EXHIBIT 10.2
CONFIDENTIAL TREATMENT REQUESTED - REDACTED COPY
CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED IS OMITTED AND NOTED WITH "***." AN UNREDACTED VERSION OF
THIS DOCUMENT HAS BEEN SUBMITTED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION.
FIRST AMENDMENT TO THE
EXCLUSIVE DISTRIBUTION AGREEMENT
This FIRST AMENDMENT TO THE EXCLUSIVE DISTRIBUTION AGREEMENT (this
"Amendment"), effective as of March 24, 2005, is entered into by and between
BAXTER HEALTHCARE CORPORATION with its principal place of business at One Baxter
Parkway, Deerfield, Illinois 60015-4633 ("Baxter"), and HALOZYME, INC. with its
principal place of business at 11588 Sorrento Valley Road, Suite 17, San Diego,
California 92121 ("Halozyme"), and is the first amendment to that EXCLUSIVE
DISTRIBUTION AGREEMENT (the "Distribution Agreement") between Baxter and
Halozyme that was entered into as of August 13, 2004.
WHEREAS, the parties are in connection herewith entering into a
Development and Supply Agreement (the "Development and Supply Agreement") that
reflects the parties' ongoing efforts to develop and supply Initial Product(s)
and potentially Other Product(s) the active ingredient of which is human
recombinant PH20 hyaluronidase for certain indications; and
WHEREAS, the parties wish to provide for a specific and consistent
definition and treatment of the Initial Product(s) and potentially Other
Product(s) pursuant to the terms of the Development and Supply Agreement and the
Distribution Agreement, the parties hereto agree to amend the Distribution
Agreement as follows:
"Product", as used in the Distribution Agreement, shall have the same meaning as
provided for "Initial Product(s)", as defined in the Development and Supply
Agreement;
"Improvements", as used in the Distribution Agreement, shall have the same
meaning as provided for "improvements" under the definition of "Initial
Product(s)", as defined in the Development and Supply Agreement;
"Other Products", as used in the Distribution Agreement, shall have the same
meaning as provided for "Other Products", as defined in the Development and
Supply Agreement;
The "Indemnification" provisions of the Development and Supply Agreement
(specifically Section 15, including Sub-sections 15.1-15.3) shall apply equally
to Products, Improvements and Other Products (individually and collectively
"Distributed Product(s)") under this Distribution Agreement, with "this
Agreement" referring to this Distribution Agreement, "API" referring to API
supplied to Baxter for the Production of Distributed Product(s), and "Product"
referring to Distributed Product(s).
Sub-section 1.6 of the Distribution Agreement is hereby replaced in its entirety
with the following:
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CONFIDENTIAL TREATMENT REQUESTED - REDACTED COPY
"1.6 Right of First Refusal for Other Products. With regard to
potential Other Products, Halozyme hereby grants to Baxter a first right
of refusal (exercisable for six months from the date of written notice of
such potential Other Product to Baxter) to include any such potential
product within the scope of Product of this Agreement in exchange for,
inter alia, the Financial Considerations provided under Sections 2.1
through 2.6 of this Agreement (or their substantial equivalent as mutually
agreed by the parties). If Baxter does not provide such written notice
during the applicable six (6) month period, then such potential product
shall not become a Product and Baxter shall have no rights under this
Agreement with respect to such product."
Adding the following sub-section hereby amends Section 4 Covenants of Baxter, of
the Agreement:
"4.3 Marketing and Incremental Sales Costs. Baxter shall be solely
responsible for the combined marketing and incremental sales costs of the
Initial Product and Other Products as defined in the Development and
Supply Agreement to be executed between the parties by March 24, 2005. In
no event will total combined marketing and incremental sales costs paid by
Baxter hereunder exceed *** on an annualized basis. In the event that the
parties agree in advance to combine marketing and incremental sales costs
in excess of ***, such excess marketing and incremental sales costs shall
be shared *** between Baxter and Halozyme.
4.3.1 The combined marketing and incremental sales costs
required to promote the Initial Product and Other Products shall
include the following: (i) direct salary and headcount costs
directly related to such activity (ii) attendance at conventions and
conferences (iii) marketing promotions, (iv) public relations, (v)
marketing communication programs, (vi) sales meetings, (vii) Product
catalogs, (viii) telemarketing, (ix) market research, (x) direct
mail, (xi) Product ads, (xii) travel costs and (xiii) use of
consultants (if and to the extent that in each case (i) to (xiii)
such costs are directly allocable to promoting the Initial Product
and/or Other Products)."
Adding the following subsection hereby amends Section 1.2 Territories of the
Agreement:
"1.2.1 Baxter shall make the decision to enter the European market,
(hereinafter referred to as an "Additional Territory" as defined in the
Agreement) on or before ***. It is agreed by the parties that the Gross
Profit calculation split, as set forth under Section 2.1 of the Agreement
will not apply to the European market. The parties further agree that the
Gross Profit split for the European market shall be modeled after the U.S.
Distribution Agreement dated August 13, 2004, as amended. In the event
that the parties cannot agree on the U.S. model,
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CONFIDENTIAL TREATMENT REQUESTED - REDACTED COPY
then the parties shall negotiate in good faith to develop an equitable
split formula for the European market."
This Amendment may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument and shall be deemed to be a valid amendment in accordance with
Section 9.4 of the Distribution Agreement.
IN WITNESS WHEREOF, the parties hereto have each caused this Amendment to
the Exclusive Distribution Agreement to be executed by their duly authorized
representatives as of the Effective Date above written.
HALOZYME, INC. BAXTER HEALTHCARE
CORPORATION
By: /s/ Jonathan Lim By: /s/ Daniel Tasse
Name: Jonathan Lim Name: Daniel Tasse
Title: President and Chief Title: General Manager - ACCO/Baxter
Executive Officer
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