CONFIDENTIAL TREATMENT REQUESTED
Exhibit
10.7
EXCLUSIVE LICENSE AGREEMENT
THIS
AGREEMENT (“Agreement”) by and among
DR.
CESARE CASAGRANDE, having
an address at Via Campogallo, 21/67, 20020 Arese, Milan, Italy
and NILE THERAPEUTICS, INC., a corporation organized and
existing under the laws of the State of Delaware, with
principal offices located at 2850 Telegraph Avenue, Suite 310,
Berkeley, CA 94705 (“LICENSEE”) is effective as of
the date of final execution below (“EFFECTIVE
DATE”).
ARTICLE 1
BACKGROUND
1.1.
In
the course of research conducted by the LICENSOR (as defined
below), the LICENSOR has produced certain inventions referred
to a medicinal product designated as 2-NTX-99 (the
“INVENTION”), which is owned by the LICENSOR and
described in the LICENSED PATENTS (as defined
below).
1.2.
The
LICENSOR and LICENSEE wish to have the INVENTION and
any LICENSED
PATENTS (as
defined below) developed and commercialized.
1.3.
LICENSEE
has represented to LICENSOR in order to induce LICENSOR to
enter into this Agreement that it is experienced in developing
and commercializing products similar to the LICENSED PRODUCTS
(as defined below) and that it shall act diligently to develop
and commercialize the LICENSED PRODUCTS for public use
throughout the LICENSED TERRITORY (as defined
below).
1.4.
The
LICENSOR is willing to grant a license to LICENSEE, subject to
the terms and conditions of this Agreement.
1.5.
In
consideration of these statements and the mutual
promises herein
made and exchanged, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the
LICENSOR and LICENSEE agree to the terms of this
Agreement.
ARTICLE 2
DEFINITIONS
The
following terms used in this Agreement shall be defined as set
forth below:
2.1.
“AFFILIATE”
shall mean any entity or person that directly or indirectly
controls, is controlled by or is under common control with
LICENSEE or a SUBLICENSEE as applicable. For purposes of this
definition, “control” means possession of the
power to direct the management of such entity or person,
whether through ownership of more than fifty percent (50%) of
voting securities, by contract or otherwise.
____________
1
Confidential treatment has been requested for certain portions of
this Exhibit. The confidential portions of this Exhibit have been
omitted and filed separately with the Securities and Exchange
Commission. Such portions have been marked with “***”
at the exact place where material has been
omitted.
2.2.
“CHANGE
OF CONTROL” shall mean a merger, consolidation,
acquisition or the transfer of all, or substantially all, of
the business interests of LICENSEE to which this Agreement
relates to which LICENSEE is a party where the shareholders of
LICENSEE immediately prior to effective date of such
transaction beneficially own, immediately following the
effective date of such transaction, securities representing
less than fifty percent (50%) of the combined voting power of
the surviving corporation’s then outstanding voting
securities.
2.3.
“COMMON
STOCK” shall mean the shares of common stock of the
LICNESEE, par value $0.001 per share.
2.4.
“CONFIDENTIAL
INFORMATION” shall mean all information disclosed by one
party to the other during the negotiation of or under this
Agreement in any manner, whether orally, visually or in
tangible form, that relates to LICENSED PATENTS, LICENSED
INFORMATION, IMPROVEMENT PROJECT or the Agreement itself,
unless such information is subject to an exception described
in Article 9.2
.
CONFIDENTIAL INFORMATION that is disclosed in tangible form
shall be marked “Confidential” at the time of
disclosure and CONFIDENTIAL INFORMATION that is disclosed
orally or visually shall be identified as confidential at the
time of disclosure and subsequently reduced to writing, marked
confidential and delivered to the other party within thirty
(30) days of such disclosure.
2.5.
“EARNED
ROYALTY” is defined in Article 7.1
.
2.6.
“EFFECTIVE
DATE” is defined in the introductory paragraph of this
Agreement.
2.7.
“EMEA”
shall mean the European Medicines Agency or successor
entity.
2.8.
“EUROPEAN
UNION” shall mean the European organisation of member
states first established by the Treaty of the European Union
in 1992 (otherwise known as the Maastricht Treaty) as it may
be constituted from time to time, which, as of the date of
this Agreement, consists of Austria, Belgium, Bulgaria,
Cyprus, Czech Republic, Denmark, Estonia, Finland, France,
Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania,
Luxembourg, Malta, The Netherlands, Poland, Portugal, Romania,
Slovakia, Slovenia, Spain, Sweden and the United
Kingdom.
2.9.
“FAIR
MARKET VALUE” shall mean the last sale price of the
COMMON STOCK on the trading day on which the value is being
determined or, in case no such reported sales take place on
such day, the average of the last reported bid and asked
prices of the COMMON STOCK on such day, in either case on the
principal national securities exchange on which the COMMON
STOCK is admitted to trading or listed, or if not listed or
admitted to trading on any such exchange, the representative
closing sale price of the COMMON STOCK as reported by the
National Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ"), or other similar organization if
NASDAQ is no longer reporting such information, or, if the
COMMON STOCK is not reported on NASDAQ, the per share sale
price for the COMMON STOCK in the over-the-counter market as
reported by the National Quotation Bureau or similar
organization, or if not so available, the fair market value of
the COMMON STOCK as determined by the price per share in the
most recent private financing round wherein (a) the total
shares in the financing represent no less than five percent
(5%) of the COMMON STOCK following such financing, and (b)
greater than fifty percent (50%) of the shares were purchased
by parties unaffiliated with LICENSEE management or
directors.
2.10.
“FDA”
shall mean the United States Food and Drug Administration or
successor entity.
2.11.
“FIELD”
shall mean all therapeutic uses in humans and
animals.
2.12.
“FIRST
SALE” shall mean the first commercial sale to a third
party of any LICENSED PRODUCT in the LICENSED TERRITORY (as
defined below).
2.13.
“IMPROVEMENT
PROJECT” shall mean any and all projects conceived by
the LICENSOR intended to find and/or develop any novel
intellectual property relating to the LICENSED PRODUCTS,
including, without limitation, improved methods of manufacture
and production techniques, new or additional analogs,
therapeutic indications and developments intended to enhance
the safety and efficacy, or broaden the intended use of the
LICENSED PRODUCTS.
2.14.
“IND”
shall mean an investigational new drug application filed with
the FDA prior to the commencement of human clinical trials in
the United States.
2.15.
“INVENTION”
is defined in Article 1.1
.
2.16.
“LICENSE”
refers to the license granted under Article 3.1
.
2.17.
“LICENSED
INFORMATION” shall mean all technical information and
data, whether or not patented, that is known , learned,
invented, or developed by the LICENSOR as of the EFFECTIVE
DATE, as demonstrated by the written records of the LICENSOR
to the extent that:
(a)
such
technical skills, information and data are useful for the use
or practice of the LICENSED PATENTS as permitted herein;
and
(b)
the
LICENSOR possess the right to license the use of such
information to LICENSEE for commercial purposes under the
terms of this Agreement.
2.18.
“LICENSED
PATENTS” shall mean the United States or foreign patent
application(s) and patents(s) listed in
Appendix A owned
or assigned to LICENSOR during the term of this Agreement, together
with any continuations, divisionals, and continuations-in-part, to
the extent the claims of any such patent or patent application are
directed to subject matter specifically described in the patent
applications listed on
Appendix A ;
any reissues, re-examinations, or extensions thereof, or
substitutes therefore; and the relevant international equivalents
of any of the foregoing.
Appendix A is
incorporated into this Agreement. LICENSED PATENTS shall also
include any results of the IMPROVEMENT PROJECTS added to the
LICENSE pursuant to Article 3.2
.
2.19.
“LICENSED
PRODUCTS” shall mean any product, apparatus, kit, or
component part thereof;
(a)
the
manufacture, use or sale of which without a license from
LICENSOR, would infringe a VALID CLAIM of a LICENSED
PATENT;
(b)
incorporates,
uses, or is derived from the LICENSED PATENTS; or
(c)
is
developed by using a process or composition which is covered
in whole or in part by a VALID CLAIM of a LICENSED
PATENT.
2.20.
“LICENSED
TERRITORY” shall mean the entire world.
2.21.
“MAJOR
MARKET COUNTRY” shall mean Canada, the United Kingdom,
France, Germany, Spain, Italy, or Japan.
2.22.
“LICENSOR”
shall mean Dr. Cesare Casagrande or any immediate family
member of Dr. Casagrande, or any trust, all of the
beneficiaries of which are such Dr. Casagrande or his
immediate family members, or the guardian, conservator, heir
or estate of Dr. Casagrande, or any corporation, partnership,
limited liability company or other entity all or substantially
all of the outstanding securities and other beneficial
interests of which are owned by Dr. Casagrande or his
immediate family members.
2.23.
“NDA”
shall mean a new drug application filed with the FDA to obtain
marketing approval for a LICENSED PRODUCT in the United
States.
2.24.
“NET
SALES” shall mean:
(a)
the
total gross receipts from
the
sale
,
leasing,
renting of
,
or otherwise making LICENSED
PRODUCTS available
by
the LICENSEE, SUBLICENSEES or AFFILIATES to THIRD PARTIES
(defined below) for
profit without sale or other dispositions, whether invoiced or
not, less the
following deductions, provided they actually pertain to the
disposition of LICENSED PRODUCTS and are separately
invoiced:
(i)
all
reasonable and customary discounts, returns, credits and
allowances on account of returns, bad debt deductions actually
written off during the calendar quarter in which sales
occurred, provided, however, that deductions taken for bad
debt shall not exceed in aggregate one percent (1.0%) of gross
sales of LICENSED PRODUCT during the calendar quarter;
(ii)
reasonable
and customary arms length negotiated commissions actually paid
to independent and unaffiliated third-party distributors and
third party sales agencies not to exceed in aggregate one and
one quarter percent (1.25%) per calendar quarter;
(iii)
reasonable
and customary outbound transportation and transportation
insurance, packaging (for shipping purposes only) and freight
charges; and
(iv)
reasonable
and customary duties, taxes (but not income taxes) and other
governmental charges levied on the sale, transportation or
delivery of LICENSED PRODUCTS, but not including income taxes
of the LICENSEE.
(b)
No
deductions shall be made for any other costs or expenses,
including but not limited to commissions to any person or
entity on LICENSEE’S, SUBLICENSEE'S or an
AFFILIATE’S payroll or for the cost of
collection.
(c)
Notwithstanding
any provision in this Agreement to the contrary, NET SALES
shall not include the gross invoice price for LICENSED
PRODUCTS sold to, or services performed using LICENSED
PRODUCTS for, any AFFILIATE unless such AFFILIATE is an
end-user of any LICENSED PRODUCT, in which case that
transaction shall be included in NET SALES at the average
selling price charged to a THIRD-PARTY (as defined below)
during the same quarter.
2.25.
“PHASE
I CLINICAL TRIAL” shall mean a human clinical trial, the
principal purpose of which is to determine toxicity,
absorption, metabolism and/or safe dosage range in patients
with the disease target being studied as required in 21 C.F.R.
§312(a).
2.26.
“PHASE
II CLINICAL TRIAL” shall mean a human clinical trial,
the principal purpose of which is to evaluate the
effectiveness of a drug for a particular indication in
patients with the disease and to determine the common
short-term side effects and risks associated with the drug as
required in 21 C.F.R. §312(b).
2.27.
“PHASE
III CLINICAL TRIAL” shall mean expanded controlled and
uncontrolled human clinical trials pursuant to a randomized
study with endpoints agreed upon by regulatory bodies for
regulatory approval performed after PHASE II CLINICAL TRIALS
evidence suggesting effectiveness of a LICENSED 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 a LICENSED
PRODUCT and to provide an adequate basis for physician
labeling, as required in 21 C.F.R. §312.
2.28.
“PMA”
shall mean an application for marketing authorization of a
LICENSED PRODUCT filed with the EMEA.
2.29.
“REASONABLE
COMMERCIAL EFFORTS” shall mean those efforts consistent
with those used by comparable companies in the United States
in research and development projects for therapeutic methods
or compositions deemed to have commercial value comparable to
the LICENSED PRODUCTS.
2.30.
“SUBLICENSING
ROYALTIES” shall mean royalty consideration received by
LICENSEE as a result of NET SALES of LICENSED PRODUCTS by a
SUBLICENSEE.
2.31.
“SUBLICENSEE”
shall mean any third party sublicensed by LICENSEE to make,
have made, use, sell, have sold, import or export any LICENSED
PRODUCT.
2.32.
“TERM”
is defined in Article 3.2
.
2.33.
“THIRD
PARTY(IES)” shall mean any person or entity that is not
party to this Agreement but does not include SUBLICENSEES or
any AFFILIATE of LICENSEE or any SUBLICENSEE under the terms
herein.
2.34.
“VALID
CLAIM” shall mean an issued claim of any unexpired
patent included among the PATENT RIGHTS, which has not been
held unenforceable, unpatentable or invalid by a decision of a
court or governmental body of competent jurisdiction,
unappealable or unappealed within the time allowed for appeal,
which has not been rendered unenforceable through disclaimer
or otherwise, and which has not been lost through an
interference proceeding or abandoned.
ARTICLE 3
LICENSE GRANT AND TERM
3.1.
Subject
to all the terms and conditions of this Agreement, the
LICENSOR hereby grants to LICENSEE an exclusive license to
practice under the LICENSED PATENTS and use the LICENSED
INFORMATION, with the right to grant sublicenses, to make,
have made, use, sell, have sold, offer to sell, import or
export LICENSED PRODUCTS within the FIELD in the LICENSED
TERRITORY (the “LICENSE”).
3.2.
LICENSOR
grants to LICENSEE a right of first refusal to financially
support any IMPROVEMENT PROJECT and to include the results of
any such IMPROVEMENT PROJECT under the terms of this Agreement
as LICENSED PATENTS or LICENSED INFORMATION
.
LICENSOR shall disclose any proposed IMPROVEMENT PROJECT to
LICENSEE in writing prior to disclosing to any THIRD PARTIES.
Following such written disclosure to LICENSEE, LICENSEE shall
have ninety (90) days to determine its interest in financially
supporting such IMPROVEMENT PROJECT. In the event that
LICENSEE desires to financially support the IMPROVEMENT
PROJECT, LICENSEE shall inform LICENSOR in writing and the
parties shall negotiate in good faith the terms and conditions
of a sponsored research agreement upon commercially reasonable
terms. In the event that LICENSEE determines not to
financially support such IMPROVEMENT PROJECT, or if the
parties are unable to agree upon commercial terms, then
LICENSOR shall be free to negotiate with a THIRD PARTY
relating to the funding of such IMPROVEMENT PROJECT, provided
however, that the LICENSOR may not enter into an agreement
with a THIRD PARTYon terms more favorable to such THIRD PARTY
than those proposed by LICENSOR to LICENSEE.
Nothing
in this Agreement shall be construed as a license, sublicense
or grant to such THIRD PARTY of rights to the LICENSED PATENTS
or LICENSED INFORMATION
,
or as an exception to the rights granted pursuant to
Section 3.1
of
this Agreement.
3.3.
Unless
terminated earlier as provided in ARTICLE
15 ,
the term of the LICENSE (the “TERM”) shall
commence on the EFFECTIVE DATE and shall automatically expire
on the later of:
(a)
the
date on which the last VALID CLAIM described in the LICENSED
PATENTS expires, lapses or is declared to be invalid by a
non-appealable decision of a court of competent jurisdiction;
or
(b)
twenty
(20) years after the EFFECTIVE DATE.
3.4.
Nothing
in this Agreement shall be construed to grant by implication,
estoppel or otherwise any licenses under patents of the
LICENSOR other than the LICENSED PATENTS. Except as expressly
provided in this Agreement, under no circumstances will the
LICENSEE, as a result of this Agreement, obtain any interest
in or any other right to any technology, know-how, patents,
patent applications, materials or other intellectual or
proprietary property of the LICENSOR. Subject to Article 14.1,
nothing in this Agreement shall be construed as preventing
LICENSOR from using the LICENSED PATENTS and the LICENSED
INFORMATION for academic research and non-commercial
purposes.
3.5.
The
LICENSE granted in Article 3.1
shall
automatically convert to a paid-up, non-exclusive license, on
a country-by-country basis, upon the expiration of the TERM as
described in Article 3.3
.
3.6.
Articles
2, 6.2(b), 9, 10.2, 13, 15, 16, 18, and 20 shall survive
expiration of this Agreement pursuant to Article 3.2 or
termination pursuant to ARTICLE 15.
ARTICLE 4
SUBLICENSES
4.1.
The
LICENSOR hereby grants to the LICENSEE the right to sublicense
its right to make, have made, use, sell, have sold, import or
export LICENSED PRODUCTS within the FIELD in the LICENSED
TERRITORY following the dosing of the first subject in a PHASE
I CLINICAL TRIAL of a LICENSED PRODUCT, provided this
Agreement is in effect and the LICENSEE is not in breach of
its obligations hereunder.
4.2.
Any
sublicense granted by LICENSEE shall comply with all the terms
of this LICENSE and shall include substantially the same
definitions and provisions set forth in the following Articles
of this Agreement ARTICLES 2, 3, 8, 10.2, 13, 16 and 18.
LICENSEE shall require any SUBLICENSEE to actively pursue the
achievement of a proof of concept in humans in U.S. and/or in
the EUROPEAN UNION. Any agreement between the LICENSEE and any
SUBLICENSEE (a “ SUBLICENSE
AGREEMENT ”)
shall expressly provide that the provisions of this Agreement
shall be directly enforceable against such SUBLICENSEE by the
LICENSOR. LICENSEE will promptly provide the LICENSOR with a
copy of each SUBLICENSE AGREEMENT no later than 30 days after
execution.
4.3.
The
LICENSEE agrees that it shall promptly:
(a)
provide
the LICENSOR with a copy of any amendments to any SUBLICENSE
AGREEMENT entered into by the LICENSEE under this Agreement
and to notify the LICENSOR of termination of any SUBLICENSE
AGREEMENT; and
(b)
deliver
copies of all reports provided to the LICENSEE by SUBLICENSEES
of a similar nature to those described in ARTICLE
10 ;
(c)
exert
its best efforts in order to cause the SUBLICENSEES to perform
the obligations provided for in the SUBLICENSE
AGREEMENTS.
ARTICLE 5
LICENSE FEE AND MILESTONE PAYMENTS
5.1.
The
LICENSEE shall pay to LICENSOR, on the EFFECTIVE DATE, a non
refundable license fee equal to [***].
5.2.
The LICENSEE shall also pay to LICENSOR on the EFFECTIVE
DATE
the amount of [***]
for
past patent expenses incurred by the LICENSOR
prior
to EFFECTIVE DATE as required under ARTICLE 11.
5.3.
The
LICENSEE shall pay the following one-time non-refundable
milestone payments (the “MILESTONE PAYMETS”) to
LICENSOR, whether accomplished by the LICENSEE, a SUBLICENSEE
or any of their respective AFFILIATES:
(a)
[***]
upon the dosing of the first subject in the first PHASE I
CLINICAL TRIAL of a LICENSED PRODUCT in the United States
conducted by the LICENSEE pursuant to a corporate sponsored
IND;
(b)
[***]
upon the dosing of the first subject in the first PHASE I
CLINICAL TRIAL (or its foreign equivalent) of a LICENSED
PRODUCT conducted by the LICENSEE in the EUROPEAN
UNION;
(c)
[***]
upon the dosing of the first patient in the first PHASE II
CLINICAL TRIAL of a LICENSED PRODUCT conducted by the LICENSEE
in the United States;
(d)
[***]
upon the dosing of the first subject in the first PHASE II
CLINICAL TRIAL (or its foreign equivalent) of a LICENSED
PRODUCT conducted by the LICENSEE in the EUROPEAN
UNION;
(e)
[***]
upon the dosing of the first patient in the first PHASE III
CLINICAL TRIAL of a LICENSED PRODUCT conducted by the LICENSEE
in the United States;
(f)
[***]
upon the dosing of the first subject in the first PHASE III
CLINICAL TRIAL (or its foreign equivalent) of a LICENSED
PRODUCT conducted by the LICENSEE in the EUROPEAN
UNION;
(g)
[***]
upon the approval by the FDA of the first NDA for a LICENSED
PRODUCT;
(h)
[***]
upon approval by the FDA of an NDA for a second human
therapeutic indication of the LICENSED PRODUCT described
in 5.3
(g)
;
(i)
[***]
upon the approval by the EMEA of the first PMA submitted by
the LICENSEE resulting in the granting of a marketing
authorization for a LICENSED PRODUCT;
(j)
[***]
upon the approval by the EMEA of the first PMA submitted by
the LICENSEE resulting in the granting of a marketing
authorization for a LICENSED PRODUCT for a second human
therapeutic indication than the one described in
5.3
(i)
;
(k)
[***]
upon receipt by the LICENSEE of marketing approval in Japan
for the first LICENSED PRODUCT;
(l)
[***]
following the first calendar year in which annual NET SALES of
LICENSED PRODUCTS equal Two Hundred Fifty Million Dollars
($250,000,000.00);
(m)
[***]
following the first calendar year in which annual NET SALES of
LICENSED PRODUCTS equal Five Hundred Million Dollars
($500,000,000.00); and
(n)
[***]
following the first calendar year in which annual NET SALES of
LICENSED PRODUCTS equal One Billion Dollars
($1,000,000,000.00).
5.4.
No
MILESTONE
PAYMENT shall
be paid more than once for any LICENSED PRODUCT. In the event
that the LICENSEE is permitted to advance the clinical
development by the FDA or EMEA without conducting one or more
activities described in Article 5.3
above,
then the LICENSEE shall pay to the LICENSOR all milestone
payments owed pursuant to Article 5.3
that
would otherwise have been paid to the LICENSOR had the
LICENSEE been required to conduct such activity. By way of
example, if the EMEA permits the LICENSEE to commence PHASE
III CLINICAL TRIALS in the EUROPEAN UNION without first
conducting a PHASE II CLINICAL TRIAL in the EUROPEAN UNION,
then the LICENSEE will immediately pay to the LICENSOR the
amount owed pursuant to Article 5.3(d)
.
5.5.
The
LICENSEE shall promptly notify the LICENSOR as soon as each of
the milestones described in Article 5.3
has
been achieved, whether it is achieved by the LICENSEE, a
SUBLICENSEE or any of their respective AFFILIATES.
5.6.
Article
7.4 shall apply to MILESTONES PAYMENTS.
ARTICLE 6
EQUITY
6.1.
Upon
the EFFECTIVE DATE, LICENSEE shall issue to LICENSOR a number
of shares of COMMON STOCK having a FAIR MARKET VALUE as of the
EFFECTIVE DATE equal to One Million Dollars ($1,000,000.00).
LICENSEE shall deliver, or caused to be delivered, to LICENSOR
a stock certificate, duly signed by appropriate officers of
LICENSEE and issued in LICENSOR’S name, representing all
of the shares of COMMON STOCK required to be issued to
LICENSOR under this Article 6.1
.
6.2.
By
accepting the shares of COMMON STOCK, the LICENSOR
hereby:
(a)
consents
to the placement of a legend on any certificate or other
document evidencing the shares of COMMON STOCK that such
shares of COMMON STOCK have not been registered under the
Securities Act of 1933 or any state securities or “blue
sky” laws and setting forth or referring to the
restrictions on transferability and sale thereof contained in
this Agreement. The LICENSOR is aware that the LICENSEE will
make a notation in its appropriate records with respect to the
restrictions on the transferability of such shares of COMMON
STOCK. The legend to be placed on each certificate shall be in
form substantially similar to the following:
"THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT") OR ANY STATE SECURITIES OR "BLUE SKY LAWS", AND MAY NOT
BE OFFERED, SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION THEREOF UNDER
SUCH ACT OR COMPLIANCE WITH RULE 144 PROMULGATED UNDER SUCH
ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT
SUCH REGISTRATION IS NOT REQUIRED."
(b)
agrees
it will not, without the prior written consent of the LICESEE,
offer, pledge, sell, contract to sell, grant any option for
the sale of, or otherwise dispose of, directly or indirectly,
the shares of COMMON STOCK for a period of 180 days following
the initial public offering of the COMMON STOCK of the
LICENSEE. In order to enforce the foregoing covenant, the
LICENSEE may impose stop-transfer instructions with re-spect
to the shares of COMMON STOCK until the end of such
period.
ARTICLE 7
EARNED ROYALTIES
7.1.
Subject
to provisions of this ARTICLE
7 ,
during the TERM of this Agreement, as partial consideration
for the LICENSE, LICENSEE shall pay to LICENSOR an earned
royalty on worldwide cumulative NET SALES of LICENSED PRODUCTS
by LICENSEE or its AFFILIATES (“EARNED ROYALTIES”)
determined as a percentage of NET SALES by LICENSEE or its
AFFILIATES as set forth below:
|
ANNUAL NET SALES
|
|
ROYALTY
|
|
$0
to $250,000,000
|
|
[***]
|
|
$250,000,001
to $500,000,000
|
|
[***]
|
|
$500,000,001
and above
|
|
[***]
|
7.2.
In
the event that the LICENSEE enters into a SUBLICENCE AGREEMENT
during the TERM of this Agreement, LICENSEE shall pay to
LICENSOR the greater of:
(a)
[***]
of the SUBLICENSING ROYALTIES received by the LICENSEE from a
SUBLICENSEE; and
(b)
[***]
of the NET SALES by such SUBLICENSEE.
7.3.
LICENSEE
shall pay all EARNED ROYALTIES accruing to the LICENSOR within
thirty (30) days from the end of each calendar quarter (March
31, June 30, September 30 and December 31), beginning in the
first calendar quarter in which NET SALES occur.
7.4.
All
EARNED ROYALTIES and other payments due under this Agreement
shall be paid directly to LICENSOR in United States Dollars.
In the event that conversion from foreign currency is required
in calculating a payment under this Agreement, the exchange
rate used shall be the Interbank rate quoted by Citibank at
the end of the last business day of the quarter in which the
royalty was earned. If overdue, the royalties and any other
payments due under this Agreement shall bear interest until
payment at a per annum rate two percent (2%) above the prime
rate in effect at Citibank on the due date and the LICENSOR
shall be entitled to recover reasonable attorneys’ fees
and costs related to the administration or enforcement of this
Agreement, including collection of royalties or other
payments, following such failure to pay. The payment of such
interest shall not
