MANAGEMENT SERVICES AGREEMENT
Exhibit 10.12
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE KURA ONCOLOGY, INC. HAS DETERMINED THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO KURA ONCOLOGY, INC. IF PUBLICLY DISCLOSED.
THIS MANAGEMENT SERVICES AGREEMENT (this “Agreement”), effective as of October 1, 2014 (the “Effective Date”), is by and between KURA ONCOLOGY, INC., a Delaware corporation (“Kura”), and ARAXES PHARMA LLC, a Delaware limited liability company (the “Company”).
ARTICLE 1
1.1 “Company Confidential Information” shall mean (a) the Company Work Product and (b) any and all other data, information, technology, samples and specimens of the Company or its products, product concepts, technologies, businesses, financial, marketing, clinical or regulatory affairs, manufacturing processes and procedures, or those of any other third party, whether written, graphic or oral, and whether or not furnished to or obtained by Kura, either directly or indirectly, during the course of performing Services hereunder; but excluding, in any event, the Methodology Information and Kura Work Product. Kura shall be considered the receiving party with respect to all Company Confidential Information.
1.2 “Company Intellectual Property” shall have the meaning provided in Section 2.5(a).
1.3 “Company Work Product” shall mean any and all results (including data) and products (interim and/or final) of the Services performed by Kura or its subcontractors, consultants or agents, whether tangible or intangible, including, without limitation, each and every invention (whether or not patentable), discovery, design, drawing, protocol, process, technique, formula, trade secret, device, compound, substance, material, pharmaceutical, method, software program (including without limitation, object code, source code, flow charts, algorithms and related documentation), listing, routine, manual and specification, whether or not patentable or copyrightable, that are made, developed, perfected, designed, conceived or first reduced to practice by Kura, (or its subcontractors, consultants or agents), either solely or jointly with others, in the course of the Services. Notwithstanding the foregoing, Company Work Product shall specifically exclude Methodology Information.
1.4 “Confidential Information” shall mean the Kura Confidential Information or the Company’s Confidential Information, as applicable.
1.5 “Materials” shall mean any chemical or biological materials provided by the Company to Kura for use in the Services or procured by Kura specifically for use in the Services. For clarity, in the event a sequence or structure is provided in lieu of physical quantities, the term “Materials” will be deemed to include such sequences or structures and the physical material derived therefrom.
1.6 “Methodology Information” shall mean any methods or processes used or developed by or for Kura in or for the provision of Services, or in any documentation, records, raw data, materials (other than Materials), specimens, work product, concepts, information, inventions, improvements, designs, programs, formulas, know-how, or writings related thereto, except those methods and/or processes, if any, disclosed or provided by the Company to Kura as specified in writing and agreed to by Kura.
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1.7 “Services” shall have the meaning provided in Section 2.1.
1.8 “Term” shall have the meaning provided in Section 2.6.
1.9 “Kura Confidential Information” shall mean (a) the Kura Work Product and (b) all data, information, technology, samples and specimens of Kura or any other person or entity with which Kura has a commercial relationship (other than the Company) or their respective products, technologies, businesses, financial, marketing, clinical or regulatory affairs, manufacturing processes and procedures, or those of any other third party from whom Kura receives information on a confidential basis, whether written, graphic or oral, furnished to or obtained by the Company, either directly or indirectly, during the course of receiving Services hereunder, including, without limitation, Methodology Information, but excluding the Company’s Work Product. The Company shall be considered the receiving party with respect to all Kura Confidential Information.
1.10 “Kura Intellectual Property” shall have the meaning provided in Section 2.5(a).
1.11 “Kura Key Team” shall mean the individuals as specified on Exhibit A hereto as amended from time to time and such other individuals as may be agreed to between Kura and the Company from time to time.
1.12 “Kura Work Product” shall mean any and all results (including data) and products (interim and/or final) of any activities or services performed by Kura on behalf of itself or any third party, other than in the course of performing the Services, whether tangible or intangible, including, without limitation, each and every invention (whether or not patentable), discovery, design, drawing, protocol, process, technique, formula, trade secret, device, compound, substance, material, pharmaceutical, method, software program (including without limitation, object code, source code, flow charts, algorithms and related documentation), listing, routine, manual and specification, whether or not patentable or copyrightable, and that are made, developed, perfected, designed, conceived or first reduced to practice by Kura, either solely or jointly with others, whether before, during or after the Term, including, without limitation, the Methodology Information.
ARTICLE 2
2.3 General Obligations; Standard of Care.
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(d) Communication. On a regular basis during the Term, the parties shall conduct meetings, either in person or by telephone or video conference, to discuss the progress and results of the Services.
(d) Use of Name/Publicity. Neither party shall use the other party’s name in connection with any publication or promotion without the other party’s written consent, except as required by federal, state or local laws, rules and
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regulations. Neither party shall disclose the specific content or terms of this Agreement without the prior written consent of the other party.
2.5 Intellectual Property Rights
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“Renewal Term”) unless either party gives notice to the other party of its intention to terminate at least thirty (30) days prior to the expiration of the Initial Term or then-current Renewal Term, as applicable (the Initial Term and all Renewal Terms, collectively, the “Term”).
ARTICLE 3
REPRESENTATIONS AND WARRANTIES; DISCLAIMER; LIMITATION OF LIABILITY.
3.2 Kura Representations and Warranties. Kura hereby represents and warrants to the Company that:
(a) the Services shall be performed by qualified personnel in a good, timely, efficient and professional manner;
(b) Kura shall perform the Services in compliance with all applicable laws, rules and regulations, including but not limited to the U.S. Food, Drug and Cosmetic Act and the regulations promulgated thereunder. The parties acknowledge and agree that Kura does not warrant or represent that the results of the Services will be acceptable to any regulatory agency to which they are presented nor that the Company will be able to market or otherwise exploit any Company Work Product; and
(c) neither Kura nor any Kura contractors or personnel performing Services under this Agreement have been: (i) debarred, or proposed to be debarred under Section 306(a) or 306(b) of the United States Federal Food, Drug and Cosmetic Act, as amended from time to time, and the rules, regulations and guidelines promulgated thereunder, or under 42 U.S.C. Section 1320-7; (ii) sanctioned by, suspended, debarred, excluded or otherwise ineligible to participate in any federal or state health care program, including Medicare and Medicaid or in any federal procurement or non-procurement programs; or (iii) charged with or convicted of any felony or misdemeanor under 42 U.S.C. Section 1320a-7(a) or 42 U.S.C. Section 1320a-7(b)(1)-(3), or otherwise proposed for exclusion. Kura will promptly inform the Company, but in no event later than four (4) Business Days, if Kura becomes aware that its
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or any of its subcontractors, or any employee of Kura or any of its subcontractors, in each case performing any Services related to development activities or in support of the marketing authorizations, is not in compliance with any of the criteria set forth in this Section 3.2(c) on or after the Effective Date.
3.3 Company Representations and Warranties. The Company hereby represents and warrants to Kura that:
(a) to the extent this Agreement provides for the Company to provide Kura with any Materials, the Company has the right to provide such Materials to Kura for use as contemplated by this Agreement; and
(b) to the Company’s knowledge, the use of such Materials as contemplated by this Agreement will not infringe the intellectual property rights of any third party.
3.5 Limitation of Liability. NEITHER PARTY SHALL BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT; provided, however, that this Section 3.5 shall not apply to any breaches of Section 2.4 or be construed to limit either party’s indemnification obligations under Article 4.
ARTICLE 4
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4.4 Liability Insurance. Each party agrees to maintain during the Term usual and customary liability, workers compensation and errors and omissions insurance in amounts consistent with industry standards and to provide a certificate of insurance evidencing such coverage to the other party upon request.
ARTICLE 5
5.5 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California as applied to contracts entered into entirely in California by California residents.
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If to Kura: |
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00000 X. Xxxxxx Xxxxx Xxxx, Xxxxx 000 |
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Xx Xxxxx, XX 00000 |
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If to the Company: |
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Araxes Pharma LLC |
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00000 X. Xxxxxx Xxxxx Xxxx, Xxxxx 000 |
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Xx Xxxxx, XX 00000 |
All notices under this Agreement shall be deemed made upon receipt by the addressee as evidenced by the applicable written receipt or, in the case of a facsimile, as evidenced by the confirmation of transmission.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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KURA ONCOLOGY, INC. |
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By: |
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/s/ Xxxx Xxxxxx |
Name: |
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Xxxx Xxxxxx |
Title: |
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President & CEO |
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ARAXES PHARMA LLC |
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By: |
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/s/ Xxxxx Xxxxxx |
Name: |
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Xxxxx Xxxxxx |
Title: |
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CFO |
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EXHIBIT A
1. For purposes of this Agreement, the “Kura Key Team” shall mean the individuals listed on Schedule 1 to this Exhibit A, as may be modified by Kura from time to time in consultation with the Company. Subject to the provisions of Section 2 of the Agreement, Kura shall use commercially reasonable efforts to provide, among others, the following Services as may be requested from time to time by the Company:
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A. |
Management Services. |
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(i) |
Executive Management Services. Kura shall make available to the Company appropriate executive-level personnel to assume and perform substantially all of the day-to-day operational and executive management responsibilities and functions related to the Company’s business, as well as provide long-term strategic planning advice and assistance to the Company. |
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(ii) |
General Administrative Services. Kura shall provide general administrative services required in the ordinary course of the Company’s business which shall include, but is not limited to: (i) bookkeeping and accounting services, including the maintenance of books and records of the Company’s financial operations in accordance with U.S. generally accepted accounting principles; (ii) reasonable management information services to the Company, including coordination of network services and database management services, information technology planning services and procurement of general hardware and software; (iii) legal services and (iv) human resources management and support. |
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(iii) |
Financial and Tax Related Services. Kura shall provide to the Company the following financial services: (i) banking services administration, including bank account administration, loan administration and arrangement of letters of credit; (ii) financial management and information services, including centralized cash management, leasing and financial analysis and (iii) tax services, including assisting the Company in the preparation of applicable income tax returns, tax research and planning and assistance on tax audits or other tax-related controversies. |
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(iv) |
Development of Intellectual Property. Kura shall assist with the development of the Company’s business and intellectual property including without limitation: (i) the prosecution and maintenance of intellectual property and (ii) the formulation and execution of non-clinical and clinical development plans as agreed upon from time to time between Kura and the Company, but excluding Collaboration Services (as defined below). |
The Services described in clauses (i) through (iv) above are collectively referred to as “Management Services”.
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B. |
Collaboration Services. Kura shall provide to the Company research and development services in support of the Collaboration, Option and License Agreement between the Company and Xxxxxxx Biotech, Inc., dated February 25, 2013, as mutually agreed between the parties (“Collaboration Services”). |
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C. |
Other. Kura shall provide such other Services as mutually agreed between Kura and the Company (“Other Services”). |
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Schedule 1
Kura Key Team
(as may be modified by Kura from time to time
in consultation with the Company)
Updated as of December 8, 2014
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[***] |
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[***] |
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[***] |
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[***] |
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[***] |
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[***] |
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[***] |
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[***] = CERTAIN CONFIDENTIAL INFORMATION OMITTED |
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EXHIBIT B
1. |
In consideration for the Services provided, the Company shall pay to Kura the following, subject to adjustment pursuant to Section 2 below: |
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A. |
For Management Services, the Company shall pay a monthly fee of $100,000. |
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B. |
For Collaboration Services, the Company shall pay Kura an amount equal to the number of FTEs (as defined below) actually expended by Kura in the course of performing Collaboration Services during the term of this Agreement, multiplied by three hundred fifty thousand U.S. dollars ($350,000), increased annually by the percentage increase in the Consumer Price Index—Urban Wage Earners and Clerical Workers, U.S. City Average, All Items, 1982-84 = 100, published by the United States Department of Labor, Bureau of Labor Statistics (or its successor equivalent index) in the United States (“CPI”) as of December 31 of the then most recently ended calendar year over the level of the CPI on December 31, 2013 (i.e., the first such increase would occur on January 1, 2014). For the purposes of this Agreement, “FTE” means the equivalent of [***] over a twelve (12)-month period [***], which equals [***] per year of work in performing Collaboration Services. Kura will invoice the Company for Collaboration Services on a calendar quarter basis and will include with each invoice the number of FTEs engaged in performing Collaboration Services during the applicable quarter. |
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C. |
If the Company and Kura agree to the provision of any Other Services, the parties will mutually agree to a reasonable fee for such Services at such time. |
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In addition, the Company shall reimburse Kura for its actual expenses as reasonably incurred by Kura or its employees, officers, directors, agents and/or consultants in the course of performing Services. For Collaboration Services, the Company shall reimburse Kura for direct expenses paid or payable to any Third Parties by Kura that are incurred for services and materials in the course of performing Collaboration Services, and for the avoidance of doubt, do not include capital expenditures. |
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The fees for the Services set forth in Section 1 above shall be subject to the following: |
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The parties acknowledge that the fees payable for the Management Services set forth in Section 1 above have been set by reference to the costs expected to be incurred by Kura in the provision of Management Services to the Company, as calculated in accordance with generally accepted accounting principles (the “GAAP Costs”), plus a reasonable xxxx-up. Such charges shall be reviewed from time to time pursuant to this Section 2 to ensure they remain consistent with this |
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standard and generally reflect comparable dealings between unrelated parties as discussed in IRC Regulation §1.482. |
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B. |
The GAAP Costs shall include directly related salaries and expenses incurred, reasonably allocated indirect salaries and any other reasonably allocated indirect costs incurred by Kura in providing the Management Services under this Agreement. |
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C. |
The Service fees shall be payable in U.S. dollars (unless mutually agreed by the parties) and shall be subject to all applicable government regulations and rulings. |
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Kura shall provide the Company with documentation which may be required by the revenue authorities to support the fact that the Services fees represent arm’s length remuneration for the benefits derived from the Services provided to the Company in that particular year. |
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E. |
If at any time the amount paid under this Agreement for the Services is subsequently adjusted by a tax administration for the purposes of calculating the income tax liability of either party, the parties agree that the amount of the adjustment shall be payable and receivable by either party, as the case may be, within 90 days of the issue date of the tax assessment under which the adjustment arises. |
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All payments hereunder shall be made in cash or by offset against any indebtedness owing to the Company by Kura. Kura shall invoice the Company at least quarterly for services provided during the previous quarter, together with the amount of reimbursable costs and expenses incurred by Kura on behalf of the Company pursuant to Section 2.2 of the Agreement prior to such invoice. The Company agrees to pay all amounts due to Kura arising under this Agreement promptly upon receipt of any such invoice. The parties to this Agreement agree to discuss in good faith on a semi-annual basis during the term of this Agreement the necessity or desirability of adjusting the fees set forth in this Exhibit B.
[***] = CERTAIN CONFIDENTIAL INFORMATION OMITTED |
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4. |
The Company understands and acknowledges that Kura must reasonably allocate its staff resources among all of the companies to which Kura provides services. Notwithstanding any other provision of this Agreement, Kura may at any time, without notice or liability, change or eliminate the persons who provide the Services to the Company on behalf of Kura pursuant to this Agreement, provided that the Services continue to be provided to the Company on substantially the same levels as provided prior to such change or elimination. The Company expressly acknowledges that Kura is engaged in the business of providing drug development services to multiple companies and providing management, scientific, business development, financial and other operational services to those companies and that neither Kura nor any other company to which Kura provides services shall have any exclusivity or similar obligation to the Company, including without limitation any corporate opportunity obligation or any obligation to disclose or make available to the Company any information, potential transaction or other matter of |
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which any such Kura Party becomes aware otherwise than solely in the course of performing Services under this Agreement on behalf of the Company. |
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EXHIBIT C
Compliance with Laws and the FCPA
1.1. |
Kura shall become familiar with the FCPA, its prohibitions and purposes, and shall not undertake any actions that may violate the FCPA. Accordingly, Kura hereby agrees that: |
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(i) |
no person shall be employed by it who is an official or employee of any government or any department, agency or instrumentality thereof (including, but not limited to, any health or medical providers owned or controlled by the government); |
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(ii) |
no payment or offer to pay, or the giving or offering to give, anything of value to an official or employee of any department, agency or instrumentality thereof (including, but not limited to, any health or medical providers owned or controlled by the government), or to any political party or any candidate for political office, shall be made with the purpose of influencing any decisions favorable to either Party or its Affiliates in contravention of the FCPA or the laws of the country in which it is providing work; |
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it not pay, nor offer or agree to pay, nor caused to be paid, directly or indirectly, any political contributions, fees or commissions to any governmental employee or representative (including, but not limited to, any employee of any health or medical provider owned or controlled by the government) that could cause a violation of the FCPA; |
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it will not, directly or indirectly, in connection with the Agreement and the business resulting therefrom, offer, pay, promise to pay, or authorize the giving of money or anything of value to any governmental official or representative, to any political party or official thereof, or to any candidate for political office, or to any person, while knowing or being aware of the probability that all or any portion of such money or thing of value will be offered, given, or promised, directly or indirectly, to any government official, to any political party or official thereof, or to any candidate to political office, for the purpose of: |
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influencing any act or decisions of such official, political party, party official, or candidate in its official capacity, including a decision to fail to perform official functions; or |
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inducing such official, political party, party official, or candidate to use influence with the government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in order to assist either Party in obtaining or retaining business for or with, or directing business to, any third party. |
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(v) |
Kura will immediately notify the Company if it becomes aware of any apparent violation of the FCPA in connection with its activities hereunder. |
1.2. |
Kura shall provide the Company and its agents and representatives (collectively, “Agents”), as well as any regulatory authorities having regulatory oversight of Kura, with access to its facilities, records (financial and otherwise), and supporting documentation as may be requested by any Agents in order to document or verify compliance with the provisions of this Exhibit. Kura acknowledges that the provisions of this Exhibit granting the Company certain audit rights shall in no way relieve Kura of any of its obligations under the Agreement, nor shall such provisions require the Company to conduct any such audits. |
1.3. |
Kura shall maintain true and accurate records necessary to demonstrate compliance with this Agreement (including the requirements of this Exhibit). |
1.4. |
If Kura fails to comply with any of the provisions of this Exhibit (irrespective of the size, nature or materiality of such violation), such failure may be treated by the Company as a material breach. |
1.5. |
Notwithstanding anything to the contrary in the Agreement, each Party may disclose its terms and conditions (including any financial terms) to any government authority that it determines in good faith has a legitimate need for access to such information (including, but not limited to, any governmental authorities in the U.S. or those in the country where research is being provided). |
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