Letter Agreement Clarifying Sublicense Fees under Exclusive Patent License Agreement between ZymoGenetics and BioMimetic Therapeutics, Inc.

Summary

This letter agreement between ZymoGenetics (ZGEN) and BioMimetic Therapeutics, Inc. (BMTI) clarifies the sublicense fees BMTI owes ZGEN under their 2001 Exclusive Patent License Agreement, specifically regarding a 2003 sublicense to Luitpold Pharmaceuticals. BMTI will pay ZGEN $4 million within 10 days of marketing approval for the GEM 21S product, in addition to a $1 million milestone fee. The agreement also sets conditions on product classification, royalty rates, and the expiration of royalty obligations. Both parties have agreed to these terms as of October 2005.

EX-10.4 7 file005.htm LETTER AGREEMENT, DATED OCTOBER 17, 2005

Exhibit 10.4 ZYMOGENETICS October 17, 2005 VIA FAX (615 ###-###-####) AND FEDERAL EXPRESS Dr. Samuel Lynch President and CEO BioMimetic Therapeutics, Inc. 389-A Nichol Mill Lane Franklin, TN 37067 Dear Dr. Lynch: I am writing to summarize the recent discussions between you and Dr. Bruce Carter. ZGEN and BMTI desire to clarify Sublicense Fees payable by BMTI to ZGEN under their Exclusive Patent License Agreement dated March 28, 2001 (the "2001 License Agreement") with regard to the 2003 sublicense granted by BMTI to Luitpold, in accordance with the terms described below. With regard to the Exclusive Sublicense Agreement and Research, Development and Marketing Agreement, both dated December 9, 2003, between BMTI and Luitpold Pharmaceuticals, Inc. (the "Luitpold Transaction"), ZGEN and BMTI agree that the total amount of Sublicense Fees payable by BMTI to ZGEN under Section 4.7 of the 2001 License Agreement shall be Four Million Dollars ($4,000,000), payable within ten (10) days after first marketing approval of BMTI's periodontal product, GEM 21S(R) System. For clarity, the parties agree that such amount shall be in addition to the One Million Dollars ($1,000,000) Minimum Milestone Fee, payable by BMTI to ZGEN under Section 4.5(4) of the 2001 License Agreement, payable within thirty (30) days after first marketing approval of BMTI's periodontal product, GEM 21S. The foregoing is acceptable to ZGEN on the condition that: o GEM 21S is deemed to be a Single Agent Product and is not a Bundled Product; o the royalty rate for GEM 21S shall be ** of Net Sales by Luitpold, BMTI and its affiliates and other sublicensees; and o the royalty obligation for GEM 21S expires on 16 February 2010 (subject to any Hatch-Waxman extension of a ZGEN patent following FDA approval of GEM 21S). ** REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. If you agree with the above terms, please indicate by signing below on the copy of this letter and returning to me. Sincerely, /s/ Suzanne M. Shema -------------------------------------------- Suzanne M. Shema Senior Vice President, Intellectual Property and Legal Affairs cc: Mark Manner Earl Douglas Jim Lisbakken Bruce Carter AGREED: BioMimetic Therapeutics, Inc. By: /s/ Samuel Lynch -------------------------- Its: President & CEO Date: October 18, 2005