EXHIBIT 10.12
FIRST AMENDMENT TO LICENSE AND SUPPLY AGREEMENT
This First Amendment to License and Supply Agreement (this "Amendment")
is entered as of January 1, 2002 (the "Effective Date"), by and among ADVANCED
TISSUE SCIENCES, INC., a Delaware corporation ("ATS"), and BIOZHEM
COSMECEUTICALS, INC. a Texas corporation ("Buyer").
WHEREAS, ATS And Buyer have entered into a Development, License and
Supply Agreement dated September 25, 2000;
WHEREAS, certain changes have occurred in development timelines and
strategies which require adjustments to the terms of the Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
terms, covenants and conditions set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, ATS
and Buyer agree that the License and Supply Agreement will be amended as
follows:
I. The parties agree that Section 1.6 of the Agreement shall be deleted
and replaced with the following new Section 1.6:
1.6 "Contract Year" shall be a twelve month period commencing
on January 1st of any year the Agreement is in effect. The First
Contract Year is the period from January 1, 2002 until December 31,
2002.
II. The parties agree that Section 5.1.1.1 of the Agreement shall be
deleted and replaced with the following new Section ▇.▇.▇.▇:
5.1.1.1 on or before November 30, 2002 a payment in the amount
of One Million Dollars ($1,000,000);
III. The parties agree to add the following new Section 3.6.8 related to
Buyer's Obligations:
3.6.8 that the apportionment of revenue to the
Licensed Product shall be according to the following schedule:
3.6.8.1 100% to ATS on individual purchases
of Licensed Product
3.6.8.2 80% to ATS on purchased of one
licensed Product packaged with one or two Buyer or
other third party products
3.6.8.3 70% to ATS on purchases of one
Licensed Product packaged with three or more Buyer or
other third party products
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3.6.8.4 For offerings, if any, containing
more than one Licensed Product, the parties will
negotiate in good faith to determine apportionment of
revenues.
IV. The parties agree that Section 5.3.1 of the Agreement shall be deleted
and replaced with the following new Section 5.3.1:
5.3.1 The "Exclusivity Threshold" shall be determined
according to the following schedule:
Annual Minimum Royalty Quarterly Minimum Royalty
Contract Year Payment Payment Annual Sales Targets
------------- ------- ------- --------------------
1 $2,000,000 $500,000 $20,000,000
2 $3,000,000 $750,000 $30,000,000
3 $4,000,000 $1,000,000 $40,000,000
4 $6,100,000 $1,525,000 $60,000,000
5 $9,600,000 $2,400,000 $80,000,000
6-10 $12,000,000/year $3,000,000 $100,000,000/year
The payments made under this section shall be cumulative so that Buyer
shall receive a credit in the following period in the event the actual
royalties paid in any period exceed the minimum payments hereunder.
For the First Contract Year only, the following terms will apply:
o Payment for Q1 and Q2 actual royalties will be made
within 5 days following the end of the quarter.
o No later than July 1, 2002 payment of the difference
between the actual royalties and minimum royalties
for Q1, if any.
o No later than September 30, 2002, payment of the
minimum royalty for Q3.
o No later than October 1, 2002, payment of the
difference between the actual royalties and minimum
royalties for Q2, if any.
o No later than December 31, 2002, payment of the
minimum royalty for Q4.
o If actual royalties exceed the minimums for any
quarter, the difference will be paid to ATS no later
than 30 days following the end of the applicable
quarter.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
be effective as of the date first written above.
ADVANCED TISSUE SCIENCES, INC.
By: /s/ ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
--------------------
Title: President
Print Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
BIOZHEM COSMECEUTICALS, INC.
By: /S/ ▇. ▇. ▇▇▇▇▇▇
--------------------
Title: CEO
Print Name: ▇. ▇. ▇▇▇▇▇▇
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