Exhibit 10.5
| REDACTED | |
| *Certain identified information has been excluded from the exhibit because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.* |
PUBLIC HEALTH SERVICE
PATENT LICENSE AGREEMENT –EXCLUSIVE
ThisAgreement is based on the model Patent License Exclusive Agreement adopted by the U.S. Public Health Service (“PHS”) Technology Transfer Policy Board for use by components of the National Institutes of Health (“NIH”), the Centers for Disease Control and Prevention (“CDC”), and the Food and Drug Administration (“FDA”), which are agencies of thePHS within the Department of Health and Human Services(“HHS”).
This Cover Page identifies the Parties to thisAgreement:
The U.S. Department of Health and Human Services, as represented by
The National Institute on Alcohol Abuse and Alcoholism (hereinafter referred to as the “NIAAA”) and
The National Institute on Drug Abuse (hereinafter referred to as the “NIDA”)
(hereinafter referred to as the “IC”) of the
National Institutes of Health (hereinafter referred to as the “NIH”)
and
Vital Spark, Inc.,
hereinafter referred to as the “Licensee”,
having offices at 11 Reuven Shari, Jerusalem, Israel
created and operating under the laws of Delaware, USA
Tax ID No.: 32-0462348
For theIC internal use only:
License Number:
License Application Number:A-034-2016
Serial Number(s) of Licensed Patent(s) or Patent Application(s):
E-140-2014/0 Patent Family
Entitled, “Cannabinoid Receptor Mediating Compounds”
Inventors: George Kunos (NIAAA), Malliga R. Iyer (NIAAA), Resat Cinar (NIAAA), and Kenner C. Rice (NIDA), including PCT Application No. PCT/US2015/029946, filed on May 08, 2015, claiming priority to US Provisional Application No. 61/991,333 filed on May 09, 2014, and corresponding US, AU, CA, EP, CN, IN and JP filings
E-282-2012/0 Patent Family
Entitled, “Cannabinoid Receptor Mediating Compounds”
Inventors: George Kunos (NIAAA), Malliga R. Iyer (NIAAA), Resat Cinar (NIAAA), and Kenner C. Rice (NIDA) including PCT Application No. PCT/US2013/069686, filed on November 12, 2013, claiming priority to U.S. Provisional Patent Application No. 61/725,949 filed on November 13, 2012, and corresponding US, CA, EP, CN, IN and JP filing
E-282-2012/1 Patent Family
Entitled, “Cannabinoid Receptor Mediating Compounds”
Inventors: George Kunos (NIAAA), Malliga R. Iyer (NIAAA), Resat Cinar(NIAAA), andKenner C. Rice (NIDA) including PCT Application No. PCT/US2016/035291, filed on June 01, 2016, claiming priority to US Provisional Application No. 62/171, 179 filed on June 04, 2015
Cooperative Research and Development Agreement (CRADA) Number (if a subject invention):N/A
Additional Remarks: CRADA01638 is pending negotiation between theNIAAA andLicensee.
Public Benefit(s):Commercial development of the CB1/iNOS series of compounds will benefit public health by providing a new therapeutic to treatsystemic sclerosis and sclerodermaand otherskin fibrotic diseases in humans.
This Patent License Agreement, hereinafter referred to as the“Agreement”,consists of this Cover Page, an attachedAgreement,a Signature Page, Appendix A (List of Patent(s) or Patent Application(s)), Appendix B (Fields of Use and Territory), Appendix C (Royalties), Appendix D (Benchmarks and Performance), Appendix E (Commercial Development Plan), Appendix F (Example Royalty Report), and Appendix G (Royalty Payment Options).
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TheIC and theLicensee agree as follows:
| 1. | BACKGROUND |
| 1.1 | In the course of conducting biomedical and behavioral research, theIC investigators made inventions that may have commercial applicability. |
| 1.2 | By assignment of rights fromICemployees and other inventors,HHS,on behalf of theGovernment,owns intellectual property rights claimed in any United States or foreign patent applications or patents corresponding to the assigned inventions.HHSalso owns any tangible embodiments of these inventions actually reduced to practice by theIC. |
| 1.3 | The Secretary ofHHShas delegated to theIC the authority to enter into thisAgreementfor the licensing of rights to these inventions. |
| 1.4 | TheICdesires to transfer these inventions to the private sector through commercialization licenses to facilitate the commercial development of products and processes for public use and benefit. |
| 1.5 | TheLicenseedesires to acquire commercialization rights to certain of these inventions in order to develop processes, methods, or marketable products for public use and benefit. |
| 2. | DEFINITIONS |
| 2.1 | “Affiliate(s)”means a corporation or other business entity, which directly or indirectly is controlled by or controls, or is under common control with theLicensee.For this purpose, the term “control” shall mean ownership of more than fifty percent (50%) of the voting stock or other ownership interest of the corporation or other business entity, or the power to elect or appoint more than fifty percent (50%) of the members of the governing body of the corporation or other business entity. |
| 2.2 | “Benchmarks”mean the performance milestones that are set forth in Appendix D. |
| 2.3 | “Commercial Development Plan”means the written commercialization plan attached as Appendix E. |
| 2.4 | “CRADA”means a Cooperative Research and Development Agreement. |
| 2.5 | “FDA” means the Food and Drug Administration. |
| 2.6 | “First Commercial Sale”means the initial transfer by or on behalf of theLicenseeor its sublicensees of theLicensed Products or the initial practice of aLicensed Process by or on behalf of theLicenseeor its sublicensees in exchange for cash or some equivalent to which value can be assigned for the purpose of determiningNet Sales. |
| 2.7 | “Government”means the Government of the United States of America. |
| 2.8 | “Licensed Fields of Use”means the fields of use identified in Appendix B. |
| 2.9 | “Licensed Patent Rights”shall mean: |
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| (a) | Patent applications (including provisional patent applications and PCT patent applications) or patents listed in Appendix A, all divisions and continuations of these applications, all patents issuing from these applications, divisions, and continuations, and any reissues, reexaminations, and extensions of these patents; |
| (b) | to the extent that the following contain one or more claims directed to the invention or inventions disclosed in 2.9(a): |
| (i) | continuations-in-part of 2.9(a); |
| (ii) | all divisions and continuations of these continuations-in-part; |
| (iii) | all patents issuing from these continuations-in-part, divisions, and continuations; |
| (iv) | priority patent application(s) of 2.9(a); and |
| (v) | any reissues, reexaminations, and extensions of these patents; |
| (c) | to the extent that the following contain one or more claims directed to the invention or inventions disclosed in 2.9(a): all counterpart foreign and U.S. patent applications and patents to 2.9(a) and 2.9(b), including those listed in Appendix A; and |
| (d) | Licensed Patent Rights shallnot include 2.9(b) or 2.9(c) to the extent that they contain one or more claims directed to new matter which is not the subject matter disclosed in 2.9(a). |
| 2.10 | “Licensed Processes”means processes which, in the course of being practiced, would be within the scope of one or more claims of theLicensed Patent Rights that have not been held unpatentable, invalid or unenforceable by an unappealed or unappealable judgment of a court of competent jurisdiction. |
| 2.11 | “Licensed Products”means tangible materials which, in the course of manufacture, use, sale, or importation, would be within the scope of one or more claims of theLicensed Patent Rights that have not been held unpatentable, invalid or unenforceable by an unappealed or unappealable judgment of a court of competent jurisdiction. |
| 2.12 | “Licensed Territory”means the geographical area identified in Appendix B. |
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| 2.13 | “Net Sales”means the total gross receipts for sales ofLicensed Products or practice ofLicensed Processes by or on behalf of theLicenseeor its sublicensees, and from leasing, renting, or otherwise making theLicensed Products available to others without sale or other dispositions, whether invoiced or not, less returns and allowances, distribution cost, packing costs, insurance costs, freight out, taxes or excise duties imposed on the transaction (if separately invoiced), and wholesaler and cash discounts in amounts customary in the trade to the extent actually granted. No deductions shall be made for commissions paid to individuals, whether they are with independent sales agencies or regularly employed by theLicensee,or sublicensees, and on its payroll, or for the cost of collections.Net Sales shall specifically exclude consideration received from the transfer ofLicensed Products if the transfer is: (a) as promotional samples, and (b) as donations (for example, to non-profit institutions, international donor agencies, non-governmental organizations (NGOs), charitable organizations or government agencies for non-commercial purposes). |
| 2.14 | “Practical Application”means to manufacture in the case of a composition or product, to practice in the case of a process or method, or to operate in the case of a machine or system; and in each case, under these conditions as to establish that the invention is being utilized and that its benefits are to the extent permitted by law orGovernmentregulations available to the public on reasonable terms. |
| 2.15 | “Research License”means a nontransferable, nonexclusive license to make and to use theLicensed Products or theLicensed Processesas defined by theLicensed Patent Rights for purposes of research and not for purposes of commercial manufacture or distribution or in lieu of purchase. |
| 2.16 | “Third Party Applicant”means anynon-Licenseeapplicant from whomICreceives a license application forLicensed Patent Rightsin theLicensed Fields of Use. |
| 3. | GRANT OF RIGHTS |
| 3.1 | TheIC hereby grants and theLicenseeaccepts, subject to the terms and conditions of thisAgreement,an exclusive license under theLicensed Patent Rights in theLicensed Territory to make and have made, to use and have used, to sell and have sold, to offer to sell, and to import and export anyLicensed Products in theLicensed Fields of Use and to practice and have practiced anyLicensed Process(es) in theLicensed Fields of Use. |
| 3.2 | ThisAgreementconfers no license or rights by implication, estoppel, or otherwise under any patent applications or patents of theIC other than theLicensed Patent Rights regardless of whether these patents are dominant or subordinate to theLicensed Patent Rights. |
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| 3.3 | IfICreceives an acceptable written license application from aThird Party Applicant for commercial development ofLicensed Products orLicensed Processes,as they pertain toLicensed Patent Rights which is included in the scope of theLicensed Field of Use under thisAgreementand for which the proposed commercial development is not specifically addressed inLicensee'sthen-currentCommercial Development Plan,IC shall notifyLicensee,in writing, of the existence of theThird Party Applicant'slicense application, identifying the scientific, clinical or technical basis for its belief that such commercial development should occur. Upon receipt of such written notice,Licenseeshall have the right within ninety (90) days to amend itsCommercial Development Plan in a manner acceptable toICincluding revisedBenchmarks to be incorporated into Appendix D. Acceptance of said amendment to saidCommercial Development Plan byIC shall take into accountLicensee'songoing efforts and normal drug development standards for obtainingFDAapproval for multiple indication prophylactic and therapeutic products. IfLicenseedoes not amend itsCommercial Development Plan in a manner acceptable toICto include a clinical research and development program for the proposed commercial development of saidLicensed Products orLicensed Processesof such third party including revisedBenchmarksto be incorporated into Appendix D;ICshall remove saidLicensed ProductsorLicensed Processes fromLicensed Fields of Use,andIC shall be free to license saidLicensed Products orLicensed Processes to said third party. |
| 4. | SUBLICENSING |
| 4.1 | Upon written approval, which shall include prior review of any sublicense agreement by theIC and which shall not be unreasonably withheld, theLicenseemay enter into sublicensing agreements under theLicensed Patent Rights.IC shall provide its response within thirty (30) days as of the written request made by theLicensee.A lack of response from theIC within thirty (30) days of receipt of said written request by theICshall be deemed an approval by theIC. |
| 4.2 | TheLicenseeagrees that any sublicenses granted by it shall provide that the obligations to theIC of Paragraphs 5.1-5.4, 8.1, 10.1, 10.2, 12.5, and 13.8-13.10 of thisAgreementshall be binding upon the sublicensee as if it were a party to thisAgreement.TheLicensee further agrees to attach copies of these Paragraphs to all sublicense agreements. |
| 4.3 | Any sublicenses granted by theLicenseeshall provide for the termination of the sublicense, or the conversion to a license directly between the sublicensees and theIC, at the option of the sublicensee, upon termination of thisAgreementunder Article 13. This conversion is subject to theIC approval and contingent upon acceptance by the sublicensee of the remaining provisions of thisAgreement. |
| 4.4 | TheLicenseeagrees to forward to theIC a complete copy of each fully executed sublicense agreement postmarked within thirty (30) days of the execution of the agreement. To the extent permitted by law, theIC agrees to maintain each sublicense agreement in confidence. |
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| 5. | STATUTORY AND NIH REQUIREMENTS AND RESERVED GOVERNMENT RIGHTS |
| 5.1 | (a) TheICreserves on behalf of theGovernmentan irrevocable, nonexclusive, nontransferable, royalty-free license for the practice of all inventions licensed under theLicensed Patent Rights throughout the world by or on behalf of the Governmentand on behalf of any foreign government or international organization pursuant to any existing or future treaty or agreement to which theGovernmentis a signatory. Prior to theFirstCommercial Sale,theLicensee agrees to provide theIC with commercially reasonable quantities of theLicensed Products or materials made through theLicensed Processes forIC research use; and |
| (b) in the event that theLicensed Patent Rights are Subject Inventions made underCRADAtheLicensee grants to theGovernment,pursuant to 15 U.S.C. §3710a(b)(1)(A), a nonexclusive, nontransferable, irrevocable, paid-up license to practice theLicensed Patent Rights or have theLicensed Patent Rights practiced throughout the world by or on behalf of theGovernment.In the exercise of this license, theGovernmentshall not publicly disclose trade secrets or commercial or financial information that is privileged or confidential within the meaning of 5 U.S.C. §552(b)(4) or which would be considered as such if it had been obtained from a non-Federal party. Prior to theFirst Commercial Sale,theLicensee agrees to provide theIC with commercially reasonable quantities of theLicensed Productsor materials made through theLicensed Processes forIC research use. |
| 5.2 | TheLicenseeagrees that products used or sold in the United States embodying theLicensed Products or produced through use of theLicensed Processes shall be manufactured substantially in the United States, unless a written waiver is obtained in advance from theIC. |
| 5.3 | TheLicenseeacknowledges that theICmay enter into futureCRADAsunder the Federal Technology Transfer Act of 1986 that relate to the subject matter of thisAgreement.TheLicensee agrees not to unreasonably deny requests for aResearch License from future collaborators with theICwhen acquiring these rights is necessary in order to make aCRADAproject feasible, provided that, with respect to suchResearch License,Licensee shall not be required to disclosed any of its confidential information and trade secrets. TheLicenseemay request an opportunity to join as a party to the proposedCRADA. |
| 5.4 |
| (a) | In addition to the reserved license of Paragraph 5.1, theIC reserves the right to grantResearch Licenses directly or to require theLicenseeto grantResearch Licenses on reasonable terms, provided however thatLicenseeshall not be required to disclose any confidential information and trade secrets. |
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| (b) | The purpose of theseResearch Licenses is to encourage basic research, whether conducted at an academic or corporate facility. In order to safeguard theLicensed Patent Rights,however, theIC shall consult with theLicenseebefore granting to commercial entities aResearch License or providing to them research samples of materials made through theLicensed Processes; and |
| (c) | in exceptional circumstances, and in the event that theLicensed Patent Rights are Subject Inventions made under aCRADA,theGovernment,pursuant to 15 U.S.C. §3710a(b)(1)(B), retains the right to require theLicenseeto grant to a responsible applicant a nonexclusive, partially exclusive, or exclusive sublicense to use theLicensed Patent Rights in theLicensed Field of Use on terms that are reasonable under the circumstances, or if theLicenseefails to grant this license, theGovernmentretains the right to grant the license itself. The exercise of these rights by theGovernmentshall only be in exceptional circumstances and only if theGovernmentdetermines: |
| (i) | the action is necessary to meet health or safety needs that are not reasonably satisfied by theLicensee; |
| (ii) | the action is necessary to meet requirements for public use specified by Federal regulations, and these requirements are not reasonably satisfied by theLicensee;or |
| (iii) | theLicenseehas failed to comply with an agreement containing provisions described in 15 U.S.C. §3710a(c)(4)(B); and |
| (d) | the determination made by theGovernmentunder this Paragraph 5.4 is subject to administrative appeal and judicial review under 35 U.S.C. §203(b). |
| 6. | ROYALTIES AND REIMBURSEMENT |
| 6.1 | TheLicenseeagrees to pay theIC a noncreditable, nonrefundable license issue royalty as set forth in Appendix C. |
| 6.2 | TheLicenseeagrees to pay theIC a nonrefundable minimum annual royalty as set forth in Appendix C. |
| 6.3 | TheLicenseeagrees to pay theIC earned royalties as set forth in Appendix C. |
| 6.4 | TheLicenseeagrees to pay theIC benchmark royalties as set forth in Appendix C. |
| 6.5 | TheLicenseeagrees to pay theIC sublicensing royalties as set forth in Appendix C. |
| 6.6 | A patent or patent application licensed under thisAgreementshall cease to fall within theLicensed Patent Rights for the purpose of computing earned royalty payments in any given country on the earliest of the dates that: |
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| (a) | the application has been abandoned and not continued; |
| (b) | the patent expires or irrevocably lapses, or |
| (c) | the patent has been held to be invalid or unenforceable by an unappealed or unappealable decision of a court of competent jurisdiction or administrative agency. |
| 6.7 | No multiple royalties shall be payable because anyLicensed Products orLicensed Processesare covered by more than one of theLicensed Patent Rights. |
| 6.8 | On sales of theLicensed Products by theLicensee to sublicensees or on sales made in other than an arms-length transaction, the value of theNet Sales attributed under this Article 6 to this transaction shall be that which would have been received in an arms-length transaction, based on sales of like quantity and quality products on or about the time of this transaction. |
| 6.9 | With regard to unreimbursed expenses associated with the preparation, filing, prosecution, and maintenance of all patent applications and patents included within theLicensed Patent Rights and paid by theICprior to the effective date of thisAgreement,theLicensee shall pay theIC,as an additional royalty, within sixty (60) days of theIC’ssubmission of a statement and request for payment to theLicensee,an amount equivalent to these unreimbursed expenses previously paid by theIC.When other-exclusive-licenses are granted to theLicensed Patent Rights,theLicensee will only be liable to pay its respective share resulting from such unreimbursed expenses being equally divided. |
| 6.10 | With regard to unreimbursed expenses associated with the preparation, filing, prosecution, and maintenance of all patent applications and patents included within theLicensed Patent Rights and paid by theIC on or after the effective date of thisAgreement,theIC, at its sole option, may require the Licensee to pay the IC on an annual basis, within sixty (60) days of the IC’s submission of a statement and request for payment, a royalty amount equivalent to these unreimbursed expenses paid during the previous calendar year(s).IC shall have the right to requireLicensee |
| (a) | to pay these unreimbursed expenses directly to the law firm employed by theIC to handle these functions, however, in this event, theIC and not theLicenseeshall be the client of the law firm; or |
| (b) | in limited circumstances, theLicenseemay be given the right to assume responsibility for the preparation, filing, prosecution, or maintenance of any patent application or patent included with theLicensed Patent Rights.In that event, theLicenseeshall directly pay the attorneys or agents engaged to prepare, file, prosecute, or maintain these patent applications or patents and shall provide theIC with copies of each invoice associated with these services as well as documentation that these invoices have been paid. |
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| 6.11 | TheICagrees, upon written request, to provide theLicenseewith summaries of patent prosecution invoices for which theIChas requested payment from theLicenseeunder Paragraphs 6.9 and 6.10. TheLicenseeagrees that all information provided by theICrelated to patent prosecution costs shall be treated as confidential commercial information and shall not be released to a third party except as required by law or a court of competent jurisdiction. |
| 6.12 | TheLicenseemay elect to surrender its rights in any country of theLicensed Territory under any of theLicensed Patent Rights upon ninety (90) days written notice to the IC and owe no payment obligation under Paragraph 6.10 for patent-related expenses paid in that country after ninety (90) days of the effective date of the written notice. |
| 7. | PATENT FILING, PROSECUTION, AND MAINTENANCE |
| 7.1 | Except as otherwise provided in this Article 7, theICagrees to take responsibility for, but to consult with, theLicenseein the preparation, filing, prosecution, and maintenance of any and all patent applications or patents included in theLicensed Patent Rights and shall furnish copies of relevant patent-related documents to theLicensee. |
| 7.2 | Upon theIC’swritten request, theLicenseeshall assume the responsibility for the preparation, filing, prosecution, and maintenance of any and all patent applications or patents included in theLicensed Patent Rights and shall, on an ongoing basis, promptly furnish copies of all patent-related documents to theIC.In this event, theLicenseeshall, subject to the prior approval of theIC,select registered patent attorneys or patent agents to provide these services on behalf of theLicenseeand theIC.TheICshall provide appropriate powers of attorney and other documents necessary to undertake this action to the patent attorneys or patent agents providing these services. TheLicenseeand its attorneys or agents shall consult with theICin all aspects of the preparation, filing, prosecution and maintenance of patent applications and patents included within theLicensed Patent Rights and shall provide theIC sufficient opportunity to comment on any document that theLicenseeintends to file or to cause to be filed with the relevant intellectual property or patent office. |
| 7.3 | At any time, theICmay provide theLicensee with written notice that theIC wishes to assume control of the preparation, filing, prosecution, and maintenance of any and all patent applications or patents included in theLicensed Patent Rights.If theICelects to reassume these responsibilities, theLicensee agrees to cooperate fully with theIC,its attorneys, and agents in the preparation, filing, prosecution, and maintenance of any andall patent applications or patents included in theLicensed Patent Rightsand to providetheICwith complete copies of any and all documents or other materials that theICdeems necessary to undertake such responsibilities. TheLicenseeshall be responsible for all costs associated with transferring patent prosecution responsibilities to an attorney or agent of theIC’s choice. |
| 7.4 | Each party shall promptly inform the other as to all matters that come to its attention that may affect the preparation, filing, prosecution, or maintenance of theLicensed Patent Rights and permit each other to provide comments and suggestions with respect to the preparation, filing, prosecution, and maintenance of theLicensed Patent Rights,which comments and suggestions shall be considered by the other party in good faith. |
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| 8. | RECORD KEEPING |
| 8.1 | TheLicenseeagrees to keep accurate and correct records of theLicensed Products made, used, sold, or imported and theLicensed Processes practiced under thisAgreementappropriate to determine the amount of royalties due theIC.These records shall be retained for at least five (5) years following a given reporting period and shall be available, subject to a reasonable prior notice to theLicensee,during normal business hours for inspection, at the expense of theIC,by an accountant or other designated auditor selected by theICfor the sole purpose of verifying reports and royalty payments hereunder. The accountant or auditor shall only disclose to theICinformation relating to the accuracy of reports and royalty payments made under thisAgreement.If an inspection shows an underreporting or underpayment in excess of five percent (5%) for any twelve (12) month period, then theLicenseeshall reimburse theICfor the cost of the inspection at the time theLicenseepays the unreported royalties, including any additional royalties as required by Paragraph 9.8. All royalty payments required under this Paragraph shall be due within sixty (60) days of the date theICprovides to theLicenseenotice of the payment due. |
| 9. | REPORTS ON PROGRESS, BENCHMARKS, SALES, AND PAYMENTS |
| 9.1 | Prior to signing thisAgreement,theLicensee has provided theICwith theCommercial Development Plan in Appendix E, under which theLicenseeintends to bring the subject matter of theLicensed Patent Rights to the point ofPractical Application.ThisCommercial Development Plan is hereby incorporated by reference into thisAgreement.Based on this plan, performanceBenchmarksare determined as specified in Appendix D. |
| 9.2 | TheLicenseeshall provide written annual reports on its product development progress or efforts to commercialize under theCommercial Development Plan for each of theLicensed Fields of Use within sixty (60) days after December 31of each calendar year. These progress reports shall include, but not be limited to: progress on research and development, status of applications for regulatory approvals, manufacture and status of sublicensing, marketing, importing, and sales during the preceding calendar year, as well as, plans for the present calendar year. TheICalso encourages these reports to include information on any of theLicensee'spublic service activities that relate to theLicensed Patent Rights.If reported progress differs from that projected in theCommercial Development Plan andBenchmarks,theLicensee shall explain the reasons for these differences. In the annual report, theLicenseemay propose amendments to theCommercial Development Plan,acceptance of which by theICmay not be denied unreasonably. TheLicenseeagrees to provide any additional information reasonably required by theICto evaluate theLicensee'sperformance under thisAgreement.TheLicensee may amend theBenchmarksat any time upon written approval by theIC.TheIC shall not unreasonably withhold approval of any request of theLicenseeto extend the time periods of this schedule if the request is supported by a reasonable showing by theLicenseeof diligence in its performance under theCommercial Development Plan and toward bringing theLicensed Products to the point ofPractical Applicationas defined in 37 C.F.R. §404.3(d). TheLicenseeshall amend theCommercial Development Plan andBenchmarksat the request of theICto address anyLicensed Fields of Use not specifically addressed in the plan originally submitted. |
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| 9.3 | TheLicenseeshall report to theIC the dates for achievingBenchmarks specified in AppendixDand theFirst Commercial Sale in each country in theLicensed Territory within thirty (30) days of such occurrences. |
| 9.4 | TheLicenseeshall submit to theIC, within sixty (60) days after each calendar half-year ending June 30 and December 31, a royalty report, as described in the example in Appendix F, setting forth for the preceding half-year period the amount of theLicensed Products sold orLicensed Processes practiced by or on behalf of theLicenseein each country within theLicensed Territory,theNet Sales,and the amount of royalty accordingly due. With each royalty report, theLicenseeshall submit payment of earned royalties due. If no earned royalties are due to theIC for any reporting period, the written report shall so state. The royalty report shall be certified as correct by an authorized officer of theLicenseeand shall include a detailed listing of all deductions made under Paragraph 2.13 to determineNet Sales made under Article 6 to determine royalties due. The royalty report shall also identify the site of manufacture for theLicensed Product(s) sold in the United States. |
| 9.5 | TheLicenseeagrees to forward semi-annually to theIC a copy of these reports received by theLicenseefrom its sublicensees during the preceding half-year period as shall be pertinent to a royalty accounting to theICby theLicensee for activities under the sublicense. |
| 9.6 | Royalties due under Article 6 shall be paid in U.S. dollars and payment options are listed in Appendix G. For conversion of foreign currency to U.S. dollars, the conversion rate shall be the New York foreign exchange rate quoted inThe Wall Street Journalon the day that the payment is due. Any loss of exchange, value, taxes, or other expenses incurred in the transfer or conversion to U.S. dollars shall be paid entirely by theLicensee.The royalty report required by Paragraph 9.4 shall be mailed to theICat its address forAgreementNotices indicated on the Signature Page. |
| 9.7 | TheLicenseeshall be solely responsible for determining if any tax on royalty income is owed outside the United States and shall pay the tax and be responsible for all filings with appropriate agencies of foreign governments. |
| 9.8 | Additional royalties may be assessed by theIC on any payment that is more than ninety (90) days overdue at the rate of one percent (1%) per month. This one percent (1%) per month rate may be applied retroactively from the original due date until the date of receipt by theIC of the overdue payment and additional royalties. The payment of anyadditional royalties shall not prevent the IC from exercising any other rights it may haveas a consequence of the lateness of any payment. |
| 9.9 | All plans and reports required by this Article 9 and marked “confidential” by theLicenseeshall, to the extent permitted by law, be treated by theIC as commercial and financial information obtained from a person and as privileged and confidential, and any proposed disclosure of these records by theIC under the Freedom of Information Act (FOIA), 5 U.S.C. §552 shall be subject to the predisclosure notification requirements of 45 C.F.R. §5.65(d). |
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| 10. | PERFORMANCE |
| 10.1 | TheLicenseeshall use its reasonable commercial efforts to bring theLicensed Products and theLicensed ProcessestoPractical Application.“Reasonable commercial efforts” for the purposes of this provision shall include adherence to theCommercial Development Plan in Appendix E and performance of theBenchmarksin Appendix D. The efforts of a sublicensee shall be considered the efforts of theLicensee. |
| 10.2 | Upon theFirst Commercial Sale,until the expiration or termination of thisAgreement,theLicensee shall use its reasonable commercial efforts to make theLicensed Products and theLicensed Processesreasonably accessible to the United States public. |
| 10.3 | TheLicenseeagrees, after itsFirst Commercial Sale and to the extent commercially reasonable, to make reasonable quantities of theLicensed Products or materials produced through the use of theLicensed Processes available to patient assistance programs. TheICagrees that such a commitment byLicenseeshall not create an undue commercial burden uponLicensee,i.e., delay and/or materially affect the commercial development of theLicensed Product(s) orLicensed Process(es). Licensee will not be required to pay any earned royalty under Paragraph 6.3 of thisAgreementwith respect to anyLicensed Productsor materials used inLicensed Processes that are made available pursuant to this Paragraph 10.3. |
| 10.4 | TheLicenseeagrees, after itsFirst Commercial Sale and as part of its marketing and product promotion, to develop educational materials (e.g., brochures, website, etc.) directed to patients and physicians detailing theLicensed Products or medical aspects of the prophylactic and therapeutic uses of theLicensed Products. |
| 10.5 | TheLicenseeagrees to supply, to the Mailing Address forAgreementNotices indicated on the Signature Page, the Office of Technology Transfer,NIHwith inert samples of theLicensed Productsor theLicensed Processesor their packaging for educational and display purposes only. |
| 11. | INFRINGEMENT AND PATENT ENFORCEMENT |
| 11.1 | TheICand theLicensee agree to notify each other promptly of each infringement or possible infringement of theLicensed Patent Rights,as well as, any facts which may affect the validity, scope, or enforceability of theLicensed Patent Rights of which either party becomes aware. |
| 11.2 | Pursuant to thisAgreementand the provisions of 35 U.S.C. Chapter 29, theLicenseemay: |
| (a) | bring suit in its own name, at its own expense, and on its own behalf for infringement of presumably valid claims in theLicensed Patent Rights; |
| (b) | in any suit, enjoin infringement and collect for its use, damages, profits, and awards of whatever nature recoverable for the infringement; or |
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| (c) | settle any claim or suit for infringement made byLicenseeof theLicensed Patent Rightsprovided,however,that theIC and appropriateGovernmentauthorities shall have the first right to take such actions at their own expense; and |
| (d) | if theLicenseedesires to initiate a suit for patent infringement, theLicenseeshall notify theIC in writing. If theIC does not notify theLicenseeof its intent to pursue legal action within ninety (90) days, theLicenseeshall be free to initiate suit. TheIC shall have a continuing right to intervene in the suit. TheLicenseeshall take no action to compel theGovernmenteither to initiate or to join in any suit for patent infringement. TheLicenseemay request theGovernment to initiate or join in any suit if necessary to avoid dismissal of the suit. Should theGovernmentbe made a party to any suit in case theLicenseerequestedGovernment to join, theLicensee shall reimburse theGovernment for any costs, expenses, or fees which theGovernment incurs as a result of the motion or other action, including all costs incurred by theGovernmentin opposing the motion or other action. In all cases, theLicenseeagrees to keep theIC reasonably apprised of the status and progress of any litigation. Before theLicenseecommences an infringement action, theLicenseeshall notify theIC and give careful consideration to the views of theIC and to any potential effects of the litigation on the public health in deciding whether to bring suit. |
| 11.3 | In the event that a declaratory judgment action alleging invalidity or non-infringement of any of theLicensed Patent Rights shall be brought against theLicenseeor raised by way of counterclaim or affirmative defense in an infringement suit brought by theLicenseeunder Paragraph 11.2, pursuant to thisAgreementand the provisions of 35 U.S.C. Chapter 29 or other statutes, theLicenseemay: |
| (a) | defend the suit in its own name, at its own expense, and on its own behalf for presumably valid claims in theLicensed Patent Rights; |
| (b) | in any suit, ultimately to enjoin infringement and to collect for its use, damages, profits, and awards of whatever nature recoverable for the infringement; and |
| (c) | settle any claim or suit for declaratory judgment involving theLicensed PatentRights-provided, however, that the IC and appropriateGovernmentauthorities shall have the first right to take these actions and shall have a continuing right to intervene in the suit at their own expense; and |
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| (d) | if theICdoes not notify theLicensee of its intent to respond to the legal action within a reasonable time, theLicenseeshall be free to do so. TheLicenseeshall take no action to compel theGovernmenteither to initiate or to join in any declaratory judgment action. TheLicenseemay request theGovernment to initiate or to join any suit if necessary to avoid dismissal of the suit. Should theGovernmentbe made a party to any suit by motion or any other action of theLicensee,theLicensee shall reimburse theGovernment for any costs, expenses, or fees, which theGovernment incurs as a result of the motion or other action. If theLicenseeelects not to defend against the declaratory judgment action, theIC,at its option, may do so at its own expense. In all cases, theLicenseeagrees to keep theIC reasonably apprised of the status and progress of any litigation. Before theLicenseecommences an infringement action, theLicenseeshall notify theIC and give careful consideration to the views of theICand to any potential effects of the litigation on the public health in deciding whether to bring suit. |
| 11.4 | In any action under Paragraphs 11.2 or 11.3 the expenses including costs, fees, attorney fees, and disbursements, shall be paid by theLicensee.The value of any recovery actually received by theLicenseethrough court judgment or settlement (less attorney’s fees, expenses, taxes and other deductions) shall be treated asNet Salesand subject to earned royalties. |
| 11.5 | TheIC shall cooperate fully with theLicenseein connection with any action under Paragraphs 11.2 or 11.3. TheIC agrees promptly to provide access to all necessary documents and to render reasonable assistance in response to a request by theLicensee. |
| 12. | NEGATION OF WARRANTIES AND INDEMNIFICATION |
| 12.1 | TheICoffers no warranties other than those specified in Article1. |
| 12.2 | TheICdoes not warrant the validity of theLicensed Patent Rights and makes no representations whatsoever with regard to the scope of theLicensed Patent Rights,or that theLicensed Patent Rights may be exploited without infringing other patents or other intellectual property rights of third parties. |
| 12.3 | THEICMAKES NO WARRANTIES, EXPRESS OR IMPLIED, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY SUBJECT MATTER DEFINED BY THE CLAIMS OF THELICENSED PATENT RIGHTS OR TANGIBLE MATERIALS RELATED THERETO. |
| 12.4 | TheICdoes not represent that it shall commence legal actions against third parties infringing theLicensed Patent Rights. |
| 12.5 | TheLicenseeshall indemnify and hold theIC,its employees, students, fellows, agents, and consultants harmless from and against all liability, demands, damages, expenses, and losses, including but not limited to death, personal injury, illness, or property damage in connection with or arising out of a third party claim brought against theICarising from: |
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| (a) | the use by or on behalf of theLicensee,its sublicensees, directors, employees, or third parties of anyLicensed Patent Rights;or |
| (b) | the design, manufacture, distribution, or use of anyLicensed Products, Licensed Processes or materials by theLicensee,or other products or processes developed byLicenseein connection with or arising out of theLicensed Patent Rights. |
| 12.6 | TheLicenseeagrees to maintain a liability insurance program consistent with sound business practice. |
| 13. | TERM, TERMINATION, AND MODIFICATION OF RIGHTS |
| 13.1 | ThisAgreementis effective when signed by all parties, unless the provisions of Paragraph 14.16 are not fulfilled, and shall extend to the expiration of the last to expire of theLicensed Patent Rights unless sooner terminated as provided in this Article 13. |
| 13.2 | In the event that theLicenseeis in default in the performance of any material obligations under thisAgreement,including but not limited to the obligations listed in Paragraph 13.5,ICshall give written notice to theLicenseeand a ninety (90) day period to remedy the default. If theLicenseefails to take substantive steps to remedy the default to theIC’ssatisfaction within such ninety (90) day period, theICmay terminate thisAgreement by written notice and pursue outstanding royalties owed through procedures provided by the Federal Debt Collection Act. |
| 13.3 | In the event that theLicenseebecomes insolvent, files a petition in bankruptcy, has such a petition filed against it, determines to file a petition in bankruptcy, or receives notice of a third party's intention to file an involuntary petition in bankruptcy, theLicenseeshall immediately notify theIC in writing. |
| 13.4 | TheLicenseeshall have a unilateral right to terminate thisAgreementor any licenses in any country or territory by giving theIC sixty (60) days written notice to that effect. |
| 13.5 | TheIC shall specifically have the right to terminate or modify, at its option, thisAgreement,if theIC determines that theLicensee: |
| (a) | is not executing theCommercial Development Plan submitted with its request for a license and theLicenseecannot otherwise demonstrateto theIC’ssatisfaction that theLicenseehas taken, or can be expectedto take within a reasonable time, effective steps to achieve thePractical Application of theLicensed Productsor theLicensed Processes; |
| (b) | has not achieved theBenchmarksas may be modified under Paragraph 9.2; |
| (c) | has willfully made a false statement of, or willfully omitted a material fact in the license application or in any report required by thisAgreement; |
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| (d) | has committed a material breach of a covenant or agreement contained in thisAgreement; |
| (e) | is not keeping theLicensed Productsor theLicensed Processesreasonably available to the public after commercial use commences; |
| (f) | cannot reasonably satisfy unmet health and safety needs; or |
| (g) | cannot reasonably justify a failure to comply with the domestic production requirement of Paragraph 5.2 unless waived. |
| 13.6 | In making the determination referenced in Paragraph 13.5, theIC shall take into account the normal course of such commercial development programs conducted with sound and reasonable business practices and judgment and the annual reports submitted by theLicenseeunder Paragraph 9.2. Prior to invoking termination or modification of thisAgreementunder Paragraph 13.5, theIC shall give written notice to theLicenseeproviding theLicensee specific notice of, and a ninety (90) day opportunity to respond to, theIC’sconcerns as to the items referenced in 13.5(a)-13.5(g). If theLicenseefails to alleviate theIC’sconcerns as to the items referenced in 13.5(a)-13.5(g) or fails to initiate corrective action to theIC’ssatisfaction, theIC may terminate thisAgreement. |
| 13.7 | When the public health and safety so require and after written notice to theLicensee providing theLicensee a sixty (60) day opportunity to respond, theIC shall have the right to require theLicenseeto grant sublicenses to responsible applicants, on commercially reasonable terms, in anyLicensed Fields of Use under theLicensed Patent Rights,unless theLicenseecan reasonably demonstrate that the granting of the sublicense would not materially increase the availability to the public of the subject matter of theLicensed Patent Rights.TheIC shall not require the granting of a sublicense unless the responsible applicant has first negotiated in good faith with theLicensee. |
| 13.8 | TheIC reserves the right according to 35U.S.C.§209(d)(3) to terminate or modify thisAgreementif it is determined that this action is necessary to meet the requirements for public use specified by federal regulations issued after the date of the license and these requirements are not reasonably satisfied by theLicensee. |
| 13.9 | Within thirty (30) days of receipt of written notice of theIC’s unilateral decision to modify or terminate thisAgreement,theLicenseemay,consistent with the provisions of 37 C.F.R. §404.11, appeal the decision by written submission to the designatedIC official or designee. The decision of the designatedIC official or designee shall be the final agency decision. TheLicenseemay thereafter exercise any and all administrative or judicial remedies that may be accessible. |
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| 13.10 | Within ninety (90) days of expiration or termination of thisAgreement under this Article 13, a final report shall be submitted by theLicensee.Any royalty payments, including those incurred but not yet paid (such as the full minimum annual royalty), and those related to patent expenses, due to theIC shall become immediately due and payable upon termination or expiration. If terminated under this Article 13, sublicensees may elect to convert their sublicenses to direct licenses with theIC pursuant to Paragraph 4.3. Unless otherwise specifically provided for under thisAgreement,upon termination or expiration of thisAgreement,theLicensee shall return allLicensed Products or other materials included within theLicensed Patent Rights to theIC or provide theIC with certification of the destruction thereof. TheLicensee may not be granted additionalIC licenses if the final reporting requirement is not fulfilled. |
| 14. | GENERAL PROVISIONS |
| 14.1 | Neither party may waive or release any of its rights or interests in thisAgreement except in writing. The failure of theGovernmentto assert a right hereunder or to insist upon compliance with any term or condition of thisAgreementshall not constitute a waiver of that right by theGovernmentor excuse a similar subsequent failure to perform any of these terms or conditions by theLicensee. |
| 14.2 | ThisAgreementconstitutes the entire agreement between the parties relating to the subject matter of theLicensed Patent Rights,theLicensed Productsand theLicensed Processes,and all prior negotiations, representations, agreements, and understandings are merged into, extinguished by, and completely expressed by thisAgreement. |
| 14.3 | The provisions of thisAgreementare severable, and in the event that any provision of thisAgreementshall be determined to be invalid or unenforceable under any controlling body of law, this determination shall not in any way affect the validity or enforceability of the remaining provisions of thisAgreement. |
| 14.4 | If either party desires a modification to thisAgreement,the parties shall, upon reasonable notice of the proposed modification by the party desiring the change, confer in good faith to determine the desirability of the modification. No modification shall be effective until a written amendment is signed by the signatories to thisAgreement or their designees. |
| 14.5 | The construction, validity, performance, and effect of thisAgreement shall be governed by Federal law as applied by the Federal courts in the District of Columbia. |
| 14.6 | AllAgreementnotices required or permitted by thisAgreementshall be given by prepaid, first class, registered or certified mail or by an express/overnight delivery service provided by a commercial carrier, properly addressed to the other party at the address designated on the following Signature Page, or to another address as may be designated in writing by the other party.Agreementnotices shall be considered timely if the notices are received on or before the established deadline date or sent on or before the deadline date as verifiable by U.S. Postal Service postmark or dated receipt from a commercial carrier. Parties should request a legibly dated U.S. Postal Service postmark or obtain a dated receipt from a commercial carrier or the U.S. Postal Service. Private metered postmarks shall not be acceptable as proof of timely mailing. |
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| 14.7 | ThisAgreementshall not be assigned or otherwise transferred (including any transfer by legal process or by operation of law, and any transfer in bankruptcy or insolvency, or in any other compulsory procedure or order of court) except to theLicensee’s Affiliate(s) without the prior written consent of theIC. The parties agree that the identity of the parties is material to the formation of thisAgreementand that the obligations under thisAgreementare nondelegable. |
| 14.8 | TheLicenseeagrees in its use of anyIC-supplied materials to comply with all applicable statutes, regulations, and guidelines, includingNIH andHHSregulations and guidelines. TheLicenseeagrees not to use the materials for research involving human subjects or clinical trials in the United States without complying with 21 C.F.R. Part 50 and 45 C.F.R. Part 46. TheLicenseeagrees not to use the materials for research involving human subjects or clinical trials outside of the United States without notifying theIC, in writing, of the research or trials and complying with the applicable regulations of the appropriate national control authorities. Written notification to theIC of research involving human subjects or clinical trials outside of the United States shall be given no later than sixty (60) days prior to commencement of the research or trials. |
| 14.9 | TheLicenseeacknowledges that it is subject to and agrees to abide by the United States laws and regulations (including the Export Administration Act of1979and Arms Export Control Act) controlling the export of technical data, computer software, laboratory prototypes, biological material, and other commodities. The transfer of these items may require a license from the appropriate agency of the U.S.Governmentor written assurances by theLicenseethat it shall not export these items to certain foreign countries without prior approval of this agency. TheICneither represents that a license is or is not required or that, if required, it shall be issued. |
| 14.10 | TheLicenseeagrees to mark theLicensed Productsor their packaging sold in the United States with all applicable U.S. patent numbers and similarly to indicate “Patent Pending” status. All theLicensed Productsmanufactured in, shipped to, or sold in other countries shall be marked in a manner to preserve theIC’spatent rights in those countries. |
| 14.11 | By entering into thisAgreement,theIC does not directly or indirectly endorse any product or service provided, or to be provided, by theLicenseewhether directly or indirectly related to thisAgreement.TheLicensee shall not state or imply that thisAgreement is an endorsement by theGovernment,theIC, any otherGovernmentorganizational unit, or anyGovernmentemployee. Additionally, theLicenseeshall not use the names of theIC, theFDAor theHHS or theGovernmentor their employees in any advertising, promotional, or sales literature without the prior written approval of theIC. |
| 14.12 | The parties agree to attempt to settle amicably any controversy or claim arising under thisAgreement or a breach of thisAgreement,except for appeals of modifications or termination decisions provided for in Article 13. TheLicenseeagrees first to appeal any unsettled claims or controversies to the designatedIC official, or designee, whose decision shall be considered the finalIC decision. Thereafter, theLicenseemay exercise any administrative or judicial remedies that may be available. |
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| 14.13 | Nothing relating to the grant of a license, nor the grant itself, shall be construed to confer upon any person any immunity from or defenses under the antitrust laws or from a charge of patent misuse, and the acquisition and use of rights pursuant to 37 C.F.R. Part 404 shall not be immunized from the operation of state or Federal law by reason of the source of the grant. |
| 14.14 | Any formal recordation of thisAgreementrequired by the laws of anyLicensed Territory as a prerequisite to enforceability of theAgreementin the courts of any foreign jurisdiction or for other reasons shall be carried out by theLicenseeat its expense, and appropriately verified proof of recordation shall be promptly furnished to theIC. |
| 14.15 | Paragraphs 4.3, 8.1, 9.5-9.8, 12.1-12.5, 13.9, 13.10, 14.12 and 14.15 of thisAgreement shall survive termination of thisAgreement. |
| 14.16 | The terms and conditions of thisAgreementshall, at theIC’s sole option, be considered by theIC to be withdrawn from theLicensee’sconsideration and the terms and conditions of thisAgreement,and theAgreement itself to be null and void, unless thisAgreementis executed by theLicensee and a fully executed original is received by theICwithin sixty (60) days from the date of theIC’ssignature found at the Signature Page. |
SIGNATURES BEGIN ON NEXT PAGE
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NIH PATENT LICENSE AGREEMENT –EXCLUSIVE
SIGNATURE PAGE
| For theNIAAA: | ||
| /s/George F. Koob | 7-13-17 | |
| Name: George F. Koob, Ph.D. | Date | |
| Title: Director | ||
| The National Institute on Alcohol Abuse and Alcoholism | ||
| National Institutes of Health |
| For theNIDA: | ||
| /s/ MichelleK.Leff-S | ||
| Name: Michelle K. Leff, MD, MBA | Date | |
| Title: Technology Development Coordinator | ||
| The National Institute on Drug Abuse | ||
| National Institutes of Health |
Mailing Address or E-mail Address forAgreement notices and reports:
License Compliance and Administration
Monitoring & Enforcement
Office of Technology Transfer
National Institutes of Health
6011 Executive Boulevard, Suite 325
Rockville, Maryland 20852-3804 U.S.A.
E-mail: LicenseNotices_Reports@mail.nih.gov
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For theLicensee (Upon, information and belief, the undersigned expressly certifies or affirms that the contents of any statements of theLicenseemade or referred to in this document are truthful and accurate.):
| by: | |||
| /s/Morris Laster | 7/19/17 | ||
| Signature of Authorized Official | Date | ||
| Morris Laster, MD | |||
| Printed Name | |||
| CEO | |||
| Title |
| I. | Official and Mailing Address forAgreement notices: | ||
| Morris Laster, MD | |||
| Name | |||
| CEO | |||
| Title | |||
| Mailing Address | |||
| 11 Reuven Shari St | |||
| Jerusalem, Israel 9724611 |
| Email Address: | morris.laster@gmail.com | |||
| Phone: | +972-2-5866740 | |||
| Fax: | +972-2-5879529 |
| II. | Official and Mailing Address for Financial notices (theLicensee’s contact person for royalty payments) | ||
| Morris Laster, MD | |||
| Name | |||
| CEO | |||
| Title | |||
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| Mailing Address: | |||
| 11 Reuven Shari St | |||
| Jerusalem, Israel 9724611 |
| Email Address: | morris.laster@gmail.com | |||
| Phone: | +972-2-5866740 | |||
| Fax: | +972-2-5879529 |
Any false or misleading statements made, presented, or submitted to theGovernment,including any relevant omissions, under thisAgreementand during the course of negotiation of thisAgreementare subject to all applicable civil and criminal statutes including Federal statutes 31 U.S.C. §§3801-3812 (civil liability) and 18 U.S.C. §1001 (criminal liability including fine(s) or imprisonment).
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APPENDIX A – PATENT(S) OR PATENT APPLICATION(S)
Patent(s) or Patent Application(s):
E-140-2014/0 Patent Family
Entitled, “Cannabinoid Receptor Mediating Compounds”
Inventors: George Kunos (NIAAA), Malliga R. Iyer (NIAAA), Resat Cinar (NIAAA), and Kenner C. Rice (NIDA), including PCT Application No. PCT/US2015/029946, filed on May 08, 2015, claiming priority to US Provisional Application No. 61/991,333 filed on May 09, 2014, and corresponding US, AU, CA, EP, CN, IN and JP filings
E-282-2012/0 Patent Family
Entitled, “Cannabinoid Receptor Mediating Compounds”
Inventors: George Kunos (NIAAA), Malliga R. Iyer (NIAAA), Resat Cinar (NIAAA), and Kenner C. Rice (NIDA) including PCT Application No. PCT/US2013/069686, filed on November 12, 2013, claiming priority to U.S. Provisional Patent Application No. 61/725,949 filed on November 13, 2012, and corresponding US, CA, EP, CN, IN and JP filing
E-282-2012/1 Patent Family
Entitled, “Cannabinoid Receptor Mediating Compounds”
Inventors: George Kunos (NIAAA), Malliga R. Iyer (NIAAA), Resat Cinar (NIAAA), and Kenner C. Rice (NIDA) including PCT Application No. PCT/US2016/035291, filed on June 01, 2016, claiming priority to US Provisional Application No. 62/171, 179 filed on June 04, 2015
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APPENDIX B – LICENSED FIELDS OF USE AND TERRITORY
| I. | Licensed Fields of Use: |
Commercial development of the CB1/iNOS series of compounds as a therapeutic to treat systemic sclerosis and scleroderma and other skin fibrotic diseases in humans, as claimed in theLicensed Patent Rights.Hermansky-Pudlak syndrome (HPS) is expressly excluded.
| II. | Licensed Territory:Worldwide. |
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APPENDIX C – ROYALTIES
Royalties:
| I. | TheLicensee agrees to pay to theIC a noncreditable, nonrefundable license issue royalty in the amount of[ ]within sixty (60) days from the effective date of thisAgreement. |
| II. | TheLicenseeagrees to pay to theIC a nonrefundable minimum annual royalty in the amount of [ ] as follows: |
The first minimum annual royalty is due and payable on January 1, 2019; and subsequent minimum annual royalty payments are due and payable on January 1 of each calendar year and shall be credited against any earned royalties due for sales made in that year.
| III. | TheLicenseeagrees to pay theICearned royalties of [ ] onNet Sales by theLicensee and its sublicensees. |
| IV. | TheLicenseeagrees to pay theIC Benchmark royalties within sixty (60) days of achieving eachBenchmark: |
| (a) | [ ]Initiation of first Phase I clinical trial or foreign equivalent. |
| (b) | [ ]Initiation of first Phase II clinical trial orforeign equivalent. |
| (c) | [ ]Initiation of first Phase III clinical trial or foreign equivalent. |
| (d) | [ ]Upon initial filing of the first New Drug Application or foreign equivalent for eachLicensed Products. |
| (e) | Upon receipt of firstMarket Approval or foreign equivalent for eachLicensed Products in the following jurisdictions/countries: |
| (i) | [ ] in Europe; |
| (ii) | [ ] in the United States; |
| (iii) | [ ] in Canada; |
| (iv) | [ ] in China; |
| (v) | [ ] in India; and |
| (vi) | [ ] in Japan. |
| V. | TheLicensee agrees to pay theIC additional sublicensing royalties of [ ] on the fair market value of any consideration actually received for granting each sublicense, which is payable toLicenseeunderany such sublicense within sixty (60) days of the execution of each sublicense. |
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APPENDIX D – BENCHMARKS AND PERFORMANCE
TheLicensee agrees to the followingBenchmarks for its performance under thisAgreement and, within thirty (30) days of achieving aBenchmark, shall notify theIC that theBenchmark has been achieved.
| I. | Establish two (2) murine models for systemic sclerosis within [ ] of the effectivedate of thisAgreement. |
| II. | Completein vivo systemic sclerosis efficacy tests within [ ] of the effective date of thisAgreement. |
| III. | Hold Pre-INDmeetingwith theFDAwithin [ ] of the effective date of thisAgreement. |
| IV. | Complete GMP manufacturing within [ ] of the effective date of thisAgreement. Complete IND enabling preclinical studies, and file an IND within three and one- half (3.5) years of the effective date of thisAgreement. |
| V. | Enroll first patient in Phase 1 clinical trial within [ ]of the effective date of thisAgreement. |
| VI. | Enroll first patient in Phase 2 clinical trial within [ ]of the effective date of thisAgreement. |
| VII. | Enroll first patient in Phase 3 clinical trial within [ ]of the effective date of thisAgreement. |
| VIII. | File a NDA or foreign equivalent within [ ] of the effective date of thisAgreement. |
| IX. | Launch of first commercial product within[ ]of the effective date of thisAgreement. |
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APPENDIX E – COMMERCIAL DEVELOPMENT PLAN
Systemic sclerosis (SSc) is defined as an autoimmune rheumatic disease affecting the skin and other organs of the body. The main finding in systemic sclerosis is thickening and tightening of the skin and inflammation and scarring of many body parts, leading to problems in the lungs, kidneys, heart, intestinal system and other areas. It is an extremely debilitating disease with the highest mortality rate of any autoimmune rheumatic disease that affects about 100,000 patients in the US alone. To date, there are no drugs approved to treat SSc. Current treatment is based on attempting to manage the disease with a variety of treatments such as anti-inflammatories, immunosuppressants or drugs that address the vascular components of the disease. The unmet medical need has been exemplified by FDA's Breakthrough Therapy Designation in 2015 for Actemra based on a Phase 2 study that only showed an improving trend in skin fibrosis! There currently are no options for treating the underlying fibrotic changes which represents the core pathophysiology.
In fibrotic diseases, including SSc, there is published evidence for the pathogenic role of increased activity of inducible nitric oxide synthase (iNOS), an enzyme responsible for the generation of reactive nitrogen species. There is also evidence for the pro-fibrotic function of the endocannabinoid/CB1 receptor (CB1R) system. However, iNOS inhibitors used in preclinical studies lack oral bioavailability, whereas more recently developed, orally bioavailable iNOS inhibitors had disappointingly low therapeutic efficacy in clinical trials involving inflammatory diseases. While CB1R inhibitors have also demonstrated antifibrotic efficacy, the therapeutic potential of globally acting CB1R inhibitors such as Rimonabant has been thwarted by CNS side effects. Prof. George Kunos and NIAAA Laboratory of Physiologic Studies researchers have recently developed and patented a series of peripherally restricted hybrid inhibitors of CB1R and iNOS. These compounds have several features for optimal therapeutic efficacy and safety. The hybrid compound serves as a pro-drug and a carrier for the iNOS inhibitory moiety, facilitating its delivery to target organs such as skin, kidney, lung, and liver, resulting in high target exposure. Additionally, the compound demonstrated peripheral selectivity suggesting that it will not cause the neuropsychiatric side effects observed for Rimonabant. In preclinicalin vitro andin vivomodels, a lead compound known as MRI-1867 demonstrated inhibition of CB1R and iNOS pathways in receptor binding and cell assays as well as efficacy in animal models of liver and lung fibrosis.
Based on the scientific evidence implicating both the CB1R and iNOS pathways in the pathogenesis of SSc,Licensee has decided to develop MRI-1867 as a first in class treatment for SSc specifically targeting the fibrotic pathology of the disease. Were such a treatment to be found to be safe and efficacious for SSc it would be life changing for those suffering from the disease and the orphan indication status can help provide for commercial viability.
Product Development Plan
The development plan will begin with a CRADA (CRADA01638) to be performed with Prof George Kunos at the NIAAA.Licensee will build upon the hypothesis that the EC/CB1R system and iNOS are both pro-fibrogenic, and combined inhibition of these targets by a single compoundwould improve therapeutic outcome in scleroderma.Licenseeplan to test the novel dual-target compound MRI-1867 in two different murine models of scleroderma [ ]Using these twoexperimental models will allowLicenseeto establish the therapeutic potential ofLicensee’sdual-target compounds.
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Specific Aim 1:Test the target-specificity of hybrid peripheral CB1R/iNOS inhibitors by analyzing their anti-fibrotic efficacy in mice with genetic deletion of CB1R or iNOS, using the subcutaneous bleomycin-induced skin fibrosis model. This approach would helpLicenseeto evaluate the relative contribution of the two targets to the therapeutic efficacy of the hybrid inhibitor.
Approaches for Aim 1:
| 1.1 | Licensee will quantitatively analyze skin fibrosis in [ ] mice treated with vehicle, rimonabant, the iNOS inhibitor 1400W orLicensee’slead dual CB1R/iNOS inhibitor MRI-1867.Licenseewill also assess the presence of fibrosis and its modulation by treatment or genotype in organs potentially affected by SSc, including lung, kidneys and heart. |
| 1.2. | Expression and activity of CB1R and iNOS will be assessed in the affected tissues by measuring transcript, protein and functional levels weekly from week 1 to 6, in view of the progressive nature of the disease. |
| 1.3. | Two different treatment paradigms will be used to assess prevention or regression of fibrosis. For prevention, treatment will start immediately after implanting the [ ] minipump and continue for 4 weeks. For the regression paradigm, treatments will start 2 weeks after bleomycin induction and continued for an additional 2-4 weeks. |
| 1.4. | Skin abnormalities and fibrosis will be assessed histologically (H&E and Masson’s trichrome), biochemically (hydroxyproline content) and by measuring profibrotic gene expression (TGFβ, αSMA, fibronectin, collagen, TIMP1). |
| 1.5. | As lung fibrosis is also manifested in this model, it will be assessed by the above techniques. |
Specific Aim 2:To investigate the pathogenic role of CB1R and iNOS in [ ] and test the therapeutic efficacy of dual CB1R/iNOS inhibition.
Approaches for Aim 2:technical tools and experimental design will be the same as for Aim 1.
Specific Aim 3:Screen and optimize additional CB1R/iNOS dual-target inhibitors as back-up compounds and lead optimization in animal models of scleroderma.
Approaches for Aim 3:Scleroderma results in the failure of multiple organs including the liver and kidney. In view of the essential role of these organs in pharmacokinetics and drug metabolism, their pathological changes may alter the PK properties of therapeutic compounds. In order to optimize the druggable properties of dual-target compounds, their PK properties and metabolism need to be established for lead optimization.
3.1. Measuring tissue distribution of candidate compounds (plasma, skin, lung, kidney, heart, brain, liver) by LC-MS/MS in two animal models and in healthy control mice.
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These aims will helpto define the mechanism of action and establish the CNS safety profile of novel, dual-target peripheral CB1R/iNOS inhibitors.
Specific Aim 4:To assess long-term efficacy and potential toxicity of the lead compound by conducting a chronic (6 months) treatment study in the two models selected. Brain levels of drug as well as organ toxicity will be assessed by histology and functional assays.
The CRADA agreement time period is expected to last 24 months. Assuming the successful completion of the research aims,Licensee then intends to enter a full pre clinical and clinical development program.
A project manager will then be hired and expert consultants in the main disciplines of drug development chemistry, manufacturing, and controls (CMC), nonclinical, clinical, and regulatory will be retained byLicensee for the development of MRI-1867.
Licenseewillcontract with a current Good Manufacturing Practice (cGMP) capable contract manufacturing organizations (CMOs) to manufacture the MRI-1867 drug substance (DS) and drug product (DP). Following process development and scale up, DS analytical method development and qualification, and reference standard characterization, an engineering run of DS will be manufactured. This will be followed by the initial cGMP manufacture of DS. Both the engineering run and cGMP batches will be release tested and put on stability. The engineering run batch will be sufficiently comparable to the cGMP batch so as to allow the former to be used for the investigational new drug application- (IND) enabling nonclinical studies. It is anticipated that this process will take approximately 8 months (i.e., to the release of the 1-month stability data for cGMP DS) and cost about $1M.
The DP to be used in clinical trials will be an oral dosage form. A CMO will be contracted to perform formulation development and DP analytical method development and qualification. Following selection of the oral formulation that will be used for clinical trials and a trial run of manufacturing (i.e., engineering run), cGMP batches (varying strengths) will be manufactured. Both the engineering and cGMP batches will be release tested and put on stability. This process will begin shortly after the start of the DS work (essentially concurrently) and will take approximately 9 months (to the release of the 1-month stability data for cGMP DP) and cost approximately $250K.
In parallel with the above activities, an intravenous (IV) formulation will be developed and manufactured to allow for the determination of the absolute bioavailability of MRI-1867 during the initial Phase 1 trial. Additionally, metabolites will be synthesized to serve as analytical reference standards and if warranted by the data for toxicological qualification. Radiolabeled MRI-1867 will be synthesized for use in nonclinical mass balance and tissue distribution studies, as well as clinical CB1R binding and mass balance studies.
C. Pre-clinical Development
Assay Development: Licensee will contract with a Contract Research Organization (CRO) to develop and validate bioanalytical methods for rat, dog, and human plasma. Assay development will be concurrent with DS and DP development and manufacture and cost will be approximately [ ].
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Pharmacology: In addition to the nonclinical primary pharmacodynamic (PD) studies in scleroderma models that will be conducted under the CRADA, VS will contract with qualified CRO(s) to perform standard Good Laboratory Practice (GLP) safety pharmacology studies. The studies will include in vitro hERG, oral rat central nervous system, oral rat respiratory system, and oral dog cardiovascular system, as well as additional studies if warranted by the data. All of the GLP safety pharmacology studies will utilize DS from either the engineering or cGMP batches.
Pharmacokinetics: Licenseewill contract with qualified CRO(s) to perform various in vitro pharmacokinetic (PK) studies, including metabolic stability studies, drug-drug interaction studies, protein binding studies, and permeation studies. These studies will be initiated early on and will use DS from the scale up efforts. The data package for MRI-1867 includes results that fit into these categories of studies. Depending on the availability of the corresponding study reports (i.e., forLicenseeto use in an IND submission), the study designs, and the comparability of the test material used,Licenseemay be able to use some of the NIH results in lieu of conducting such studies. Once the engineering batch DS is available,Licenseewill contract with qualified CRO(s) to perform oral rat single dose PK, oral dog single dose PK, and absolute bioavailability. Radiolabeled MRI-1867 will be used for mass balance and tissue distribution studies. Additional nonclinical absorption, distribution, metabolism, and excretion (ADME) studies will be contracted as warranted by the data.
Toxicology:In preparation for the initial IND filing,Licenseewill contract with qualified CRO(s) to perform oral rat and dog rising single dose + 7-day repeated-dose range-finding toxicity studies with toxicokinetics and oral rat and dog 28-day repeated-dose toxicity studies with toxicokinetics. Additionally,Licenseewill contract out the performance of a standard battery of GLP genotoxicity studies, including in vitro bacterial reverse mutation test, in vitro mouse lymphoma thymidine kinase assay, and in vivo rat micronucleus test. Also, to support the single IV dose of MRI-1867 in the initial Phase I trial to determine absolute bioavailability,Licenseewill contract out the performance of an in vitro hemolysis assay and an IV single species single dose local tolerance study. To support subsequent clinical trials and eventual marketing,Licenseewill contract out the performance of oral rat 3-month and 6-month repeated-dose toxicity studies, oral dog 3-month and 9-month repeated-dose toxicity studies, carcinogenicity studies, and reproductive and developmental toxicity studies.
Overall, the timeline and cost to complete the IND-enabling nonclinical studies is estimated at approximately[ ] and [ ].
Clinical Development
Licenseewill contract out clinical trial related tasks to qualified CRO(s). The initial trial (i.e., the protocol to be included in the original IND filing) is anticipated to be a Phase 1 safety, tolerability, and PK study in healthy volunteers. The study will include a single IV and oral dose to determine absolute bioavailability, followed by 28-days of oral dosing. During the latter part of the conduct of this trial,Licenseeplans to contract out a Phase 1 clinical mass balance study (single oral dose of radiolabeled drug). This will allow for an early determination of relevant PK metabolites and parameters to follow in subsequent trials. Additionally,Licenseeplans to collaborate with NIH to perform a Phase 1 study of MRI-1867 binding to CB1R in the brain (via positron emission tomography scanning).
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Following the completion of the Phase 1 safety, tolerability, and PK study in healthy volunteers,Licenseeplansto move to a Phase 1 safety, tolerance, PK, and PD study in patients with systemic sclerosis. This trial will include [ ] of oral dosing. Pending no safety concerns,Licenseeplans to move to a Phase 2 safety, PK, and proof of concept trial in systemic sclerosis patients that is anticipated to include [ ] of oral dosing. This would be followed by a Phase 3 pivotal trial of safety, PK, and efficacy in systemic sclerosis patients, which is tentativelyexpected to include [ ]of oral dosing under double blinded conditions, followed by [ ] ofdosing under open label conditions. Additional trials will be conducted as warranted by the data. The timeline and cost of the clinical program is estimated at [ ] and at a total cost of [ ][ ]
Regulatory Submission
As soon asLicenseecompletes the CRADA period of examination,Licenseeplans to file a pre-IND meeting request with FDA to confirm that the planned CMC and nonclinical tasks will support the initiation of the proposed Phase 1 clinical trial. In this way, course corrections in the development plan can be made early on, expediting development and avoiding waste of resources.
Upon completion of the nonclinical primary PD studies in scleroderma models that will be conducted under the CRADA,Licenseeplans to submit an orphan drug designation request for MRI-1867 for the treatment of systemic sclerosis.
Licenseeanticipates to file the original IND for MRI-1867 for the treatment of systemic sclerosis [ ] following the licensing event. This timeline will be adjusted as necessary based on FDA’s feedback on the development plan during the pre-IND meeting, as well as based on the CMO and CRO availability and proposed timelines.Licenseeplans to file for Fast Track Designation shortly after the IND filing (as an IND amendment).
Once the Phase 2 proof of concept trial is completed, and assuming that proof of concept is demonstrated,Licenseeplans to file a request for breakthrough therapy designation. Shortly thereafter,Licenseeplans to file for an end of Phase 2 (EOP2) meeting to confirm the pivotal trial(s) and other tasks needed to support NDA filing.Licenseeplans to file for a pre-NDA meeting while the pivotal Phase 3 trial is ongoing. A priority review is anticipated.Licenseeanticipates that following positive pivotal clinical studies, MRI-1867 will be out-licensed to a global pharmaceutical partner for marketing and sales of the drug in return for upfront payments, milestones and royalties.
Licenseeanticipates that following positive pivotal clinical studies, MRI-1867 will be out-licensed to a global pharmaceutical partner for marketing and sales of the drug in return for upfront payments, milestones and royalties. It isLicensee’sbelief that such a strategic partner will be capable of marketing the compound in the licensed territories. If a strategic partner is not able to market in the patented territories,Licenseewill seek additional partners to maximize sales in the licensed territories.
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Marketing Plan
During the process of developing MRI-1867Licensee will contract with a US based CMO who will manufacture the clinical and subsequent commercial batches. It is anticipated that a future strategic partner will continue withLicensee’s selection of CMO or incorporate the manufacture of MRI-1867 in one of its US based manufacturing plants as required in the license agreement.
Licensee will work with its global pharmaceutical partner to ensure the promotion, marketing and sales of MRI-1867.Licensee will make all reasonable efforts to ensure that its strategic partner is maximizing the potential inherent in the product.
Licensee anticipates that a future out-license of the MRI-1867 technology to a global pharmaceutical partner will comprise upfront payments, milestones and royalties as is standard in the industry.
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APPENDIX F – EXAMPLE ROYALTY REPORT
Required royalty report information includes:
| • | License reference number (L-XXX-200X/0) |
| • | Reporting period |
| • | Catalog number and units sold of each Licensed Product (domestic and foreign) |
| • | Gross Sales per catalog number per country |
| • | Total Gross Sales |
| • | Itemized deductions from Gross Sales |
| • | Total Net Sales |
| • | Earned Royalty Rate and associated calculations |
| • | Gross Earned Royalty |
| • | Adjustments for Minimum Annual Royalty (MAR) and other creditable payments made |
| • | Net Earned Royalty due |
Example
| Catalog Number | Product Name | Country | Units Sold | Gross Sales (US$) | |||||||
| 1 | A | US | 250 | 62,500 | |||||||
| 1 | A | UK | 32 | 16,500 | |||||||
| 1 | A | France | 25 | 15,625 | |||||||
| 2 | B | US | 0 | 0 | |||||||
| 3 | C | US | 57 | 57,125 | |||||||
| 4 | D | US | 12 | 1,500 | |||||||
| Total Gross Sales | 153,250 | ||||
| Less Deductions: | |||||
| Freight | 3,000 | ||||
| Returns | 7,000 | ||||
| Total Net Sales | 143,250 | ||||
| Royalty Rate | 8 | % | |||
| Royalty Due | 11,460 | ||||
| Less Creditable Payments | 10,000 | ||||
| Net Royalty Due | 1,460 |
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APPENDIX G – ROYALTY PAYMENT OPTIONS
The License Number MUST appear on payments, reports and correspondence.
Credit and Debit Card Payments
Credit and debit card payments can be submitted for amounts up to $29,999. Submit your payment through the U.S. Treasury web site located at: https://www.pay.gov/public/form/start/28680443.
Automated Clearing House (ACH) for payments through U.S. banks only
TheIC encourages its licensees to submit electronic funds transfer payments through the Automated Clearing House (ACH). Submit your ACH payment through the U.S. Treasury web site located at: https://www.pay.gov/public/form/start/28680443. Please note that the IC “only” accepts ACH payments through this U.S. Treasury web site.
Electronic Funds Wire Transfers
The following account information is provided for wire payments. In order to process payment via Electronic Funds Wire Transfer sender MUST supply the following information within the transmission:
Drawn on aU.S.bank account via FEDWIRE should be sent directly to the following account:
| Beneficiary Account: | Federal Reserve Bank of New York or TREAS NYC |
| Bank: | Federal Reserve Bank of New York |
| ABA# | 021030004 |
| Account Number: | 75080031 |
| Bank Address: | 33 Liberty Street, New York, NY 10045 |
| Payment Details: | License Number (L-XXX-XXXX) |
| Name of the Licensee |
Drawn on aforeign bank account should be sent directly to the following account. Payment must be sent inU.S. Dollars (USD) using the following instructions:
| Beneficiary Account: | Federal Reserve Bank of New York/ITS or FRBNY/ITS |
| Bank: | Citibank N.A. (New York) |
| SWIFT Code: | CITIUS33 |
| Account Number: | 36838868 |
| Bank Address: | 388 Greenwich Street, New York, NY 10013 |
| Payment Details (Line 70): | NIH 75080031 |
| License Number (L-XXX-XXXX) | |
| Name of the Licensee | |
| Detail of Charges (line 71a): | Charge Our |
Checks
All checks should be made payable to “NIH Patent Licensing”
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Checks drawn on aU.S. bank account and sent by US Postal Service should be sent directly to the following address:
National Institutes of Health
P.O. Box 979071
St. Louis, MO 63197-9000
Checks drawn on a U.S. bank account and sent byovernight or courier should be sent to the following address:
US Bank
Government Lockbox SL-MO-C2GL
1005 Convention Plaza
St. Louis, MO 63101
Phone: 314-418-4087
Checks drawn on aforeign bank account should be sent directly to the following address:
National Institutes of Health
Office of Technology Transfer
License Compliance and Administration
Royalty Administration
6011 Executive Boulevard
Suite 325, MSC 7660
Rockville, Maryland 20852
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