Exhibit 10.1

CONFIDENTIAL TREATMENT REQUESTED

LICENSE AGREEMENT

This License Agreement (“Agreement”) is made and entered into as of the
Effective Date (defined below), by and between DARÉ Bioscience,
Inc.(“Licensee”), and ADVA-Tec, Inc., having its principal place of business at
51 Technology Drive, Suite B, Anderson, SC  29625 (“Licensor”).  Licensor and
Licensee are sometimes referred to herein individually as a “Party” and
collectively as the “Parties.”

RECITALS

 

A.

Licensor owns or controls certain products and intellectual property rights
related to a proprietary medical device currently known as the Ovaprene® product
(“Ovaprene,” as defined in more detail below).

 

B.

As of the date of last signature hereto (“Signature Date”), Licensee has
undertaken diligent and good faith efforts to secure an investment of at least
one million two hundred fifty thousand dollars ($1,250,000) (“Initial Funding”)
in order to satisfy its obligations under Section 2.7(i) of this Agreement.

 

C.

Subject to and conditioned upon Licensee’s receipt of Initial Funding by
September 15, 2017, Licensor is willing to grant to Licensee, and Licensee
desires to obtain, an exclusive license under Licensor’s intellectual property
rights to develop and commercialize Licensed Products for the Indication (both
defined below) worldwide, on the terms and conditions stated herein.

Now, Therefore, Licensor and Licensee hereby agree as follows:

AGREEMENT

1.

DEFINITIONS.  

The following terms, whether used in the singular or plural, shall have the
meanings set forth below.

1.1.“Affiliate” means any individual, corporation, association or other business
entity, that directly or indirectly controls, is controlled by or is under
common control with a Party, for the duration of such control.  As used in this
definition of “Affiliate,” the term “control” means the direct or indirect
ownership of more than fifty percent (50%) of the stock having the right to vote
for directors thereof or the ability to otherwise control the management of the
corporation, association or other business entity whether through the ownership
of voting securities, by contract, resolution, regulation or otherwise.

1.2 “Applicable Law” means laws, statutes, ordinances, codes, rules and
regulations as applicable, to which a Party is subject during the Term,
including cGMP, Regulatory Approvals and Pricing Approvals, in each case to the
extent that the same are applicable to the performance by the Parties of their
respective obligations under this Agreement.

1.3“Background Technology” means all technology owned, licensed or controlled by
Licensor and its Affiliates and PMI as of the Effective Date, and all
improvements, enhancements and modifications thereof or thereto.

1.4“Budget” means funding required for the Research Program, as determined by
the JRC.

1.4“Calendar Quarter” means the respective periods of three consecutive calendar
months ending on March 31, June 30, September 30 and December 31.

1.5“COGS” means Licensor’s cost of goods sold for the Licensed Product
(calculated in accordance with United States generally accepted accounting
principles and adding Licensor’s costs in administering the

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

Quality Agreement and Supply Agreement) (including without limitation amounts
paid by Licensor to CMO for the Licensed Product).  

1.6“cGMP” means current Good Manufacturing Practices as specified in the United
States Code of Federal Regulations, ICH Guideline Q7A, or equivalent laws,
rules, or regulations of an applicable Regulatory Authority at the time of
Manufacture.

1.7“Commercialization” or “Commercialize” means any and all activities directed
to the marketing, promotion, distribution, offering for sale, and selling of a
Licensed Product, importing and exporting of a Licensed Product for sale, and
including interacting with Regulatory Authorities in a country regarding the
foregoing after obtaining Regulatory Approval of such Licensed Product in such
country, and obtaining pricing and reimbursement approvals from such Regulatory
Authorities.

1.8“Commercially Reasonable Efforts” means, with respect to a Party, those
efforts and resources commensurate with the efforts and resources commonly used
in the industry in connection with the development or commercialization of
medical devices that are of similar status, including with respect to commercial
potential, the proprietary position of the product, the regulatory status and
approval process, the probable profitability of the applicable product, and
other relevant factors such as technical, legal, scientific and medical factors.

1.9“Competing Product” means non-hormonal ring-based vaginal contraceptive
devices.

1.10“Control” or “Controlled” means, with respect to any Know-How, Patent Right,
Regulatory Approval or other intellectual property right, the ability to grant
the right to access or use such item or a license or sublicense with respect
thereto without violating any Applicable Law or breaching the terms of any
agreement or other arrangement with any Third Party.

1.11“Contract Year” means (a) the period beginning on the Effective Date and
ending on the first anniversary of the last day of the calendar month in which
the Effective Date falls and (b) each succeeding twelve (12) month period
thereafter.

1.12“Cover” and “Covered” means, with respect to a Patent Right, where a Valid
Claim of such Patent Right would (absent a license thereunder or ownership
thereof) be infringed by the Exploitation of the applicable product; provided,
however, that in determining whether a Valid Claim that is a claim of a pending
application would be infringed, it shall be treated as if issued in the form
then currently being prosecuted.

1.13“De Facto Exclusivity” means, with respect to any Licensed Product within
any Royalty Country, any given Calendar Quarter during which (i) no Third Party
has obtained Regulatory Approval for sale (if required) in such Royalty Country
for a Competing Product and (ii) no Third Party has made at least one commercial
sale for value of a product that is competitive to the Licensed Product in such
Royalty Country within six (6) months prior to or after such Calendar Quarter.
Notwithstanding the above, all countries in the Territory without a Valid Claim
are deemed to have De Facto Exclusivity unless Licensee can provide verifiable
third-party evidence to the contrary.  

1.14“Development” or “Develop” means the research, development and regulatory
activities relating to obtaining or maintaining Regulatory Approval of a
Licensed Product, including preclinical testing, toxicology and pharmacology
studies, statistical analysis and report writing, clinical trials, and
preparation of applications for Regulatory Approval, but excluding Manufacturing
and Commercialization.

1.15“Effective Date” means the date that Licensee receives the Initial Funding,
provided that such date is no later than September 15, 2017 (and for the
avoidance of doubt if Licensee does not receive Initial Funding by September 15,
2017, then there is no Effective Date).

1.16“EMA” means the European Medicines Agency and any successor entity thereto.

2

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

1.17“Exploit” means to Develop, Commercialize, discover, optimize, research,
Manufacture, use, offer for sale, sell, import, export or otherwise commercially
exploit a product.  

1.18“FDA” means the U.S. Food and Drug Administration and any successor entity
thereto.

1.19“First Commercial Sale” means, with respect to each Licensed Product, the
first sale of such Licensed Product by Licensee or its Sublicensee to a Third
Party following Regulatory Approval in such country.

1.20“Indication” means all uses for human contraceptive devices.  The Parties
may, by written agreement as described in more detail below in Section 2.4,
amend the Indication as desired, for example, to include vaginal health as a
secondary endpoint.

1.21 “Know-How” means not publicly known ideas, inventions, information,
business methods, discoveries, diagrams, plans, concepts, formulas, practices,
procedures, processes, methods, knowledge, Trade Secrets, technology, designs,
drawings, computer programs, skill, experience, documents, results, clinical and
regulatory strategies, test data (including pharmacological, toxicological and
clinical data (and including data relating to a mechanism or action, and all
assays, models, and biological, chemical, pharmacological, toxicological,
clinical and assay results), analytical and quality control data, manufacturing
data and descriptions), and legal data, market data, and financial data or
descriptions, and the like, in written, electronic or other form, now known or
hereafter developed, whether or not patentable, and all improvements thereto.  

1.22“Licensed Product” means an intravaginal device designed for the Indication
wherein the ringed-mesh comprises a composite ring comprising a flexible matrix
containing one or more bioactive agent or agents and needed excipients or
modulators, which encircles a fluid-permeable mesh material, where the
manufacture, use, sale or import of which is Covered by the Licensor Patent
Rights and/or the Licensor Know-How.

1.23“Licensor Know-How” means all Know-How that is (i) Controlled by Licensor
and its Affiliates (other than PMI) as of the Effective Date or during the Term
that is not publicly known (even though parts thereof may be publicly known);
and/or (ii) necessary or useful to Develop, Manufacture and/or Commercialize a
Licensed Product.  Notwithstanding the above, Know-How Controlled by PMI is
excluded from the definition of Licensor Know-How.  Know-How Controlled by PMI
will only be transferred to Licensee in the context of a Supply Agreement
(defined in Section 6.2).  Know-How to be transferred shall be limited to the
physical properties (e.g., mechanical strength, diameter, degradation profile
and the like) of the components of Ovaprene, but not the manufacturing and/or
testing methodologies used to produce the fiber and/or the base polymers that
make up the components of Ovaprene.

1.24“Licensor Patent Rights” means the patents and patent applications listed on
Exhibit A and all Patent Rights relating thereto.

1.25“Licensor Technology” means Licensor’s rights under Inventions, Licensor
Know-How and Licensor Patent Rights.

1.26“Manufacture” or “Manufacturing” means the following activities related to
the manufacturing of a Licensed Product by licensor, including any ingredient or
component thereof, for Development or for Commercialization, including test
method results and stability testing, formulation, process development,
scale-up, manufacturing, packaging, in-process and finished product testing
results, release of Licensed Product or any component or ingredient thereof and
quality assurance activities related to any of the foregoing, all to the extent
agreed by the Parties in writing.

1.27 “Marketing Authorization” means all approvals and clearances from the
relevant Regulatory Authority that are necessary to market and sell a Licensed
Product in any country (including all applicable government-purchaser pricing
and governmental reimbursement approvals).

3

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

1.28“NDA” means a New Drug Application (as more fully defined in 21 C.F.R. 314.5
et seq. or its successor regulation) and all amendments and supplements thereto
filed with the FDA.  

1.29“Net Sales” means, with respect to a Licensed Product, the aggregate gross
invoiced sales prices from the sale of Licensed Products sold by Licensee (but
not sold by Sublicensees) in the Royalty Countries during each Calendar Quarter,
less the following deductions, actually incurred, paid or accrued by Licensee:
(i) normal trade, quantity and cash discounts, rebates, or similar payments
actually granted or given to wholesalers or other distributors, buying groups,
health care insurance carriers, managed care entities or other institutions,
including any government-mandated rebates; (ii) returns, rejections or recalls
(due to spoilage, damage, expiration of useful life or otherwise); (iii)
reasonable freight, packing, shipping and postage charges; and (iv) customs or
excise taxes on the sale of a Licensed Product required by Applicable Law,
including import duties, value added, sales and use tax and other taxes (except
income taxes) or duties relating to importation, use or sales of a Licensed
Product.  In the event of any sale or other disposal for value, such as barter
or counter-trade, of a Licensed Product, other than an arms’-length transaction
for cash, Net Sales shall be calculated as above based on the value of the
non-cash consideration received or the fair market price of such Licensed
Product in the country of sale or disposal.  Sales of Licensed Products between
or among Licensee and its Affiliates and Sublicensees for use in conducting
clinical trials in order to obtain the Regulatory Approval of such Licensed
Products, shall be excluded from the computation of Net Sales and no payments
shall be payable on such sales.  Also, notwithstanding anything to the contrary
above, sales or transfers of a Licensed Product at or below cost for any
charitable purposes, compassionate use, named patient sales or free samples
shall be excluded from Net Sales calculations.  In no event shall any particular
amount of deduction identified above be deducted more than once in calculating
Net Sales (i.e., no “double counting” of reductions).  All discounts,
allowances, credits, rebates, and other deductions shall be fairly and equitably
allocated between Licensed Products and other products of Licensee and its
Affiliates and Sublicensees bundled or sold with such Licensed Products such
that Licensed Product does not bear a disproportionate portion of such
deductions.  In addition, any Sales of Licensed Products for post-market studies
shall not be considered to be excluded from the computation of Net Sales, unless
such Licensed Product is provided free of charge as part of a required
post-market study.

1.30“Ovaprene” means a non-absorbable silicone-based, non-hormonal (which
releases ferrous gluconate and ascorbic acid), ring-based vaginal contraceptive
device.

1.31“Patent Rights” means (i) letters patent (or other equivalent legal
instrument), including utility and design patents, and including any term
adjustment, extension, substitution, registration, confirmation, reissue,
re-examination, or renewal thereof, and supplemental protection certificates,
and all equivalents and foreign counterparts of any of the foregoing and (ii)
any application for any of the foregoing, including any provisional application,
reissue application, re-examination application, continuation application,
continued prosecution application, continuation-in-part application, or a
divisional application, and all equivalents and foreign counterparts of any of
the foregoing.

1.32“Phase 1 Clinical Trial” means a human clinical trial of a Licensed Product
on sufficient numbers of normal volunteers and/or patients that is designed to
establish that such Licensed Product is safe for its intended use and to support
its continued testing in Phase 2 Clinical Trials.  For purposes of this
Agreement, ‘initiation’ of a Phase 1 Clinical Trial for a Product means the
first use or treatment of such Licensed Product in a human subject in a Phase 1
Clinical Trial.

1.33“Phase 2 Clinical Trial” means a human clinical trial of a Licensed Product
that utilizes the information obtained from one or more previously conducted
Phase 1 Clinical Trial(s) that is designed to provide a preliminary
determination of safety of such Licensed Product in the target patient
population over a range of doses and dose regimens.  For purposes of this
Agreement, ‘initiation’ of a Phase 2 Clinical Trial for a Product means the
first use or treatment of such Product in a human subject in a Phase 2 Clinical
Trial.

1.34“Phase 3/Pivotal Clinical Trial” means a pivotal human clinical trial of a
Licensed Product designed to ascertain efficacy and safety of such product, in a
manner that is generally consistent with 21 C.F.R.

4

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

§812 or 21 C.F.R. Part 814, as amended (or its successor regulation), for the
purpose of enabling the preparation and submission of an NDA or a PMA or a
510(k) notification.

1.35“PMA” means a premarket approval filed with the FDA for a medical device as
required in 21 C.F.R. Part 814.

1.36“Postcoital Study (“PCT”)” means a human clinical trial of Licensed Product
wherein the number of progressively motile sperm that achieve access into the
woman’s mid-cycle cervical mucus within a predetermined period of time
post-coitus are tabulated.  

1.37 “Pricing Approval” means any and all pricing or reimbursement approvals of
any Pricing Authority in any jurisdiction that may be required for
Commercialization of Licensed Product in such jurisdiction and/or for
reimbursement of Licensed Product by national health insurance (or its local
equivalent) or other governmental payors in such jurisdiction.

1.38“Pricing Authority” means any Regulatory Authority in any jurisdiction whose
approval or authorization of pricing or reimbursement is required for
Commercialization of Licensed Product in such jurisdiction and/or for
reimbursement of Licensed Product by national health insurance (or its local
equivalent) or other governmental payors in such jurisdiction.

1.39“Promotional Materials” means all sales representative training materials
and all written, printed, graphic, electronic, audio or video matter, intended
for use or used by or on behalf of Licensee, any of its Affiliates or
Sublicensees, and any of their respective sales forces, sales managers and other
sales personnel, in connection with promotion of any Licensed Product, which may
include without limitation journal advertisements, sales visual aids,
leave-behind items, formulary binders, reprints, direct mail, direct-to-consumer
advertising, internet postings and sites and broadcast advertisements.

1.40“Regulatory Approval” means any approvals, clearances, licenses, permits,
registrations or authorizations by any applicable Regulatory Authority, that are
necessary for the Development, Manufacture or Commercialization of a Licensed
Product in the Territory.  Regulatory Approval includes Marketing
Authorizations.

1.41“Regulatory Authority” means any applicable supra-national, federal,
national, regional, state, provincial, or local regulatory agencies,
departments, bureaus, commissions, councils, or other government entities,
including the FDA and EMA, regulating or otherwise exercising authority with
respect to the Development, Manufacture or Commercialization of Licensed
Products in the Territory.

1.42“Regulatory Materials” means any and all regulatory submissions,
applications, regulatory reports, safety reports, registrations, filings,
approvals and associated master file(s), label(s), labeling, package insert(s)
and packaging and associated correspondence required to Develop, Manufacture,
market, sell and import Licensed Product.

1.43“Royalty Country” means each country identified on Exhibit B, and “Royalty
Countries” means all of such countries collectively.  The Parties may agree to
add Royalty Countries to Exhibit B from time to time based upon expansion of
Patent Rights into additional countries.

1.44“Royalty Term” means, for each Licensed Product in each Royalty Country, on
a country-by-country basis, the period of time commencing upon First Commercial
Sale of such Licensed Product in such Royalty Country and expiring on the later
of (a) the date on which the Development, Manufacture and Commercialization of
such Licensed Product in such Royalty Country is no longer Covered by a Valid
Claim, or (b) expiration of De Facto Exclusivity in such Royalty Country.

1.45“Sublicensee” means any person or entity to which Licensee grants a
sublicense under the rights granted to Licensee under this Agreement.

5

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

1.46“Sublicensee Revenue” means all revenue, including for example, upfront
payments, milestone payments and royalties, received by Licensee from
Sublicensees in consideration for the grant of a sublicense under Licensor
Technology within Royalty Countries during the Royalty Term, excluding (i)
payments for equity or debt securities of Licensee which are unrelated to a
sublicense of the Licensed Product; (ii) research or development funding to be
applied directly to the research and/or development of Licensed Products, and
(iii) amounts paid to Licensee for supplies of Licensed Products or other
tangible materials, or that are otherwise paid in reimbursement of costs or
expenditures, whether incurred before or after the date of the sublicense
agreement.  Sublicensee Revenue shall not include amounts received in connection
with a merger, consolidation or sale of all or substantially all of the business
or assets of Licensee (including the assets of Licensee to which this Agreement
relates).  To the extent Licensee receives compensation for both a grant of a
sublicense of rights to commercialize Licensed Products, and the grant of other
rights or licenses or undertaking of other obligations, such compensation will
be reasonably apportioned between that amount attributable to the sublicense of
Licensor Technology and that amount attributable to the grant of other rights or
licenses or undertaking of other obligations, which shall be excluded from
Sublicense Revenue; such apportionment to be reasonably agreed by the Parties.

1.47“Territory” means worldwide.

1.48“Third Party” means any person or entity other than Licensor, Licensee, or
an Affiliate of either of them.

1.49“Trade Secrets” means any formula, pattern, device or other information or
compilations thereof which is used by a Party in its business which gives that
Party an opportunity to obtain an advantage over competitors who do not know or
use it, or such other information that qualifies as a “Trade Secret” under
Applicable Law.

1.50“Valid Claim” means a claim of any issued and unexpired patent or patent
application within the Licensor Patent Rights that (a) has not been finally
cancelled, withdrawn, abandoned or rejected by any administrative agency or
other body of competent jurisdiction, (b) has not been revoked, held invalid, or
declared unpatentable or unenforceable in a decision of a court or other body of
competent jurisdiction that is unappealable or unappealed within the time
allowed for appeal, (c) has not been rendered unenforceable through disclaimer
or otherwise, and (d) is not lost through an interference
proceeding.  Notwithstanding the foregoing, if a claim of a pending patent
application within the Licensor Patent Rights in the United States has not
issued as a claim of a patent within the five (5) years after the PCT filing
date from which such claim takes priority (or the first national filing date if
no PCT was filed), such claim shall not be a Valid Claim for the purposes of
this Agreement, unless and until such claim issues as a claim of an issued
patent (from and after which time the same shall be deemed a Valid Claim subject
to the foregoing clauses (a) through (d) above). Further notwithstanding the
foregoing, the Parties will negotiate in good faith, on a country-by-country
basis, the period during which a claim of a pending patent within the Licensor
Patent Rights outside of the United States must issue in order for it to be
considered a Valid Claim, which period shall not exceed ten (10) years.

1.51“Additional Definitions.”  Each of the following terms has the meaning set
forth in the corresponding section of this Agreement indicated below:

Definition:

Section:

Agreement

Preamble

Alliance Manager

4.1.1

Audited Party

8.11

CMO

6.2

Commercialization Plan

7.2

Confidential Information

11.1

Disputes

14.1

Development Plan

5.1

6

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

Effective Date

Preamble

Executive Officer

4.1.4

Export Control Laws

2.6

Licensor

Preamble and 2.5

Licensor Indemnitees

12.1

Executive Officers

14.2

Global Product Marks

7.3.1

Indemnitee

12.3

Indemnitor

12.3

Inventions

9.1

Joint Research Committee or JRC

4.1

Local Product Marks

7.3.1

Losses and Claims

12.1

Licensee

Preamble and 2.5

Licensee Indemnitees

12.2

Licensee Standards

12.1

Negotiated Country

8.4.2

Other Indication

2.4

Party and Parties

Preamble

PMI

Product Infringement Claim                        

2.5

9.4.1

Product Marks

7.3.1

Quality Agreement

5.6

Recall

5.5

Research Plan

3.2

Research Program

3.1.1

Research Term

3.2

Reverted Product

13.6

ROFN

2.4

ROFN Negotiation Period

2.4

ROFN Notice

2.4

Safety Information

5.7

SDEA

5.7

Second Manufacturing Source

6.3

Sublicensee Revenue Share

8.3

Supply Agreement

6.2

Term

13.1

Terminated Country

13.1

VAT

8.12.2

 

2.

LICENSE.  

2.1.License Grant.  Subject to the terms and conditions of this Agreement
(including the terms of Section Error! Reference source not found.), Licensor
hereby grants to Licensee an exclusive (other than as to Licensor in the case of
Development and Manufacturing as set forth herein), sublicensable (in accordance
with Section 2.2) license under the Licensor Technology to Develop, use, sell
offer for sale, have sold, import and otherwise Commercialize and Exploit
Licensed Products for the Indication within the Territory.  The foregoing
license includes the exclusive right to use data and Regulatory Materials
related to the Licensed Product for the Indication within the Territory that are
Controlled by Licensor, its Affiliates and PMI (including data from clinical
trials) in support of Licensee’s practice of the foregoing exclusive license
grant.

2.2.Right to Sublicense. Licensee may grant one or more sublicenses under the
license granted under Section 2.1, in full or in part, by means of written
agreement to one or more Third Parties in which Licensee does not have any
equity interest (with the right to sublicense through multiple tiers), provided,
however, that as a

7

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

condition precedent to and requirement of any such sublicense: (a) any such
sublicense shall be consistent with and subject to the terms and conditions of
this Agreement including granting Licensor the audit rights stated in Section
8.11; and (b) Licensee will continue to be responsible for full performance of
its obligations under this Agreement, and will be responsible for all actions of
such Sublicensees in connection with such sublicense. Licensee shall provide
Licensor a copy of any sublicense agreement within 15 business days of its
execution, subject to reasonable redaction except that no redaction shall be
made which impinges Licensor’s ability to determine that the sublicense complies
with this Section.

2.3.Retained Rights; No Other Rights.  All rights not explicitly licensed to a
Party under this Agreement are retained by the Party owning such rights, and no
other rights are granted by implication, estoppel or otherwise.  Notwithstanding
the exclusive license granted to Licensee in Section 2.1, Licensor retains the
right under the Licensor Technology to perform its obligations under this
Agreement, including to Develop and Manufacture Licensed Products for Licensee
as set forth herein, and to practice the Licensor Technology for all uses other
than the Indication.  

2.4.Additional Indications.  Licensor represents and warrants to Licensee that,
as of the Effective Date, neither Licensor nor its Affiliates nor PMI have
directly or indirectly granted any Third Party a right or license to Exploit
Licensed Products for any use or any indication other than the Indication (e.g.,
for treatment, diagnosis or prevention of infections, hormone replacement
therapy, short cervix applications, cervical ripening, etc.) (each an “Other
Indication”).  Licensor hereby grants Licensee an exclusive right of first
negotiation to obtain an exclusive license to Exploit Licensed Products for each
Other Indication within the Territory (each, a “ROFN”) as further described
herein.  Licensor shall notify Licensee promptly upon Licensor’s or its
Affiliate’s decision to seek a partner for the research, development and/or
commercialization of any Licensed Product for use within any Other Indication
(“ROFN Notice”). Licensee shall have sixty (60) days from its receipt of the
ROFN Notice to notify Licensor if Licensee desires to exercise its ROFN with
respect to such Other Indication and upon such notice from Licensee, the Parties
will negotiate such rights in good faith for a period of one hundred twenty
(120) days (the “ROFN Negotiation Period”).  If, at the end of the ROFN
Negotiation Period, the Parties are unable to reach agreement on such terms, or
if Licensee does not notify Licensor of Licensee’s interest in such Other
Indication during such sixty (60) day period, Licensor shall be free to grant a
license or enter into any other arrangement with a Third Party to Exploit
Licensed Products for such Other Indication. The terms of any such Third Party
arrangement shall not, on the whole, be more favorable to such Third Party than
the most favorable terms offered by Licensor to Licensee during the ROFN
negotiations. Licensor shall notify Licensee within thirty (30) days of entering
into an arrangement with a Third Party for the Exploitation of Licensed Products
for each Other Indication and, if requested by Licensee in writing, Licensor’s
Chief Executive Officer shall certify Licensor’s compliance with such favored
terms requirement within thirty (30) days of receipt of such request.

2.5.Affiliates.  Each Party acknowledges and accepts that the other Party may
exercise its rights and perform its obligations under this Agreement either
directly or through one or more of its Affiliates.  In any event each Party will
remain responsible for the acts and omissions of its Affiliates, as if such
action or omission were taken by the Party itself. Notwithstanding anything in
this Agreement to the contrary, Poly-Med, Inc. is not a party to this Agreement
and its role is limited to the licensor of technology and a subcontractor to
Licensor. With regard to its status as a licensor of technology and a
subcontractor to Licensor, Poly-Med, Inc. is referred to as “PMI.”

2.6.Export Control Laws.  

2.6.1.In performing this Agreement, each Party agrees to comply strictly and
fully with applicable U.S. export control laws, including the International
Emergency Economic Powers Act (50 U.S.C. §§ 1701 et seq.), the Trading With the
Enemy Act (50 U.S.C. app. §§ 1 et seq.), the Export Administration Act of 1979
(50 U.S.C. app. §§ 2401 et seq.), International Boycott Provisions of Section
999 of the U.S. Internal Revenue Code of 1986, and all rules, regulations and
executive orders relating to any of the foregoing, including but not limited to
the Export Administration Regulations (15 C.F.R. §§

8

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT REQUESTED

 

730 et. seq.), and the regulations administered by the Office of Foreign Assets
Controls of the United States Department of the Treasury, and all export
controls imposed on Licensed Products by any country or organization or nations
within whose jurisdiction Licensee operates or does business (collectively,
“Export Control Laws”).  Licensee will not export or permit exportation of the
Licensed Product or any related technical data or any direct product of any
related technical data, outside of the United States without obtaining any
required written permission, license, or approval to do so from the Bureau of
Industry and Security of the U.S. Department of Commerce and/or other
appropriate governmental agencies of the United States.

2.6.2.Licensee shall not (i) export, reexport, or transfer any Licensed Product
to any country that is at the time of export, reexport or transfer subject to an
embargo by the U.S. government; (ii) export, reexport, or transfer any Licensed
Product to any instrumentality, agent, entity, or individual that is acting on
behalf of, or directly or indirectly owned or controlled by, any governmental
entity that is subject to an embargo by the U.S. government; (iii) export,
reexport or transfer any Licensed Product to a national of a country that is
subject to an embargo of the U.S. government; and (iv) engage in any
transactions or dealings with any organization, entity, or individual identified
on the List of Specially Designated Nationals and Blocked Persons (“SDNs”) or
the Foreign Sanctions Evaders List, which are both maintained by the Office of
Foreign Assets Control of the U.S. Treasury Department, or the Entity List,
Denied Persons List, or Unverified List, which are maintained by the Bureau of
Industry and Security of the U.S. Commerce Department; in each case to the
extent such export, reexport or transfer violates Applicable
Laws.  Notwithstanding the above and for the avoidance of doubt, Licensee may
export, reexport, or transfer any Licensed Product as permitted by Applicable
Law or based upon specific or general licenses allowed by Applicable Law at the
export, reexport or transfer of the Licensed Product.  The Parties acknowledge
that the above prohibitions do change from time to time, and any changes in the
above can be discussed by the Joint Steering Committee.

(a)Obligation to Report.  Either Party will immediately report to the to the
Party (i) any concerns, suspicions, or actual knowledge of violations of the
Export Control Laws or any other similar applicable export control law in
performance of this Agreement, or (ii) if either Party becomes the subject of
any formal or informal investigation, prosecution, or government or judicial
determination related to a violation of Export Control Laws or any other similar
applicable export control law, in performance of this Agreement.

(b)Obligation to Cooperate.  Each Party will fully cooperate and cause its
relevant personnel to cooperate with the other Party in the other Party’s review
or investigation in relation to an actual or potential violation of any
applicable export law or regulation in performance of this Agreement.

(c)Termination for Non-Compliance.  Each Party understands and acknowledges
that, notwithstanding any provision contained herein,

 

(i)

an intentional violation of this Section 2.6 by any either Party shall be deemed
a material breach of this Agreement and will entitle the other Party to (i)
terminate this Agreement immediately upon notice for cause, and (ii) be
indemnified for and held harmless against any and all damages, fines, penalties,
disgorgements, settlements, determinations, or claims faced by or imposed on the
non-breaching Party or any of its representatives to the extent attributable to
the material breach of this Section by the breaching Party or any of its
respective directors, officers, employees, consultants, agents, sublicensees,
subcontractors, distributors, subdistributors or other representatives’ and

 

(ii)

a non-intentional violation of this Section 2.6 by either Party shall be deemed
a non-material breach of this Agreement.  Such a breach may be cured by
reporting as soon as practicable the basis of the breach to

9

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT REQUESTED

 

 

the regulatory agency responsible for the applicable export control laws.  In
addition each Party must thereafter cooperate with said agency during any
investigation and with any subsequent fines or remediation imposed by said
agency.

2.7.Licensee Investment.  Licensee shall invest in the development of a Licensed
Product to support the efforts required for regulatory submissions for the
Licensed Product, including product development, pre-clinical and or clinical
studies, in accordance with the following minimum annual investment schedule:

 

(i)

Establishing One Million, Two Hundred and Fifty Thousand  Dollars ($1,250,000)
in available funds no later than the Effective Date, to cover activities for the
first Contract Year, such amount to be spent in equal installments during each
Quarter within such Contract Year;

 

(ii)

Spending One Million Two Hundred Fifty Thousand Dollars ($1,250,000) during the
second Calendar Year; and

 

(iii)

Spending Two Million Five Hundred Thousand Dollars ($2,500,000) during the third
Contract Year, and during each subsequent Contract Year through the day a final
PMA submission is successfully filed with the FDA or the First Commercial Sale,
whichever is earlier.

Amounts spent by Licensee during any Contract Year in excess of the amount
required to be spent in such Contract Year shall contribute to Licensee’s spend
requirements applicable to the subsequent Contract Year(s).  The Parties shall
confer at least quarterly to assess Licensee’s progress towards achieving the
foregoing minimum investments and spend.  Licensee’s demonstration of the
investments set forth above must be accompanied by actual investor documents
and/or financing documents sufficient to evidence to Licensor the investment set
forth above.  For the avoidance of doubt, the foregoing dollar amounts need not
correspond to amounts payable by Licensee to Licensor as consideration for
Licensor’s costs and expenses as allocated to Licensor pursuant to the Budget.

3.

RESEARCH PROGRAM.

3.1.Research Program.  

3.1.1.During the Research Term, Licensor will carry out a research program to
develop Licensed Products in support of obtaining Regulatory Approvals (the
“Research Program”).   The Research Program will include certain pre-clinical
Development activities, manufacturing and manufacturing support, develop
manufacturing process adequate for the Commercialization Plan, analytical method
development and validation, work needed to establish final product
specifications, providing animal and clinical trial supplies, analytical testing
for product release, manufacturing process improvements, engineering support,
transfer activities to an outside contract manufacturing organization, assembly
and support of manufacturing section(s) of CE mark, NDA, PMA, or 510(k)
notification for regulatory filings, or other regulatory filing. Licensor will
not be responsible for technology support for clinical protocols, the conduct of
animal studies, or other work outside the scope of specified work. The Research
Program will be carried out by Licensor in accordance with the Research
Plan.  The objective of the Research Program will be for Licensor to Develop
Licensed Products for Licensee to advance into human clinical trials and
ultimately to Commercialize.

3.1.2.The Research Program will be conducted by Licensor diligently and in good
scientific manner, and in compliance with all applicable good laboratory
practices and the terms of this Agreement, intended to achieve efficiently and
expeditiously the objectives of the Research Program.  Licensor shall comply
with all Applicable Laws in the performance of work under this Agreement, and

10

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT REQUESTED

 

shall ensure that its Affiliates, PMI and Third Party contractors perform all
activities under the Research Program in accordance with this Agreement.

3.1.3.Licensor will maintain laboratories, offices and all other facilities (all
of which may be virtual or actual business locations), and will engage
sufficient personnel in accordance with the Budget as necessary to carry out its
responsibilities under the Research Program pursuant to the Research Plan.  The
professional skills and expertise levels of such personnel shall be appropriate
to the scientific objectives of the Research Program. Licensor shall make its
personnel reasonably available at their respective places of employment to
consult with Licensee on issues arising during the performance of the Research
Program.  

3.2.Research Term.  The Research Program will be carried out from the Effective
Date through the day a final PMA submission is successfully filed with the FDA
or the First Commercial Sale, whichever is earlier (such period, as may be
extended pursuant to this Section 3.2, is the “Research Term”).  Licensee shall
have the option to extend the Research Term for four additional three-month
periods.  In order to exercise its option to extend the Research Term, Licensee
must provide Licensor a written notice exercising Licensee’s option to extend
the Research Term at least thirty (30) days prior to the scheduled expiration of
the Research Term.  For each extension of the Research Term, JRC will prepare an
update to the Research Plan which will include an updated Budget.

3.3.Research Plan.  The Research Program will be carried out by Licensor in
accordance with a written research plan prepared and agreed upon by the Parties
(the “Research Plan”).  The purpose of the Research Plan is to detail the
responsibilities and activities of Licensor with respect to carrying out the
Research Program.  The Research Plan will include a description of the specific
activities to be performed by Licensor in support of the Research Program, a
description of the research objectives, projected timelines for completion of
such activities, projected costs for completion of such activities and
provisions for the supply of research deliverables including but not limited to
test method results, prototypes, test units, and supplies of Licensed Product
for clinical Development studies by Licensor to Licensee. The Research Plan will
be reviewed quarterly and agreed upon by the JRC at least on a quarterly basis
in advance of the performance of activities by Licensor and may be updated and
amended from time to time, as the JRC determines, provided that if the JRC
cannot reach consensus, Licensee shall have final decision making authority so
long as such decision is made in good faith, and Licensee does not exercise such
final decision making authority in a manner that would require any material
increase in costs to Licensor for which Licensee will not reimburse
Licensor.  For purpose of clarity and notwithstanding anything to the contrary
above, as between the Parties, Licensor will be exclusively responsible for
executing development activities of the Research Program as directed by the JRC,
and Licensee is responsible for all clinical and regulatory matters,
pre-clinical animal studies and in vitro sperm testing.  With respect
specifically to aspects of pharmaceutical product development such as the
development of dissolution methods, eluent characterization work, product
release characterization work, chemical specifications establishment, assay
method development and eluent release optimization, the JRC will either approve
Licensor resources to conduct the work, or select external experts/labs to
produce the data set to satisfy CDER for regulatory submissions.  

3.4.Research Funding.  As compensation for Licensor’s performance of the
Research Program in accordance with the Research Plan during the Research Term,
Licensee shall pay all of Licensor’s costs and expenses as allocated in the
Budget (and any Third Party and PMI costs and fees will be itemized in the
Budget and passed through to Licensee at cost).   Licensor will keep complete
and accurate copies of the underlying invoices paid by Licensor in relation to
amounts payable by Licensee to Licensor in connection with the Research Program
generated in the then current calendar year and during the preceding seven (7)
calendar years (“Books”). Licensee will have the right, once annually at its own
expense, to have a nationally recognized, independent, certified public
accounting firm, selected by it and subject to Licensor’s prior written consent
(which shall not be unreasonably withheld), review Books in Licensor’s primary
place of business upon reasonable written notice (which shall be no less than
thirty (30) days’ prior written notice) and during regular business hours and
under obligations of strict confidence, for the sole purpose of verifying the
basis and accuracy of amounts invoiced to Licensee within the twenty four (24)
month period preceding the date of the request for

11

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT REQUESTED

 

review.  No calendar year will be subject to audit under this Section 3.3 more
than once. Licensor will receive a copy of each such report concurrently with
receipt by the Licensee.  Should such audit certify a discrepancy to the
Licensee’s detriment, Licensor will, within forty-five (45) days after receipt
of such report from the accounting firm, pay any undisputed amount of the
discrepancy. The Licensee will pay the full cost of the review unless the
underpayment of amounts due to the Licensee is certified to be greater than five
percent (5%) of the amount due for the entire period being examined, in which
case the Licensor will pay the cost charged by such accounting firm for such
review. The Budget shall provide Commercially Reasonable dollar amounts to allow
completion of the Research Plan during the Research Term, which in no event will
be less than that provided in Section 13.5(a).

3.5.Research Program Records.  Licensor will maintain complete and accurate
records of all work conducted in the performance of the Research Program and all
of Licensor’s results, data, inventions and developments which relate to
Ovaprene and are made in the performance of the Research Program.  Such records
will be in sufficient detail and in good scientific manner appropriate for
patent and regulatory purposes.  Licensor shall maintain appropriate records
sufficient to document the work performed by each of the individuals working in
support of the Research Program and the time such individuals spent working in
support of the Research Program.  Licensor shall provide copies of all requested
records within thirty (30) days of such request.  In order to protect the
Parties’ patent rights law in any inventions conceived or reduced to practice
during or as a result of the Research Program, Licensor shall require such
individuals to record all inventions in standard laboratory notebooks (paper or
electronic) or other suitable means that are dated and corroborated by
non‑inventors on a regular, contemporaneous basis.

3.6.Disclosure of Results of Research Program.  Licensor will disclose all
patent applications that are filed by Licensor, and all patentable inventions,
in each case which result from work done under the Research Program and that are
not Background Technology. Within thirty (30) days following the end of each
Calendar Quarter, Licensor shall provide to the JRC a written report summarizing
in reasonable detail the work performed by it under the Research Program and
results achieved during the preceding Calendar Quarter.  In addition, upon
reasonable request by Licensee, Licensor will make presentations to the JRC of
its activities related to the Licensed Products to inform Licensee of the
details of the work done in the performance of the Research Program, and with
respect to use of the Licensed Products for any Other Indication.  Upon
reasonable request by Licensee, Licensor shall provide Licensee with additional
data, results and other information with respect to the work performed by
Licensor in the performance of the Research Program.  In addition, at Licensee’s
request, Licensor will transfer (within thirty (30) days of such request) to
Licensee all data, results, and information related to testing and studies of
Licensed Products (including analytical test results and non-clinical
pharmacology and safety data) in the possession of Licensor to the extent such
data, results and/or information are necessary or reasonably useful for the
Exploitation of Licensed Products.

3.7.Subcontracting.  Except as may be provided in the Research Plan or as may be
specifically permitted in writing by the JRC, or otherwise agreed to in advance
in writing by Licensee, Licensor shall not subcontract any of the work for which
it is responsible in the performance of the Research Program.  In the case of
any such permitted subcontracting to a Third Party or Affiliate, such Third
Party or Affiliate shall have entered into a written agreement with Licensor
that includes terms and conditions protecting and limiting use and disclosure of
Confidential Information, and addressing ownership of intellectual property
rights, at least to the same extent as under this Agreement; provided that the
term of such Third Party’s or Affiliate’s obligations regarding the use and
disclosure of Confidential Information shall be as long as can be reasonably
negotiated with such Third Party or Affiliate, but in any event no less than
seven (7) years after the date of disclosure to the Third Party or
Affiliate.  Notwithstanding the above, Licensor shall have the right to
subcontract work to PMI for any purpose, and to Third Parties for Quality
Assurance and Quality Control analysis, sterilization and /or packaging of
Licensed Product upon notice to but without the consent of Licensee.  In any and
all such events Licensor is liable and responsible for compliance by such Third
Party, PMI and Affiliates with the applicable terms and conditions of this
Agreement in the same way and to the same extent as Licensor, and Licensor will
be responsible for any Third Party’s, PMI’s and Affiliates’ compliance with this
Agreement and that such Third Party, PMI and Affiliate complies with all
Regulatory requirements relevant to the performance of such activities.

12

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT REQUESTED

 

3.8.Information Transfer to Licensee.  Without limiting the licenses and other
rights and obligations under this Agreement, subject to the provisions of
Section 1.23, upon request by Licensee, Licensor shall, on an ongoing basis
during the Term, deliver, and cause its Affiliates to deliver, to Licensee, all
Licensor Know-How in Licensor’s possession for purposes of supporting the
Development and Commercialization of Licensed Products by Licensee.  In
addition, subject to the provisions of Section 1.23, Licensor shall promptly
disclose to Licensee’s Alliance Manager any inventions under the Research Plan
for which Licensor has determined it desires to seek Patent Rights.  Licensor
shall provide reasonable consultation and assistance for the purpose of
transferring to Licensee the Licensor Know‑How to the extent reasonably
necessary or useful for Licensee to Develop and Commercialize Licensed Products
in the Indication

4.

GOVERNANCE.  

4.1.Overview.  Within fifteen days (15) days after the Effective Date, the
Parties shall establish a joint research committee (the “Joint Research
Committee” or the “JRC”) which shall oversee and manage Licensor’s performance
of the Research Program.

4.1.1.Alliance Managers.  Each Party shall appoint one representative who
possesses a general understanding of development, regulatory, manufacturing and
commercialization matters to act as its respective alliance manager(s) for this
relationship (an “Alliance Manager”).  Each Party may replace its respective
Alliance Manager at any time upon written notice to the other in accordance with
this Agreement.  Each Alliance Manager shall be charged with creating and
maintaining a collaborative work environment between the Parties.  Each Alliance
Manager will also be responsible for:

(a)providing a primary single point of communication responsible for the flow of
communication and for seeking consensus both within the respective Party’s
organization and together with the other Party regarding key strategy and plan
issues;

(b)ensuring awareness of the governance procedures and rules set forth herein
and monitoring compliance therewith;

(c)identifying and raising disputes to the JRC for discussion in a timely
manner; and

(d)planning and coordinating internal and external communications in accordance
with the terms of this Agreement.

The Alliance Managers may attend all JRC meetings, and may bring any matter to
the attention of the JRC where such Alliance Manager reasonably believes that
such matter requires attention of the JRC.  After the Effective Date each Party
shall appoint and notify the other Party of the identity of their representative
to act as its Alliance Manager as of the Effective Date.

4.1.2.Joint Research Committee.

(a)Composition.  The Joint research Committee shall be comprised of two (2)
named representatives for each Party (or such other number as the Parties may
agree), including each Party’s Alliance Manager. The JRC will be led by the
Licensee’s Alliance Manager.  Each Party may replace one or more of its
representatives, in its sole discretion, effective upon written notice to the
other Party of such change.

(b)Role of the JRC.  The JRC will be responsible for (i) the overall oversight
and management of the Research Program, and for approving changes and updates to
the Research Plan, (ii) the monitoring, reviewing and recording of the progress
of the Research Program, (iii) setting, and monitoring the spending against, the
Research Funding and the Budget, and (iv) facilitating the prosecution of the
Licensor Patent Rights in accordance with Article 9.  As needed, the JRC shall
establish subcommittees and working groups that will

13

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT REQUESTED

 

report to the JRC to further the objectives of the Research Program. The JRC
will keep minutes of JRC meetings that record all decisions and all actions
recommended or taken in reasonable detail, and perform any and all tasks and
responsibilities that are expressly attributed to the JRC under this Agreement.

(c) Frequency of Meetings.  The JRC shall meet at least once per quarter or more
or less often as otherwise agreed by the Parties, and such meetings may be
conducted by telephone, videoconference or in person as determined by the
co-chairs; provided that no less than two (2) meetings during each calendar year
shall be conducted in person (with each Party’s travel costs and expenses to be
borne by the respective Party).  Each Party may also call for special meetings
of the JRC with reasonable prior written notice (it being agreed that at least
five (5) business days shall constitute reasonable notice) to resolve particular
matters requested by such Party and within the decision-making responsibility of
the JRC.  Each co-chair shall ensure that its JRC members receive adequate
notice of such meetings Drafts of the minutes shall be prepared by Licensee and
circulated to the members of the JRC by the Licensor Alliance Manager within
twenty (20) days after the meeting.  Each member of the JRC may circulate
comments on the draft minutes.  

4.1.3.Information.  Each Party shall provide the JRC such information as
required under the Research Plan or as reasonably requested by the other Party
and reasonably available, relating to the progress of the goals or performance
of activities under each of the Research Plan.

4.1.4.Decisions.  Other than as set forth herein, in order to make any decision
required of it hereunder, the JRC must have present (in person, by
videoconference or telephonically) at least the co-chair of each Party (or
his/her designee for such meeting). Decisions of the JRC shall be by consensus,
with each Party having one (1) vote.  If the JRC cannot reach consensus or a
dispute arises which cannot be resolved within the JRC within fifteen (15) days,
the co-chair of either Party may cause such dispute to be referred to the Chief
Executive Officer of Licensee, and President of Licensor (each an “Executive
Officer”) for resolution within thirty (30) days.  If consensus cannot be
reached with respect to a decision after a meeting of the Executive Officers,
then the decision shall be made by Licensee’s Executive Officer in all matters;
provided that such decision is made in good faith, and such Executive Officer
may not exercise his or her final decision making authority to modify Licensor’s
contractual obligations, or to materially modify Licensor’s Research Plan
commitments, including that would increase any Budget under the Research Plan
for which Licensee would not be responsible.

4.1.5.Authority.  The JRC and any subcommittee shall have only the powers
assigned expressly to it in this Article 4 and elsewhere in this Agreement, and
shall not have any power to amend, modify or waive compliance with this
Agreement.  In furtherance thereof, each Party shall retain the rights, powers
and discretion granted to it under this Agreement and no such rights, powers or
discretion shall be delegated or vested in the JRC or subcommittee unless such
delegation or vesting of rights is expressly provided for in this Agreement or
the Parties expressly so agree in writing.

4.2.Discontinuation of JRC.  The JRC shall continue to exist until the end of
the Research Term, at which time it will disband.

5.

DEVELOPMENT AND REGULATORY MATTERS.

5.1.Development Plan.  Licensee shall be responsible for, and shall use
Commercially Reasonable Efforts to, perform the Development activities set forth
in the Development Plan attached hereto as Exhibit D (the “Development Plan”) in
order to obtain Regulatory Approval to market the Licensed Products within the
Territory for the Indication. Failure to achieve, in whole or in part, the goals
of the Development Plan shall not in itself be deemed a failure to meet the
obligations under the Development Plan or this Section 5.1.  Licensee may
request that Licensor provide additional services in support of Licensee’s
performance of the Development Plan, in which case the Parties will negotiate
and enter into a separate development services agreement under commercially
reasonable terms.

14

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT REQUESTED

 

5.2.Regulatory Matters.  Licensee shall be solely responsible for seeking and
obtaining Regulatory Approval for the Licensed Products from Regulatory
Authorities in the Territory, including the preparation, submission and
maintenance of Regulatory Materials to Regulatory Authorities and any
interactions with Regulatory Authorities.  Without limiting the generality of
the foregoing, Licensee shall have sole responsibility and decision‑making
authority with respect to the content of any regulatory filing or dossier,
pharmacovigilance reporting, labeling, safety, and the decision to file or
withdraw any Marketing Authorization or to cease or suspend any clinical
trial.  Licensee will own all regulatory materials for Licensed Products and all
such regulatory materials shall be submitted in the name of Licensee (or its
Affiliate or Sublicensee, as applicable), and Commercialization of Licensed
Products shall be conducted under Marketing Authorizations that will be owned by
Licensee or its Affiliate or Sublicensee, as applicable.  Licensee (or its
Affiliate or Sublicensee, as applicable), will provide a copy to Licensor of all
submissions and communications with Regulatory Authorities and an irrevocable
right to reference these files.  Licensor’s right to reference must be a
component of the submission to the regulatory authority at the time of
submission.  Licensee will transfer all registrations and approvals to Licensor
upon termination of this Agreement.

5.3.Cooperation. Each Party shall provide the other Party with such cooperation
and assistance as may reasonably be requested with respect to Regulatory
Approvals, Regulatory Materials and interactions and communications with the
Regulatory Authorities in respect of Licensed Products within the Territory.

5.4.Threatened Agency Action.  Each Party shall promptly notify the other
Party’s regulatory affairs department of any information that such Party
receives regarding any threatened or pending action by any Regulatory Authority,
or any potential request by a Regulatory Authority, that may affect the proposed
labeling or approved labeling for a Licensed Product or may affect the continued
Commercialization of a Licensed Product.  Upon receipt of any such information,
each Party shall consider in good faith the other Party’s comments with respect
to the appropriate action to be taken; provided, however, that nothing herein
shall be construed to prevent a Party from complying with its obligations under
the SDEA or with such Party’s regulatory reporting obligations under Applicable
Laws.  

5.5.Recalls.  Each Party shall promptly notify the other Party in writing if it
determines that any event, incident or circumstance has occurred that may result
in the need for a “recall”, “field correction” or “market withdrawal” (as such
terms are defined in Title 21 of the Code of Federal Regulations, Section 7.3 or
a similar regulation of any governmental authority and further defined in
relevant guidelines or guidance from a Regulatory Authority)) of a Licensed
Product (a “Recall”).  Licensee shall have the sole right to determine whether
or not to initiate a Recall.  If at any time (i) any Regulatory Authority in the
Territory issues a request, directive or order for a Recall of a Licensed
Product, (ii) a court of competent jurisdiction orders a Recall of a Licensed
Product, or (iii) Licensee determines to initiate a Recall, then the Parties
shall establish and coordinate a strategy pursuant to which Licensee will engage
in discussions with the Regulatory Authorities with respect to the Recall, and
will keep Licensor informed of the progress.  The Parties shall determine the
allocation of out of pocket costs incurred in preforming a Recall consistent
with the Parties’ responsibilities and liabilities relating thereto.

5.6.Quality Agreement.  Within ninety (90) days of the Effective Date, the
Parties shall enter into a written quality assurance agreement setting forth the
specific responsibilities, procedures and guidelines for batch release, quality
control testing, quality assurance review, acceptance testing and other
quality-related aspects of the manufacture and release of Licensed Products by
Licensor or a CMO (as such agreement may be amended from time to time by mutual
written agreement of the Parties, the “Quality Agreement”).  Each Party (or the
CMO, as applicable) agrees to perform the responsibilities assigned to such
party under the Quality Agreement in accordance with the terms and conditions of
the Quality Agreement.  In case of any conflict between the provisions of this
Agreement and those of the Quality Agreement, the Quality Agreement shall
prevail as to any quality-related matter, and this Agreement shall prevail as to
all other matters.  

5.7.Pharmacovigilance and Safety Monitoring Activities.  Within ninety (90) days
of the Effective Date, the Parties shall enter into a Safety Data Exchange
Agreement (“SDEA”), governing the Parties’ respective

15

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT REQUESTED

 

responsibilities with respect to adverse events, device malfunctions, complaints
and other safety-related matters with respect to the Licensed Products.  The
SDEA shall set forth specific details regarding the exchange and management of
information relating to adverse events related to the use of Licensed Products,
and shall, among other terms, specify (i) which Party shall be responsible for
adverse event, malfunction and Licensed Products complaint reporting to specific
Regulatory Authorities, consistent with Applicable Law and ownership of
Regulatory Approvals, (ii) that each Party shall maintain a record noting in
reasonable detail any and all complaints and notices of safety concerns and
adverse events it receives with respect to Licensed Product (collectively the
“Safety Information”) and (iii) each Party shall provide to the other Party or
its designee all Safety Information in a format and in a form agreed to by the
Parties in SDEA to enable the other Party to comply with Applicable Law (with
such Safety Information being provided, in any event within two (2) business
days after such Safety Information is first received if such Safety Information
concerns a matter with the potential to adversely affect patient safety, and
within seven (7) business days after such receipt otherwise). Notwithstanding
anything to the contrary, within the context of the SDEA Licensee shall be
responsible for investigating evaluating, and reporting all reportable adverse
events or malfunctions to the relevant Regulatory Authorities.

5.8.Licensee’s Rights of Reference. Subject to the rules of the relevant
Regulatory Authority, Licensor hereby grants to Licensee a revocable right of
reference to any Regulatory Approval Controlled by Licensor (including any
Marketing Authorization approved by the relevant Regulatory Authority) relating
to the Licensed Products (including, without limitation, the right to rely upon,
access, inspect, copy and otherwise use all information and data included in or
used to support any such Regulatory Approval), solely for Licensee’s and
Sublicensees’ use in Development, Manufacturing (subject to Article 6) and
Commercialization of Licensed Products in the Territory during the Term in
accordance with this Agreement. Licensor shall take such actions as may be
reasonably requested by Licensee to give effect to the intent of this Section
5.8 and to give Licensee the benefit of Licensor’s Regulatory Approvals as
provided in this Section 5.8.  Such actions may include, without limitation,
providing a signed statement upon which Licensee may rely, and that the
Regulatory Authority may access, in support of the Licensee’s application for
Regulatory Approval, and providing any underlying raw data or information
submitted by Licensor to a Regulatory Authority, Regulatory Approval, or other
regulatory documentation Controlled by Licensor or its Affiliates that relates
to any Licensed Product, or entering into one or more distribution agreements or
taking other reasonable actions to enable Licensee to register as a distributor
with the applicable Regulatory Authority.  

6.

MANUFACTURING AND SUPPLY.  

6.1.General.  Licensor shall be responsible for all activities related to
process development and scale up manufacturing, in accordance with the Budget,
for each Licensed Product, all as the Parties may agree in writing.

6.2.Manufacturing.  Subject to Section 6.3, Licensor shall supply, either
through itself or a Third Party contract manufacturing organization (“CMO”), to
Licensee, such quantities of Licensed Products necessary for Licensee’s
Development and Commercialization of Licensed Products in the Territory at a
price equal to Licensor’s COGS plus a commercially reasonable margin as the
Parties agree in writing, and in accordance with the product specifications and
requirements set forth in the Supply Agreement and the Quality
Agreement.  Subject to the foregoing and to Section 6.3, Licensee shall not
obtain Licensed Products from any source other than Licensor (or with Licensor’s
permission, Licensor’s CMO) without the approval of Licensor, which shall not be
unreasonably withheld subject to the understanding that the license from PMI to
Licensor requires that PMI be the exclusive manufacturer of any Licensed Product
and is a condition of this License Agreement. The parties shall negotiate and
enter into one or more supply agreements on reasonable and customary terms,
consistent with the terms herein, governing the supply of Licensed Products from
Licensor or CMO to Licensee (including any quality agreement, each a “Supply
Agreement”).

6.3.Secondary Manufacturing Source.  Commencing upon FDA approval of the PMA or
NDA, and in accordance with the terms of the Supply Agreement and the Quality
Agreement, Licensor shall have qualified

16

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

and keep qualified an additional manufacturing source (a “Second Manufacturing
Source”) in accordance with the terms of the Supply Agreement.  Licensor shall
ensure that the Second Manufacturing Source shall be ready and able to supply
Licensed Products to Licensee in accordance with the terms of the Supply
Agreement and the Quality Agreement, and Licensor shall engage the Second
Manufacturing Source to manufacture and supply Licensed Products for Licensee
should Licensor and CMO be unable to comply with the Supply Agreement and the
Quality Agreement.  The Second Manufacturing Source must be a second facility
operated by Licensor’s CMO or Third Party CMO with quality and reliability in
manufacturing comparable to Licensor’s CMO, and such Second Manufacturing Source
must be approved by or registered with the FDA or other relevant regulatory
authorities such that Licensed Products manufactured by the Second Manufacturing
Source may be lawfully sold by Licensee, its Affiliates and Sublicensees.  If
the Licensor is unable or unwilling to provide a Second Manufacturing Source,
then the Licensee shall have the right to identify a third party to provide this
capability and to require Licensor to transfer Licensor Know-How to the third
party (under the terms and conditions of this Agreement), and Licensor shall
promptly comply with such requirement.  

7.

COMMERCIALIZATION.  

7.1.Generally.  Except as set forth in Section 7.3, Licensee shall be solely
responsible for the Commercialization of Licensed Products in the Territory, at
its own expense.  Licensee’s Commercialization responsibilities in the Territory
shall include the following activities: (i) developing and executing a plan for
Commercialization activities for the Licensed Products; (ii) negotiating with
applicable Regulatory Authorities regarding the price and reimbursement status
of Licensed Product and obtaining pricing and reimbursement approvals from
Regulatory Authorities; (iii) marketing and promotion, including the preparation
of packaging and promotional materials for Licensed Products; (iv) medical
affairs; (v) booking sales and distribution and performance of related services;
(vi) handling all aspects of order processing, invoicing and collection,
inventory and receivables; (vii) providing customer support, including handling
medical queries; and (viii) conforming its practices and procedures to
Applicable Law relating to the marketing, detailing and promotion of Licensed
Product in the Territory.  

7.2.Commercialization Plan.  No later than twelve (12) months prior to the
anticipated First Commercial Sale (or earlier, if necessary to secure pricing or
reimbursement approvals in such country) for each Licensed Product, Licensee
shall provide to Licensor the following plan (each, a “Commercialization Plan”):
(i) a reasonably detailed and written plan for Commercialization of such
Licensed Product, (ii) a rolling five (5)-year budget for such activities for
such Licensed Product in the Territory, and (iii) a non-binding, rolling sales
projection for the next five (5) years for such Licensed Product.  Each such
Commercialization Plan may be updated by Licensee and submitted to Licensor from
time to time.  Failure to achieve, in whole or in part, the goals of the
Commercialization Plan shall not in itself be deemed a failure to meet the
obligations under this Section.

7.3.Trademarks; Packaging; Promotional Materials.

7.3.1.Trademarks.  Licensee shall determine and approve all trademarks or trade
names for the Licensed Products for the Indication within the Territory (the
“Product Marks”), subject to Licensor’s final decision-making authority for the
Global Product Marks (as defined below) and Licensee’s final decision-making
authority for the Local Product Marks (as defined below).  Licensor shall be
responsible for (i) registering and owning the Product Marks used globally and
throughout the Territory (with the exception of any Local Product Marks used
only in a particular country within the Territory) (the “Global Product Marks”),
(ii) registering, prosecuting and enforcing the Global Product Marks in the
Territory, (iii) the accrual of goodwill as a result of the use of the Global
Product Marks, (iv) any branding guidelines applicable to the use of the Global
Product Marks and (v) the investigation and defense of any infringement or
threatened infringement relating thereto.  The Parties anticipate that the
Licensed Products will be Commercialized throughout the Territory under the
Global Product Mark of “Ovaprene”.  Licensee shall be responsible for (a)
registering and owning the Product Marks used locally only in a particular
country in the Territory (the “Local Product Marks”), (b) registering,

17

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

prosecuting and enforcing the Local Product Marks in any country in the
Territory (c) the accrual of goodwill as a result of the use of the Local
Product Marks, (d) any branding guidelines applicable to the use of the Local
Product Marks and (e) the investigation and defense of any infringement or
threatened infringement relating thereto.  For purpose merely of clarity,
Licensor reserves the right to require the use of Licensor’s trademark
“Ovaprene®” on any Licensed Product.

7.3.2.Trademark Licenses.  If Licensor has rights to a Global Product Mark,
Licensor hereby grants and shall grant to Licensee an exclusive, royalty-free
license, with the right to sublicense, to use the Global Product Mark in
connection with the Commercialization of Licensed Products in the Territory,
subject to the terms and conditions of this Agreement.  Each Party acknowledges
(i) that Licensor has sole and exclusive rights to the Global Product Marks and
(ii) that Licensee has sole and exclusive ownership of all rights, title and
interests in and to the Local Products Marks (including, without limitation, all
registrations and applications therefor). Neither Party will register in its own
name any Product Mark owned by the other Party, corporate name, domain name,
social media account or other source identifier containing such Product Mark or
any word or mark that is confusingly similar to such Product Mark.  All use of a
Global Product Mark and all goodwill and benefit arising from such use will
inure to the sole and exclusive benefit of Licensor and all use of a Local
Product Mark and all goodwill and benefit arising from such use will inure to
the sole and exclusive benefit of Licensee.  Each Party will cooperate with the
other Party in the execution, filing and prosecution of any trademark
applications in connection with a Product Mark.  Licensee shall assure at all
times that the quality of the Licensed Products is of a standard of quality
consistent with pharmaceutical industry standards.  Licensee shall assure at all
times that Licensed Products are sourced, manufactured and labelled in
accordance with Applicable Law.  Licensee shall place and display the Global
Product Marks on and in connection with the Licensed Products only in such form
and manner as are specifically approved in writing in advance by
Licensor.  Except as otherwise expressly provided in this Agreement, neither
Party is granted any license under, and shall not use, any trademarks of the
other Party in connection with the Licensed Products.

7.3.3.Packaging and Promotional Materials. Licensee shall be responsible for the
preparation of the design of all final packaging (non-commercial and commercial)
and promotional materials for use in Commercializing Licensed Products in the
Territory.

8.

FINANCIAL TERMS.  

8.1.License Fee.  Left intentionally blank.

8.2.Development, Regulatory and Commercial Milestone Payments.

8.2.1.Development and Regulatory Milestones.  For the first Licensed Product
that is Commercialized hereunder (and for no other Licensed Product), Licensee
shall promptly notify Licensor following the first achievement of each of the
corresponding milestone events set forth below by such Licensed
Product.  Following receipt of such notice, Licensor shall invoice Licensee for,
and Licensee shall pay to Licensor the following corresponding one-time
milestone payment within thirty (30) days of its receipt of such invoice:

 

 

Milestone Event

Milestone Payment

18

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT REQUESTED

 

1.

Successful Postcoital Study.

$[***] will be payable upon confirmation that 100% of the PCT participants have
fewer than 5 progressively motile sperm in the cervical mucus per high power
field (and such metric is considered indicative of minimally acceptable barrier
function).

 

$[***] will be payable upon confirmation that 100% of the PCT participants have
zero progressively motile sperm in the cervical mucus per high power field.

 

$[***] will be payable upon confirmation that the Licensed Product is
“well-tolerated” and resulted in no serious adverse events or malfunctions.  For
clarity, “well-tolerated” means no significant change in genital flora, no
significant (reportable) discomfort, no bleeding, no pain or other safety
concern, no colposcopic abnormalities related to the Licensed Product, and at
least 80% of test subjects report the Licensed Product is considered acceptable
to sexually active women and their partners.

 

2.

Approval by the US Food and Drug Administration to commence Phase 3/Pivotal
Clinical Trial

$[***]

3.

Completion of successful Phase 3/Pivotal Clinical Trial, where “completion” is
defined as completion of minimal number of subjects, total cycles, and
successive cycles per subject, all as required by the FDA for registration in
the United States.  

The proposed primary endpoint for the Phase 3/Pivotal Clinical Trial is to
estimate the risk of pregnancy among users of the Product over 6 months of
typical use. The secondary endpoints will clinically evaluate the safety of the
Product during the same time period.

$[***] will be payable upon clinical trial effectiveness rate of 68-80% in
typical use as a result of the clinical trial, which is comparable to the
category of barrier methods.

$[***] will be payable upon clinical trial effectiveness rate of between
80.1-86% in typical use, which is comparable to the category of barrier methods
with spermicide use (double method approach).

$[***] will be payable upon clinical trial effectiveness rate in typical use of
between 86.1 and 89.9%, which is greater than all other barrier methods,
including use with spermicides.

$[***] will be payable upon clinical trial effectiveness rate in typical use of
greater than 90% as a result of the clinical trial, which is comparable to the
US approved prescribing information of the NuvaRing or its generic equivalent.

$[***] will be payable upon confirmation that Licensed Product is
“well-tolerated” and resulted in no serious adverse events or malfunctions.  For
clarity, “well-tolerated” means no significant change in genital flora, no
significant (reportable) discomfort, no bleeding, no pain or other safety
concern, no colposcopic abnormalities related to the Licensed Product, and at
least 80% of test subjects report the Licensed Product is considered acceptable
to sexually active women and their partners, at the 6 month time point.

19

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT REQUESTED

 

4.

The FDA accepts the filing of a PMA

$[***]

5.

The FDA approves the PMA

$[***]

6.

CE Marking of the Licensed Product or filing in at least three of the following:
Germany, France, Italy, Spain, United Kingdom.

$[***]

7.

Regulatory Approval by EMA or Regulatory Approval in at least three of the
following: Germany, France, Italy, Spain, United Kingdom.

$[***]

8.

Regulatory Approval in Japan

$[***]

 

For clarity, each Milestone Payment is payable only once and the maximum amount
payable under this Section 8.2.1 is Fourteen million and six-hundred thousand
dollars ($14.6 million).

8.2.2.Commercial Milestone Payments.  Licensee shall promptly notify Licensor in
writing following the first achievement of the corresponding commercial
milestone events set forth below.  Following receipt of such notice, Licensor
shall invoice Licensee for, and Licensee shall pay the following one-time,
non-refundable, non-creditable milestone payments within thirty (30) days of its
receipt of such invoice:

Milestone Event

Milestone Payment

Worldwide Net Sales reach $[***]

$[***]

Worldwide Net Sales reach $[***]

$[***]

 

8.3.Sublicensee Revenue.  In the event of a Sublicense, Licensee shall pay
Licensor [***] percent ([***]%) of Sublicensee Revenue received by Licensee
during the Royalty Term in lieu of the Royalty Rate outlined in 8.4
(“Sublicensee Revenue Share”) provided, however, (i) for Sublicensee Revenue
received by Licensee from Sublicensees that represents an upfront payment  or
license fee due on or around the effective date of the sublicense, then the
Sublicensee Revenue Share for such Sublicensee shall be lowered to [***] percent
([***]%) of the Sublicensee Revenue received by Licensee from such Sublicensee
prior to the First Commercial Sale (but shall be [***] percent ([***]%) of
Sublicense Revenue received from such Sublicensee thereafter), and (ii)
Sublicense Revenue received by Licensee for a Sublicensee’s achievement a
milestone event described in Section 8.2 shall not, only for purposes of
calculating the associated Sublicensee Revenue Share, exceed the amount payable
by Licensee for achievement of such milestone event as required in Section 8.2
(even if Licensee receives more than this amount from a Sublicensee).

8.4.Royalties.

8.4.1.Royalty Rate.  Licensee shall pay to Licensor royalties on annual Net
Sales of Licensed Products for each calendar year during the Royalty Term as set
forth in the table below.  Such annual Net Sales for Licensed Products shall be
aggregated for all Licensed Products in order to

20

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT REQUESTED

 

determine the royalty rate applicable to all Licensed Products sold during the
corresponding calendar year.  

Aggregate Annual (i.e. within a calendar year) Net Sales Within the Royalty
Countries

Royalty Rate

Net Sales less than or equal to $[***]

[***]%

Portion of aggregate annual Net Sales greater than $[***] and less than or equal
to $[***]

[***]%

Portion of aggregate annual Net Sales greater than $[***] and less than or equal
to $[***]

[***]%

Portion of aggregate annual Net Sales greater than $[***]

[***]%

 

For clarity, only one royalty shall be due to Licensor with respect to the same
unit of a Licensed Product.  For clarity, Licensee shall not owe royalties on
Licensed Products sold in a Royalty Country after expiration of the Royalty Term
for such Licensed Product in such Royalty Country.  Upon the expiration of the
Royalty Term with respect to a Licensed Product in a Royalty Country, Licensee
shall have a fully-paid-up perpetual license under Section 2.1.

8.4.2.Royalty Reductions.  

(a)De Facto Exclusivity. On a Royalty Country-by-Royalty Country and Licensed
Product-by-Licensed Product basis, if Exploitation of a Licensed Product is not
Covered by a Valid Claim in such Royalty Country, but if there is De Facto
Exclusivity in such Royalty Country, then the royalty rates set forth in Section
8.4.1 with respect to Net Sales for such Licensed Product in such Royalty
Country shall be reduced by [***] percent ([***]%) of what would otherwise have
been due in the absence of such reduction.

(b)Third-Party Intellectual Property.  If Licensee obtains a license from a
Third Party under intellectual property that, in Licensee’s reasonable judgment,
is necessary or useful for the Exploitation of a Licensed Product within a
Royalty Country, then Licensee may credit [***] percent ([***]%) of the
royalties, milestones or other payments that Licensee actually pays to such
Third Party for the Exploitation of such Licensed Product in such Royalty
Country during a Calendar Quarter against royalties otherwise payable by
Licensee to Licensor under Section 8.4.1 for such Licensed Product in such
Royalty Country in such Calendar Quarter, provided, however, that under no
circumstances shall any royalty payment to Licensor be reduced as a result of
this Section 8.4.1(b) to less than [***] percent ([***]%) of what would
otherwise have been due in the absence of such reduction.

8.4.3.Countries For Which a Royalty Rate and Commercialization Plan Must be
Negotiated.  With the exception of Developing World Countries, which means
countries listed in Exhibit F, for which royalties are never payable, Licensee
may not Commercialize a Licensed Product in a country that is not a Royalty
Country unless and until the Parties agree on a royalty rate and
Commercialization Plan applicable to such country (hereinafter a “Negotiated
Country”).  More specifically, no later than six (6) months after receiving
either US or EU regulatory approval (whichever is earlier) for a Licensed
Product, if Licensee wishes to Commercialize such Licensed Product in a
Negotiated Country, Licensee shall propose a royalty rate and a
Commercialization Plan of such Licensed Product (including a binding timeline
for regulatory submissions and good faith estimates of commercialization) for
such Negotiated Country, in which case Licensor will respond to and negotiate
such proposal diligently and in good faith.  Upon the Parties’ written agreement
as to a royalty rate for any such country, Licensee may Commercialize Licensed
Products in such country.  The royalty rate applicable to such country shall be
set such

21

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT REQUESTED

 

that Licensee’s cost of goods sold for the Licensed Product (calculated in
accordance with United States generally accepted accounting principles) (which
costs include any transfer price plus royalty amounts payable by Licensee to
Licensor in respect of such Licensed Products) in such country shall not exceed
[***] percent ([***]%) of the sales price for such Product in such country, and
in any case such royalty rate shall not exceed the corresponding royalty rate
identified in Section 8.4 above.  If the Licensee does not propose a
Commercialization plan and royalty rate within said six (6) months, or, if,
despite their diligent and good faith efforts, the Parties fail to agree in
writing upon a royalty rate for each country in the Negotiated Countries within
120 days of the proposal from Licensee, then all such countries for which an
agreement could not be reached shall be excluded from the definition of
Territory set forth in Section 1.46 (each an “Excluded Country”).  For any
Excluded Country, if any Third Party or any Affiliate of Licensor wishes to
commercialize a Licensed Product in such Excluded Country, Licensor may not
permit such person or entity to commercialize a Licensed Product in such
Excluded Country without first offering Licensee the rights to do so under terms
that are, on a whole, at least as favorable to Licensee as the most favorable
terms offered by Licensor to such person or entity, and allowing Licensee thirty
(30) days to accept or reject such offer.

8.5.Reports and Payments.  On a Licensed Product-by- Licensed Product basis,
after the First Commercial Sale of the first Licensed Product and until
expiration of the last applicable Royalty Term, Licensee shall prepare and
deliver to Licensor royalty reports of the sale of Licensed Products by Licensee
and of Sublicensee Revenue for each Calendar Quarter within sixty (60) days of
the end of each such Calendar Quarter specifying (1) all Sublicensee Revenue
received during such Calendar Quarter; and (2) in the aggregate and on a
Licensed Product-by-Licensed Product basis: (a) total gross amounts for Licensed
Products sold or otherwise disposed of by Licensee; (b) amounts deducted in
accordance with the definition of Net Sales from gross amounts to calculate Net
Sales; (c) Net Sales; and (d) royalties payable.  Royalties and Sublicensee
Revenue will be payable on a quarterly basis and any such payments shall be made
within sixty (60) days after the end of the Calendar Quarter during which the
applicable Net Sales occurred or Sublicensee Revenue was received.

8.6.Mutual Convenience of the Parties.  The royalty and other payment
obligations set forth hereunder have been agreed to by the Parties for the
purpose of reflecting and advancing their mutual convenience, including the ease
of calculating and paying royalties and other amounts required hereunder.

8.7.Late Payments. In the event that any payment due hereunder is not made when
due, the payment shall accrue interest from the date due at the rate of 1.5% per
month; provided, however, that in no event shall such rate exceed the maximum
legal annual interest rate.  A Party may also charge for the actual costs of
collection, including reasonable attorney fees and any administrative expenses
actually incurred.  The payment of such interest, costs and/or fees shall not
limit a Party from exercising any other rights it may have as a consequence of
the lateness of any payment.

8.8.No Other Compensation.  Neither Party will be obligated to pay any
additional fees, milestone payments, royalties or other payments of any kind to
the other hereunder, except as otherwise expressly set forth herein.

8.9.Method of Payment.  All payments due from Licensee to Licensor under this
Agreement shall be paid in U.S. Dollars by wire transfer or electronic funds
transfer of immediately available funds to the account specified by Licensor
from time to time upon at least thirty (30) days notice:

8.10.Currency Conversion.  In the case of Net Sales outside the United States,
payments received by Licensee will be expressed in the U.S. Dollar equivalent
calculated on a quarterly basis in the currency of the country of sale and
converted to their U.S. Dollar equivalent using the average rate of exchange
over the applicable calendar quarter to which the sales relate, in accordance
with the rate of exchange for such currency reported in The Wall Street Journal,
Internet U.S. Edition at www.wsj.com, as of the last day of the applicable
reporting period (or, if unavailable on such date, the first date thereafter on
which such rate is available).  

8.11.Records and Audits.  Licensee will keep complete and accurate records of
the underlying revenue data relating to the calculations of Net Sales generated
in the then current calendar year and during the

22

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT REQUESTED

 

preceding seven (7) calendar years. Licensor will have the right, once annually
at its own expense, to have a nationally recognized, independent, certified
public accounting firm, selected by it and subject to Licensee’s prior written
consent (which shall not be unreasonably withheld), review any such records of
Licensee and its Affiliates and Sublicensees (the “Audited Party”) in the
location(s) where such records are maintained by the Audited Party upon
reasonable written notice (which shall be no less than thirty (30) days’ prior
written notice) and during regular business hours and under obligations of
strict confidence, for the sole purpose of verifying the basis and accuracy of
the payments made under Section 8.5 within the twenty four (24) month period
preceding the date of the request for review.  No calendar year will be subject
to audit under this Section 8.11 more than once. The Audited Party will receive
a copy of each such report concurrently with receipt by the Licensor.  Should
such audit certify a discrepancy to the Licensor’s detriment, the Audited Party
will, within forty-five (45) days after receipt of such report from the
accounting firm, pay any undisputed amount of the discrepancy. The Licensor will
pay the full cost of the review unless the underpayment of amounts due to the
Licensor is certified to be greater than five percent (5%) of the amount due for
the entire period being examined, in which case the Audited Party will pay the
cost charged by such accounting firm for such review. Should the audit lead to
the discovery of a discrepancy to the Audited Party’s detriment, the Audited
Party may credit the amount of the discrepancy, without interest, against future
payments payable to the Licensor under this Agreement, and if there are no such
payments payable, then the Licensor shall pay to the Audited Party the amount of
the discrepancy, without interest, within forty-five (45) days of the Licensor’s
receipt of the report.

8.12.Taxes.

8.12.1.Withholding.  If any Applicable Law requires Licensee to withhold taxes
with respect to any payment to be made by Licensee pursuant to this Agreement,
Licensee will notify Licensor of such withholding requirement prior to making
the payment to Licensor and provide such assistance to Licensor, including the
provision of such standard documentation as may be required by a tax authority,
as may be reasonably necessary in Licensor’s efforts to claim an exemption from
or reduction of such taxes.  Licensee will, in accordance with such Law,
withhold taxes from the amount due, remit such taxes to the appropriate tax
authority, and furnish Licensor with proof of payment of such taxes within
thirty (30) days following the payment.  If taxes are paid to a tax authority,
Licensee shall provide reasonable assistance to Licensor to obtain a refund of
taxes withheld, or obtain a credit with respect to taxes paid.

8.12.2.VAT.  All payments due to Licensor from Licensee pursuant to this
Agreement shall be paid exclusive of any value-added tax (“VAT”) (which, if
applicable, shall be payable by Licensee upon receipt of a valid VAT
invoice).  If Licensor determines that it is required to report any such tax,
Licensee shall promptly provide Licensor with applicable receipts and other
documentation necessary or appropriate for such report.  For clarity, this
Section 8.12.2 is not intended to limit Licensee’s right to deduct value-added
taxes in determining Net Sales.

8.13.Payment Disputes.  If Licensee, in good faith, disputes: i) a payment under
Milestone Events 1 or 3 in Section 8.2.1; or ii) a payment under Section 8.2.2,
then it shall promptly notify Licensor of such dispute and provide Licensor with
relevant supporting documentation, in which case the Parties shall promptly meet
to discuss and resolve the dispute.  If the Parties cannot resolve the dispute
informally, they shall refer such dispute for resolution pursuant to Section 14.

9.

INTELLECTUAL PROPERTY AND INVENTIONS.  

9.1.Ownership of Inventions.  With the understanding that Licensor may assign
any and all of its rights to PMI, ownership of inventions, developments or
discoveries, whether patentable or non-patentable, invented or otherwise
developed or generated by the Parties or their Affiliates, or any of its or
their employees, independent contractors or agents in the course of Developing,
Manufacturing or Commercializing Licensed Products under this Agreement during
the Term (“Inventions”), and any and all intellectual property rights therein,
shall be determined based on the principles of inventorship in accordance with
United States patent laws.  

23

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

Any Invention invented by Licensor and/or PMI shall be owned solely by Licensor
or PMI, and shall be licensed to Licensee in accordance with the terms and
conditions of this Agreement and shall be Licensed Technology. This Agreement
will be understood to be a joint research agreement under 35 U.S.C. 100(h) and
102(c), entered into for the performance of experimental, developmental, or
research work in the field of the invention, for the purpose of researching and
developing Licensed Products under the terms set forth herein.  

9.2.Licensor Patent Rights.  Licensor shall have the sole right, but not the
obligation, to file, prosecute and maintain all Licensor Patent Rights using
patent counsel selected by Licensor.  Licensee shall not disclose to Third
Parties the existence of any unpublished patent applications that are Licensor
Patent Rights, or any Know-How contained therein that is not otherwise disclosed
publicly at the time of filing of any such unpublished patent applications.
Licensee shall reimburse Licensor for all of Licensor’s reasonable out of pocket
costs incurred in filing, prosecuting and maintaining the Licensor Patent
Rights, which amount shall be reduced, on an equal basis, between Licensor and
any Third Party(ies) to whom Licensor licenses or grants rights under Licensor
Patent Rights for any use or indication other than the Indication.  Licensee may
opt out of reimbursement of such out of pocket costs with respect to any country
within the Territory, in which case the Territory shall be amended to exclude
such country and Licensee shall have no right to Commercialize Licensed Products
in such country.

9.3.Process.  Licensor shall reasonably inform and consult with Licensee on the
preparation, prosecution and maintenance of Licensor Patents, including
providing Licensee with copies of draft documents and filings reasonably in
advance of any filing for Licensee’s review and comment.  Licensor shall
consider in good faith any changes reasonably requested by Licensee to such
documents promptly upon their being received.  Licensor shall promptly provide
Licensee with a copy of material communications from any patent authority in the
Territory regarding the Licensor Patents, and shall provide drafts of any
material filings or material responses to be made to such patent authorities
reasonably in advance of submitting such filings or responses so that Licensee
may have an opportunity to review and comment thereon.  If Licensor disagrees
with any of Licensee’s comments, it shall consult with Licensee in good faith to
reach a mutually agreeable position.  If Licensor elects not to prosecute or
maintain patent protection on any Licensor Patents, Licensor shall notify
Licensee at least ninety (90) days before any such Patent Rights would become
abandoned or otherwise forfeited, and Licensee shall have the right (but not the
obligation), at its sole cost and expense, to prosecute and maintain such
Licensor Patents. Each Party shall provide the other Party with all reasonable
assistance and cooperation, at the request and expense of the requesting Party,
in patent prosecution and maintenance efforts, including providing all necessary
powers of attorney and executing any other required documents or instrument for
such prosecution.  The Parties will confer regarding the desirability of seeking
in any country any patent term adjustment, patent term extension, supplemental
patent protection or related extension of rights with respect to Licensor
Patents.

9.4.Data Exclusivity.  Licensee will have the sole right and authority for
securing, maintaining and enforcing exclusivity rights that may be available
under Applicable Law in a country for a Licensed Product, including regulatory
or statutory exclusivity periods.  Licensor will cooperate fully with and
provide all reasonable assistance to Licensee and use all commercially
reasonable efforts consistent with its obligations under Applicable Law
(including any applicable consent order or decree) to seek, maintain and enforce
all data exclusivity periods available for Licensed Products.  

9.5.Third Party Claims and Enforcement.

9.5.1.Notice.  If the Exploitation of Licensed Products in the Territory results
in a claim of infringement by a Third Party of any Patent Rights of such Third
Party (a “Product Infringement Claim”), the Party first having notice thereof
shall promptly notify the other Party in writing, setting forth the facts of the
claim in reasonable detail.  Each Party shall consult with the other Party
regarding the strategy for such defense or action in the Territory and keep the
other Party reasonably informed regarding the same.  

24

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

9.5.2.Enforcement of Patent Rights.  Each Party shall notify the other Party
promptly of any Third Party conduct that it reasonably believes is a potential
infringement of Licensor Technology in the Territory.  The Parties shall
thereafter consult and cooperate fully to investigate and determine a course of
action.  Licensee shall have the first right, but not the obligation, to enforce
Licensor Technology against potential Third Party infringement in the Territory
for the Indication (and to defend any declaratory judgment action alleging the
invalidity, unenforceability or non-infringement of any such Patent
Right).  Licensor shall have the first right, but not the obligation, to enforce
Licensor Technology against potential Third Party infringement in the Territory
for any uses or indications other than the Indication.  The Party initiating the
action under this Section 9.5.2 shall have control over the handling of the
litigation, including the selection of counsel and settlement; provided,
however, that no Party shall settle any action with respect to Licensor
Technology without the specific written consent of Licensor and no Party shall
settle any action in a matter that will substantially adversely affect the
rights of the other Party in the Territory (including the licenses granted
herein) without the consent of such other Party, which consent shall not be
unreasonably withheld; provided further that such other Party shall have the
right (except in the case of a conflict) to be represented in such action by
separate counsel of its own choice at its own expense.  The Party controlling
such litigation shall keep the other Party reasonably informed about the status
and developments in such action, including considering, in good faith, the input
of the other Party regarding the strategy and handling of the litigation.  Each
Party shall cooperate fully and provide each other with information or
assistance that the other Party may reasonably request in connection with any
defense, enforcement, litigation or other action initiated pursuant to this
Section 9.5.2, including voluntarily consenting to be named as a party in an
action commenced or defended by the other Party.

9.5.3.Expenses and Recoveries.  A Party bringing a claim, suit or action under
Section 9.3.2 shall be solely responsible for any expenses incurred by such
Party as a result of such claim, suit or action.  If such Party recovers
monetary damages from such Third Party in such suit or action, such recovery
shall be allocated first to the reimbursement of any expenses incurred by the
Parties in such litigation (including, for this purpose, a reasonable allocation
of expenses of internal counsel), and any remaining amount shall be retained by
the enforcing Party.  

9.6.Further Actions.  Each Party shall cooperate with the other Party to execute
all documents and take all reasonable actions requested by the other Party to
effect the intent of this Article 9.

10.

REPRESENTATIONS, WARRANTIES AND COVENANTS; DISCLAIMERS; LIMITATION OF
LIABILITY.  

10.1.Representations and Warranties of the Parties.  Each Party hereby
represents and warrants to the other Party that:

10.1.1.such Party (i) is a corporation duly organized and subsisting under the
laws of its jurisdiction of organization and (ii) has full power and authority
and the legal right to own and operate its property and assets and to carry on
its business as it is now being conducted and as it is contemplated to be
conducted by this Agreement;

10.1.2.such Party has the power, authority and legal right, and is free to enter
into this Agreement and, in so doing, will not violate any other agreement to
which such Party is a party, or conflict with the rights granted to any Third
Party or Affiliate;

10.1.3.this Agreement has been duly executed and delivered on behalf of such
Party and constitutes a legal, valid, and binding obligation of such Party and
is enforceable against it in accordance with its terms, subject to the effects
of bankruptcy, insolvency, or other laws of general application affecting the
enforcement of creditor rights and judicial principles affecting the
availability of specific performance and general principles of equity;

25

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT REQUESTED

 

10.1.4.such Party has taken all corporate action necessary to authorize the
execution and delivery of this Agreement;

10.1.5.such Party has obtained all necessary consents, approvals, and
authorizations of all Regulatory Authorities and other Third Parties required to
be obtained by such Party in connection with the execution and delivery of this
Agreement and the performance of its obligations hereunder;

10.1.6.the execution and delivery of this Agreement and the performance of such
Party’s obligations hereunder (i) do not conflict with or violate any
requirement of Applicable Law or any provision of the articles of incorporation,
bylaws, limited partnership agreement, or any similar instrument of such Party,
as applicable, in any material way, and (ii) do not conflict with, violate, or
breach or constitute a default or require any consent under, any Applicable Law
or any contractual obligation or court or administrative order by which such
Party is bound;

10.1.7.there is no pending, nor, to the knowledge of a Party any threatened
investigation or audit of such Party by the FDA, EMA, or other governmental
entity and/or agency which is a counterpart of the FDA or EMA, that could impact
either Party’s ability to commercialize the Licensed Product;

10.1.8.such Party is not currently suspended or excluded from participating, or
otherwise ineligible to participate, in any national health insurance program or
system or other governmental reimbursement program in any country of the
Territory, or in any governmental procurement or non-procurement programs in the
Territory, or otherwise excluded from contracting with the government of any
country in the Territory; and

10.1.9.all of the activities it takes under or pursuant to this Agreement shall
comply with all Applicable Law, rules and regulations, including, without
limitation, the applicable anticorruption laws and regulations relevant to the
Development, Manufacture, supply and Commercialization of Licensed Product in
the Territory.

10.2.Additional Licensor Warranties.  As of the Effective Date, Licensor
warrants to Licensee that:

(a)The Licensor Patent Rights are licensed from Poly-Med Inc. under an exclusive
license to Licensor.  

(b)Neither Licensor nor PMI nor any of their Affiliates have granted any rights
to any Third Party or any Affiliate to such Licensor Patent Rights with respect
to any Licensed Product for the Indication;

(c)Licensor has not entered, and shall not enter, into any agreement with any
Third Party, PMI or Affiliate that is in conflict with the rights granted to
Licensee under this Agreement, and has not taken and shall not take any action
that would in any way prevent it from granting the rights granted to Licensee
under this Agreement;

(d)Exhibit A is a complete and accurate list of all Licensor Patent Rights
existing as of the Effective Date;

(e)No patent application or registration within Licensor Patent Rights is
subject of any pending interference, opposition, cancellation or patent protest;

26

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT REQUESTED

 

(f)Exhibit C lists all Third Party licenses and agreements pursuant to which
Licensor or its Affiliates has obtained license rights to Licensor Patent Rights
and Licensor Know-How, and Licensor has shared with Licensee complete and
accurate copies of all such licenses and agreements;

(g)No Third Party has made any claim or allegation to Licensor, its Affiliates
or PMI in writing that a Third Party has any right or interest in or to Licensor
Patent Rights;

(h)To Licensor’s knowledge, no Third Party is infringing the Licensor Patent
Rights and no Third Party has misappropriated any Licensor Know-How;

(i)There is no claim or litigation that has been brought or threatened by any
Third Party alleging that Licensor Patent Rights are invalid or unenforceable;
and

(j)Licensor has not intentionally withheld any information in Licensor’s and its
Affiliates control that is material to Licensee’s decision to enter into this
Agreement. To Licensor’s knowledge, all information disclosed at any time prior
to the Effective Date by Licensor and its Affiliates relating to the Licensor
Technology is true and accurate and complete.  Additionally, to Licensor’s
knowledge, Licensor has not failed and will not fail to disclose to Licensee any
material information known to Licensor and its Affiliates and in its possession
and control that would be required to be disclosed in order to make the
information relating to the Licensor Technology that have been disclosed not
misleading.

10.3.Licensee Warranties. Licensee warrants to Licensor that

Licensee has the commercial expertise to market the Licensed Product for the
Indication in the Territory and will use Commercially Reasonable Efforts to sell
Licensed Product on a FIFO (First-In, First-Out basis).

10.4.Disclaimers.  EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY
PROVIDES ANY REPRESENTATIONS OR WARRANTIES, WHETHER WRITTEN OR ORAL, EXPRESS OR
IMPLIED, REGARDING THE LICENSED PRODUCTS, AND EACH PARTY HEREBY DISCLAIMS ALL
OTHER REPRESENTATIONS OR WARRANTIES, WHETHER WRITTEN OR ORAL, EXPRESS AND
IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, AND FREEDOM FROM INFRINGEMENT OF THIRD PARTY RIGHTS.

11.

CONFIDENTIALITY.  

11.1.Confidential Information.  For the Term and for a period of ten (10) years
thereafter, each Party shall maintain in confidence all Know-How and other
information of the other Party disclosed or provided to it by the other Party
thereof (“Confidential Information”).  Confidential Information shall include
Know-How generated hereunder and Know-How regarding intellectual property and
confidential or proprietary Know-How of Third Parties, in each case as disclosed
by one Party to the other Party.  The terms and conditions of this Agreement
also shall be deemed Confidential Information of both Parties.  

11.2.Degree of Care; Permitted Use.  Each Party shall take reasonable steps to
maintain the confidentiality of the Confidential Information of the other Party,
which steps shall be no less protective than those steps that such Party takes
to protect its own Confidential Information of a similar nature, and in no event
less than a reasonable degree of care.  Neither Party shall use or permit the
use of any Confidential Information of the other Party except for the purposes
of carrying out its obligations or exercising its rights under this Agreement,
and neither Party shall copy any Confidential Information of the other Party
except as may be reasonably necessary or useful for such purposes.  All
Confidential Information of a Party, including all copies and derivations
thereof, is and shall remain the sole and exclusive property of the disclosing
Party and subject to the restrictions provided for herein.  Neither Party shall
disclose any Confidential Information of the other Party other than to those of
its directors, officers, employees, actual or potential acquirers or investors,
independent

27

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

contractors, actual or potential Sublicensees, actual or potential assignees,
agents, and external advisors directly involved in or concerned with the
carrying out of this Agreement, on a strictly applied “need to know” basis;
provided, however, that such persons and entities are subject to confidentiality
and non-use obligations at least as stringent as the confidentiality and non-use
obligations provided for in this Article 11, and each Party shall be responsible
for any actions of its employees or Sublicensees as if such actions were taken
by the Party itself.

11.3.Exceptions.  The obligations of confidentiality and non-use set forth in
Section 11.1 shall not apply to any portion of Confidential Information that the
receiving Party can demonstrate was (i) known to the general public at the time
of its disclosure to the receiving Party, or thereafter became generally known
to the general public, other than as a result of wrongful actions or omissions
of the receiving Party or anyone to whom the receiving Party disclosed such
portion; (ii) known by the receiving Party prior to the date of disclosure by
the disclosing Party, as shown by the receiving Party’s written records kept in
the ordinary course of its business; (iii) disclosed to the receiving Party on
an unrestricted basis from a source unrelated to the disclosing Party, as shown
by the receiving Party’s written records kept in the ordinary course of its
business, where such source is not under a duty of confidentiality to the
disclosing Party; or (iv) independently developed by the receiving Party by
personnel that did not have access to or use of Confidential Information of the
disclosing Party, as shown by the receiving Party’s written records kept in the
ordinary course of its business.  Any combination of features or disclosures
shall not be deemed to fall within the foregoing exclusions merely because
individual features are published or known to the general public or in the
rightful possession of the receiving Party unless the combination itself are
published or known to the general public or are in the rightful possession of
the receiving Party.

11.4.Permitted Disclosures.  The obligations of confidentiality and non-use set
forth in Section 11.1 shall not apply to the extent that the receiving Party is
required to disclose Know-How pursuant to (i) an order of a court of competent
jurisdiction, (ii) Applicable Law, (iii) regulations or rules of a securities
exchange, (iv) requirement of a governmental agency for purposes of obtaining
approval to test or market Licensed Product, (v) subject to the terms of
Section 11.1, disclosure of Confidential Information to a patent office for the
purposes of filing Patent Rights, or (vi) the exercise by each Party of its
rights granted to it under this Agreement or its retained rights; provided that,
to the extent allowed under Applicable Law, (a) in the case of (i) through (iv),
the receiving Party shall provide prior written notice thereof to the disclosing
Party and sufficient opportunity for the disclosing Party to review and comment
on such required disclosure and request confidential treatment thereof or a
protective order therefor, and (b) in the case of (vi), such disclosure is made
under confidentiality obligations and restrictions on use comparable to those
set forth in this Article 11.

11.5.Return of Confidential Information.  Each Party shall return or destroy, at
the other Party’s instruction, all Confidential Information of the other Party
in its possession upon expiration or termination of this Agreement, or destroy
such Confidential Information, at the disclosing Party’s election and written
request.  The receiving Party shall provide a written confirmation of such
destruction within thirty (30) days of such destruction; provided, however, that
the foregoing shall not apply to any Confidential Information that is necessary
to allow such Party to perform its obligations or exercise any of its rights
that expressly survive the termination or expiration of this Agreement.

11.6.Public Disclosure.  The Parties agree that the initial public announcement
of the execution of this Agreement shall be in the form of the press release
attached to this Agreement as Exhibit E. Thereafter, during the Term, each Party
shall submit to the other Party for review and approval all proposed press
releases and other publications and public presentations relating to the
Licensor Technology, Licensed Products or this Agreement that have not been
previously disclosed.  Each Party shall provide copies of any such publications
and presentations issued by such Party to the other Party within fifteen (15)
business days after such release.

11.7.Attorney-Client Privilege.  Neither Party is waiving, nor will be deemed to
have waived or diminished, any of its attorney work product protections,
attorney-client privileges or similar protections and privileges recognized
under the Applicable Law of any jurisdiction as a result of disclosing
information pursuant to this Agreement, or any of its Confidential Information
(including Confidential Information related to pending

28

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

--------------------------------------------------------------------------------

CONFIDENTIAL TREATMENT REQUESTED

 

or threatened litigation) to the receiving Party, regardless of whether the
disclosing Party has asserted, or is or may be entitled to assert, such
privileges and protections.  The Parties may become joint defendants in
proceedings to which the information covered by such protections and privileges
relates and may determine that they share a common legal interest in disclosure
between them that is subject to such privileges and protections, and in such
event, may enter into a joint defense agreement setting forth, among other
things, the foregoing principles but are not obligated to do so.

12.

INDEMNITIES; LIABILITY; INSURANCE.  

12.1.  Indemnification by Licensee.  Licensee shall indemnify, defend, and hold
harmless Licensor and its employees, directors, officers and agents, and their
respective successors, heirs and permitted assigns and representatives (the
“Licensor Indemnitees”), from and against any and all Third Party damages,
losses, liabilities, costs and expenses (including without limitation reasonable
legal expenses, costs of litigation, and reasonable attorney’s fees) and
judgments, whether for money or equitable relief, of any kind, incurred or
alleged by such Third Party (“Losses and Claims”) in a suit, action or
proceeding brought against any Licensor Indemnitees to the extent arising out of
or relating to: (i) Development, Commercialization, and those manufacturing
standards and specifications of Licensed Products that are instructed by
Licensee to Licensor in writing (“Licensee Standards”), by or on behalf of
Licensee or its Sublicensees, including Losses and Claims based upon product
liability, except to the extent reasonably attributable to any negligence,
recklessness, willful misconduct, or breach of this Agreement by any Licensor
Indemnitee; and (ii) the gross negligence, recklessness, or wrongful intentional
acts or omissions of Licensee.

12.2.Indemnification by Licensor.  Licensor shall defend, indemnify, and hold
harmless Licensee and its employees, directors, officers and agents, and their
respective successors, heirs and assigns and representatives (the “Licensee
Indemnitees”) from and against all Losses and Claims in a suit, action or
proceeding brought against any Licensee Indemnitees to the extent arising out of
or relating to: (i) the Development or Manufacture (except for Licensee
Standards) of Licensed Products by or on behalf of Licensor, including Losses
and Claims based upon product liability, except to the extent reasonably
attributable to any negligence, recklessness, willful misconduct, or breach of
this Agreement by any Licensee Indemnitee; and (ii) the gross negligence,
recklessness, or wrongful intentional acts or omissions of Licensor.

12.3.Indemnification Procedure.  Each Party, if seeking indemnification under
this Article 12 (the “Indemnitee”), shall give prompt written notice of the
claim to the other Party (the “Indemnitor”); provided, however, that any failure
or delay in providing such notice will not relieve the Indemnitor of its
indemnification obligation, except to the extent it is actually prejudiced by
such failure or delay.  Each Party shall furnish promptly to the other Party,
copies of all papers and official documents received in respect of any Losses
and Claims.  The Indemnitee shall cooperate as requested by the Indemnitor in
the defense against any Losses and Claims.  The Indemnitor shall have the right
to assume and control the defense of the indemnification claim at its own
expense with counsel selected by the Indemnitor and reasonably acceptable to the
Indemnitee; provided, however, that an Indemnitee shall have the right to retain
its own counsel, with the fees and expenses to be paid by the Indemnitee, if
representation of such Indemnitee by the counsel retained by the Indemnitor
would be inappropriate due to actual or potential conflict of interest between
such Indemnitee and any other party represented by such counsel in such
proceedings.  If the Indemnitor does not assume the defense of the
indemnification claim as described in this Section 12.3, the Indemnitee may
defend the indemnification claim but shall have no obligation to do so.  The
Indemnitee shall not settle or compromise the indemnification claim without the
prior written consent of the Indemnitor, and the Indemnitor shall not settle or
compromise the indemnification claim in any manner which would have an adverse
effect on the Indemnitee’s interests (including any rights under this Agreement
or the scope or enforceability of any Patent Rights or Confidential Information
or other rights licensed to Licensee by Licensor hereunder), without the prior
written consent of the Indemnitee, which consent, in each case (by Indemnitor or
Indemnitee), shall not be unreasonably withheld.  The Indemnitee shall
reasonably cooperate with the Indemnitor at the Indemnitor’s expense and shall
make available to the Indemnitor all pertinent information under the control of
the Indemnitee, which information shall be subject to Article 11.  The
Indemnitor shall not be liable for any settlement or other disposition of Losses
and

29

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

Claims by the Indemnitee which is reached without the written consent of the
Indemnitor, which consent shall not be unreasonably withheld.

12.4.Insurance.  Each Party shall procure and maintain insurance, including
commercial general liability insurance, having product and completed operations
coverage adequate to cover its obligations hereunder and consistent with normal
business practices of prudent companies similarly situated at all times during
which any Development, Manufacture or Commercialization of Licensed Product is
conducted by such Party pursuant to this Agreement and for a five (5) year
period thereafter.

12.5.Exclusion of Damages.  WITHOUT LIMITING THE PARTIES’ OBLIGATIONS AND
LIABILITIES UNDER THIS ARTICLE 12, AND EXCEPT FOR DAMAGES CAUSED BY A BREACH OF
ARTICLE 11, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR LOST PROFITS OR
FOR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES
ARISING OUT OF THIS AGREEMENT OR WITH RESPECT TO A PARTY’S PERFORMANCE OR
NON-PERFORMANCE HEREUNDER.

13.

TERM AND TERMINATION.  

13.1.Term; Expiration.  This Agreement shall not be effective, and shall not
come into force or effect, prior to the Effective Date.  The term of this
Agreement shall commence as of the Effective Date (if any) and, unless sooner
terminated as specifically provided in this Agreement, shall continue on a
country-by-country basis in the Territory until the later of (i) the expiration
of the last-to-expire Valid Claim within the Licensor Patent Rights; and (ii)
Licensee’s last commercial sale of a Licensed Product (the “Term”).

13.2.Termination for Breach.  If either Party believes the other is in breach of
one or more of its fundamental obligations under this Agreement, it may give
notice of such breach to the other Party, which Party shall have three (3)
months in which to remedy such breach.  If such alleged breach is not remedied
such three (3) months period, the non-breaching Party shall be entitled, in
addition to any other remedies available to it by law or in equity, to terminate
this Agreement in its entirety, or with respect to the Licensed Product or
Licensed Products or to a country or countries in the Territory (each, a
“Terminated Country”) to which such breach applies, upon further notice to the
other Party.

13.3.Termination upon Insolvency.  To the extent permitted under Applicable Law,
a non-affected Party may terminate this Agreement if, at any time, the other
Party shall file in any court or agency pursuant to any statute or regulation of
any state, country, administrative region, district, or jurisdiction, a petition
in bankruptcy or insolvency or for reorganization or for an arrangement or for
the appointment of a receiver or trustee of that Party or of its assets, or if
such other Party proposes a written agreement of composition or extension of its
debts, or if such other Party shall be served with an involuntary petition
against it, filed in any insolvency proceeding, and such petition shall not be
dismissed within one hundred twenty (120) days after the filing thereof, or if
such other Party shall propose or be a party to any dissolution or liquidation,
or if such other Party shall make an assignment for the benefit of its
creditors.  In the event of insolvency by Licensor, Licensor will use its best
efforts to make any Third-Party licenses required to produce the Licensed
Product available to Licensee.

13.4.Termination by Licensee.  Licensee may terminate this Agreement, in whole
or on a country-by-country basis, in each case for its convenience upon sixty
(60) days’ notice to Licensor.  Irrespective of the date of termination,
Licensee will be responsible for all payments due as of the termination, and all
payments incurred but not yet due under the Budget.

13.5.Termination by Licensor. Licensor may terminate this Agreement upon notice
to Licensee as follows:

(a)Failure to make the investments as required in Section 2.7.

30

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

(b)Failure to exercise Commercially Reasonable Efforts to complete all necessary
pre-clinical and clinical studies required to support and submit a PMA, where
such failure is not cured within sixty (60) days of Licensee’s receipt of a
notice.  

(c)Licensee’s failure to Commercialize a Licensed Product within six (6) months
of PMA approval;

(d)On a Royalty Country-by-Royalty Country basis,   Licensee’s failure to
Commercialize a Licensed Product in such Royalty Country within three (3) years
after the First Commercial Sale, unless (i) the Parties determine there is no
basis for filing any regulatory submission for Licensed Product in such Royalty
Country, or (ii) Licensee terminates its license in such Royalty Country; or
(iii) despite using Commercially Reasonable Efforts to seek Regulatory Approval
in such Royalty Country, the Regulatory Authority in such Royalty Country has
not granted Regulatory Approval;

(e)Licensee’s failure to conduct the clinical trials as set forth in the
Development Plan where such failure is not caused by events outside of
Licensee’s reasonable control, unless otherwise agreed by the JRC, or unless
cured within ninety (90) days of notice from Licensor;

(f)If a site institutional review board or the FDA determines that Ovaprene is a
non-significant risk device for the purpose of the first clinical trial in
humans and Licensee determines to conduct the first clinical trial in humans as
a non-significant risk device, and upon institutional review board clearance to
conduct the first clinical trial in humans Licensee does not enroll a patient in
a the first non-significant risk medical device study or clinical trial within
six (6) months of the Licensed Product production and release, based on Licensed
Product release specifications as determined by Licensee, of Licensed Product
supplies adequate for the conduct of the study, and where non-enrollment is not
caused by events outside of Licensee’s reasonable control;

(g)Licensee’s Development and/or Commercialization of a Competing Product.

(h)Violation of Export Control Laws as set forth in Section 2.6 (subject to any
cure periods provided therein).

(i)Failure to make any material payment required under Section 8 (Financial
Terms) after written notice from the Licensor identifying the unpaid amount and
requesting cure of the breach and referencing this Section 13.4; provided,
however, that Licensee’s withholding of disputed amounts in good faith as
permitted by and in accordance with Section 8.13 shall not constitute a failure
to make material payment as contemplated in this subsection (i).  Any such
termination shall become effective at the end of ninety (90) days with respect
to any material payment breach which has not been cured (including any interest
due) by Licensee.

13.6.Consequences of Termination.  Upon termination of this Agreement in
accordance with the provisions of this Article 13, either in its entirety, with
respect to one or more Licensed Product(s) (each such Licensed Product subject
to termination, a “Reverted Product”), then as of the effective date of such
termination the following will apply; provided, however, that where this
Agreement has been terminated with respect to a Reverted Product in a Terminated
Country (but not for the entire Territory), then the following will apply only
to such Reverted Product in such Terminated Country, as applicable:.  

(a)Regulatory.  Licensee shall: (A) transfer or assign, or cause to be
transferred or assigned, to Licensor or its designee (or to the extent transfer
or assignment is not permitted by Applicable Law, take all reasonable actions to
make available to Licensor or its designee) the full benefits (including the
right of reference, to the extent consistent with Applicable Law) of all
Regulatory Applications, Regulatory Approvals, Regulatory Materials, regulatory
dossiers, applications for Pricing Approval, and Pricing Approvals, for the
Licensed Product, whether held in the name of Licensee, its Affiliate or a
Sublicensee or subdistributor; (B) provide to Licensor or its designee originals
of all of the foregoing documents, as well as copies of all correspondence with
relevant Regulatory Authorities or Pricing Authorities pertaining to Licensed
Products; and (C) take such other

31

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

reasonable actions and execute such other instruments, assignments and documents
as may be necessary to effect, evidence, register and record the transfer,
assignment or other conveyance of rights under this Section to Licensor or its
designee, at Licensor’s cost and expense.  Notwithstanding the above, if
Licensee cannot complete (A) through (C) as set forth above due to Applicable
Law or contracts that prohibit the same, Licensee will take all reasonable
actions to make the above available to Licensor or Licensor’s designee, at
Licensor’s cost and expense.  

(b)Transition.  Licensee shall use Commercially Reasonable Efforts to cooperate
with Licensor or its designee to effect a smooth and orderly transition of
Commercialization activities with respect to the Licensed Product, at Licensor’s
cost and expense.

(c)  Inventory.  Licensor shall have the right, but not the obligation, to
purchase from Licensee any or all of the usable inventory of any Licensed
Product in Licensee’s or its Affiliates’ possession as of the date of
termination, at a purchase price equal to the price paid by Licensee for such
inventory.  Any packaging, transport, insurance and other costs relating to
delivery shall be borne by Licensor.  In addition, if Licensor does not purchase
the inventory, Licensee and its Affiliates and Sublicensees may sell, have sold
and offer to sell any inventory of Licensed Product in its or their possession
as of the termination date during the 180-day period beginning on the
termination date, or if applicable, complete performance of any and all bid and
tender agreements that had been entered into prior to the termination date.
Notwithstanding the above, Licensee may not sell off any inventory at a price
less than the fair market value.

(d)Promotional Materials.  Licensee shall, if requested by Licensor, deliver to
Licensor all Promotional Materials in Licensee’s or its Affiliates’ possession
(including electronic files of all Promotional Materials), and Licensor will
reimburse Licensee for its out-of-pocket cost for printing and delivering such
materials.

(e)Data.  Licensee shall transfer to Licensor any and all data exclusivity
rights that may be available under Applicable Law in a country for a Licensed
Product, including regulatory or statutory exclusivity periods.  .  

(f)Commercial Agreements.  Licensee shall promptly provide to Licensor a list of
all agreement in effect between Licensee and any distributors of Licensed
Products in the Territory, including the identity of and contact information for
each such Third Party, and will use Commercially Reasonable Efforts to
facilitate introductions between Licensee and such Third Parties, and Licensee
will disclose copies of such agreements to Licensor to the extent permitted by
the relevant Third Party (either through the agreement itself, or through the
Third Party’s written consent).  Licensee shall use Commercially Reasonable
Efforts to include in each such agreement a provision allowing Licensee to
assign such agreement to Licensee in the event of termination of this
Agreement.  

(g)Sublicenses.  The licenses granted by Licensor to Licensee under Section 2
will terminate; provided that any sublicenses granted in accordance with
Section 2.2 shall survive if the relevant Sublicensee agrees in writing to be
bound by the terms of this Agreement as such terms apply to such Sublicensee (in
which event, such Sublicensee will be deemed a direct licensee of Licensor);
provided, further, that any such Sublicensee shall only be responsible for any
payments that become due as a result solely of such Sublicensee’s activities
after the effective date of any such termination.  

(h)Return of Confidential Information.  Upon termination or expiration of this
Agreement, each Party shall promptly return to the other Party, or delete or
destroy, all relevant records and materials in such Party’s possession or
control containing Confidential Information of the other Party; provided,
however, that: (a) Licensor shall not be obligated to return, delete or destroy
any such materials that contain Confidential Information of Licensee that are
provided by Licensee to Licensor under this Section 13.6 to the extent necessary
or useful for the use, sale, offer for sale, import or Commercialization of
Licensed Product in the Territory; and (b) each Party may retain one copy of
such materials in its secure archives solely (i) for the purpose of

32

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

monitoring compliance with its obligations under this Agreement or (ii) as
necessary to comply with Applicable Laws.

13.7. INTENTIONALLY DELETED.

13.8.Surviving Obligations.  The following provisions shall survive the
termination or expiration of this Agreement, as applicable: Sections 5.5, 9.1,
13.3, 13.8,13.9, and Articles 11, 12, 14 and 15.  Without limiting the
foregoing, termination or expiration of this Agreement shall not relieve either
Party from obligations that are expressly indicated to survive termination of
this Agreement or relieve either Party of any obligation accruing prior to
termination.  Any termination of this Agreement or this Agreement shall be
without prejudice to the rights of either Party against the other accrued or
accruing under this Agreement or this Agreement, as applicable, prior to
expiration or termination, including the obligation to make any payments under
this Agreement.  Termination by a Party shall not be an exclusive remedy and all
other remedies will be available to the terminating Party, in equity and at law.

13.9.Rights in Bankruptcy.  All rights and licenses granted under or pursuant to
this Agreement by Licensor are, and are intended by the Parties to be, for
purposes of Section 365(n) of the United States Bankruptcy Code, licenses of
right to “intellectual property” as defined under Section 91 of the United
States Bankruptcy Code or any applicable foreign equivalent thereof.  As a
licensee of such rights under this Agreement, Licensee shall retain and may
fully exercise all of its rights and elections under the United States
Bankruptcy Code or any applicable foreign equivalent thereof.  The Parties
further agree that, in the event of the commencement of a bankruptcy proceeding
by or against Licensor under the United States Bankruptcy Code, Licensee shall
be entitled to a complete duplicate of (or complete access to, as appropriate)
any such intellectual property and all embodiments of such intellectual
property, which, if not already in the Licensee’s possession, shall be promptly
delivered to it (i) upon any such commencement of a bankruptcy proceeding upon
the Licensee’s written request therefor, unless Licensor elects to continue to
perform all of its obligations under this Agreement or (ii) if not delivered
under clause (i) above, following the rejection of this Agreement by or on
behalf of Licensor upon written request therefor by Licensee.  Further, each
Party agrees and acknowledges that all payments made pursuant to Article 8 of
this Agreement constitute “royalties” within the meaning of Section 365(n) of
the Bankruptcy Code.

14.

DISPUTE RESOLUTION.

14.1.Exclusive Dispute Resolution Mechanism.  If the Parties cannot reach
agreement through good faith negotiation to resolve any dispute, controversy or
claim arising out of or in connection with this Agreement and any other
agreement entered into pursuant hereto or in connection herewith (including
matters relating to any Party’s rights or obligations hereunder or regarding the
construction, interpretation, and enforceability of such agreements)
(collectively, “Disputes”), the procedures set forth in this Article 14 shall be
the exclusive mechanism for resolving any such Dispute between the Parties that
may arise from time to time except as set forth in Article 3 (or unless
otherwise set forth herein.

14.2.Resolution by Executive Officers.  Except as otherwise provided in this
Agreement, in the event of any Dispute, the Parties shall first attempt in good
faith to resolve such Dispute through negotiation and consultation between the
Parties.  In the event that such Dispute is not resolved on an informal basis
within thirty (30) days after one Party provides notice to the other Party of
such Dispute, either Party may, by written notice to the other Party, escalate
the good faith negotiation of such Dispute.  Such escalated Disputes shall be
referred to the Executive Officers, who shall have a period of sixty (60) days
to resolve the Dispute.  If any matter is not resolved under the foregoing
provisions, either Party may, at its sole discretion, seek resolution of such
Dispute in accordance with Section 14.3.

14.3.Arbitration.  

33

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

14.3.1.If the Parties are unable to resolve the Dispute informally, the Dispute
shall be settled by arbitration administered by the AAA before a single
arbitrator in accordance with the Commercial AAA rules then pertaining, except
where those rules conflict with this provision or any other provision of this
Agreement, in which case this provision or Agreement controls. The arbitrator
shall be an attorney with no less than ten (10) years’ experience in
intellectual property law and experience in the law related to the development
of medical devices or drugs.  The arbitration shall be heard in New York, New
York. Within thirty (30) days of initiating arbitration, the parties shall reach
agreement upon and thereafter follow procedures assuring to the extent possible
that the arbitration will be concluded and the award rendered within no more
than six (6) months from selection of the arbitrator. Failing such agreement or
an agreement on which AAA rules shall apply to the matter, the arbitrator will
design and the Parties will follow such procedures. CONSISTENT WITH THE
LIMITATIONS ON LIABILITY STATED IN THIS AGREEMENT, THE PARTIES AGREE NEITHER TO
REQUEST NOR SEEK TO ENFORCE ANY PUNITIVE, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL
DAMAGES FROM THE ARBITRATOR AND THE
ARBITRATOR  SHALL  NOT  BE  EMPOWERED  TO  GRANT  ANY  SUCH DAMAGES UNDER THIS
AGREEMENT, EXCEPT AS PERMITTED IN SECTION 12.4.  The arbitrator shall issue a
reasoned award.  The proceedings shall be confidential and the arbitrator shall
issue appropriate protective orders to safeguard both Parties’ Confidential
Information. The fees of the arbitrator shall be split equally between the
Parties, except that a Party shall be responsible for all of the arbitrator’s
fees if: (1) the arbitrator determines that such Party’s positions in the
dispute were frivolous or based in bad faith; (2) arbitration is required to
resolve a dispute under Section 8.7, and the dispute is resolved against such
Party; or (3) an arbitration is required to resolve a dispute as to whether
termination of this Agreement was proper under Section 13.5(a), and the dispute
is resolved against such Party. The prevailing Party in any such proceeding
shall be entitled to reimbursement of its reasonable attorneys’ fees and
arbitration expenses.

14.3.2.The Parties hereby consent to the jurisdiction of the any court in New
York, New York for the enforcement of these provisions and to the jurisdiction
of any court having jurisdiction for the entry of judgment on any award rendered
hereunder. Should such court for any reason lack jurisdiction, any court with
jurisdiction shall enforce this clause and enter judgment on any award.

14.3.3.Notwithstanding the provisions of this Section, each Party has the right
to pursue any provisional relief by court action, such as attachment,
preliminary injunction, replevin, etc. to avoid irreparable harm, maintain the
status quo, or preserve the subject matter of the arbitration, even though
mediation has not been commenced or completed. The Parties acknowledge that
monetary damages may be an inadequate remedy for any breach by a Party of its
nondisclosure obligations under this Agreement, and that the nonbreaching Party
shall be entitled to injunctive relief and specific performance to enforce the
breaching Party’s non-disclosure obligations, in addition to whatever remedies
the nonbreaching Party may be entitled to. In the case of either Party seeking
relief under this paragraph the Party seeking such relief shall be free to file
an action in the state or federal courts in New York, New York with all other
matters to be referred to the other dispute resolution procedures of this
Agreement.

15.

MISCELLANEOUS.  

15.1.Assignment.  Neither Party may assign this Agreement without prior written
consent from the other Party which shall not be unreasonably withheld,
conditioned or delayed, except that no such consent shall be required for either
Party to assign its rights or transfer its obligations to its Affiliate or in
connection with the sale or transfer of the majority of its stock or all or
substantially all of its assets or of the business to which this Agreement
relates, whether as part of a merger, sale of stock, sale of assets or other
change in control or operation of law.  This Agreement shall be binding upon and
inure to the successors and permitted assignees of the Parties and the name of a
Party appearing herein shall be deemed to include the names of such Party’s
successor’s and permitted assigns to the extent necessary to carry out the
intent of this Agreement.  Any assignment not in accordance with this
Section 15.1 shall be null and void.  Any agreement that provides for an
assignment of this Agreement shall be consistent with and subject to the terms
and conditions of this Agreement

34

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

and shall oblige the assignee to comply with all the terms of this
Agreement.  The Party assigning this Agreement shall promptly furnish the other
Party with a fully signed photocopy of all assignment agreements.

15.2.Notices.  Subject to the exception set out below in this Section 15.3, all
communications hereunder shall be in writing, electronic mail or by confirmed
fax, and shall be deemed to have been duly given (i) upon personal delivery,
(ii) upon delivery by a recognized commercial courier or registered mail,
provided, that notice which was sent in accordance with this Section 15.3 and
the addressee has refused to accept its delivery shall be deemed as duly
delivered on the day the annotation on refusal of delivery has been made by the
delivering party, or (iii) one (1) business day after confirmation of
transmission, if sent by electronic mail or fax, to the e-mail address or fax
number set forth below or such other address, e-mail address or fax number as
either Party may specify by notice sent in accordance with this Section 15.1:

 

If to Licensor, addressed to:

ADVA-Tec, Inc.

 

51 Technology Drive, Suite B

 

Anderson, SC 29625

Telephone:  864-506-0097

 

 

If to Licensee, addressed to:

DARÉ Bioscience, Inc.

 

Attn:  Chief Executive Officer

 

Notwithstanding any provision to the contrary, the delivery of any notice
relating to the exercise of the rights of the Parties to terminate the Agreement
as provided for in Article 14, including notices alleging the occurrence of an
event which may give rise to Party's right to terminate the Agreement, shall be
delivered by recognized commercial courier or registered mail.

15.3.Further Actions.  At the request of the other Party, each Party shall
execute, acknowledge, and deliver such further instruments, and to do all such
other acts, as may be necessary or appropriate in order to carry out the
purposes and intent of this Agreement.

15.4.Force Majeure.  Neither Party shall be liable or responsible to the other
Party for loss or damages, nor shall it have any right to terminate this
Agreement for any default or delay attributable to any event beyond its
reasonable control and without its fault or negligence, including acts of God,
acts of government (including injunctions and clinical holds), fire, flood,
earthquake, strike, lockout, labor dispute, breakdown of plant, shortage of
critical equipment, loss or unavailability of manufacturing facilities or
material, casualty or accident, civil commotion, acts of public enemies, acts of
terrorism or threat of terrorist acts, blockage or embargo and the like;
provided, however, that in each such case the Party affected shall use
commercially reasonable efforts to avoid such occurrence and to remedy it
promptly.  The Party affected shall give prompt notice of any such cause to the
other Party.  The Party giving such notice shall thereupon be excused from such
of its obligations hereunder as it is thereby disabled from performing for so
long as it is so disabled, and the Party receiving notice shall be similarly
excused from its respective obligations which it is thereby disabled from
performing; provided, however, that such affected Party commences and continues
to take reasonable and diligent actions to cure such cause.  

15.5.Amendment.  No amendment, modification, or supplement of any provision of
this Agreement shall be valid or effective unless made in writing and signed by
a duly authorized officer of each Party.

15.6.Waiver.  No provision of this Agreement shall be waived by any act,
omission or knowledge of a Party or its agents or employees except by an
instrument in writing expressly waiving such provision and signed by a duly
authorized officer of the waiving Party.

15.7.Construction.  The descriptive headings of this Agreement are for
convenience only, and shall be of no force or effect in construing or
interpreting any of the provisions of this Agreement.  Except where the context
otherwise requires, wherever used the singular shall include the plural, the
plural the singular, the use of

35

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

any gender shall be applicable to all genders.  The words “including”,
“includes” and “such as” are used in their non-limiting sense and have the same
meaning as “including without limitation” and “including but not limited
to”.  The term “or” shall be interpreted in the inclusive sense commonly
associated with the term “and/or.”  The word “will” shall be construed to have
the same meaning and effect as the word “shall.”  The language of this Agreement
shall be deemed to be the language mutually chosen by the Parties and no rule of
strict construction shall be applied against either Party.

15.8.Governing Law.  This Agreement shall be governed by and interpreted in
accordance with the laws of New York without regard to its or any other
jurisdiction’s choice of law rules that would result in the application of the
laws of any jurisdiction other than New York.  All questions concerning the
construction or effect of Patent Rights shall be decided in accordance with the
laws of the country in which the particular Patent Right concerned has been
filed or granted, as the case may be.

15.9.Severability.  Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under Applicable Law,
but if any provision of this Agreement is held to be prohibited by or invalid
under Applicable Law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.  In the event of such invalidity, the Parties shall seek to agree on
an alternative enforceable provision that preserves the original purpose of this
Agreement.

15.10.Entire Agreement.  This Agreement and the Exhibits attached hereto,
together with agreements the conclusion of which is contemplated herein upon
their conclusion, constitute and contain the complete, final and exclusive
understanding and agreement of the Parties, and cancel and supersede any and all
prior and contemporaneous negotiations, correspondence, understandings and
agreements, whether oral or written, between the Parties respecting the subject
matter hereof (and for the avoidance of doubt including the Non-Binding Term
Sheet for License Agreement dated August 12, 2015, as amended by the Parties on
November 11, 2015, which are hereby superseded and terminated).  Neither Party
shall be liable to nor bound by the other Party in any manner by any
representations, warranties, covenants or agreements except as specifically set
forth herein or therein.  Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the Parties and their respective
successors and assigns, any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided herein.

15.11.Counterparts; Electronic Delivery.  This Agreement may be executed
simultaneously in two or more counterparts, any of which need not contain the
signature of more than one Party but both such counterparts taken together shall
constitute one and the same agreement.  Signatures to this Agreement transmitted
by facsimile, by email in “portable document format” (“.pdf”), or by any other
electronic means intended to preserve the original graphic and pictorial
appearance of this Agreement shall have the same effect as physical delivery of
the paper document bearing original signature.

[Signature Page Follows]

36

Portions of this Exhibit, indicated by the mark “[***]”, were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

In Witness Whereof, the Parties have executed this Agreement as of the Signature
Date, and this Agreement shall be effective, if at all, as of the Effective
Date.

 

DARÉ BIOSCIENCE, INC.

ADVA-TEC, INC.

By:  /s/ Sabrina Martucci Johnson

By:   /s/ [***]

Name:   Sabrina Martucci Johnson

Name:   [***]

Title:   Chief Executive Officer

Date: March 19, 2017

Title:   President

Date: March 19, 2017

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

EXHIBIT A

 

Licensor Patent Rights

PMI REF

APP #

PATENT/REG

#

TITLE

DATE FILED

STATUS

SHA-52-CIP

10/935,808

8,399,013

PARTIALLY ABSORBABLE FIBER-REINFORCED COMPOSITES FOR CONTROLLED DRUG DELIVERY

9/8/2004

Issued

SHA-52

10/860,677

8,404,272

COMPOSITE ABSORBABLE/BIODEGRADABLE RINGS FOR CONTROLLED DRUG DELIVERY

6/3/2004

Issued

SHA-52-CON

13/766,907

9,084,717

PARTIALLY ABSORBABLE FIBER-REINFORCED COMPOSITES FOR CONTROLLED DRUG DELIVERY

02/14/2013

 

Issued

SHA-52-CON_II

13/771,201

8,992,968

COMPOSITE ABSORBABLE/BIODEGRADABLE RINGS FOR CONTROLLED DRUG DELIVERY

02/20/2013

Issued

SHA-52-CON-B

14/669,105

9,370,574

COMPOSITE ABSORBABLE/BIODEGRADABLE RINGS FOR CONTROLLED DRUG DELIVERY

03/26/2015

Issued

SHA-52-CIP-CON-B

14/707,453

9,308,168

COMPOSITE ABSORBABLE/BIODEGRADABLE RINGS FOR CONTROLLED DRUG DELIVERY

05/08/2015

Issued

SHA-52-CIP-EP

EP 04811105.8

EP1786356 B1

PARTIALLY ABSORBABLE FIBER-REINFORCED COMPOSITES FOR CONTROLLED DRUG DELIVERY

1/31/2007

Granted

SHA-52-EP

EP 04755812.7

EP1648338 B1

COMPOSITE ABSORBABLE/BIODEGRADABLE RINGS FOR CONTROLLED DRUG DELIVERY

6/22/2004

Granted

SHA-60-US

11/667,933

8,057,817

INTRAVAGINAL RINGED MESH DEVICE AND APPLICATOR THEREFOR

12/14/2005

Issued

SHA-60-CIP- DIV

13/272,351

8,506,988

MULTICOMPONENT BIOACTIVE INTRAVAGINAL RING

10/13/2011

Issued

SHA-60-CIP

11/974,140

8,062,658

MULTICOMPONENT BIOACTIVE INTRAVAGINAL RING

10/11/2007

Issued

SHA-60-EP

EP 05853990.9

EP1827328 B1

INTRAVAGINAL RINGED MESH DEVICE

6/6/2007

Granted

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

SHA-60-CIP-EP

EP 08836926.9

 

MULTICOMPONENT BIOACTIVE INTRAVAGINAL RING

10/9/2008

Pending

SHA-60-CIP-EP-HK

HK12108153.2

 

 

MULTICOMPONENT BIOACTIVE INTRAVAGINAL RING

08/20/2012

Pending

SHA-121-PCT-US

15/301,281

 

CONTRACEPTIVE AND RELATED DEVICE

04/01/2015

Pending

SHA-121-CA

 

2944436

 

 

CONTRACEPTIVE AND RELATED DEVICE

04/01/2015

Pending

SHA-121-CN

 

201580025821.3

 

 

CONTRACEPTIVE AND RELATED DEVICE

04/01/2015

Pending

SHA-121-EP

 

15774399.8

 

 

CONTRACEPTIVE AND RELATED DEVICE

04/01/2015

Pending

SHA-121-IN

 

201617036424

 

 

CONTRACEPTIVE AND RELATED DEVICE

04/01/2015

Pending

SHA-121-JP

 

2016-560390

 

 

CONTRACEPTIVE AND RELATED DEVICE

04/01/2015

Pending

Ovaprene®

78439767

3160046

INTRAVAGINAL RING FOR CONTRACEPTION

2006

Live

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

EXHIBIT B

 

Royalty Countries

 

[***]

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

EXHIBIT C

 

Licenses

 

[***]

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

EXHIBIT D

 

Development Plan

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

EXHIBIT E

 

Press Release

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

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CONFIDENTIAL TREATMENT REQUESTED

 

EXHIBIT F

 

Developing World Countries for which Royalties under section 8.4 are never
payable

 

Developing World Countries means [***] and [***] specifically:

[***]

 

 

 

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have
been filed separately with the Securities and Exchange Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.