Document:

iaso_ex101.htm

EXHIBIT 10.1

 

STANDARD LICENSE AGREEMENT (Spin-off) 

 

This License Agreement is effective as of the sixth day of January 6th, 2016 (“the Effective Date”). 

 

	
BETWEEN: 
	
The Royal Institution for the Advancement of Learning/McGill University, a Canadian University with principal offices 845 Sherbrooke Street, West, James Administration Building, Montreal, Quebec, H3A 0G4, Canada and herein acting and represented by its duly authorised representatives,

	
 
	
 

	
 
	
(hereinafter called McGill)

	
 
	
 

	
AND: 
	
Iaso Biomed Inc. with principal offices at 7315 East Peakview Avenue, Centennial, CO 80111 USA and herein acting and represented by its duly authorised representatives

	
 
	
 

	
 
	
(hereinafter called Licensee)

 

McGill and Licensee are hereinafter referred to individually as a “Party” and collectively as the Parties”.

 

1. PREAMBLE:

 

WHEREAS McGill, by virtue of its role as an educational institution, carries out scientific research through its faculty, staff, and students, and is committed to bringing the results of that research into widespread use.

 

WHEREAS McGill is owner by assignment from inventor(s) Vassilios Papadopoulos, Yasaman Aghazadeh and Jinjiang Fanof the entire right, title, and interest in the Intellectual Property (IP) and PATENT(S) corresponding to the invention in McGill report of invention No. 14007 entitled Identification of peptide sequences inducing steroid production, and McGill is owner by assignment from inventor(s) Vassilios Papadopoulos and Edward Daly of the entire right, title, and interest in the IP rights corresponding to the invention in McGill report of invention No. 15073 entitled Product/Precursor Ions diagnostic of a DHEA Precursor Detected in Human Serum as Potential Biomarkers for the Determination of Alzheimer's Disease (the "Inventions"). 

 

WHEREAS pursuant to the McGill University Policy on Intellectual Property (the "University Policy") McGill is authorized to assume the management and to take whatever steps necessary for securing protection of intellectual property rights embodied in Inventions, and to commercialize such Inventions.

 

WHEREAS Licensee desires to obtain license rights to the intellectual property (“IP”) and LICENSED PATENT(S) under the terms and conditions of this License Agreement.

 

	 
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2 DEFINITIONS

 

When used in this Agreement, the following terms shall have the following meaning unless otherwise expressly provided:

 

		2.1	“AFFILIATES” means, with respect to a Party to this Agreement, any person which, directly or indirectly controls, is controlled by, or is 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 of policies of a person, whether through ownership of equity participation, voting securities, beneficial interest, contract, agreement or otherwise. In the event Licensee desires to extend its rights to its Affiliates, Licensee shall cause its Affiliates to enter into this Agreement or (b) a joinder agreement, in a form satisfactory to McGill, agreeing to be bound by all of the conditions of this Agreement as if such Affiliates were an original party to this Agreement.
		
 
	
 

		2.2	“CONFIDENTIAL INFORMATION” means and includes all technical information, inventions, developments, discoveries, software, know-how, methods, techniques, formulae, data, processes and other proprietary ideas, whether or not patentable or copyrightable, regardless whether the disclosing party identifies such information as confidential or proprietary at the time it is delivered or communicated to the other party.
		
 
	
 

		2.3	“FIELD” means all applications as identified in Appendix “A”.
		
 
	
 

		2.4	“PATENT(S), and LICENSED PATENT(S)” mean those patents or patent applications identified in Appendix “B”, including all continuations, divisions, reissues, re-examinations or extensions of the foregoing.
		
 
	
 

		2.5	“LICENSED INTELLECTUAL PROPERTY” means the IP described in the Report of Invention attached in Appendix “B”.
		
 
	
 

		2.6	“LICENSED PRODUCT(S)” means any product, apparatus or methods, the production manufacture, sale, lease, use or practice of which incorporates or makes use of one or more Licensed Patent(s) claims.
		
 
	
 

		2.7	“NET REVENUES” means any amount, whether or not invoiced, billed or received from a third party attributable to the sale, lease, use, transferor other disposition (“sale”) of any of the “Licensed Product(s)”, less the following qualifying costs directly attributable to such sale. Such qualifying costs shall be limited to:

 

		
 
	a)	transportation insurance premiums, freight and prepaid outbound transportation expenses ;
		
 
	
 
	
 

		
 
	b)	discounts, in amounts customary in the trade, for quantity purchases, cash payments, and for wholesalers and distributors;
		
 
	
 
	
 

		
 
	c)	sales or other similar taxes imposed by a governmental agency and;
		
 
	
 
	
 

		
 
	d)	“Licensed Product(s)” provided to the end user at no cost and used in testing, in clinical trials or as marketing samples.
		
 
	
 
	
 

		
2.8 
	
“TERRITORY” means the geographical area identified in Appendix “C”.

 
	 
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3 LICENSE GRANTED

 

		3.1	McGill hereby grants to Licensee the exclusive royalty bearing right to use and practice, in the Field and in the TERRITORY, the LICENSED PATENT(S) and the LICENSED INTELLECTUAL PROPERTY with the exclusive right to make, have made, sell, lease or otherwise transfer the LICENSED PRODUCT(S).
		
 
	
 

		3.2	McGill grants Licensee only the qualified right to grant sub-licenses as more fully described in Section 3.4. No other rights or licenses are granted.
		
 
	
 

		3.3	To the extent that any Affiliate wishes to exercises any rights granted Licensee hereunder in accordance with Section 2.1, Licensee liable to McGill for the duties and obligations of any Affiliate hereunder and any such act or omission of an Affiliate would be deemed to be a breach by Licensee of this Agreement.
		
 
	
 

		3.4	RIGHTS TO SUB-LICENSE
		
 
	
 

		
 
	
The right to sub-license granted to Licensee under Section 3.2 is subject to the following conditions: 

 

	
 
		(a)	any grant of sub-license hereunder shall be subject to the prior written consent of McGill, such consent not to be unreasonably withheld; and,
	
 
		
 
	
 

	
 
		(b)	within thirty (30) days of the execution of a sub-license agreement, as authorized herein, Licensee shall forward to McGill a fully executed copy of such sub-license agreement. If the agreement is in a language other than French or English Licensee shall provide McGill with an English translation. In case the sub-license agreement is subsequently amended, Section 3.4 b) shall apply and a copy of the signed amended agreement shall be sent to McGill within thirty (30) days after execution; and,
	
 
		
 
	
 

	
 
		(c)	all sub-licenses granted by Licensee shall impose obligations, responsibilities and standards upon any sub-license that, in all material respects, are not less than those imposed on Licensee by this Agreement. Each sub-license shall specifically refer to this Agreement and to all rights retained by McGill or required to be granted back to McGill from Licensee or the sub-licensee; and,
	
 
		
 
	
 

	
 
		(d)	Each sub-license agreement shall include a provision to the effect that it shall automatically be modified or terminated, in whole or in part, upon modification or termination, in whole or in part, of this Agreement; and,
	
 
		
 
	
 

	
 
		(e)	Licensee shall be solely responsible for the enforcement of the terms of any sub-license, for collection of payment due thereunder and for inspecting the accounts and records kept by the sub-licensee to ascertain the Net Revenues;
	
 
		
 
	
 

	
 
		(f)	all sub-license agreements shall prohibit the sub-licensee from further sub-licensing.
	
 
		
 
	
 

	
 
		(g)	even if Licensee enters into sub-licenses, Licensee remains liable to McGill for all of Licensee’s duties and obligations contained in this Agreement, including the obligation to pay royalties, and any act or omission of a sub-licensee that would be a breach of this Agreement if performed by Licensee shall be deemed to be a breach by Licensee of this Agreement.

 

	 
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		3.5	RIGHTS RESERVED
		
 
	
 

		
 
	
Notwithstanding the exclusive license granted herein, McGill reserves the right to use and practice the LICENSED INTELLECTUAL PROPERTY and LICENSED PATENTS for its internal purposes (which excludes commercial exploitations), including teaching, research, continuing research, development, and testing and all other practise or utilization of the LICENSED PRODUCT(S) as well as collaborations with other Institutions. 

		
 
	
 

		
3.6 
	
NO FURTHER GRANT

	
 
	
 
	
 

	
 
	
 
	
This Agreement shall not be interpreted or construed as granting to Licensee any rights, express or implied, by estoppels or otherwise, to any patents, patent applications, inventions, methods, technical information, confidential information, proprietary information, expertise, know-how, trade secrets, or knowledge not specifically licensed under this Agreement regardless of whether such technology or patent right shall be dominant or subordinate to any LICENSED INTELLECTUAL PROPERTY and LICENSED PATENT(S) and all rights not expressly granted to Licensee by this Agreement are expressly reserved by McGill.

	
 
	
 
	
 

	
 
	
3.7 
	
IMPROVEMENT

	
 
	
 
	
 

	
 
	
 
	
Any improvement and modification related to the Inventions made, discovered or conceived by McGill inventors under a sponsored research agreement or service contract between Licensee and the RI-MUHC will be automatically included in this License Agreement provided that the work is disclosed by the McGill inventors to McGill through a report of invention. Licensee will be the sole and exclusive owner of these disclosed improvements and modifications.

	
 
	
 
	
 

	
 
	
3.8 
	
ASSIGNMENT OF IP RIGHTS

	
 
	
 
	
 

	
 
	
 
	
McGill will, in good faith, consider assignment of IP rights to the Licensee when the Licensee demonstrates stability by having an experienced management team in place, an executable business plan, sufficient financing to execute the business plan and has been in existence for at least 5 years or earlier upon the Licensee’s and McGill’s mutual agreement. The assignment of IP rights is conditional on all the inventors’ agreement and on receipt of acceptable consideration, such as cash payment or additional equity, the amount of which will be negotiated at a later date based on the company valuation.

 
	 
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4 CONSIDERATION

 

In consideration of the licenses and rights granted hereunder by McGill, Licensee shall pay to McGill;

 

	
 
	4.1	An annual, non-refundable minimum royalty as set forth in Appendix “D”. The minimum annual royalty is due and payable on each anniversary date of the Agreement starting with the Effective Date and may be credited against any royalties due that year;
	
 
	
 
	
 

	
 
	4.2	A royalty based on a percentage (%) of NET REVENUES and payable as set forth in Appendix “D”;
	
 
	
 
	
 

	
 
	4.3	Milestone payments as set forth in Appendix “D”;
	
 
	
 
	
 

	
 
	4.4	Equity as set forth in Appendix “D”.
	
 
	
 
	
 

	
 
	4.5	No multiple royalties shall be payable because any LICENSED PRODUCT(S) are covered by more than one of the LICENSED PATENT(S), such royalty shall be the highest applicable one.
	
 
	
 
	
 

	
 
	4.6	Licensee shall pay to McGill twenty five percent (25%) of any sub-licensee up-front fees, milestones or other such consideration paid by each sub-licensee or Affiliate of this Agreement. Any non-cash consideration received by the Licensee from such sub-licensee or Affiliate shall be valued at its fair market value as of the date of receipt.
	
 
	
 
	
 

	
 
	4.7	On sales of LICENSED PRODUCT(S) by Licensee to sub-licensees or on sales made in other than arm’s-length transactions, the value of the NET REVENUES attributed under this Section to such a transaction shall be that which would have been received in an arm’s-length transaction, based on a like transaction at that time.
	
 
	
 
	
 

	
 
	4.8	Unless otherwise provided herein, all payments required under this Agreement shall be payable within thirty (30) days of the due date. Payments past due shall bear interest at the rate of one and one-half percent (1 1⁄2%) per month compounded, or the maximum interest rate allowed by applicable law, whichever is less.
	
 
	
 
	
 

	
 
	4.9	All dollar amounts referred to in this Agreement are expressed in Canadian dollars. All payments to McGill under this Agreement shall be made in Canadian dollars by cheque payable to “McGill University”. If Licensee receives amounts payable to McGill in currency other than Canadian dollars, the revenues shall be converted into Canadian dollars at the conversion rate for the foreign currency as published by the Bank of Canada as of the last business day of the applicable calendar quarter.

 
	 
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5 REPORTS

 

		5.1	Licensee shall deliver to McGill within thirty (30) days after the end of each calendar quarter or such other period as otherwise defined in Appendix “D”, a written report certified by the chief financial officer of Licensee, setting forth the calculation of royalties due to McGill for such period, including the following data as related to this License Agreement without limitation:

 

			(a)	NET REVENUES listed by country.
			
 
	
 

			(b)	All income derived from sub-licenses, including one time fees, special entry fees or equity granted in consideration of sub-licenses or other in-kind benefits.
			
 
	
 

			(c)	Royalties, from any source and minimum royalties.
			
 
	
 

			(d)	Milestone payments from licenses and sub-licenses and Affiliates.
			
 
	
 

			(e)	Gross revenue amounts, including sales price or fees, revenues, or monies invoiced, billed, or received for all LICENSED PRODUCT(S).
			
 
	
 

			(f)	Qualifying costs, by category of cost, as defined in Section 2.6 and used to calculate NET REVENUES.
			
 
	
 

			(g)	Number or quantity of LICENSED PRODUCT(S) sold, listed by country.
			
 
	
 

			(h)	Royalties credited against minimum royalty payments.
			
 
	
 

			(i)	A nil report if applicable.

 

		5.2 	In the event that Vassilios Papadopoulos, Yasaman Aghazadeh, Jinjiang Fan and Edward Dalyare granted financial interest in Licensee or a new venture created either by Licensee or jointly by Licensee and third parties for the purpose of commercializing and promoting the LICENSED PRODUCT(S), Licensee shall inform McGill, in advance, of the nature, the value and the distribution of such financial interest.
		
 
	
 

		5.3 	Licensee shall provide to McGill, within one (1) month of release, a copy of the annual report of the company, if any, including its audited financial statement and a three (3) year estimate of future royalty payments

 

	 
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	5.4 	Licensee shall inform McGill and consent to re-evaluate the commercial deal whenever a sub-license may be deemed as contrary to the best interests of Canadians, may have an adverse impact on McGill’s image or may include ethical issues. In such cases, a written request will be addressed to the Assistant Vice-Principal (Research and International Relations), McGill.

 

6AUDIT

 

	
 
	6.1	Licensee shall keep and cause its sub-licensees and Affiliates to keep at their own expense, accurate books of accounts, using generally accepted accounting principles in the United States (US GAAP), detailing all data necessary to calculate any payment due to McGill under this Agreement. In the case of an audit, Licensee will convert its accounting records into Canadian GAAP, upon McGill’s request.
	
 
	
 
	
 

	
 
	6.2	McGill shall have the right, upon at least fifteen (15) days written notice, to retain auditors who are at arm’s length from McGill and audit Licensee’s books of accounts to verify compliance with the terms of this Agreement. The audit may be performed at any time within five (5) years after the end of any reporting period to which the books of accounts pertains to. Access to Licensee’s books and records shall be made available at least once each year. The audit shall be performed during normal business hours at Licensee principal place of business or at such other site as may be agreed upon by McGill and Licensee in writing. McGill and Licensee shall have the right to make abstracts or copies of such books of account and any working papers used to determine royalty payments.
	
 
	
 
	
 

	
 
	6.3	Licensee shall reasonably cooperate with auditors and McGill in the performance of an audit, and respond with diligence to any reasonable request from such auditors and McGill for further documents, instruments or assurances in order to carry out the provisions of this Section of the Agreement.
	
 
	
 
	
 

	
 
	6.4	Information gained in such an audit and all books of account shall be treated as confidential information. McGill and Licensee agree to impose a similar requirement of confidentiality on the auditors retained to conduct the audit.
	
 
	
 
	
 

	
 
	6.5	If the audit shows that Licensee has paid less than required under this Agreement, Licensee shall promptly pay the additional amount due. If the amount of underpayment exceeds five percent (5%) of the amount that should have been paid, Licensee shall also pay the full cost of the audit and accrued interest on the difference. Any overpayment amount shall be credited against payments due to McGill in the following year.

 

	 
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7 PERFORMANCE

 

	
 
	7.1	DILIGENT EFFORT
	
 
	
 
	
 

	
 
		Licensee shall use diligent efforts to develop the LICENSED PATENT(S) and to introduce LICENSED PRODUCT(S) into the commercial market as soon as practicable consistent with sound and reasonable business practice and judgement, in order to maximise NET REVENUES. To that end, Licensee acknowledges and agrees to the performance milestones and development plans described in Appendix “D”. Thereafter, and until the expiration of this Agreement, Licensee shall endeavour to keep LICENSED PRODUCT(S) reasonably available to the public.
	
 
	
 
	
 

	
 
	7.2	Licensee agrees to develop a vigorous sub-licensing program to develop the LICENSED PATENT(S) and to effect commercialization of LICENSED PRODUCT(S) in any Field of use or TERRITORY that Licensee decides not to exploit for its own self.

 

8 CONFIDENTIALITY

 

	
 
	8.1	Non-Disclosure by the Parties. Licensee and McGill shall maintain in confidence and not disclose to any third party any Confidential Information of the other party. The disclosing party is referred to as the “disclosing party” and the receiving party is referred to as the “receiving party.” The receiving party shall ensure that its employees have access to Confidential Information only on a need-to-know basis and are obligated to abide by the receiving party’s obligations under this Agreement. The foregoing obligation shall not apply to:

 

	
 
		8.1.1	Information that is known to the receiving party or independently developed by receiving party prior to the time of disclosure, in each case, to the extent evidenced by written records promptly disclosed to the disclosing party upon receipt of the Confidential Information;
	
 
		
 
	
 

	
 
		8.1.2	Information disclosed to a receiving party by a third party that has a right to make such disclosure;
	
 
		
 
	
 

	
 
		8.1.3	Information that becomes patented, published or otherwise part of the public domain through no fault of the disclosing party; or
	
 
		
 
	
 

	
 
		8.1.4	Information that is required to be disclosed by order of governmental authority or a court of competent jurisdiction; provided that receiving party shall use best efforts to obtain confidential treatment of such information by the agency or court.

 

	 
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	8.2	Limited Non-Disclosure by McGill. McGill shall not be obligated to accept any Confidential Information from Licensee except for the reports required hereunder. McGill shall use reasonable efforts not to disclose those reports to any third party other than McGill’s outside advisors (subject to exceptions similar to those applicable to Licensee under 8.1 Confidentiality). In the event that McGill does accept any Confidential Information other than such reports, it shall be subject to the provisions of this Section 8.

 

9 PATENT PROSECUTION AND MAINTENANCE

 

	
 
	9.1	Licensee shall reimburse McGill within thirty (30) days of McGill’s documented invoices an amount equivalent to all patent fees, expenses and charges incurred by McGill in relation to the technology reported in ROI No. 14007 entitled Identification of peptide sequences inducing steroid production prior to the Effective Date including, attorney’s fees, expenses, official fees and other charges incident to the preparation, prosecution and maintenance of LICENSED PATENT(S) in the amount of CAD 12,066.11.
	
 
	
 
	
 

	
 
	9.2	PROSECUTION

 

		
 
	9.2.1	 Matters related to the prosecution, filing and maintenance of all IP and LICENSED PATENT(S) shall be the sole responsibility of Licensee, provided, however, that McGill shall be given reasonable opportunity to advise Licensee concerning such matters. The parties agree to cooperate with one another in such matters and McGill will be kept informed at all times of the prosecution activities.
		
 
	
 
	
 

		
 
	9.2.2	No claims of the LICENSED PATENT(S) shall be modified, deleted, or abandoned by Licensee or its patent counsel without the express, prior written approval of McGill, such approval shall not be unreasonably withheld or delayed. Licensee’s obligations under this Section 9.2.2 shall include, without limitation, an obligation to inform McGill in a timely manner that Licensee will not pursue patents in any foreign countries where patent protection may be available such that McGill may prosecute patents in such countries if McGill so desires. If McGill pursues such foreign patent protection, then from that time forward all such subject patent applications and any patents arising therefrom shall no longer be considered patent rights under this Agreement and Licensee shall forfeit all rights under this Agreement to such patent applications and any patents arising therefrom. McGill shall be responsible for all costs associated with those patent applications and patents it decides to pursue and maintain.
		
 
	
 
	
 

		
 
	9.2.3	Licensee shall consult McGill in case of a change in the patent agent or attorney with respect to the licensed IP and LICENSED PATENT(S).
		
 
	
 
	
 

		
 
	9.2.4	Licensee will disclose to McGill the existence and nature of any potential conflict of interest caused by the simultaneous prosecution of other technologies that may infringe with the LICENSED PATENT(S). In such cases, McGill shall have the right to instruct a change of patent agent or attorney and related costs shall be born by Licensee.

 

	 
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		9.3	FEES AND COSTS

 

		
 
	9.3.1	Licensee shall be solely responsible for the payment of all maintenance and other fees relating to the filing, prosecution, and maintenance of the Licensed Patent(s). At least sixty (60) days prior to the time payment of such fees is required, Licensee shall make the necessary payment and give McGill written notice that such fees have been paid. If McGill does not receive such notice, McGill may, in its discretion, pay the fees and Licensee shall reimburse McGill within 30 days in CAD.
		
 
	
 
	
 

		
 
	9.3.2	Within thirty (30) days of receiving notice from McGill stating patent maintenance fees or costs related to the LICENSED PATENT(S) have been paid, in accordance with Section 9.3.1, Licensee shall reimburse McGill for all such fees and costs.
		
 
	
 
	
 

		
 
	9.3.3	Licensee shall have the ultimate responsibility for meeting all payment, cost, and filing deadlines concerning the LICENSED PATENT(S) and any other form of intellectual property protection associated with the LICENSED PATENT(S). Licensee shall have no claim of damages against McGill, its officers, administrators, or employees, should any such payment or cost not be made or any such deadline not be met, and McGill’s failure to meet any such deadline or pay any such fee or cost shall not be considered a breach of this Agreement.

 

		9.4	IDENTIFICATION OF LICENSED PRODUCTS
		
 
	
 

			Licensee shall comply with all applicable statutes relating to the identification of LICENSED PRODUCT(S) and their packaging with patent pending, patent number(s), copyrights, or other intellectual property notices and legends required to maintain the intellectual property rights licensed in this Agreement.

 

10 DISCLAIMER OF WARRANTIES

 

	
 
	10.1	MERCHANTABILITY OF LICENSED PRODUCT(S)
	
 
	
 
	
 

	
 
		The LICENSED PATENT(S), LICENSED PRODUCT(S) and all other technology, if any, licensed under this Agreement are provided on an “as is” basis.
	
 
	
 
	
 

	
 
	10.2	McGill makes no representations, extends no warranties of any kind, either express or implied, and assumes no responsibilities whatsoever with respect to the use, sale, or other disposition by Licensee, its Affiliates and sub-licensee(s), or their vendees or other transferees of LICENSED PRODUCT(S) incorporating or made by use of the LICENSED PATENT(S) or any technology licensed hereunder. There are no express or implied warranties of merchantability or fitness for a particular purpose, or that the use of the LICENSED PATENTS, LICENSED PRODUCT(S) or any technology licensed hereunder will not infringe any patent, copyright, trademark, service mark, or other proprietary rights of others. McGill shall not be liable to licensee, licensee’s sub-licensees or their respective successors or assigns or any third party with respect to: any claim arising from use of the LICENSED PATENTS, technical information, LICENSED PRODUCTS or any technology licensed under this Agreement or from the manufacture, use or sale of Licensed Products; or any claim for loss of profits, loss or interruption of business, or for indirect, special or consequential damages of any kind.

 

	 
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	10.3	Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement shall be construed as:

 

	
 
		(a)	A warranty or representation by McGill as to rights in any technology or the validity or scope of any of the LICENSED PATENT(S);
	
 
		
 
	
 

	
 
		(b)	An obligation to furnish any technology not specifically agreed to in this Agreement, to bring or prosecute actions or suits against third parties for infringement or to provide any services other than those specified in this Agreement.

 

11 INDEMNIFICATION

 

	
 
	11.1	Licensee shall indemnify, defend and hold McGill, its employees, students, officers, agents, Affiliates, and representatives harmless from and against any and all liability, demands damages losses, and expenses (including attorney fees), for death, personal injury, illness, property damage, non-compliance with applicable laws and any other claim, proceeding, demand, expense and liability of any kind whatsoever in connection with or arising out of:

 

		
 
	(a)	the use by or on behalf of Licensee, its sub-licensees, Affiliates, directors, officers, employees, or third parties of any LICENSED PATENT(S) or of any technology licensed hereunder;
		
 
	
 
	
 

		
 
	(b)	the design, development, use, manufacture, distribution, advertisement, sale, or other disposition of any LICENSED PRODUCT(S) or materials by Licensee, or other products or processes developed in connection with or arising out of the LICENSED PATENT(S); or
		
 
	
 
	
 

		
 
	(c)	any right or obligation of Licensee, its Affiliates or sub-licensee(s) under this Agreement.

 

12  INFRINGEMENT

 

	
 
	12.1	By Third Parties
	
 
	
 
	
 

	
 
		McGill and Licensee agree to inform the other Party promptly in writing of any actual or suspected infringement of the LICENSED PATENT or LICENSED INTELLECTUAL PROPERTY by a third party. Licensee shall have, for a period of 120 days from the date of any notice of infringement of the Licensed Patent or LICENSED INTELLECTUAL PROPERTY, the first right to institute suit against such third party. Thereafter, McGill and Licensee shall each have the right to institute an action for infringement of the Licensed Patent against such third party in accordance with the following:

 

	 
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		a.	If both McGill and Licensee agree to institute suit jointly, the suit shall be brought in both their names, the out-of-pocket costs thereof shall be borne equally, and any recovery or settlement shall be shared equally. McGill and Licensee shall agree to the manner in which they shall exercise control over such suit. Each Party, at its option, may be represented by separate counsel of its own selection, the fees for which shall be paid by that Party.
	
 
		
 
	
 

	
 
		b.	In the absence of an agreement to institute a suit jointly, McGill may, but is not obligated to, institute suit, and at its option, join Licensee as a plaintiff. If McGill decides to institute suit, it shall notify Licensee in writing. Licensee’s failure to notify McGill in writing within fifteen (15) days after the date of McGill’s notice, that it will join in enforcing the LICENSED PATENT(S) pursuant to the terms hereof, shall be deemed conclusively to be Licensee’s assignment to McGill of all rights, causes of action, and damages resulting from any such alleged infringement. McGill shall bear the entire cost of such litigation and shall be entitled to retain the entire amount of any recovery or settlement; and
	
 
		
 
	
 

	
 
		c.	In the absence of an agreement to institute a suit jointly, and if McGill does not notify Licensee of its intent to pursue legal action within ninety (90) days, as provided in (a) or (b) above, Licensee may institute suit. Licensee shall bear the entire cost of such litigation. Any recovery in excess of litigation costs and reasonable attorney fees shall be shared equally between Licensee and McGill.
	
 
		
 
	
 

	
 
		d.	If Licensee undertakes to defend the LICENSED PATENT(S) by litigation, Licensee may deduct from its royalty payments to McGill with respect to the LICENSED PATENT(S) subject to suit an amount not exceeding fifty percent (50%) of Licensee’s expenses and costs of such action, including reasonable attorney’s fees, provided however, that such reduction shall not exceed fifty percent (50%) of the total royalty due to McGill for each calendar year.

 

	
 
	12.2	Claim from Third Parties
	
 
	
 
	
 

	
 
		Without prejudice to any other right it may have, should a claim or suit that the manufacturing, marketing, offering for sale, sale of the LICENSED PRODUCT(S) or use of the LICENSED PATENT(S) by Licensee as authorized hereunder and/or exercise by Licensee of any rights granted to it by McGill pursuant to the terms hereof, infringe a third party’s intellectual property rights be threatened or made against McGill, Licensee, or any party having the right to use the LICENSED PATENT(S) through Licensee, each of McGill and Licensee agrees that it shall give the other Party prompt written notice detailing as many facts as possible concerning such claim and shall consult and cooperate fully with one another to decide what action, if any, should be taken in the defence of such claim.

 

	 
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The reasonable expenses incurred by Licensee (including, for greater certainty, attorney's fees) in the defence of such claim, shall be deducted from any royalty owing and any balance shall be held in trust by Licensee until such time that the potential infringement ceases, is terminated or settled. If the third party claiming the infringement is successful in obtaining a judgment against Licensee or any of its sub-licensees or if the parties agree, Licensee acting reasonably, to amicably settle the matter, except that Licensee shall have no right to deny the validity of any patent, patent claim, or patent application included in the LICENSED PATENT(S) in any compromise or settlement of any claim or suit without the express prior written consent of McGill, any amount held in trust and any future royalties shall first serve to pay the third party's indemnity or damages awarded pursuant to a judgement of a court of competent jurisdiction or pursuant to any settlement and the balance, if any, shall be payable to McGill pursuant to the provisions of Section 4.9 hereof. If Licensee elects not to defend against such claim or suit, McGill, at its option, may do so at its own expense and shall be entitled to retain the entire amount of any recovery or settlement.

 

	
 
	12.3	In all cases Licensee agrees to keep McGill reasonably apprised of the status and progress of any litigation.

 

13TERM AND TERMINATION

 

	
 
	13.1	TERM OF THE AGREEMENT
	
 
	
 
	
 

	
 
		The term of this Agreement shall commence on the Effective Date and shall terminate after ten (10) years of the first payment of royalties or minimum royalties as described in Appendix D, or upon the expiry or abandonment of the LICENSED PATENT(S), whether by statute or otherwise, whichever is the latest, unless it earlier terminates by operation of law or by acts of the parties in accordance with the terms of this Agreement.
	
 
	
 
	
 

	
 
	13.2	TERMINATION BY LICENSEE
	
 
	
 
	
 

	
 
		Licensee may, after this Agreement has been in effect for one (1) year, upon sixty (60) days written notice to McGill, terminate this Agreement by doing all of the following:

 

		
 
	13.2.1 	Ceasing to make, have made, use, import, sell and offer for sale all LICENSED PRODUCT(S), except for liquidation of inventory which shall be subject to the terms of this Agreement; and,

 

	 
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	13.2.2	Paying all amounts due as well as all amounts that have been reasonably incurred or committed to by McGill under this Agreement and any sponsored research agreement in relation to the LICENSED PATENT(S) and LICENSED INTELLECTUAL PROPERTY, up to the date of receipt of Licensee’s notice of termination; and
		
 
	
 
	
 

		
 
	13.2.3	Submitting a final report of the type described in Section 6; and,
		
 
	
 
	
 

		
 
	13.2.4	Terminating all sub-licenses, and causing all sub-licensees and Affiliates to cease making, having made, using, importing, selling and offering for sale all LICENSED PRODUCT(S).
		
 
	
 
	
 

		
 
	13.2.5	Returning any Confidential Information provided by McGill.

	
 
	13.3	TERMINATION BY MCGILL

 

McGill may terminate this Agreement if any of the following events of default occur:

 

	
 
	13.3.1	Licensee or any Affiliate or sub-licensee is more than sixty (60) days late in paying to McGill any royalties, expenses or any other monies due under this Agreement and Licensee does not pay McGill such amounts in full upon demand;
	
 
	
 
	
 

	
 
	13.3.2	Forthwith if Licensee ceases to operate in the normal course, files a petition in bankruptcy, has such a petition filed against it, determines to file a petition in bankruptcy, or receives notice of a third party’s intention to file an involuntary petition in bankruptcy; or
	
 
	
 
	
 

	
 
	13.3.3	Licensee or any Affiliate or sub-licensee is in material breach or material default of this Agreement or of any sub-license Agreement, other than those occurrences listed in Sections 13.3.1 and 13.3.2, and Licensee fails to cure the breach or default within thirty (30) days of written notice of such breach or default. Events constituting a breach or default shall include, but are not limited to, the following:

 

	
 
		(a)	failure by Licensee to meet any milestones as defined in Appendix “D”; in this event, McGill retains the right to convert this Agreement to a nonexclusive Agreement;
	
 
		
 
	
 

	
 
		(b)	breach of any material portion of this Agreement;
	
 
		
 
	
 

	
 
		(c)	operation, manufacture, use of or sale of the LICENSED PRODUCT(S) outside of the Field or TERRITORY;
	
 
		
 
	
 

	
 
		(d)	failure to keep records in conformance with agreed to financial record keeping standards or permit inspection or audit at the end of the notice period.

 

	 
	14

	

	 

  

In the event the breach is not cured within the notice period this licensing Agreement and all rights granted to Licensee shall automatically terminate, except when Licensee’s default is a result of McGill’s own default.

 

	
 
	13.4	In the event that Licensee has failed to use its diligent efforts as set forth in Section 7, McGill at its discretion, shall have the right to: (a) terminate all license rights granted to Licensee, without any obligation to compensate Licensee in any way; (b) require Licensee to license specific sub-licensees within a reasonable period of time; and/or (c) convert all exclusive license rights granted hereto to nonexclusive license rights, whereupon McGill may, in its sole discretion, grant non-exclusive licenses to any third party upon terms and without any obligation to compensate Licensee in any way. One month before termination, McGill shall inform Licensee of its intention and will give Licensee the opportunity to provide McGill with information in writing to permit McGill to review its position during this period.
	
 
	
 
	
 

	
 
	13.5 	EFFECT OF TERMINATION

 

		
 
	13.5.1 	Termination of this Agreement shall not release McGill or Licensee from any obligation or liability which shall have matured prior to termination nor shall termination rescind or require reimbursement of any payment or consideration made or given by either Party, except as otherwise specifically provided herein. If the terms of this Agreement expressly state that a right or obligation survives its termination, such right or obligation shall survive to the degree necessary to allow complete fulfilment or discharge of such right or obligation.
		
 
	
 
	
 

		
 
	13.5.2	Return of Confidential Information. Upon termination of this Agreement, Licensee and any Affiliate and/or sub-licensee shall, at McGill’s request, return all of McGill’s Confidential Information and any work product incorporating McGill’s Confidential Information.

 

14GENERAL PROVISIONS

 

	
 
	14.1	DISPUTE RESOLUTION AND ARBITRATION
	
 
	
 
	
 

	
 
		In the event of any dispute arising out of or relating to this Agreement, the affected party shall promptly notify the other party (“Notice Date”), and the parties shall attempt in good faith to resolve the matter. Any disputes not so resolved shall be referred to senior executives, who shall meet at a mutually acceptable time and location within thirty (30) days of the Notice Date and shall attempt to negotiate a settlement. If the senior executives fail to meet within thirty (30) days of the Notice Date, or if the matter remains unresolved for a period of sixty (60) days after the Notice Date, the parties hereby irrevocably agree to submit the matter to arbitration in accordance with the provisions of articles 940-952 of Québec’s Code of Civil Procedure, in Montreal (Quebec). There shall be one arbitrator, jointly appointed by the parties. If the parties do not agree on the appointment of the arbitrator, the civil courts of Quebec will appoint the arbitrator in accordance with the provisions of Quebec’s Code of Civil Procedure. The costs of the arbitrator shall be divided equally between the parties. The arbitrator’s decision shall be final and binding, and there shall be no appeal from the decision.

 

	 
	15

	

	 

  

	
 
	14.2	ASSIGNMENT
	
 
	
 
	
 

	
 
		None of the rights or obligations of this Agreement may be assigned by either Party without the prior written consent of the other Party. Such consent shall not be unreasonably withheld.
	
 
	
 
	
 

	
 
	14.3	ENTIRE AGREEMENT
	
 
	
 
	
 

	
 
		The terms and promises contained in this Agreement constitutes the entire agreement and understanding between the Parties and shall supersede all previous communications, representations, agreements or understandings either oral or written, between the Parties hereto with respect to the subject matter hereof and no agreement or understanding varying or extending this Agreement will be binding upon either Party hereto, unless in writing.
	
 
	
 
	
 

	
 
	14.4	FORCE MAJEURE
	
 
	
 
	
 

	
 
		Neither McGill nor Licensee shall be in default under the terms of this Agreement as a result of failure or delay in performance provided such delay or failure is caused by events that are beyond the reasonable control of a Party. Causes deemed to be beyond the control of the parties shall include, but not be limited to, revolutions, civil disobedience, fires, acts of God, war, embargoes, strikes or other labour disputes, laws, governmental, administrative or judicial orders, proclamations, regulations, ordinances, demands, or requirements.
	
 
	
 
	
 

	
 
	14.5	GOVERNING LAW
	
 
	
 
	
 

	
 
		This Agreement shall be governed by and construed in accordance with the laws of the province of Québec and the laws of Canada applicable therein.
	
 
	
 
	
 

	
 
	14.6	HEADINGS
	
 
	
 
	
 

	
 
		The section and subsection headings used in this Agreement are to be used only for convenience and reference. Such titles and headings shall not define or limit the scope of sections or subsections of this Agreement, and shall not affect the construction or interpretation of any of such sections or subsections.

 

	 
	16

	

	 

 

	
 
	14.7	INDEPENDENCE OF THE PARTIES
	
 
	
 
	
 

	
 
		McGill and Licensee are independent entities engaged in independent businesses, and neither Party nor any agent or employee of either Party shall be regarded as an agent or employee of the other. Nothing herein shall be construed as reserving to either Party the right to control the other in the conduct of its employees or business, nor shall either Party have the authority to make any promise guarantee, warranty or representation which will create any obligation or liability whatsoever, whether express or implied, on behalf of the other. McGill and Licensee are not joint venturers or partners.
	
 
	
 
	
 

	
 
	14.8	NOTICES
	
 
	
 
	
 

	
 
		All notices, reports, payments, requests, consents, demands, and other communications between McGill and Licensee pertaining to this Agreement, shall be in writing and shall be deemed duly given and effective (a) when actually received by mail or personal delivery, or (b) when mailed by prepaid registered or certified mail to the receiving Party at the address set forth below, or sent by email with a notice of receipt, or to such other address as may be later designated by written notice by either Party.

 

	
 

McGill’s Notification Address:
	
 

Licensee Notification Address:

	
Office of the Vice-Principal

(Research and International Relations)
	
Iaso Biomed Inc.

	
McGill University
	
 

	
845 Sherbrooke Street West, Room 429,

James Administration Building,

Montreal, Quebec, H3A 0G4, Canada
	
7315 East Peakview Avenue

Centennial, CO 80111

USA

	
Attn: Associate Director IDEA

Email: michele.beaulieu@mcgill.ca
	
Attn: President

Email: dickschell@comcast.net

 

	
 
	14.9	SEVERABILITY
	
 
	
 
	
 

	
 
		The provisions of this Agreement are severable, and should any provision(s) of this Agreement be determined by agreement of the Parties or by a court of competent jurisdiction, to be illegal, invalid or unenforceable, the parties and the court shall have the right to strike the provision(s) or modify the provision(s) within the original intent of the parties, to make the provision valid and enforceable. All other provisions of this Agreement shall remain in full force and effect

 

	 
	17

	

	 

  

	
 
	14.10	USE OF NAME AND TRADEMARKS
	
 
	
 
	
 

	
 
		Neither Party shall, without prior written consent of the other Party, use such other Party’s name or trademarks or any adaptations. Neither Party will publicly disclose the nature or commercial terms of the Agreement without prior written consent by the other Party. Any press release or public statement concerning the Agreement will be pre-approved both parties in writing before release.
	
 
	
 
	
 

	
 
	14.11	WAIVER OF RIGHTS
	
 
	
 
	
 

	
 
		In order to be effective, any waiver, by either Party, of any right under this Agreement, must be in writing and signed by an authorised representative of the Party making the waiver. Failure of McGill or Licensee to enforce a right or strict performance under this Agreement shall not be deemed to prevent McGill or Licensee from subsequently asserting or exercising any right or from requiring strict performance. Waiver or failure to enforce shall not affect the validity of this Agreement.
	
 
	
 
	
 

	
 
	14.12	NO RELATIONSHIP
	
 
	
 
	
 

	
 
		This Agreement does not establish a joint venture, agency or partnership between the parties, nor created an employer-employee relationship.
	
 
	
 
	
 

	
 
	14.13	EXTENDED OPERATION
	
 
	
 
	
 

	
 
		This Agreement shall be binding upon the parties, their heirs, agents, successors and permitted assigns.
	
 
	
 
	
 

	
 
	14.14	PARTIAL INVALIDITY
	
 
	
 
	
 

	
 
		If any provision of this Agreement or the application of it to any person or circumstances is held to be invalid or unenforceable, the remainder of this Agreement or the application of the provision to persons or circumstances other than those as to which it is held invalid or unenforceable is not affected.
	
 
	
 
	
 

	
 
	14.15	SURVIVAL
	
 
	
 
	
 

	
 
		The provisions of Sections 4 Consideration, 5 Reports, 6 Audit, 9 Patent, 10 Disclaimer of Warranties, 11 Indemnification and 12 Infringement and any other provision of this Agreement that by its nature is intended to survive shall survive any termination or expiration of this Agreement.
	
 
	
 
	
 

	
 
	14.16	LANGUAGE OF THIS AGREEMENT
	
 
	
 
	
 

	
 
		This Agreement is drawn up in English at the request of the parties. Le présent contrat est rédigé en anglais à la demande des parties.

	 
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Signed in Montréal, Province of Québec, Canada.

 

	
The Royal Institution for the Advancement of Learning/McGill University
	
 
	
IASO BIOMED INC.

	
 
	
 
	
 

	/s/ Michèle Beaulieu		/s/ Dick Schell
	
 

Michèle Beaulieu, Ph.D., MBA

Associate Director IDEA – 

Invention Development and Entrepreneurship Assistance

Office of Innovation and Partnerships
		
 

Dick Schell

President and CEO

	
 
	
 
	
 

	January 12, 2016		
January 8, 2016

	
Date
	
 
	
Date

	
 
	
 
	
 

	/s/ A. Coquet		
/s/ Rebecca S. Rice

	
Witness
	
 
	
Witness

 

	 
	19

	

	 

  

APPENDIX “A”

FIELD

 

All fields

 

	 
	20

	

	 

 

APPENDIX “B”

LICENSED PATENT(S) and LICENSED INTELLECTUAL PROPERTY

 

LICENSED PATENT(S)

 

PCT/CA2014/050467 entitled Therapeutics for the Induction of Endogenous Steroidogenesis and Methods Associated with Their Identification filed on May 21, 2014, Published on December 18, 2014 (Publication No WO 2014/1979790.

 

Identification of peptide sequences inducing steroid production. McGill ROI 14007

 

LICENSED INTELLECTUAL PROPERTY

 

Product/Precursor Ions diagnostic of a DHEA Precursor Detected in Human Serum as Potential Biomarkers for the Determination of Alzheimer’s Disease. McGill ROI 15073.

	 
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APPENDIX “C”

TERRITORY

 

Worldwide

 

 
	 
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APPENDIX “D”

ROYALTIES

 

To be applied for ROI No. 14007 Identification of peptide sequences inducing steroid production and ROI No. 15073 Product/Precursor Ions diagnostic of a DHEA Precursor Detected in Human Serum as Potential Biomarkers for the Determination of Alzheimer's Disease:

 

No upfront license fee

 

Equity: 5% non dilutable until series A of financing. (“Series A financing” shall be defined as any financing by the company amounting to a total of USD 1,500,000 in one or a series of transactions involving the sale of the same security.) IASO BIOMED will issue to McGill a number of common shares equal to 5% of the total number of issued and outstanding shares in IASO BIOMED.

 

Licensee will provide to McGill a written report with the information described in clause 5.1 on a yearly basis until first commercial sale of a LICENSED PRODUCT and a quarterly report thereafter. Minimum royalty payments will be made yearly at the time the annual report is submitted; royalty payments on sales will be made on a quarterly basis.

  

To be applied to ROI No. 14007 Identification of peptide sequences inducing steroid production only:

 

	
Royalties: 
	
3.0% of annual NET REVENUES of products developed from or using the LICENSED PATENT by licensee/affiliates in any country in which IASO BIOMED sells products. 

	
 
	
Licensee shall pay McGill 25% of any and all sublicensing fees received by licensee from sub licensee.

	
Minimum royalties: 
	
$5,000 per year starting on the date of commercialization of the first product developed using the IP, covered in this License Agreement.

	
Royalty stacking:
	
In the event that it is required for IASO BIOMED to obtain third party licenses for the commercialization of the product using the IP, there could be a reduction of the original royalty rate by 50% of the royalty to be paid to McGill (the maximum reduction cannot exceed 50% of the royalties). For greater certainty, the royalty rate payable to McGill will not be lower than 1.5%  

	
Milestone payments:
	
$5,000 on the issuance of the 1st US patent $25,000 on the filing with a governmental authority of the first investigational new drug application (or equivalent regulatory filing) $50,000 on the initiation of the first Phase II clinical study $100,000 on the initiation of the first Phase III clinical study $300,000 on receipt of regulatory approval (US FDA or its equivalent in any other jurisdiction) to launch and market the licensed product Each above-mentioned Milestone payment shall be payable by licensee within 30 days from its achievement, as the case may be. If such Milestone is not achieved, no payment related thereto shall become due and owing.

 

	 
	23

	

	 

 

	
Patent expenses:
	
Iaso Biomed will reimburse McGill for the incurred costs for filing, prosecuting and maintaining the patents, to date an amount of $12,066.11. This amount is payable upon the license agreement execution date. 

 

To be applied to ROI No. 15073 Product/Precursor Ions diagnostic of a DHEA Precursor Detected in Human Serum as Potential Biomarkers for the Determination of Alzheimer's Disease only:

 

	
Royalties: 
	
3.0% of annual NET REVENUES of products developed from or using the LICENSED INTELLECTUAL PROPERTY by licensee/affiliates in any country in which IASO BIOMED sells products.

		
Licensee shall pay McGill 25% of any and all sublicensing fees received by licensee from sub licensee

	
 
	
 

	
Minimum royalties:
	
 $5,000 per year starting on the date of commercialization of this technology

	
Royalty stacking:
	
 In the event that it is required for IASO BIOMED to obtain third party licenses for the commercialization of the product using the IP, there could be a reduction of the original royalty rate by 50% of the royalty to be paid to McGill (the maximum reduction cannot exceed 50% of the royalties). For greater certainty, the royalty rate payable to McGill will not be lower than 1.5% 

	
Milestone payments: 
	
$5,000 on the issuance of the 1st US patent $50,000 on the filing with a governmental authority of the 510(k) or PMA application $200,000 on receipt of regulatory approval (US FDA or its equivalent in any other jurisdiction) to launch and market the licensed product

 

	
24Exhibit 10.41

 

*** TEXT OMITTED AND SUBMITTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST

 

DISTRIBUTION AGREEMENT

 

This Distribution Agreement (this “Agreement”) is made and entered into as of December 9, 2016 (the “Effective Date”), by and between Jaguar Animal Health, Inc. a Delaware corporation (“Vendor”) and Butler Animal Health Supply, LLC d/b/a/ Henry Schein Animal Health, a Delaware limited liability company (“Distributor”).

 

RECITALS

 

WHEREAS, Vendor desires to appoint Distributor, and Distributor desires to be appointed, to distribute Products of Vendor in the Territory pursuant to the terms and conditions of this Agreement;

 

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

 

ARTICLE I

APPOINTMENT

 

Section 1.01  Appointment. Subject to the terms and conditions of this Agreement, Vendor hereby appoints Distributor on an exclusive basis, and Distributor hereby accepts such appointment, as Vendor’s distributor with the right to promote, market, distribute and sell the products specifically identified on Exhibit A (the “Products”) within the territory specifically identified on Exhibit B (the “Territory”) during the term of this Agreement.

 

Section 1.02  Term. This Agreement shall take effect as of the Effective Date and, subject to the provisions of Section 6.01, shall continue in force for an initial period of one (1) year (the “Initial Term”). Thereafter, unless either party notifies the other of its intent not to renew the Term of this Agreement at least 30 days prior to the end of the then current Term, the Term shall be automatically renewed upon expiration for successive renewal Terms of one (1) year (each a “Renewal Term” and collectively with the Initial Term, the “Term”).

 

ARTICLE II 
  DISTRIBUTION

 

Section 2.01  Duties of Distributor. Distributor shall use commercially reasonable efforts to promote, market, distribute and sell the Products to customers in the Territory.

 

Section 2.02  Promotional Materials. Subject to the terms of this Agreement, Distributor shall use sales and technical literature as well as promotional artwork and training materials provided by Vendor. Distributor may alter such materials or develop any other materials in connection with the marketing and distribution of Products (including but not limited to product brochures and sales aids), subject to Vendor’s review and prior written approval.

 

Section 2.03 Vendor Service Level Commitment. Vendor shall exercise all reasonable efforts to provide Distributor with an aggregate average monthly service level of at least ninety-five percent (95%), calculated quarterly as follows: the service level will be calculated on a monthly basis by dividing the total lines products shipped to Distributor by the total lines of products ordered by Distributor. If the aggregate average monthly adjusted service level falls below ninety-five percent (95%) for two (2) consecutive months, Vendor shall, as Distributor’s sole and exclusive remedy, pay Distributor (in the form of a credit memo) an amount equal to 1% multiplied by Distributor’s total product purchases during

 

 

the second month of such two (2)-month period, and every month thereafter until service levels return to ninety-five percent (95%). Distributor shall provide Vendor a two (2) month lead time for manufacturing to fulfill an order.

 

Section 2.04  EDI. Vendor shall exchange data with Distributor through the Electronic Data Interchange (“EDI”) using, without limitation, the following transaction sets: i) 810 Invoice, ii) 820 Payment Order/Remittance Advice; iii) 850 Purchase Order; iv) 856 Advanced Ship Notice/Manifest (including, without limitation, purchase order number, carrier, expected delivery date and location, item description and quantities, and cost; v) Trace Sales Date. Specific data fields and any other requirements will be communicated in writing by Distributor to Vendor from time to time. Distributor may charge Vendor a fee, as mutually agreed upon by the parties, for data not exchanged via EDI.

 

ARTICLE III 
  PAYMENT

 

Section 3.01  Pricing. Vendor will offer the Products to Distributor at the price(s) set forth on Exhibit A (the “Price List”). Vendor reserves the right, in its sole discretion, upon 90 days advance written notice to Distributor, to change the prices listed on the Price List. In each case in which the prices on the Price List are changed by Vendor, Vendor shall deliver to Distributor a revised Price List, which will be deemed a part of this Agreement; provided, that no price change shall affect orders submitted to Vendor prior to such change.

 

Section 3.02  Payment Terms. Amounts due and payable with respect to a Product to be delivered by Vendor shall be paid 2% 30, net 31. All payments to Vendor under this Agreement shall be made, at Distributor’s option, by credit card, EDI, Automated Clearing House (ACH), or electronic wire transfer to an account designated by Vendor in writing from time to time.

 

Section 3.03  Delivery and Risk of Loss. All orders will be FOB Distributor’s warehouse. Legal title to and risk of loss of all Products purchased by Distributor hereunder will be transferred to Distributor upon Products being accepted at Distributor’s warehouse. In the event that any Products are damaged during shipment to Distributor or are otherwise defective, Distributor shall notify Vendor and provide reasonable substantiation. At Distributor’s election, Vendor shall either promptly deliver substitute Products to Distributor or issue Distributor a full credit for the same.

 

Section 3.04  Floor Stock Adjustment. Vendor agrees to provide a floor stock adjustment when Vendor decreases price of an item and Distributor has inventory on hand at the old price. Such floor stock adjustment shall be equal to the difference in old versus new price multiplied by the amount of inventory on hand at the old price.

 

Section 3.05  Product Expiration. Distributor may return any unsold Products to Vendor within ninety (90) days of such Product’s expiration date and Vendor shall promptly provide to Distributor a full refund for the cost of such returned Product at the price paid by Distributor for such Product.

 

Section 3.06  Reporting Distributor will provide Vendor with a quarterly sales report, by state within the Territory (“Report”). The Report will be provided no later than 30 days after the end of the quarter. Vendor will pay a fee of 2% of the net sales on each Report (“Report Fee”) for such reporting which shall be waived during the Initial Term and first Renewal Term of the agreement. Payment of the Report Fee shall be paid within 30 days after the report is provided.

 

2

 

ARTICLE IV

WARRANTIES AND INDEMNIFICATION

 

Section 4.01          Vendor’s Warranties. Vendor hereby represents and warrants that, at the time of delivery of the Products to Distributor:

 

(a)    The Products shall be adequately contained, packaged and labeled, and shall conform to the claims and affirmations of fact made on any container or label, or in any applicable advertisement issued by Vendor.

 

(b)    The Products shall not be adulterated, misbranded or otherwise prohibited by any federal, state and local laws, ordinances and regulations in the Territory.

 

(c)    The Products shall have a remaining shelf-life and be merchantable and fit for the purpose for which they are intended for a period of at least eighteen (18) months from the date of such delivery to Distributor.

 

Section 4.02  Indemnification by Vendor. Vendor shall indemnify and hold harmless Distributor and its managers, officers, employees, agents and affiliates from and against any and all liabilities, damages, losses, penalties, fines, costs and expenses, including reasonable attorneys’ fees, paid or incurred by them in connection with: (i) claims based upon or arising from physical injury (including death) or property damage relating to defects in the Products including design or manufacture, (ii) any alleged infringement of intellectual property rights of any third party as a result of the sale of any of the Products; or (iii) any recall of the Products. Vendor agrees to maintain comprehensive “occurrence” general liability insurance, including “occurrence” product liability, contractual liability insurance and advertising injury coverage, with minimum limits of liability of $3,000,000 and to deliver to Distributor a certificate thereof with Distributor named as an additional insured thereon. Such insurance must insure against all products contemplated under this Agreement. Insurance coverage must be procured from an insurance company bearing an AM Best Rating of no less than B+ or a S&P Rating of no less than BBB.

 

Section 4.03.  Limitation of Liability. EXCEPT AS OTHERWISE PROVIDED IN SECTION 4.02, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL (INCLUDING, WITHOUT LIMITATION, LOST PROFITS), SPECIAL OR PUNITIVE DAMAGES FOR ANY CLAIM HEREUNDER RESULTING FROM ANY CAUSE WHATSOEVER, WHETHER BASED IN CONTRACT, NEGLIGENCE, STRICT LIABILITY, OTHER TORT OR OTHERWISE REGARDLESS OF WHETHER SUCH PARTYHAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

Section 4.04.  Recall Expense Reimbursement. In the event of a recall, Distributor will invoice Vendor for any and all costs associated with those services Distributor provides as mutually agreed upon by the parties in the execution of the manufacturer’s recall including but not limited to, identification and sequestering of any recalled inventory still in-house, data mining to identify accounts that purchased recalled Product(s) and providing such data to the Vendor and/or contacting the affected accounts with specific instructions on what to do with that recalled Product, providing freight collection services to have the Product returned to Distributor (if applicable), warehousing and managing returned inventory according to the parameters of the recall, return shipping to the Vendor or Vendor’s designated recall processing designee, issuing customer credits for returned Product when applicable, and handling the expense reimbursement (receivable) for any and all services provided by Distributor in facilitating Vendor’s recall. Once invoiced, Vendor shall reimburse Distributor net 30. Delinquent reimbursement payments will be assessed a late fee of 18% APR.

 

3

 

ARTICLE V

INTELLECTUAL PROPERTY

 

Section 5.01  Trademark Use. Vendor grants Distributor a non-exclusive, non-transferable and royalty-free right and license to use such trademarks, trade names and designs owned by or licensed to Vendor (the “Trademarks”) and used on or in reference to the Products in connection with the advertising, promotion, marketing, distribution and sale of the Products in the Territory in accordance with this Agreement.

 

Section 5.02  Trademark Ownership. Vendor shall retain exclusive ownership of all Trademarks, and Distributor’s use of the Trademarks shall be for the sole purpose of performing its responsibilities under this Agreement and shall inure to the benefit of Vendor.

 

Section 5.03  Post-Expiration/Termination Use. Upon expiration or termination of this Agreement, if Vendor does not repurchase Distributor’s entire inventory of Products remaining on hand at Vendor’s selling price to Distributor, then Distributor shall have the right to continue to use the Trademarks to sell any such remaining inventory of Products.

 

ARTICLE VI 
  TERMINATION

 

Section 6.01  Termination. Notwithstanding the terms of Section 1.02, this Agreement may be terminated as follows:

 

(a)     Insolvency. Either party may terminate this Agreement at any time by giving written notice to the other party, which notice shall be effective upon dispatch, should the other party file a petition of any type as to its bankruptcy, be declared bankrupt, become insolvent, make an assignment for the benefit of its creditors, go into liquidation or receivership, cease to function as a going concern, cease to conduct its operations in the normal course of business or otherwise lose legal control of its business, or should the other party or a substantial part of its business come into the control of one or more third parties other than those in control as of the date of this Agreement.

 

(b)     Without Cause. Either party may terminate this Agreement, with or without cause, by giving the other party 30 days prior written notice thereof.

 

Section 6.02  No Liability. Neither party, by reason of the termination of this Agreement, shall be liable to the other for compensation, reimbursement or damages because of any loss of anticipated sales/rentals or prospective profits or because of expenditures, investments, leases, property improvements or other matters related to the business or goodwill of the parties.

 

ARTICLE VII

CONFIDENTIAL INFORMATION

 

Section 7.01  Non-Disclosure. Vendor and Distributor acknowledge that in the performance of their duties hereunder each may obtain access to “Confidential Information” (as defined below) of the other. Vendor and Distributor agree that, during the Term of this agreement and for a period of two (2) years after the termination of this Agreement, unless specifically permitted in writing by the other party, each will (a) retain in confidence and not disclose to any third party, and (b) use only for the purpose of carrying out their duties hereunder, any such Confidential Information. As used herein, the term

 

4

 

“Confidential Information” means any information, or data, whether of a business or scientific nature and whether in written, oral or tangible form, relating to Vendor’s and Distributor’s business or potential business or its research and development activities, not generally available to or known to the public, and not otherwise known to the receiving party, that is disclosed to or learned by the other party pursuant hereto. Confidential Information does not include, however, information which (a) was available to the receiving party on a non-confidential basis prior to its disclosure by the disclosing party or its representative; (b) becomes available to the receiving party on a non-confidential basis from a person other than the disclosing party or its representatives who are not otherwise bound by a confidentiality agreement with the disclosing party or any of its representatives; (c) was independently developed or discovered by the receiving party; (d) has come within the public domain through no fault of, or action by, the receiving party or its representatives; or (e) which is required by law to be disclosed. For the avoidance of any doubt, such confidentiality restrictions on Vendor include, but are not limited to, disclosure of Distributor’s sales information to any third party which aggregates sales information/data for the production of industry market reports or analysis. It is understood that money damages would not be sufficient for any breach if this provision by either party or their representatives, and the parties agree that each party shall be entitled to equitable relief, including, without limitation, injunction and specific performance in the event of any breach of this provision.

 

ARTICLE VIII

GOVERNING LAW

 

Section 8.01  Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of California as applicable to contracts made and to be performed in that state, without regard to conflicts of laws principles. Any action under this Agreement must be brought in any court that has subject matter jurisdiction and is located in, or whose district includes the State of Ohio and that such court will have personal jurisdiction over the parties for purposes of the action, and each party waives any objection to venue.

 

ARTICLE IX

MISCELLANEOUS

 

Section 9.01  Force Majeure. If a party is prevented, hindered or delayed in performing its obligations under this Agreement by an event not reasonably foreseeable which is due to a cause beyond such party’s control which renders performance of that party’s obligations impossible or so difficult and costly as to be commercially unreasonable, then, upon giving written notice thereof to the other party, such party shall be released from any liability on its part for the performance of its obligations under this Agreement (except for any obligation to pay amounts due and owing hereunder). During any such period that the performance by one party under this Agreement has been suspended, the other party may likewise suspend the performance of its obligations hereunder to the extent it is commercially reasonable to do so.

 

Section 9.02  Independent Parties. Each party is acting under this Agreement as an independent contractor. This Agreement does not make either party the employee, partner, agent or legal representative of the other party for any purpose whatsoever. Neither party is granted any right or authority to assume or to create any obligation, liability or responsibility, express or implied, on behalf of or in the name of the other party.

 

Section 9.03  Notices. All notices or communications given or required under this Agreement shall be in writing and shall be effective upon the earlier of: (i) actual receipt; (ii) seven (7) days following deposit into the United States mail (registered or certified mail, return receipt requested); (iii) the next business day following deposit with a nationally recognized overnight courier service; or (iv) if

 

5

 

sent by facsimile, upon receipt by the transmitting facsimile machine that such legible facsimile was successfully sent to and received by the proper facsimile number during regular business hours, in each case with any delivery fees pre-paid and addressed to the Party at the address set forth on the signature page of this Agreement (or at such other address as may have been designated by written notice).

 

Section 9.04  Severability. If any provision of this Agreement is found by any court, arbitral tribunal or public authority of competent jurisdiction to be invalid or unenforceable, subject to the following sentence of this Section, such provision shall be severed herefrom and such invalidity or unenforceability will not affect any other provisions of this Agreement, all of which will remain in full force. If any provision is found invalid or unenforceable due to its geographic, temporal or subject matter scope, this Agreement shall automatically be deemed to be amended to the extent necessary for the provision in question to be valid and enforceable

 

Section 9.05  Exhibits. This Agreement has Exhibits A, B, C and D, each of which forms an integral part of this Agreement and is made a part hereof by reference.

 

Section 9.06  CG&I. The Continuing Guaranty and Indemnification attached hereto as Exhibit D (CG&I) is incorporated herein and the provisions of the CG&I supersede and control any conflicting provisions of this Agreement.

 

Section 9.07  Entire Agreement; Amendment; Waiver. This Agreement, including its Exhibits, are the entire agreement between Vendor and Distributor concerning the subject of this Agreement and supersedes all other prior and contemporaneous agreements between the parties. This Agreement may be amended only by an instrument in writing signed by both parties which expressly refers to this Agreement and specifically states that it is intended to amend it. The failure of either party to enforce at any time any of the provisions of this Agreement will not be construed to be a waiver of such provision or of the right of that party to subsequently enforce any such provision.

 

Section 9.08  Binding Effect. This Agreement will become effective only after it is signed on behalf of both parties. Thereafter, the Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. This Agreement may be executed (including by electronic transmission) in two or more counterparts, each of which when taken together shall constitute one and the same.

 

Section 9.09  Survival. Sections 4.01, 4.02, 4.04, 5.03 and 7.01 shall survive termination or expiration of this Agreement.

 

[Signature Page Follows]

 

6

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on and as of the date first written above.

 

	
BUTLER ANIMAL HEALTH SUPPLY,   LLC
    	
 
    	
JAGUAR ANIMAL HEALTH, INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Kimberly E. Allen
    	
 
    	
By:
    	
/s/ Lisa A. Conte
    
	
Name:
    	
Kimberly E. Allen
    	
 
    	
Name: 
    	
Lisa A. Conte
    
	
Title: 
    	
President, Commerical   Divison
    	
 
    	
Title: 
    	
President &   CEO
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Address for Notices:
    	
 
    	
Address for Notices:
    
	
 
    	
 
    	
 
    
	
400 Metro Place North
    	
 
    	
201 Mission Street,   Suite 2345,
    
	
Dublin, Ohio 43017
    	
 
    	
San Francisco, CA 94105
    
	
 
    	
 
    	
 
    
	
Attn: Legal
    	
 
    	
Attn: Lisa Conte
    
	
Fax No: 614-761-9096
    	
 
    	
Fax No: 415-371-8311
    

 

7

 

EXHIBIT A

PRODUCTS AND PRICE LIST

 

Product: Neonorm Foal 30ml syringe

 

	
 
    	
 
    	
Per Syringe
    	
 
    	
Per Box(8 syringes
    	
 
    	
Per Treatment
    
	
Horse   Owner
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
Veterinarian
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
Distributor
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    

 

*** CONFIDENTIAL TREATMENT REQUESTED

 

8

 

EXHIBIT B

TERRITORY DESCRIPTION

 

The United States of America including its possessions and territories.

 

9

 

EXHIBIT C

 

SALES TARGETS

 

Market for Foals with Diarrhea

 

	
Year
    	
 
    	
 
    	
 
    	
Yr1
    	
 
    	
yr2
    	
 
    	
Yr3
    
	
Thoroughbreds
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
Quarter Horses
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
Standard Breeds
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
Other
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
Total #  of foals
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
# experience foal heat diarrhea
    	
 
    	
90
    	
%
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
% get treated
    	
 
    	
20
    	
%
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
% market share
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
Total number of treatments for foal heat
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
infectious diarrhea
    	
 
    	
10
    	
%
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
% market share
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
Total number of   treatments for infectious diarrhea
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
Total number treated
    	
 
    	
 
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
Total number of syringes
    	
 
    	
2
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    

 

*** CONFIDENTIAL TREATMENT REQUESTED

 

10

 

EXHIBIT D

 

CONTINUING GUARANTY AND INDEMNIFICATION

 

Jaguar Animal Health, Inc. on behalf of itself and its affiliates (collectively referred to as “JAGUAR”) hereby guarantees that each article (collectively, the “PRODUCTS”) constituting or being part of any shipment or delivery now or hereafter made to Butler Animal Health Supply, LLC d/b/a Henry Schein Animal Health or any affiliate thereof (collectively, “HSAH”) will: (i) at the time of each shipment or delivery be in compliance with all applicable federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, order, requirement or rule of law (including common law) (hereinafter referred to as “Legal Requirements”), in each region in which HSAH will distribute the Products; and (ii) not be adulterated or misbranded within the meaning of the U.S Federal Food, Drug and Cosmetic Act (the “Act”), or within the meaning of any Legal Requirements, nor will any PRODUCT be an article which may not, under the provisions of Sections 405, 505 or 512 of the Act, be introduced into interstate commerce. JAGUAR hereby guarantees that it has proper legal title to the PRODUCTS and that the PRODUCTS are merchantable and fit for their intended purpose.

 

JAGUAR shall indemnify and hold HSAH harmless for and against any and all liabilities, losses, damages (including, actual, punitive and exemplary damages), claims (including product liability claims), costs and expenses, interest, awards, judgments and penalties (including attorneys’ and consultants’ fees and expenses) suffered or incurred by HSAH arising or resulting from:

 

i. any claim of trademark, trade dress, trade secret, copyright, patent or other intellectual property infringement arising out of HSAH’s distribution of the PRODUCTS (except where HSAH has supplied the trademark which is the basis for the claim);

 

ii. any alleged or actual use or misuse of the PRODUCTS (other than by HSAH);

 

iii. any breach by JAGUAR of any obligation to HSAH, including those contained in related agreements in respect of distribution, if any;

 

iv. any negligent or willful action or omission of JAGUAR or any of its agents, employees, representatives, successors or assigns in connection with the manufacture, development, sale, distribution, storage or dispensing of the PRODUCTS; or

 

v. any action for the recall or seizure of the PRODUCTS.

 

JAGUAR agrees to maintain comprehensive “occurrence” general liability insurance, including “occurrence” product liability, contractual liability insurance and advertising injury coverage, with minimum limits of liability of $3,000,000 and to deliver to HSAH a certificate thereof with HSAH named as an additional insured thereon. Such insurance must insure against all products contemplated under this Agreement. Insurance coverage must be procured from an insurance company bearing an AM Best Rating of no less than B+ or a S&P Rating of no less than BBB.

 

JAGUAR will provide notice to HSAH of any regulatory action related to its operations and JAGUAR shall be responsible, if required by Legal Requirements, for notifying the appropriate federal, state and local authorities of any customer complaints or other occurrences regarding the PRODUCTS, evaluating all complaints and responding to HSAH in writing on the resolution of any complaints from HSAH for its customers.

 

If JAGUAR private labels, co-brands or enters into an exclusive distribution arrangement with HSAH for any PRODUCT, JAGUAR agrees: (a) to make no changes in the PRODUCT, labeling or packaging, manufacturing site or country of origin of the PRODUCT without HSAH’s prior written approval; and (b) to allow representatives of HSAH to enter and inspect JAGUAR’S facilities (and any of its PRODUCT contractor manufacturer facilities)

 

11

 

during normal business hours and, upon reasonable request, to supply HSAH with proper documentation for HSAH to determine JAGUAR’s (and its relevant contract manufacturers’) adherence to quality assurance and regulatory compliance standards provided that HSAH will not be permitted to carry out any such audit or inspection more than once in any 12 month period. If such approved PRODUCT changes are made, JAGUAR shall provide adequate explanation of the changes, make all required filing with government agencies/competent authorities and any required packaging or literature changes, and pay all costs associated with such changes.

 

JAGUAR shall comply with all applicable legal requirements, including by making (with appropriate federal and state authorities) any filings and disclosures of reportable transactions with practitioners and other relevant parties with respect to any marketing or promotion of its PRODUCTS whether directly or on its behalf.

 

JAGUAR warrants that packaging, including cartons, ship cases and pallets shall be of sufficient strength to maintain the quality of the PRODUCTS during normal transportation and storage.

 

This CG&I shall be continuing and shall be binding upon JAGUAR and his or its successors and assigns and shall inure to the benefit of HSAH, its successors and assigns and to the benefit of its officers, directors, agents and employees. This CG&I shall supersede any and all prior agreements or understandings between HSAH and JAGUAR regarding the subject matter hereof. JAGUAR shall not provide any compensation or other benefit to HSAH’s employees without the prior written consent of HSAH and agrees to promptly disclose any financial relationships between JAGUAR and any HSAH employee which may give rise to a conflict of interest between such employee and HSAH. No right, express or implied, is granted to JAGUAR hereunder to use in any manner any name, trade name, trademark or service mark of HSAH. This CG&I contains proprietary information and may not be disclosed without prior written approval from HSAH. Any amendments or modifications to this CG&I must be in writing and executed by authorized representatives of both Parties. This CG&I shall be governed by the laws of the State of New York. This CG&I shall cover all PRODUCTS and shall survive the termination of this and any other distributor agreement between the Parties.

 

12

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