<PAGE>
Exhibit 10.10
EXECUTION COPY
EXCLUSIVE LICENSE AGREEMENT
THIS
EXCLUSIVE LICENSE AGREEMENT (this "Agreement") is entered into on
the
14th day of February 2005, by and between EndoChem, Inc., a
corporation
organized and existing under the laws of the State of California
having its
principal place of business at 1751 Capistrano Ave, Berkeley,
California
94707-1805 ("EndoChem"), and QuatRx Pharmaceuticals Company, a
corporation
organized and existing under the laws of the State of Delaware
having its
principal place of business at 777 East Eisenhower Parkway, Suite
100, Ann
Arbor, Michigan 48108-8935 (hereinafter called "Licensee").
EndoChem and
Licensee are each individually referred to herein as a "Party" and
collectively
as the "Parties".
WHEREAS, EndoChem owns or has license rights to certain inventions
that are
described in the "Licensed Patents" defined below, and EndoChem is
willing to
grant a license to Licensee and Licensee desires a license under
the Licensed
Patents;
NOW,
THEREFORE, in consideration of the mutual covenants and agreements
set
forth below, the parties covenant and agree as follows:
SECTION 1. DEFINITIONS.
The following capitalized terms shall have the meanings set forth
below:
1.1
"Affiliate" shall mean, with respect to a given entity, any
other
entity (including any individual) which, directly or indirectly,
Controls, is
Controlled by or is under common Control with such entity.
"Control" for the
purpose of this Section 1.1 means (i) having the actual, present
capacity to
elect a majority of the directors of such entity; (ii) having the
power to
direct at least fifty percent (50%) of the voting rights entitled
to elect
directors; or (iii) in any country where the local law will not
permit foreign
equity participation of a majority, ownership or control, directly
or
indirectly, of the maximum percentage of such outstanding stock or
voting rights
permitted by local law.
1.2
"Agreement" has the meaning set forth in the first paragraph.
1.3
"Attributed Income" shall mean the total gross proceeds (excluding
from
such proceeds Sublicensee Royalties of Sublicensees and Earned
Royalties, but
including in such proceeds, without limitation, any license fees,
maintenance
fees, or milestone payments), whether consisting of cash or any
other form of
consideration and whether or not any rights other than Patent
Rights are
granted, which gross proceeds are received by or payable to the
Licensee and/or
any of its Affiliates from any Sublicensee in consideration of the
grant of a
sublicense and from any Development Partner in consideration of any
agreement or
arrangement between such Development Partner and Licensee or
Sublicensee in
connection with an agreement or arrangement relating to the
research or
development of Licensed Products. Notwithstanding the foregoing,
Attributed
Income shall not include proceeds reasonably and fairly attributed
in such
sublicense or such agreement or arrangement to bona fide (i) debt
financing;
(ii) equity (and conditional equity, such as warrants, convertible
debt and the
like) investments in the Licensee at market value; (iii)
reimbursements of
Patent
QuatRx EndoChem License
1.
<PAGE>
Prosecution Costs actually incurred by Licensee; (iv) reimbursement
for the
cost of research and/or development services to be provided by
Licensee on a
going forward basis (or within the six (6) month period preceding
the
consummation of such sublicense or such agreement or arrangement,
so long as the
reimbursement in question is specifically agreed upon between
Licensee and such
Sublicensee or Development Partner in view of the negotiation
period involved)
which is payable on a commercially reasonable full-time equivalent
("FTE") basis
or other similar commercially reasonable basis where reference to
FTEs is not
applicable; (v) amounts paid for the supply of Licensed Products by
Licensee to
a Sublicensee or a Development Partner or by a Sublicensee to a
Development
Partner for preclinical or clinical development (so long as amounts
received for
such supply do not exceed ********* percent (***%) of the actual
fully burdened
manufacturing cost thereof); and (vi) reimbursement of reasonable
out-of-pocket
costs actually paid by Licensee to third parties in connection with
the services
described in subsection (iv) above to the extent such costs are not
already
included in subsections (iv) or (v). For the avoidance of doubt,
any gross
proceeds meeting the definition set forth above shall be
"Attributed Income"
irrespective of whether such gross proceeds are received under one
or more
separate agreements and irrespective of how such gross proceeds are
referred to
or characterized by Licensee, the Sublicensee or the Development
Partner.
Although Attributed Income shall include all aggregate proceeds
meeting the
foregoing definition, regardless of whether the underlying
sublicense or
agreement or arrangement includes other intellectual property or
technology
besides the Patent Rights, in the event this results in a very
substantial and
disproportionate amount of proceeds attributable solely to such
other
intellectual property or technology to be included in Attributed
Income so as to
impose an overly burdensome and inequitable obligation on Licensee,
Licensee may
reasonably request EndoChem to make appropriate adjustment to
Attributed Income
in such a particular case to mitigate such burden and inequity,
which request
EndoChem shall consider in good faith. Notwithstanding the
foregoing, however,
the Parties understand and agree that the negotiated Sublicense Fee
rate in
Section 6.2 already presumes that additional value, technology and
intellectual
property will be included in any transaction generating a given
amount of
Attributable Income and that the mere inclusion of such additional
value,
technology and/or intellectual property shall not, by itself, be
sufficient to
justify any such adjustment.
1.4
"Claim" has the meaning set forth in Section 11.1.
1.5
"Combination Product" shall mean a combined Product that contains
or
uses a Licensed Product as an active ingredient and at least one
other Product
or process that is not a Licensed Product (a "Combination Product
Component"),
where (i) if such Combination Product Component were removed from
such combined
Product, the manufacture, use, Sale or import of the resulting
Product in or
into a particular country would infringe, but for a license, the
same Valid
Claim in the country where such manufacture, use, Sale or import
occurs as such
Combination Product, (ii) such Combination Product Component is
either a
separate active ingredient with independent therapeutic
functionality or a
specialized delivery device (thus excluding, for example and
without limitation,
adjuvants, conjugates, excipients, syringes and similar
components), and (iii)
the market price of such combined Product is higher than the market
price for
(or, if no such price exists, the fair market value of) such
Licensed Product as
a result of such combined Product containing or using such
Combination Product
Component.
QuatRx EndoChem License
2.
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1.6 "Commencement"
shall mean, in connection with a clinical trial, the
first dosing of the first patient in such trial.
1.7
"Confidential Information" has the meaning set forth in Section
9.1.
1.8
"Control" shall mean, with respect to an item of information or
intellectual property right, that a Party or one of its Affiliates
owns or has a
license to such item or right and has the ability to disclose to
the other Party
and grant a license or sublicense under such item or right as
provided for in
this Agreement without violating the terms of any agreement with or
other
obligation to any Third Party.
1.9
"Development Partner" shall mean any person or entity other than
a
Sublicensee that has an agreement or arrangement with the Licensee,
its
Affiliates or any Sublicensee for the conduct of research or
development of
Licensed Products.
1.10
"Disclosing Party" has the meaning set forth in Section 9.1.
1.11
"Earned Royalty" shall mean any Sublicensee Royalty and/or any
Royalty.
1.12 "Effective Date"
shall mean the later of (i) the date upon which this
Agreement is entered into, as set forth in the first paragraph, and
(ii) the
date upon which each of this Agreement, the UC Agreement, and the
letter
agreement by and between QuatRx and UC relating to Section 3.1.2 of
the UC
Agreement are executed by all parties thereto. QuatRx shall notify
EndoChem in
writing when it has executed the letter agreement between it and
UC.
1.13
"FDA" shall mean the United States Food and Drug Administration, or
a
successor federal agency thereto.
1.14
"Field of Use" shall mean the use of Licensed Product or
Licensed
Method for all human therapeutic applications, including, but not
limited to,
the treatment of hyperlipidemia, obesity and diabetes. The Field of
Use
specifically excludes all uses and applications other than human
therapeutic
applications.
1.15
"First Commercial Sale" shall mean the first Sale of a Licensed
Product to a Third Party (other than an Affiliate or Sublicensee)
in a
jurisdiction after Regulatory Approval.
1.16
"Invention" has the meaning set forth in Section 10.2.
1.17
"Inventor" has the meaning set forth in Section 10.2.
1.18
"Licensed Method" shall mean any process, art or method the use
or
practice of which, but for the license granted in this Agreement,
would
infringe, or contribute to, or induce the infringement of, any
Licensed Patents
in any country were they issued at or prior to the time of the
infringing
activity in that country.
1.19 "Licensed
Patents" shall mean: (i) the Patent Rights; (ii) any other
patents and patent applications that are now or hereafter
Controlled by EndoChem
that are (a) necessary to make, use or sell the composition of
matter of any
compound, or to practice a method,
QuatRx EndoChem License
3.
<PAGE>
claimed by the Patent Rights in subsection (i), or (b) necessary to
make or use
the composition of matter of any intermediates used to make the
foregoing
compounds; and (iii) any patents and patent applications on
inventions made by
EndoChem during its participation on the Steering Committee, in
each case
including any foreign counterparts thereof, and any
continuations,
continuations-in-part, divisions, re-issues, additions,
reexaminations, renewals
and extensions thereof, and any patents issuing from any such
patent
applications in any jurisdiction in the Territory. In no event
shall the
Licensed Patents include any patents or patent applications
Controlled by
EndoChem that claim any methods of manufacturing or formulations of
the
compositions of matter claimed by the Patent Rights, unless such
patents and
patent applications are described in (i) or (ii).
1.20
"Licensed Product" shall mean any Product, including, without
limitation, a Product for use or used in practicing a Licensed
Method and any
Product made by practicing a Licensed Method, the manufacture, use,
Sale, offer
for Sale or import of which, but for the license granted in this
Agreement,
would infringe, or contribute to, or induce the infringement of,
any Licensed
Patents in any country were they issued at or prior to the time of
the
infringing activity in that country.
1.21
"Licensee" has the meaning set forth in the first paragraph.
1.22
"Net Invoice Price" shall mean (a) the gross invoice price or, if
no
invoice is issued for the Sale of Licensed Product, the amount
otherwise charged
by the Licensee and/or any Sublicensee for a Licensed Product or a
Licensed
Method, or (b) in those instances where the Licensed Product is
combined in any
manner with any other Product or service, the gross invoice price
or, if no
invoice is issued for the Sale of Licensed Product, the amount
otherwise charged
by the Licensee and/or any Sublicensee for the combined Product or
service in
its entirety, less the following items, but only to the extent that
they
actually pertain to the disposition of such Licensed Product and
are separately
billed:
(i) Allowances actually granted to customers for rejections,
returns
and
prompt payment and volume discounts;
(ii) Freight, transport packing and insurance charges associated
with
transportation to the extent included in the gross invoice
price;
(iii) Taxes, including Deductible Value Added Tax, tariffs or
import/export duties based on Sales when included in the gross
invoice
price, but excluding value-added taxes other than Deductible Value
Added
Tax
or taxes assessed on income derived from Sales, where "Deductible
Value
Added Tax" means value added tax only to the extent that such value
added
tax
is actually incurred and is not reimbursable, refundable or
creditable
under the tax authority of any country;
(iv) Only those normal and customary discounts and rebates that
are
given as part of a formulary program and are paid or credited to
customers,
third-party payers, healthcare systems, or administrators for a
Licensed
Product that is included in such formulary program, as permitted
by
applicable law;
(v) Only those normal and customary wholesaler's discounts and
rebates
that
are given as part of a formulary program and are paid or credited
to
QuatRx EndoChem License
4.
<PAGE>
customers, third-party payers, health care systems, or
administrators for a
Licensed Product that is included in such formulary program, as
permitted
by
applicable law; and
(vi) Rebates and discounts which are reasonable and customary in
the
industry paid or credited as permitted by applicable law.
1.23
"Net Sale" shall mean:
(i) except in the instances described in Sections (ii), (iii),
(iv),
(v),
(vi), and (vii) of this definition, the Net Invoice Price;
(ii) for any Relationship-Influenced Sale of a Licensed Product,
Net
Sales shall be based on the Net Invoice Price (calculated as if
the
Relationship-Influenced Sale Purchaser was a Sublicensee) at which
the
Relationship-Influenced Sale Purchaser resells such Licensed
Product in
lieu
of the Net Invoice Price of the Licensee and/or any Sublicensee
with
respect to such Licensed Product;
(iii) in those instances where Licensed Product is not Sold, but
is
otherwise used for purposes other than those directed toward the
further
research and development (including without limitation for
quality
assurance, quality control, compound assays, or similar activities,
whether
conducted pre- and/or post-approval) of Licensed Products, (a) the
Net
Sales for such Licensed Product shall be the Net Invoice Price of
such
Licensed Products if then being commercialized, or (b) if such
Licensed
Products are not then being commercialized, the Net Sales for such
Licensed
Product shall be the Net Invoice Price of similar products or
services Sold
in
similar quantities in an arm's length transaction by Licensee,
a
Sublicensee or, if not Sold by Licensee or a Sublicensee, by any
other
manufacturer (taking into account, however, the fact (if true) that
the
Licensed Product in question is not then being produced in
commercial
quantities, in which case a reasonable discount shall be applied),
or (c)
if
subsection (a) does not apply and similar products or services are
not
then
being Sold by Licensee, a Sublicensee or any other manufacturer,
then
the
Net Sale of the Licensed Product so used for such a purpose shall
be
Licensee's or the Sublicensee's cost of manufacturing such Licensed
Product
(determined in accordance with generally accepted accounting
principles)
plus
an additional **** percent (**%) thereof;
(iv) in those instances where the Licensee or any Sublicensee
acquires
a
Licensed Product and then subsequently Sells or otherwise uses
(as
described in Section (iii)) such Licensed Product, Net Sales shall
mean the
Net
Invoice Price charged upon the Sale or other use of such
Licensed
Product by the Licensee or any Sublicensee, with the resulting
royalty
amount due to UC subject to a deduction for any royalty amounts
paid to UC
on
account of an earlier Sale or other use (as described in Section
(iii))
of
such Licensed Product, if any;
(v) in the event Licensee or its Sublicensee Sells or otherwise
uses
(as
described in Section (iii)) any Licensed Product in the Territory
in
the
form of a Combination Product containing one or more active
ingredients
which are themselves not Licensed Products (which may be either
combined in
a
single formulation or bundled with separate formulations but sold
as one
product), (a) Net
QuatRx EndoChem License
5.
<PAGE>
Sales for such Combination Product will be calculated by
multiplying actual
Net
Sales of such Combination Product (i.e., calculated as if the
entire
Combination Product is one Licensed Product) by the fraction
A/(A+B) where
A is
the standard arms-length invoice price of the Licensed Product
within
such
Combination Product if sold separately, and B is the total
standard,
arms-length invoice price of the other active ingredient or
ingredients in
the
Combination Product, if sold separately (with Section (iii) being
used
to
calculate the Net Invoice Price of a Licensed Product used as
described
in
such paragraph) or (b) if, on a country-by-country basis, the
other
active ingredient or ingredients in the Combination Product are not
sold
separately in said country, Net Sales for the purpose of
determining
royalties of the Combination Product shall be determined by the
Parties in
good
faith and in a manner consistent with the intent of this
Agreement
(Net
Sales shall be determined in a manner consistent for all
Licensed
Products and in accordance with GAAP, and notwithstanding any of
the
foregoing to the contrary, in no event shall Net Sales for a
Combination
Product be **** **** percent (**%) of Net Sales, calculated
without
regard to the formulas set forth above, of the entire Combination
Product);
(vi) transfers or dispositions of Licensed Products for no
consideration or for consideration at or below the manufacturing
cost
thereof in commercially reasonable quantities for charitable (i.e.
for use
in
an investigator initiated studies by a not-for-profit entity or
for
compassionate use purposes) or promotional purposes or for
preclinical,
clinical, manufacturing scale-up, regulatory or governmental (i.e.
required
by a
governmental authority to be supplied to a governmental authority
for
use
by such governmental authority) purposes shall not be included in
the
calculation of Net Invoice Price or Net Sales;
(vii) except as otherwise provided in Section (ii), if Licensee or
a
Sublicensee Sell a Licensed Product other than in a bona fide arm's
length
transaction exclusively for cash consideration, such Sale shall be
deemed
to constitute a Sale
invoiced at the relevant market value of such Licensed
Product in the country in which the sale occurs, or, if that price
is not
ascertainable, then it shall be deemed to constitute a sale
invoiced at a
reasonable price assessed on an arm's length basis for such
Licensed
Product in such country; and
(viii) to the extent Licensee and/or any Sublicensee receives any
cash
amounts or any non-cash consideration for the Sale of Licensed
Products
that
are not otherwise included in the Net Invoice Price and that are
not
otherwise addressed in the foregoing subsections of this Section,
then the
Net
Invoice Price shall be deemed to include such additional cash
amounts
and
the fair market value of such non-cash consideration so received
for
such
Sale of such Licensed Products.
1.24
"New Developments" shall mean inventions, or claims to
inventions,
made by UC which constitute advancements, developments or
improvements to the
technology claimed in Valid Claims in the Patent Rights, whether or
not
patentable and whether or not the subject of any patent
application, which are
not sufficiently supported by the specification of a
previously-filed patent or
patent application within the Patent Rights to be entitled to the
priority date
of the previously-filed patent or patent application.
1.25
"Party" or "Parties" has the meaning set forth in the first
paragraph.
QuatRx EndoChem License
6.
<PAGE>
1.26 "Patent Prosecution Costs" shall mean the costs of
preparing,
filing, prosecuting and maintaining all United States and foreign
patent
applications contemplated by this Agreement.
1.27 "Patent Rights" shall mean the Valid Claims of the
following
United States patents and patent applications:
<TABLE>
<CAPTION>
Patent Application Number
UC Case Number
or Patent Number
Filing or Issue Date
--------------
-------------------------
-------------------------
<S>
<C>
<C>
*****
US *********
******
Australia *********
******
Canada *********
******
Germany *********
******
France *********
******
U.K. *********
******
Italy *********
******
Japan *********
******
*****
U.S. *********
******
*****
U.S. *********
******
*****
U.S. *********
******
Canada
*********
******
EPO *********
******
Japan *********
******
</TABLE>
Patent Rights shall further include: (a) the Valid Claims of the
foreign
patents and patent applications corresponding to the patents and
patent
applications listed above (and all patents and patent applications
(i) requested
under Section 10.1.4 herein after the Effective Date, or, (ii) with
respect to
patents and patent applications requested prior to the Effective
Date, as to
which Licensee has complied with its obligation to bear the Patent
Prosecution
Costs thereof); and (b) any reissues, reexaminations, extensions
and
substitutions, and any continuation, division, and
continuation-in-part
applications (provided that Valid Claims in the
continuation-in-part
applications are included in the Patent Rights only if entirely
supported in the
specification of, and entitled to the priority date of, a parent
application
listed in the
QuatRx EndoChem License
7.
<PAGE>
chart above), all to the extent assigned to or otherwise obtained
by UC. This
definition of Patent Rights excludes any rights in and to New
Developments.
1.28
"Product" shall mean any kit, article of manufacture, composition
of
matter, material, compound, component or product.
1.29
"Regulatory Approval" shall mean all approvals by government
pricing
and health authorities in a country or supra-national organization
(including,
but not limited to the FDA and its foreign equivalents), product
licenses,
registrations and authorizations of all national and international
regulatory
agencies, departments, bureaus and other governmental entities, in
each case
that are necessary for the commercial manufacture, use, storage,
importation,
export, transport and Sale of Licensed Products in a regulatory
jurisdiction.
1.30
"Related Party" shall mean a corporation, firm or other entity
with
which, or individual with whom, the Licensee, any Sublicensee
and/or any
Development Partner (or any of their respective Affiliates) have
any agreement,
understanding or arrangement (for example, but not by way of
limitation, an
option to purchase stock or other equity interest, or an
arrangement involving a
division of revenue, profits, discounts, rebates or allowances)
unrelated to the
Sale or use of the Licensed Products without which such other
agreement,
understanding or arrangement, the amounts, if any, charged by the
Licensee or
any Sublicensee to such entity or individual for the Sale of
Licensed Product,
would be higher than the Net Invoice Price actually received, or if
such
agreement, understanding or arrangement results in the Licensee or
any
Sublicensee extending to such entity or individual lower prices for
the Sale of
such Licensed Product than those charged to others without such
agreement,
understanding or arrangement buying similar products or services in
similar
quantities.
1.31
"Relationship-Influenced Sale" shall mean a Sale or use of a
Licensed
Product or use of a Licensed Method between the Licensee and/or any
Sublicensee
and (i) an Affiliate of such entity (wherein, for purpose of this
definition,
Affiliate shall be defined by reference to the 40% ownership
standard rather
than the 50% standard in the "Affiliate" definition above); (ii) a
Related Party
or (iii) the Licensee, a Sublicensee and/or a Development
Partner.
1.32
"Relationship-Influenced Sale Purchaser" shall mean the purchaser
of
Licensed Product in a Relationship-Influenced Sale.
1.33
"Royalty" shall have the meaning set forth in Section 6.4.
1.34
"Royalty Term" shall mean, with respect to a particular
Licensed
Product in any country in the Territory, the period of time
commencing on the
First Commercial Sale of such Licensed Product in such jurisdiction
and ending
upon the expiration of the last to expire Licensed Patent
containing a Valid
Claim which would be infringed by the manufacture, use,
importation, offer for
Sale, or Sale of such Licensed Product in such country.
1.35
"Sale" shall mean the act of selling, leasing or otherwise
transferring, providing, or furnishing for use for any
consideration.
Correspondingly, "Sell" means to make or cause to be made a Sale
and "Sold"
means to have made or caused to be made a Sale.
1.36
"Steering Committee" shall have the meaning set forth in Section
3.2.
QuatRx EndoChem License
8.
<PAGE>
1.37
"Subcontractor" shall mean a Third Party that has been retained by
a
Licensee or Sublicensee hereto to perform specific research,
development or
manufacturing activities on a fee-for-service basis.
1.38
"Sublicense Fees" shall have the meaning set forth in Section
6.2.
1.39
"Sublicensee" shall mean any person or entity (excluding any
Subcontractor, Development Partner or distributor) to which any of
the license
rights granted to the Licensee hereunder are sublicensed.
1.40
"Technical Information" shall mean any and all know-how, trade
secret
or other information of a technical nature necessary for the
manufacture, use,
or sale of the composition of matter of any compound, or practice
of any method,
claimed by the Licensed Patents in Section 1.19(i) that is
Controlled by
EndoChem.
1.41 "Territory" shall mean
the world.
1.42
"Third Party" shall mean any individual or entity other than
the
Parties or their respective Affiliates.
1.43
"UC" shall mean The Regents of the University of California.
1.44
"UC Agreement" shall mean that certain License Agreement
between
EndoChem and the UC dated February 14, 2005.
1.45
"Valid Claim" shall mean a claim of a patent or patent application
in
any country, whether existing as of the Effective Date or
thereafter, that (i)
has not expired; (ii) has not been disclaimed; (iii) has not been
cancelled or
superseded, or if cancelled or superseded, has been reinstated; and
(iv) has not
been revoked, held invalid, or otherwise declared unenforceable or
not allowable
by a tribunal or patent authority of competent jurisdiction over
such claim in
such country from which no further appeal has or may be taken.
SECTION 2. GRANT.
2.1
License. EndoChem hereby grants to Licensee an exclusive,
sublicensable
(subject to Section 2.2 below), royalty-bearing license in the
Territory under
the Licensed Patents Controlled by EndoChem to make, have made,
use, Sell, have
Sold, offer for Sale and import and export Licensed Products and to
practice
Licensed Patents, in each case in the Field of Use. Licensee
acknowledges that
the Licensed Patents licensed to EndoChem pursuant to the UC
Agreement exist
only in certain countries in the Territory.
2.1.1 Licensee's rights under the Patent Rights shall be subject
to
the
restrictions set forth in Sections 2.2 thru 2.5 and 3.1 of the
UC
Agreement, which is attached hereto as Exhibit A (with certain
portions
redacted). Licensee and each Sublicensee (as authorized under
Section 2.2
below) shall comply with all applicable terms, conditions,
obligations and
other restrictions of the UC Agreement that protect or benefit UC's
(and,
if
applicable, the United States Government's and other sponsors')
rights
and
interests, other than those terms, conditions and obligations
specified
in
QuatRx EndoChem License
9.
<PAGE>
Article 6 (License Issue Fee), Article 7 (License Maintenance Fee)
and
Paragraph 9.3 (Minimum Annual Royalty), Article 10 (Milestone
Payments) and
Paragraphs 21.4 and
21.6 (reimbursement for Patent Prosecution Costs) of
the
UC Agreement (although the foregoing shall not limit Licensee's
obligations to make the payments it is required to make under
this
Agreement to EndoChem). Licensee shall attach a copy of the UC
Agreement to
each
sublicense issued under Section 2.2 below and shall specify in
the
sublicense that the sublicensee must comply with the terms of the
UC
Agreement to the extent required in the previous sentence.
2.1.2 Within five (5) days of the date hereof, EndoChem shall
deliver
to
Licensee, at EndoChem's cost, copies of all materials embodying
the
Licensed Patents and Technical Information Controlled by EndoChem
and any
other information, data or materials, whether or not in a tangible
medium,
relating to or necessary for the research and/or development of
Licensed
Products or the practice of Licensed Methods.
2.1.3 Licensee shall provide EndoChem with a written copy of
any
correspondence or notice Licensee sends to UC under Section 3.1.2
of the UC
Agreement concurrently with its provision of such notice to UC.
EndoChem
further agrees that notwithstanding the terms of Section 3.1.2 of
the UC
Agreement, Licensee shall not be required to seek or obtain
EndoChem's
consent under such Section 3.1.2 of the UC Agreement prior to or as
a
condition of asserting its rights as described in Section 3.1.2 of
the UC
Agreement to continue to exercise the rights sublicensed by
EndoChem to
Licensee hereunder. EndoChem does not waive or forego any other
rights it
may
have under the UC Agreement or at law or equity, with respect to
any
rights obtained by EndoChem under the UC Agreement.
2.1.4 During the term of this Agreement, EndoChem shall not (a)
directly or indirectly, license or otherwise grant to any Third
Party any
rights or licenses, including, without limitation, the right to
grant
sublicenses in, to and under the Licensed Patents or Technical
Information,
to
make or have made, use, have used, have imported, Sell, offer for
Sale
or
have Sold the Licensed Product(s) and/or Licensed Methods in the
Field
of
Use, or (b) directly or indirectly, use, develop, manufacture,
market,
distribute, import, export, license to, Sell or offer for Sale, or
assist a
Third Party in using, developing, manufacturing, marketing,
distributing,
importing, exporting, licensing, Selling or offering for Sale, a
Licensed
Product or Licensed Method which incorporates or otherwise exploits
a
compound that has activity as ******************. EndoChem shall
not amend,
modify, breach or terminate the UC Agreement and shall provide
Licensee a
copy
of any notice EndoChem receives from UC alleging breach by
EndoChem,
and
confer with Licensee to determine how to respond to any such
notice.
Notwithstanding the foregoing, (i) any breach or termination of the
UC
Agreement arising from Licensee's breach of its obligations under
this
Agreement shall not constitute a breach of EndoChem's obligations
in the
prior sentence, and (ii) Licensee will reasonably consider in good
faith
and
not unreasonably withhold or delay its consent to any proposal
by
EndoChem to amend or modify the UC Agreement in any manner that
does not
affect Licensee's rights under this Agreement.
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10.
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2.2
Sublicenses. Affiliates of Licensee shall have no licenses under
this
Agreement unless Licensee grants a sub-license to such Affiliates.
Licensee may
only sublicense to its Affiliates or other parties to the extent
reasonably
necessary for the development and commercialization of Licensed
Products in
accordance with this Agreement. Each Sublicensee must be subject to
a written
sublicense agreement. Such sublicenses shall contain terms,
conditions,
obligations and other restrictions that are consistent with those
in this
Agreement. For the purposes of compliance with this Agreement,
Licensee shall be
responsible to ensure that its Sublicensees comply with the terms
of this
Agreement, and accordingly, the operations of all Sublicensees
shall be deemed
to be the operations of the Licensee, for which the Licensee shall
be
responsible. Sublicensees who have received a direct sublicense
from Licensee
under this Article 2 may grant further sublicenses (without further
rights to
sublicense) solely for the purpose of developing, manufacturing
and/or
commercializing, in collaboration with Licensee, Licensed Products
developed
and/or commercialized in material part by Licensee or EndoChem. Any
such
sublicense (a) shall not be granted on a stand-alone basis, where
the term
"standalone" means that a sublicense is granted to an entity for
the
development, manufacture or commercialization of Licensed Products
without
EndoChem or Licensee or any such direct Sublicensee participating
or having
participated in the development or commercialization of Licensed
Products in
material part (i.e., without Licensee or EndoChem or any such
direct Sublicensee
having incurred more than ******** dollars ($*****) in costs
related to
the development, manufacture or commercialization of Licensed
Products); (b)
shall not allow for further sublicensing of any such rights; and
(c) shall be
subject to the terms and conditions herein. For the avoidance of
doubt, Licensee
and any permitted Sublicensee can engage independent contractors
such as
manufacturers, clinical trial organizations, and work-for-hire
research
laboratories (such as those who conduct assays on a fee for service
basis) so
long as the work conducted by such entities is being conducted on
Licensee's or
such Sublicensee's behalf and such contracting entity does not
receive rights to
develop, manufacture, use or commercialize Licensed Products
outside of, or
after it completes, its services. Licensee shall require
appropriate reporting
from all Sublicensees to establish all amounts owed hereunder, and
shall make
such reports available to EndoChem. Licensee shall require all
Sublicensees to
comply with the audits and obligations set forth in Section 6.7 as
if they were
Licensee and to submit to Licensee progress reports and financial
reports
consistent with this Agreement. Licensee shall make all of the
foregoing reports
available to EndoChem. Licensee understands and agrees that
EndoChem may provide
the information in these reports to UC, in accordance with
EndoChem's reporting
requirements under the UC Agreement. Licensee shall require that
Sublicensees
indemnify UC as provided for in Section 11 of this Agreement.
2.2.1 The Licensee will identify each Sublicensee to EndoChem and
will
notify EndoChem of each sublicense granted hereunder (including,
without
limitation, any sublicenses granted by any Sublicensee and any
sublicense
granted to or by Licensee) and will provide EndoChem with a
complete copy
of
each such sublicense and each amendment to such sublicense within
twenty
(20)
days of issuance of such sublicense or such amendment.
2.3
Mandatory Sublicensing.
2.3.1 If UC provides a written notice to EndoChem under the UC
Agreement of evidence supporting any commercially reasonable
application or
use
for Products (the "New Product Use"), the manufacture, use or Sale
of
which are claimed in the Patent
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Rights, (other than Licensed Products which are currently being
Sold by
Licensee), within the Field of Use but for which Licensed Products
have not
been
developed or are not, at such time, being developed by Licensee,
then
EndoChem shall immediately give written notice to Licensee thereof,
along
with
a copy of such notice from UC.
2.3.2 Within ninety (90) days of Licensee's receipt of such
notice,
Licensee shall give EndoChem written notice stating whether
Licensee agrees
to
develop and commercialize Licensed Products for such application
either
itself or with or through a Sublicensee ("New Licensed Products").
If
Licensee so agrees, such notice shall be accompanied by (i) a
detailed
development schedule, including specific diligence requirements
and
development milestones, for the development of New Licensed
Products; and
(ii)
a detailed business plan for the development, marketing and
commercialization of New Licensed Products (collectively, the
"Development
Plan"). If (a) Licensee has not notified EndoChem, in accordance
with the
foregoing, that Licensee agrees to develop and commercialize such
New
Licensed Product within such ninety (90) day period, or if (b)
the
Development Plan is not reasonably acceptable to UC, then Licensee
shall be
deemed to not so agree provided that as to (b), EndoChem so
notifies
Licensee in writing providing the basis for UC's determination,
cooperates
with
Licensee's efforts to discuss such business plan with UC, and
Licensee
fails to provide an
updated business plan reasonably acceptable to UC
within thirty (30) business days after receiving such written
notice.
2.3.3 If Licensee agrees, as set forth in Section 2.3.2, to
develop
and
commercialize such New Licensed Product, then Licensee shall
(a)
diligently proceed with the development, manufacture and
commercialization
of
such New Licensed Product and earnestly and diligently endeavor
to
market the same in accordance with the Development Plan and in
quantities
sufficient to meet market demand, either itself or with or through
a
Sublicensee; and (b) Licensee shall submit a written progress
report
setting forth in detail the status of such development, manufacture
and
commercialization every six (6) months to EndoChem, which may
provide such
report to UC as required under the UC Agreement.
2.3.4 If Licensee does not agree, as set forth in Section 2.3.2,
to
develop and commercialize such New Licensed Product, but instead
notifies
EndoChem in writing that development of the New Licensed Product
would
impair Licensee's ability to develop or commercialize Licensed
Products
then
under development or being commercialized by Licensee on a
commercially reasonable basis (for example, if such New Licensed
Product
were
useful for an indication or use for which Licensee, its
Sublicensees
or
Development Partners are then developing or commercializing
Licensed
Products, if such New Licensed Product contained the same or a
substantially similar active ingredient as a Licensed Product then
being
developed or commercialized by Licensee, its Sublicensees or
Development
Partners), then the Parties shall meet with UC to discuss the basis
for
Licensee's belief and any basis for UC's disagreement with such
basis for
Licensee's belief for a period of thirty (30) days.
2.3.5 If Licensee does not agree, as set forth in Section 2.3.2,
to
develop and commercialize such New Licensed Product, or if Licensee
fails
to
diligently pursue the development and commercialization thereof
in
accordance with the Development Plan, or if UC does not agree
(in
accordance with Section 2.3.4) that development of
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<PAGE>
New
Licensed Products would impair Licensee's ability to develop or
commercialize Licensed Products on a commercially reasonable basis
, then
UC
has the right to seek one or more Third Parties for the development
and
commercialization of such New Licensed Product and refer such Third
Party
to
EndoChem, which shall refer such Third Party to Licensee, so that
such
Third Party may request a sublicense allowing for development
and
commercialization of such New Licensed Product. If the Third Party
requests
a
sublicense, then Licensee shall report such request to EndoChem,
together
with
the terms and conditions thereof, within thirty (30) days from
the
date
of such request.
2.3.6 If Licensee does not grant a sublicense to the Third
Party
within a reasonable time after such request (and, in any event,
within
ninety (60) days after such request), or refuses to grant such
sublicense
under reasonable terms, then Licensee shall promptly, or, in the
event of
such
refusal, within thirty (30) days after such refusal, submit to
EndoChem (which shall in turn submit to UC) a written report
specifying the
license terms proposed by the Third Party and a written
justification for
the
Licensee's refusal or failure to grant such sublicense. If UC
determines that the terms of the sublicense proposed by the Third
Party are
reasonable under the circumstances, then UC has the right to grant
to the
Third Party (and the rights granted to Licensee in this Agreement
shall be
limited accordingly) a license to make, have made, use, Sell, offer
for
Sale
and import Licensed Products, and to practice the Licensed
Methods
claimed in the Patent Rights (within the Field of Use and
otherwise), but
only
to the extent necessary to research, develop and commercialize
such
Licensed Products for such New Product Use, at substantially the
same terms
last
proposed to Licensee by the Third Party provided that the
royalty
rates are not lower than the earned royalties owed by EndoChem to
UC under
the
UC Agreement. Any such grant of a license by UC to such a Third
Party
shall be deemed to restrict the license granted to Licensee under
Section
2.1
to the extent necessary to permit such Third Party to conduct
such
activities, and shall not be deemed a breach of this Agreement by
EndoChem.
2.3.7 In the event that Licensee reasonably believes that (a)
the
evidence provided by UC under Section 2.3.1 does not support
any
commercially reasonable application or use for Products, (b) UC
unreasonably rejected the Development Plan provided by Licensee
under
Section 2.3.2, or (c)
the terms proposed by a Third Party and granted by UC
as
described in Section 2.3.6 are not of an appropriate scope or have
not
been
granted on terms consistent with those described in the last clause
of
Section 2.3.6, then EndoChem shall facilitate and cooperate with
Licensee's
efforts to seek any legal or equitable recourse available to
EndoChem under
the
UC Agreement with respect to such belief, including, without
limitation, permitting Licensee to seek legal and equitable
remedies in
EndoChem's name at Licensee's expense. EndoChem shall retain the
right, at
its
sole discretion, to engage counsel of its own choice in connection
with
any
such legal or equitable remedies undertaken by Licensee for the
sole
purpose of monitoring Licensee's efforts to seek such legal or
equitable
remedies.
SECTION 3. DEVELOPMENT.
3.1
Responsibility. Licensee shall be responsible for, and shall have
sole
control over the research and development of the Licensed Products,
including,
without limitation,
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13.
<PAGE>
providing all funding of such research and development, subject to
the terms and
conditions of this Agreement. EndoChem shall not be required to
incur any
research or development costs or otherwise conduct research or
development
relating to Licensed Products. EndoChem shall not conduct any
research or
development relating to Licensed Products without Licensee's prior
written
consent, provided, however, that Licensee shall consider in good
faith any
proposal by EndoChem to allow EndoChem to perform research and
development on
Licensed Products, and provided further that Licensee may withhold
its consent
in Licensee's sole discretion.
3.2
Steering Committee. Licensee shall establish a steering
committee
("Steering Committee") which shall include two Licensee
representatives and one
representative of EndoChem. Each Party may replace its
representatives to the
Steering Committee at any time in its sole discretion. The Steering
Committee
shall be responsible for monitoring the overall development of
Licensed
Products, but shall have no responsibility over the management or
day to day
decisions relating to the development of Licensed Products. All
decisions of the
Steering Committee shall require a majority vote. The Steering
Committee shall
meet semi-annually at dates and times mutually agreeable to the
Parties. Each
meeting shall require a quorum of three members. The Steering
Committee may meet
by telephone or videoconference or in person as determined by the
members.
Attendance at meetings shall be at the respective expense of each
Party. The
Steering Committee shall assure that agendas and minutes are
prepared for each
of its meetings.
SECTION 4. DILIGENCE.
4.1
Diligence. The Licensee, by itself or with or through its
Sublicensees
or (with respect to development) Development Partners, upon
execution of this
Agreement, will diligently proceed with the development,
manufacture and Sale of
Licensed Products and will earnestly and diligently market the same
after
execution of this Agreement and in quantities sufficient to meet
the market
demands therefor.
4.2
Regulatory Approvals. The Licensee, by itself or with or through
its
Sublicensees or Development Partners, will obtain all necessary
Regulatory
Approvals in each country where Licensed Products are manufactured,
used, Sold,
offered for Sale or imported. For the purpose of the foregoing
sentence, a
Regulatory Approval will be deemed to be necessary only when the
relevant
activity could not be conducted legally within the relevant country
without
first obtaining such an approval for the purpose of conducting such
activity.
For example and without limiting the foregoing, if Licensee
manufactures
Licensed Product in a given country but does not Sell such Licensed
Product in
such country, then Licensee shall only be required to have obtained
those
approvals necessary to conduct such manufacturing activities in
such country,
and it shall not be required to obtain Regulatory Approvals
required to sell
such Licensed Product legally in such country unless it also Sells
Licensed
Products in such country. For clarity, nothing in this Section 4.2
shall expand
Licensee's diligence obligations under this Agreement to require
Licensee or its
Sublicensees or Development Partners to obtain Regulatory Approvals
in all
countries of the Territory.
4.3
Diligence Milestones. The Licensee, its Affiliates and/or
Sublicensees
or Development Partners will diligently proceed to achieve the
following
milestones prior to or on the target date specified below:
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14.
<PAGE>
4.3.1 submit an IND application for a Licensed Product with the
FDA
within ******* after the Effective Date;
4.3.2 submit an NDA for a Licensed Product with the FDA within
******* after the Effective Date;
4.3.3 submit an application for marketing approval in *******
or
********* to a foreign equivalent of the FDA within ******* after
the
Effective Date;
4.3.4 achieve the First Commercial Sale of a Licensed Product in
the
US
within ********* after the Effective Date;
4.3.5 launch and market each subsequent Licensed Product in the
US
within **** of receiving approval for such Licensed Product from
the FDA
(but
in any event no later than the date specified in Section 4.3.4
with
respect to the first launched Licensed Product); and
4.3.6 fill the market demand for Licensed Products following
commencement of marketing at any time during the exclusive period
as
required under 35 U.S.C. Section 203.
4.4
Diligence Funding. In addition to the obligations set forth
above,
Licensee, or its Sublicensees or Development Partners shall spend
an aggregate
of not less than $****** dollars ($******) for the development of
Licensed
Products during the first *** years following the Effective Date of
this
Agreement.
4.5
Tolling of Diligence Milestones. In the event that Licensee is
unable
to meet any of the deadlines set forth in Section 4.3 for reasons
attributable
to safety, efficacy or regulatory agency actions or requirements
(including,
without limitation, such actions or requirements affecting dosage
methodology,
formulation or recruitment of clinical sites or clinical patients)
which actions
or requirements (a) directly cause a delay in the ability to meet
the applicable
milestone, and (b) do not result from the failure of Licensee (or
its applicable
Sublicensee and/or Development Partner) to diligently proceed with
development
of Licensed Products (including failure to diligently design and
conduct
reasonable clinical trials and pursue a reasonable regulatory
strategy), then
Licensee may extend the time period for required achievement of
such relevant
target milestones and all ensuing target milestones for additional
*** ***
periods (each an "Extension Period(s)") for up to a total of ****
years in the
aggregate. For the avoidance of doubt, Licensee may only obtain a
total of
****** *** extensions hereunder and no specific target milestone
may have its
original time period extended more than **** *** beyond its
original date
(whether such extensions are cause by the direct extension of such
target
milestone or by the combined effect of the extension of preceding
milestones, or
both). In order to obtain an extension, Licensee shall pay to
EndoChem a fee,
which for the first Extension Period shall be $******, for the
second Extension
Period shall be $****** and for the third Extension Period shall be
$******,
provided that no fee shall be required to be paid by Licensee to
extend any
deadline for any Extension Period in the event that the underlying
delay is
caused by a change in the applicable laws and regulations governing
the
development of Licensed Products that directly affects the target
milestone at
issue. No extension hereunder shall be effective
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15.
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unless and until the applicable fee, if any, is paid to EndoChem,
which shall
remit such fee to UC as required under Section 11.4 of the UC
Agreement. In
addition, (y) with respect to any extension for regulatory actions
or
requirements, Licensee must provide EndoChem a written plan for
addressing the
problems raised by the source of delay and Licensee shall
thereafter diligently
pursue such plan until the delayed milestone is achieved; (z) with
respect to
the **** Extension Period, EndoChem and/or UC shall have the right
to discuss
the reasons for any such **** extension with Licensee to understand
Licensee's
plan for pursuing the applicable diligence milestone event
associated with such
target date. For the avoidance of doubt and by way of example only,
it is
understood that in the event Licensee extends a target milestone
for the first
Extension Period, then such target milestone and all ensuing target
milestones
are automatically extended in a lock-step fashion for *******.
Thereafter,
Licensee may extend the same target milestone and all ensuing
target milestones
for up to **** Extension Periods, or Licensee may extend one or
more of the
ensuing target milestones (and each target milestone following such
extended
target milestone) for up to **** Extension Periods, in all cases up
to a maximum
extension for each target milestone of *******.
4.6
Termination Right. Without limiting any other rights or remedies
of
EndoChem hereunder, if the Licensee is unable to perform any of the
provisions
set forth in Section 4.3 in spite of the extensions granted
pursuant to Section
4.5, then EndoChem shall have the right and option to either
terminate this
Agreement or convert the exclusive license granted to the Licensee
to a
non-exclusive license in accordance with Section 4.7 below. This
right, if
exercised, shall be deemed to modify the rights granted in Article
2 as
necessary to effect EndoChem's decision to reduce the license to a
non-exclusive
license.
4.7
Notice of Deficiency. If EndoChem notifies Licensee that
Licensee's
rights under this Agreement will terminate or convert the exclusive
license to a
non-exclusive license because UC has elected to so terminate or
modify such
rights under the UC Agreement for lack of diligence, EndoChem shall
give the
Licensee written notice of the deficiency. The Licensee thereafter
has
eighty-five (85) days to cure the deficiency. If (a) EndoChem has
not received
written tangible evidence that the deficiency has been cured; or
(b) for any
non-monetary default, if such default is not curable within such
eighty-five
(85) day period and a written plan for such cure reasonably
satisfactory to UC
(which in any event shall provide for the cure to be completed no
later than one
hundred seventy (170) days from the original date of EndoChem's
notice) along
with written tangible evidence that Licensee has begun to implement
such plan
has not been received by EndoChem within such eighty-five (85) day
period; or
(c) if a cure plan has been provided pursuant to (b) above,
EndoChem has not
received within the aforementioned one hundred seventy (170) day
period written
tangible evidence reasonably satisfactory to EndoChem and UC that
the deficiency
has been cured, then in each case EndoChem may, at its option,
terminate this
Agreement immediately by additional written notice to Licensee,
which shall be
effective immediately without the obligation to provide any further
notice, or
reduce the exclusive license granted to the Licensee to a
non-exclusive license
by giving written notice to the Licensee.
SECTION 5. PROGRESS AND ROYALTY REPORTS
5.1
Reporting Obligation. Beginning on June 15, 2005, and
semi-annually
thereafter, the Licensee will submit to EndoChem a written progress
report as
described in Section 5.2 below covering the Licensee's (and any
Affiliate's,
Sublicensee's or Development
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<PAGE>
Partner's) activities related to the development and testing of all
Licensed
Products, the obtaining of the governmental approvals necessary for
marketing
and the activities required and undertaken in order to meet the
diligence
requirements set forth in Section 4. Progress reports are required
for each
Licensed Product until the first Sale or other exploitation of that
Licensed
Product occurs in the United States and shall be again required if
Sales of such
Licensed Product are suspended or discontinued.
5.2
Development Report Contents. Progress reports submitted under
Section
5.1 shall include, but are not limited to, a detailed summary of
the following
topics at a level that enables EndoChem and UC to determine the
progress of the
development of Licensed Products and to determine whether or not
the Licensee
has met its diligence obligations set forth in Article 4 above:
5.2.1 summary of work completed with respect to development and
commercialization of Licensed Products as of the submission date of
the
progress report;
5.2.2 a description of key scientific discoveries relating to
Licensed
Products or Licensed Methods (or the development or
commercialization
thereof) as of the submission date of the progress report
(including
preclinical analyses performed with respect to the Licensed
Products);
5.2.3 a summary of work in progress with respect to development
and
commercialization of Licensed Products as of the submission date
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