Document:

Exhibit 10.4

 

EXECUTIVE SEVERANCE 

 

&

 

CHANGE IN CONTROL AGREEMENT

 

THIS EXECUTIVE SEVERANCE
AND CHANGE IN CONTROL AGREEMENT (the “Agreement”) is made by and between Ritter Pharmaceuticals, Inc. (the
“Company”), and Ira E. Ritter (“Executive”) as of June 29, 2015.

 

In consideration of
the mutual promises, covenants and obligations contained herein, the Company and Executive agree as follows:

 

1.           At-Will
Employment.    The Company and Executive acknowledge that Executive’s
employment is and shall continue to be at-will, as defined under applicable law. If Executive’s employment terminates for
any reason, Executive shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by
this Agreement, or as may otherwise be available in accordance with the Company’s established employee plans and practices
in accordance with other agreements between the Company and Executive.

 

2.           Definitions.   For
purposes of this Agreement, the following terms have the following meanings:

 

(a)          “Accrued
Obligations” means (i) Executive’s earned but unpaid Base Salary through the Termination Date; (ii) payment of
any annual, long-term, or other incentive award which relates to a completed fiscal year or performance period, as applicable,
and is payable (but not yet paid) on or before the Termination Date; (iii) a lump-sum payment in respect of accrued but unused
vacation days at Executive’s per-business-day Base Salary rate in effect as of the Termination Date; and (iv) any unpaid
expense or other reimbursements due pursuant to Company expense reimbursement policy.

 

(b)          “Affiliate(s)”
means, with respect to any specified Person (as such term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended),
any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common
control with, such specified Person.

 

(c)          “Annual
Bonus” means Executive’s target annual bonus for the year in which the Change in Control occurs.

 

(d)          “Base
Salary” means Executive’s base rate of pay as of a specified date.

 

(e)          “Cause”
means a finding by the Company that Executive has (i) been convicted of a felony or crime involving moral turpitude; (ii) disclosed
trade secrets or confidential information of the Company (or any Parent or Subsidiary) to persons not entitled to receive such
information; (iii) engaged in conduct in connection with Executive’s employment or service to the Company (or any Parent
or Subsidiary), that has, or could reasonably be expected to result in, material injury to the business or reputation of the Company
(or any Parent or Subsidiary), including, without limitation, act(s) of fraud, embezzlement, misappropriation and breach of fiduciary duty;
(iv) violated the operating and ethics policies of the Company (or any Parent or Subsidiary) in any material way, including, but
not limited to those relating to sexual harassment and the disclosure or misuse of confidential information; (v) engaged in willful
and continued negligence in the performance of the duties assigned to Executive by the Company, after Executive has received notice
of and failed to cure such negligence; or (vi) breached any material provision of any agreement between Executive and the Company
(or any Parent or Subsidiary), including, without limitation, any confidentiality agreement.

 

    	 

    	 	 	 

    

 

 

(f)           “Change
in Control” means the occurrence of any of the following events:

 

		(i)	Any “person” (as such term is used in sections
13(d) and 14(d) of the Exchange Act) becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing more than 50% of the voting power of the then outstanding securities
of the Company; provided that a Change of Control shall not be deemed to occur as a result of a change of ownership resulting
from the death of a shareholder, and a Change of Control shall not be deemed to occur as a result of a transaction in which the
Company becomes a subsidiary of another corporation and in which the shareholders of the Company, immediately prior to the transaction,
will beneficially own, immediately after the transaction, shares entitling such shareholders to more than 50% of all votes to
which all shareholders of the parent corporation would be entitled in the election of directors (without consideration of the
rights of any class of stock to elect directors by a separate class vote)

 

		(ii)	A change in the effective control of the Company which
occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by Directors whose
appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election;
or

 

		(iii)	The consummation of (A) a merger or consolidation of the
Company with another corporation where the shareholders of the Company, immediately prior to the merger or consolidation, will
not beneficially own, immediately after the merger or consolidation, shares entitling such shareholders to more than 50% of all
votes to which all shareholders of the surviving corporation would be entitled in the election of directors (without consideration
of the rights of any class of stock to elect directors by a separate class vote); (B) a sale or other disposition of all or substantially
all of the assets of the Company; or (C) a liquidation or dissolution of the Company.

 

(g)          “Disability”
means total and permanent disability as defined in Section 22(e)(3) of the Code or in the Company’s long-term disability
plan. A termination of Executive’s employment due to a Disability
shall be effective only if the party terminating Executive’s employment first gives at least 15 days’ written notice
of such termination to the other party.

 

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(h)          “Good
Reason” means, without Executive’s express written consent, the occurrence of any one or more of the following:
(i) a substantial and material diminution in Executive’s duties or responsibilities; (ii) a material reduction in Executive’s
Base Salary; or (iii) the relocation of Executive’s principal place of employment to a location more than 50 miles from Executive’s
principal work location to a location that is more than 50 miles from the prior location. A termination of employment by Executive
for Good Reason shall be effectuated by giving the Company written notice (“Notice of Termination for Good Reason”),
not later than 90 days following the occurrence of the circumstance that constitutes Good Reason, setting forth in reasonable detail
the specific conduct of the Company that constitutes Good Reason and the specific provision(s) of this Agreement on which Executive
relied. The Company shall be entitled, during the 30-day period following receipt of a Notice of Termination for Good Reason, to
cure the circumstances that gave rise to Good Reason, provided that the Company shall be entitled to waive its right to cure or
reduce the cure period by delivery of written notice to that effect to Executive (such 30-day or shorter period, the “Cure
Period”). If, during the Cure Period, such circumstance is remedied, Executive will not be permitted to terminate employment
for Good Reason as a result of such circumstance. If, at the end of the Cure Period, the circumstance that constitutes Good Reason
has not been remedied, Executive shall terminate employment for Good Reason on the date of expiration of the Cure Period.

 

(i)           “Termination
Date” means the date on which Executive’s employment hereunder terminates.

 

3.           Termination
Without Cause or by Executive With Good Reason.  Subject to Section 6 below, if
the Company terminates Executive’s employment without Cause, or the Executive terminates for Good Reason, Executive shall
be entitled to: (a) the Accrued Obligations; (b) an amount equal to twelve (12) months of the Base Salary as in effect immediately
prior to the Termination Date, paid in a lump sum on the sixtieth (60th) day following the Termination Date; (c) medical,
dental benefits provided by the Company to Executive and Executive’s spouse and dependents (in each case, as provided in
any applicable plan) at least equal to the levels of benefits provided to other similarly situated active employees of the Company
and its subsidiaries until the earlier of (i) the twelve (12) month anniversary of the Termination Date or (ii) the date that Executive
becomes covered under a subsequent employer’s medical and dental plans; and (d) acceleration of vesting of all equity and
equity-based awards.

 

4.           Change
in Control Termination. Subject to Section 6 below, in
the event that within the one (1) month prior to or the twelve (12) months following a Change in Control the Company terminates
Executive’s employment without Cause, or the Executive terminates for Good Reason, then, in lieu of the payments and benefits
otherwise due to Executive under Section 3 above, Executive shall be entitled to: (a) the Accrued Obligations; (b) an amount equal
to the sum of (twelve (12) months of the Base Salary as in effect on the Termination Date or the date of the Change in Control,
whichever is greater; (c) medical, dental benefits provided by the Company to Executive and Executive’s spouse and dependents
(in each case, as provided in any applicable plan) at least equal to the levels of benefits provided to other similarly situated
active 

 

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employees
of the Company and its subsidiaries until the earlier of (i) the twelve (12) month anniversary of the Termination Date or (ii)
the date that Executive becomes covered under a subsequent employer’s medical and dental plans; and (d) acceleration of vesting
of all equity and equity-based awards.

 

5.           Other
Terminations.  If Executive’s employment hereunder is terminated (a) by Executive
without Good Reason; (b) by the Company for Cause; or (c) due to Executive’s death or Executive’s Disability, Executive
and/or Executive’s estate or beneficiaries shall be entitled to the Accrued Obligations. 

 

6.           Release.  Executive’s
entitlement to the payments (other than the Accrued Obligations) and benefits described in Sections 3 and 4 above is expressly
contingent upon Executive providing the Company with a signed release satisfactory to the Company (the “Release”).
To be effective, such Release must be delivered by Executive to the Company no later than 45 days following the Termination Date
and must not be revoked during the seven (7) days following such delivery. If such Release is not executed in a timely manner or
is revoked, all such payments and benefits shall immediately cease and the Executive shall be required to repay to the Company
any such payments that have already been paid to the Executive.

 

7.           Withholding.  The
Company shall withhold all applicable federal, state and local taxes, social security and workers’ compensation contributions
and other amounts as may be required by law with respect to compensation payable to Executive. 

 

8.           Modification
of Payments. In the event it shall be determined that any payment, right or distribution
by the Company or any other person or entity to or for the benefit of Executive pursuant to the terms of this Agreement or otherwise,
in connection with, or arising out of, his employment with the Company or a change in ownership or effective control of the Company
or a substantial portion of its assets (a “Payment”) is a “parachute payment” within the meaning
of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) on account of the aggregate
value of the Payments due to Executive being equal to or greater than three times the “base amount,” as defined in
Section 280G(b)(3) of the Code, (the “Parachute Threshold”) so that Executive would be subject to the excise
tax imposed by Section 4999 of the Code (the “Excise Tax”) and the net after-tax benefit that Executive
would receive by reducing the Payments to the Parachute Threshold is greater than the net after-tax benefit Executive would receive
if the full amount of the Payments were paid to Executive, then the Payments payable to Executive shall be reduced (but not below
zero) so that the Payments due to Executive do not exceed the amount of the Parachute Threshold, reducing first any Payments under
Section 4(d) above. 

 

9.           Section
409A.  (a)  Notwithstanding anything herein to the contrary, this Agreement
is intended to be interpreted and applied so that the payment of the benefits set forth herein either shall either be exempt from
the requirements of Section 409A of the Code (“Section 409A”) or shall comply with the requirements of
such provision. 

 

(b)          Notwithstanding
any provision of this Agreement to the contrary, if Executive is a “specified employee” within the meaning of Section
409A, any payments or arrangements due upon a termination of Executive’s employment under any arrangement that constitutes a “nonqualified
deferral of compensation” within the meaning of Section 409A and which do not otherwise qualify under the exemptions under
Treas. Regs. Section 1.409A-1 (including without limitation, the short-term deferral exemption or the permitted payments under
Treas. Regs. Section 1.409A-1(b)(9)(iii)(A)), shall be delayed and paid or provided, without interest, on the earlier of (i) the
date which is six months after Executive’s “separation from service” (as such term is defined in Section 409A
and the regulations and other published guidance thereunder) for any reason other than death, and (ii) the date of Executive’s
death.

 

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(c)          After
any Termination Date, Executive shall have no duties or responsibilities that are inconsistent with having a “separation
from service” within the meaning of Section 409A and, notwithstanding anything in the Agreement to the contrary, distributions
upon termination of employment of nonqualified deferred compensation may only be made upon a “separation from service”
as determined under Section 409A and such date shall be the Termination Date for purposes of this Agreement. Each payment under
this Agreement or otherwise shall be treated as a separate payment for purposes of Section 409A. In no event may Executive, directly
or indirectly, designate the calendar year of any payment to be made under this Agreement which constitutes a “nonqualified
deferral of compensation” within the meaning of Section 409A and to the extent an amount is payable within a time period,
the time during which such amount is paid shall be in the discretion of the Company.

 

10.         Merger
Clause.  Effective as of the Effective Date, this Agreement contains the complete,
full, and exclusive understanding of Executive and the Company as to its subject matter and shall, on such date, and supersede
any prior agreement between Executive and the Company regarding severance benefits. Any
amendments to this Agreement shall be effective and binding on Executive and the Company only if any such amendments are in writing
and signed by both Parties. 

 

11.         Assignment.  (a)  This
Agreement is personal to Executive and, without the prior written consent of the Company, shall not be assigned by Executive otherwise
than by will or the laws of descent and distribution, and any assignment in violation of this Agreement shall be void.

 

(b)          This
Agreement and all rights of Executive hereunder shall inure to the benefit of, and be enforceable by, Executive’s personal
or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive should
die while any amounts would still be payable to him or her hereunder if he or she had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Executive’s devisee, legatee or
other designee or, should there be no such designee, to Executive’s estate.

 

(c)          The
Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially
all of the business or assets of the Company (a “Successor”) to assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would have been required to perform it if no such succession had taken
place. As used in this Agreement, (i) the term “Company” shall mean the Company as hereinbefore defined and
any Successor and any permitted assignee to which this Agreement is assigned and (ii) the term “Board” shall
mean the Board as hereinbefore defined and the board
of directors or equivalent governing body of any Successor and any permitted assignee to which this Agreement is assigned.

 

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12.         Dispute
Resolution.  The parties agree that any dispute arising out of or relating to this
Agreement or the formation, breach, termination or validity thereof, will be settled by binding arbitration by a panel of three
arbitrators in accordance with the commercial arbitration rules of the American Arbitration Association. The arbitration proceedings
will be located in Los Angeles County, California. The arbitrators are not empowered to award damages in excess of compensatory
damages and each party irrevocably waives any damages in excess of compensatory damages. Judgment upon any arbitration award may
be entered into any court having jurisdiction thereof and the parties consent to the jurisdiction of any court of competent jurisdiction
located in the State of California.

 

13.         GOVERNING
LAW.  THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN THE STATE OF CALIFORNIA, AND THE VALIDITY, INTERPRETATION, CONSTRUCTION
AND PERFORMANCE OF THIS AGREEMENT IN ALL RESPECT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO ITS
PRINCIPLES OF CONFLICTS OF LAW.

 

14.         Amendment;
No Waiver.  No provision of this Agreement may be amended, modified, waived or
discharged except by a written document signed by Executive and duly authorized officer of the Company. The failure of a party
to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered as a waiver of such party’s
rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.
No failure or delay by any party in exercising any right or power hereunder will operate as a waiver thereof, nor will any single
or partial exercise of any other right or power. No agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by any party, which are not set forth expressly in this Agreement.

 

15.         Severability.  If
any term or provision of this Agreement is invalid, illegal or incapable of being enforced by any applicable law or public policy,
all other conditions and provisions of this Agreement shall nonetheless remain in full force and effect so long as the economic
and legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any
party. Upon any such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated
to the fullest extent possible.

 

16.         Survival.  The
rights and obligations of the parties under the provisions of this Agreement that relate to post-termination obligations shall
survive and remain binding and enforceable, notwithstanding the expiration of the term of this Agreement, the termination of Executive’s
employment with the Company for any reason or any settlement of the financial rights and obligations arising from Executive’s
employment hereunder, to the extent necessary to preserve the intended benefits of such provisions.

 

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17.         Notices.  All
notices and other communications required or permitted by this Agreement will be made in writing and all such notices and communications
will be deemed to have been duly given when delivered or (unless otherwise specified) mailed by United States certified or registered
mail, return receipt requested, postage prepaid, addressed to the Company at its headquarters, and addressed to Executive at his
last address on file with the Company, or to such other address as any party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon receipt.

 

18.         Headings
and References.  The headings of this Agreement are inserted for convenience only
and neither constitute a part of this Agreement nor affect in any way the meaning or interpretation of this Agreement. When a reference
in this Agreement is made to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated.

 

19.         Counterparts.  This
Agreement may be executed in one or more counterparts (including via facsimile), each of which shall be deemed to be an original,
but all of which together shall constitute one and the same instrument.

 

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IN WITNESS WHEREOF, this Agreement
has been executed by the parties as of the date first written above.

 

	 	RITTER PHARMACEUTICALS, INC.
	 	 	 
	 	By:	/S/MICHAEL D. STEP

	 	Name:	Michael D. Step
	 	Title:	Chief Executive Officer

 

	 	Executive
	 	 
	 	/S/IRA E. RITTER
	 	Ira E. RitterEXHIBIT 10.17

  
 Exhibit 10.17
 

 EXCLUSIVE LICENSE AGREEMENT
 

 THIS EXCLUSIVE LICENSE AGREEMENT (the “Agreement”) by and between Accelerating Combination Therapies, LLC, a limited liability company under of the state of Maryland, having its principal place of business at 1550 Orleans St., Baltimore, Maryland  21287 ("ACL"), and Accurexa, Inc., a corporation organized and existing under the laws of the State of Delaware, with principal offices located at 113 Barksdale, Newark, DE 19711, United States of America ("LICENSEE"), is effective as of August 11, 2015 (“Effective Date”).
 

 ARTICLE 1 – BACKGROUND
 

 1.1
 ACL are the owner of certain ACL’s Intellectual Property (“IP) Rights (as defined below) and have the right to grant licenses under said IP Rights.
 

 1.2
 LICENSEE desires to obtain rights under the IP Rights to develop and commercialize certain of the inventions disclosed and claimed therein.  
 

 1.3
 LICENSEE has represented to ACL, in order to induce ACL to enter into this Agreement, that it shall act diligently to develop and commercialize the Licensed Products and Licensed Processes (as defined below).
 

 1.4
 LICENSEE recognizes the contribution of ACL to the development of the inventions disclosed and claimed in the Patent Rights and is willing to pay compensation to ACL as set forth in this Agreement.
 

 1.5
 ACL are willing to grant a license to LICENSEE, subject to the terms and conditions of this Agreement.
 

 1.6
 In consideration of the premises and the mutual covenants contained in this Agreement, ACL and LICENSEE (hereinafter the “Parties” or singularly a “Party”) agree to the terms of this Agreement.
 

 

 Page 1 of 19
 

 
 ARTICLE 2 – DEFINITIONS
 

 For the purposes of this Agreement, the following words and phrases shall have the following meaning:  
 

 2.1
 “Affiliate” shall mean any entity or person that directly or indirectly controls, is controlled by, or is under common control with LICENSEE.  For purposes of this definition, “control” means possession of the power to direct the management of such entity or person, whether through ownership of more than fifty percent (50%) of voting securities, by contract, or otherwise.
 

 2.2
 “Confidential Information” is defined in Section 15.1.
 

 2.3
 “Effective Date” is defined in the introductory paragraph of this Agreement.
 

 2.4
 "First Commercial Sale" shall mean the initial transfer by or on behalf of LICENSEE or its Sublicensees of Licensed Products or the initial practice of a Licensed Process by or on behalf of LICENSEE or its Sublicensees in exchange for cash or some equivalent to which value can be assigned for the purpose of determining Net Sales.
 

 2.5. 
 “ACL’s know-how” means all information (other than Patent Rights) that is (a) controlled by and/or in the possession of ACL as of the Effective Date or during the term and (b) is reasonably required or useful for LICENSEE to develop, manufacture or commercialize the Licensed Product or practice the licensed process.
 

 2.6. 
 “ACL’s Intellectual Property (IP)” means Patent Rights (as defined below) and ACL’s Know-how.
 

 2.7
 “License” refers to the license granted under Article 3.1.
  
 2.8 
 “Licensed Field” shall mean all fields of use of all applications within the Patent Rights, without limitation.
  
 2.9 
 “Licensed Process” shall mean any process, method, procedure, or service necessary for research, development, manufacture, or commercialization activity, the practice of which falls 
 

 Page 2 of 19
 

 
 within the limitations of an issued, unexpired claim of the Patent Rights or utilizes the ACL’s Know-how.
 

 2.10
 "Licensed Product" shall mean any product or part thereof which:
 

 (a)
 is covered in whole or in part by an issued, unexpired claim of the Patent Rights or is made or used with the ACL’s Know-how in the country in which any such product or part thereof is made, used, or sold; or 
 

 (b)
 is manufactured by using a process or is employed to practice a process which is covered in whole or in part by an issued, unexpired claim or a pending claim contained in the Patent Rights in the country in which any Licensed Process is used or in which such product or part thereof is used or sold.
 

 2.11
 "LICENSEE" is understood to include all of its Affiliates.  
 

 2.12
 “Net Sales” shall mean:
 

 (a)
 gross invoice price from the sale, lease, or other transfer or disposition of the Licensed Products or Licensed Processes to third parties, or from services performed using Licensed Products or Licensed Processes for third parties, by LICENSEE or Affiliates, less the following deductions, provided they actually pertain to the disposition of the Licensed Products or Licensed Processes and are separately invoiced:
 

 (i)
 all discounts, credits, and allowances on account of returns; 
 

 (ii)
 transportation and insurance; and 
 

 (iii)
 duties, taxes, and other governmental charges levied on the sale, transportation, or delivery of Licensed Products or practice of the Licensed Processes, but not including income taxes.
 

 No deductions shall be made for any other costs or expenses, including but not limited to commissions to independents, agents, or those on LICENSEE’s or an Affiliate’s payroll or for the cost of collection.
 

 

 Page 3 of 19
 

 
 
 (b)
 “Net Sales” shall not include the gross invoice price for Licensed Products or Licensed Processes sold to, or services performed using Licensed Products or Licensed Processes for, any Affiliate unless such Affiliate is an end-user of any Licensed Product or Licensed Process, in which case such consideration shall be included in Net Sales at the average selling price charged to a third party during the same quarter.
 

 2.13
 "Patent Rights" shall mean all of the following ACL’s intellectual property:
 

 U.S. Patent No. 8,895,597; and any reexaminations, and reissues thereof, which were assigned to ACL by the inventors Violette Renard Recinos, Betty Tyler, Sarah Brem Sunshine and Henry Brem (collectively referred to as the “Inventors”) on August 3, 2015 (Appendix B).  ACL is beneficially owned by the Inventors. 
 

 2.14
 “Best Commercial Efforts” shall mean documented efforts that are consistent with those utilized by companies of similar size and type that have successfully developed and brought to market products and services similar to Licensed Products and Licensed Processes. 
 

 2.15
 “Sublicense Income” shall mean consideration in any form received by LICENSEE or an Affiliate in connection with a grant to any third party or parties of a sublicense or other right, license, privilege, or immunity to make, have made, use, sell, have sold, distribute, import, or export Licensed Products or to practice Licensed Processes.  Sublicense Income shall include without limitation any license signing fees; license maintenance and continuation fees; unearned portions of any minimum royalty payment; and royalty payments received by LICENSEE.
 

 2.16
 “Sublicensee” shall mean any third party granted a sublicense or other right, license, privilege, or immunity by LICENSEE to develop, make, have made, use, sell, have sold, distribute, import, or export any Licensed Product or to practice any Licensed Process.
 

 2.17
 “Term” is defined in Section 13.1.
 

 2.18
 “Territory” shall mean the world.
 

 

 

 Page 4 of 19
 

 
 

 ARTICLE 3 – GRANT
 

 3.1
 Subject to the terms and conditions of this Agreement, ACL hereby grants to LICENSEE an exclusive right and license in the Territory for the Licensed Field under the ACL’s IP to develop, make, have made, use, offer for sale, and sell Licensed Products and to practice Licensed Processes (“License”).  
 

 3.2
 LICENSEE shall have the right to grant sublicenses consistent with this Agreement provided that LICENSEE shall be responsible for the operations of its Sublicensees relevant to this Agreement as if such operations were carried out by LICENSEE, including the payment of royalties.  
 

 ARTICLE 4  – SUBLICENSES
 

 4.1.
 Any sublicense granted by LICENSEE shall include substantially the same definitions and provisions as are agreed to in this Agreement, and such other provisions as are needed to enable LICENSEE to comply with this Agreement.  LICENSEE will provide ACL with a copy of each Sublicense Agreement (and any amendment to or notice of termination thereof) within thirty (30) days after execution, modification, or termination, which ACL shall maintain in confidence per the terms of Article 16.  LICENSEE shall remain responsible for the performance of all Sublicensees under any such sublicense as if such performance were carried out by LICENSEE itself, including, without limitation, the payment of any royalties or other payments provided for hereunder, regardless of whether the terms of any sublicense provide for such amounts to be paid by the Sublicensee directly to ACL.  A breach of this provision shall constitute a material breach that is subject to Article 15.
 

 4.2
 LICENSEE agrees to promptly deliver copies of all reports provided to LICENSEE by Sublicensees.
 

 ARTICLE 5 - DUE DILIGENCE
 

 5.1
 LICENSEE, whether independently or through the activities of an Affiliate or Sublicensee, shall use best commercial efforts to bring one or more Licensed Products or Licensed Processes to market through an active and diligent program for exploitation of the 
 

 Page 5 of 19
 

 
 Patent Rights and to continue active, diligent marketing efforts for one or more Licensed Products or Licensed Processes throughout the life of this Agreement.
 

 5.2
 In addition, LICENSEE, acting alone or in collaboration with a Sublicensee, will initiate a first human clinical trial within 30 months after the Effective Date, which is negotiable upon mutual consent by both LICENSEE and ACL.
 

 ARTICLE 6 - ROYALTIES AND OTHER CONSIDERATION
 

 6.1
 For the rights, privileges and license granted hereunder, LICENSEE shall pay royalties and other compensation to ACL in the manner hereinafter provided to the end of the term of the IP Rights or until this Agreement shall be earlier terminated:
 

 (a)
 License Issue Fee:  LICENSEE shall issue 1,000,000 shares of LICENSEE’s common stock to ACL within 6 months after the Effective Date and reimburse all Patent Expenses in the amount of $19,391.67 upon signing of the Agreement.
 

 (b)
 License Maintenance Fees: LICENSEE shall pay to ACL within thirty (30) days of the first and subsequent anniversaries of the Effective Date a License Maintenance Fee of Eight Thousand Dollars ($8,000) until the First Commercial Sale.
 

 (c)
 Running Royalties:  LICENSEE shall pay to ACL running royalties in the form of Four Percent (4%) of Net Sales upon First Commercial Sale in a country with a valid, issued patent and One Percent (1%) of Net Sales upon First Commercial Sale in a country without a valid, issued patent but in which the licensed ACL’ Know-How is utilized.
 

 (d)
 Minimum Annual Royalties:  LICENSEE shall pay to ACL a minimum annual royalty for Licensed Products or Licensed Processes as follows:  
 (i)
 Fifteen Thousand Dollars ($15,000) beginning with the year of the First Commercial Sale of Licensed Products or Licensed Processes;
 (ii)
 Twenty Four Thousand Dollars ($24,000) for the second year of Sale of Licensed Products or Licensed Processes; and 
 (iii)
 Twenty Four Thousand Dollars ($24,000) for the third year of Sale of Licensed Products or Licensed Processes.
 

 

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 The Minimum Annual Royalties will be credited against the Royalties due for the calendar year in which the minimum payment was made.  
 

 (e)
 Sublicense Income:  If LICENSEE receives Sublicense Income, LICENSEE shall  pay to ACL royalties in the form of Twenty Five Percent (25%) of all Sublicense Income.  
 

 (f)
 Corporate Partnerships or Collaborations:  If LICENSEE receives proceeds from sales of ACL IP as a result of corporate partnerships or collaborations, LICENSEE shall pay Four Percent (4%) of those proceeds to ACL. 
 (g)
 Milestone Payments: LICENSEE shall pay to ACL the following milestone payments: 
 

 (i)
 A one-time payment of Fifty Thousand Dollars ($50,000) within thirty (30) days upon completion of a first human clinical trial; 
 (ii)
 A one-time payment of Fifty Thousand Dollars ($50,000) within thirty (30) days upon submission of a first regulatory application for a Licensed Product or Licensed Process; and
 (iii)
 A one-time payment of Hundred Thousand Dollars ($100,000) within thirty (30) days upon first regulatory approval of a Licensed Product or Licensed Process. 
 

 These payments shall be made in addition to any royalties due.
 

 (h)
 LICENSEE shall reimburse ACL for past costs (100%, including attorney’s fees and fees required by the U.S. Patent and Trademark Office) in the amount of $19,391.67 incurred association with acquiring the patent rights.  These Up-front royalties shall include fees incurred in the preparation, filing and prosecution of the United States Patent Listed in Appendix A, and the application to which it claims priority, within thirty (30) days of signing the Agreement.  LICENSEE will continue to be responsible for payment of all future costs relating to the maintenance and defence of the IP.  Failure to do so will result in immediate termination of this agreement and return of IP to the ACL.
 

 6.2
 All amounts payable hereunder by LICENSEE shall be paid in full, without deduction of taxes or other fees which may be imposed by any government. 
 

 ARTICLE 7 - RECORDS AND REPORTS
 

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 7.1
 LICENSEE shall keep full, true, and accurate books of account containing all particulars that may be necessary for the purpose of showing the amounts payable to ACL hereunder.  Said books of account shall be kept at LICENSEE’s principal place of business or the principal place of business of the appropriate operating subsidiary of LICENSEE to which this Agreement relates.  Said books and the supporting data shall be open, to the extent relevant to the licenses granted hereunder, at all reasonable times for three (3) years following the end of the calendar year to which they pertain, to the inspection of ACL or its agents for the purpose of verifying LICENSEE’s royalty statements or compliance in other respects with this Agreement.   The cost of such inspection by ACL shall be at ACL’s expense .  If, based on the results of such inspection, additional payments are owed by LICENSEE under this Agreement, such additional payments shall be made within sixty (60) days after the date on which such inspection report is delivered to LICENSEE.
 

 7.2
 LICENSEE shall report to ACL the date of any event that triggers a milestone payment and the date of First Commercial Sale of a Licensed Product or Licensed Process in each country within thirty (30) days of occurrence.
 

 7.3
 After the First Commercial Sale of a Licensed Product or Licensed Process, LICENSEE shall, within sixty (60) days after each December 31 of each year, deliver to ACL true and accurate reports, giving such particulars of the business conducted by LICENSEE and its Sublicensees with respect to the Licensed Products or Licensed Processes during the preceding twelve-month period under this Agreement as shall be pertinent to a royalty accounting hereunder.  With each such report submitted, LICENSEE shall pay to ACL the royalties and other amounts then due and payable under this Agreement.  If no royalties or other amounts shall be due, LICENSEE shall so report.
 

 ARTICLE 8 – PATENT PROSECUTION
 
  8.1 
  LICENSEE shall reimburse ACL for the maintenance fees and associated costs incurred in maintenance of the United States Patent Listed in Appendix A in the amount of $19,391.67. 
 

 ARTICLE 9 - INFRINGEMENT
 

 In the event of any action for infringement, or institution of any proceedings challenging the validity of any of the patents under the Patent Rights in the Licensed Field, LICENSEE shall 
 

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 have the right, but not the obligation, at its own expense and in its own name, to prosecute actions or defend proceedings.  ACL will assist LICENSEE in actions or proceedings, if so requested, and will lend its name to actions or proceedings if required by LICENSEE or by law.  If LICENSEE elects not to bring any action for infringement of or defend any proceedings challenging the validity of any of the patents under the Patent Rights as aforesaid, ACL shall have the right but not the obligation to bring action or defend proceedings in its own name and at its own expense.  LICENSEE shall assist ACL in such actions or proceedings, if so requested, and will lend its name to actions or proceedings if required by ACL or by law.  In the event of a recovery with respect to an action for infringement, ACL and LICENSEE shall first be reimbursed for costs of prosecuting or defending the action, and any resulting balance shall be paid seventy percent (70%) to the Party defending or prosecuting the action and thirty percent (30%) to the other Party. 
 

 ARTICLE 10 – PRODUCT LIABILITY
 

 LICENSEE shall at all times during the term of this Agreement and thereafter, indemnify, defend, and hold ACL, its trustees, directors, officers, employees, and affiliates, harmless against all claims, proceedings, demands, and liabilities of any kind whatsoever, including legal expenses and reasonable attorneys’ fees, arising out of the death of or injury to any person or persons or out of any damage to property, or resulting from the production, manufacture, sale, use, consumption or advertisement of the Licensed Products or Licensed Processes or arising from any obligation of LICENSEE hereunder, excepting only claims that the Patent Rights infringe third party intellectual property and any claims arising out of negligence or willful misconduct of ACL, its trustees, directors, officers, employees, and affiliates.
 

 ARTICLE 11 – ASSIGNMENT
 

 Neither party may assign this Agreement or any part hereof without the express written consent of the other, which consent shall not be unreasonably withheld. LICENSEE may, upon written notice, assign this Agreement without consent in connection with the sale or transfer of all or substantially all of LICENSEE's equity and assets related to the subject matter of this Agreement, provided that such assignee agrees in writing to be bound by all the terms and conditions of this Agreement.  Failure of assignee to so agree shall be considered a material breach and grounds to terminate this Agreement by ACL pursuant to Section 13.2.
 

 ARTICLE 12 - DISPUTE RESOLUTION
 

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 Except for the right of either Party to apply to a court of competent jurisdiction for a temporary restraining order, a preliminary injunction, or other equitable relief to preserve the status quo or prevent irreparable harm, any and all claims, disputes, or controversies arising under, out of, or in connection with this Agreement (including the validity of any patent within Patent Rights) which the Parties shall be unable to resolve within sixty (60) days shall be mediated in good faith.  The Party raising such dispute shall promptly advise the other Party of such claim, dispute, or controversy in writing, which describes in reasonable detail the nature of such dispute.  By not later than fifteen (15) business days after recipient has received such notice of dispute, each Party shall have selected for itself a representative who shall have the authority to bind such Party and shall additionally have advised the other Party in writing of the name and title of such representative.  By not later than thirty (30) business days after such notice of dispute, the Party against whom the dispute shall be raised shall select a mediation firm and such representatives shall schedule a date with such firm for a mediation hearing.  The Parties shall enter into good faith mediation and shall share the costs equally.  If the representatives of the Parties have not been able to resolve the dispute within thirty (30) business days after such mediation hearing, the Parties shall have the right to pursue any other remedies legally available to resolve such dispute and any suit relating to this Agreement shall be brought in the State of Delaware.  
 

 ARTICLE 13 - TERM AND TERMINATION
 

 13.1
 The Term of this Agreement shall extend from the Effective Date until expiration of the patent under the Patent Rights.
 

 13.2
 Upon any breach of, or default under, this License Agreement by LICENSEE, ACL may terminate this License Agreement by ninety (90) days written notice to LICENSEE.  Said notice shall become effective at the end of such period unless during said period LICENSEE shall cure such defect or default.
 

 13.3
 LICENSEE shall have the right to terminate this Agreement at any time upon ninety (90) days written notice to ACL.  Such notice shall become effective at the ends of such period unless previously withdrawn by LICENSEE.
 

 

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 13.4
 ACL shall have the right to terminate this Agreement upon ninety (90) days written notice to LICENSEE if LICENSEE challenges the validity of any patent within Patent Rights in a court of competent jurisdiction. 
 

 13.5
 ACL shall have the right to terminate this Agreement within ninety (90) days after consummation of a Change of Control Transaction.  "Change of Control Transaction" means any acquisition, consolidation, merger, reorganization or other transaction or series of transactions in which greater than fifty percent (50%) of the voting power of Licensee is transferred to a third party.  
 

 13.6
 Upon termination of this Agreement for any cause, nothing herein shall be construed to release either Party of any obligation matured prior to the effective date of such termination.  LICENSEE may, after the effective date of such termination, sell all Licensed Products and parts thereof that it may have on hand at the date of termination, provided that it pays earned royalties thereon as provided in this Agreement.
 

 13.7
 Termination of this Agreement shall not affect any rights or obligations accrued prior to the effective date of such termination and specifically LICENSEE’s obligation to pay all royalties and other payments specified by Articles 6 and 7.  The following provisions shall survive any termination:  Article 2, Article 7, Article 10, Article 12, Sections 13.5, Article 14, Article 15, and Article 16.  
 

 ARTICLE 14 – PAYMENTS, NOTICES AND OTHER COMMUNICATIONS
 

 Any payment, notice, or other communication pursuant to this Agreement shall be sufficiently made or given on the date of mailing if sent to such Party by Email, certified first class mail, postage prepaid, addressed to it at its address below:
  
 LICENSEE:
 Accurexa, Inc.
 113 Barksdale 
 Newark, DE 19711
 

 Accelerating Combination Therapies, LLC
 1550 Orleans St.
 Baltimore, Maryland  21287
 

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 ARTICLE 15 CONFIDENTIALITY
 

 15.1
 Confidential Information.
 “Confidential Information” shall mean any non-public information of a Party, including but not limited to business plans, products, technical data, specifications, documentation, rules and procedures, contracts, presentations, know-how, product plans, business methods, product functionality, services, data, customers, markets, competitive analysis, databases, formats, methodologies, applications, developments, inventions, processes, payments, delivery and inspection of procedures, designs, drawings, algorithms, formulas, and information related to intellectual property, engineering, marketing, and finance.
 

 15.2 
 Disclosures by ACL.   ACL may, from time to time, disclose its Confidential Information to LICENSEE. LICENSEE shall not disclose ACL’s Confidential Information to any third party except as follows:
 

 (i) 
 to its Affiliates, Sublicensees, and any employees, officers, directors, contractors, or other agents or representatives of LICENSEE or any of the foregoing for purposes related to the exercise of the rights granted under this Agreement; or
 

 (ii)
 under conditions of confidentiality to prospective or actual investors, lenders, acquirors, sublicensees, strategic partners, and investment bankers in connection with its financing, acquisition, licensing, development, commercialization, and stockholder relations activities; or
 

 (iii)
 with the prior written consent of ACL,
 

 provided that, LICENSEE requires such recipients of ACL’s Confidential Information to protect the confidentiality of such Confidential Information. LICENSEE may also disclose ACL’s Confidential Information as it reasonably deems necessary or advisable in connection with the prosecution, maintenance, defense and enforcement of the PATENT RIGHTS or in connection with the pursuit or maintenance of regulatory or marketing approvals for, or commercialization of, Licensed Products or Licensed Processes.
 

 15.3 
 Disclosures by LICENSEE.  LICENSEE, through its employees or other agents, may disclose its Confidential Information to ACL. ACL (i) shall not disclose such Confidential Information to any third party, (ii) shall treat such information with the same degree of care as it 
 

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 treats its own confidential information, which shall be no less than reasonable, and (iii) shall only use such information for purposes of enforcing its rights under this Agreement.  
 

 15.4 
 Limits on Confidential Information.  Confidential Information under this Agreement shall not include information:
 

 (i)
 which at the time of disclosure is in the public domain;
 

 (ii)
 which, after disclosure, becomes part of the public domain by publication or otherwise, except by the breach of this Agreement by either Party;
 

 (iii) 
 which was (a) in the recipient Party’s possession in documentary form at the time of disclosure or (b) independently developed by or for the recipient Party by any person or persons who had no knowledge or benefit of the other Party’s Confidential Information, as evidenced by written documentation; and
 

 (iv)
 which a Party received without obligation of confidentiality or limitation on use from a third party who had the lawful right to disclose such information and who did not obtain such information under an obligation of confidentiality to either Party; and
 

 Confidential Information disclosed under this Agreement shall not be deemed to be within the foregoing exceptions merely because such information is embraced by more general information in the public domain or in the possession of a Party. In addition, any combination of features shall not be deemed to be within the foregoing exceptions merely because individual features are in the public domain or in the Party’s possession, but only if the combination itself and its principle of operation are in the public domain or in the Party’s possession.
 

 15.5
 Allowed Disclosures.  Notwithstanding any other provision of this Agreement, disclosure by a recipient Party of the other Party’s Confidential Information shall not be precluded if such disclosure:
 

 (i)
 is in response to a valid order of a court or to another governmental body of the United States or any political subdivision thereof; or
 

 (ii)
 is required by law or regulation;
 

 

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 provided, however, that, in either case, the Party required to make such disclosures shall (1) have made reasonable effort to give prompt notice to the other Party to permit it to seek a protective order or grant of confidentiality, (2) cooperate with the other Party’s efforts to seek confidential or protective treatment of such information, as reasonably requested by the other Party, and (3) minimize the extent of any such disclosure.
 

 ARTICLE 16 – GENERAL
 

 16.1
 Legal Compliance.  LICENSEE shall comply with all applicable federal, state, and local laws and regulations in connection with its activities pursuant to this Agreement.
 

 16.2
 Patent Marking.  LICENSEE shall mark, and shall require Sublicensees to mark, all Licensed Products with the numbers of all patents included in Licensed Patents that cover the Licensed Products.  Without limiting the foregoing, all Licensed Products shall be marked in such a manner as to conform with the patent marking notices required by the law of any country where such Licensed Products are made, sold, used, or shipped, including, but not limited to, the applicable patent laws of that country.
 

 16.3   Waiver.  Neither Party may waive or release any of its rights or interests in this Agreement except in writing.  Failure to assert any right arising from this Agreement shall not be deemed or construed to be a waiver of such right.
 

 16.4
 Integration.  This Agreement constitutes the entire agreement between the Parties relating to the subject matter thereof, and all prior negotiations, representations, agreements, and understandings are merged into, extinguished by, and completely expressed by it.
 

 16.5   Effect of Agreement.  This Agreement is binding upon the Parties hereto, and shall inure to the benefit of the Parties, and their respective agents, attorneys, insurers, employees, representatives, officers, directors, partners, principals, divisions, indemnitors, indemnitees, parent companies, grandparent companies, subsidiaries, affiliates, associates, consultants, assigns, heirs, predecessors, and successors in interest, successor trusts, trustees, shareholders and any trustee in bankruptcy or debtor in possession.
 

 16.6   Construction and Interpretation.  This Agreement and its effect are subject to and shall be construed and enforced in accordance with the laws of the State of Delaware without regard to its choice of law principles. The drafting and negotiation of this Agreement have been participated 
 

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 in by counsel for each of the Parties, and any rule of construction to the effect that any ambiguity is to be resolved against the drafting Party shall not be applied to the interpretation of this Agreement.
 

 16.7 
 Severability.  The provisions of this Agreement are severable, and in the event that any provisions of this Agreement shall be determined to be invalid or unenforceable under any controlling body of the law, such invalidity or unenforceability shall not in any way affect the validity or enforceability of the remaining provisions hereof.
  
 16.8    Representation by Counsel.  The Parties hereby acknowledge that counsel has represented each such Party and that this Agreement has been executed with the consent and advice of counsel.
 

 16.9
 Execution and Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original.  All counterparts together shall constitute one and the same original.
 

 16.10   Authority.  Each Party represents and warrants for itself that the individual executing this Agreement on its behalf is authorized to do so and to bind the Party on whose behalf he is signing to the terms, obligations and conditions set forth herein.
 

 16.11   Modification or Amendment.  This Agreement may not be modified or amended except in writing signed by all Parties hereto.
 

 16.12    Further Assurance and Documents.  The Parties, and each of them, agree to execute any and all additional documents and to do all things reasonably necessary to carry out and implement the provisions of this Agreement.
 

 

 

 

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 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their duly authorized representatives.
 

 ACCELERATING COMBINATION THERAPIES, LLC
 ACCUREXA, INC.
 

 

 

 /s/ Henry Brem
 /s/ George Yu
 By:  Henry Brem
 By:  George Yu
 Title:  Member
 Title:  President & CEO
 

 Date:  August 11, 2015
 Date:  August 11, 2015
 

 

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 APPENDIX A
 

 Licensed Patent Rights:
   
 U.S. Patent No. 8,895,597 B2 Combination of Local Temozolomide with Local BCNU
 

 

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 APPENDIX B
 

 US Patent and Trademark Office, Notice of Recordation of Assignment Document, as of August 3, 2015
 

 
 

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