EXCLUSIVE LICENSE AGREEMENT

 

THIS EXCLUSIVE LICENSE AGREEMENT (the “Agreement”), effective as of this 28th
day of February, 2018, between ACCU-BREAK PHARMACEUTICALS, INC., a Florida
corporation having a business address of 6100 Hollywood Boulevard, Suite 207,
Hollywood, FL 33024 (the “Licensor”) and INTIVA BIOPHARMA INC., a Delaware
corporation having a business address at 4340 East Kentucky Avenue, Suite 206,
Denver, CO 80246 (the “Licensee”).

 

RECITALS

 

WHEREAS, Licensor owns all right, title and interest in certain Licensed
Technology (as hereinafter defined), for use with Cannabinoids (as hereinafter
defined) in recreational, Medicinal and Pharmaceutical (as both terms are
hereinafter defined) products for the treatment of various medical conditions
and disorders for humans and animals; and

 

WHEREAS, Licensee desires to license Licensor’s right, title and interest in the
Licensed Technology in the Licensed Field and in the Territory (as hereinafter
defined), and Licensee desires to secure such license in order to develop,
commercialize, sell, and license throughout the Territory products that embody
or employ the Licensed Technology;

 

NOW THEREFORE, in consideration of the premises, and the receipt of good and
valuable consideration the sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

 

1. DEFINITIONS

 

1.1 “Accounting Period” shall mean each three-month period ending March 31, June
30, September 30, and December 31 during the term of this Agreement.

 

1.2 “Affiliate” with respect to each party shall mean any corporation or other
legal entity controlling, controlled by, or under common control with such
party. The term “control” means possession, direct or indirect, of the powers to
direct or cause the direction of the management and policies of an entity,
whether through the ownership of voting securities, by contract or otherwise.

 

1.3 “API” means active pharmaceutical ingredient.

 

1.4 “Cannabinoids” means any of the chemical compounds that are the active
components of the Cannabis genus of plants and its three species, Cannabis
sativa, Cannabis indica, and Cannabis ruderalis; whether the compounds are
synthetically produced or plant-derived, as well as cannabinoid compounds,
formulations or products, that include single and/or multiple Cannabinoids
including both synthetic and plant-derived Cannabinoids, as well as any and all
Cannabinoid analogues. For formulations or compounds which may include
combinations of API’s, other than Cannabinoids or terpenes, it is being agreed
that if the API is another FDA approved Pharmaceutical, Licensor approval will
be required to ensure that the API is not the subject of a current Licensor
product, or the product of another licensee of the Licensor.

 

CONFIDENTIAL1 

 

 

1.5 “Effective Date” shall mean the date first written above.

 

1.6 “FDA” shall mean the United States Food and Drug Administration and any
successor thereto.

 

1.7 “First Commercial Sale” shall mean the first sale of any Licensed Product by
Licensee, its Affiliates or Sublicensees, but not including transfers or
dispositions of Licensed Product for charitable, promotional, pre-clinical,
clinical, regulatory or governmental purposes for which Licensee receives no
payment.

 

1.8 “GMP” means good manufacturing practices required in order to conform to the
guidelines recommended by agencies that control the authorization and licensing
of the manufacture and sale of food and beverages, cosmetics, Pharmaceutical
products, dietary supplements, and medical devices.

 

1.9 “License” shall have the meaning ascribed to that term in Section 2.1(a).

 

1.10 “License Fee” shall have the meaning ascribed to that term in Section
5.1(a).

 

1.11 “Licensed Field” shall mean the use of Cannabinoids, together with the
Licensed Technology for recreational, Medicinal and Pharmaceutical purposes in
humans and animals.

 

1.12 “Licensed Inventions” shall mean the inventions claimed in the Licensed
Patents.

 

1.13 “Licensed Know-how” shall include all technology, materials, research data,
designs, formulas, process information, manufacturing information, application
information, commercialization information, clinical data, scientific data,
medical data, and any other information useful from time to time for the design,
development, manufacturing, use, and/or commercialization of the Licensed
Products, whether or not eligible for protection under the patent laws of the
United States or elsewhere and whether or not any such technology, materials,
information, data and the like related thereto, would be enforceable as a trade
secret or the copying of which would be enjoined or restrained by a court as
constituting unfair competition, which is developed by, or in the possession or
control of, Licensor now or at any time during the term of this Agreement other
than such information that is independently developed by Licensee or its agents,
as evidenced by contemporaneous written records.

 

1.14 “Licensed Patents” shall mean any and all rights arising out of or
resulting from (i) the patents and patent application set forth in Schedule 1.14
attached to this Agreement, as well as any additional patents or patent
applications related to any aspect of any Licensed Technology Improvements,
Licensed Know-how, Licensed Products, and/or Licensed Technology (as herein
defined) filed prior to or during the term of this Agreement and (ii) any patent
granted in respect of all such applications, as well as, without limitation, any
substitutions, divisions, continuations, continuations-in-part, reissues,
renewals, re-examinations, extensions, supplementary protection certificates,
confirmations, registrations, revalidations and the like, of any and all such
patents and patent applications and any international equivalents thereof.

 

CONFIDENTIAL2 

 

 

1.15 “Licensed Products” shall mean any and all products comprising tablets with
Cannabinoids) utilizing the Licensed Technology for the delivery of a
recreational, Medicinal or Pharmaceutical Cannabinoids product in specific
dosage forms.

 

1.16 “Licensed Technology” shall mean the aggregate of the Licensed Inventions,
the Licensed Know-how, the Licensed Products and the Licensed Patents and any
other information and/or technology related to the Licensed Products and/or the
design and/or the manufacturing of the Licensed Products.

 

1.17 “Licensed Technology Improvements” shall have the meaning ascribed to that
term in Section 2.2.

 

1.18 “Medicinal” shall mean any product containing marijuana, hemp or cannabis
produced and sold for health, wellness, or nutritional purposes, including as
herbal medicine, including products produced or sold through U.S. state-licensed
or regulated marijuana programs and comparable programs in other countries and
jurisdictions.

 

1.19 “Milestone Payments” shall have the meaning ascribed to that term in
Section 5.1(b).

 

1.20 (a) “Net Sales” shall mean the Gross Sales (as defined and calculated in
accordance with US generally accepted accounting principles (“GAAP”)) of
Licensed Products by Licensee or any of its Affiliates or Sublicensees
(“Sellers”) to a third party that is not an Affiliate or Sublicensee of Licensee
(“Customer”), less applicable Sales Returns and Allowances (as defined below),
and corresponding to the definition of actual net sales used in the audited
consolidated financial statements of Licensee:

 

“Sales Returns and Allowances” means the sum of

 

  (a) (i) as determined under US GAAP, trade, cash, and quantity discounts or
rebates (other than price discounts granted at the time of invoicing and which
are included in the determination of Gross Sales), credits or allowances given
or made for rejection or return of, and for uncollectible amounts on, previously
sold Licensed Products or for retroactive price reductions (including any types
of rebates and charge-backs), (ii) taxes, duties, or other governmental charges
levied on or measured by the billing amount for Licensed Products, and (iii)
credits for allowances given or made for wastage, replacement, indigent patient,
and any other sales programs for Licensed Products; and   (b) periodic
adjustments of the amount determined in (a) to reflect amounts actually incurred
by Licensee for items (i), (ii), and (iii) in clause (a).

 

(b) For purposes of determining Gross Sales, a “sale” shall not include
transfers or dispositions for charitable, promotional purposes or for
pre-clinical, clinical, regulatory or governmental testing purposes for which a
Seller receives no payment.

 

CONFIDENTIAL3 

 

 

(c) If a Seller commercially uses or disposes of any Licensed Product by itself
(as opposed to use or disposition of the Licensed Product as a component of a
combination of active functional elements) other than in a bona fide sale to a
bona fide Customer, the Gross Sales price of the Licensed Product for purposed
of calculating Gross Sales shall be the price which would be then payable in an
arm’s length transaction with such a Customer.

 

(d) Transfer of a Licensed Product within a Seller or between or among Licensee
and its Affiliate and Sublicensees for sale by the transferee shall not be
considered a sale, commercial use or disposition for the purpose of the
foregoing subsections; in the case of such transfer the Gross Sales price shall
be the Gross Sales price of the Licensed Product when sold to a third party by
the transferee.

 

1.21 “Patent Right” shall mean any right, title or interest in any Licensed
Patent.

 

1.22 “Pharmaceutical” means relating to drugs and subject to a variety of laws
and regulations that govern the patenting, testing, safety, efficacy and
marketing of drugs under the rules and regulations of the FDA or similar
international agencies

 

1.23 “Regulatory Authorities” shall mean the governmental authorities
responsible for regulating the development, marketing, and/or sales of
Pharmaceutical products in a particular country.

 

1.24 “Seller” shall mean with respect to any sale of a Licensed Product the
party responsible for such sale, where such party may be, as applicable,
Licensee, an Affiliate of Licensee or a Sublicensee.

 

1.25 “Sublicensee” shall mean any third party licensed by Licensee or by an
Affiliate thereof to develop or have developed, make or have made, use or have
used, sell or have sold, import or have imported any Licensed Product. For the
avoidance of doubt, a wholesaler, distributor, or similar entity which purchases
any Licensed Product from Licensee or any of its Affiliates, shall not be deemed
to be a Sublicensee.

 

1.26 “Sublicensee Payments” shall have the meaning ascribed to that term in
Section 5.2(ii).

 

1.27 “Term” shall mean the period during which this Agreement is in effect,
commencing on the Effective Date and continuing until the termination of the
Agreement.

 

1.28 “Territory” shall mean the World.

 

1.29 “Valid Claim” shall mean any pending or issued claim of any patent
application or patent that has not been finally rejected or declared invalid or
unenforceable by a patent office or court of competent jurisdiction in any
unappealed and unappealable decision.

 

CONFIDENTIAL4 

 

 

2. LICENSE

 

2.1 Grant of License. Subject to the provisions of this Agreement, Licensor
hereby grants Licensee, including Licensee’s Affiliates,

 

(a) during the Term, a royalty-bearing, Territory-wide license (the “License”)
in the Licensed Field under the Patent Rights to the Licensed Technology, as
well as under the Licensed Patents, the Licensed Know-how, and the Licensed
Technology, regardless of whether such Licensed Patents are actually granted, to
use the Licensed Know-how and Licensed Technology and to develop and have
developed, make and have made, use and have used, sell and have sold, offer for
sale and have offered for sale, import and have imported, export and have
exported, any and all inventions claimed in the Licensed Patents related to the
Licensed Products and/or any compounds, chemicals, substrates, devices, tools,
dies, molds or any other materials whatsoever that are useful in the development
and/or manufacturing and/or sale of the Licensed Products, and particularly
including, without limitation, such license to develop and have developed, make
and have made, use and have used, sell and have sold, offer for sale and have
offered for sale, import and have imported, export and have exported Licensed
Products, which license shall be exclusive even as to Licensor, and

 

(b) the right to grant bona fide sublicenses to third parties, to develop and
have developed, to make and have made, use and have used, sell and have sold,
import and have imported, export and have exported, Licensed Products, and to
exercise all other rights under the License; provided, however, Licensee shall
not have the right to grant any sublicense or to transfer any of its rights
under the License unless each such sublicense or other transfer granted by
Licensee contains terms and conditions under which the Sublicensee or transferee
will be bound in the same manner as Licensee is under this Agreement. A copy of
the proposed agreement shall be provided to Licensor prior to the execution of
the Agreement.

 

2.2 Improvements. The parties acknowledge and agree that this Agreement shall
apply to any and all improvements, modifications, enhancements, or other changes
to the Licensed Technology created, conceived, developed, or reduced to practice
by Licensor during the Term of this Agreement within the Licensed Field
(collectively, the “Licensed Technology Improvements”). Licensed Technology
Improvements within the Licensed Field shall be considered to be a part of the
Licensed Technology and shall be licensed to Licensee in accordance with the
provisions of this Agreement.

 

3. DEVELOPMENT OBLIGATIONS

 

3.1 Licensee’s Obligations. Licensee shall use its commercially reasonable
efforts to develop and commercialize one or more Licensed Products, and, in
particular, Licensee will be responsible for the (i) development and manufacture
of recreation and medicinal License Products and (ii) design, development,
manufacturing, preclinical, clinical, and regulatory development activities of
Pharmaceutical Licensed Products in the Territory and shall bear the costs of
such activities. Licensee shall be responsible for the GMP manufacturing of the
Licensed Products, where applicable, including the development of associated
compounds, chemicals, substrates, devices, tools, dies, molds, and or related
materials.

 

CONFIDENTIAL5 

 

 

3.2 Progress Reports. At intervals no longer than every six (6) months, Licensee
shall communicate with Licensor by telephone or through in-person meetings on
progress made toward achieving the development and commercialization of one or
more Licensed Products.

 

3.3 Cooperation of Licensor. Licensor, in consideration of the various
continuing payment obligations of Licensee under Article 5 (License Fees,
Milestone Payments and Royalties) and Article 9 (Termination), shall provide to
Licensee such assistance, consultation and cooperation as shall be reasonably
requested by Licensee relating to the development and commercialization of
Licensed Products. Licensee shall, as it deems necessary, separately contract
with Licensor for consulting services regarding the design and/or manufacturing
of the Licensed Products. Licensor shall make available its personnel to provide
such consulting services at commercially reasonable consulting rates, and in
accordance with other terms to be separately negotiated between Licensor and
Licensee. No compensation shall be paid to Licensor for any disclosures required
under this Agreement.

 

3.4 Provision of Product in Support of Development and Sales. Licensee will
manufacture or will have manufactured the finished and packaged Licensed
Products in support of development activities and for commercial sales.

 

4. FILING, PROSECUTION AND MAINTENANCE OF LICENSED PATENTS

 

4.1 Responsibility. Licensor, at its expense, shall be responsible, and shall
have sole decision-making authority, for the preparation, filing, prosecution
and maintenance of all existing patent applications and patents included in the
Licensed Patents. Additionally, Licensee, at its expense, shall be responsible
and shall work together with Licensor with respect to the preparation, filing
and prosecution of any new patent applications using the Licensed Technology
with the Licensed Products.

 

4.2 Delivery of Existing Documents. With respect to each Licensed Patent, each
document or a draft thereof pertaining to the filing, prosecution, or
maintenance of such Licensed Patent, including, without limitation, each patent
application, office action, response to office action, request for terminal
disclaimer, request for reissue or reexamination of any patent issuing from such
application, and all other prosecution items contained in the file maintained by
or for Licensor in respect of such Licensed Patent in the possession of Licensor
or its counsel at the Effective Date shall be provided to Licensee within thirty
(30) days of the Effective Date and any such documents received by Licensor or
its counsel from any patent office after the Effective Date shall be provided
within fifteen (15) days after receipt.

 

CONFIDENTIAL6 

 

 

5. LICENSE FEES, MILESTONE PAYMENTS AND ROYALTIES

 

5.1 License Fees and Milestone Payments.

 

(a) Licensee shall pay Licensor a License fee in the total amount of $100,000
(the “License Fee”), which License Fee shall be payable as follows:

 

  ● The amount of $35,000 in the form of cash for access to the Licensed
Technology will be paid by Licensee to Licensor upon the date of execution of
this Agreement;   ● The amount of $30,000 in the form of cash shall be due
within one hundred eighty (180) days from the date of execution of this
Agreement; and   ● The amount of $35,000 in the form of cash or (at the option
of Licensee) common stock of Licensee, shall be due within one (1) year from the
date of execution of this Agreement.

 

(b) With respect specifically to Pharmaceutical Licensed Products, milestone
payments (the “Milestone Payments”) may be paid in cash or (at the option of
Licensee) common stock of Licensee pursuant to the following:

 

  ● A milestone payment of $100,000 shall be due upon approval of filing by each
Regulatory Authority of each Pharmaceutical Licensed Product;         ● A
milestone payment of $100,000 shall be due upon approval by each Regulatory
Authority of each Pharmaceutical Licensed Product;         ● A milestone payment
of $50,000 shall be due upon achievement of $10,000,000 of cumulative Net Sales
for any and all of the Licensed Products (for clarity purposes, this payment is
a one-time only payment) in the Territory;         ● A milestone payment of
$50,000 shall be due upon achievement of $25,000,000 of cumulative Net Sales for
any and all of the Licensed Products (for clarity purposes, this payment is a
one-time only payment) in the Territory;         ● A milestone payment of
$50,000 shall be due upon achievement of $50,000,000 of cumulative Net Sales for
any and all of the Licensed Products (for clarity purposes, this payment is a
one-time only payment) in the Territory.

 

(c) For the purposes of this Section 5.1, if License Fees and/or Milestone
Payments are paid with common stock of Licensee, the shares shall not be
registered under federal securities laws and shall be valued using the weighted
average over the five (5) trading days immediately preceding the due date of the
payment.

 

5.2 Royalties. Beginning with the First Commercial Sale in any country of any
Licensed Product by Licensee or any of its Affiliates or Sublicensees, Licensee
shall pay to Licensor royalties in accordance with the following schedule for
Licensed Products sold by Licensee or its Affiliates and Sublicensees so long as
the manufacture, use, sale, import or offer for sale of such Licensed Product
would, in the country where such manufacture, use, sale, import or offer for
sale of such Licensed Product occurs, infringe a Valid Claim of any Licensed
Patent or violate an exclusive marketing right granted by any governmental
agency in such country in the absence of the License granted by Article 2 or a
sublicense granted under Article 2:

 

CONFIDENTIAL7 

 

 

  (i)  For sales of Licensed Products by Licensee and/or any Affiliate, four
percent (4%) of the annual Net Sales thereof.         (ii)  For sales of
Licensed Products by Sublicensees, twenty-five percent (25%) of the total
revenue received by Licensee, or any Affiliate of Licensee, from any other
person or organization in the form of royalties, milestone payments or any other
consideration (including the proportionate share of such non-cash consideration,
for example and without limitation, stock, real property, and ownership
interests) in respect of sublicense(s) granted by Licensee or any of its
Affiliates under Article 2 (“Sublicensee Payments”);         (iii)
 Notwithstanding the foregoing (i) and (ii), the License Fee and Milestone
Payments shall be offset against any amounts due to Licensor for royalties and
Sublicensee Payments and only after the License Fee and Milestone Payments have
been reimbursed in full to Licensee shall Licensor be entitled to a royalty
payment or Sublicensee Payments. In other words, the License Fee and Milestone
Payments shall be treated as a credit against Licensee’s obligations under this
Section 5.2. For purposes of illustration, if Licensee has paid Licensor
$100,000 in License Fees and Licensee has begun selling a recreational Licensed
Product, Licensor shall not receive any royalty on the Net Sales of that
recreational Licensed Product until the cumulative Net Sales for that Licensed
Product equals Two Million Five Hundred Thousand Dollars ($2,500,000 multiplied
by 4%, which equals $100,000).         (iii)   Development funds received by the
Licensee and/or any Affiliate, from a Sublicensee or any other source, will not
be considered revenue under Section 5.2(iii) and such funds shall not be subject
to any royalty payment whatsoever to Licensor.

 

5.3 Overdue Payments. The payments due under this Agreement shall, if overdue,
bear interest until payment at a per annum rate equal to the lesser of ten
percent (10%) and the maximum permitted by law. The payment of such interest
shall not preclude Licensor from exercising any other rights it may have as a
consequence of the lateness of any payment.

 

5.4 Currency. All License Fees, Milestone Payments and royalty payments under
this Agreement shall be in United States Dollars. Whenever conversion from any
foreign currency shall be required, such conversion shall be at the rate of
exchange thereafter published in the Wall Street Journal for the business day
closest to the due date of the payment.

 

CONFIDENTIAL8 

 

 

6. REPORTS AND PAYMENTS

 

6.1 Books of Accounts. Licensee shall keep, and shall cause each of its
Affiliates and Sublicensees, if any, to keep full and accurate books of accounts
containing all particulars that may be necessary for the purpose of calculating
all Milestone Payments and royalties payable to Licensor. Such books of account
shall be kept at their principal place of business and, with necessary
supporting data shall, during all reasonable times for the three (3) years next
following the end of the calendar year to which each shall pertain, be open for
inspection at reasonable times by Licensor or its designee at Licensor’s expense
for the purpose of verifying royalty statements or compliance with this
Agreement. In the event that any audit performed under this Section 6.1 reveals
an underpayment in excess of ten percent (10%) of the total amount determined by
the auditor to be due Licensor (the “Underpayment”), Licensee shall bear the
full cost of such audit and shall remit any amounts due to Licensor within
ninety (90) days of receiving notice thereof from Licensor. Licensor shall have
the right to audit yearly, provided however if such audit reveals an
Underpayment, Licensor shall thereafter have the right to audit on a semi-annual
basis (with the audit returning to a yearly basis after three (3) sequential
semi-annual audits are conducted with no Underpayments discovered).

 

6.2 Quarterly Payments. In each year the amount of Milestone Payment and royalty
due shall be calculated on a cash received basis as of the end of each
Accounting Period as defined in Section 1.1 of this Agreement and shall be paid
within the sixty (60) days next following such date, every such payment to be
supported by the accounting prescribed in Section 6.3.

 

6.3 Accounting Reports. With each semiannual/quarterly payment, Licensee shall
deliver to Licensor a full and accurate accounting to include at least the
following information:

 

(a) Quantity of each Licensed Product sold by Licensee and its Affiliate or
Sublicensees (by country);

 

(b) Gross Sales billed and Net Sales received by Licensee or any of its
Affiliates or Sublicensees (“Sellers”) for the sale of each Licensed Product;

 

(c) Quantities of each Licensed Product used by Licensee and its Affiliate or
Sublicensees;

 

(d) Names and addresses of all Sublicensees of Licensee; and

 

(e) Total Milestone Payments and/or royalties payable to Licensor.

 

CONFIDENTIAL9 

 

 

7. INFRINGEMENT

 

7.1 Infringement of Licensed Patents. Each party shall promptly notify the other
party of evidence of infringement of a claim of a Licensed Patent by a third
party. If either party shall have supplied the other party with written evidence
demonstrating prima facie infringement of a claim of a Licensed Patent in the
Licensed Field by a third party, Licensee shall have the right to take steps to
protect the Patent Right in such claim, either upon notice from Licensor
requesting such action, or on its own initiative. Licensee shall notify
Licensor, within three (3) months of one party providing the other with evidence
of infringement, whether Licensee intends to prosecute the alleged infringement.
If Licensee notifies Licensor that it intends to so prosecute, Licensee shall
(at its expense), within three (3) months of its notice to Licensor either (i)
cause infringement to terminate or (ii) initiate and diligently prosecute legal
proceedings against the infringer and in Licensor’s name if so required by law.
In the event Licensee notifies Licensor that Licensee does not intend to
prosecute said infringement, Licensor may, upon notice to Licensee, initiate
legal proceedings against the infringer at Licensor’s expense. No settlement,
consent judgment, or other voluntary final disposition of the suit which
invalidates or restricts the claims of such Patent Rights may be entered into
without the consent of the other party, which consent shall not be unreasonably
withheld, but provided that, in the event one party (“the Objecting Party”)
withholds consent for a proposed settlement, the party proposing the settlement
may decline to support further costs of such suit or settlement discussions, and
the Objecting Party shall be required to continue such suit or settlement
discussions at its own expense. Licensee shall indemnify Licensor against any
order for payment that may be made against Licensor in such proceedings brought
by Licensee. Licensor shall indemnify Licensee against any claim of damages that
may be made against Licensee to the extent arising out of any proceedings which
Licensor brings at its own expense pursuant to Section 7.1 following Licensee’s
decision not to prosecute any alleged infringement.

 

7.2 Cooperation. In the event one party shall initiate or carry on legal
proceedings to enforce any Patent Right against any alleged infringer, the other
party shall fully cooperate with and supply all assistance reasonably requested
by the party initiating or carrying on such proceedings. The party which
institutes any suit to protect or enforce a Patent Right shall have sole control
of that suit and shall bear the reasonable expenses (excluding legal fees)
incurred by said other party in providing such assistance and cooperating as is
requested pursuant to this Section. The party initiating or carrying on such
legal proceedings shall keep the other party informed of the progress of such
proceedings and said other party shall be entitled to counsel in such
proceedings but at its own expense. Any award paid by third parties as the
result of such proceedings (whether by way of settlement or otherwise) shall
first be applied to reimbursement of the unreimbursed legal fees and expenses
incurred by either party and then the remainder shall be divided between the
parties as follows:

 

(a) If the amount is based on lost profits, Licensee shall receive an amount
equal to the damages the court determines Licensee has suffered as a result of
the infringement less the amount of any royalties that would have been due
Licensor on sales of Licensed Product lost by Licensee as a result of the
infringement had Licensee made such sales, and Licensor shall receive an amount
equal to the royalties it would have received if such sales had been made by
Licensee, and

 

(b) As to awards other than those based on lost profits, sixty percent (60%) to
the party initiating such proceedings and forty percent (40%) to the other
party.

 

7.3 Infringement Actions by Third Parties. In the event that the making, selling
or using of a Licensed Product in the Licensed Field infringes the intellectual
property rights of others, Licensee will have the first right to control any
negotiation or litigation with respect thereto; however, no settlement, consent
judgment or other voluntary final disposition of the infringement allegation may
be entered into without the written consent, which shall not be unreasonably
withheld, of Licensor.

 

CONFIDENTIAL10 

 

 

7.4 Further Assurances; Progress Reports. For the purpose of the proceedings
referred to in this Article 7, Licensor and Licensee shall permit the use of
their names and shall execute such documents and carry out such other acts as
may be necessary. The party initiating or carrying on such legal proceedings
shall keep the other party informed of the progress of such proceedings and said
other party shall be entitled to counsel in such proceedings but at its own
expense, said expenses to be offset against any damages received by the party
bringing any infringement suit against a third party in accordance with Section
7.2.

 

8. IDEMNIFICATION; REPRESENTATIONS AND WARRANTIES

 

8.1 Indemnification.

 

(a) Licensee shall indemnify, defend and hold harmless Licensor and its
directors, officers, medical and professional staff, employees, independent
contractors, and agents and their respective successors, heirs and assigns (each
an “Indemnitee” under this Section 8.1(a)), against any liability, damage, loss
or expense (including reasonable attorney’s fees and expenses of litigation)
(collectively, “Losses”) incurred by or imposed upon such Indemnitees or any one
of them in connection with any claims, suits, actions, demands or judgments
arising out of any theory of product liability (including, but not limited to,
actions in the form of tort, warranty, or strict liability) concerning any
Licensed Product made, used or sold pursuant to any right or license granted
under this Agreement other than Losses arising out of claims of infringement of
intellectual property rights held by third parties by the practice of the
Licensed Inventions, the existence of which rights constitute a breach of the
representations and warranties given by Licensor under Section 8.2(b) or (c).

 

(b) Licensor shall indemnify, defend and hold harmless Licensee and its
directors, officers, medical and professional staff, employees, independent
contractors, and agents and their respective successors, heirs and assigns (each
an “Indemnitee” under this Section 8.1(b)), against Losses incurred by or
imposed upon such Indemnitees or any one of them in connection with any claims,
suits, actions, demands or judgments arising out of (i) any theory of product
liability (including, but not limited to, actions in the form of tort, warranty,
or strict liability) concerning any Licensed Product made, used or sold by
Licensee or any of its Affiliates or Sublicensees pursuant to any right or
license granted under this Agreement, but only to the extent that any such
claim, suit, action, demand or judgment owes to a failure on the part of
Licensor to advise Licensee as to some unsafe element of the Licensed Technology
that was within Licensor’s actual knowledge (provided, however, that Licensor
shall not have any affirmative obligation to make a determination as to the
safety of the Licensed Technology), (ii) any theory of product liability
(including, but not limited to, actions in the form of tort, warranty, or strict
liability) concerning any Licensed Product made, used or sold by Licensor or any
of its Affiliates or Sublicensees and (iii) any claims of infringement of
intellectual property rights held by third parties by the practice of the
Licensed Inventions, the existence of which rights constitute a breach of the
representations and warranties given by Licensor under Section 8.2(b) or (c).

 

CONFIDENTIAL11 

 

 

(c) No Indemnitee under clause (a) or clause (b) of this Section 8.1 shall be
entitled to any indemnification under such clause for any Loss to the extent
that such Loss is attributable to the negligent activities, reckless misconduct
or intentional misconduct of such Indemnitee.

 

(d) Any Indemnitee under clause (a) or clause (b) of this Section 8.1 shall give
the party from whom indemnification under such clause is sought (the
“Indemnitor”) prompt written notice of any Losses or discovery of fact upon
which such Indemnitee intends to base a request for indemnification under such
clause, provided, however, that an Indemnitor’s obligations to such Indemnitee
under this Section 8.1 shall not be rendered inapplicable as a result of the
failure by such Indemnitee to notify such Indemnitor as required under this
Section 8.1(d), unless such failure materially prejudices such Indemnitor’s
ability to take action with respect to any such Loss.

 

(e) Each Indemnitor under this Section 8.1 agrees, at its own expense, to
provide attorneys reasonably acceptable to an Indemnitee under this Section 8.1
to defend against any actions brought or filed against such Indemnitee with
respect to the subject of indemnity contained herein, whether or not such
actions are rightfully brought. Each Indemnitee under this Section 8.1 shall be
entitled to participate in, but not control, the defense of such action and to
employ counsel of its own choice for such purpose; provided, however, that such
employment shall be at such Indemnitee’s own expense.

 

(f) Each Indemnitor shall have the sole right to consent to the entry of any
judgment, enter into any settlement or otherwise dispose of any Loss, on such
terms as such Indemnitor, in its sole discretion, shall deem appropriate.

 

8.2 Representations and Warranties.

 

Licensor represents to Licensee that:

 

(a) To the best of Licensor’s actual knowledge with respect solely to its
Licensed Technology, there is no fact or circumstance that could adversely
affect the acceptance, or the subsequent approval, by any regulatory authority
of any filing, application or request with respect to the development or
commercialization of any Licensed Product, existing on the Effective Date.

 

(b) Licensor is the sole and exclusive owner of all right, title and interest in
and to the Patent Rights to the Licensed Patents originally listed on Schedule
1.14 and such rights, and all other rights granted to Licensee under the License
existing as of the date hereof, are not subject to any encumbrance, lien or
claim of ownership by any third party. Licensor has obtained all necessary
assignments and made all appropriate filings with respect thereto in order to
secure its sole and exclusive ownership rights in and to such Patent Rights, and
all other rights granted to Licensee as of the date hereof. During the term of
this Agreement, Licensor shall not knowingly take any action that would encumber
the rights granted to Licensee hereunder.

 

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(c) Except for the grant by Licensor to Licensee of the License and other rights
in Article 2, which relate solely to the Licensed Product, Licensor has not,
directly or indirectly, expressly or by implication, by action or omission or
otherwise (i) assigned, transferred or conveyed any right, title or interest in
or to the Patent Rights in the Licensed Patents and/or any other rights granted
to Licensee under the License, (ii) granted any license or other right, title or
interest in or to the Patent Rights in the Licensed Patents and/or any other
rights granted to Licensee under the License, or (iii) agreed to or is otherwise
bound by any covenant not to sue for any infringement, misuse or otherwise with
respect to the Patent Rights in the Licensed Patents and/or any other rights
granted to Licensee under the License.

 

(d) To the best of Licensor’s knowledge, there is no actual or threatened
infringement by a third party of the Patent Rights in the Licensed Patents.

 

8.3 Limitation on Damages and Disclaimer. WITH THE EXCEPTION FOR INTENTIONAL
MISCONDUCT OF SUCH PARTY, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECIAL,
INDIRECT, INCIDENTAL, COLLATERAL, EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL DAMAGES,
INCLUDING LOSS OF INCOME, PROFIT OR SAVINGS, OF ANY PARTY, INCLUDING THIRD
PARTIES, REGARDLESS OF THE FORM OF THE ACTION OR THE THEORY OF RECOVERY, EVEN IF
SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

OTHER THAN WARRANTIES SET FORTH HEREIN, EACH PARTY MAKES NO WARRANTY, EXPRESS OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY
OR ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO ANY
PATENT, TRADEMARK, SOFTWARE, TRADE SECRET, TANGIBLE RESEARCH PROPERTY,
INFORMATION OR DATA LICENSED OR OTHERWISE PROVIDED TO THE OTHER PARTY HEREUNDER
AND HEREBY DISCLAIMS THE SAME.

 

8.4 Insurance. Each party will maintain insurance in amounts and areas of
coverage that are considered commercially reasonable in this industry.

 

9. TERMINATION

 

9.1 Upon Expiration of Patent Rights and Exclusive Marketing Rights. Unless
otherwise terminated as provided for in this Agreement, the License and other
rights granted to Licensee in Article 2 will continue on a country by country
and Licensed Product by Licensed Product basis, and shall expire in each country
for each Licensed Product sold in that country when the manufacture, use, sale,
import or offer for sale of such Licensed Product would not, in said country,
infringe a Valid Claim of any Licensed Patent or violate an exclusive marketing
right granted by any governmental agency in such country in the absence of the
License granted by Article 2 or a sublicense granted under Article 2. Upon such
expiration, the License, with respect to such country and such Licensed Product,
will be automatically converted to a fully paid-up royalty–free perpetual
license that grants Licensee the same bundle of rights as the License, including
all the rights under Section 2.1(b) to grant sublicenses.

 

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9.2 Upon Default, Generally. If either party shall fail to faithfully perform
any of its obligations under this Agreement, the non-defaulting party may give
written notice of the default to the defaulting party. Unless such default is
corrected within sixty (60) days after such notice, the notifying party may
terminate this Agreement upon thirty (30) days prior written notice; provided,
however, in the event that prior to the expiration of any such sixty (60) day
period, such breaching party has in good faith commenced to use commercially
reasonable efforts to remedy such breach and the completion of such remedy, due
to reasons beyond the control of such breaching party, requires more than sixty
(60) days to complete, then such sixty (60) day period shall be extended for so
long as such breaching party is continuing in good faith to use commercially
reasonable efforts to remedy such breach.

 

9.3 If Commercially Unfeasible. Licensee may terminate this Agreement, as to a
particular Licensed Product, without penalty and at any time, if Licensee, at
its sole discretion, determines that further development, manufacture, and/or
sales of the Licensed Products will be commercially unfeasible.

 

9.4 Effect on Sublicenses. In the event that the License granted to Licensee
under this Agreement is terminated, any sublicense under such License granted
prior to termination of said License shall remain in full force and effect,
provided that

 

(a) the Sublicensee is not then in breach of its sublicense agreement;

 

(b) the Sublicensee agrees to be bound to Licensor as the licensor under the
terms and conditions of this Agreement, as modified by the provisions of this
Section 9.4;

 

(c) Licensor shall have the right to receive any payments payable to Licensee
under such sublicense agreement to the extent that they are reasonably and
equitably attributable to such Sublicensee’s right under such sublicense to use
and exploit Patent Rights in the Licensed Patents and other rights granted in
the License;

 

(d) the Sublicensee agrees to be bound by the development and commercialization
obligations of Licensee pursuant to Article 3 (whether set by the parties or by
arbitration) in the field and territory of the sublicense;

 

(e) Licensor has the right to terminate such sublicense upon thirty (30) days
prior written notice to Licensee and such Sublicensee in the event of any
material breach of the obligation to make the payments described in clause (c)
of this Section 9.4, unless such breach is cured prior to the expiration of such
thirty (30) day period, and shall further have the right to terminate such
sublicense in the event of Sublicensee’s failure to meet its development
obligations pursuant to clause (d) hereof; and

 

(f) Licensor shall not assume, and shall not be responsible to each Sublicensee
for, any representations, warranties or obligations of Licensee to such
Sublicensee, other than to permit such Sublicensee to exercise any rights to the
Patent Rights in the Licensed Patents and other rights under the License that
are granted under such sublicense agreement consistent with the terms of this
Agreement.

 

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9.5 Payments. Upon termination of the License granted hereunder, Licensee shall
pay Licensor all royalties due or accrued on (i) the sale of Licensed Products
up to and including the date of termination and (ii) for twelve (12) months
following the date of termination, the sale of Licensed Products manufactured
prior to the termination date, if Licensee and Licensor separately agree to
conduct such sales.

 

10. CONFIDENTIAL INFORMATION

 

10.1 Definitions. Each party receiving information (the “Receiving Party”)
disclosed to it by the other party (the “Disclosing Party”) acknowledges that by
reason of its relationship to the Disclosing Party hereunder, between the
parties, will have, or has had, access to certain information and materials,
including the terms of this Agreement and information concerning the Disclosing
Party’s business, plans, technology, products and/or services that are
confidential and of substantial value to the Disclosing Party (“Confidential
Information”).

 

10.2 Obligation to Protect Confidential Information. Each Receiving Party agrees
that it shall (i) take every reasonable precaution to protect the
confidentiality of Disclosing Party’s Confidential Information from unauthorized
access or use and (ii) not use the Disclosing Party’s Confidential Information
in any way for the Receiving Party’s own account or the account of any third
party except for the purposes of performing its obligations under this
Agreement. Upon termination of this Agreement and at the request of the
Disclosing Party, the Receiving Party will return to Disclosing Party all of the
Disclosing Party’s Confidential Information in its possession or within its
control or destroy such Confidential Information and certify in writing to the
Disclosing Party that all such information has been destroyed; however,
Receiving Party shall have the right to retain one (1) copy of the Disclosing
Party’s Confidential Information solely for the purpose of determining Receiving
Party’s obligations under this Agreement.

 

10.3 Exclusions. Confidential Information does not include any information that
the Receiving Party can demonstrate by written records: (a) was known to the
Receiving Party prior to its disclosure by the Disclosing Party; (b) was
independently developed by the Receiving Party without use of or reference to
the Disclosing Party’s Confidential Information; (c) was or becomes publicly
known through no wrongful act of the Receiving Party; (d) was rightfully
received from a third party whom the Receiving Party had reasonable grounds to
believe was authorized to make such disclosure without restriction; or (e) has
been approved for public release by the Disclosing Party’s prior written
authorization. Further, if the Receiving Party is required to disclose
Confidential Information pursuant to a subpoena, court order or other similar
process (“Court Order”), it is agreed that the Receiving Party shall provide the
Disclosing Party with notice of such request(s), to the extent that such notice
is legally permissible, so that the Disclosing Party may seek an appropriate
protective order. In the event that the Disclosing Party is not successful in
obtaining a protective order and the Receiving Party is compelled to disclose
the Confidential Information, the Receiving Party may disclose such information
solely in accordance with and for the limited purpose of compliance with the
Court Order without liability hereunder.

 

CONFIDENTIAL15 

 

 

10.4 Disclosures Required by Law. In addition, either party may disclose, on a
confidential basis, the existence and terms of this Agreement to existing or
potential investors in such party, in connection with a private or public
offering of such party’s securities, or if required by law. Furthermore, either
party may disclose, on a confidential and need-to-know basis, the existence and
terms of this Agreement and the proposed terms of this Agreement to its counsel,
accountants, directors and other similar advisors (the “Representatives”). The
foregoing shall not, however, operate or grant either party any rights under any
patents, trade secrets, copyrights, or any other proprietary rights of the other
party.

 

10.5 Remedies. The parties acknowledge that money damages would be both
incalculable and an insufficient remedy for any breach of the confidentiality
provisions of this Agreement, and that any such breach would cause the other
party irreparable harm. Accordingly, the parties hereto agree that in the event
of any such breach or threatened breach hereof by a party or by its respective
Representatives, the other party to this Agreement shall be entitled, in
addition to any other available remedies at law, to seek equitable relief,
including injunctive relief and specific performance without the posting of any
bond or other security.

 

11. MISCELLANEOUS

 

11.1 Entire Agreement. This Agreement constitutes the entire understanding
between the parties with respect to the subject matter hereof.

 

11.2 Notices. All notices and other communications required or permitted under
this Agreement shall be in writing and shall be sent by registered or certified
mail (return receipt requested and postage prepaid), or delivered by hand, by
messenger or by a recognized overnight delivery service, addressed to each party
as follows:

 

if to Licensor:

 

ACCU-BREAK PHARMACEUTICALS, INC.

Accu-Break Pharmaceuticals, Inc.

6100 Hollywood Boulevard, Suite 207

Hollywood, FL 33024

Telephone: 954-989-4150

E-mail: r.goldfarb@accubreak.com

 

if to Licensee:

 

INTIVA BIOPHARMA INC.

4340 East Kentucky Avenue, Suite 206

Denver, CO 80246

Telephone:

E-mail: jfriedland@intivabiopharma.com

 

Each such notice or other communication shall for all purposes of this Agreement
be treated as effective or having been given (i) if sent by registered or
certified mail, the earlier of receipt and five (5) business days after
dispatch, and (ii) if delivered in person, by messenger, or by overnight
courier, on the business day delivered.

 

CONFIDENTIAL16 

 

 

11.3 Amendments; Waivers. This Agreement may be amended or any of its terms or
conditions may be waived only by a written instrument executed by the parties
or, in the case of a waiver, by the party waiving compliance. The failure of
either party at any time or times to require performance of any provision hereof
shall in no manner affect its rights at a later time to enforce the same. No
waiver by either party of any condition shall be deemed as a further or
continuing waiver of such condition or term or of any other condition or term.

 

11.4 Assignment; Successors. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors and permitted assigns; provided that this Agreement shall not be
assignable by Licensor without Licensee’s written consent (which consent shall
not be unreasonably withheld, delayed or conditioned) except for the right to
receive royalties or other payments payable herein, and further provided that
Licensee may, with the consent of Licensor (which consent shall not be
unreasonably withheld, delayed or conditioned), transfer its interest or any
part thereof under this Agreement to a wholly-owned subsidiary of Licensee or to
any assignee or purchaser of the portion of its business associated with the
manufacture and sale of Licensed Product, so long as such transferee assumes and
agrees to be bound by the provisions of this Agreement and provided further that
such transferee shall give to Licensor financial statements which financial
statements shall reflect that its tangible net worth is equal to or greater than
Licensee’s net worth as reflected in Licensee’s financial statement provided to
Licensor at the time of such request. Except as provided in the immediately
preceding sentence, this Agreement shall be assignable by Licensee only with the
consent in writing of Licensor, not to be unreasonably withheld, provided that
the proposed assignee has sufficient resources and capabilities to operate a
business in the Licensed Field.

 

11.5 Force Majeure. Any delays in or failures of performance by either party
under this Agreement shall not be considered a breach of this Agreement if and
to the extent caused by occurrences beyond the reasonable control of the party
affected, including but not limited to: acts of God, acts, regulations, or laws
of any government, strikes or the concerted acts of workers, fires, floods,
explosions, riots, wars, rebellion, and sabotage. Any time for performance
hereunder shall be extended by the actual time of delay caused by such
occurrence; provided, however, that either party shall have the right to
terminate this Agreement if any such extension endures for more than twelve (12)
consecutive months.

 

11.6 Publicity. Neither party shall use the name of the other party, nor the
officers or employees of the other party, nor any adaptation thereof in any
advertising, promotional or sales literature, publicity or in any document
employed to obtain funds or financing without the prior written approval of the
party or individual whose name is to be used, such approval not to be
unreasonably withheld.

 

11.7 Governing Law. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of Colorado, without regard
to its choice of law principles.

 

CONFIDENTIAL17 

 

 

11.8 Alternative Dispute Resolution. For any and all claims, disputes, or
controversies arising under, out of, or in connection with this Agreement,
except issues relating to the validity, construction or effect of any Patent
Right, which the parties shall be unable to resolve within sixty (60) days, the
party raising such dispute shall promptly advise the other party of such claim,
dispute, or controversy in a writing which describes in reasonable detail the
nature of such dispute. By not later than five (5) business days after the
recipient has received such notice of dispute, each party shall have selected
for itself a representative who shall have the authority to bind such party and
shall additionally have advised the other party in writing of the name and title
of such representative. By not later than ten (10) business days after the date
of such notice of dispute, such representatives shall agree upon a third party,
which is in the business of providing Alternative Dispute Resolution (ADR)
services (hereinafter, “ADR Provider”) and shall schedule a date with such ADR
Provider to engage in ADR. Thereafter, the representatives of the parties shall
engage in good faith in an ADR process under the auspices of the selected ADR
Provider. If within the aforesaid ten (10) business days after the date of the
notice of dispute the representatives of the parties have not been able to agree
upon an ADR Provider and schedule a date to engage in ADR, or if they have not
been able to resolve the dispute within thirty (30) business days after the
conclusion of ADR, the parties shall have the right to pursue any other remedies
legally available to resolve such dispute in either the state or federal courts
of New York, to whose jurisdiction for such purposes each of Licensor and
Licensee hereby irrevocably consents and submits. Notwithstanding the foregoing,
nothing in this Section 11.8 shall be construed to waive any rights or timely
performance of any obligations existing under this Agreement.

 

11.9 Severability. If any provision(s) of this Agreement are or become invalid,
are ruled illegal by any court of competent jurisdiction or are deemed
unenforceable under then current applicable law from time to time in effect
during the term thereof, it is the intention of the parties that the remainder
of this Agreement shall not be affected thereby. It is further the intention of
the parties that in lieu of each such provision which is invalid, illegal or
unenforceable, there be substituted or added as part of this Agreement a
provision which shall be as similar as possible in economic and business
objectives as intended by the parties to such invalid, illegal or enforceable
provision, but shall be valid, legal and enforceable.

 

11.10 Independent Contractors. It is expressly agreed that Licensor, on the one
hand, and Licensee, on the other hand, shall be independent contractors and that
the relationship between the two parties shall not constitute a partnership,
joint venture or agency. Neither Licensor, on the one hand, nor Licensee, on the
other hand, shall have the authority to make any statements, representations or
commitments of any kind, or to take any action, which shall be binding on the
other, without the prior written consent of the other party to do so. All
persons employed by a party shall be employees of such party and not of the
other party and all costs and obligations incurred by reason of any such
employment shall be for the account and expense of such party.

 

11.11 Survival. Sections 5, 6, 7, 8, 9, 10 and 11 shall survive the expiration
or termination of this Agreement.

 

11.12 Counterparts. This Agreement may be executed in two counterparts, each of
which shall be enforceable against the party actually executing such
counterpart, and both of which together shall constitute one instrument.

 

11.13 Titles and Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not considered in construing or interpreting
this Agreement.

 

[signature page follows]

 

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THE PARTIES have duly executed this Agreement as of the date first shown above
written.

 

[signature page to Exclusive License Agreement]

 

Licensor:   Licensee: ACCU-BREAK PHARMACEUTICALS, INC.  

INTIVA BIOPHARMA INC.

      BY: /s/ Elliot F. Hahn   BY: /s/ Alain Bankier NAME: Elliot F. Hahn, Ph.D
  NAME: Alain Bankier TITLE: Executive Chairman   TITLE: Chief Strategy Officer
and Director

 

CONFIDENTIAL19