|
(a)
|
with
respect to MAYO means any corporation or other entity within the
same
“controlled group of corporations” as MAYO or its parent Mayo Foundation.
For purposes of this definition, the term “controlled group of
corporations” shall have the same definition as Section 1563 of the
Internal Revenue Code as of November 10, 1998, but shall include
corporations or other entities that, if not a stock corporation,
more than
50% of the board of directors or other governing body of such corporation
or other entity is controlled by a corporation within the controlled
group
of corporations of MAYO or Mayo Foundation. MAYO's Affiliates include,
but
are not limited to: Mayo Foundation; Mayo Collaborative Services;
Inc.,
Rochester Methodist Hospital; Saint Mary's Hospital; Mayo Clinic
Rochester; Mayo Clinic Jacksonville, Florida; St. Luke's Hospital,
Jacksonville, Florida; Mayo Clinic Arizona; Mayo Clinic Hospital,
Arizona;
Mayo Regional Practices, P.C., Decorah, Iowa; and Mayo Health System
West
Central Wisconsin and controlled or wholly-owned subsidiary corporations
of all of the above.
|
|
(b)
|
with
respect to NILE means any corporation or other person controlling,
controlled by or under common control with
NILE.
|
|
(c)
|
The
term “control” means the possession, directly or indirectly, of the power
to direct the management and policies of a corporation or person,
whether
through the ownership of voting securities, by contract or otherwise.
Control shall be deemed to exist in the case of the ownership, directly
or
indirectly, of 50% or more of the equity interests in any such
corporation.
|
|
1.02
|
“Change
of Control”
shall mean a merger, consolidation, acquisition or the transfer of
all, or
substantially all, of the business interests of NILE to which this
Agreement relates to which NILE is a party where the shareholders
of NILE
immediately prior to effective date of such merger or consolidation
beneficially own, immediately following the effective date of such
merger,
consolidation, acquisition or other transaction, securities representing
less than 50% of the combined voting power of the surviving corporation's
then outstanding voting securities.
|
|
1.03
|
“Commercialization”
means all steps that must be taken to put a Product on the market
in the
Territory after all necessary regulatory approvals have been obtained,
including, without limitation, the manufacturing, marketing, distribution
and/or sublicensing of such
Product.
|
|
1.04
|
“Development”
means the process of creating and assembling the data and files necessary
to obtain regulatory approval for a Product including, without limitation,
all preclinical and clinical research and trials on such
Product.
|
|
1.05
|
“Effective
Date”
means 20 January 2006.
|
|
1.06
|
“FDA”
means
the Food and Drug Administration within the Department of Health
and Human
Services of the United States.
|
|
1.07
|
“Field”
means all therapeutic indications.
|
|
1.08
|
“Government
Rights”
means rights, if any, of the United States Government to the Patents
under
Public Law 96-517 and Public Law 98-620, as amended or augmented
by other
similar laws.
|
|
1.09
|
“Improvements”
means any and all new developments relating solely to Products made
by or
arising out of the laboratories of Drs. John Burnett and Ondrej Lisy
during the three (3) year period following the Effective Date of
this
Agreement, including improved methods of manufacture and production
techniques, and shall include, but not be limited to, new or additional
analogs of the Product, therapeutic indications and developments
intended
to enhance the safety and efficacy of the
Product.
|
|
1.11
|
“License
Quarter” begins
on the Effective Date, and thereafter begins on the first day of
each
January, April, July, and October during the
Term.
|
|
1.12
|
“License
Year”
begins on the Effective Date, and thereafter begins on the first
day of
each January during the Term.
|
|
1.13
|
“Net
Sales”
means the amount invoiced by NILE, its Affiliates or Sublicensee
for sale
of a Product in the Territory to a third party, less the
following:
|
|
(a)
|
sales,
tariff duties, excise or use taxes directly imposed and with reference
to
particular sales;
|
|
(b)
|
credits
for defective or returned Products;
|
|
(c)
|
regular
trade and discount allowances; and
|
|
(d)
|
bad
debt deductions actually written off during the accounting
period;
|
|
1.14
|
“NDA”
shall mean a New Drug Application filed in the United States with
the
FDA.
|
|
1.15
|
“Patent
or Patents”
means the issued United States and foreign patents and the pending
applications set forth in Exhibit A, together with any and all
substitutions, extensions, divisionals, continuations,
continuations-in-part (to the extent that the subject matter is disclosed
and enabled in the parents), or foreign counterparts of such patent
applications and patents which issue thereon any where in the world,
including reexamined and reissued
patents.
|
|
1.16
|
“Phase
II”
means a human clinical trial, the principal purpose of which is to
evaluate the effectiveness of the Product for a particular indication
in
patients with the disease and to determine the common short-term
side
effects and risks associated with the Product as required in 21 C.F.R.
§312. A Phase II study shall be deemed to have been initiated when
the
first patient has been dosed with the drug
substance.
|
|
1.17
|
“Phase
III”
means expanded controlled and uncontrolled human clinical trials
performed
after Phase II evidence suggesting effectiveness of the Product has
been
obtained, and is intended to gather the additional information about
effectiveness and safety that is needed to evaluate the overall
benefit-risk relationship of the Product and to provide an adequate
basis
for physician labeling, as required in 21 C.F.R. §312. A Phase III study
shall also include any other human clinical trial intended to provide
the
substantial evidence of efficacy necessary to support the filing
of an
approvable NDA (such as a combined Phase II/Phase III study, or any
Phase III study in lieu of a Phase II study) (a “Pivotal Study”), whether
or not such study is a traditional Phase III study. A Phase III study
shall be deemed to have been initiated when the first patient has
been
dosed with the drug substance.
|
|
1.18
|
“Product”
means any method, service or product within the Field, the manufacture,
use, offer for sale or sale of which would infringe the Patent
rights.
|
|
1.19
|
“Reasonable
Commercial Efforts”
means efforts consistent with those used by comparable biotechnology
companies in the United States in research and development projects
for
therapeutic methods or compositions deemed to have commercial value
comparable to the Product.
|
|
1.20
|
“Reports”
means written summaries for each Product generally describing NILE's
efforts with respect to Development and Commercialization of the
Product,
including:
|
|
(a)
|
tests
and research completed;
|
|
(b)
|
any
filings made with any regulatory
authorities;
|
|
(c)
|
any
regulatory approvals received;
|
|
(d)
|
a
response to any comments that MAYO have made to any earlier Report,
including NILE's rationale for rejecting any suggestion contained
in such
comments;
|
|
(e)
|
reports
or minutes of any formal meetings with regulatory authorities, whether
convened in person or otherwise;
and
|
|
(f)
|
any
other major regulatory event, including but not limited to, placement
of a
“clinical hold” on a trial.
|
|
(a)
|
conduct
a reasonable research and commercial development program to develop
a
Product;
|
|
(b)
|
expend
reasonable amounts towards the research and development of such
Products;
|
|
(c)
|
diligently
pursue worldwide regulatory approval of a
Product;
|
|
(d)
|
commence
marketing of a Product within [***] following regulatory approval
in the
United States.
|
|
(e)
|
comply
with all applicable laws in performing its obligations under this
Agreement, including in connection with obtaining the regulatory
approvals; and
|
|
(f)
|
perform
in good faith all of its obligations under this
Agreement.
|
|
(a)
|
a
management team with relevant drug development experience;
and
|
|
(b)
|
a
Board of Directors initially consisting initially of up to five
members.
|
|
(a)
|
determine
whether NILE is using Reasonable Commercial Efforts to pursue the
regulatory approvals;
|
|
(b)
|
determine
whether NILE is using Reasonable Commercial Efforts to develop a
Development plan; and
|
|
(c)
|
determine
whether a Development plan, once developed and implemented, establishes
that NILE is using its Reasonable Commercial Efforts for Commercialization
of a Product.
|
|
(a)
|
becomes
part of the public domain through no action or fault of the Receiving
Party; or
|
|
(b)
|
was
in the Receiving Party's possession before disclosure by the Disclosing
Party, as demonstrated by written records, and was not acquired,
directly
or indirectly, from the Disclosing Party;
or
|
|
(c)
|
was
received by the Receiving Party from a third party having a legal
right to
transmit such information.
|
|
(a)
|
Upon
execution of this Agreement, NILE will pay MAYO an up-front payment
of
FIVE HUNDRED THOUSAND DOLLARS (US $500,000) as consideration for
entering
into the Agreement. This initial payment is nonrefundable and is
not an
advance or creditable against any royalties otherwise due under this
Agreement.
|
|
(b)
|
MAYO
shall be granted FIVE HUNDRED THOUSAND (500,000) shares of common
stock,
par value $0,001 per share (the “Common Stock”) representing ten percent
(10%) of the fully diluted stock of NILE as of the date of execution
of
this Agreement.
|
|
MILESTONE
|
MILESTONE
PAYMENT
|
|
|
Initiation
of the first company sponsored Phase II clinical trial of a
Product
|
[***]
|
|
|
Initiation
of the first U.S. company sponsored Phase III clinical trial of a
Product
|
[***]
|
|
|
Successful
completion of a U.S. company sponsored Phase III clinical trial of
a
Product
|
[***]
|
|
|
Acceptance
by the FDA of the first New Drug Application (“NDA”) for a
Product
|
[***]
|
|
|
Approval
by the FDA of the first NDA for a Product
|
[***]
|
|
|
Approval
by the FDA of an NDA for the first Product in each additional therapeutic
indication
|
[***]
|
|
|
Approval
by the FDA of an NDA for each additional Product
|
[***]
|
|
(a)
|
the
Product or use of the Patents by NILE and/or NILE's Sublicensees;
or
|
|
(b)
|
the
import of the Product into the Territory by NILE and/or NILE's
Sublicensees.
|
|
(a)
|
the
number of Products sold during the period covered by the written
report;
|
|
(b)
|
a
description of all deductions from gross receipts applied to determine
Net
Sales;
|
|
(c)
|
amount
of royalty due thereupon for the period covered by the written report;
and
|
|
(d)
|
exchange
rates used to calculate the royalties
due.
|
|
(a)
|
MAYO
has the full right and power to perform the obligations and grant
the
License set forth in this
Agreement;
|
|
(b)
|
There
are no outstanding agreements, assignments or encumbrances in existence
inconsistent with the provisions of this
Agreement.
|
|
(c)
|
Subject
to Section 3.02, MAYO owns or possesses all right, title and interest
in
and to the Patents free and clear of all liens, charges, encumbrances
or
other restrictions or limitations of any kind
whatsoever.
|
|
(d)
|
Subject
to Section 3.02, there are no licenses, options, restriction, liens,
rights of third parties, disputes, royalty obligations, proceedings
or
claims relating to, affecting, or limiting its rights or the rights
of
NILE under this Agreement, which imposes obligations upon MAYO or
gives
any rights to MAYO which, in either case, would adversely affect
the
rights of NILE or the obligations of MAYO under this
Agreement.
|
|
(e)
|
There
is no claim, pending or threatened, of infringement, interference
or
invalidity regarding, any part or all of the Patents and their use
as
contemplated in the underlying patent applications as presently drafted
or
as contemplated under this
Agreement.
|
|
(f)
|
MAYO
has provided a copy of all pending patens and applications for which
Dr.
Burnett or Dr. Lisy is an inventor.
|
|
(a)
|
a
warranty or representation by MAYO as to the validity or scope of
any of
the Patents; or
|
|
(b)
|
an
obligation to bring or to prosecute actions against third parties
for
infringement of the Patents; or
|
|
(c)
|
a
warranty or representation that the manufacture, use, sale, offer
for sale
or importation of any Product or the use or practice of any of the
Patents
are free from infringement or misappropriation of a third party's
intellectual property rights.
|
|
(a)
|
NILE's
obligation to supply reports covering the time period up to the date
of
termination or expiration;
|
|
(b)
|
MAYO'
right to receive payments, fees, and royalties accrued or accruable
from
payment at the time of any termination or expiration;
|
|
(c)
|
NILE's
obligation to maintain records, and MAYO' right to have those records
inspected;
|
|
(d)
|
any
cause of action or claim of MAYO, accrued or to accrue, because of
any
action or omission by NILE;
|
|
(e)
|
NILE's
obligations stated in Section 2.06 for data developed prior to termination
or expiration, Sections 3.04 and 3.06; the applicable sections of
Article
6; Sections 7.06, 7.08 and 7.09; and Article 10;
and
|
|
(f)
|
MAYO'
obligations stated in Section 3.04 and 10.01, and the applicable
sections
of Articles 6 and 10.
|
|
(a)
|
If
MAYO and NILE agree to institute suit jointly, then the suit will
be
brought in the names of both parties. NILE will exercise control
over such
action, provided, however, that MAYO may, if it so desires, be represented
by counsel of its own selection, and at its own
expense.
|
|
(b)
|
In
the absence of an agreement to institute a suit jointly, MAYO may
institute suit and, at its option, join NILE as a plaintiff. MAYO
will
bear the entire cost of such litigation, including attorneys' fees.
NILE
will cooperate reasonably with MAYO, except financially, in such
litigation. MAYO will not settle or enter into a voluntary disposition
of
the action without NILE's prior written
consent.
|
|
(c)
|
In
the absence of an agreement to institute a suit jointly, and if MAYO
determines not to institute a suit, as provided in paragraph (b)
of this
Section 9.02, then NILE may institute suit and, at its option, join
MAYO
if MAYO is a necessary party to the litigation. NILE will bear the
entire
cost of such litigation, including attorneys' fees. MAYO will cooperate
reasonably with NILE, except financially, in such litigation NILE
will not
settle or enter into a voluntary disposition of the action without
MAYO's
prior written consent.
|
|
(d)
|
Absent
an agreement to the contrary, any costs under (a) above will be borne
equally by the Parties and any recoveries will be shared in proportion
to
the economic damages suffered by each Party. Otherwise, each Party
will
bear its own expenses and any recovery will be applied as
follows:
|
|
(i)
|
first,
to reimburse the Party bringing the
action;
|
|
(ii)
|
second,
to reimburse the expenses of the other Party in connection with such
action; and
|
|
(iii)
|
third,
[***] percent ([***]%) to MAYO and [***] percent ([***]%) to
NILE.
|
|
(e)
|
If
either Party institutes a suit under this Section 9.02 and then decides
to
abandon the suit, it will first provide timely written notice to
the other
Party of its intention to abandon the suit, and the other Party,
if it
wishes, may continue prosecution of such suit, provided, however,
that the
sharing of expenses and of any recovery in such suit will be agreed-upon
separately by the Parties.
|
|
200
First Street SW
|
||
|
Rochester,
Minnesota 55905-0001
|
||
|
Attn:
|
Susan
L. Stoddard, Ph.D.
|
COPY
TO
|
|
Office
of Technology Commercialization
|
Mayo
Legal
|
|
|
Mayo
Medical Ventures
|
Attn:
General Counsel
|
|
|
Telephone
|
:507-284-8878
|
Telephone:
507-284-2650
|
|
Facsimile:
|
507-284-5410
|
Facsimile:
507-284-0929
|
|
Email:
|
sstoddard@mayo.edu
|
|
|
Nile
Pharmaceuticals, Inc.
689
Fifth Avenue, 14th Floor
New
York New York
Attn:
David Tanen
Telephone:
212-871-7900
Facsimile:
212-871-7901
Email:
dmt@tworiver.com
|
|
/s/
Steven P. Vannurden
|
1/18/06
|
|
NAME:
STEVEN P. VANNURDEN
TITLE:
ASSISTANT TREASURER
|
DATE
|
|
READ,
UNDERSTOOD AND AGREED:
/s/
John C. Burnett
|
1/18/06
|
|
JOHN
C. BURNETT, M.D.
|
DATE
|
| /s/ Ondrej Lisy | 1/18/06 |
|
ONDREJ
LISY, M.D., PH.D.
|
DATE
|
|
NILE
PHARMACEUTICALS, INC:
|
|
| /s/ Joshua A. Kazam | 1/18/06 |
|
NAME: Joshua A. Kazam
TITLE:
President
|
DATE
|