Exclusive License And Distribution Agreement

Exhibit 10.20







EXCLUSIVE LICENSE AND DISTRIBUTION AGREEMENT FOR RECTOGESIC99





BETWEEN





STRAKAN INTERNATIONAL LIMITED





AND





CELLEGY PHARMACEUTICALS, INC.







CONFIDENTIAL










[*] designates portions of this document that have been omitted pursuant to a request for confidential treatment filed seperately with the Commission







Confidential










TABLE OF CONTENTS



ARTICLE 1 DEFINITIONS

Affiliates
Agreement
Approvals
Baseline Price
Cellegy Information
Cellegy Marks
Cellegy Patents
Commercially Reasonable and Diligent Efforts
Competing Licensed Products
Development
Dollars or $
Effective Date
Euros or 80
Field
GMP
Initial Indication
Intellectual Property Rights
Know-How
Launch Date
Licensed Product
Licensee Product
Loss
Major European Countries
Manufacturer
Marketing Authorization
Minimum Sales
M.R.P
Net Sales
Party
Patent Rights
Relevant Regulatory Authority
Steering Committee
Sublicensee
Subsequent Indication
Technical Agreement
Territory
Third Party




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ARTICLE 2 GRANT OF LICENSE

2.1 Grant
2.2 Right to sub-license
2.3 Acceptance of Appointment; Sales Outside Territory
2.4 Competing Products
2.5 Right of First Negotiation Regarding Licensee Product in North America

ARTICLE 3 REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of Cellegy
3.2 Representations and Warranties of Licensee

ARTICLE 4 MANAGEMENT OF THE COLLABORATION

4.1 Steering Committee
4.2 Responsibilities of the Steering Committee
4.3 Voting; Deadlocks
4.4 Approval Plan; Marketing Plan

ARTICLE 5 REGULATORY MATTERS; APPROVALS
5.1 Regulatory Matters; Approvals
5.2 Reversion of Product Rights in Certain Circumstances
5.3 Cooperation Regarding Material Events
5.4 Copies of Documents
5.5 Approval Application in the United Kingdom
5.6 Meetings With Regulatory Authorities
5.7 Inspection
5.8 Clinical Trials
5.9 Cellegy Obligations
5.10 Approvals

ARTICLE 6 POST- APPROVAL RESPONSIBILITIES

6.1 Responsibility
6.2 Collaboration
6.3 Insurance

ARTICLE 7 INFORMATION; DATA; PHARMACOVIGILENCE

7.1 Clinical Data
7.2 Safety Data Base
7.3 Adverse Events
7.4 Product Complaints

ARTICLE 8 MILESTONE PAYMENTS; ROYALTIES AND RELATED PAYMENTS

8.1 Milestone Payments
8.2 Sales Milestones
8.3 Fee Conditions

ARTICLE 9 SALES REPORTS AND ACCOUNTING

9.1 Quarterly Reports; Records
9.2 Payment Due Dates
9.3 Right to Audit Licensee





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9.4 Disagreement with Auditor Findings

ARTICLE 10 MARKETING

10.1 General Promotional Duties
10.2 Marketing Effort; Minimum Expenditures for Commercialization
10.3 Licensee92s Failure to Commercialize in the Territory
10.4 Minimum Sales

ARTICLE 11 MANUFACTURING; SUPPLY OF LICENSED PRODUCT

11.1 Production and Supply of Product
11.2 Forecasts
11.3 Product Packaging and Labeling
11.4 Pricing
11.5 Cellegy Report
11.6 Timing of Firm Orders
11.7 Delivery
11.8 Title and Risk of Loss
11.9 Export Controls
11.10 Manufacture and Supply Warranty
11.11 Defective Product
11.12 Recalls

ARTICLE 12 PATENT RIGHTS

12.1 No Ownership By Licensee
12.2 New Cellegy Inventions/Improvements to the Licensed Product
12.3 Improvements by Licensee

ARTICLE 13 CELLEGY MARKS

13.1 Use of Cellegy Marks by Licensee
13.2 Acknowledgment of Ownership
13.3 Marking
13.4 Registration
13.5 Termination of Use
13.6 Trademarks

ARTICLE 14 INFRINGEMENT; INDEMNIFICATION AND OTHER CLAIMS

14.1 Infringement of Intellectual Property Rights
14.2 Alleged Infringement of Third Party Intellectual Property Rights
14.3 Product Liability Claims
14.4 Notice from Licensee
14.5 Indemnification

ARTICLE 15 CONFIDENTIALITY

15.1 Treatment of Confidential Information
15.2 Right to Disclose
15.3 Release From Restrictions
15.4 Confidentiality of Agreement




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15.5 Return of Confidential Information
15.6 Previous Confidentiality Agreements

ARTICLE 16 TERM; TERMINATION

16.1 Term
16.2 Bilateral Termination Rights
16.3 Cellegy92s Right to Terminate
16.4 Licensee92s Right to Terminate
16.5 Rights Upon Termination or Expiration

ARTICLE 17 REGISTRATION OF LICENSE; LIMITATION OF LIABILITY

17.1 Registration
17.2 Limitation of Liability

ARTICLE 18 GENERAL PROVISIONS

18.1 Force Majeure
18.2 Further Assurances
18.3 Severability
18.4 Notices
18.5 Assignment
18.6 Amendment
18.7 Entire Agreement
18.8 Waiver
18.9 No Implied Licenses
18.10 Injunctions
18.11 Independent Contractors
18.12 No Third Party Beneficiaries
18.13 Governing Law
18.14 Resolution of Disputes
18.15 Headings
18.16 Counterparts
18.17 Late Payment
18.18 ProStrakan Group Limited Guarantee


SIGNATURES

EXHIBIT A LICENSED PRODUCT
EXHIBIT B COUNTRIES IN THE TERRITORY
EXHIBITC PATENT RIGHTS
EXHIBIT D CELLEGY MARKS
EXHIBIT E PROSTRAKAN GROUP GUARANTEE





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EXCLUSIVE LICENSE AND DISTRIBUTION AGREEMENT



THIS EXCLUSIVE LICENSE AND DISTRIBUTION LICENSE AGREEMENT (this " Agreement ") is made and entered into as of December 9, 2004 (the " Effective Date "), by and between Cellegy Pharmaceuticals, Inc., a Delaware corporation having its principal place of business at 349 Oyster Point Boulevard, San Francisco, California 94080, US (" Cellegy "), and Strakan International Limited , a company organized and existing under the laws of Bermuda with a branch office at Buckholm Mill, Galashiels, TD1 2HB, UK (" Licensee" ").





BACKGROUND



A. Cellegy owns or possesses certain intellectual property rights with respect to the Licensed Product (as hereinafter defined) and certain rights pertaining to Cellegy92s Marks (as hereinafter defined).



B. Licensee desires to obtain an exclusive license to certain rights to the Licensed Product under such intellectual property rights, and to Cellegy92s Marks within the Territory (as hereinafter defined) .



C. Cellegy is willing to grant an exclusive license to Licensee under such intellectual property rights, and is willing to grant an exclusive license to Cellegy92s Marks to Licensee, each within the Territory, all as more particularly described in, and subject to the terms and conditions of, this Agreement.



AGREEMENT



NOW THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set forth and other good and valuable consideration, the receipt of which is hereby acknowledged, the Parties (as hereinafter defined) mutually agree as follows:



ARTICLE 1
DEFINITIONS





As used in this Agreement, the following terms, whether used in the singular or the plural, shall have the following meanings:



" Affiliates " shall mean, with respect to any party, any person, which, directly or indirectly, is controlled by, controls or is under common control with such party. For purposes of this definition, the term control (including with correlative meanings, the terms controlled by and under common control with) means having the power, whether held directly or indirectly and by whatever means (and whether or not enforceable at law or in equity) to:



(i) exercise or control the right to vote attached to 50% or more of the issued shares in the party;



(ii) dispose of or exercise a right of disposal in respect of 50% or more of the issued voting shares in the party;



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(iii) appoint one half or more of the number of directors to the board of the party; or



(iv) determine substantially the conduct of the party92s business activities.



" Agreement " means this Exclusive License Agreement.



" Approvals " are registration approvals, registrations or authorizations provided by the Relevant Regulatory Authority in the Territory for the importation, storage, Development, promotion, marketing, distribution or sale of the Licensed Product, but excluding any pricing approvals that may be required by any Relevant Regulatory Authority of a country within the Territory.



" Baseline Price " has the meaning set forth in Section 11.4



" Cellegy Information " means the technical and clinical information concerning the Licensed Product that is developed by Cellegy and that is included in the new drug application filed with the Relevant Regulatory Authority in the United Kingdom, and Cellegy92 s European common technical document format, and which may include, without limitation, data in support of indications, bioequivalency data and information, clinical data, pharmaco-toxicological data, analytical methods, stability and pharmaceutical data concerning the Licensed Product, and any other of Cellegy92s related supporting documentation or other information or materials of Cellegy in Cellegy92s possession from time to time that Cellegy may in its discretion from time to time develop before the date that all required Approvals are obtained and that may be necessary for, or useful in connection with obtaining and maintaining Approvals for the Licensed Product in the Territory.



" Cellegy Marks " means the trademarks, service marks and/or trade names owned by Cellegy or that Cellegy has the right to use in connection with the Licensed Product as set forth on Exhibit D hereto and as further described in Section 13.1, that are used by Licensee, its Affiliates or Sublicensees in connection with the importation, storage, Development, promotion, marketing, distribution and sale of the Licensed Product.



" Cellegy Patents " means the patents identified on Exhibit D hereto.



" Commercially Reasonable and Diligent Efforts " shall mean with respect to Development and commercialization of the Licensed Product, a Party92s reasonable efforts no less than those efforts used by the Party in its other development, commercialization or marketing projects with other technologies and products having comparable commercial potential.



" Competing Licensed Products " has the meaning set forth in Section 2.4.



" Development " (including variations such as "Develop" and the like) shall mean all appropriate measures, steps and the like that are necessary to prepare and compile dossiers appropriate for obtaining Approvals for the Licensed Product in the Territory and conducting clinical trials in the Territory (if required). As it relates to Cellegy, "Development" shall mean



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that Cellegy shall provide Licensee a copy of the dossier concerning the Licensed Product filed by Cellegy with the Relevant Regulatory Authority in the United Kingdom, and such other materials relating thereto or to obtaining other Approvals for the Licensed Product in the Territory as Cellegy may in its discretion from time to time develop before the date that all required Approvals are obtained.



" Dollars " or "$" means United States dollars.



" Effective Date " means the date set forth at the beginning of this Agreement.



" Euros " or "80" shall mean currency denominated in Euros.



" Field " shall mean the use of the Licensed Product for the treatment of the pain associated with chronic anal fissure and for the treatment of one (1) or more of the symptoms associated with or related to hemorrhoids.



" GMP " means good manufacturing practices in conformity with the regulations and regulatory interpretations of the Relevant Regulatory Authorities in each country in the Territory, including without limitation EU cGMP such regulations covering good manufacturing practices set forth in the relevant legislation or guidelines and applicable to the Territory, as such regulations may be amended and interpreted by the Relevant Regulatory Authorities from time to time.



"Initial Indication" means the treatment of the pain associated with chronic anal fissure.





" Intellectual Property Rights " means all rights and interests, vested or arising out of any industrial or intellectual property, whether protected at common law or under statute, which includes (without limitation) the Patent Rights, Trade Marks and Know-How and any rights and interests in inventions (both patentable and unpatentable), patents, copyrights, moral rights, designs (whether registered or unregistered), trade marks (whether registered or unregistered), trade secrets, goodwill, samples, materials, data, , results and Confidential Information.



" Know-How " means all data, information, methods, procedures, processes and materials, which is or comes to be possessed, acquired, licensed or owned by Cellegy as of the Effective Date and from time to time thereafter of this Agreement, to the extent that such data, information, methods, procedures, processes and materials specifically relates to the manufacture, development, testing or use of the Licensed Product, including but not limited to, biological, chemical, biochemical, toxicological, pharmacological, metabolic, formulation, clinical, analytical and stability information and data (other than such Know-How which is the subject of a patent or of a provisional or filed patent application), and for which Cellegy has the right to license, disclose or provide to Licensee.



" Launch Date " means following Approval the date upon which the Licensed Product is first commercially offered for sale in a country in the Territory, determined on a country by country basis.



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" Licensed Product " means the pharmaceutical product known as Rectogesic99 ointment 96 a 0.4% nitroglycerin ointment for the treatment of pain associated with chronic anal fissure and, if Approvals are obtained, for the treatment of one or more of the symptoms associated with or related to hemorrhoids, in the pharmaceutical presentation described in Exhibit A .



" Licensee Product " means one (1) of either (i) Licensee92s orally delivered estradiol glucoside product, which is currently in Phase 1 clinical studies, or, at Cellegy92s option if it elects to accept such product in lieu of the product specified in the preceding clause "(i)", (ii) any future product, product candidate or potential product developed or acquired by Licensee in the therapeutic area of gastroenterology.



" Loss " means any and all loss, liability, damage, fee, cost, (including without limitation actual reasonable court costs and reasonable attorneys92 fees regardless of outcome) expense, suit, claim, demand, judgment and prosecution.



" Major European Countries " shall mean France, Germany, Italy, Spain and the United Kingdom.



"Manufacturer" means Cellegy92s nominated Third Party manufacturer of the Licensed Product.



"Marketing Authorization" means any approval (including any applicable pricing and governmental reimbursement approvals) in Licensee92s name required to Develop, market and sell the Licensed Product in a particular country in the Territory.



" Minimum Sales " means agreed targets for unit sales of Licensed Product in the Territory, as determined in accordance with Section 10.4.



"M.R.P" means the mutual recognition procedure as defined in Article 28 of European Directive 2001/83/EC.



" Net Sales " means the gross proceeds from sales of the Licensed Product that is due, or otherwise received by, Licensee, or its Affiliates or its Sublicensees from Third Party customers for such Licensed Product, less:



(i) reasonable credited allowances actually granted to such Third Party customers for spoiled, damaged, rejected, recalled, outdated or returned Licensed Product,



(ii) the amounts of reasonable trade and cash discounts actually allowed, to the extent such trade and cash discounts are specifically allowed on account of the purchase of such Licensed Product,



(iii) sales taxes, excise taxes, use taxes and import/export duties and any other government charges (other than taxes on income) actually due or incurred or paid by Licensee, or its Affiliates or Sublicensees, in connection with the sales of the Licensed Product to any Third Party, and



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(iv) reasonable allowances, adjustments, reimbursements, discounts, chargebacks and rebates actually granted to Third Parties, including, but not limited to, rebates given to health care organizations or other Third Parties, and any bona fide payment made in respect of any sales of Licensed Product to any governmental or quasi-governmental body or agency, whether during the actual Sales Period or not.





"Party" means Cellegy or Licensee and Parties shall mean both Cellegy and Licensee.



" Patent Rights " means (i) the patents and patent applications listed in Exhibit C hereto and any patents and patent applications existing as of the Effective Date; (ii) any patent or patent application hereafter which is acquired by Cellegy or under which Cellegy becomes licensed and with the right to sublicense to Licensee, during the term of this Agreement, in each case of (i) and (ii) above relating to the Licensed Product, its manufacture, use or sale, including methods of use and screening or processes that use the Licensed Product; (iii) any divisionals, continuations and continuations-in-part defined in (i) or (ii); (iv) any extension, renewal or reissue or patent identified in any reissue or re-examination of any patent or patent application identified in (i) through (iv), in each case, to the extent that such items relate to the Licensed Product. Such items set forth in sub-items (i) through (iv) will be identified and added by the Parties to Exhibit C from time to time during the term of this Agreement.



" Relevant Regulatory Authority ", in relation to a country or region in the Territory, means the governmental authority, regulating the use, importation, storage, Development, promotion, marketing, distribution or sale of therapeutic substances and the grant of Approvals in such country or region.



" Steering Committee " means the Steering Committee, as described in Article 4 of this Agreement.



" Sublicensee " means any person to whom Licensee sublicenses the rights, or any portion thereof, granted by Cellegy to Licensee pursuant to Section 2.1 hereof.



" Subsequent Indication " means the treatment of one (1) or more of the symptoms associated with or related to hemorrhoids.





" Technical Agreement " means the agreement between Cellegy and any Manufacturer defining the roles and responsibilities for all parties in relation to, inter alia, (i) manufacture and supply of the Licensed Product to GMP; and (ii) regarding regulatory, safety and pharmacovigilence issues, as separately provided by Cellegy to Licensee as of the date of this Agreement.



" Territory " means the countries listed on Exhibit B hereto.



" Third Party " means any party other than Cellegy or Licensee, or Licensee92s Affiliates or Sublicensees.



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ARTICLE 2
GRANT OF LICENSE





2.1 Grant . Cellegy hereby grants to Licensee an exclusive license, with a right to sublicense as set forth herein, under all of Cellegy92s Intellectual Property Rights to import, store, Develop, have Developed (through agreements with contract research organizations or similar Third Parties, performing work on behalf of and for the benefit of Licensee), promote, market, distribute, offer for sale, and sell the Licensed Product in the Field within the Territory, and to use Cellegy92s Intellectual Property Rights in connection with the importation, storage, Development, promotion, marketing, distribution and sale of Licensed Product in the Field within the Territory and obtaining any Approvals hereunder. Licensee92s rights to the Licensed Product and the Intellectual Property Rights are limited to those expressly granted, and all others are reserved to Cellegy.



2.2 Right to sub-license . Subject to Section&nb sp;2.5 below, Licensee may sub-license any of its rights or obligations under this Agreement, directly or indirectly, in whole or in part:



(a) to Third Parties approved by Cellegy in writing, which approval will not be unreasonably withheld and delayed; and



(b) to any of its Affiliates that are engaged primarily in the business of importation, storage, Development, promotion, marketing, distribution and sale of pharmaceutical products, as Licensee sees fit.





Any such sublicense shall not relieve Licensee of any of its obligations hereunder, and Licensee shall remain responsible and liable for compliance by any such Third Party, Affiliate or Sublicensee with this Agreement, all relevant laws, regulations and requirements relating to the importation, distribution, marketing, promotion and sale of the Licensed Product in the Territory, and any acts or omissions by any such Third Party, Affiliate or Sublicensee that would constitute a breach of this Agreement if such sublicense had not been entered into and the actions or omissions were those of Licensee rather than the Third Party, Affiliate or Sublicensee. Any sublicense agreement shall contain terms and conditions that are not inconsistent with those of this Agreement.



2.3 Acceptance of Appointment; Sales Outside Territo ry .



(a) Licensee hereby accepts appointment as Cellegy92s exclusive licensee of Licensed Product in the Territory, as provided in Section 2.1 above.





(b) Licensee shall not, and Licensee shall use all Commercially Reasonable and Diligent Efforts to ensure that its officers, directors, employees, Affiliates, agents or representatives (collectively, " Agents ") shall not, without the prior written consent of Cellegy, directly or indirectly promote, sell, distribute or otherwise make available (for remuneration or gratuitously) Licensed Product outside the Territory or sell, distribute or otherwise make available (for remuneration or gratuitously) Licensed Product to persons outside the Territory for the purpose of resale or distribution (whether for remuneration or gratuitously) outside the



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[*] designates portions of this document that have been omitted pursuant to a request for confidential treatment filed seperately with the Commission





Territory. Without limiting the foregoing, Licensee agrees to use all Commercially Reasonable and Diligent Efforts to ensure compliance with the preceding sentence, including without limitation placing appropriate notices on the labels or Licensed Products; provided, however, that Licensee shall not be obligated to include any notices in a particular country in the Territory that would conflict with any relevant requirements of the Relevant Regulatory Authority for such country, and Licensee92s failure or refusal to include any such notices in such circumstances shall not constitute a breach of any provision of this Agreement.



2.4 Competing Products . During the term of this Agreement, or, if earlier, the maximum period of time permitted by applicable European Union regulations, Licensee shall not, and shall use all Commercially Reasonable and Diligent Efforts to ensure that its officers, directors, employees, Affiliates, Sublicensees, agents or representatives (collectively, " Agents ") shall not, directly or indirectly, promote, sell or distribute products within the Territory that are directly competitive in the treatment of anal fissures or hemorrhoids or such other indications for the Licensed Product as may be added to this Agreement (the " Competing Licensed Products "). If applicable law or applicable European Union regulations provide that the ...