Document:

stlt_ex1037.htm

EXHIBIT 10.37

 

[***] Indicates Redacted Information Subject to a Request for Confidential Treatment. 

IURTC Agreement Number [***]

 

EXCLUSIVE LICENSE AGREEMENT

OF OCTOBER 13, 2016

 

between

 

INDIANA UNIVERSITY RESEARCH AND TECHNOLOGY CORPORATION

 

and

 

SPOTLIGHT INNOVATION, INC.

 

	 
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Introduction: This exclusive license agreement (the “Agreement”) is made and entered into as of October 13, 2016 (the “Effective Date”) by and between:

 

Indiana University Research and Technology Corporation (“IURTC”), a non-profit corporation organized under the laws of Indiana, having its principal offices at 518 Indiana Ave., Indianapolis, Indiana 46202, and 

 

Spotlight Innovation, Inc. (“Spotlight”), a company organized under the laws of Nevada, having its principal offices at 6750 Westown Pkwy Ste 200-226, West Des Moines, Iowa 50266.

 

The Parties hereby agree:

 

1 Background : IURTC and The Brigham and Women’s Hospital, Inc. (“BWH”) are co-owners of certain intellectual property rights invented by Elliot Androphy, M.D. at Indiana University and Kevin Hodgetts, Ph.D. at BWH (the “Inventors”; collectively, Indiana University and BWH are the “Institutions”). IURTC and BWH entered into an agreement effective January 1, 2016 which grants IURTC the right to grant licenses under both parties’ ownership rights in the intellectual property. IURTC is willing to grant licenses to these intellectual property rights provided the rights are used to further scientific research, for new product development, and for other applications in the public interest. Spotlight represents to IURTC that it has the necessary product development, manufacturing, and marketing capabilities to commercialize products based on such intellectual property rights. Spotlight desires to obtain a license to commercialize these intellectual property rights upon the terms and conditions set forth in this Agreement. 

 

2 Definitions: In addition to other capitalized terms defined herein, the following words and phrases have the meanings assigned to them below. 

 

2.1 Affiliate: Any entity that, directly or indirectly, owns or controls Spotlight or that is owned or controlled by or is under common ownership or control with Spotlight. Own(s) or control(s) means: 

 

2.1.1 Direct or indirect ownership of at least fifty percent (50%) of the outstanding voting securities of a corporation; 

 

2.1.2 The right to receive at least fifty percent (50%) of the earnings of the entity in question; or 

 

2.1.3 The right to control the business decisions of the entity in question. 

 

	 
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2.2 Development Plan: Spotlight’s good faith, bona fide plan for the development, manufacture, promotion, importation, use, sale, and marketing of Licensed Products. The Development Plan will include, at a minimum, then current: 

 

2.2.1 Definitions and/or specifications for each Licensed Product planned for development; 

 

2.2.2 Tasks to be performed by Spotlight and/or Sublicensees to develop each Licensed Product to the point of First Commercial Sale and thereafter to maximize Sales, including without limitation estimated time schedules for specific tasks; 

 

2.2.3 Tasks to be performed to achieve any regulatory approval or other certification of each Licensed Product, including without limitation estimated time schedules for each; and

 

2.2.4 Identification of the primary country(ies) in which each Licensed Product is or will be Sold, and a good faith estimate of time of First Commercial Sale in the primary country(ies) where Licensed Product is not yet Sold.

 

2.3 Field: Human therapeutic for spinal muscular atrophy.

 

2.4 First Commercial Sale: The earliest date of Sale of a Licensed Product by Spotlight or any of its Sublicensees. The transfer of Licensed Products by Spotlight or its Sublicensees strictly for their internal laboratory and clinical research and development purposes or beta-testing prior to regulatory approval does not constitute a First Commercial Sale, provided that Spotlight and its Sublicensees receive no payment or other consideration or value for such Licensed Product in excess of the actual documented costs of producing and transporting such Licensed Product.

 

2.5 Licensed Product: Any product or process that: (i) is claimed in the Patent Rights; and/or (ii) is made by, uses, incorporates, is used by, or results from a process that is claimed in the Patent Rights.

 

2.6 Net Sales: The gross receipts for the Sale of Licensed Products, less the following to the extent documented to IURTC and only insofar as they are included in gross receipts and are separately billed:

 

2.6.1 Trade, quantity, and cash rebates on Licensed Products actually provided to third parties;

 

2.6.2 Credits, allowances, or refunds, not to exceed the original invoice amount, actually allowed for actual claims, damaged goods, rejections, or returns of Licensed Products; and

 

2.6.3 Excise, sale, use, or other taxes, other than income taxes and value added taxes, that are included in gross receipts and that are paid to Spotlight or Sublicensees for Licensed Products.

 

If Sales are not in an arms-length transaction or are between Spotlight, Affiliates, or Sublicensees, then the gross receipts of the Sale will be deemed to be the annual average gross invoiced amount in the same country for arms-length transactions for the Licensed Product.

 

	 
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2.7 Party: Individually, IURTC or Spotlight. Collectively, IURTC and Spotlight may be referred to as the “Parties.”

 

2.8 Patent Rights: IURTC’s and BWH’s rights in:

 

2.8.1 U.S. provisional patent applications [***]; 

 

2.8.2 All U.S. patent applications claiming priority to the above-referenced patents or applications, including without limitation divisionals, equivalent continuations, and subject matter claimed in continuations-in-part applications that is entitled to the priority filing date of any of the above; 

 

2.8.3 Foreign equivalent applications claiming priority to the above-referenced patents or applications; 

 

2.8.4 Patents issuing from any of the above-referenced applications;

 

2.8.5 Any of the foregoing during reissue, re-examination, opposition, or post-grant review proceedings;

 

2.8.6 Reissues and re-examinations of any of the above-referenced patents; and

 

2.8.7 Any extensions of or supplementary protection certificates referencing any of the above patents. 

 

2.9 The terms Sale, Sold, Sell: Any transaction in which a Licensed Product is manufactured, exchanged, or transferred for value, including without limitation sales, leases, licenses, rentals, provision of services through the practice of Licensed Products, and other modes of distribution or transfer of a Licensed Product. A Sale of a Licensed Product will be deemed to have been made upon the earliest of the dates on which Spotlight or its Sublicensee (or anyone acting as a result of, on behalf of, or for the benefit of Spotlight or any of its Sublicensees) invoices, ships, provides, or receives value for a Licensed Product.

 

2.10 Sublicense: Each agreement, however captioned, in which Spotlight directly, or indirectly through privity of contract with a Sublicensee: 

 

2.10.1 Grants, conveys, or otherwise transfers any of the rights granted hereunder;

 

2.10.2 Agrees not to assert one or more of the Patent Rights or agrees not to sue, prevent, or seek a legal remedy for the practice of same;

 

2.10.3 Has obtained the agreement from another entity not to practice the Patent Rights; 

 

2.10.4 Has agreed with any other entity to do any of the foregoing, or to forbear from offering or doing any of the foregoing with any other entity, including without limitation licenses, option agreements, right of first refusal agreements, standstill agreements, settlement agreements, co-development agreements, co-promotion agreements, joint venture agreements, and other agreements; or

 

	 
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2.10.5 Has another party Sell, offer for Sale, manufacture, or import Licensed Product.

 

2.11 Sublicensee: Each entity, other than Spotlight or Affiliates that have satisfied the requirements of Paragraph 3.2, that enters into a Sublicense.

 

2.12 Sublicensing Revenue: The remuneration received under each Sublicense, including without limitation the fair market cash value of any and all non-cash consideration, including without limitation license issue fees, option fees, other licensing fees, milestone payments, minimum annual royalties, equity, or other payments of any kind whatsoever (but excluding solely running royalties paid by Licensee to IURTC for Net Sales by Sublicensees), irrespective of whether such revenues are received in the form of cash, barter, credit, stock, warrants, release from debt, goods or services, licenses back, and/or a premium on the sale of equity (i.e., payments for equity that exceed the pre-Sublicense value).

 

2.13 Term: Commencing on the Effective Date and continuing until the expiration of the last of the Patent Rights, unless earlier terminated in accordance with this Agreement.

 

2.14 Territory: Anywhere in the world, except those countries to which export of technology or goods is prohibited by applicable U.S. export control laws or regulations.

 

3 Grant: 

 

3.1 Subject to the terms and conditions of this Agreement and Spotlight’s compliance therewith, and in consideration of Spotlight’s satisfaction of its obligations hereunder, IURTC hereby grants to Spotlight and Spotlight hereby accepts an exclusive license under the Patent Rights, to make, have made, use, offer for Sale, Sell, and import Licensed Products solely in the Field and the Territory.

 

3.2 Subject to the terms and conditions of this Agreement and Affiliate compliance therewith, the rights licensed to Spotlight hereunder, except for the right to grant Sublicenses, may be extended to Affiliates provided that each such Affiliate first agrees in a written agreement to be bound by the terms and conditions of this Agreement as Spotlight is bound, and such agreement: (i) names IURTC as a third party beneficiary; (ii) terminates upon termination of this Agreement with obligations that survive for Spotlight surviving for Affiliates; and (iii) is not transferable. Any Affiliate that desires to exercise any of the rights granted hereunder will enter into such written agreement with Spotlight prior to exercising such rights. Spotlight will deliver to IURTC a copy of said agreement and any amendment thereto within thirty (30) days of each execution. Spotlight agrees to be fully responsible for the performance of such Affiliates and liable for their compliance therewith and herewith.

 

3.3 Subject to the terms and conditions of this Agreement and Sublicensee compliance therewith and with its Sublicense, Spotlight may grant Sublicenses, conditioned on such compliance, to third parties under this Agreement. Only Spotlight, and not its Sublicensees, is permitted to grant Sublicenses unless IURTC provides prior written consent in each instance. If such consent is provided, which IURTC may withhold for any reason, then all terms and conditions applicable to Sublicensee hereunder will also apply to Sublicensee’s Sublicensee.

 

3.3.1 Each Sublicense will be consistent with the terms and conditions of this Agreement, including without limitation Paragraphs 8.3 and 13.5 and Article 14 and will: 

 

3.3.1.1 Contain the terms and conditions set forth in Paragraph 2.6 and the definitions it references therein, and in Paragraphs 3.4, 3.6, 3.7, 6.3, 6.4, 8.4, 8.5, 9.7, 16.6, and 16.7, and in Article 7 modified only to indicate that Sublicensee is under the same obligations as Spotlight;

 

3.3.1.2 Contain the terms and conditions set forth in Paragraph 6.2 and the definitions it references modified only to indicate that the Sublicensee is obligated to Spotlight as Spotlight is to IURTC; 

 

	 
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3.3.1.3 Contain the terms and conditions set forth in Articles 11, 12, and Paragraph 7.5, modified only to indicate that the Sublicensee is obligated to IURTC and the Institutions as Spotlight is obligated to IURTC and the Institutions hereunder; and

 

3.3.1.4 State that if Spotlight enters bankruptcy or receivership, voluntarily or involuntarily, then upon notice from IURTC, each Sublicensee will pay Sublicensee’s royalties on Net Sales and Sublicensing Revenue then or thereafter due directly to IURTC for the account of Spotlight. IURTC will remit to Spotlight any amounts received that exceed the sum actually owed by Spotlight to IURTC.

 

3.3.2 Within thirty (30) days of the effective date of each Sublicense and each amendment thereto, Spotlight will provide IURTC a complete copy of the Sublicense and all amendments and exhibits thereto, along with Spotlight’s representation and warranty that no prior, contemporaneous, planned, or proposed contractual relationships between Spotlight and Sublicensee contain consideration to Spotlight reasonably attributable to the sublicensed rights. If the original Sublicense is written in a language other than English, the copy of the Sublicense and all exhibits thereto will be accompanied by a complete translation written in English that Spotlight represents and warrants will be a true and accurate translation of the Sublicense and its exhibits. Spotlight will also notify IURTC promptly upon the termination of each Sublicense.

 

3.3.3 Spotlight agrees to be fully responsible for the performance of Sublicensees and liable for their compliance hereunder. Any act or omission by a Sublicensee that would be a breach of this Agreement if imputed to Spotlight will be deemed to be a breach by Spotlight of this Agreement. 

 

3.4 IURTC, the Institutions, BWH’s affiliates, and the Inventors retain the right to practice the Patent Rights for educational and/or research purposes, for patient care and treatment purposes, and to permit other non-profit entities to do the same for educational and/or research purposes. Spotlight agrees not to directly or indirectly restrict the rights of the Institutions, other non-profit entities, or their respective faculty, staff, students, or employees from publishing the results of their research or transferring materials related to the Patent Rights, provided, however, that any such publications that are disclosed to IURTC will be provided to Spotlight for its review at least thirty (30) days prior to publication so that Spotlight may discuss with IURTC its interest in such disclosures. 

 

3.5 This Agreement provides Spotlight, Affilates, and Sublicensees no ownership rights of any kind in the Patent Rights or any Confidential Information (as defined in Paragraph 7.1) provided by or on behalf of IURTC. All rights, titles, and interests in and to tangible and/or intangible property of IURTC or the Institutions, including without limitation those rights expressly reserved in Paragraph 3.4 and ownership of the Patent Rights and any Confidential Information provided, remain the property of IURTC. Nothing in this Agreement will be construed as a sale thereof or conferring, by implication, estoppel, or otherwise, upon Spotlight, Affiliates, Sublicensees, or any party in privity with, or any customer of any of the foregoing, any right, title, or interest of IURTC or the Institutions except as expressly granted in Paragraphs 3.1-3.3. Spotlight will provide notice of Field and Territory limitations on Licensed Products to prevent any implied license outside the Field or Territory. 

 

3.6 In accordance with 35 U.S.C. §§ 200-212, 37 C.F.R. Part 401, and in the relevant government research contracts with the Institutions, the U.S. government retains certain rights and may impose certain requirement with respect to subject inventions as that term is defined therein. To the extent applicable, such rights and requirements include without limitation: (i) the grant of a nonexclusive, non-transferable, irrevocable, fully paid-up license to practice or have practiced for or on behalf of the government the subject inventions throughout the world; and (ii) the requirement that subject inventions and products produced through the use of subject inventions that are used or sold in the U.S. be manufactured substantially in the U.S. The rights granted in this Agreement are expressly made subject to these laws and regulations as they may be amended from time to time, and Spotlight agrees to comply and enable IURTC and the Institutions to comply with all such laws and regulations, including without limitation to submit information requested by IURTC to satisfy the Institutions’ reporting requirements in connection therewith. Spotlight represents and warrants that it, all Affiliates extended rights under Paragraph 3.2, and all Sublicensees constitute a “small business firm” as defined in 15 U.S.C. §632, and Spotlight will promptly notify IURTC of any change thereof that occurs during the term.

 

	 
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3.7 Spotlight will mark all Licensed Products Sold in the U.S. with the applicable Patent Rights and in a manner not inconsistent with 35 U.S.C. §287(a), and will mark all Licensed Products Sold in other countries with the applicable Patent Rights in a manner not inconsistent with the laws and regulation then applicable in each such country. Spotlight acknowledges that it will be liable to IURTC for infringement damages lost due to a failure to mark Licensed Products and/or due to the improper or defective marking of the Patent Rights.

 

4 Diligence: Spotlight agrees to develop, promote, and Sell Licensed Products within the Field and throughout the Territory in accordance with the terms and conditions of this Agreement and applicable laws and regulations. 

 

4.1 Within ninety (90) days of the Effective Date, Spotlight will provide IURTC with a Development Plan. No later than January 31 of each subsequent year during the Term, Spotlight will provide IURTC with written updates to the Development Plan. The updates will summarize in reasonable detail the progress achieved during the previous year, any problems encountered in the development, evaluation, testing, pre-production manufacturing, First Commercial Sale, and/or initial marketing of each Licensed Product, and plans for the future regarding the foregoing. Upon reasonable request by IURTC, Spotlight will consult with IURTC about tasks, schedules, and progress.

 

4.2 Spotlight will achieve directly or through a Sublicensee the following commercial goals by the dates set forth below:

 

4.2.1 [***]

 

4.2.2 [***]

 

4.2.3 [***] Spotlight will provide IURTC with commercially reasonable evidence of Spotlight’s or Sublicensee’s achievement of each of such goals within thirty (30) days after the corresponding date.

 

5 Financial Consideration:

 

5.1 Within thirty (30) days of the Effective Date, Spotlight will pay to IURTC [***].

 

5.2 Spotlight will pay to IURTC a running royalty of Net Sales by Spotlight and Sublicensee according to the following table.

 

[***1% to 11%***]

 

The royalty will apply to all Licensed Products made during the Term, though specific Licensed Products may be Sold after the Term. No multiple royalties will be payable because: (i) the Licensed Product is later sold or used following the Sale of the Licensed Product generating the Net Sale hereunder; or (ii) the manufacture or use of the Licensed Product is covered by more than one of the Patent Rights. Royalties will be paid to IURTC within thirty (30) days of the end of each calendar quarter in which the Net Sales occurred.

 

5.3 Beginning with the [***] calendar year, Spotlight will pay to IURTC an annual maintenance fee according to the table below: 

 

[***][***][***][***][***][***]

 

	 
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The maintenance fee will be paid by Spotlight to IURTC on January 1 of the calendar year for which it is owed, with the first payment due on January 1, [***]. Maintenance fee payments may be credited toward payments due to IURTC under Paragraphs 5.2, 5.4, and 5.5 but only for those payments that accrue in the same calendar year in which the maintenance fee was due and paid.

 

5.4 Spotlight will pay to IURTC [***] of all Sublicensing Revenue. IURTC’s percentage of Sublicensing Revenue will be paid by Spotlight to IURTC within thirty (30) days of the end of each calendar quarter in which Spotlight received the Sublicensing Revenue.

 

5.5 Spotlight will pay to IURTC the following performance milestone payments:

 

5.5.1 [***]

 

5.5.2 [***]

 

5.5.3 [***]

 

5.5.4 [***] [for an aggregate potential milestone payment of $1,100,000]

 

Spotlight will promptly notify IURTC of the achievement of a performance milestone. Should Spotlight receive Sublicensing Revenue for a Sublicensee’s achievement of a particular performance milestone, Spotlight will pay to IURTC the greater of the payment listed above or IURTC’s percentage of Sublicensing Revenue under Paragraph 5.4. Performance milestone payments will be paid by Spotlight to IURTC within thirty (30) days of the end of each calendar quarter in which the performance milestone is achieved.

 

6 Payment and Reports:

 

6.1 All dollar ($) amounts referred to in this Agreement are expressed in U.S. dollars. All payments to IURTC are non-refundable and, except as provided in Paragraph 5.3, non-creditable, may not be placed in escrow, and will be made in U.S. dollars by check or electronic transfer (without deduction of any transfer fees) payable solely to “Indiana University Research and Technology Corporation.”

 

6.1.1 Checks will be sent to:

 

Indiana University Research and Technology Corporation

518 Indiana Ave.

Indianapolis, IN 46202

 

The IURTC Agreement Number [***] and purpose of the payment will be included with the check. 

 

6.1.2 Wire transfer payments will be sent to:

 

	 
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[***]

 

The IURTC Agreement Number [***] and purpose of the payment will be included with the wire transfer information. Spotlight will add wire transfer fees to the payment.

 

6.1.3 Any amounts due in currency other than U.S. dollars will be converted to U.S. dollars at the conversion rate for the foreign currency as published in the Eastern edition of The Wall Street Journal as of the last business day in the U.S. of the applicable payment period.

 

6.2 Spotlight will deliver to IURTC, with each payment made under Paragraph 6.1, a written report describing the purpose of the payment and setting forth the calculation of the payment being made to IURTC, including without limitation the following:

 

6.2.1 For payments under Paragraph 5.2, calculations of payments due by Spotlight, by each Affiliate extended rights under Paragraph 3.2, and by each Sublicensee on a Licensed Product-by-Licensed Product and country-by-country basis: the number of Licensed Products Sold; gross receipts for Sales; deductions as described in Paragraph 2.6, giving totals by each type; and calculation of Net Sales;

 

6.2.2 For payments under Paragraphs 5.2, 5.4, and 5.5, the serial numbers of the patent applications and patents of the Patent Rights that may cover each Licensed Product;

 

6.2.3 For payments under Paragraphs 5.2, 5.4, and 5.5, a description and list of amounts credited against the maintenance fee; and

 

6.2.4 For payments under Paragraph 5.4, the name of the Sublicensee paying the Sublicensing Revenue.

 

6.3 Spotlight will maintain complete, continuous, and accurate books of account and records sufficient to enable IURTC’s independent auditor to verify the amounts paid under this Agreement, and for otherwise verifying its and Affiliates’ granted rights under Paragraph 3.2 and Sublicensees’ performance hereunder and compliance herewith. The books and records will be maintained for at least three (3) years following the quarter after submission of the reports required by this Article. Upon reasonable notice by IURTC and during normal business hours, Spotlight will give IURTC (or auditors or inspectors appointed by and representing IURTC) access to all books and records, including without limitation for Sales of Licensed Products, to conduct at IURTC’s expense an audit or review of those books and records. This access will be available at least once every calendar year during the Term and for the three (3) calendar years thereafter. Any underpayment will be promptly paid, with interest as set forth in Paragraph 6.4, to IURTC. Any overpayment will be granted to Spotlight solely and exclusively as a credit against future payment. If the audit or review reflects an underpayment or overpayment by five percent (5%) or more for any calendar quarter, then Spotlight will promptly reimburse IURTC for the costs and expenses of the accountants and auditors in connection with the review and audit. 

 

6.4 All payments not paid by Spotlight to IURTC when due will accrue interest, from the due date until payment is received by IURTC, at an annual rate equal to two percent (2%) above the prime rate published in the Eastern edition of The Wall Street Journal at the beginning of the period of arrearage (or the maximum allowed by law, if less). In the event of default in payment, collection agency’s fees of the delinquent balance and out-of-pocket attorney fees plus any applicable court costs will be added to the amount due to IURTC. Spotlight will reimburse IURTC within fifteen (15) days of each invoice for all such costs.

 

	 
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6.5 Any taxes required to be withheld by Spotlight from payments due under Article 5 to comply with the tax laws of the U.S. or any other country will be promptly paid by Spotlight to the appropriate tax authorities, and Spotlight will furnish IURTC with original tax receipts or other appropriate evidence issued by the appropriate tax authorities sufficient to enable IURTC to support a claim for income tax credit or refund in respect to any sum so withheld.

 

7 Confidentiality:

 

7.1 The terms and conditions of Articles 4 and 5 and information exchanged between the Parties under Articles 4, 6, and 9, and 10, tangible materials and technical information provided by or on behalf of IURTC, as well as any information designated by a Party in any reasonable manner as confidential within a reasonable time after it is delivered to the receiving Party, are “Confidential Information.” 

 

7.2 During the Term and for a period of three (3) years thereafter, the receiving Party agrees to maintain in secrecy and not disclose to any third party any Confidential Information received. The receiving Party will use the Confidential Information received solely as necessary to perform its obligations and exercise its rights in accordance with the terms and conditions of this Agreement. 

 

7.3 Confidential Information does not include information that:

 

7.3.1 Is or becomes part of the public domain through no fault of the receiving Party;

 

7.3.2 Was known to the receiving Party before disclosure by the disclosing Party as established by documentary evidence;

 

7.3.3 Is identical subject matter originally and independently developed by the receiving Party’s personnel without knowledge, use of, or access to any disclosing Party’s Confidential Information as established by documentary evidence; or

 

7.3.4 Was disclosed to the receiving Party without restriction by a third party having a right to make the disclosure.

 

7.4 Notwithstanding the other terms of this Article 7:

 

7.4.1 Spotlight may, to the extent necessary, use Confidential Information to secure governmental approval to clinically test or market a Licensed Product or to show to a potential sublicensee or contractor subject to an appropriate confidentiality agreement. Spotlight will, in any such use, take all reasonably available steps to maintain confidentiality of the disclosed information and to guard against any further disclosure;

 

	 
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7.4.2 IURTC may report consideration received under this Agreement and Spotlight’s progress under Article 4, including without limitation providing Development Plans and reports, to the Institutions and the Inventors and to the U.S. government under Paragraph 3.6; and

 

7.4.3 The receiving Party may disclose Confidential Information when required by law, regulation, or court order provided it has first notified the disclosing Party and it reasonably cooperates therewith in obtaining a protective order or other remedy of the disclosing Party’s election.

 

7.5 Spotlight may not use or permit the use of the name of IURTC, the Institutions, or any trustee, director, officer, staff member, employee, student or agent of the Institutions or any adaptation thereof or use the trademarks, including without limitation logos, of any of the foregoing for any commercial, advertisement, or promotional purpose without the prior written consent of IURTC and the BWH or the individual whose name is to be used. For BWH, such approval will be obtained from BWH’s Chief Public Affairs Officer. Notwithstanding the foregoing, Spotlight will be permitted to disclose the existence and terms of this Agreement, including the name of IURTC, to the extent required under federal securities laws, or to the extent consistent with Spotlight’s past practices with regard to public disclosures to stockholders. Consistent with the foregoing, each Party including UABRF may state that Spotlight licensed from IURTC one or more of the patent applications and/or patents in the Licensed Patents, list Inventor names, and describe the type and extent of licenses.

 

8 Representations and Warranties:

 

8.1 IURTC represents and warrants that:

 

8.1.1 It is a corporation organized, existing, and in good standing under the laws of Indiana;

 

8.1.2 It has the authority to enter into this Agreement and that the person signing on its behalf has the authority to do so; and

 

8.1.3 To the best of its knowledge, it is the co-owner (subject to any rights retained by the U.S. government by operation of law) of the Patent Rights and that it has the authority to grant the licenses set forth herein.

 

8.2 Spotlight represents and warrants that:

 

8.2.1 It is a company duly organized, existing, and in good standing under the laws of Nevada; 

 

8.2.2 The execution, delivery, and performance of this Agreement have been authorized by all necessary corporate action on the part of Spotlight and that the person signing this Agreement on behalf of Spotlight has the authority to do so;

 

	 
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8.2.3 The making, exercising of any right, or performance of any obligation under this Agreement does not violate any separate agreement it has with a third party, and in so acting, Spotlight will not breach the terms and conditions of this Agreement or fail to comply with applicable laws, regulations, and court orders;

 

8.2.4 It is not a party to any agreement or arrangement that would prevent it from performing its duties and fulfilling its obligations to IURTC under this Agreement;

 

8.2.5 It has and will maintain at the time specified in Article 12, the insurance coverage called for in Article 12;

 

8.2.6 It will obtain any additional licenses from any third party needed to perform and fulfill its duties and obligations under this Agreement; and

 

8.2.7 There is no pending litigation and no threatened claims against it that could impair its ability or capacity to perform and fulfill its duties and obligations under this Agreement.

 

8.2.8 As of the Effective Date it is a small entity as defined in 37 CFR 1.27, and it will promptly notify IURTC of any change to its entity status through acquisition, addition of employees, sublicensing this Agreement, or any other mechanism.

 

8.3 IURTC AND BWH PROVIDE THE PATENT RIGHTS “AS IS.” EXCEPT AS PROVIDED IN PARAGRAPH 8.1, IURTC AND BWH MAKE NO REPRESENTATIONS OR WARRANTIES, AND EXPRESSLY DISCLAIMS ON BEHALF OF IURTC AND THE INSTITUTIONS ALL OTHER REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS, STATUTORY, IMPLIED, OR OTHERWISE, INCLUDING WITHOUT LIMITATION:

 

8.3.1 A warranty or representation by IURTC or the Institutions as to the validity, scope, enforceability, or efficacy of the Patent Rights;

 

8.3.2 A warranty or representation by IURTC or the Institutions that the exercise of any rights granted in this Agreement, including without limitation practicing the Patent Rights, does not or will not infringe patents, copyrights, trademarks, trade secrets or other tangible or intangible property rights of third parties;

 

8.3.3 A warranty or representation by IURTC or the Institutions of operability, that development of a Licensed Product is possible, or to safety, effectiveness, or commercial viability of Licensed Products;

 

8.3.4 An obligation to bring or prosecute actions or suits against third parties for infringement of the Patent Rights; 

 

8.3.5 A grant, by implication, estoppel, or otherwise, of any licenses or rights under patents or other intellectual property rights of IURTC, the Institutions, or other persons, other than the rights expressly granted herein to the Patent Rights;

 

	 
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8.3.6 Directly or indirectly operating or applying as a waiver of sovereign immunity by IU or Indiana; 

 

8.3.7 Imposing any obligation or any liability on any party contrary to the laws of Indiana; and

 

8.3.8 IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS OF THE PATENT RIGHTS OR ANY LICENSED PRODUCTS FOR ANY PURPOSE. In no event will IURTC, BWH or any of its affiliates or any of their respective trustees, directors, officers, medical and professional staff, employees and agentsbe liable, including without limitation to Spotlight, its Affiliates, its Sublicensees, and their respective affiliates, successors, assigns, independent contractors, and agents, or to any third party regarding any claim arising from or relating to the exercise of any right granted, including without limitation Spotlight’s use of the Patent Rights; or from the manufacture, use, or importation of products; or for any claim for loss of profits or loss or interruption of business; or for indirect, special, exemplary, punitive, or consequential damages of any kind. The above limitations on liability apply even if advised of the possibility of such damages.

 

8.4 The rights granted to Spotlight under this Agreement are contingent upon compliance with applicable U.S. export laws and regulations, including without limitation the Arms Export Control Act, as amended, and the Export Administration Act of 1979. The transfer of certain technical data and commodities may require a license from the cognizant agency of the U.S. Government and/or written assurances by Spotlight that Spotlight will not export data or commodities to certain foreign countries without prior approval of such agency. IURTC does not represent that a license is not required, or that, if required, such a license will be issued.

 

8.5 The rights granted to Spotlight under this Agreement are contingent upon compliance with the U.S. Foreign Corrupt Practices Act. Notwithstanding anything to the contrary herein, IURTC is not obligated to take any action that it believes in good faith may cause it to be in violation of the U.S. Foreign Corrupt Practices Act or other U.S. laws and such inaction will not give rise to liability hereunder.

 

9 Prosecution of Patent Rights:

 

9.1 IURTC will prepare, file, prosecute, defend, and maintain the Patent Rights in its discretion in accordance with the terms and conditions herein using attorneys of its choosing. IURTC will instruct its attorneys to keep Spotlight informed of patent prosecution in the Field and to seek Spotlight’s comments and suggestions prior to taking material actions for the same (provided Spotlight is not in breach of this Agreement).

 

9.2 IURTC will authorize Spotlight to communicate directly with IURTC’s patent counsel. All information exchanged among IURTC’s counsel, the Parties, and/or the Inventors regarding the preparation, filing, prosecution, issue, defense, or maintenance of the Patent Rights will be deemed Confidential Information of IURTC. In addition, the Parties acknowledge and agree that, with regard to such preparation, filing, prosecution, issue, defense, and maintenance of the Patent Rights, the interests of the Parties as licensor and licensee are to obtain the strongest and broadest patent protection possible, and as such, are aligned and legal in nature. The Parties agree and acknowledge that they have not waived, and nothing in this Agreement constitutes a waiver of, any legal privilege concerning the Patent Rights, including without limitation, privilege under the common interest doctrine and similar or related doctrines.

 

9.3 Spotlight will reimburse IURTC [***] within thirty (30) days after the Effective Date for expenses incurred prior to the Effective Date for the Patent Rights.

 

9.4 During the Term, Spotlight will reimburse IURTC for all reasonable and documented costs and expenses incurred by IURTC relating to the Patent Rights within thirty (30) days of receipt of billing invoices for such costs and expenses. 

 

	 
	13
	

 
	 

 

9.5 Notwithstanding anything to the contrary herein:

 

9.5.1 IURTC may request written confirmation from Spotlight that it will satisfy its reimbursement obligations for any particular fees or expenditures for the Patent Rights at least sixty (60) days in advance of the date on which such expenditure is to be made or such fee is due to be paid. If Spotlight elects not to pay in accordance with Paragraph 9.6 or fails to respond, then such Patent Rights will be removed from the Agreement, the license granted to Spotlight for those patent applications or patents in the Patent Rights will terminate, the definition of Patent Rights will be unilaterally amended to exclude such rights, and IURTC will be free, at IURTC’s sole discretion and without any further obligation to Spotlight regarding such former Patent Rights, including without limitation, to prosecute and maintain for IURTC’s sole use and benefit, to license or to abandon the patent applications or patents; 

 

9.5.2 In addition, IURTC may, at its sole discretion, require payment of a retainer from Spotlight for filing fees prior to filing patent applications in foreign countries, foreign annuities, or other direct costs paid on behalf of IURTC for the Patent Rights to any patent office; 

 

9.5.3 Should Spotlight become delinquent at any time for the reimbursement of patenting costs, IURTC may, at its sole discretion, require Spotlight to pay in advance of all future actions undertaken by counsel regarding the Patent Rights; and

 

9.5.4 In addition to and not in lieu of its other rights and remedies hereunder, IURTC will have no obligations to Spotlight under this Article 9 if Spotlight is delinquent in its payments.

 

9.6 If Spotlight elects not to incur fees or expenditures for any Patent Rights, Spotlight will give IURTC written notice of such election at least sixty (60) days in advance of the date on which such expenditure is to be made or such fee is due to be paid. Upon IURTC’s receipt of such notice, or if any payment due under this Article 9 is delinquent for more than thirty (30) days, the license granted to Spotlight for those patent applications or patents in the Patent Rights will terminate, the definition of Patent Rights will be unilaterally amended to exclude such rights, and IURTC will be free, at IURTC’s sole discretion and without any further obligation to Spotlight regarding such former Patent Rights, including without limitation, to continue prosecution and maintenance for IURTC’s sole use and benefit, to license or to abandon the patent applications or patents.

 

9.7 Spotlight and IURTC agree that the Patent Rights will be extended by all means provided by U.S. or foreign law or regulation, including without limitation extensions provided under U.S. law at 35 U.S.C. §154(b) and 156, and foreign supplementary protection certificates. Spotlight hereby agrees to provide IURTC with all necessary assistance in securing such extension, including without limitation, providing all information regarding applications for regulatory approval, approvals granted, and the timing of same. Spotlight acknowledges that extension under 35 U.S.C. §156 must be applied for within sixty (60) days of the date that a Licensed Product receives permission under the provision of law under which the applicable regulatory review period occurred for commercial marketing or use, and that Spotlight’s failure to promptly provide the necessary information or assistance to IURTC during such sixty day period will cause serious injury to IURTC, for which Spotlight will be liable at law. The Parties will also cooperate in selecting the Licensed Product each supplementary protection certificate referencing the Patent Rights will list.

 

	 
	14
	

 
	 

  

10 Third Party Infringement:

 

10.1 Spotlight will give prompt written notice to IURTC of any known or suspected infringement of the Patent Rights after which Spotlight at its sole expense may attempt to abate any infringement of the Patent Rights in the Field and the Territory. Upon receipt of IURTC’s written consent, such consent not to be unreasonably withheld, Spotlight may initiate and prosecute actions in IURTC’s name against third parties for infringement and/or unfair trade practices through outside counsel of its choice which is reasonably acceptable to IURTC. Spotlight will consult with IURTC prior to and in conjunction with all significant issues regarding such action including without limitation settlement thereof, will keep IURTC informed of all proceedings, and will provide copies to IURTC of all pleadings, legal analyses, and other papers related to such actions. IURTC will provide reasonable assistance to Spotlight in prosecuting any such actions and will be compensated by Spotlight, including without limitation for its reasonable out-of-pocket expenses, which IURTC will only be required to expend if Spotlight has approved same for reimbursement. Absent IURTC’s and BWH’s prior written consent, Spotlight will not settle or compromise any claim or action in a manner that grants rights or concessions to a third party to the Patent Rights or a Licensed Product or admits the fault of or creates any obligation on IURTC, IU, BWH, or any Inventor.

 

10.2 Any damages paid (including without limitation statutory damages, compensatory damages, lost profits damages, exemplary damages, increased damages, and awards of costs and attorney fees) will first be applied to reimbursement of Spotlight’s reasonable costs, expenses, and legal fees, including without limitation amounts Spotlight has reimbursed or must reimburse to IURTC. The remaining balance of such damages will be distributed [***].

 

10.3 If Spotlight fails or declines to take any action under Paragraph 10.1 within a reasonable time after learning of third party infringement or unfair trade practices, IURTC will have the right, but not the obligation, to take appropriate actions against any such third party at its sole expense and to retain all recovered damages. In such instances, Spotlight will cooperate as requested by IURTC, including without limitation joining in an action and will be reimbursed by IURTC for its reasonable and documented out-of-pocket expenses, which Spotlight will only be required to expend if IURTC has approved same for reimbursement. 

 

11 Indemnification:

 

11.1 Spotlight will indemnify, defend, and hold harmless IURTC, the Institutions, their respective affiliates, Board of Directors, trustees, employees, faculty, staff, students, Inventors, successors, heirs, assigns, independent contractors, and agents (collectively, “IURTC Indemnitees”) from and against any and all judgments, liabilities, losses, damages, actions, claims, costs, or expenses (including without limitation all attorney fees and costs incurred by IURTC Indemnitees) (collectively, “Losses”) arising out of or relating to the exercise of any rights conveyed under this Agreement and/or by Sublicense, breach of any term or condition under this Agreement and/or Sublicense, and/or the negligence, willful malfeasance, and/or willful misconduct by Spotlight and/or Affiliates, successors, assigns, or Sublicensees, including without limitation:

 

11.1.1 The use of any Patent Rights, including without limitation, in the design, development, production, manufacture, sale, offer for sale, use, importation, exportation, lease, marketing, or promotion of any Licensed Product;

 

11.1.2 Product liability, injury or death to any person, damage to property, or any injury to business, including without limitation, business interruption or damage to reputation, arising out of and/or relating to the use of the Patent Rights or a Licensed Product; and

 

	 
	15
	

 
	 

  

11.1.3 Any third party claim that any use of Confidential Information or licensing of the Patent Rights, or development, provision, or use of Licensed Products violates or infringes a third party’s intellectual property rights;

 

except to the extent of the Losses that are solely attributable to the breach, negligence, recklessness, willful malfeasance, or willful misconduct of IURTC.

 

11.2 Spotlight at its sole expense will defend third party claims. Spotlight will have the right to conduct the defense of such actions through outside counsel of its choice which is reasonably acceptable to IURTC and BWH. Spotlight will consult with IURTC and BWH prior to and in conjunction with all significant issues, will keep IURTC and BWH informed of all proceedings, and will provide copies to IURTC and BWH of all pleadings, legal analyses, and other papers related to such actions. IURTC will provide reasonable assistance to Spotlight in defending any such actions, and IURTC Indemniteeswill have the right to retain its own counsel, at the expense of Spotlight, if representation of such Indemnitees by counsel retained by Spotlight would be inappropriate because of actual or potential differences in the interests of such Indemnitees and any other party represented by such counsel. Spotlight will not settle or compromise any claim or action in a manner that admits the fault of, imposes restrictions, or creates obligations on IURTC Indemnitees or requires any financial payment or admission of liability by IURTC Indemnitees. Spotlight will consult with IURTC and BWH prior to any proposed settlement. 

 

11.3 If Spotlight fails to defend a claim or action within twenty (20) days of learning of the same, in addition to and not in lieu of other rights and remedies, IURTC may assume the defense for the account of and at the risk of Spotlight, and any resulting liability, including attorney fees, will be deemed conclusively to be a liability of Spotlight. Spotlight’s failure or refusal to act is a material breach of this Agreement.

 

12 Insurance:

 

12.1 Commencing on the Effective Date, Spotlight will maintain insurance that is reasonably sufficient to fulfill its obligations under this Agreement, including without limitation workers’ compensation insurance with statutory limits as required by law; commercial general liability insurance with coverage of not less than [***] for any single occurrence and [***] in the aggregate. Upon commencing human testing or sales, Spotlight will maintain product liability insurance that is reasonably sufficient to fulfill its obligations under this Agreement, but not less than [***] for any single occurrence and [***] in the aggregate. In connection with the conduct of any clinical testing, Spotlight will maintain professional liability insurance (errors and omissions) that is reasonably sufficient to fulfill its obligations under this Agreement, but not less than [***] for any single occurrence and [***] in the aggregate. Upon commencement of coverage (as required above) and thereafter annually upon renewal, Spotlight will provide IURTC and BWH with written evidence of insurance. Such insurance will list IURTC Indemnitees as an additional insured. All policies will be endorsed to indicate that they provide primary coverage without right of contribution by any insurance carrier or self-insured by IURTC Indemnitees. A waiver of subrogation in favor of the Indemnitees will also be endorsed to the policies. If such coverage is not written on an “occurrence” basis (i.e., it is written on a “claims made” basis), Spotlight will maintain such insurance coverage during the term of this Agreement and for five (5) years thereafter. For purposes of this Paragraph 12.1, references to “Spotlight” will include any Affiliates extended rights under Paragraph 3.2 and Sublicensees.

 

	 
	16
	

 
	 

  

12.2 Beginning at such time as any such product, process or service is being commercially distributed, sold, leased or otherwise transferred, or performed or used (other than for the purpose of obtaining regulatory approvals), by Spotlight, Affiliates extended rights under Paragraph 3.2 or Sublicensees, Spotlight will, at its sole cost and expense, procure and maintain commercial general liability insurance in amounts not less than [***] per incident and [***] annual aggregate and naming the IURTC Indemnitees as additional insureds. Such commercial general liability insurance will provide (i) product liability coverage and (ii) broad form contractual liability coverage for Spotlight’s indemnification under Article 11 of this Agreement. [***]. The minimum amounts of insurance coverage required under this Paragraph 12.2 will not be construed to create a limit of Spotlight’s liability with respect to its indemnification under Article 11 of this Agreement.

 

12.3 Spotlight will provide IURTC and BWH with written evidence of such insurance upon request of IURTC and/or BWH. Spotlight will provide IURTC and BWH with written notice at least thirty (30) days prior to the cancellation, non-renewal or material change in such insurance; if Spotlight does not obtain replacement insurance providing comparable coverage prior to the expiration of such thirty (30) day period, IURTC will have the right to terminate this Agreement effective at the end of such thirty (30) day period without notice or any additional waiting periods. 

 

12.4 Spotlight will maintain such commercial general liability insurance beyond the termination of this Agreement during (i) the period that any such product, process, or service is being commercially distributed, sold, leased or otherwise transferred, or performed or used (other than for the purpose of obtaining regulatory approvals), by Spotlight or by a Sublicensee, Affiliates extended rights under Paragraph 3.2 or agent of Spotlight and (ii) a reasonable period after the period referred to in Paragraph 12.4 (i) above which in no event will be less than fifteen (15) years.

 

13 Termination:

 

13.1 Spotlight may terminate this Agreement with or without cause on ninety (90) days advance written notice to IURTC. The rights granted by IURTC herein, including without limitation in Article 3, will terminate and automatically revert to IURTC at the end of the 90-day period.

 

13.2 Time is of the essence for Spotlight to develop Licensed Products and make payments and reports theron. The fee stated in Paragraph 5.1 and the reimbursement of past patent costs under Paragraph 9.3 are due within thirty (30) days after the Effective Date, and if such payments are not received by IURTC thereby, this Agreement is null, void, and without effect.

 

13.3 IURTC may terminate this Agreement in whole or in part on sixty (60) days advance written notice to Spotlight upon Spotlight’s breach of this Agreement, including without limitation for:

 

13.3.1 Failure to timely pay any fee, royalty, or other payment required, including without limitation, those due under Article 5, Paragraph 6.3, Article 9, or Paragraph 10.2, and including without limitation any interest on and fees and costs attributable to the collection of late payments under Paragraph 6.4;

 

	 
	17
	

 
	 

  

13.3.2 Failure to timely provide reports or notices, including without limitation, those due under Paragraphs 3.2, 3.3, 4.1, 6.2, or 14.1;

 

13.3.3 Failure to keep accurate and completed books and records under Paragraph 6.3; 

 

13.3.4 Failure to obtain, maintain, or timely report levels of insurance under Article 12; 

 

13.3.5 Failure to include all required terms in Sublicenses or inclusion of any terms prohibited under Paragraph 3.3; 

 

13.3.6 Failure to indemnify IURTC Indemnitees or properly inform or involve IURTC under Article 11; and

 

13.3.7 Breach of Spotlight’s representations or warranties under Paragraph 8.2.

 

13.4 To the extent not prohibited by applicable law, Spotlight agrees that in the event Spotlight by its own actions or the action of any of its shareholders or creditors files or has filed against it, with an order for relief being entered, a case under the U.S. Bankruptcy Code of 1978, as previously or hereafter amended, IURTC will be entitled to relief from the automatic stay of Section 362 of Title 11 of the U.S. Code, as amended, on or against the exercise of the rights and remedies available to IURTC. Spotlight hereby waives the benefits of such automatic stay and consents and agrees to raise no objection to such relief. Spotlight further agrees that IURTC, at its sole discretion, may immediately terminate this Agreement by means of a written notice to Spotlight in the event that a creditor or other claimant takes possession of, or a receiver, administrator, or similar officer is appointed over any of the assets of Spotlight, or in the event that Spotlight makes any voluntary arrangement with its creditors or becomes subject to any court or administration order under any U.S. bankruptcy proceedings or insolvency law. Spotlight will promptly inform IURTC of its intention to file a voluntary petition in bankruptcy or of another’s communicated intention to file a voluntary petition in bankruptcy.

 

13.5 As of the date of termination of this Agreement by either Party for any reason under the terms herein, including expiration of the Term, all rights granted by IURTC will terminate and automatically revert to IURTC. Upon termination other than through expiration of this Agreement, Spotlight agrees not to practice or permit another to practice the Patent Rights. All terms and conditions herein that, by their express terms or by implication, are to be performed after the termination of this Agreement or are prospective in nature will survive termination, as the case may be, including without limitation the provisions in Articles 5, 6, 7, 8, 11, and 12 and Spotlight’s obligations to pay fees, royalties, or other payments and patent expenses accruing prior thereto. Articles 11 and 12 will survive expiration of this Agreement.

 

13.6 Upon termination of this Agreement, Spotlight will promptly notify its Affiliates extended rights under Paragraph 3.2 and Sublicensees of such termination. Any rights previously granted by Spotlight under Paragraphs 3.2 and 3.3 will be automatically revoked thirty (30) days following the effective date of termination of this Agreement. However, any Sublicensee in compliance with its Sublicense and evidencing to IURTC its ability to meet the requirements of Article 4 and Paragraph 3.5 has the right to enter into a written license agreement with IURTC before its Sublicense is revoked, through which such Sublicensee will become bound to IURTC on substantially the same terms and conditions, including without limitation financial terms, as Sublicensee was bound to Spotlight under the Sublicense, but only to the extent that each financial term is no less favorable to IURTC than those set forth in Article 5 and Paragraph 9.4, and provided that the Sublicense does not impose any obligations on IURTC in excess of those imposed under this Agreement. If any Sublicensee desires to enter into such a license agreement, it will be wholly the responsibility of that Sublicensee to notify IURTC of such desire within thirty (30) days after the effective date of termination of this Agreement. IURTC hereby agrees to enter into such written license agreement, with modifications negotiated in good faith as is reasonably necessary to accommodate the functional and structural differences between Spotlight and IURTC. Time is of the essence for a Sublicensee to provide notice of its desire for such license and to negotiate in good faith in a timely manner to effectuate a license. Failure of a Sublicensee to timely provide such notice or enter into such license will automatically result in the termination of the Sublicense and all rights granted thereunder or hereunder, including but not limited to IURTC’s obligation to enter into such license with Sublicensee.

 

	 
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14 Assignment of this Agreement:

 

14.1 This Agreement will not be assigned, in whole or in part, by either Party to any third party without the written consent of the non-assigning Party. Such consent will not be unreasonably withheld. However, Spotlight may assign this entire Agreement to a third party that acquires [***], through merger, sale, acquisition, or other similar transaction, provided that:

 

14.1.1 Spotlight is not in breach of this Agreement in any respect;

 

14.1.2 Spotlight demonstrates to IURTC’s satisfaction that the successor has or is likely to acquire capital and manpower resources sufficient to fulfill the obligations it is assuming hereunder and the expertise to meet its requirements under Article 4; and

 

14.1.3 The successor agrees in writing (with a copy sent to IURTC within ten (10) days of the effective date of the assignment) to assume all obligations and liabilities of Spotlight to IURTC. 

 

14.2 The rights granted in this Agreement may not be encumbered, pledged, or hypothecated in any way by Spotlight or any Sublicensee, including without limitation to secure any purchase, lease, or loan. Any conveyance in contravention with the terms and conditions of this Agreement is null and void.

 

14.3 This Agreement is binding on the Parties and their respective successors and assigns and inures to the benefit of the Parties and their respective permitted successors and permitted assigns.

 

15 Notice: 

 

15.1 Any required or permissive notice under this Agreement will be sufficient if in writing and delivered personally, by recognized national overnight courier, or by registered or certified mail, postage prepaid and return receipt requested, to the address below and will be deemed to have been given as of the date shown on the receipt if by certified or registered mail, or the day following dispatch if by overnight courier.

 

If to IURTC:

 

Vice President 

Office of Technology Commercialization

Attn: IURTC Agreement Number [***]

Indiana University Research and Technology Corporation

518 Indiana Ave.

Indianapolis, IN 46202

 

	 
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If to Spotlight:

President

Spotlight Innovation Inc.

6750 Westown Pkwy Ste 200-226

West Des Moines, IA 50266

 

15.2 For the convenience of the Parties in administering this Agreement, the Parties may direct inquiries as follows:

 

	
 
	
If to IURTC: 
	
If to Spotlight:

	
Patent prosecution
	
[***]
	
geoffrey.laff@spotlightinnovation.com 

	
Patent cost reimbursement 
	
[***]
	
geoffrey.laff@spotlightinnovation.com

	
Financial consideration
	
[***] 
	
geoffrey.laff@spotlightinnovation.com

 

16 General Provisions:

 

16.1 This Agreement will be construed, interpreted, and applied according to the laws of Indiana, without regard to its or any other jurisdiction’s conflicts of laws provisions. Spotlight agrees that all claims, disputes, or controversies arising under or relating to this Agreement, including without limitation those concerning the validity, construction, or scope of any of the Patent Rights that are not barred by sovereign immunity will be subject to the exclusive jurisdiction and venue of the state or Federal District Court seated in Marion County, Indiana. Neither Party waives its right to seek reimbursement of documented attorney fees in any action to enforce this Agreement.

 

16.2 No waiver of any breach of this Agreement will constitute a waiver of any other breach of the same or any other provision of this Agreement, and no waiver will be effective unless made in writing by the Party against whom the waiver is sought to be asserted. The delay or failure to assert a right or to insist upon compliance with any term or condition of this Agreement will not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition.

 

16.3 The Parties acknowledge that they have read this Agreement in its entirety and agree that this instrument comprises the entire agreement, contract, and understanding of the Parties on the subject matter of this Agreement. The Parties acknowledge that invoices, purchase orders, or other mechanisms for administering any payment or obligation set forth herein will not contain terms and conditions separate from, in addition to, and/or in conflict with this Agreement, and that any such terms, if present, will be void and without effect and will not be enforceable by either Party. The Parties had an opportunity to be advised by counsel of their choosing and as such the clauses of this Agreement will not be strictly construed against the drafter.

 

	 
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16.4 Spotlight agrees to register and give required notice concerning this Agreement, at its expense, in each country where an obligation exists under law to so register or give notice. This Agreement cannot be changed, modified, or amended except by a written instrument subscribed by authorized representatives of the respective Parties.

 

16.5 Neither Party is an agent, employer, employee, partner, joint venturer, or contractor of the other as a result of this Agreement. The representations, warranties, covenants, and undertakings contained in this Agreement are for the sole benefit of the Parties and their permitted successors and permitted assigns and will not be construed as conferring any rights on any third party. Neither Party may in any way pledge the other Party’s credit or incur any obligation on behalf of or bind the other Party on its behalf.

 

16.6 The provisions of this Agreement are severable in that if any provision in this Agreement is finally determined by a court of competent jurisdiction to be invalid or unenforceable, such invalidity or non-enforceability will not in any way affect the validity or enforceability of the remaining provisions or the validity or enforceability of such provision in any jurisdiction where valid and enforceable. Any invalid or unenforceable provision will be reformed by the Parties to effectuate their intent as evidenced on the Effective Date.

 

16.7 Spotlight agrees that in the event a faculty or staff member of the Institutions serves Spotlight in the capacity of consultant, officer, employee, board member, advisor, or other designation, under contract or otherwise, such faculty or staff member is subject to compliance with the Institution’s conflict of interest and conflict of commitment policies, including without limitation the obligation to complete a disclosure therefor, will serve solely in his or her individual capacity, as an independent contractor, and not as an agent or representative of IURTC or the Institutions, that IURTC or the Institutions exercises no authority or control over such faculty or staff member while acting in such capacity, that IURTC and the Institutions receive no benefit from such activity, and that IURTC and the Institutions assume no liability or obligation in connection with any such work or service undertaken by such faculty or staff member. Spotlight further agrees that any breach, error, act, or omission by such faculty or staff member acting in the capacity set forth above in this Paragraph will not be imputed or otherwise attributed to IURTC or the Institutions, including without limitation to constitute a breach by IURTC of this Agreement.

 

16.8 This Agreement may be executed in counterparts, each of which will be deemed an original and all of which when taken together will be deemed one instrument.

 

	 
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Witness: The Parties have caused this valid and binding agreement to be executed by their duly qualified representatives as of the Effective Date.

 

	
Spotlight: 
	
 
	
IURTC:

			
			
 

	
Signature 
		
			
		
 
	
Marie C. Kerbeshian, Ph.D.

	
Name
	
 
	
Vice President

			
		
 
	
Office of Technology Commercialization

	
Title 
		
			
			
 

	
Date
	
 
	
Date 

 

	
22stlt_ex1038.htm

EXHIBIT 10.38

 

[***] Indicates redacted information subject to a request for confidential treatment.

 

STANDARD EXCLUSIVE LICENSE AGREEMENT

WITH SUBLICENSING TERMS

 

TABLE OF CONTENTS

 

	
 
	
Section 1 
	
Definitions 

	
 
	
Section 2
	
Grant

	
 
	
Section 3
	
Due Diligence 

	
 
	
Section 4
	
Payments 

	
 
	
Section 5
	
Certain Warranties and Disclaimers of FSURF

	
 
	
Section 6
	
Record Keeping

	
 
	
Section 7
	
Patent Prosecution

	
 
	
Section 8
	
Infringement and Invalidity

	
 
	
Section 9
	
Term and Termination 

	
 
	
Section 10 
	
Assignability 

	
 
	
Section 11
	
Dispute Resolution Procedures

	
 
	
Section 12
	
Product Liability; Conduct of Business

	
 
	
Section 13
	
Use of Names

	
 
	
Section 14 
	
Miscellaneous

	
 
	
Section 15
	
Notices

	
 
	
Section 16
	
Contract Formation and Authority

	
 
	
Section 17
	
United States Government Interests

	
 
	
Section 18
	
Confidentiality 

	
 
	
Section 19
	
University Rules and Regulations 

	
 
	
 
	
 

	
 
	
Appendix A – Inter-institutional Agreement 

	
 
	
Appendix B – Development Plan 

	
 
	
Appendix C – Development Report 

	
 
	
Appendix D – FSURF Royalty Report

	
 
	
Appendix E – Due Diligence 

 
	 
	Page 1
	

 
	 

 

This Agreement is made effective the ____ day of _____________, 2016, (the “Effective Date”) by and between the Florida State University Research Foundation, Inc. (hereinafter called “FSURF”), a nonstock, nonprofit Florida corporation, having its principal place of business at 2000 Levy Avenue, Suite 351, Tallahassee, Florida 32310, and Spotlight Innovation Inc. (hereinafter called “Licensee”), a corporation organized and existing under the laws of Nevada, having its principle place of business at 6750 Westown Pkwy, Ste. 200-226, Des Moines, Iowa 50266;

 

WHEREAS, U.S. Department of Health and Human Services, as represented by National Center for Advancing Translational Sciences (HHS), and Johns Hopkins University (JHU) are co-owners with Florida State University Research Foundation of certain inventions that are described in the “Licensed Patents” (defined below) and has granted FSURF the right to license its undivided rights pursuant to that certain Inter-institutional Agreement effective [***] and attached as Appendix A;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, the parties covenant and agree as follows:

  

Section 1 Definitions

 

	
 
	1.1	The term “Affiliate” shall mean: (a) any person or entity which controls at least fifty percent (50%) of the equity or voting stock of the Licensee or (b) any person or entity fifty percent (50%) of whose equity or voting stock is owned or controlled by the Licensee or (c) any person or entity of which at least fifty percent (50%) of the equity or voting stock is owned or controlled by the same person or entity owning or controlling at least fifty percent (50%) of Licensee or (d) any entity in which any officer or employee is also an officer or employee of Licensee or any person who is an officer or employee of Licensee.
	
 
	
 
	
 

	
 
	1.2	“Development Plan” shall mean a written report summarizing the development activities that are to be undertaken by the Licensee to bring Licensed Products and/or Licensed Processes to the market. The Development Plan is attached as Appendix B.
	
 
	
 
	
 

	
 
	1.3	“Development Report” shall mean a written account of Licensee’s progress under the Development Plan having at least the information specified on Appendix C to this Agreement, and shall be sent to the address specified on Appendix C.
	
 
	
 
	
 

	
 
	1.4	“Licensed Field” shall include treatment of viral infection(s).
	
 
	
 
	
 

	
 
	1.5	“Licensed Patents” shall refer to and mean all of the following FSURF intellectual property:

 

	
 
	1.5.1 	the United States patent(s)/patent application(s) U.S. Provisional patent applications [***], and all U.S. patents and foreign patents and patent applications based on these U.S. applications.
	
 
	
 
	
 

	
 
	1.5.2 	United States and foreign patents issued from the applications listed in 1.5.1 above and from divisionals and continuations of these applications, to the extent the claims are directed to subject matter specifically described in the applications listed in 1.5.1 above and are dominated by the claims of those patent applications and patents issuing thereon or reissues thereof, and any and all foreign patents and patent applications corresponding thereto, all to the extent owned or controlled by Florida State University.

 
	 
	Page 2
	

 
	 

 

	
 
	1.6	“Licensed Product” and “Licensed Process” shall mean:

 

	
 
	1.6.1	In the case of a Licensed Product, any product or part thereof developed by or on behalf of Licensee that:

 

	
 
	(a)	is covered in whole or in part by an issued, unexpired claim or a pending claim contained in the Licensed Patents, in any country in which any product is made, used or sold;
	
 
	
 
	
 

	
 
	(b)	is manufactured by using a process which is covered in whole or in part by an issued, unexpired claim or a pending claim contained in the Licensed Patents, in any country in which any such process is used or in which any such product is used or sold.

 

	
 
	1.6.2	In the case of a Licensed Process, any process which:

 

	
 
	(a)	is covered in whole or in part by an issued, unexpired claim or a pending claim contained in the Licensed Patents in any country in which such process is practiced.

  

	
 
	1.7	“Licensed Territory” shall be worldwide.
	
 
	
 
	
 

	
 
	1.8	“Liquidation Event” means (a) a merger, share exchange or other reorganization, (b) the sale by one or more stockholders of a majority of the voting power of Licensee, (c) the sale of all or substantially all of the assets of Licensee, or (d) an asset sale of a Licensed Product(s) and or Licensed Process(es), in which, with respect to (a), (b), and (c), the stockholders of Licensee prior to such transaction do not own, directly or indirectly, a majority of the voting power of the acquiring, surviving or successor entity, as the case may be. For the avoidance of doubt, a Liquidation Event shall not include the issuance and sale of Licensee’s equity securities, or securities convertible into Licensee’s equity securities, in a private placement transaction or other transaction that is not an Initial Public Offering or the issuance of Licensee’s equity securities to a bona fide creditor of Licensee in exchange for the cancellation of indebtedness owed by Licensee, in each case, even if such sale or issuance transaction results in the stockholders of Licensee immediately prior to such transaction not owning, directly or indirectly, a majority of the voting power of Licensee after such transaction.
	
 
	
 
	
 

	
 
	1.9	“Net Sales” shall mean the gross invoice price charged by, and the value of non-cash consideration owed to, Licensee, an Affiliate or a Sublicensee for sales of Licensed Products and Licensed Processes, less (a) sales taxes or other taxes (other than income taxes), (b) shipping and insurance charges, (c) actual allowances, rebates, credits, or refunds for returned or defective goods, chargeback payments (or the equivalent thereof), (d) trade, quantity, and other discounts, retroactive price reductions, or other allowances actually allowed or granted from the billed amount and taken (provided that such discounts shall be limited to discounts in amounts customary in the trade), and (e) any import or export duties, tariffs, or similar charges incurred with respect to the import or export of Licensed Products or Licensed Processes into or out of any country in the Licensed Territory. Licensed Products and Licensed Processes will be considered sold when it is shipped, delivered, or invoiced, whichever is earlier, by Licensee, an Affiliate or a Sublicensee, as the case may be. Notwithstanding the foregoing, Net Sales shall not include, and shall be deemed zero with respect to (a) the distribution of reasonable quantities of promotional samples of Licensed Products and (b) Licensed Products and Licensed Processes provided for clinical trials and research purposes. For purposes of calculating Net Sales, a sale to a Sublicensee for end use by the Sublicensee will be treated as a sale at Licensee’s list price. For clarity, the term “Net Sales” does not include consideration received by Licensee for the grant of rights under a Sublicense (for which payment shall be governed solely by Section 2.2.2 hereof) or for royalties under a Sublicense (for which payment shall be governed solely by Section 2.2.2 hereof).
	
 
	
 
	
 

	
 
	1.10	The term “Sublicensee” shall mean any third party to whom Licensee confers the right to make, use or sell Licensed Product and/or Licensed Processes and/or any of the intellectual property rights embodied in Licensed Patents.

 
	 
	Page 3
	

 
	 

 

Section 2 Grant 

 

	
 
	2.1	License.

 

	
 
	2.1.1 	License Under Licensed Patents
	
 
	
 
	
FSURF hereby grants to Licensee an exclusive license, limited to the Licensed Field and the Licensed Territory, under the Licensed Patents to make, use and sell Licensed Products and/or Licensed Processes. FSURF reserves to itself, Florida State University, HHS, and JHU the right to make and use the Licensed Patents, Licensed Products and/or Licensed Processes solely for their internal research, clinical (including, but not limited to patient care), and educational purposes. In addition, FSURF reserves to itself, as well as to Florida State University, HHS, JHU and to all non-profit research institutions, the right to use materials that might be covered under Licensed Patents solely for their internal research, educational, and clinical purposes and to meet all applicable governmental requirements governing the ability to transfer materials. This license grant is subject to the government license rights in Section 17 herein.

  

	
 
	2.2	Sublicense.

 

	
 
	2.2.1 	Licensee may grant written, Sublicenses to third parties. Any agreement granting a Sublicense shall state that the Sublicense is subject to the termination of this Agreement. Licensee shall have the same responsibility for the activities of any Sublicensee or Affiliate as if the activities were directly those of Licensee. This right is subject to the requirement that any sublicense is subject to the HHS Inter-Institutional Agreement attached as Appendix A.
	
 
	
 
	
 

	
 
	2.2.2 	In respect to Sublicenses granted by Licensee under 2.2.1 above, Licensee shall pay to FSURF an amount equal to what Licensee would have been required to pay to FSURF had Licensee sold the amount of Licensed Products or Licensed Processes sold by such Sublicensee. In addition, if Licensee receives any fees, minimum royalties, or other payments in consideration for any rights granted under a Sublicense, and such payments are not based directly upon the amount or value of Licensed Products or Licensed Processes sold by the Sublicensee, then Licensee shall pay FSURF an amount equal to [***] of such payments for any Sublicense entered into during the first two years following the Effective Date, and an amount equal to [***] of such payments for a Sublicense entered into thereafter, of such payments in the manner specified in Section 4. Licensee shall not receive from Sublicensees anything of value in lieu of cash payments in consideration for any Sublicense under this Agreement without the express prior written permission of FSURF.
	
 
	
 
	
 

	
 
	2.2.3 	Licensee shall provide FSURF with an unredacted copy of each sublicense agreement and any agreement which transfers intellectual property rights granted hereunder, at least thirty (30) days prior to the execution of the sublicense agreement and a fully executed version within thirty (30) days of execution.
	
 
	
 
	
 

	
 
	2.2.4 	In the event that FSURF notifies Licensee in writing of a third party’s interest in a field of use which Licensee is not addressing at the time of receipt of the notice, Licensee shall respond to FSURF in writing within thirty (30) days of receipt of such notice to inform FSURF whether Licensee intends to pursue the Field of Use. If in such response, Licensee elects to forego the Field of Use, FSURF may terminate the Licensee’s license in said field and negotiate and execute said license directly.

 

	 
	Page 4
	

 
	 

 

Section 3 Due Diligence

 

	
 
	3.1	Development.

 

	
 
	3.1.1 	Licensee agrees to and warrants that:

 

	
 
	(a)	it has, or will obtain, the expertise necessary to independently evaluate the inventions of the Licensed Patents;
	
 
	
 
	
 

	
 
	(b)	it will establish and actively and diligently pursue the Development Plan (see Appendix B) to the end that the inventions of the Licensed Patents will be utilized to provide Licensed Products and/or Licensed Processes for sale in the retail market within the Licensed Field;
	
 
	
 
	
 

	
 
	(c)	it will diligently develop markets for Licensed Products and Licensed Processes; and
	
 
	
 
	
 

	
 
	(d)	until the date of first commercial sale of Licensed Products or Licensed Processes, it will supply FSURF with a written Development Report annually fifteen (15) days after the end of the calendar year (see Appendix C).

 

	
 
	3.1.2	Licensee agrees that the first commercial sale of products to the retail customer shall occur on or before January 1, 2023 or FSURF shall have the right to terminate the Agreement pursuant to Section 9.3 hereto. In addition, Licensee agrees to pay the product development milestone payments listed in Section 4.3.3 and to complete the due diligence activities listed in Appendix E or FSURF shall have the right to terminate the Agreement pursuant to Section 9.3. Licensee will notify FSURF in writing as each milestone or due diligence activity is met.
	
 
	
 
	
 

	
 
	3.1.3 	Licensee may issue a written request to negotiate extensions of individual milestones listed in Section 4.3.3 or due dates for individual due diligence activities listed in Appendix E. Provided that such requests are received by FSURF no less than ninety (90) days prior to the original due date in the case of milestone payments, or no less than forty five (45) days prior to the original due date in the case of due diligence activities, and that each request describes fully Licensee’s diligent efforts to achieve the milestones or complete the due diligence activities, FSURF shall consider in good faith such requests. Upon granting each such request, FSURF and Licensee shall negotiate in good faith the length of the extension. FSURF shall not unreasonably withhold requests to negotiate extensions.
	
 
	
 
	
 

	
 
	3.1.4 	Florida State University policies may require approval of clinical trials involving technology invented at the University. Accordingly, Licensee will notify FSURF prior to commencing any clinical trials at Florida State University or its affiliated medical facilities.

  

Section 4 Payments

 

	
 
	4.1 	Obligation in Lieu of License Issue Fee (Alternative Fee).
	
 
	
 
	
 

	
 
	
 
	
In lieu of a license issue fee, in the case of a Liquidation Event after the Effective Date, Licensee agrees to pay to FSURF an amount equal to [***] of the transaction value ascribed to those assets, products, and properties related to or stemming from the licensed technology defined in the Agreement (the “Alternative Fee”). Payment of the Alternative Fee shall be due thirty (30) days following the closing of such Liquidation Event.

 
	 
	Page 5
	

 
	 

 

	
 
	4.2 	Royalty.
	
 
	
 
	
 

	
 
	
 
	
Licensee agrees to pay to FSURF as earned royalties a royalty calculated as a percentage of Net Sales from the sale of Licensed Product and/or Licensed Process. The royalty is deemed earned as of the earlier of the date the Licensed Product and/or Licensed Process is actually sold and paid for, the date an invoice is sent by Licensee or its Sublicensee(s), or the date a Licensed Product and/or Licensed Process is transferred to a third party for any promotional reasons. The royalty shall remain fixed while this Agreement is in effect at a rate of [***1% to 11%***] of Net Sales.

 

	
 
	4.3 	Other Payments.
	
 
	
 
	
 

	
 
	4.3.1	Licensee agrees to pay FSURF maintenance fees according to the schedule below upon each anniversary of the Effective Date.
	
 
	
 
	
 

	
 
	
 
	
Payment 
	
[***]

	
 
	
 
	
$ [***] 
	
[***]

	
 
	
 
	
$ [***] 
	
[***]

	
 
	
 
	
$ [***]
	
[***] 

	
 
	
 
	
$ [***] 
	
[***] 

	
 
	
 
	
$ [***] 
	
[***] and every [***] thereafter on the same date, for the life of this Agreement.

	
 
	
 
	
 
	
 

	
 
	4.3.2 	Upon the first quarter that sales are made, the maintenance fee shall no longer be required, and minimum royalty payments shall be made according to the schedule below and shall be creditable against royalties.
	
 
	
 
	
 
	
 

	
 
	
 
	
Payment 
	
[***]

	
 
	
 
	
$ [***] 
	
[***]

	
 
	
 
	
$ [***] 
	
[***]

	
 
	
 
	
$ [***] 
	
[***]

	
 
	
 
	
$ [***] 
	
[***] and every [***] thereafter on the same date, for the life of this Agreement.

	
 
	
 
	
 
	
 

	
 
	
 
	
Upon the first quarter following the quarter in which commercial sales of the applicable Licensed Product and/or Licensed Process begin, the above minimum royalties shall be paid on a quarterly basis, with such amounts due within thirty (30) days of the end of the calendar quarter, such calendar quarters ending on March 31, June 30, September 30, and December 31. Any minimum royalty paid in a calendar year will be credited against the earned royalties for that calendar year. Any earned royalties paid in a calendar year will be credited against the minimum royalties due for said calendar year. It is understood that earned royalties will be applied against minimum royalties on a calendar year basis, and that sales of Licensed Products and/or Licensed Processes requiring the payment of earned royalties made during a prior or subsequent calendar year shall have no effect on the annual minimum royalty due FSURF for other than the same calendar year in which the royalties were earned.

 

	 
	Page 6
	

 
	 

 

	
 
	4.3.3 	In addition to all other payments required under this Agreement, Licensee agrees to pay FSURF milestone payments, as follows:
	
 
	
 
	
 

	
 
	
 
	
Milestone payments for the first product:

 

[***]– upon the earlier of (a) the [***], or (b) [***]anniversary of the date of this license.

 

[***]– upon the earlier of (a) [***], or (b) [***]anniversary of the Effective Date. 

 

[***]– upon the [***].

 

[***]– upon filing of the [***].

 

[***]– within [***]after the [***].

 

[for an aggregate potential milestone payment of $1,000,000]

 

Milestones payments for each additional product:

 

[***]– upon [***]. 

 

[***]– upon [***]

 

[***]– within [***]after the [***].

 

[for an aggregate potential milestone payment of $500,000]

 

	
 
	4.4	Accounting for Payments.

 

	
 
	4.4.1 	Amounts owing to FSURF under Sections 4.1 and 4.2 shall be paid on a quarterly basis after the amount of minimum royalties paid is exceeded, with such amounts due and received by FSURF on or before the thirtieth day following the end of the calendar quarter ending on March 31, June 30, September 30 or December 31 in which such amounts were earned. Any amounts which remain unpaid after the date they are due to FSURF shall accrue interest from the due date at the rate of [***]. However, in no event shall this interest provision be construed as a grant of permission for any payment delays. Licensee shall also be responsible for repayment to FSURF of any attorney, collection agency, or other out-of-pocket FSURF expenses required to collect overdue payments due from this Section, or any other applicable section of this Agreement.
	
 
	
 
	
 

	
 
	4.4.2 	Except as otherwise directed, all amounts owing to FSURF under this Agreement shall be paid in U.S. dollars to FSURF at the following address:
	
 
	
 
	
 

	
 
	
 
	
President

Florida State University Research Foundation, Inc.

Attn: Gary K. Ostrander 

2000 Levy Avenue, Suite 351

Tallahassee, FL 32310

 

All royalties owing with respect to Net Sales stated in currencies other than U.S. dollars shall be converted at the rate shown in the Federal Reserve Noon Valuation - Value of Foreign Currencies on the day preceding the payment due date. 

 

	 
	Page 7
	

 
	 

 

	
 
	4.4.3	A certified full accounting statement showing how any amounts payable to FSURF under Section 4.3 have been calculated shall be submitted to FSURF on the date of each such payment. In addition to being certified, such accounting statements shall contain a written representation signed by an executive officer of Licensee that states that the statements are true, accurate, and fairly represent all amounts payable to FSURF pursuant to this Agreement. Such accounting shall be on a per-country and product line, model or trade name basis and shall be summarized on the form shown in Appendix D – FSURF Royalty Report of this Agreement.
	
 
	
 
	
 

	
 
	4.4.4	FSURF is exempt from paying income taxes under U.S. law. Therefore, all payments due under this Agreement shall be made without deduction for taxes, assessments, or other charges of any kind which may be imposed on FSURF by any government outside of the United States or any political subdivision of such government with respect to any amounts payable to FSURF pursuant to this Agreement. All such taxes, assessments, or other charges shall be assumed by Licensee.

 

Section 5 Certain Warranties and Disclaimers of FSURF

 

	
 
	5.1	FSURF warrants that, except as otherwise provided under Section 17.1 of this Agreement and the Inter-Institutional Agreement attached as Appendix A, with respect to U.S. Government interests, it is the co-owner of the Licensed Patents or otherwise has the right to grant the licenses granted to Licensee in this Agreement. However, nothing in this Agreement shall be construed as:

 

	
 
	5.1.1	a warranty or representation by FSURF as to the validity or scope of any right included in the Licensed Patents;
	
 
	
 
	
 

	
 
	5.1.2	a warranty or representation that anything made, used, sold or otherwise disposed of under the license granted in this Agreement will or will not infringe patents of third parties;
	
 
	
 
	
 

	
 
	5.1.3	an obligation to bring or prosecute actions or suits against third parties for infringement of Licensed Patents;
	
 
	
 
	
 

	
 
	5.1.4 	an obligation to furnish any know-how not provided in Licensed Patents or any services other than those specified in this Agreement; or
	
 
	
 
	
 

	
 
	5.1.5	a warranty or representation by FSURF that it will not grant licenses to others to make, use or sell products not covered by the claims of the Licensed Patents which may be similar and/or compete with products made or sold by Licensee.

 

	 
	Page 8
	

 
	 

 

	
 
	5.2	EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, FSURF MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND VALIDITY OF LICENSED PATENTS CLAIMS, ISSUED OR PENDING. FSURF ASSUMES NO RESPONSIBILITIES WHATSOEVER WITH RESPECT TO USE, SALE, OR OTHER DISPOSITION BY LICENSEE, ITS SUBLICENSEE(S), OR THEIR VENDEES OR OTHER TRANSFEREES OF PRODUCT INCORPORATING OR MADE BY USE OF INVENTIONS LICENSED UNDER THIS AGREEMENT.

 

Section 6 Record Keeping

 

	
 
	6.1	Licensee and its Sublicensee(s) shall keep books and records sufficient to verify the accuracy and completeness of Licensee’s and its Sublicensee(s)’s accounting referred to above, including without limitation, inventory, purchase and invoice records, manufacturing records, sales analysis, general ledgers, financial statements, and tax returns relating to the Licensed Products and/or Licensed Processes. Such books and records shall be preserved for a period not less than six years after they are created or as required by federal law, both during and after the term of this Agreement.
	
 
	
 
	
 

	
 
	6.2	Licensee and its Sublicensee(s) shall take all steps necessary so that FSURF may, within thirty (30) days of its written request, audit, review and/or copy all of the books and records at a single U.S. location to verify the accuracy of Licensee’s and its Sublicensee(s)’s accounting. Such review may be performed by any authorized employees of FSURF as well as by any attorneys and/or accountants designated by FSURF, upon reasonable notice and during regular business hours. If a deficiency with regard to any payment hereunder is determined, Licensee and its Sublicensee(s) shall pay the deficiency within thirty (30) days of receiving notice thereof along with applicable interest as described in Section 4.4.1. If a royalty payment deficiency for a calendar year exceeds [***] of the royalties paid for that year, then Licensee and its Sublicensee(s) shall be responsible for paying FSURF’s out-of-pocket expenses incurred with respect to such review.
	
 
	
 
	
 

	
 
	6.3	At any time during the term of this agreement, FSURF may request in writing that Licensee verify the calculation of any past payments owed to FSURF through the means of a self-audit. Within ninety (90) days of the request, Licensee shall complete a self-audit of its books and records to verify the accuracy and completeness of the payments owed. Within thirty (30) days of the completion of the self-audit, Licensee shall submit to FSURF a report detailing the findings of the self-audit and the manner in which it was conducted in order to verify the accuracy and completeness of the payments owed. If Licensee has determined through its self-audit that there is any payment deficiency, Licensee shall pay FSURF the deficiency along with applicable interest under Section 4.4.1 with the submission of the self-audit report to FSURF.

 

	 
	Page 9
	

 
	 

 

Section 7 Patent Prosecution

 

	
 
	7.1	FSURF shall diligently prosecute and maintain the Licensed Patents using counsel of its choice. FSURF shall provide Licensee with copies of all patent applications amendments, and other filings with the United States Patent and Trademark Office and foreign patent offices. FSURF will also provide Licensee with copies of office actions and other communications received by FSURF from the United States Patent and Trademark Office and foreign patent offices relating to Licensed Patents. Licensee agrees to keep such information confidential.
	
 
	
 
	
 

	
 
	7.2	Licensee shall pay to FSURF the sum of [***], within thirty (30) days of the Effective Date to reimburse any and all expenses associated with preparation, filing, prosecution, issuance, maintenance, defense, and reporting of the Licensed Patents incurred prior to the Effective Date. (NOTE: the above referenced dollar amount in this Section 7.2 is subject to change, as all related patent prosecution expense invoices may not have been received from the law firm at the time of license terms negotiation. In addition, the amounts in this article are separate from other amounts due for payment listed elsewhere.)
	
 
	
 
	
 

	
 
	7.3	Licensee shall be responsible for and pay all costs and expenses incurred by FSURF related to the preparation, filing, prosecution, issuance, maintenance, defense and reporting of the Licensed Patents subsequent to and separate of those expenses cited in Section 7.2 within thirty (30) days of receipt of an invoice from FSURF. It shall be the responsibility of Licensee to keep FSURF fully apprised of the “small entity” status of Licensee and all Sublicensees with respect to the U.S. patent laws and with respect to the patent laws of any other countries, if applicable, and to inform FSURF of any changes in writing of such status, within thirty (30) days of any such change. In the event that additional licenses are granted to licensees for alternate fields-of-use, patent expenses associated with Licensed Patents will be divided proportionally between the number of existing licensees. In the case of foreign patent protection, if a licensee declines to reimburse FSURF for its proportional share of patent expenses in any particular country, then said licensee relinquishes the right to commercialize Licensed Products in the specified country.

 

	 
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Section 8 Infringement and Invalidity 

 

	
 
	8.1	In the event that any Licensed Patents are infringed by a third party, Licensor and joint owners of the Licensed Patents (subject to and as described in the Inter-Institutional Agreement attached as Appendix A) shall have the first right and choice, but not obligation, to defend the Licensed Patents. Licensee shall have the right, but not the obligation, to defend the Licensed Patents after Licensor and joint owners elect not to commence a suit either by formal notice to Licensee or by failure to act within the ninety (90) day period following notification of the infringer, to institute, prosecute and control any action or proceeding with respect to such infringement, by counsel of its choice, including any declaratory judgment action arising from such infringement provided, however, prior to instituting such action, Licensee shall first meet with FSURF and provide FSURF with (i) a written estimate of the expenses that would reasonably be incurred in connection with such action or proceeding and (ii) financial records reasonably sufficient to reasonably demonstrate that it has the financial wherewithal to pay such expenses as they fall due through the conclusion of such action or proceeding by means of judgment or other final, non-appealable decision or a plan to raise such funds. In the event that any Patent Rights licensed to Licensee are infringed by a third party prior to Licensee filing an investigational new drug application (“IND”) for a Licensed Product, prior to any enforcement action being taken by either FSURF or Licensee regarding such infringement, FSURF and Licensee shall discuss, and will mutually agree, in writing, as to how to handle such infringement by such third party. Licensee shall be free to enter into a settlement, consent judgment, or other voluntary disposition with respect to any such action, provided that any settlement, consent judgment or other voluntary disposition thereof which (i) materially limits the scope, validity, or enforceability of patents included in the Patent Rights or (ii) admits fault or wrongdoing on the part of FSURF must be approved by FSURF, such approval not to be unreasonably withheld. Licensee’s request for such approval shall include complete copies of final settlement documents, a detailed summary of such settlement, and any other information material to such settlement. FSURF shall provide Licensee notice of its approval or denial within fifteen (15) business days of any request for such approval by Licensee, provided that (i) in the event FSURF wishes to deny such approval, such notice shall include a detailed written description of FSURF’s reasonable objections to the proposed settlement, consent judgment, or other voluntary disposition and (ii) FSURF shall be deemed to have approved of such proposed settlement, consent judgment, or other voluntary disposition in the event it fails to provide such notice within such fifteen (15) day period in accordance herewith. If Licensee recovers monetary damages in the form of lost profits from a third party infringer as a remedy for the infringement of Patent Rights licensed hereunder, then Licensee shall first apply such recovery to the costs and expenses incurred in obtaining or negotiating for such recovery (including attorneys’ fees) and reimburse FSURF for the costs and expenses it reasonably incurred in obtaining or negotiating for such recovery (including attorneys’ fees), and pay to FSURF the royalties on the remaining portion of such lost profits at the rate specified in Section 4.2. If Licensee recovers monetary damages in the form of a reasonable royalty as a remedy for the infringement of Patent Rights, then, after applying such royalty to the recovery of the costs and expenses incurred in obtaining or negotiating for such royalty (including attorneys’ fees) and reimbursing FSURF for the costs and expenses it reasonably incurred in obtaining or negotiating for such recovery (including attorneys’ fees), the remaining amount of any such royalty shall be treated as Sublicensing Royalty Revenue in accordance with Section 2.2.2.
	
 
	
 
	
 

	
 
	8.2	Notwithstanding the foregoing, and in FSURF’s sole discretion, FSURF shall be entitled to participate through counsel of its own choosing in any legal action involving the invention and Patent Rights. Nothing in the foregoing Sections shall be construed in any way which would limit the authority of the Florida Attorney General. FSURF and Licensee agree to notify each other promptly of each infringement or possible infringement of Licensed Patents, as well as any facts which may affect the validity, scope or enforceability of the patent rights of which any party becomes aware.

 

	 
	Page 11
	

 
	 

 

Section 9 Term and Termination

 

	
 
	9.1	The term of this license shall begin on the Effective Date of this Agreement and continue until the date that no Licensed Patent remains an enforceable patent, unless earlier terminated as provided herein.
	
 
	
 
	
 

	
 
	9.2	Licensee may terminate this Agreement at any time by giving at least sixty (60) days written notice of such termination to FSURF. Such a notice shall be accompanied by a statement of the reasons for termination.
	
 
	
 
	
 

	
 
	9.3	FSURF may terminate this Agreement by giving Licensee at least thirty (30) days written notice if Licensee:

 

	
 
	9.3.1 	is delinquent on any report or payment;
	
 
	
 
	
 

	
 
	9.3.2 	is not diligently developing and commercializing Licensed Product and Licensed Process;
	
 
	
 
	
 

	
 
	9.3.3 	is in breach of any provision;
	
 
	
 
	
 

	
 
	9.3.4	provides any false report;
	
 
	
 
	
 

	
 
	9.3.5	goes into bankruptcy, liquidation or proposes having a receiver control any assets;
	
 
	
 
	
 

	
 
	9.3.6	violates any laws or regulations of applicable government entities;
	
 
	
 
	
 

	
 
	9.3.6	shall cease to carry on its business pertaining to Licensed Patents; or
	
 
	
 
	
 

	
 
	9.3.8 	fails for more than two (2) calendar quarters to make payments of earned royalties under Section 4.2.

 

	
 
		
Termination under this Section 9.3 will take effect thirty (30) days after written notice by FSURF unless Licensee remedies the problem in that 30-day period.

	
 
	
 
	
 

	
 
	9.4	FSURF may immediately terminate this Agreement upon the occurrence of the second separate default by Licensee within any consecutive three-year period for failure to pay royalties, patent or any other expenses when due.
	
 
	
 
	
 

	
 
	9.5	Upon the termination of this Agreement for any reason, nothing herein shall be construed to release either party from any obligation that matured prior to the effective date of such termination. Licensee shall remain obligated to provide an accounting for and to pay royalties earned to the date of termination, and any minimum royalties shall be prorated as of the date of termination by the number of days elapsed in the applicable calendar year. Licensee may, however, after the effective date of such termination, sell all Licensed Products, and complete Licensed Products in the process of manufacture at the time of such termination and sell the same, provided that Licensee shall remain obligated to provide an accounting for and to pay running royalties thereon.
	
 
	
 
	
 

	
 
	9.6	Licensee shall be obligated to deliver to FSURF, within ninety (90) days of the date of termination of this agreement, complete and unredacted copies of all documentation prepared for or submitted for all regulatory approvals of Licensed Products or Licensed Processes.

 

	 
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Section 10 Assignability

 

	
 
	This Agreement may not be transferred or assigned by Licensee except with the prior written consent of FSURF, which will not be unreasonably withheld. Licensee may, on written notice to FSURF and with FSURF’s consent, assign this Agreement to an acquirer of all or substantially all of Licensee's stock or assets, in which case assignee assumes all responsibilities under this license, however Licensee shall not be released of its obligations that matured prior to assignment.

 

Section 11 Dispute Resolution Procedures 

 

	
 
	11.1	Mandatory Procedures.

 

	
 
	In the event either party intends to file a lawsuit against the other with respect to any matter in connection with this Agreement, compliance with the procedures set forth in this Section shall be a condition precedent to the filing of such lawsuit, other than for injunctive relief. Either party may terminate this Agreement as provided in this Agreement without following the procedures set forth in this section.

 

	
 
	11.1.1 	When a party intends to invoke the procedures set forth in this section, written notice shall be provided to the other party. Within thirty (30) days of the date of such notice, the parties agree that representatives designated by the parties shall meet at mutually agreeable times and engage in good faith negotiations at a mutually convenient location to resolve such dispute.
	
 
	
 
	
 

	
 
	11.1.2 	If the parties fail to meet within the time period set forth in Section 11.1.1 above or if either party subsequently determines that negotiations between the representatives of the parties are at an impasse, the party declaring that the negotiations are at an impasse shall give notice to the other party stating with particularity the issues that remain in dispute.
	
 
	
 
	
 

	
 
	11.1.3 	Not more than fifteen (15) days after the giving of such notice of issues, each party shall deliver to the other party a list of the names and addresses of at least three individuals, any one of whom would be acceptable as a neutral advisor in the dispute (the “Neutral Advisor”) to the party delivering the list. Any individual proposed as a Neutral Advisor shall have experience in determining, mediating, evaluating, or trying intellectual property litigation and shall not be affiliated with the party that is proposing such individual.
	
 
	
 
	
 

	
 
	11.1.4 	Within ten (10) days after delivery of such lists, the parties shall agree on a Neutral Advisor. If they are unable to so agree within that time, within five (5) days, they shall each select one individual from the lists. Within five (5) days, the individuals so selected shall meet and appoint a third individual from the lists to serve as the Neutral Advisor. Within thirty (30) days after the selection of a Neutral Advisor:

 

	
 
	(a)	The parties shall each provide a written statement of the issues in dispute to the Neutral Advisor.
	
 
	
 
	
 

	
 
	(b)	The parties shall meet with the Neutral Advisor in Tallahassee, Florida on a date and time established by the Neutral Advisor. The meeting must be attended by persons authorized to make final decisions on behalf of each party with respect to the dispute. At the meeting, each party shall make a presentation with respect to its position concerning the dispute. The Neutral Advisor will then discuss the issues separately with each party and attempt to resolve all issues in the dispute. At the meeting, the parties will enter into a written settlement agreement with respect to all issues that are resolved. Such settlement agreement shall be final and binding with respect to such resolved issues and may not be the subject of any lawsuit between the parties, other than a suit for enforcement of the settlement agreement.

 

	 
	Page 13
	

 
	 

 

	
 
	11.1.5	The expenses of the Neutral Advisor shall be shared by the parties equally. All other out-of-pocket costs and expenses for the alternative dispute resolution procedure required under this Section shall be paid by the party incurring the same.
	
 
	
 
	
 

	
 
	11.1.6 	Positions taken and statements made during this alternative dispute resolution procedure shall be deemed settlement negotiations and shall not be admissible for any purpose in any subsequent proceeding.

 

	
 
	11.2	Failure to Resolve Dispute.
	
 
	
 
	
 

	
 
	
 
	
If any issue is not resolved at the meeting with the Neutral Advisor, either party may file appropriate administrative or judicial proceedings with respect to the issue that remains in dispute. No new issues may be included in the lawsuit without the mandatory procedures set forth in this section having first been followed.

 

	
 
	11.3 	If Licensee or any of its Affiliates (i) brings a Patent Challenge against FSURF, or (ii) Licensee or any of its Affiliates assists another party in bringing a Patent Challenge against FSURF (except as required under a court order or subpoena), and (iii) FSURF does not choose to exercise its rights to terminate this Agreement pursuant to Section 9.3 then, in the event that such a Patent Challenge is successful, Licensee will have no right to recoup any consideration, including royalties, paid during the period of challenge. In the event that a Patent Challenge is unsuccessful, Licensee shall reimburse FSURF for all reasonable legal fees and expenses incurred in its defense against the Patent Challenge.

 

Section 12 Product Liability; Conduct of Business

 

	
 
	12.1	Licensee and its Sublicensee(s) shall, at all times during the term of this Agreement and thereafter, indemnify, defend and hold FSURF, the Florida Board of Governors, the Florida State University Board of Trustees, Florida State University, JHU, The Johns Hopkins Hospital, The Johns Hopkins Health System Corporation, U.S. Department of Health and Human Services, as represented by National Center for Advancing Translational Sciences (HHS) and each of their directors, officers, employees, and agents, and the inventors of the Licensed Patents “Indemnitees”, regardless of whether such inventors are employed by Florida State University, and/or HHS, and/or JHU at the time of the claim, harmless against all claims and expenses, including legal expenses and reasonable attorneys’ fees, whether arising from a third party claim or resulting from FSURF’s enforcing this indemnification clause against Licensee, arising out of the death of or injury to any person or persons or out of any damage to property and against any other claim, proceeding, demand, expense and liability of any kind whatsoever (other than patent infringement claims) resulting from the production, manufacture, sale, use, lease, consumption, marketing, or advertisement of Licensed Products or Licensed Process(es) or arising from any right or obligation of Licensee hereunder. Notwithstanding the above, FSURF at all times reserves the right to retain counsel of its own to defend FSURF, the Florida Board of Governors’, the Florida State University Board of Trustees, Florida State University, and the inventor’s interests.
	
 
	
 
	
 

	
 
	12.2	Licensee warrants that it now maintains and will continue to maintain liability insurance coverage at a minimum level of [***] per claim until first commercial use, and at a minimum level of [***] per claim at and continuing after first initial human testing or first commercial sale and that such insurance coverage lists Indemnitees’ as additional insureds. Within ninety (90) days after the execution of this Agreement and thereafter annually between January 1 and January 31 of each year, Licensee will present evidence to FSURF that the coverage is being maintained with Indemnitees listed as additional insureds. In addition, Licensee shall provide FSURF with at least thirty (30) days prior written notice of any change in or cancellation of the insurance coverage.

 

	 
	Page 14
	

 
	 

 

Section 13 Use of Names

 

	
 
	Licensee and its Sublicensee(s) shall not use the names of FSURF and joint owners (see Appendix A), or of Florida State University, nor of any of either institution's employees, agents, or affiliates, nor the name of any inventor of Licensed Patents, nor any adaptation of such names, in any promotional, advertising or marketing materials or any other similar form of publicity, or to suggest any endorsement by the such entities or individuals, without the prior written approval of FSURF in each case.

 

Section 14 Miscellaneous

 

	
 
	14.1	This Agreement shall be construed in accordance with the internal laws of the State of Florida. Venue for any legal action shall be the state or federal courts in Leon County, Florida.
	
 
	
 
	
 

	
 
	14.2	The parties hereto are independent contractors and not joint venturers or partners.
	
 
	
 
	
 

	
 
	14.3	Licensee shall ensure that it applies patent markings that meet all requirements of U.S. law, 35 U.S.C. §287, with respect to all Licensed Products subject to this Agreement.
	
 
	
 
	
 

	
 
	14.4	This Agreement constitutes the full understanding between the parties with reference to the subject matter hereof, and no statements or agreements by or between the parties, whether orally or in writing, shall vary or modify the written terms of this Agreement. This Agreement supercedes and replaces any and all previous agreements between the Parties. Neither party shall claim any amendment, modification, or release from any provisions of this Agreement by mutual agreement, acknowledgment, or otherwise, unless such mutual agreement is in writing, signed by the other party, and specifically states that it is an amendment to this Agreement. Failure of either party to require performance by the other of any provision herein shall in no way affect the rights of that party to enforce same. The waiver of either party of any breach shall never be construed to be a waiver of any succeeding breach or a waiver of the provision itself.
	
 
	
 
	
 

	
 
	14.5	Licensee shall not encumber or otherwise grant a security interest in any of the rights granted hereunder to any third party.
	
 
	
 
	
 

	
 
	14.6	Licensee acknowledges that it is subject to and agrees to abide by the United States laws and regulations (including the Export Administration Act of 1979 and Arms Export Contract Act) controlling the export of technical data, computer software, laboratory prototypes, biological material, and other commodities. The transfer of such items may require a license from the cognizant agency of the U.S. Government or written assurances by Licensee that it shall not export such items to certain foreign countries without prior approval of such agency. FSURF neither represents that a license is or is not required or that, if required, it shall be issued.
	
 
	
 
	
 

	
 
	14.7	Licensee is responsible for any and all wire/bank fees associated with all payments due to FSURF pursuant to this agreement.

 

	 
	Page 15
	

 
	 

 

	
 
	14.8	Survival.
	
 
	
 
	
 

	
 
	
 
	
The provisions of this Section shall survive termination of this Agreement. Upon termination of the Agreement for any reason, the following sections of the License Agreement will remain in force as non-cancelable obligations:

 

	
 
	·	Section 6 Record Keeping
	
 
	
 
	
 

	
 
	·	Section 9 Requirement to pay royalties on sale of Licensed Products made, and in process, at time of License Agreement termination
	
 
	
 
	
 

	
 
	·	Section 12 Product Liability; Conduct of Business
	
 
	
 
	
 

	
 
	·	Section 13 Use of Names
	
 
	
 
	
 

	
 
	·	Section 18 Confidentiality

 

	
 
	14.9	This Agreement is subject to the terms and conditions of Appendix A, the terms of which are incorporated herein, which is an agreement between the U.S. Department of Health and Human Services, Johns Hopkins University, and Florida State University Research Foundation regarding technology collaboratively developed and jointly owned.

 

Section 15 Notices

 

	
 
	Any notice required to be given pursuant to the provisions of this Agreement shall be in writing and shall be deemed to have been given

 

	
 
	·	when delivered personally, or
	
 
	
 
	
 

	
 
	·	if sent by facsimile transmission, when receipt thereof is acknowledged at the facsimile number of the recipient as set forth below, or
	
 
	
 
	
 

	
 
	·	the second day following the day on which the notice has been delivered prepaid to a national air courier service, or
	
 
	
 
	
 

	
 
	·	five (5) business days following deposit in the U.S. mail if sent certified mail, (return receipt acknowledgement is not required to certify delivery). 

 

	
 
	15.1	If to Florida State University Research Foundation, Inc.:

 

	
 
	
President

Florida State University Research Foundation, Inc.

Attn: Gary K. Ostrander 

2000 Levy Avenue, Suite 351

Tallahassee, FL 32310

Facsimile Number: (850) 644-3658 

 

with a copy to:

  

	
 
	
Office of Commercialization
	
FSU Office of Research Legal Counsel

	
 
	
Florida State University 
	
3012 Westcott N. Annex

	
 
	
Attn: Executive Director
	
222 S. Copeland Street

	
 
	
95 Chieftan Way, 312 Dittmer Bldg.
	
Tallahassee, FL 32306-1330

	
 
	
Tallahassee, FL 32306-4391
	
850-645-0108 (facsimile)

 

	 
	Page 16
	

 
	 

 

	
 
	15.2	If to Licensee:

 

	
 
	
President

Spotlight Innovation Inc.

Attn: Cris Grunewald

6750 Westown Pkwy, Ste. 200-226

West Des Moines, Iowa 50266

 

Section 16 Contract Formation and Authority

 

	
 
	
The submission of this Agreement does not constitute an offer, and this document shall become effective and binding only upon the execution by duly authorized representatives of both Licensee and FSURF. Copies of this Agreement that have not been executed and delivered by both FSURF and Licensee shall not serve as a memorandum or other writing evidencing an agreement between the parties. This Agreement shall automatically terminate and be of no further force and effect, without the requirement of any notice from FSURF to Licensee, if FSURF does not receive the License Issue Fee or certificates representing shares issued to FSURF pursuant to this Agreement, as applicable, within thirty (30) days of the Effective Date.

	
 
	
 
	
 

	
 
	
16.1
	
FSURF and Licensee hereby warrant and represent that the persons signing this Agreement have authority to execute this Agreement on behalf of the party for whom they have signed.

	
 
	
 
	
 

	
 
	
16.2
	
Force Majeure.

	
 
	
 
	
 

	
 
	
 
	
No default, delay, or failure to perform on the part of Licensee or FSURF shall be considered a default, delay or failure to perform otherwise chargeable hereunder, if such default, delay or failure to perform is due to epidemics, war, embargoes, fire, earthquake, hurricane, flood, acts of God, or default of common carrier. In the event of such default, delay or failure to perform, any date or times by which either party is otherwise scheduled to perform shall be extended automatically for a period of time equal in duration to the time lost by reason of the excused default, delay or failure to perform.

 

Section 17 United States Government Interests

 

	
 
	17.1	It is understood that the United States Government (through any of its agencies or otherwise) has funded research during the course of or under which any of the inventions of the Licensed Patents were conceived or made. The United States Government, as a co-owner of the Licensed Patents, is entitled, to certain rights, under the provisions of 35 U.S.C. §202-212 and applicable regulations of Title 37 of the Code of Federal Regulations. These include a non-exclusive, nontransferable, irrevocable, paid-up license to practice or have practiced the inventions of such Licensed Patents for governmental purposes. Any license granted to Licensee in this Agreement shall be subject to such right. FSURF shall have the right to share all Sublicensees’ confidential information with JHU and HHS for the purpose of compliance with the Inter-Institutional Agreement attached as Appendix A.
	
 
	
 
	
 

	
 
	17.2	Licensee agrees that for Licensed Products covered by the Licensed Patents that are subject to the non-exclusive royalty-free license to the United States Government, said Licensed Products will be manufactured substantially in the United States. Licensee further agrees that it shall abide by all the requirements and limitations of U.S. Code, Title 35, Chapter 18, and implementing regulations thereof, for all patent applications and patents invented in whole or in part with federal money.

 

	 
	Page 17
	

 
	 

 

Section 18 Confidentiality

 

	
 
		Each Party shall maintain all information of the other Party which is treated by such other Party as proprietary or confidential and appropriately marked “proprietary” or “confidential” (referred to herein as “Confidential Information”) in confidence, and shall not disclose, divulge or otherwise communicate such confidential information to others, or use it for any purpose, except pursuant to, and in order to carry out, the terms and objectives of this Agreement, and each party hereby agrees to exercise every reasonable precaution to prevent and restrain the unauthorized disclosure of such confidential information by any of its Affiliates, directors, officers, employees, consultants, subcontractors, Sublicensees or agents. The parties agree to keep the terms of this Agreement confidential, provided that each party may disclose this Agreement to their authorized agents and investors who are bound by similar confidentiality provisions. Notwithstanding the foregoing, Confidential Information of a party shall not include information which: (a) was lawfully known by the receiving party prior to disclosure of such information by the disclosing party to the receiving party; (b) was or becomes generally available in the public domain, without the fault of the receiving party; (c) is subsequently disclosed to the receiving party by a third party having a lawful right to make such disclosure; (d) is required by law, rule, regulation or legal process to be disclosed, provided that the receiving party making such disclosure shall take all reasonable steps to restrict and maintain to the extent possible confidentiality of such disclosure and shall provide reasonable notice to the other party to allow such party the opportunity to oppose the required disclosure; or (e) has been independently developed by employees or others on behalf of the receiving party without access to or use of disclosing party’s information as demonstrated by written record. Each party’s obligations under this Section 18 shall extend for a period of five (5) years from termination or expiration of this Agreement.

 

Section 19 University Rules and Regulations 

 

	
 
		Licensee understands and agrees that Florida State University personnel who are engaged by Licensee, whether as consultants, employees or otherwise, or who possess a material financial interest in Licensee, are subject to the Florida State University’s policies regarding outside activities and financial interests and, Florida State University’s Intellectual Property Policy, and a monitoring plan which addresses conflicts of interests associated therewith as required by Chapter 112, Florida Statutes. Any term or condition of an agreement between Licensee and such Florida State University personnel which seeks to vary or override such personnel’s obligations to Florida State University may not be enforced against such personnel, Florida State University or FSURF, without the express written consent of an individual authorized to vary or waive such obligations on behalf of Florida State University and FSURF. Furthermore, should an interest of Licensee conflict with the interest of Florida State University, Florida State University personnel are obligated to resolve such conflicts according to the guidelines and policies set forth by Florida State University.

 

	 
	Page 18
	

 
	 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the dates indicated below.

 

  

FLORIDA STATE UNIVERSITY RESEARCH FOUNDATION, INC.

 

______________________________________             Date: __________, 2016

Gary K. Ostrander

President, Florida State University Research Foundation

  

 

  

LICENSEE

 

By: ___________________________________             Date: ___________, 2016

 

Name and Office: __________________________________________________

 
	 
	Page 19
	

 
	 

 

Appendix A - Inter-institutional Agreement

 

 

 

 

 

 

 

 

 

 

 

	 
	Page 1
	

 
	 

 

Appendix B - Development Plan

 

The starting point for the Development Plan will be the group of compounds previously identified by Prof. Hengli Tang and collaborators and described in Provisional Patent Application [***]. Novel compounds (prodrugs or other derivatives) will be synthesized with the aim of optimizing characteristics such as oral bioavailability, CNS penetration, pharmacodynamic (PD) and pharmacokinetic (PK) properties, and safety. The ultimate goals of the Development Program are to complete preclinical and clinical testing of one or more lead drug candidates, prepare and file a New Drug Application, obtain marketing approval, and commence product manufacturing and sales.

 

	
 
	A.	Development activities to be undertaken
	
 
	
 
	
 

	
 
	
 
	
(Please break activities into subunits)

 

	
 
	1.	Testing of lead compounds in small animal and human brain organoid model for ZIKV inhibition. We will test the efficacy of lead compounds in both IFNAR-/- mice and C57BL/6 mice. Multiple assays, including body weight loss, lethality, and viral load in blood and tissues, will be used to determine if a compound is effective against ZIKV infection. We will also use the human brain organoid system as a complementary model to avoid pitfalls of species-specific differences and safeguard the success of our project.
	
 
	
 
	
 

	
 
	2.	Determination of mechanism of action (this project is concurrent with other activities and not part of a sequence of activities). We will use a combined approach of biochemistry, molecular biology, and virology to identify the compound target and dissect its mechanism of action (MOA). We will label the compound and identify its binding partner in cells and in vitro; we will map any drug resistant mutations in cell culture and determine the specific steps of the virus life cycle to which the compound targets.
	
 
	
 
	
 

	
 
	3.	Optimization of lead compounds in each class. For both classes of compounds, we will perform iterative rounds of analog synthesis and testing, typically on a biweekly or monthly schedule. The chemistry team will design and synthesize compounds; the biology team will test the compounds in assays; and the Drug Metabolism and Pharmacokinetics (DMPK) team will evaluate compound physical properties. During lead optimization, it is necessary to address ADME and toxicological liabilities and to improve the lead compound’s DMPK properties. The goal lead optimization is to identify an advanced lead candidate with drug-like properties, efficacy in animal models, and low toxicity.
	
 
	
 
	
 

	
 
	4.	Advanced safety testing for lead candidates. Once advanced lead candidates are identified, we will begin to build a safety package for the compound. This in general will consist of non-GLP toxicology studies in a rodent and a non-rodent species. Upon successful completion of the exploratory toxicology studies, we will manufacture sufficient amounts of application program interface (API) under GMP conditions to support GLP toxicology studies in two species under GLP conditions, including GLP genotoxicity and safety pharmacology studies under GLP conditions. The results from these studies will form the body of the regulatory filing to open an IND with the FDA.

 

	
 
	B.	Estimated total development time

 

	II.	Governmental Approval
	
 
	
 

	
 
	A.	Types of submissions required
	
 
	
 
	
 

	
 
	B.	Government agency, e.g., FDA, EPA, etc.
	
 
	
 
	
 

	III.	Proposed Market Approach (this may include/involve an exit strategy)

 

	 
	Page 1
	

 
	 

 

Appendix C - Development Report

 

When appropriate, indicate estimated start date and finish date for activities.

 

	I.	Date Development Plan Initiated and Time Period Covered by this Report.
	
 
	
 

	II.	Development Report.
	
 
	
 

	
 
	A.	Activities completed since last report including the object and parameters of the development, when initiated, when completed and the results.
	
 
	
 
	
 

	
 
	B.	Activities currently under investigation, i.e., ongoing activities including object and parameters of such activities, when initiated, and projected date of completion.

 

	III.	Future Development Activities.
	
 
	
 

	
 
	A.	Activities to be undertaken before next report including, but not limited to, the type and object of any studies conducted and their projected starting and completion dates.
	
 
	
 
	
 

	
 
	B.	Estimated total development time remaining before a product will be commercialized.

 

	IV.	Changes to Initial Development Plan.
	
 
	
 

	
 
	A.	Reasons for change.
	
 
	
 
	
 

	
 
	B.	Variables that may cause additional changes.

 

	V.	Items to be Provided if Applicable:
	
 
	
 

	
 
	A.	Information relating to Licensed Products or Licensed Processes that has become publicly available, e.g., published articles, competing products, patents, etc.
	
 
	
 
	
 

	
 
	B.	Development work being performed by third parties, other than Licensee, to include name of third party, reasons for use of third party, planned future uses of third parties including reasons why and type of work.
	
 
	
 
	
 

	
 
	C.	Update of competitive information trends in industry, government compliance (if applicable) and market plan.
	
 
	
 
	
 

	
 
	D.	Information and copies of relevant materials evidencing the status of any patent applications or other protection relating to Licensed Products, or Licensed Processes or the Licensed Patents.

 

 

PLEASE SEND DEVELOPMENT REPORTS TO:

 

		
with a copy to:

		
	
President
	
Office of Commercialization 

	
Florida State University Research Foundation, Inc.
	
Florida State University

	
Attn: Gary K. Ostrander 
	
Attn: Executive Director 

	
2000 Levy Avenue, Suite 351
	
95 Chieftan Way, 312 Dittmer Bldg.

	
Tallahassee, FL 32310
	
Tallahassee, FL 32306-4391

	
Facsimile Number: (850) 644-3658
	
Facsimile Number: (850) 644-3675

 

	 
	Page 1
	

 
	 

 

Appendix D - FSURF Royalty Report

   

	
Licensee:_______________________________________________
	
Agreement No.:_______________________

	
Inventor:  _______________________________________________
	
P#: P                                                                         

	
Period Covered:   From:         /        /2              Through:        /        /2              
	
 

	
Prepared By: ____________________________________________
	
Date: _______________________________

	
Approved By: ____________________________________________
	
Date: _______________________________

  

 

If license covers several major product lines, please prepare a separate report

for each line. Then combine all product lines into a summary report. 

 

	
Report Type:
	
 ̈  
	
Single Product Line Report:  _________________________________________________________

	
 
	
 ̈
	
Multiproduct Summary Report.   Page 1 of ______ Pages

	
 
	
 ̈
	
Product Line Detail.   Line:   ___________     Tradename: ________________     Page: _____________

	
Report Currency:
	
 ̈
	
U. S. Dollars      ̈   Other ____________________________________________________________

 

		

Unit
	

Gross
	

* Less:
	

Net
	

Royalty
	

Period Royalty Amount

	

Country
	

Sales
	

$$ Sales
	

Allowances
	

$$ Sales
	

Rate
	

This Year
	

Last Year

	

U.S.A.
		
 
					
	

Canada
							
	

Europe:
							
	 							
	 							
	 							
	

Japan
							
	

Other:
							
	 							
	 							
	

TOTAL: 
							

 

Total Royalty: _______________       Conversion Rate: ____________        Royalty in U.S. Dollars: $                                

 

The following royalty forecast is non-binding and for FSURF’s internal planning purposes only:

 

Royalty Forecast Under This Agreement: Next Quarter:__________    Q2:__________    Q3:__________    Q4:__________

 

	
* On a separate page, please indicate the reasons for returns or other adjustments if significant.

Also note any unusual occurrences that affected royalty amounts during this period.

To assist FSURF's forecasting, please comment on any significant expected trends in sales volume.

 

	 
	Page 1
	

 
	 

 

Appendix E – Due Diligence 

 

	
Due Diligence Activity
	
 
	
Completion

Date

	
Synthesis of novel analog(s) of parent compound(s) to create a First Lead Compound (“FLC”)
	
 
	
[***]

	
ZIKV inhibition testing of FLC in mice
	
 
	
[***]

	
ZIKV inhibition testing of FLC in human brain organoid system
	
 
	
[***]

	
GMP Manufacturing of FLC (small scale)
	
 
	
[***]

	
Non-GLP toxicology testing in rodents and non-rodents
	
 
	
[***]

	
Pre-IND meeting with FDA
	
 
	
[***]

	
Identification of packaging, labeling and compatibility testing
	
 
	
[***]

	
GLP toxicology testing of FLC in rodents and non-rodents
	
 
	
[***]

	
Submission of IND
	
 
	
[***]

	
Initiation of Phase 1 clinical trial
	
 
	
[***]

	
ADME, PK, GLP testing of FLC
	
 
	
[***]

	
Initiation of Phase 2 clinical trial
	
 
	
[***]

	
CMC development (product characterization, purity, potency, qualification, validation of analytical methods and processes, bioequivalence and bioavailability) 
	
 
	
[***]

	
End of Phase 2 meeting with FDA
	
 
	
[***]

	
Two-year stability testing
	
 
	
[***]

	
Initiation of Phase 3 clinical trial
	
 
	
[***]

	
Pre-NDA meeting with FDA
	
 
	
[***]

	
Submission of NDA
	
 
	
[***]

	
Sale of first FDA-approved drug
	
 
	
[***]

 

 

	
Page 1

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