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EXHIBIT 10.14
LETTER AGREEMENT
This Agreement, dated as of June 21, 1999, by and between WOMEN FIRST
HEALTHCARE, INC., a Delaware corporation ("WFHC"), and LABORATOIRES XXXXXXXX
X.X., a French corporation ("Xxxxxxxx").
1. Distribution and License Agreement. WFHC and Xxxxxxxx agree to
negotiate in good faith the final terms of and enter into a Distribution and
License Agreement (the "Definitive Agreement") under which Xxxxxxxx will grant
to WFHC an exclusive right (subject to certain exceptions) to market, use,
distribute and sell Product (as defined below) in the United States (including
its territories and possessions and Puerto Rico) (the "Territory") for a period
of seven years. "Product" means the Esclim(TM) estrogen transdermal system
consisting of a twice weekly patch in various strengths as currently approved by
the United States Food and Drug Administration ("FDA"), together with any new
dosages and a seven-day Esclim(TM) patch (if approved by the FDA), but excluding
any combination transdermal system. Under the Definitive Agreement, Xxxxxxxx
will xxxxx an exclusive license to WFHC to use the trademark Esclim(TM) in
connection with the Product in the Territory. The Definitive Agreement will
contain representations, warranties, covenants and indemnities of WFHC and
Xxxxxxxx customary in a transaction of this type. The Definitive Agreement may
be terminated (among other reasons) upon a "change of control" of the other
party; by Xxxxxxxx if WFHC does not raise $15 million by December 31, 1999; or
by WFHC if Product meeting its initial purchase order is not delivered as
provided therein.
2. Fees and Royalties Payable by WFHC. The Definitive Agreement will
provide that WFHC will pay Xxxxxxxx a non-refundable license fee of $1.45
million payable over a two-year period and, in the case of $700,000 of such fee,
subject to certain sales objectives
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being reached. In addition, the Definitive Agreement will provide that WFHC will
pay Xxxxxxxx a royalty quarterly during the term of the Definitive Agreement
based upon the net sales of Product in amounts to be established in the
Definitive Agreement.
3. Responsibilities of the Parties. The Definitive Agreement will
provide that Xxxxxxxx will be solely responsible for the manufacture of the
Product and for quality assurance, quality control and other aspects of
manufacturing the Product, except that after payment of certain license fees,
Xxxxxxxx will transfer to WFHC responsibility for the New Drug Application
("NDA") filed with the FDA with respect to the Product. WFHC will be solely
responsible for U.S. Customs clearance, sales, marketing, advertising,
distribution of the Product and for handling Product complaints and certain
other regulatory matters in the Territory.
4. Exclusive Dealing. WFHC and Xxxxxxxx agree that for a period of 30
days from the date of this Letter Agreement, they will each negotiate only with
the other party regarding a distribution and license arrangement for the Product
in the Territory, and neither party will directly or indirectly solicit,
encourage, assist, initiate discussions with or enter into any agreement with a
third party regarding the distribution or license of the Product (or any similar
product) in the United States.
5. Publicity. Xxxxxxxx understands and agrees that the terms of this
Letter Agreement may be disclosed by WFHC in a registration statement filed with
the Securities and Exchange Commission relating to WFHC's initial public
offering and, if so required, the Letter Agreement may be filed as an exhibit to
the registration statement. Any other public disclosure, press release or other
public statement regarding this Letter Agreement must be agreed to in advance by
both parties.
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6. Liquidated Damages. In consideration of Xxxxxxxx'x agreements
contained herein, and in the event that following good faith negotiation between
the parties the Definitive Agreement is not entered into within 30 days of the
date of this Letter Agreement (unless extended by Xxxxxxxx), as liquidated
damages and in lieu of any other costs or claims, WFHC will pay to Xxxxxxxx
$250,000 plus an amount equal to actual direct manufacturing costs of the
Product incurred by Xxxxxxxx (or its designee) from the date of the execution of
this Letter Agreement in anticipation of a Definitive Agreement. In such event,
the parties' obligations under this Letter Agreement will be terminated.
7. Binding Effect. This Letter Agreement sets forth legally binding
obligations upon the parties and is intended by the parties to obligate them to
negotiate in good faith the final terms of a Definitive Agreement. In addition,
the parties intend that the provisions relating to exclusive dealing, publicity
and liquidated damages are fully binding upon the parties. The parties
understand that time is of the essence and agree to use their best efforts to
execute the Definitive Agreement within thirty days.
8. Applicable Law; Arbitration. This Letter Agreement shall be governed
by and construed in accordance with the laws of the state of New York, without
regard to such state's conflicts of laws principles. Any disputes arising under
this Letter Agreement which cannot be resolved by the parties shall be finally
resolved by binding arbitration in New York, New York under the Rules of the
American Arbitration Association in an arbitration conducted by one arbitrator
appointed and acting in accordance with such rules.
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IN WITNESS WHEREOF, the parties have executed this Letter Agreement as
of the date first set above.
LABORATOIRES XXXXXXXX X.X. WOMEN FIRST HEALTHCARE, INC.,
a French corporation a Delaware corporation
By: /s/_____________________________ By: /s/_____________________________
Title:_____________________________ Title:______________________________
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