EXHIBIT 10.128
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE
BEEN REDACTED AND HAVE BEEN FILED SEPARATELY WITH THE U.S. SECURITIES AND
EXCHANGE COMMISSION
AMENDMENT NO. 1 TO LICENSING AGREEMENT
This Amendment No. 1 to Licensing Agreement (the "Amendment") is executed
as of the 5th day of December, 2002 (the "Date Hereof") and effective as of
October 1, 2002 (the "Amendment Effective Date"), by and between Eli Lilly and
Company ("Eli Lilly"), Eli Lilly S.A. ("Lilly SA"), and Indevus Pharmaceuticals,
Inc. (f/k/a Interneuron Pharmaceuticals, Inc.) ("Indevus"). Eli Lilly and Lilly
SA will be referred to collectively as "Lilly".
RECITALS
1. Eli Lilly, Lilly SA and Indevus heretofore entered into that certain
Licensing Agreement (the "Agreement") dated as of June 19, 1997.
2. The parties now wish to amend the Agreement as set forth in this
Amendment.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Capitalized terms not otherwise defined herein will have the meaning
given to them in the Agreement. All references in the Agreement to "Interneuron
Pharmaceuticals, Inc." are hereby replaced by references to "Indevus
Pharmaceuticals, Inc.", and all references in the Agreement to "Interneuron" are
hereby replaced by references to "Indevus".
2. As of the Amendment Effective Date, Section 1.9 of the Agreement will
be replaced in its entirety with the following:
"1.9 "Net Sarafem Sales" means, for each applicable period, the gross
amount invoiced by Eli Lilly, its Affiliates and its sublicensees to
unaffiliated third parties for Compound sold in the United States under the
brand name "Sarafem," less:
(a) trade, quantity, period, and cash discounts allowed;
(b) such Compound returns, credits and allowances;
(c) any tax imposed on the production, sales, delivery or use of the
Compound;
(d) allowance for distribution expenses such as freight and
insurance; and
(e) any other similar or customary deductions.
Such amounts shall be determined from the books and records of Eli
Lilly, its sublicensees or its Affiliates, as applicable, maintained in
accordance with United States Generally Accepted Accounting Principles
("GAAP") consistently applied. Net Sarafem Sales shall not include sales of
Compound between or among Eli Lilly, Eli Lilly Affiliates and sublicensees
of Eli Lilly. Net Sarafem Sales shall include sales of Compound under any
subsequent or additional brand name(s) that Eli Lilly, its Affiliates and
its sublicensees elect to use, which exploit(s) the market exclusivity
afforded by United States Patent [*].
3. As of the Amendment Effective Date, the text of Section 1.10 will be
deleted in its entirety and "[RESERVED]" shall be substituted in lieu thereof.
4. As of the Amendment Effective Date, Section 4.2 of the Agreement will
be replaced in its entirety with the following:
"4.2. Royalties. Eli Lilly shall pay Indevus a royalty ("Royalty
Payments") equal to [*]% of Net Sarafem Sales made during the period
beginning on October 1, 2002 and ending on the date upon which a Valid
Claim with respect to United States Patent [*] no longer exists (the
"Royalty Term"). For purposes of this Agreement, a Net Sarafem Sale will be
deemed to have been made as of the date of delivery of the applicable
Compound to the applicable customer without regard to whether the customer
has actually paid for such Compound.
In addition to the foregoing, Eli Lilly will pay to Indevus a payment of
US$728,000 (each, a "Bonus Payment," and collectively, "Bonus Payments")
for each calendar quarter, beginning January 1, 2003, during the Royalty
Term in which Net Sarafem Sales are equal to or greater than US$[*] for
such calendar quarter; provided, however, that in no event will Eli Lilly
be obligated to pay Bonus Payments in the aggregate greater than
US$2,184,000 attributable to Net Sarafem Sales during the Royalty Term.
In addition, Eli Lilly will pay to Indevus a one time payment of US$776,773
within 10 days of the Date Hereof."
5. As of the Amendment Effective Date, Section 4.3 of the Agreement will
be replaced in its entirety with the following:
*CONFIDENTIAL TREATMENT REQUESTED
"4.3. Time of Payment. All Royalty Payments with respect to Net
Sarafem Sales made during a calendar quarter shall be payable within ninety
(90) days after the end of such calendar quarter. Bonus Payments, if any,
with respect to Net Sarafem Sales made during a calendar quarter shall be
payable within twenty (20) days after Net Sarafem Sales reach US$[*] during
the applicable calendar quarter. All Royalty Payments shall be accompanied
by a statement setting forth the Net Sarafem Sales with respect to the
applicable calendar quarter. Notwithstanding anything in this Amendment to
the contrary, upon the first grant, but not subsequent grants, of a
sublicense by Lilly under United States Patent [*] to sell, market or
promote Compound in the United States, Lilly will pay to Indevus within 30
days of the closing of such sublicensing transaction an amount equal to
US$2,184,000 less the aggregate amount of Bonus Payments made to Indevus
prior to such payment. Upon such payment by Lilly, Lilly will have no
further obligation to make any Bonus Payments to Indevus. Eli Lilly
covenants that, for purposes of determining the Bonus Payment, the Lilly's
total deductions from gross Sarafem sales in arriving at Net Sarafem Sales
shall be consistent with Lilly's past practice."
6. As of the Amendment Effective Date, the reference to "Net Sales" in
the fourth (4/th/) sentence of Section 4.4 of the Agreement is hereby replaced
with "Net Sarafem Sales."
7. As of the Amendment Effective Date, the fifth (5/th/) through the
eighth (8/th/) sentences of Section 9.1 of the Agreement are hereby replaced in
their entirety with the following:
"Each party shall bear its own costs and expenses in defense of such claim.
Indevus agrees to defend, fully indemnify and hold Lilly and its employees,
agents and sublicensees harmless from and against any and all liabilities,
claims, actions, demands, suits, losses, damages, costs and expenses
(including reasonable attorney's fees) which Lilly, its employees, agents
and/or sublicenses may incur, suffer or be required to pay by reason of the
sale, marketing or label indication of Compound for the Field which arises
from a third party claim of patent infringement or inducing or contributing
to patent infringement. If, as a result of settlement or a final
nonappealable judgment pursuant to litigation, Eli Lilly, its Affiliates or
its sublicensees is required to pay a royalty or damages to a third party
for the right to make, have made, use, or sell, or continue to make, have
made, use, or sell Compound in the United States for use in the Field, any
royalties or other payments paid to such third party by Eli Lilly, its
Affiliates or its sublicensees shall be creditable against the Royalty
Payments payable to Indevus by Eli Lilly under Section 4.2, provided that
the net effect of such credit shall not reduce Indevus' royalty rate below
[*]% of Net Sarafem Sales. The preceding sentence will in no event limit
Lilly's, its employees', and/or agents', right to indemnification pursuant
to this Agreement. If such payments are to be made as a result of
settlement, Indevus shall have the right to participate in and consent to
such settlement."
*CONFIDENTIAL TREATMENT REQUESTED
8. Eli Lilly represents and warrants that the License Agreement dated
December 18, 1998 between Eli Lilly and Michael J. Norden (the "Norden
Agreement") is in full force and effect as of the Date Hereof. Notwithstanding
anything in the Agreement or this Amendment to the contrary, in the event of the
termination or material breach by Lilly of the Norden Agreement, Lilly, its
employees, agents, and/or sublicensees will not be entitled to indemnification
from Indevus for liabilities, claims, actions, demands, suits, losses, damages,
costs and expenses (including reasonable attorney's fees) arising out of an
infringement cause of action brought by Michael J. Norden against Lilly directly
related to Lilly's practice of United States Patent [*].
9. This Amendment will be in full and complete satisfaction of any and
all claims, actions, suits, demands, costs and other liabilities of any nature
("Claims") which either party now has, whether known or unknown, or, but for the
execution of this Amendment, could or might have had against the other party,
its Affiliates or their respective employees, agents, contractors or
sublicensees arising out of or related to the Agreement and based on events,
acts or omissions occurring prior to the Date Hereof. Both parties hereby
release, remise and forever discharge the other party and its Affiliates,
including their respective employees, agents, sublicensees and contractors from
any and all Claims which a party now has, whether known or unknown, or, but for
the execution of this Amendment, could or might have had against the other party
or its Affiliates, including their respective employees, agents, sublicensees or
contractors, arising out of or related to the Agreement and based on events,
acts or omissions occurring prior to the Date Hereof, whether such Claims are
based upon alleged tort or alleged contract or any other legal theory or
recovery, known or unknown, past, present or future, suspected to exist or not
suspected to exist, anticipated or not anticipated including those Claims
arising from the negligence, gross negligence or willful misconduct of the other
party or its Affiliates, including their respective employees, agents,
sublicensees or contractors. This Amendment shall not be construed as an
admission of liability by either party with respect to the Agreement or any act
or omission. Both parties acknowledge that there is a risk that, subsequent to
the execution of this Amendment, it may discover, incur or suffer from claims,
damages or injuries related to the Agreement and based on events, acts or
omissions occurring prior to the Date Hereof, on its own behalf or on behalf of
another, which are unknown or unanticipated as of the Date Hereof, including,
without limitation, unknown or unanticipated claims, damages or injuries which
arise from, are based upon or are related to the issues and matters raised by or
related to the Agreement and based on events, acts or omissions occurring prior
to the Date Hereof. Both parties acknowledge that it is assuming the risk of
such unanticipated claims and agrees that the releases contained in this Section
9 of the Amendment applies thereto. The provisions of any local, state, federal
or foreign law, statute or judicial decision providing in substance that
releases shall not extend to such unknown or unanticipated claims, damages or
injuries, are hereby expressly waived by both parties. Without limiting the
foregoing, both parties agree that this Section 9 of the Amendment will apply to
all Claims related to sales of Compound made prior to the Date Hereof except for
Royalty Payment based on Net Sarafem Sales in accordance with this Amendment
made after the Amendment Effective Date.
*CONFIDENTIAL TREATMENT REQUESTED
10. Indevus represents and warrants that the Patent Licensing Agreement
dated February 13, 1996 between Indevus and Massachusetts Institute of
Technology (the "MIT Agreement") isas of the Amendment Effective Date, and will
continue to be during the term of the Agreement, in full force and effect.
Indevus will not cause, by its acts or omissions, the MIT Agreement to be
terminated during the term of the Agreement.
11. Indevus agrees that any rights granted to Lilly pursuant to the
Agreement with respect to the United States may be exercised by Lilly's
sublicensees to the extent Lilly confers that right to its sublicensees.
12. Indevus covenants and agrees (i) that, notwithstanding anything in the
Agreement to the contrary, Eli Lilly or its designee (including a sublicensee of
Eli Lilly) will have the right to manage and control the current litigation with
Teva Pharmaceuticals USA, Inc. in the U.S. District Court, Southern District of
Indiana (IP02-0512-C-B/S) (the "Teva Litigation"), and (ii) that Indevus will
use commercially reasonable efforts to seek the cooperation of Massachusetts
Institute of Technology in Eli Lilly's and its designee's pursuits with respect
to the Teva Litigation.
13. Exhibit A and Exhibit B of the Agreement are hereby deleted in their
entirety.
14. In all other respects, the Agreement shall remain in full force and
effect.
15. This Amendment may be executed in any number of counterparts, each of
which will be deemed an original but all of which together constitute a single
instrument.
IN WITNESS WHEREOF, the parties have caused this Amendment to be entered
into by their duly authorized representatives as of the date first above
written.
ELI LILLY AND COMPANY INDEVUS PHARMACEUTICALS, INC.
By: /s/ Gino Santini By: /s/ Noah D. Beerman
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Printed Name: Gino Santini Printed Name: Noah D. Beerman
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Title: President U.S. Operations Title: Sr. Vice President, Business Dev.
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ELI LILLY S.A.
By: /s/ Thomas W. Green
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Printed Name: Thomas W. Green
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Title: Vice President
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