EXHIBIT 10.1

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.

 

[***] INDICATES INFORMATION THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED INFORMATION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

EXCLUSIVE PATENT LICENSE AGREEMENT

 

This exclusive license agreement (“Agreement”) is effective May 2, 2017
(“Effective Date”), by and between (a) Analog Biosciences, Inc. (“Licensor”), a
Nevada corporation, having an office at 1340 Specialty Dr., Ste i, Vista, CA
92081, and (b) Artelo Biosciences, Inc. (“Licensee”), a Nevada corporation
having a principal place of business at 564 Wedge Lane, Fernley, NV 89408.
Licensor and Licensee may be referred to herein, on occasion, individually as
“Party” or collectively as “Parties”.

 

RECITALS

 

Whereas, Licensor has an assignment of title to the invention titled [****] (the
“Invention”), invented by [****], and to the patents and patent applications
under Patent Rights as defined below, which are directed to the Invention;

 

Whereas, Licensor and Licensee desire to have the Invention developed and
commercialized so that products resulting therefrom may be available for public
use and benefit; and

 

Whereas, Licensee desires to acquire, and Licensor desires to grant, a license
under Patent Rights to make, 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). “Control” means (a)
having the actual, present capacity to elect a majority of the directors of such
entity, (b) having the power to direct at least fifty percent (50%) of the
voting rights entitled to elect directors of such entity, or (c) in any country
where the local law will not permit foreign equity participation of a majority
of the outstanding stock or voting rights of such entity, the ownership or
control, directly or indirectly, of the maximum percentage of such outstanding
stock or voting rights permitted by local law.

 

1.2 “Licensed Field of Use” means all fields of use covered by the Patent
Rights.

 

1.3 “Licensed Method” means any process or method the use or practice of which,
(a) but for the license granted pursuant to this Agreement, would infringe, or
contribute to or induce the infringement of, a Valid Claim of any issued,
unexpired patent under Patent Rights, or (b) is covered by a claim in a pending
patent application under Patent Rights. As used in Subparagraph (b) of this
Paragraph 1.3, “covered by a claim in a pending patent application” means that
such use or practice would, but for the license granted pursuant to this
Agreement, constitute infringement, contributory infringement, or inducement of
infringement, of such claim if such claim were issued.

 

 

   

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.

 

[***] INDICATES INFORMATION THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED INFORMATION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

1.4 “Licensed Product” means any product, material, kit, or other article of
manufacture or composition of matter, the making, use, Sale, offer for Sale, or
import of which (a) but for the license granted pursuant to this Agreement,
would infringe, or contribute to or induce the infringement of, a Valid Claim of
any issued, unexpired patent under Patent Rights, or (b) is covered by a claim
in a pending patent application under Patent Rights. As used in Subparagraph (b)
of this Paragraph 1.4, “covered by a claim in a pending patent application”
means that such making, use, Sale, offer for Sale, or import would, but for the
license granted pursuant to this Agreement, constitute infringement,
contributory infringement, or inducement of infringement, of such claim if such
claim were issued.

 

1.5 “Licensed Service” means a service provided using Licensed Products or
Licensed Methods, 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.

 

1.6 “Licensed Territory” means the United States and its territories and
possessions, and any foreign countries where Patent Rights exist.

 

1.7 “Net Sales” means the gross invoice price charged by, and the value of
non-cash consideration owed to, Licensee or a Sublicensee for Sales of Licensed
Products and Licensed Services, less the sum of the following actual and
customary deductions to the extent applicable: (a) cash, trade or quantity
discounts; (b) sales, use, tariff, import or export duties, or other excise
taxes, when included in Sales, but not value-added taxes assessed on (or income
taxes derived from) such Sales; and (c) allowances or credits to customers
because of rejections or returns. For purposes of calculating Net Sales, a Sale
by Licensee to a Sublicensee for end use by the Sublicensee will be treated as a
Sale at Licensee’s list price.

 

1.8 “Patent Rights” means Licensor’ rights in the claims of the following:
[****] and assigned to Licensor; continuing applications thereof, including
divisions, substitutions, extensions and continuation-in-part applications;
patents issuing on said applications or continuing applications; reissues of
such patents; and corresponding foreign patents or applications of any of the
foregoing.

 

1.9 “Sale” means the act of selling, leasing, or otherwise transferring or
providing Licensed Products and Licensed Services for any consideration.
Correspondingly, “Sell” means to make or cause to be made a Sale, and “Sold”
means to have made or caused to be made a Sale.

 

1.10 “Sublicense” means a sublicense under this Agreement.

 

1.11 “Sublicensee” means a sublicensee under this Agreement.

 

1.12 “Sublicense Agreement” means a sublicense agreement under this Agreement.

 

1.13 “Valid Claim” means a claim of a patent in any country, which claim (a) has
not expired and (b) has not been held to be invalid by a final judgment of a
court of competent jurisdiction from which no appeal can be or is taken.

 

2. GRANT

 

2.1 Subject to the limitations set forth in this Agreement, including, without
limitation, the rights reserved in Paragraph 2.2, Licensor hereby grants to
Licensee an exclusive license under Patent Rights, in the Licensed Field of Use
in the Licensed Territory, (a) to make, use, offer for Sale, import, and Sell
Licensed Products and Licensed Services, and (b) to practice Licensed Methods.

 

2.2 Licensor reserves the right to do any one or more of the following:

 

 

(a) publish any technical data resulting from research performed by Licensor
relating to the Invention;

  

 

   

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.

 

[***] INDICATES INFORMATION THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED INFORMATION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

 

(b) make, use, and import the Invention and associated technology for
educational and research purposes;

 

 

 

 

(c) practice Patent Rights for educational and research purposes, including in
order to make, use, and import products, and in order to use and practice
methods; and

 

 

 

 

(d) allow other educational and non-profit institutions to do any one or more of
the activities of Subparagraphs (a), (b), and (c) of this Paragraph 2.2, for
educational and research purposes.

 

3. SUBLICENSES

 

3.1 Licensor hereby further grants to Licensee the right to grant to Affiliates
of Licensee, to Affiliates of Sublicensees, and to third parties a Sublicense
under the rights granted to Licensee hereunder, provided that Licensee has
exclusive rights under this Agreement at the time of the grant of the
Sublicense. Every Sublicense will include:

 

 

(a) a statement setting forth the date upon which Licensee’s exclusive license
rights hereunder will expire;

 

 

 

 

(b) a provision requiring the performance by the Sublicensee of all the
obligations owed by Licensee to Licensor under this Agreement other than those
rights and obligations specified in Paragraph 5.3 (Minimum Annual Royalty);

 

 

 

 

(c) a provision requiring payment of royalties to Licensee in an amount
sufficient to permit Licensee to meet Licensee’s royalty obligations to Licensor
at the rates and bases set forth in this Agreement;

 

 

 

 

(d) a prohibition on the grant of further Sublicenses; and

 

 

 

 

(e) a provision imposing on the Sublicensee the same obligation of
indemnification which Licensee has under Article 18 (Indemnification).

 

3.2 Licensee will pay to Licensor twenty-five percent (25%) of any cash
consideration, and of the cash equivalent of all other consideration, which is
due to Licensee for the grant of rights under a Sublicense, excluding payments
due to Licensee as a royalty based on Sales by the Sublicensee. Payment owed to
Licensor under this Paragraph 3.2 is in addition to payments owed by Licensee to
Licensor as Earned Royalties under Paragraph 4.1 below based on Sales by the
Sublicensee.

 

3.3 Within thirty (30) days of execution of each Sublicense Agreement, or
amendment thereof, Licensee will inform Licensor of such executed Sublicense
Agreement or amendment, and Licensee will furnish to Licensor a copy of such
Sublicense Agreement or amendment.

 

3.4 Affiliates of Licensee and Affiliates of Sublicensees will have no licenses
under Patent Rights except as granted by Licensee in a Sublicense pursuant to
this Agreement.

 

3.5 For the purposes of this Agreement, the operations of Sublicensees under
their respective Sublicense Agreements will be deemed to be the operations of
Licensee, for which Licensee will be responsible.

 

3.6 Licensee will collect and guarantee payment of all monies and other
consideration due Licensor under this Agreement from Sublicensees.

 

3.7 Upon termination of this Agreement for any reason, at Licensor’ discretion,
all Sublicenses that are granted by Licensee pursuant to this Agreement, where
the Sublicensee is in compliance with its Sublicense Agreement as of the date of
such termination, will remain in effect and will be assigned to Licensor, except
that Licensor will not be bound to perform any obligations set forth in any
Sublicenses that extend beyond the obligations of Licensor set forth in this
Agreement.

 

 

   

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.

 

[***] INDICATES INFORMATION THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED INFORMATION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

4. ROYALTIES

 

4.1 Licensee will pay to Licensor earned royalties (“Earned Royalties”) at the
rate of [****] ([****]%) of the Net Sales of all Licensed Products and Licensed
Services.

 

4.2 Earned Royalties accruing to Licensor will be paid to Licensor, to be
accompanied by the corresponding royalty report as required in Paragraph 6.4,
quarterly within sixty (60) days after the end of each calendar quarter as
follows: May 31 (for first quarter), August 31 (for second quarter), November 30
(for third quarter), and February 28 (for fourth quarter).

 

4.3 Beginning May 2, 2021, and in each calendar year thereafter, Licensee will
pay to Licensor a minimum annual royalty (“Minimum Annual Royalty”) of [****]
dollars ($[****]) for the life of this Agreement. The Minimum Annual Royalty
will be paid to Licensor by May 2 of each year and will be credited against the
Earned Royalties due and owing for the calendar year for which the Minimum
Annual Royalty is made.

 

4.4 All payments due Licensor will be payable in United States dollars. When
Licensed Products and Licensed Services are Sold for monies other than United
States dollars, Earned 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.

4.5 Earned Royalty payments due to Licensor for Sales occurring in any country
outside the United States will not be reduced by any taxes, fees, or other
charges imposed by the government of such country on the remittance of royalty
income. Licensee will also be responsible for all bank transfer charges for
payments to Licensor.

 

4.6 Licensee will make all payments under this Agreement either by check or
electronic transfer, payable to “Analog Biosciences, Inc.” and Licensee will
forward such payments to Licensor at the address shown in Paragraph 20.1.

 

4.7 If any patent or patent application, or any claim thereof, included within
Patent Rights expires, or is held invalid or unpatentable in a final decision by
a court of competent jurisdiction and last resort and from which no appeal has
been or can be taken, all obligations to pay Earned Royalties based on such
patent, patent application, or claim will cease as of the date of such
expiration or final decision. Licensee will not, however, be relieved from
paying any Earned Royalties that accrued before such expiration or final
decision or that are based on another patent, patent application, or claim
within Patent Rights which is not expired, or which is not held invalid or
unpatentable in such final decision.

 

5. DILIGENCE

 

5.1 Licensee will diligently proceed with the development, manufacture,
marketing, and Sale of Licensed Products and Licensed Services in quantities
sufficient to meet the market demand.

 

5.2 In addition to Licensee’s obligations under Paragraph 5.1, Licensee will
accomplish the following milestones in Licensee’s activities under this
Agreement:

 

 

(a) Dose the first patient in a Phase III Clinical Trial or foreign equivalent
using the Licensed Product within three (3) years of the Effective Date of this
Agreement; and

 

 

 

 

(b) Obtain marketing authorization from the FDA or foreign equivalent for a
Licensed Product within five (5) years of the Effective Date of this Agreement.

  

 

   

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.

 

[***] INDICATES INFORMATION THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED INFORMATION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

5.3 As part of the consideration under this Agreement, Licensee shall pay to
Licensor the following milestone payments:

 

 

(a) $[****] upon enrolling the first patient in a Phase III Clinical Trial or
foreign equivalent using a Licensed Product; and

 

 

 

 

(b) $[****] upon obtaining marketing authorization from the FDA or foreign
equivalent for each Licensed Product.

 

5.4 If Licensee is unable to meet any of its diligence obligations set forth in
Paragraphs 5.1, 5.2 and 5.3, then Licensor will so notify Licensee of failure to
perform. Licensee will have the right and option to extend the target date of
any such diligence obligation for a period of six (6) months upon the payment of
Five Thousand dollars ($5,000) within the thirty (30)-day period prior to the
date to be extended, for each such extension option exercised by Licensee.
Licensee may further extend the target date of any diligence obligation for an
additional six (6) months upon payment of an additional Five Thousand dollars
($5,000). Additional extensions may be granted only by written agreement of the
Parties. These payments are in addition to any other payments owed under this
Agreement. Should Licensee opt not to extend the obligation or fail to meet the
obligation by the extended target date, then Licensor will have the right and
option either to terminate this Agreement or to reduce Licensee’s exclusive
license to a non-exclusive license. This right, if exercised by Licensor,
supersedes the rights granted in Article 2 (Grant).

 

5.5 To exercise either the right to terminate this Agreement or to reduce the
license to a non-exclusive license for lack of diligence under Paragraph 5.1,
5.2 or 5.3, Licensor will give Licensee written notice of the deficiency.
Licensee thereafter will have sixty (60) days to cure the deficiency. If
Licensor has not received satisfactory written evidence that the deficiency has
been cured by the end of the sixty (60)-day period, then Licensor may, at its
option, either terminate the Agreement or reduce Licensee’s exclusive license to
a non-exclusive license by giving written notice to Licensee. These notices will
be subject to Article 20 (Notices).

 

6. PROGRESS AND ROYALTY REPORTS

 

6.1 For the six (6)-month period beginning May 2, 2021, within sixty (60) days
of each June 30 and December 31 following the end of such six (6)-month period,
Licensee will submit to Licensor a semi-annual progress report covering
Licensee’s activities related to the development and testing of Licensed
Products, Licensed Services, and Licensed Methods, including the obtaining of
necessary governmental approvals, if any, for marketing in the United States.
These progress reports will be made until the first Sale occurs in the United
States.

 

6.2 Each progress report will be a sufficiently detailed summary of activities
of Licensee and any Sublicensees so that Licensor 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 5, and will include (but not be limited to) the following:

 

 

(a) summary of work completed and in progress;

 

 

 

 

(b) current schedule of anticipated events and milestones, including diligence
milestones under Paragraph 5.2;

 

 

 

 

(c) anticipated market introduction dates for the Licensed Territory; and

 

 

 

 

(d) Sublicensees’ activities during the reporting period.

 

6.3 In Licensee’s progress report immediately subsequent to the first Sale of a
Licensed Product or a Licensed Service by Licensee or by a Sublicensee, Licensee
will report the date of such first Sale.

 

 

   

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.

 

[***] INDICATES INFORMATION THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED INFORMATION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

6.4 After the first Sale of a Licensed Product or a Licensed Service, Licensee
will make quarterly royalty reports to Licensor, to be accompanied by the
corresponding Earned Royalty payment as required in Paragraph 4.2, within sixty
(60) days after the quarters ending March 31, June 30, September 30, and
December 31, of each year. Each such royalty report will include at least the
following:

 

 

(a) the volume of Licensed Products and Licensed Services Sold;

 

 

 

 

(b) gross revenue from Sale of Licensed Products and Licensed Services;

 

 

 

 

(c) Net Sales pursuant to Paragraph 1.7, and the calculation of Net Sales,
including all deductions taken, so that Licensor can confirm the calculation;

 

 

 

 

(d) total Earned Royalties due Licensor; and

 

 

 

 

(e) names and addresses of Sublicensees for any new Sublicenses entered into
during the reporting quarter.

 

6.5 If no Sales of Licensed Products or Licensed Services have occurred during
the report period, the royalty report will contain a statement to this effect.

 

7. BOOKS AND RECORDS

 

7.1 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
Earned Royalties payable to Licensor, and (b) Licensee’s compliance with
obligations under this Agreement. For five (5) 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 the inspection and
audit by representatives of Licensor for the purpose of verifying Licensee’s
royalty reports or 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
Licensor.

 

7.2 The fees and expenses of Licensor’ representatives performing such an
examination will be borne by Licensor, provided that if an error in underpaid
royalties to Licensor of more than five percent (5%) of the total Earned
Royalties due for any year is discovered, then the fees and expenses of these
representatives in conducting such examination will be borne by Licensee.

 

8. LIFE OF THE AGREEMENT

 

8.1 Unless otherwise terminated by operation of law or by acts of the Parties in
accordance with the terms of this Agreement, this Agreement will be in effect
from the Effective Date and will remain in effect for the life of the
last-to-expire patent or last-to-be-abandoned patent application licensed under
this Agreement, whichever is later.

 

8.2 Any termination of this Agreement will not affect the rights and obligations
set forth in the following:

 

Article 1 Definitions

Article 3 Sublicenses

Article 7 Books and Records

Article 8 Life of the Agreement

Article 11 Disposition of Licensed Products Upon Termination

Article 14 Limited Warranties

Article 16 Indemnification

Article 20 Notices

Article 21 Payments

Article 23 Confidentiality

Article 25 Applicable Law; Venue; Attorneys’ Fees

Article 26 Scope of Agreement

 

 

   

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.

 

[***] INDICATES INFORMATION THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED INFORMATION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

8.3 Any termination of this Agreement will not relieve Licensee of Licensee’s
obligation to pay any payment due or owing at the time of such termination and
will not relieve any obligations, owed by either Party to the other Party,
established prior to termination.

 

9. TERMINATION BY LICENSOR

 

9.1 If Licensee should violate or fail to perform any term of this Agreement,
then Licensor may give written notice of such default (“Notice of Default”) to
Licensee. If Licensee should fail to repair such default within sixty (60) days
of the effective date of such notice, Licensor will have the right to terminate
this Agreement and the licenses herein 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 license fees owing at the time of such termination and will not
impair any accrued rights of Licensor. These notices will be subject to Article
20 (Notices).

 

9.2 Notwithstanding Paragraph 9.1, this Agreement will terminate immediately, if
Licensee files a claim including in any way the assertion that any portion of
Patent Rights is invalid or unenforceable, where the filing of such claim is by
Licensee, by a third party on behalf of Licensee, or by a third party at the
urging of Licensee.

 

9.3 Notwithstanding Paragraph 9.1, this Agreement will terminate immediately in
the event of the filing of a petition for relief under the United States
Bankruptcy Code by or against Licensee as a debtor or alleged debtor.

 

10. TERMINATION BY LICENSEE

 

10.1 Licensee will have the right at any time to terminate this Agreement in
whole or as to any portion of Patent Rights by giving notice in writing to
Licensor. Such notice of termination will be subject to Article 20 (Notices) and
such termination of this Agreement in whole or in part will be effective ninety
(90) days after the effective date of such notice of termination.

 

10.2 Any termination pursuant to Paragraph 10.1 will not relieve Licensee of any
obligation or liability accrued hereunder prior to such termination or rescind
anything done by Licensee or any payments made to Licensor hereunder prior to
the time such termination becomes effective, and such termination will not
affect in any manner any rights of Licensor arising under this Agreement prior
to such termination.

 

11. DISPOSITION OF LICENSED PRODUCTS UPON TERMINATION

 

11.1 Upon termination of this Agreement, for a period of one hundred and twenty
(120) days after the date of termination, Licensee may complete the making of,
and may Sell, any partially made Licensed Products, and Licensee may continue
the practice of Licensed Methods only to the extent necessary to do the
foregoing; provided that all such Sales will be subject to the terms of this
Agreement including, but not limited to, the payment of royalties at the rate
and at the time provided herein and the rendering of reports thereon.

 

12. PATENT PROSECUTION AND MAINTENANCE

 

12.1 Patent prosecution shall be exclusively conducted by Coastal Patent Law
Group, P.C. (www.coastalpatent.com), which is a third-party beneficiary under
this Agreement.

 

12.2 Any matter related to patent prosecution under this Agreement shall be
redressed under the terms set forth in Section 4 of the Engagement Agreement
between Licensee and Coastal Patent Law Group, P.C. which is dated March 20,
2017, and the Addendum thereto dated March 24, 2017, collectively the
“Engagement Agreement”, such terms thereof being hereby incorporated by
reference.

 

 

   

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.

 

[***] INDICATES INFORMATION THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED INFORMATION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

12.3 For clarity, Licensee shall pay for all official costs of patent filings
and patent maintenance, including fees of any patent authority whether U.S. or
foreign, fees for drawings, postage and courier fees, and other fees, but
specifically excluding attorney fees, within thirty (30) days of receiving an
invoice or demand from Licensor.

 

13. MARKING

 

13.1 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.

 

14. LIMITED WARRANTIES

 

14.1 Licensor warrants to Licensee that Licensor has the lawful right to grant
this license.

 

14.2 This license and the associated rights to the Invention are provided to
Licensee WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED. LICENSOR MAKES NO REPRESENTATION OR
WARRANTY THAT PRACTICE OF THE INVENTION OR PATENT RIGHTS (INCLUDING MAKING,
USING, SELLING, OFFERING TO SELL, OR IMPORTING LICENSED PRODUCTS, LICENSED
SERVICES, OR LICENSED METHODS) WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY
RIGHT.

 

14.3 IN NO EVENT WILL LICENSOR BE LIABLE FOR ANY INCIDENTAL, SPECIAL, OR
CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE OR A SUBLICENSE,
OR THE USE OF THE INVENTION, PATENT RIGHTS, LICENSED METHODS, LICENSED SERVICES,
OR LICENSED PRODUCTS.

 

14.4 Nothing in this Agreement is or will be construed as:

 

 

(a) a warranty or representation by Licensor as to the patentability, validity,
enforceability, or scope of Patent Rights;

 

 

 

 

(b) a warranty or representation that anything made, used, Sold, offered for
Sale, or imported under any license granted in this Agreement is or will be free
from infringement of patents of third parties;

 

 

 

 

(c) an obligation to bring or prosecute actions or suits against third parties
for patent infringement;

 

 

 

 

(d) conferring by implication, estoppel, or otherwise any license or rights
under any patent applications or patents of Licensor other than Patent Rights,
regardless of whether such patent applications or patents are dominant or
subordinate to Patent Rights; or

 

 

 

 

(e) an obligation to furnish any know-how not provided in the patents and patent
applications under Patent Rights.

 

15. PATENT INFRINGEMENT

 

15.1 Any matter of patent infringement shall be redressed under the terms set
forth in Section 5 of the Engagement Agreement referenced herein, such terms
thereof being hereby incorporated by reference.

 

 

   

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.

 

[***] INDICATES INFORMATION THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED INFORMATION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

16. INDEMNIFICATION

 

16.1 Licensee will, and will require Sublicensees to, indemnify, hold harmless,
and defend Licensor and its officers, employees, and agents; sponsors of the
research that led to the Invention; and the inventors of any patents and patent
applications under Patent Rights and their employers; against any and all
claims, suits, losses, damages, costs, fees, and expenses resulting from or
arising out of exercise of this license or any Sublicense. This indemnification
will include, but not be limited to, any product liability.

 

17. COMPLIANCE WITH LAWS/EXPORT CONTROLS

 

17.1 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 the
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.

 

18. GOVERNMENT APPROVAL OR REGISTRATION

 

18.1 If this Agreement or any associated transaction is required by the law of
any nation to be either approved or registered with any governmental agency,
Licensee will assume all legal obligations to do so. Licensee will notify
Licensor if Licensee becomes aware that this Agreement is subject to a United
States or foreign government reporting or approval requirement. Licensee will
make all necessary filings and pay all costs, including fees, penalties, and all
other out-of-pocket costs, associated with such reporting or approval process.

 

19. ASSIGNMENT

 

19.1 This Agreement is binding upon and will inure to the benefit of Licensor
and to Licensor’ successors and assigns. This Agreement is personal to Licensee
and assignable by Licensee only with the written consent of Licensor, provided
that Licensee may, on written notice to Licensor, assign this Agreement,
including, without limitation, all obligations owed to Licensor hereunder, to an
acquiror of all or substantially all of Licensee’s stock or assets.

 

20. NOTICES

 

20.1 All notices under this Agreement will be deemed to have been fully given
and effective when done in writing and (a) delivered in person, (b) mailed by
registered or certified United States mail, or (c) deposited with a carrier
service requiring signature by recipient, and addressed as follows:

 

To Licensor:

[  ]

 

To Licensee:

[  ]

 

Either Party may change its address upon written notice to the other Party.

 

 

   

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.

 

[***] INDICATES INFORMATION THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED INFORMATION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

21. PAYMENTS

 

21.1 Payments to Licensor will be made by check or bank wire transfer, to the
following address:

 

Checks:

The address associated with Licensor in accordance with Section 20.1.

 

Bank wire (Licensee is responsible for all wire transfer fees):

TBD upon payment becoming due

 

21.2 If monies owed to Licensor under this Agreement are not received by
Licensor when due, Licensee will pay to Licensor interest charges at a rate of
ten percent (10%) per annum. Such interest will be calculated from the date
payment was due until actually received by Licensor. Such accrual of interest
will be in addition to, and not in lieu of, enforcement of any other rights of
Licensor related to such late payment. Acceptance of any late payment will not
constitute a waiver under Article 22 (Waiver).

 

22. WAIVER

 

22.1 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 right or excuse a similar subsequent failure to perform any such
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.

 

23. CONFIDENTIALITY

 

23.1 With respect to disclosures by one Party (“Disclosing Party”) to the other
Party (“Receiving Party”) under this Agreement, the Receiving Party will,
subject to Paragraphs 23.2 and 23.3, hold the Disclosing Party’s proprietary
business and technical information, patent prosecution material, and other
proprietary information, including the negotiated terms of this Agreement (all
such proprietary information referred to collectively herein as “Proprietary
Information”), in confidence and against disclosure to third parties, with at
least the same degree of care as the Disclosing Party exercises to protect the
Disclosing Party’s own data and information of a similar nature. This obligation
will expire five (5) years after the termination or expiration of this
Agreement.

 

23.2 With respect to Proprietary Information disclosed by the Disclosing Party
to the Receiving Party, nothing contained herein will in any way restrict or
impair the right of the Receiving Party to use, disclose, or otherwise deal with
any information or data which:

 

 

(a) at the time of disclosure to the Receiving Party by the Disclosing Party is
available to the public by publication or otherwise, or thereafter becomes
available to the public by publication or otherwise through no act of the
Receiving Party;

 

 

 

 

(b) the Receiving Party can show by written record was in the Receiving Party’s
possession prior to the time of disclosure to the Receiving Party hereunder and
was not acquired by the Receiving Party from the Disclosing Party;

 

 

 

 

(c) is independently made available to the Receiving Party without restrictions
as a matter of right by a third party, as demonstrated by written record;

 

 

 

 

(d) is independently developed by employees or agents of the Receiving Party who
did not have access to the information disclosed by the Disclosing Party, as
demonstrated by written record; or

 

 

 

 

(e) is subject to disclosure under the California Public Records Act or other
requirements of law.

  

 

   

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.

 

[***] INDICATES INFORMATION THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED INFORMATION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

23.3 Within fifteen (15) days following the effective date of termination or
expiration of this Agreement, each Receiving Party agrees to destroy or return
to the Disclosing Party Proprietary Information received from the Disclosing
Party which is in the possession of the Receiving Party. However, each Receiving
Party may retain one copy of Proprietary Information received from the
Disclosing Party for archival purposes in non-working files for the sole purpose
of verifying the ownership of the Proprietary Information, provided such
Proprietary Information will be subject to the confidentiality provisions set
forth in this Article 23 (Confidentiality). Subject to such right to retain for
archival purposes, each Receiving Party agrees to provide to the Disclosing
Party, within thirty (30) days following termination of this Agreement, a
written notice that Proprietary Information received from the Disclosing Party
has been returned or destroyed.

 

24. SEVERABILITY

 

24.1 The provisions of this Agreement are severable, and in the event that any
provision of this Agreement is determined to be invalid or unenforceable under
any controlling law, such invalidity or enforceability will not in any way
affect the validity or enforceability of the remaining provisions hereof.

 

25. APPLICABLE LAW; VENUE; ATTORNEYS’ FEES

 

25.1 This Agreement will be construed, interpreted, and applied in accordance
with the laws of the State of California, excluding any choice-of-law rules that
would direct the application of the laws of another jurisdiction, except that
the scope and validity of any patent or patent application under Patent Rights
will be determined by the applicable law of the country of such patent or patent
application. Any legal action brought by one Party against the other Party
relating to this Agreement will be conducted in San Diego, California. The
prevailing Party in any such legal action under this Agreement will be entitled
to recover its reasonable attorneys’ fees in addition to its costs and necessary
disbursements.

 

26. SCOPE OF AGREEMENT

 

26.1 Neither Party will use this Agreement as a basis to invoke the CREATE Act,
35 U.S.C. 103(c), without the written consent of the other Party.

 

26.2 This Agreement incorporates the entire agreement between the Parties with
respect to the subject matter hereof and supersedes all previous communications,
representations, or understandings, whether oral or written, between the Parties
relating to the subject matter hereof unless incorporated by reference herein.
For clarity, it is the intent of the Parties that the Engagement Agreement
referenced in Section 15.1, and all terms thereof, are incorporated by reference
herein. In the event any term of this Agreement conflicts with a term of the
Engagement Agreement, the term in this Agreement shall control.

 

26.3 This Agreement may be modified only by written amendment duly executed by
the Parties.

 

26.4 Intentionally left blank.

 

 

   

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.

 

[***] INDICATES INFORMATION THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED INFORMATION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

 

In witness whereof, the Parties have executed this Agreement in duplicate
originals by their respective authorized officers or representatives on the
respective dates below.

 

 

Licensor: Analog Biosciences, Inc.

 

Licensee: Artelo Biosciences, Inc.

 

 

 

 

/s/ Joshua Schoonover

 

/s/ Gregory Gorgas

 

Authorized Signatory: Joshua S. Schoonover

 

Authorized Signatory: Gregory Gorgas

 

 

 

 

Date: May 2, 2017

 

Date: May 2, 2017