EX-10.58 8 ex10-58.htm

 

Exhibit 10.58

 

EXCLUSIVE AGREEMENT

 

This exclusive license agreement (“Agreement”) is dated and effective as of the date of last signature (the “Effective Date”) and is made by and between University of Louisville Research Foundation, Inc. (“ULRF”), a Kentucky 501(c)3 non-profit corporation having an office at 300 East Market Street, Suite 300, Louisville, Kentucky, 40202, as the agent of the University of Louisville (“UofL”) for licensing intellectual property owned and controlled by ULRF on behalf of UofL and Qualigen, Inc. (“Licensee”), a corporation with a principal place of business at 2042 Corte Del Nogal, Carlsbad, CA 92011. ULRF and Licensee are referred to herein, on occasion, separately as a “Party” or together as the “Parties”.

 

BACKGROUND

 

1. ULRF was established by UofL to enter into and administer research agreements with external funding sources and to own, control, and license intellectual property on behalf of UofL in order to foster the transfer and development of technology for public benefit.
   
2. A valuable invention or inventions known as “ULRF Conjugated Nanoparticles,” as described in ULRF Case Nos. 11063 and 15070 (“Invention”), was/were developed during the course of research conducted at UofL by the individuals hereinafter listed in Section 1.4 (“Inventors”).
   
3. ULRF has acquired through assignment all rights, title and interest of said Inventors in said valuable Invention and the related Licensed Patents, as hereinafter defined and identified.
   
4. The Parties have entered into a mutual confidentiality agreement effective April 2, 2018 (ULRF ref. 18237-NDA) hereinafter the “Confidentiality Agreement”, for the purpose of allowing ULRF and Licensee to evaluate their respective interests in entering into this Agreement with respect to the Invention.
   
5. Licensee has provided ULRF with a commercialization plan for the Invention in order to allow ULRF to evaluate Licensee’s capabilities.
   
6. Development of the Invention was sponsored in part by both the Wallace H. Coulter Foundation and the United States government, and as a consequence, this Agreement is subject to certain obligations under the respective sponsorship agreements including overriding obligations to the federal government under 35 U.S.C. §§ 200-212 and applicable regulations.
   
7. ULRF and Licensee desire to have the Invention developed and commercialized so that products and services resulting therefrom may be available for public use and benefit.
   
8. Licensee desires to acquire, and ULRF desires to grant, a license under the Licensed Patents to make, have made, use, sell, offer for sale, and import products, methods, and services in accordance with the terms herein.

 

Now, therefore, the Parties agree as follows:

 

1. definitions

 

1.1 “Affiliate” of Licensee (or of a Sublicensee, respectively) means any entity that, as of the applicable point in time during the term of this Agreement, directly or indirectly controls Licensee (or a Sublicensee, respectively), is controlled by Licensee (or a Sublicensee, respectively), or is under common control with Licensee (or a Sublicensee, respectively). For purposes of this definition, “control” means (a) having the actual, present capacity to elect a majority of the directors of such entity, or (b) having the power to direct at least fifty percent (50%) of the voting rights entitled to elect directors of such entity.

 

 
 

 

1.2 “Change of Control” means (a) the sale of all or substantially all the assets of a Party; (b) any merger, consolidation or acquisition of a Party with, by or into another corporation, entity or person; or (c) any change in the ownership of more than fifty percent (50%) of the voting capital stock of a Party in one or more related transactions.
   
1.3 “Field of Use” means: all fields.
   
1.4 “Inventors” means: Paula J. Bates, Kyung A. Kang, Mohammed Tariq Malik, and Martin G. O’Toole.
   
1.5 “Licensed Method” means any process or method, the use or practice of which in a given country, absent the license granted pursuant to this Agreement, infringes or contributes to or induces the infringement of a Licensed Patent.
   
1.6 “Licensed Patents” means: (a) the United States and foreign patents and/or patent applications identified in Exhibit A; (b) any and all patents issuing from the foregoing; (c) any and all claims of continuation-in-part applications that claim priority to the United States patent applications identified in Exhibit A, but only where such claims are directed to inventions disclosed in the manner provided in 35 U.S.C. § 112(a) in the United States patent applications identified in Exhibit A, and such claims in any patents issuing from such continuation-in-part applications; (d) any and all foreign patent applications, foreign patents or related foreign patent documents that claim priority to the patents and/or patent applications identified in Exhibit A; and (e) any and all divisionals, continuations, reissues, reexaminations, renewals, substitutions, and extensions of the foregoing. Any claim of an issued and unexpired Licensed Patent is presumed to be valid unless it has been held to be invalid by a final judgment of a patenting authority or a court of competent jurisdiction from which no appeal can be or is taken.
   
1.7 “Licensed Product” means any product, material, kit, or other article of manufacture or composition of matter, the making, use, Sale, or offer for Sale, or import of which in a given country, absent the license granted pursuant to this Agreement, infringes, induces infringement, or contributes to infringement of a Licensed Patent.
   
1.8 “Licensed Service” means a service provided using Licensed Products or Licensed Methods in a given country, including, without limitation, any such service provided in the form of contract research or other research performed by Licensee on behalf of a third party.
   
1.9 “License Year” means a year in which this Agreement is in effect. The first License Year will begin on the Effective Date and run until December 31 of the same calendar year. Thereafter, each subsequent License Year will mean each subsequent calendar year, beginning January 1 and ending December 31, provided that the final License Year will end on the date of expiration or termination of this Agreement.
   
1.10 “Net Sales” means the gross amount of any payments, and the fair market value of any non-cash consideration, received by Licensee, Affiliates or Sublicensees for the use, Sale or other transfer of Licensed Products and Licensed Services, less the following deductions:

 

  a. Trade, cash and quantity discounts;
     
  b. Discounts, refunds, rebates actually taken, chargebacks, retroactive price adjustments, and any other allowances which effectively reduce the net selling price (other than such which have already diminished the gross amount invoiced), including, without limitation, Medicaid, HMO, institutional and governmental rebates (other than such which have already diminished the gross amount invoiced);
     
  c. Credits or allowances granted on returns or rejections of Licensed Products/Licensed Services actually Sold;

 

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  d. Amounts invoiced for Licensed Products/Licensed Services sales but actually written off in good faith as uncollectible (net of any recoveries on written-off debt);
     
  e. Shipping, handling, freight, postage, insurance and transportation charges, but all only to the extent included as a separate line item in the gross amount invoiced; and
     
  f. Any tax imposed on the production, sale, delivery or use of the Licensed Products/Licensed Services, including, without limitation, import, export, sales, use, excise or value added taxes and customs and duties, but all only to the extent included as a separate line item (e.g., “taxes”) in the gross amount invoiced.

 

Net Sales will not include transfers among Licensee, its Affiliates, or Sublicensees unless the recipient is the end purchaser.

 

If Licensed Products/Licensed Services are Sold as part of a combination product or bundle, the Net Sales of such Licensed Products/Licensed Services for the purpose of calculating royalties owed under this Agreement, shall be determined as follows: first, Licensee shall determine the actual Net Sales of such combination product or bundle (using the above provisions) and then such amount shall be multiplied by the fraction A/(A+B), where A is the average gross selling price in the applicable country of such Licensed Products/Licensed Services sold separately, and B is the sum of the average gross selling prices in the applicable country of each other component/constituent in the combination product or bundle sold separately. If the Licensed Products/Licensed Services and/or the other component/constituent(s) in the combination product or bundle are not sold separately in the applicable country, the adjustment to Net Sales shall be determined by the Parties in good faith to reasonably reflect the fair market value of the contribution of the Licensed Products/Licensed Services in the combination product or bundle to the total fair market value of such combination product or bundle. If the Parties cannot agree on such relative value, such disagreement shall be referred to an independent expert.

 

1.11 “Non-Royalty Sublicensing Income” means the gross amount of any payments, and the fair market value of all other consideration, received by Licensee for the grant of rights under a Sublicense, excluding payments made to Licensee as a royalty based on Sales by the Sublicensee. For avoidance of doubt, amounts received by Licensee or its securities holders upon a Change of Control do not constitute Non-Royalty Sublicensing Income.
   
1.12 “Sale” means the act of selling, leasing, or otherwise transferring or providing Licensed Products or Licensed Services for any consideration. Correspondingly, “Sell” means to make or cause to be made a Sale, and “Sold” means to have made or cause to be made a Sale.
   
1.13 “Sublicense” means any agreement between Licensee and a third party that contains a grant to Licensed Patents regardless of the name given to the agreement by the parties.
   
1.14 “Sublicensee” means any third party to whom Licensee has granted a Sublicense.
   
1.15  “Term” has the meaning set forth in Section 15.1.

 

2. grant

 

2.1 Grant. Subject to Licensee’s compliance with the terms and conditions of this Agreement, ULRF grants to Licensee an exclusive (subject to Sections 2.2 and 2.3), worldwide license under the Licensed Patents in the Field of Use to (a) make, have made, use, offer for Sale, import, and Sell Licensed Products and Licensed Services, and (b) to practice Licensed Methods.

 

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2.2 Retained Rights. ULRF reserves to itself and UofL and to the Inventors to do any one or more of the following: (a) publish any information resulting from research relating to the Invention; (b) practice the Licensed Patents for any not-for-profit purposes, including education, research, teaching, and public service; (c) make, use, and import the Invention and associated technology for educational and research purposes; and (d) allow other non-profit academic research institutions to do any one or more of the activities of the preceding clauses (a), (b), and (c) of this Section for educational and research purposes.

 

2.3 Government Rights. It is understood that if the United States Government (through any of its agencies or otherwise) has funded research, during the course of or under which any inventions of the Licensed Patents were conceived or made, the United States Government is entitled, as a right, under the provisions of 35 U.S.C. §§ 200–212 and applicable regulations of Chapter 37 of the Code of Federal Regulations, to a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced the invention of such Licensed Patents for governmental purposes. These provisions also impose the obligation that Licensed Products Sold or produced in the United States be “manufactured substantially in the United States.” Licensee will ensure that all obligations under these provisions are met.
   
2.4 Specific Exclusions. Nothing in this Agreement is or will be construed as: (a) conferring by implication, estoppel, or otherwise any license or rights under any patent applications or patents of ULRF other than the Licensed Patents, regardless of whether such patent applications or patents are dominant or subordinate to the Licensed Patents; or (b) an obligation to furnish to Licensee any know-how not provided in the patents and patent applications of the Licensed Patents.

 

3. SUBLICENSING

 

3.1 Permitted Sublicensing. Subject to the requirements of Section 3.3 and for so long as Licensee remains in good standing with all terms and conditions of this Agreement, Licensee may grant Sublicenses in the Field of Use. For this consideration, Licensee will pay to ULRF the fees and other amounts specified in Exhibit B. For purposes of this Agreement, the operations of any Sublicensee under their respective Sublicense will be deemed to be the operations of Licensee, for which Licensee will be responsible. Affiliates will have no licenses under the Licensed Patents except as granted by Licensee in a Sublicense.
   
3.2 Required Sublicensing.

 

  (a) In the event that ULRF and Licensee each own an undivided interest in any Licensed Patent (a “Jointly Owned Licensed Patent”), Licensee will not attempt to separately grant a license to any third party under its rights in such Jointly Owned Licensed Patent without concurrently granting a Sublicense under ULRF’s rights in the same, and ULRF will not attempt to separately grant a license to any third party under its rights in such Jointly Owned Licensed Patent without concurrently granting a sublicense under Licensee’s rights in the same.
     
  (b) If Licensee licenses patent rights assigned to or otherwise acquired by it (“Licensee’s Patent Rights”), and it believes, in good faith, that the recipient of such license will infringe Licensed Patents in practicing Licensee’s Patent Rights, then Licensee will not separately grant a license to such recipient under Licensee’s Patent Rights without concurrently granting a Sublicense.
     
  (c) If Licensee is unable or unwilling to develop potential Licensed Products or Licensed Services (within the parameters set forth in this Agreement) or to serve a market territory and Licensee has not after an appropriate search period have identified a Sublicensee candidate therefor reasonably acceptable to Licensee, and ULRF has identified to Licensee an experienced, competent and reliable organization willing to be a Sublicensee therefor, Licensee will, at ULRF’s request, negotiate in good faith a Sublicense with any such potential Sublicensee.

 

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3.3 Sublicense Requirements. Any Sublicense: (a) is subject to this Agreement, (b) will not permit the grant of further Sublicenses by the Sublicensee, and (c) will, as a condition of validity, expressly include the provisions of Articles 7, 8 and 10 for the benefit of ULRF and UofL.
   
3.4 Notice and Copy of Sublicense. Within thirty (30) days of execution of each Sublicense, or amendment thereof, Licensee will notify ULRF of such executed Sublicense or amendment and provide to ULRF a copy of such Sublicense or amendment with no portion which is relevant to ULRF’s rights hereunder redacted. Such Sublicense or amendment shall be Confidential Information of Licensee hereunder.
   
3.5 License Termination. Upon termination of this Agreement for any reason, all Sublicenses will automatically terminate, unless ULRF, at its sole discretion, agrees in writing to an assignment to ULRF of any Sublicense. In the event of termination of this Agreement and if ULRF accepts assignment of any Sublicense, ULRF will not be bound by any grant of rights broader than, and will not be required to perform any obligation other than, those rights and obligations contained in this Agreement. ULRF will have the sole right to modify each such assigned Sublicense to include all of the rights of ULRF contained in this Agreement.

 

4. DILIGENCE

 

4.1 Best Efforts by Licensee. Licensee will use good-faith efforts to effect introduction of Licensed Products and Licensed Services into the commercial market as soon as possible; thereafter, and until the expiration or termination of this Agreement, Licensee will keep Licensed Products and Licensed Services reasonably available to the public.
   
4.2 Milestones. In addition to Licensee’s obligations under Section 4.1, Licensee will accomplish the diligence milestones (“Milestones”) set forth in Exhibit C. Licensee agrees that said Milestones are reasonable and that it will take all reasonable steps to meet its diligence obligations.
   
4.3 Licensee’s failure to perform in accordance with Sections 4.1 or 4.2 will be grounds for ULRF to terminate this Agreement pursuant to Section 15.3.

 

5. payments and accounting

 

5.1 Fees and Royalties. In partial consideration for the rights granted herein, Licensee will pay to ULRF the fees, royalties and other amounts specified in Exhibit B, and will reimburse ULRF for costs incurred in connection with the Licensed Patents as provided in Section 9.2.
   
5.2 Payment Procedures. All payments due to ULRF will be made in United States currency preferably by electronic funds transfer (EFT), e.g., ACH, wire or book transfer. Bank information will be provided upon request. Alternatively, payments due to ULRF hereunder may be made by check or money order payable to “University of Louisville Research Foundation, Inc.” with reference to tax identification number 61-1029626, and remitted to the address for ULRF specified in Section 14.1. Licensee or its Sublicensees will be responsible for payments of any fees associated with the transfer or other delivery of amounts payable to ULRF hereunder.

 

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5.3 Calculation and Payment of Royalties. When Licensed Products or Licensed Services are Sold for monies other than United States dollars, Royalties will first be determined in the foreign currency of the country in which the Sale was made and then converted into equivalent United States dollars. The exchange rate will be that rate quoted in the Wall Street Journal on the last business day of the reporting period. Royalties will be paid to the ULRF free and clear of all foreign taxes. If any Licensed Patent, or any claim thereof, expires or is held invalid by a final decision of a patenting authority or a court of competent jurisdiction from which no appeal can be or is taken, all obligations to pay Royalties based on such Licensed Patent, or claim, will cease as of the date of such expiration or final decision and in addition (in the case of invalidity but not in the case of expiration) Licensee shall be relieved of all accrued but unpaid obligations to pay Royalties based on such Licensed Patent, or claim. Licensee will not, however, be relieved from paying any Royalties that accrued before such expiration or that are based on another Licensed Patent, or claim within any Licensed Patent, which is not expired, or which is not held invalid or unpatentable in such final decision.

 

5.4 Books and Records. Licensee will keep full, true, and accurate books of accounts containing all particulars that may be necessary for the purpose of showing (a) the amount of Royalties payable to ULRF, and (b) Licensee’s compliance with obligations under this Agreement. For six (6) years following the end of the calendar year to which they pertain, said books and the supporting data will be open, during normal business hours upon reasonable notice, to inspection and audit by an independent certified public accountant as well as an internal ULRF auditor for purposes of verifying Licensee’s Development and Royalty Reports under Article 6 and compliance in other respects with this Agreement. Such representatives will be required to hold all information in confidence except as necessary to communicate Licensee’s non-compliance with this Agreement to ULRF. The fees and expenses of the representatives performing such an examination will be borne by ULRF, provided that if an error in underpaid Royalties or other payments to ULRF of more than five percent (5%) for any calendar year is discovered, then the fees and expenses of these representatives in conducting such examination will be borne by Licensee.
   
5.5 Self-audit. Licensee will conduct an independent audit of Sales and Royalties at least every two (2) years if Net Sales exceed five million dollars ($5,000,000) in any given calendar year. The audit will address, at a minimum, the amount of Net Sales by or on behalf of Licensee during the audit period, the amount of funds owed to ULRF under this Agreement, and whether the amount owed has been paid to ULRF and is reflected in Licensee’s records. Licensee will submit the auditor’s report promptly to ULRF upon completion. Licensee will pay for the entire cost of the audit.
   
5.6 Auditing and Review of Development Records. ULRF reserves the right to audit Licensee’s records relating to the development of Licensed Products and Licensed Services as required hereunder. Such requirements for Licensee’s record keeping and ULRF’s audit thereof will be subject to the same procedures and restrictions set forth in Section 5.4 for audit of financial records of Licensee.
   
5.7 Late Payments. In the event any payment due hereunder is not made when due, the payment will accrue interest, calculated at the monthly rate of one and one-half percent (1.5%), the interest being compounded on the last day of each calendar month. Each such payment when made will be accompanied by all interest so accrued. Said interest and the payment and acceptance thereof will not negate or waive the right of ULRF to seek any other remedy, legal or equitable, to which it may be entitled because of the delinquency of any payment including, but not limited to, termination of this Agreement as provided in Article 15.

 

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6. development AND ROYALTY REPORTS

 

6.1 Development Reports. Until the first Sale occurs in the United States, Licensee will submit to ULRF a semi-annual development report (“Development Report”) within sixty (60) days of each June 30 and December 31 following the end of such six (6) month period. Development Reports will cover Licensee’s activities related to the development and testing of Licensed Products, Licensed Services, and Licensed Methods, including efforts related to obtaining necessary government approvals, if any, for marketing in the United States and foreign countries. Each Development Report will provide a sufficiently detailed summary of activities of Licensee and any Sublicensees so that ULRF may evaluate and determine Licensee’s progress in the development of Licensed Products, Licensed Services, and Licensed Methods, and in meeting Licensee’s diligence obligations under Article 4, and include at least the following: (a) summary of work completed and in progress; (b) current schedule of anticipated events and milestones, including the diligence Milestones under Article 4; (c) anticipated market introduction dates; (d) names and addresses of Sublicensees for any new Sublicenses entered into during the reporting period; (e) Sublicensees’ known activities during the reporting period; and (f) description of any Non-Royalty Sublicensing Income received by Licensee. In the Development Report immediately subsequent to the first Sale by Licensee or by a Sublicensee, Licensee will report the date of such first Sale.

 

6.2 Royalty Reports. After the first Sale, within sixty (60) days of each June 30 and December 31 following the end of such six (6) month period, Licensee will submit to ULRF a semi-annual royalty report (“Royalty Report”), accompanied by the corresponding Royalty payment as required in Exhibit B, Section 2. Each Royalty Report will include at least the following: (a) the volume of Licensed Products and Licensed Services Sold (if no Sales have occurred during the report period, the Royalty Report will contain a statement to this effect); (b) gross amounts of any payments or other consideration received in connection with Sales, (c) Net Sales pursuant to Section 1.10, and the calculation of Net Sales, including all deductions taken, so that ULRF can confirm the calculation; (d) total Royalties due to ULRF; (e) description of any Non-Royalty Sublicensing Income received by Licensee; and (f) names and addresses of Sublicensees for any new Sublicenses entered into during the reporting period.
   
6.3 Submission of Development and Royalty Reports. All Development and Royalty Reports will be submitted electronically via email with reference to this Agreement (ULRF ref. 18255-LA) to the UofL Office of Technology Transfer service account at thinker@louisville.edu.

 

7. EXCLUSIONS AND NEGATIONS OF WARRANTIES, AND LIMITATION OF LIABILITY

 

7.1 Negation of Warranties. ULRF provides Licensee the rights granted in this Agreement AS IS and WITH ALL FAULTS. ULRF makes no representations and extends no warranties of any kind, either express or implied, except a representation that ULRF owns the Licensed Patents and that neither ULRF nor any of the Inventors have granted any licenses in the Licensed Patents to anyone. Among other things, ULRF disclaims any express or implied warranty: (a) of merchantability, or of fitness for a particular purpose; (b) of non-infringement; or (c) arising out of any course of dealing.
   
7.2 No Representation of Licensed Patent. Licensee also acknowledges that ULRF does not represent or warrant: (a) the validity or scope of any Licensed Patent; or (b) that the exploitation of the Invention or Licensed Patents will be successful.
   
7.3 No Warranties to Third Parties. Licensee will not make any statements, representations or warranties or accept any liabilities or responsibilities whatsoever to or with regard to any person or entity that are inconsistent with any disclaimer or limitation included in this Article.

 

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7.4 Limitation of Liability. THE ENTIRE RISK AS TO PERFORMANCE OF LICENSED PRODUCTS, LICENSED SERVICES, LICENSED METHODS AND UNDERLYING RESEARCH IS ASSUMED BY LICENSEE OR ANY SUBLICENSEES. IN NO EVENT (OTHER THAN FOR BREACH OF CONFIDENTIALITY OBLIGATIONS, WILLFUL MISCONDUCT OR FRAUD) WILL ULRF, UOFL, INCLUDING ITS TRUSTEES, FELLOWS, OFFICERS, EMPLOYEES, STUDENTS AND AGENTS, BE RESPONSIBLE OR LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL OR OTHER DAMAGES WHATSOEVER, OR LOST PROFITS OR OTHER ECONOMIC LOSS OR DAMAGE WITH RESPECT TO THE PRACTICE OF THE INVENTION OR LICENSED PATENTS (INCLUDING MAKING, USING, SELLING, OFFERING TO SELL, OR IMPORTING LICENSED PRODUCTS, LICENSED SERVICES, OR LICENSED METHODS) WHETHER GROUNDED IN TORT (INCLUDING NEGLIGENCE AND PRODUCT LIABILITY), STRICT LIABILITY, CONTRACT OR OTHERWISE. THE ABOVE LIMITATIONS ON LIABILITY APPLY EVEN THOUGH ULRF, UOFL, ITS TRUSTEES, FELLOWS, OFFICERS, EMPLOYEES, STUDENTS OR AGENTS MAY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.

 

8. INDEMNITY AND INSURANCE

 

8.1 Indemnity. Licensee will indemnify, hold harmless, and defend ULRF, UofL, and its trustees, fellows, officers, employees, students, and agents from and against any and all claims, suits, losses, damage, costs, fees, and expenses (including attorneys’ fees), in each case in respect of third-party claims resulting from or arising out of the exercise of the license granted hereunder, or any Sublicense thereof, by Licensee, Affiliates or Sublicensees. This indemnification will include, but not be limited to, any product liability. This Section 8.1 shall not apply where the claims, suits, losses, damage, costs, fees, and/or expenses are primarily due to any indemnitee’s breach of this Agreement, violation of law, willful misconduct or fraud.
   
8.2 Insurance. During the Term, Licensee will obtain and maintain at all times and will require Sublicensees, and any subcontractors of any of the foregoing, to obtain and maintain (a) insurance for all statutory workers’ compensation and employers’ liability requirements covering any and all employees with respect to activities performed under this Agreement; and (b) commercial general liability insurance, with limits of insurance not less than $1,000,000 per occurrence and $3,000,000 aggregate, including products liability insurance, written on an occurrence bases, from reputable and financially secure insurance carriers (having an A.M. Best rating of A IX or above) to cover their respective activities. Such insurance will provide an appropriate and standard level of coverage considering the size of the company and for the product and industry, and will list ULRF, UofL, its trustees, fellows, officers, employees, students, and agents as additional insureds. Such insurance will be written to cover claims resulting from or arising out of the exercise of the licenses granted hereunder, or any Sublicense thereof, by Licensee or Sublicensees incurred, discovered, manifested, or made at any time during or after the expiration or termination of this Agreement. At ULRF’s request, Licensee will furnish a certificate of insurance evidencing primary coverage, indicating that ULRF and UofL have been listed as an additional insured under commercial general liability, and requiring thirty (30) days prior written notice to ULRF of cancellation or material change. All such insurance of Licensee will be primary coverage; the insurance of ULRF will be deemed to be excess and noncontributory. ULRF will notify Licensee in writing of any claim brought against ULRF in respect to which ULRF intends to invoke the provisions of this Section. Licensee will keep ULRF informed in writing and on a current basis of Licensee’s defense(s) of any known claim under this Section.

 

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9. patent prosecution and maintenance

 

9.1 Responsibility for Licensed Patents. ULRF will prosecute and maintain the Licensed Patents, subject to Licensee’s reimbursement of ULRF’s Patent Costs under Section 9.2. ULRF will have sole responsibility for retaining and instructing patent counsel (which from and after the Effective Date shall be selected by Licensee but reasonably acceptable to ULRF), and will promptly provide Licensee with copies of all official patent office correspondence. ULRF will seek and consider comments from Licensee prior to taking any substantive prosecution action in any Licensed Patent, provided that if Licensee has not commented on such prosecution action prior to the deadline for filing a response with the relevant government patent office, ULRF will be free to respond appropriately without consideration of Licensee’s comments. ULRF will use reasonable efforts to prepare or amend any patent application within the Licensed Patents to include claims reasonably requested by Licensee to protect the Licensed Products or Licensed Services contemplated to be Sold or Licensed Methods to be practiced under this Agreement. Licensee will make all reasonable efforts to advise ULRF and its patent counsel in order to secure the broadest patent protection possible with respect to envisioned Licensed Products and Licensed Services.

 

9.2 Patent Costs. Subject to Section 9.3, Licensee will reimburse ULRF for all out-of-pocket costs incurred before, on, or after the Effective Date in connection with preparing, filing, prosecuting and maintaining Licensed Patents (including, without limitation, the cost of any reexaminations, oppositions, post-grant review, inter partes review, supplemental examinations, and other patent office administrative proceedings, and their appeals), which have not been previously reimbursed to ULRF (“Patent Costs”). If, however, one or more Licensed Patents are licensed to parties other than Licensee outside the Field of Use, any subsequently incurred Patent Costs will be divided equally among the licensed parties from the effective date of each subsequently granted license agreement.

 

  (a) Prior Patent Costs. Licensee will reimburse ULRF for all Patent Costs incurred prior to the Effective Date in the amount stated in Exhibit B at such time and in such manner as stated in Exhibit B.
     
  (b) Ongoing Patent Costs. Licensee will reimburse ULRF for all Patent Costs incurred on or after the Effective Date within thirty (30) days of receipt by Licensee of invoice from ULRF for the same.

 

9.3 Surrender of Rights. Licensee’s obligation to pay Patent Costs will continue for so long as this Agreement remains in effect, provided that Licensee may terminate Licensee’s obligations with respect to any given patent application or patent within the Licensed Patents in any designated country upon ninety (90) days written notice to ULRF. In the event of such notice to ULRF, ULRF will undertake to curtail applicable Patent Costs reimbursable by Licensee pursuant to Section 9.2. ULRF may continue prosecution and maintenance of such patent applications or patents at ULRF’s sole discretion and expense, provided that Licensee will have no further rights thereunder.

 

10. CONTEST OF PATENT VALIDITY

 

10.1 Licensee and Sublicensees must provide ULRF at least ninety (90) days prior written notice before filing any action that contests the validity of any Licensed Patent during the Term.
   
10.2 In the event Licensee, a Sublicensee, or an Affiliate files any action contesting the validity of any Licensed Patent, the Royalty rate applicable to Sales made during the pendency of such action will be two (2) times the Royalty rate specified in Exhibit B. Should the outcome of such contest determine that any claim of a Licensed Patent challenged is valid and would be infringed by Licensee’s or a Sublicensee’s Sales if not for the license granted by this Agreement, the applicable Royalty rate for Sales made thereafter and for the remainder of the Term will be three (3) times the Royalty rate specified in Exhibit B. In the event that Licensee, a Sublicensee, or an Affiliate contests the validity of any Licensed Patent during the Term, Licensee agrees (and will require its Sublicensees to agree) to pay to ULRF all royalties due under this Agreement during the period of challenge. For the sake of clarity, such amounts will not be paid into any escrow or other account, but directly to ULRF, and will not be refunded.

 

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11. INFRINGEMENT

 

11.1 Infringement Procedure. Each Party will promptly notify the other Party if it believes a third party infringes a Licensed Patent in the Field of Use. So long as the license granted herein remains exclusive, Licensee may have the right to institute a suit against such third party as provided in Sections 11.2 through 11.6.
   
11.2 ULRF Suit. ULRF will have the first right to institute suit, and may name Licensee as a party to such suit for standing purposes. If ULRF decides in good faith to institute suit, it will notify Licensee in writing. If Licensee does not notify ULRF in writing that it desires to jointly prosecute the suit within fifteen (15) days after the date of the notice, Licensee will assign and hereby does assign to ULRF all rights, causes of action, and damages resulting from the alleged infringement. ULRF will bear the entire cost of the litigation, and from any recovery or damages derived therefrom, ULRF will first be reimbursed its out-of-pocket costs and attorney fees, and the remaining sums will be split, with seventy-five percent (75%) of such sums going to ULRF, and twenty-five percent (25%) of such sums going to Licensee. In the event that a non-cash cross license is awarded or a non-cash settlement is reached, both Parties agree to negotiate appropriate compensation in good faith.
   
11.3 Joint Suit. If ULRF and Licensee so agree, they may institute suit jointly. If so, they will: (a) prosecute the suit in both their names; (b) bear the out-of-pocket costs equally; (c) share any recovery or settlement equally; and (d) agree in a separate written document how they will exercise control over the action. In the event that a non-cash cross license is awarded or a non-cash settlement is reached, both Parties agree to negotiate appropriate compensation in good faith
   
11.4 Licensee Suit. If ULRF does not elect to pursue a suit pursuant to either of Sections 11.2 or 11.3, Licensee may institute and prosecute a suit so long as it conforms with the requirements of this Section and Licensee or a Sublicensee is diligently developing or making Sales of Licensed Products or Licensed Services. Licensee will diligently pursue the suit and will bear the entire cost of the litigation, and will indemnify ULRF for any costs, expenses, and counsel fees incurred by ULRF. Licensee will keep ULRF reasonably apprised of all developments in the suit, and will seek ULRF’s input and approval on any substantive submissions or positions taken in the litigation regarding the scope, validity and enforceability of the Licensed Patent. Licensee will not prosecute, settle or otherwise compromise any such suit in a manner that adversely affects the interests of ULRF or UofL without ULRF’s prior written consent. ULRF may be named as a party only if: (a) Licensee’s counsel recommends that such action is necessary in their reasonable opinion to achieve standing; (b) ULRF is not the first named party in the action; and (c) the pleadings and any public statements about the action state that Licensee is pursuing the action and that Licensee has the right to join ULRF as a party plaintiff thereto.
   
11.5 Recovery. If Licensee institutes suit pursuant to Section 11.4, any recovery in excess of any unrecovered litigation costs and fees will be shared with ULRF as follows: Licensee will first be reimbursed its out-of-pocket costs and attorney fees, and the remaining sums will be treated as royaltyable Net Sales hereunder. In the event that a non-cash cross license is awarded or a non-cash settlement is reached, both Parties agree to negotiate appropriate compensation to ULRF in good faith.

 

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11.6 Abandonment of Suit. If either ULRF or Licensee commences a suit and thereafter intends to abandon the suit, it will give timely notice to the other Party. The other Party may continue prosecution of the suit after ULRF and Licensee agree on the sharing of expenses and any recovery in the suit.

 

12. DECLARATORY JUDGMENT

 

12.1 In the event a declaratory judgment action alleging invalidity or noninfringement of any Licensed Patent is brought against Licensee, then ULRF, at its option and sole discretion, will have the right, within thirty (30) days after commencement of such action, to (in good faith) intervene and take over and conduct the sole defense of the action at its own expense.

 

13. CONFIDENTIALITY

 

13.1 With respect to disclosures by one Party (“Disclosing Party”) to the other Party (“Receiving Party”) under this Agreement or under the Confidentiality Agreement identified in the above Background Section, effective April 2, 2018, the Receiving Party will, subject to Sections 13.2 and 13.3, keep any information identified as confidential by the Disclosing Party confidential using methods at least as stringent as each Party uses to protect its own confidential information. “Confidential Information” will include the negotiated terms of this Agreement as set forth in Exhibits B and C, Licensee’s Development Reports, Royalty Reports, Sublicenses, the Licensed Patents, information regarding any prior/on-going/future research or the review of such research and all information concerning them and any other information which is obviously confidential or which is marked confidential or accompanied by correspondence indicating such information is exchanged in confidence between the Parties. Except as may be authorized in advance in writing by ULRF, Licensee will grant access to ULRF’s Confidential Information only to its own employees or agents involved in research relating to the Licensed Patents and Licensee will require such employees to be bound by terms of confidentiality no less restrictive than those set forth in this Article.
   
13.2 The confidentiality and use obligations set forth above apply to all or any part of the Confidential Information disclosed hereunder except to the extent that:

 

  (a) the information was already in the Receiving Party’s possession on a non-confidential basis prior to receipt from the Disclosing Party;
     
  (b) the information was in the public domain by public use, general knowledge or the like, or after disclosure hereunder, becomes general or public knowledge through no fault of the Receiving Party or its disclosees;
     
  (c) was properly obtained by the Receiving Party from a third party not under a confidentiality obligation to or for the benefit of the Disclosing Party;
     
  (d) is explicitly approved for release by written authorization of the Disclosing Party;
     
  (e) is independently developed by employees or agents of the Receiving Party who had no knowledge of or access to the Confidential Information as evidenced by the Receiving Party’s business records; or
     
  (f) five (5) years have elapsed from the expiration of this Agreement.

 

13.3 ULRF will be free to release to the Inventors, and to ULRF and UofL senior administrators, the terms and conditions of this Agreement upon their request. If such release is made, ULRF will inform such individuals of the confidentiality obligations set forth above and will be compel that such individuals not disclose such terms and conditions to others.

 

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13.4 The Receiving Party may disclose Confidential Information of the Disclosing Party pursuant to a requirement to so disclose under applicable laws or regulations or a valid order of a court or other governmental authority of competent jurisdiction, including an opinion issued by the Kentucky Attorney General, which carries the force of law in Kentucky open-records cases, provided that the Receiving Party: (a) provides the Disclosing Party with prompt notice of such disclosure requirement if legally permitted, (b) affords the Disclosing Party an opportunity to oppose or limit, or secure confidential treatment for such required disclosure (and reasonably cooperates with such effort) and (c) to the extent that the Disclosing Party is unsuccessful in its efforts pursuant to subsection (b), discloses only that portion of the Confidential Information that the Receiving Party is legally required to disclose. For the avoidance of doubt, the Confidential Information disclosed by said law or legal process remains confidential unless and until it falls under one of the exceptions set forth in Sections 13.2(a)-(f).

 

14. NOTICES and invoices

 

14.1 Notices. All notices required or permitted to be given hereunder will be effective when given in writing, with reference to this Agreement and when (a) sent by email, (b) sent by registered or certified mail, return receipt requested, or (c) by overnight courier, such as Federal Express or UPS, to the other Party at its respective address set forth below or to such other address as one Party may designate by written notice from time to time hereunder. Notices will be deemed effective when received.

 

  If to Licensee: Qualigen, Inc.
    2042 Corte Del Nogal
    Carlsbad, CA 92011
    Email: mpoirier@qualigeninc.com
    Attn.: Michael S. Poirier, President/CEO
     
  If to ULRF: University of Louisville Technology Transfer
    300 East Market Street, Suite 300
    Louisville, KY 40202
    Email: thinker@louisville.edu
    Attn.: Director
    ULRF ref. #18255-LA

 

14.2 Invoices. ULRF may submit invoices for any payments due in electronic form via email sent to the email address supplied by Licensee from time to time. An invoice directed to the last email address provided by Licensee to ULRF will be deemed received by Licensee when sent by ULRF.

 

15. TERM AND TERMINATION

 

15.1 Term. This Agreement will continue in full force and effect from the Effective Date until the expiration of the last to expire Licensed Patents, unless sooner terminated by operation of law or by acts of either Party in accordance with the terms of this Agreement (the “Term”).
   
15.2 Termination by Licensee. Licensee may terminate this Agreement by providing written notice to ULRF in accordance with Section 14.1 at least ninety (90) days in advance of the effective date of termination selected by Licensee.

 

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15.3 Termination by ULRF. If Licensee should materially violate or fail to perform any material term or provision of this Agreement, then ULRF may give written notice of such default (“Notice of Default”) to Licensee. If Licensee should fail to repair such default within thirty (30) days of the effective date of such Notice of Default, ULRF will have the right to terminate this Agreement by a second written notice (“Notice of Termination”) to Licensee. If a Notice of Termination is sent to Licensee, this Agreement will automatically terminate on the effective date of such notice. Such termination will not relieve Licensee of Licensee’s obligation to pay any Royalty or fees owing at the time of such termination and will not impair any accrued rights of ULRF. Notices given under this Section will be subject to Section 14.1.

 

  (a) Notwithstanding Section 15.3, ULRF may, to the extent permitted by applicable law, terminate this Agreement immediately upon written notice to Licensee if Licensee files in any court or agency pursuant to any statute or regulation of any state, country or jurisdiction, a petition in bankruptcy or for reorganization or for an arrangement or for the appointment of a receiver or trustee of Licensee or of its assets, or if Licensee is served with an involuntary petition against it, filed in any proceeding of such sort, and such petition is not dismissed within 60 days after the filing thereof, or if Licensee overtly proposes to dissolve or liquidate, or if Licensee makes an assignment for the benefit of its creditors.

 

15.4 Consequences of Termination. Upon termination of this Agreement for any reason, nothing herein is to be construed to release either Party from any obligation that matured prior to the effective date of such termination. Licensee may, however, for one (1) year following the date of termination, Sell inventoried Licensed Products, provided that Licensee pays to ULRF Royalties thereon as required under Article 5 and submits the related reports as required under Article 6. Upon termination, Licensee will remain obligated to provide, in the form specified in Section 6.2, an accounting for and pay Royalties earned up to the date of termination and for the one (1) year period thereafter, as specified above, and any Annual Minimums prorated as of the date of termination based on the number of days elapsed in the applicable License Year. Any such payments or reports due hereunder will be sent to ULRF within thirty (30) days of termination. In the event of termination, ULRF will have no obligation to as a result of such termination refund any royalties, fees, or other amounts paid to ULRF under this Agreement or any other agreement between the Parties.
   
15.5 Surviving Provisions. Surviving any termination or expiration are: (a) Licensee’s obligation to pay royalties or other amounts accrued; (b) any claim of Licensee or ULRF, accrued or to accrue, because of any breach or default by the other Party; and (c) the provisions of Articles 5, 6, 7, 8, 12, 13 and 17, Section 3.5, and any other provision that by its nature is intended to survive.

 

16. assignment

 

16.1 Permitted Assignment by Licensee. Subject to Section 16.3, Licensee may assign this Agreement to their successor in interest as part of a Change of Control, provided that, if Licensee is in material breach of any material provision of this Agreement, Licensee must obtain ULRF’s prior written consent to such assignment.
   
16.2 Any Other Assignment by Licensee. Any other attempt to assign this Agreement by Licensee is null and void.
   
16.3 Conditions of Assignment. Prior to any assignment, the following conditions must be met:

 

  (a) Licensee must give ULRF simultaneous or prior written notice of the assignment, including the assignee’s contact information; and
     
  (b) the assignee must agree in writing to ULRF to be bound by this Agreement.

 

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16.4 After the Assignment. Upon a permitted assignment of this Agreement pursuant to this Article, the term “Licensee” in this Agreement will mean the assignee.

 

17. MISCELLANEOUS

 

17.1 Marking. Licensee will mark all Licensed Products made, used, offered for Sale, imported, or Sold under this Agreement, or their containers, in accordance with applicable patent marking laws.
   
17.2 Use of Names and Trademarks. Licensee will not, without the prior written consent of ULRF, identify ULRF, UofL, or any of their affiliated entities in any promotional statement or use the name of any Inventor (with the exception of any Inventors who are employed by, partners in, or consultants of Licensee) or any UofL employee or student, or any trademark, service mark, trade name, or symbol of ULRF or UofL. Notwithstanding the foregoing or anything to the contrary herein, Licensee may state that it is a licensee of ULRF with respect to the Licensed Patents; likewise, ULRF or UofL may state that the Licensed Patents are licensed to Licensee.
   
17.3 Entire Agreement; Amendment. This Agreement, including the attached Exhibits, constitutes the entire agreement and the understanding of the Parties with respect to the subject matter contained herein, and supersedes all prior or contemporaneous communications, agreements, commitments, representations, or understandings, whether oral or written, between the Parties relating to the same; provided, that the Confidentiality Agreement is not superseded and remains in effect. Any confidential information which was disclosed under the Confidentiality Agreement before the Term shall remain confidential and shall be subject to the nondisclosure and nonuse provisions set forth in Article 13 of this Agreement. This Agreement may be modified only by an instrument duly executed by authorized officials of the Parties and only if such instrument specifically states that it is an amendment to this Agreement.
   
17.4 Severability. In the event any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, that provision will be curtailed, limited or deleted, but only to the extent necessary to remove such invalidity, illegality or unenforceability, and the remaining provisions are not in any way to be affected or impaired thereby. In the event such curtailment, limitation or deletion is not allowed by relevant law or if such curtailment, limitation or deletion changes any essential basis of the bargain set forth in this Agreement, the Parties agree to substitute a new provision as similar in effect to the deleted provision as may be allowed by relevant law.
   
17.5 Interpretation. Any reference herein to any defined term includes both the singular and the plural, whether or not both forms are included in the reference. References to any statutes or regulations mean such statutes or regulations as amended at the time of interpretation and include any successor legislation or regulations. All references to particular Exhibits, Articles or Sections mean the Exhibits to, and Articles and Sections of, this Agreement, unless otherwise specified. Any Exhibits are hereby incorporated by reference and deemed a part of this Agreement. Unless the context otherwise requires, capitalized terms used herein will have the respective meanings specified or referred to in Article 1, or elsewhere herein. Any words not herein defined will have their ordinary meaning.
   
17.6 Waiver. The failure of either Party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement will not constitute a waiver of that (or any other) right or excuse a similar subsequent failure to perform any such (or any other) term or condition by the other Party. None of the terms and conditions of this Agreement can be waived except by the written consent of the Party waiving compliance.

 

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17.7 No Agency. The relationship between the Parties is that of independent contractors. Neither Party will be deemed an agent of the other in connection with the exercise of any rights hereunder, nor will either Party have any right or authority to assume or create any obligation or responsibility on behalf of the other.
   
17.8 Governing Law. This Agreement will be governed solely by the laws of the Commonwealth of Kentucky, without applying any law that would result in the application of a different body of law; provided that questions affecting the construction and effect of any patent will be determined by the law of the country in which the patent has been granted. The Parties agree that the United Nations Convention on Contracts for the International Sale of Goods will not apply to this Agreement.
   
17.9 Jurisdiction and Forum. The state courts located in the Commonwealth of Kentucky will have exclusive jurisdiction over any claim or dispute concerning or arising out of this Agreement. The Parties hereby irrevocably consent to the exclusive jurisdiction of such courts and irrevocably waive any claim of inconvenient forum; provided that, notwithstanding the foregoing, either Party will have the right to seek injunctive relief and the enforcement of judgments in any court of competent jurisdiction.
   
17.10 Compliance with Laws. This Agreement will be subject to all United States laws and regulations now or hereafter applicable to the subject matter of this Agreement. Licensee will comply with all applicable international, national, state, regional, and local laws and regulations in performing its obligations hereunder and in Licensee’s use, manufacture, Sale, offer for Sale, or import of Licensed Products or Licensed Services, or in Licensee’s practice of Licensed Methods. Without limitation, Licensee will observe all applicable United States and foreign laws and regulations governing the transfer to other countries of technical data related to Licensed Products, Licensed Services, or Licensed Methods, including, without limitation, the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR). Licensee will obtain, and will require Affiliates (if applicable) and Sublicensees to obtain, such written assurances regarding export and re-export of technical data (including Licensed Products made by use of technical data) as may be required by EAR, and any similar foreign laws or regulations, and Licensee hereby gives such written assurances as may be required under those Regulations to ULRF.
   
17.11 Export Controls. Licensee understands that ULRF and UofL are subject to United States laws and regulations (including the Arms Export Control Act, as amended, and the Export Administration Act of 1979) controlling the export of technical data, computer software, laboratory prototypes, and other commodities, and ULRF’s obligations to Licensee under this Agreement are contingent on and subject to compliance with such laws and regulations. The transfer of certain technical data or commodities may require a license from an agency of the United States Government or written assurances by Licensee or a Sublicensee that Licensee or a Sublicensee will not export such technical data or commodities to certain foreign countries without prior approval of such agency. ULRF neither represents that such a license will not be required nor that, if required, it will be issued.

 

Therefore, the Parties have executed this Agreement in duplicate originals by their duly authorized officers or representatives.

 

Signatures are shown on the following page.

 

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UNIVERSITY OF LOUISVILLE   QUALIGEN, INC.
RESEARCH FOUNDATION, INC    
     
/s/ Allen Morris   /s/ Michael S. Poirier
T. Allen Morris, Ph.D., MBA   Michael S. Poirier
Director, Office of Technology Transfer   President/CEO

 

Date June 8, 2018   Date June 8, 2018

 

Attachments: Exhibit A: Licensed Patents
  Exhibit B: Fees and Royalties
  Exhibit C: Diligence Milestones

 

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EXHIBIT A – LICENSED PATENTS

 

  ● U.S. Patent no. 9,452,291, Anti-Nucleolin Agent-Conjugated Nanoparticles, and related priority documents and pending U.S. foreign patent applications; ULRF ref. #11063.
     
  ● U.S. Patent Application no. 15/571,763, Anti-Nucleolin Agent-Conjugated Nanoparticles as Radio-Sensitizers and MRI and/or X-Ray Contrast Agents, and related priority documents and foreign patent applications; ULRF ref. #15070.

 

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EXHIBIT B – FEES AND ROYALTIES

 

NOTICE

 

THIS EXHIBIT B CONTAINS FINANCIAL AND COMMERCIAL INFORMATION DEEMED BUSINESS SENSITIVE AND CONFIDENTIAL. THE PARTIES AGREE NOT TO DISCLOSE THE TERMS OF THIS EXHIBIT TO ANY THIRD PARTY WITHOUT THE WRITTEN CONSENT OF THE OTHER PARTY, EXCEPT AS NECESSARY TO ENABLE THE PARTIES TO PERFORM UNDER THIS AGREEMENT OR AS MAY BE REQUIRED AND CONTEMPLATED IN ARTICLE 13 HEREOF.

 

1. License Issue Fee. Within ten (10) calendar days of the Effective Date, Licensee will issue to ULRF a License Issue Fee of Fifty Thousand dollars ($50,000) in the form of a convertible promissory note with an accrued annual percentage rate of eight percent (8%) compounded annually for a term of twenty-four (24) months. At the end of the term, ULRF may choose to convert the note into its cash value or receive Qualigen securities at a conversion rate at seventy percent (70%) of the offering price.
   
2. Royalties. Licensee agrees to pay to ULRF earned royalties (“Royalties”) as a percentage of Net Sales for all Licensed Products and Licensed Services Sold during the Term by Licensee, Affiliates, Sublicensees or any third party otherwise authorized by Licensee to Sell Licensed Products and/or Licensed Services according to the following schedule:

 

  a. Licensee agree to pay to ULRF Royalties at the rate of four percent (4%) of Net Sales up to and equal to two hundred fifty million dollars ($250,000,000) cumulative gross sales in which Licensed Products are produced and/or sold or Licensed Services are conducted in countries or regions where there are valid claims for Licensed Patents covering such Licensed Patents or Licensed Services.
     
  b. Licensee agrees to pay to ULRF Royalties at the rate of five percent (5%) of Net Sales for any sales exceeding two hundred fifty million dollars ($250,000,000) cumulative gross sales in which Licensed Products are produced and/or sold or Licensed Services are conducted in countries or regions where there are valid claims for Licensed Patents covering such Licensed Patents or Licensed Services.

 

Amounts owed under this Section will be paid and reported on a semi-annual basis, as described in Section 6.2.

 

3. Sharing of Non-Royalty Sublicensing Income. In addition to but not in duplication of paragraph 2 above, with respect to any Sublicenses granted by Licensee under Article 3, Licensee will pay Non-Royalty Sublicensing Income to ULRF according to the following schedule for Non-Royalty Sublicensing Income actually received by Licensee:

 

  a. Fifty percent (50%) if sublicensed in years 1-2 of the Agreement;
  b. Forty percent (40%) if sublicensed in years 3-4 of the Agreement; and
  c. Thirty percent (30%) if sublicensed in year 5 or subsequent years of the Agreement.

 

Amounts owed under this Section will be paid to ULRF within thirty (30) days of Licensee’s receipt of any Non-Royalty Sublicensing Income. No payments owed under this Section will be prorated, regardless of whether or not the Sublicense is bundled with other licenses or sublicenses, without ULRF’s written consent. It is contemplated that any Sublicensee of the Licensed Patents or any third party acquiring Licensee would continue the performance of relevant activities and obligations under this Agreement, including the payment of all royalties and fees, pursuant to this Agreement.

 

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4. Annual Minimums. If total amounts actually paid under Sections 2 and 3 of this Exhibit for any License Year are less than the applicable minimum amount set forth in the following subsections (the “Annual Minimum”), Licensee will pay to ULRF an amount for that License Year equal to the shortfall. Such payment will be made within sixty (60) days of the end of the applicable License Year (i.e. the first payment will be due sixty (60) days from January 1, 2020). If this Agreement expires or terminates for any reason during any year, the Annual Minimum for such License Year will be reduced pro-rata.

 

License Year(s) corresponding with calendar year(s) Annual Minimum
2019-2021 Ten thousand dollars ($10,000)
2022 Twenty thousand dollars ($20,000)
2023 and each License Year thereafter Fifty thousand dollars ($50,000)

 

5. Prior Patent Costs. Licensee will reimburse ULRF the total of any and all Patent Costs incurred prior to the Effective Date. Licensee’s payment of such prior Patent Costs will be due as of the Effective Date of this Agreement but payable according to the following schedule:

 

Payment Amount Payment Due Date
$25,000 July 1, 2019
$25,000  January 1, 2020
$Balance of Prior Patent Costs* July 1, 2020

 

*Balance not to exceed $150,000. Any balance in excess of $150,000 is payable on July 1, 2040.

 

6. Milestone Payments. Licensee will pay to ULRF the following non-creditable, non-refundable license milestone payments:

 

To be paid by Licensee to ULRF for the first Licensed Product:

 

  ● Upon dosing the Licensed Product to the first subject or patient for the first phase I clinical trial: $100,000
  ● Upon dosing the Licensed Product to the first subject or patient for the first phase II clinical trial: $200,000
  ● Upon dosing the Licensed Product to the first subject or patient for the first phase III clinical trial: $350,000
  ● Market approval*: $500,000
  ● Achieving $500,000,000 in sales of Licensed Product: $5,000,000

 

*Market approval is regulatory approval by a major regulatory entity, such as the FDA.

 

For the avoidance of doubt, payment for the above milestone payments (for Phases I, II, or III, and $500M in sales) shall be made one-time for the specific, first therapeutic area or indication regardless of the number of therapeutic areas or indications pursued by Licensee, and only for the first Licensed Product which achieves such respective milestone.

 

For the second and every subsequent therapeutic or diagnostic indication for which Licensee develops a Licensed Product, Licensee agrees to pay to ULRF the following, non-creditable, non-refundable license milestone fee:

 

  ● Market approval for such other indication: $500,000

 

Payment for the above milestones shall be paid within thirty (30) days from the date that specific milestone occurs.

 

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EXHIBIT C – DILIGENCE MILESTONES

 

NOTICE

 

THIS EXHIBIT C CONTAINS COMMERCIAL AND PROPRIETARY INFORMATION DEEMED BUSINESS SENSITIVE AND CONFIDENTIAL. THE PARTIES AGREE NOT TO DISCLOSE THE TERMS OF THIS EXHIBIT TO ANY THIRD PARTY WITHOUT THE WRITTEN CONSENT OF THE OTHER PARTY, EXCEPT AS NECESSARY TO ENABLE THE PARTIES TO PERFORM UNDER THIS AGREEMENT OR AS MAY BE REQUIRED AND CONTEMPLATED IN ARTICLE 13 HEREOF.

 

Non-Fee-Based, Diligence Milestones: If Licensee fails to meet a diligence milestone by the milestone due date, Licensee may request an extension or modification of the diligence milestone, and ULRF will consider a reasonable extension or modification provided that Licensee demonstrates that it has diligently, vigorously and in good faith made progress in the applicable milestone.

 

  ● December 1, 2018: Determination of developmental path for diagnostic product involving discussion and decision regarding Licensee’s company partner for diagnostic applications.
     
  ● June 1, 2019: Execution of an agreement with Licensee’s company partner for development of a licensed product for diagnostic applications. If no agreement has been reached for a developmental path for diagnostic applications, then the diagnostic application of the licensed technology will be removed from this Agreement.
     
  ● June 1, 2019: Execution of a sponsored research agreement supporting at least $250,000 in research to develop the licensed technology, or creation of an internal treasury fund of at least $250,000 for such purpose.
     
  ● December 1, 2019: Investment of at least $200,000 in development of a diagnostic product and determination of strategy and new milestones for the development of a diagnostic product.
     
  ● June 1, 2020: Licensee to obtain at least ($XXX) in funding in support of Phase I clinical trials.
     
  ● January 1, 2021: Dosing of first patient in Phase I clinical trials.
     
  ● January 1, 2022: Dosing of first patient in Phase II clinical trials.
     
  ● January 1, 2025: Regulatory submission.
     
  ● January 1, 2026: First commercial sale for use in humans.

 

  ● Following the first commercial sale, Licensee shall reasonably fill the market demand for the licensed products at all times.

 

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