "Effective Date"), Stryker shall pay Curis the
sum of $14,000,000 by wire transfer to the account designated by Curis in
Exhibit A.
2. The provisions of Section 4.12(b) of the Agreement are hereby deleted
in their entirety.
3. The provisions of Section 4.13 (a) of the Agreement are hereby amended
to read in their entirety as follows:
(a) Creative hereby agrees to pay to Stryker in U.S. dollars,
quarterly royalties (the "Creative Royalty Payments") equal to (i)
one-quarter of one percent (0.25%) of the first $500,000,000 of Net
Sales of Creative Royalty Bearing OP Products by Creative or any
Creative Third Party Seller or any other sublicensee of Creative or
Person to which Creative has assigned any of its rights under this
Agreement or the Creative License Agreement (all such Persons other
than Creative being referred to herein collectively as "Creative
Sublicensees") in any calendar year during the Royalty Period and (ii)
one-half of one percent (0.50%) of Net Sales of Creative Royalty
Bearing OP Products by Creative or any Creative Sublicensee in excess
of $500,000,000 in any calendar year during the Royalty Period. "Net
Sales" for purposes of this Section 4.13 shall mean revenue derived by
Creative or any Creative Sublicensee from the sale of Creative Royalty
Bearing OP Products, less discounts allowed, transportation charges,
insurance, credits for claims or allowances, returns, and taxes or
other governmental charges levied on or measured by such sales and
included in the billing price, whether absorbed by Creative, third
parties or their customers. For Creative Royalty Bearing OP Products
(collectively, the "OP Component") that are sold in combination with
another product, if both the OP Component and such other product have
established market prices, Net Sales shall be calculated by
multiplying Net Sales of the combination product by the fraction
A/(A+B) where A is the sales price of the OP Component in the
combination when sold separately and B is the sales price of the other
product in the combination when sold separately. If one or both of the
OP Component and the other product do not have an established market
price, Net Sales shall include only that portion of the sales price of
the combination product that is determined by good faith negotiation
between Stryker and Creative to represent the value of the OP
Component. In such negotiation, the parties shall take into account
the list price of either the OP Component or the other product, if
there be one, or of similar products, and the market share of the
combination product. The allocation of the sales price of the
combination product shall be subject to renegotiation upon the request
of either party at two year intervals. The method of allocation of the
sales price of a combination product set forth in the four preceding
sentences is referred to herein as the "Allocation Method."
4. The first sentence of Section 4.13(b) of the Agreement shall be
deleted in its entirety and replaced by the following:
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Creative agrees that it will furnish to Stryker at least three
business days in advance of the execution thereof a copy of any
proposed agreement with any Creative Sublicensee and that references
to sublicensees in the provisions of subsections (c) through (h) of
this Section 4.13 shall be deemed to be references to Creative
Sublicensees. Creative further agrees that it shall be responsible for
all payments due to Stryker under the provisions of Section 4.13(a)
regardless of whether it receives payments owed to it by any Creative
Sublicensee and regardless of the amount or form of any such payment.
Creative will, if requested by Stryker, grant Stryker a perfected,
first priority security interest in the payments received by it from
any Creative Sublicensee to secure the payment of the royalties due to
Stryker pursuant to Section 4.13(a) of the Agreement.
5. The provisions of Section 4.14 of the Agreement, which relate to
royalties and other payments to be made by Stryker to Curis, are hereby deleted
in their entirety, it being understood and agreed that as a result thereof
Stryker shall not have any obligation to make any payment to Curis in respect of
Net Sales of Stryker Royalty Bearing OP Products by Stryker or any Stryker Third
Party Seller or any licensing or sublicensing payment received by Stryker from
any Stryker Third Party Seller. Notwithstanding the foregoing, the provisions of
subsections (b) through (h) of Section 4.14 shall remain in force to the extent
and only to the extent that they relate to Net Sales of Stryker Royalty Bearing
OP Products prior to the Effective Date.
6. Schedule 1 of the Stryker License Agreement (Exhibit 4.6 to the
Agreement and as separately executed and delivered as of October 15, 1998) is
hereby amended to delete in their entirety the rows beginning with "CRP-067AU,"
"CRP-067CA," "CRP-067CN" "CRP-067EP," "CRP-067FW," "CRP-067JP," "CRP-067KR,"
"CRP-081FW".
7. Schedule 1 to the Creative License Agreement (Exhibit 4.7 to the
Agreement and as separately executed and delivered as of October 15, 1998) is
hereby amended to insert, immediately following the row beginning with
"CRP-163PR" eight rows as set forth below:
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CRP-067AU AU 51293/93 9/15/93 670334
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CRP-067CA CA 2,144,513 9/15/93
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CRP-067CN US 08/643,763 5/6/96 5,733,878
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CRP-067EP EP 93 92-2212.1 9/15/93
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CRP-067FW US 08/155,343 11/15/93 5,656,593
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CRP-067JP JP 06-508301 9/15/93
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CRP-067KR KR 700993/95 9/15/93
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CRP-081FW US 08/402,542 3/13/95
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8. Curis agrees to execute and deliver to Stryker on the Effective Date
the Patent Assignment Agreement in the form of Exhibit B attached hereto in
order to effectuate the assignment to Stryker of the entire right, title and
interest of Curis in and to the inventions and improvements claimed in the U.S.,
foreign and PCT applications and patents issuing therefrom that are listed in
Schedule 1 to the Patent Assignment Agreement and all worldwide counterparts and
registrations, continuations, divisions, reissues, extensions or supplementary
protection certificates, continuations-in-part or additions (but only to the
extent such continuations-in-part or additions claim inventions disclosed as
required by 35 U.S.C. (S)112 (CIPs) or the applicable laws (additions) in the
parent application thereof as listed in said Schedule 1 with respect thereto).
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9. The provisions of Section 4 of the PDGF License and Sublicense, which
relate to royalties and other payments to be made by Stryker to Curis, are
hereby deleted in their entirety, it being understood and agreed that as a
result thereof Stryker shall not have any obligation to make any payment to
Curis in respect of Stryker's Net Sales of PDGF Products ("Net Sales" and "PDGF
Products" having the meaning provided therefor in the PDGF License and
Sublicense for purposes of this Section 9) or sublicensing payments received by
Stryker for sublicensing any PDGF Product.
10. The provisions set forth in paragraphs 1 through 9 hereof shall be
effective as of the Effective Date. Except as specifically provided above, the
terms and provisions of the Agreement shall continue in full force and effect in
all respects and are hereby confirmed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
Agreement this 1st day of October, 2002.
CURIS, INC.
/s/ Daniel R. Passeri
------------------------------------
Daniel R. Passeri, President and
Chief Executive Officer
STRYKER CORPORATION
/s/ John W. Brown
------------------------------------
John W. Brown
Chairman of the Board, President and
Chief Executive Officer
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Exhibit A
CURIS, INC.
WIRE TRANSFER INFORMATION
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ABA#: 011000138
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Bank: Fleet National Bank, Boston, MA
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Beneficiary: Curis, Inc.
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Account #: 94277-70021
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Exhibit B
ASSIGNMENT
Curis, Inc., a Delaware corporation, having a place of business at 61
Moulton Street, Cambridge, MA, in consideration of One Dollar and other valuable
consideration paid to it by Stryker Corporation, a Michigan corporation, having
a principal place of business at 2725 Fairfield Road, Kalamazoo, MI, the receipt
of which is hereby acknowledged, does hereby sell, assign and transfer unto said
Stryker Corporation, its successors and assigns, its entire right, title and
interest for the United States of America and all foreign countries, including
all rights of priority under the International Convention for the Protection of
Industrial Property, in the inventions and improvements disclosed in the U.S.,
foreign, and PCT applications listed in Schedule 1 attached hereto, and in all
Letters Patent of the United States and all foreign countries which have been or
shall be granted on said inventions, or any parts thereof, or on said
applications, or any divisions, continuations, reissues, extensions or other
applications based in whole or in part thereon. And Curis, Inc. agrees, for
itself and its successors and assigns, with said Stryker Corporation and its
successors and assigns, but at its or their expense and charges, hereafter to
execute all applications, amended specifications, deeds or other instruments,
and to do all acts necessary or proper to secure the grant of Letters Patent in
the United States and in all other countries to said Stryker Corporation, with
specifications and claims in such form as shall be approved by the counsel of
said Stryker Corporation and to vest and confirm in said Stryker Corporation,
its successors and assigns, the legal title to all such patents and to otherwise
give full effect to and perfect the rights of said Stryker Corporation under
this Assignment.
And it does hereby authorize and request authorities to issue such Letters
Patent as shall be granted upon said applications to said Stryker Corporation,
its successors and assigns.
WITNESS its hand and seal this 1st day of October, 2002.
Curis, Inc.
By: /s/ Daniel R. Passeri
-------------------------------------
Daniel R. Passeri
President and Chief Executive Officer
State of Massachusetts
County of _____________
Then personally appeared the above-named Daniel R. Passeri, to me known and
known to me to be the person who executed the foregoing instrument, and
acknowledged it to be his free act and deed, before me, this 1st day of October,
2002.
/s/ Marcia R. Thomas
-------------------------------------
Notary Public
My Commission Expires: March 6, 2003
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SCHEDULE 1
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Docket No. Country Application Number Filing Date Patent Number
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CRP0-19 US 07/155,066 2/11/88
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CRP-019DV US 07/686,550 5/6/91 5,759,815
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CRP-065AU AU 92/15591 3/12/92 656,372
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CRP-065AT AT 92908042 3/12/92 196604
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CRP-065CA CA 2,106,073 3/12/92
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CRP-065DE DE 3/12/92 69231486
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CRP-065EP EP 92908042.2 3/12/92 575484
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CRP-065JP JP 04-507,585 3/12/92
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CRP-065WO WO US92/02043 3/12/92 WO92/16181
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CRP-065 US 669,070 3/12/91 5,149,691
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CRP-065CP US 07/849,931 3/12/92 5,376,636
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CRP-067AU AU 51293/93 9/15/93 670334
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CRP-067CA CA 2,144,513 9/15/93 2,144,513
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CRP-067CN US 08/643,763 5/6/96 5,733,878
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CRP-067EP EP 93922212.1 9/15/93 665739
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CRP-067FW US 08/155,343 11/15/93 5,656,593
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CRP-067JP JP 93-508301 9/15/93
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CRP-067KR KR 700993/95 9/15/93
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CRP-081FW US 08/402,542 3/13/95 6,395,883
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