Silo Pharma, Inc. (Form: 8-K, Received: 02/16/2021 08:31:07)

Master License Agreement

Table Of Contents

[*] Certain information in this document has been omitted from this exhibit because it is both (i) not material

This Master License Agreement (“Agreement”) is effective as of the date of the last signature on the signature page (“Effective Date”) and is made by and between the University of Maryland, Baltimore (“University”), a public university that is part of the University System of Maryland (which is a public corporation and an instrumentality of the State of Maryland), and Silo Pharma, Inc., a Delaware corporation (“Company”).

1.1 A valuable invention generally known as “Central nervous system-homing peptides in vivo and their use for the investigation and treatment of multiple sclerosis and other neuroinflammatory pathology” (the “Invention”), has been made by Kamal Moudgil, MD, PhD and Bodhraj Acharya, PhD (“University Inventors”).

1.2 Subject to certain rights retained by the U.S. Government in inventions resulting from federally supported work, under the IP Policies (as defined below): (a) University owns the Invention; and (b) University is the record owner of the Invention, which has been confirmed by the execution of assignments to University from the University Inventors.

1.3 Research described in the Invention was funded in part by grant 5R21NS082918 from the National Institutes of Health.

1.4 University and Company entered into a Sponsored Research Agreement dated as of January 5, 2021 (the “SRA”). Pursuant to the SRA, the Company agreed to fund research entitled “novel peptide-guided drug delivery approach for the treatment of multiple sclerosis,” in accordance with the protocol and budget attached as Exhibits to the SRA. In the event of any conflict between the terms of this Agreement and the SRA, the terms of this Agreement shall supersede and govern.

1.5 As a public research and education institution, University is interested in licensing the Invention to Company to benefit the public by the development and marketing of new and useful products and methods. Company desires to license the Invention on the terms and conditions set forth in this Agreement. University and Company have entered into this Agreement of their own free will. The terms of this Agreement were agreed upon in an arm’s length transaction.

In this Agreement, the following terms have the meanings set forth in this Article.

2.2 “Business Day”: A day other than a Saturday, Sunday, federal holiday, holiday observed by University, or any day on which the University campus is closed.

2.3 “Change of Control”: Any one of the following: (a) a sale, lease, transfer, or other disposition of all or substantially all of the assets or business of the Company; (b) a merger, consolidation, reorganization, recapitalization, share exchange, business combination, or similar form of transaction in which the equity holders of the Company immediately prior to such transaction cease to own collectively fifty percent (50%) or more of the equity securities of the successor entity of the Company; or (c) the acquisition of fifty percent (50%) or more of the equity securities of the Company by a person or group of persons acting in concert, in each case, whether through a single transaction or a series of related transactions.

2.4 “Clinical Trial”: A human Clinical Trial of a Licensed Product that satisfies the requirements of 21 C.F.R. §312.21, or its foreign equivalent. A Clinical Trial shall be considered to have commenced when the Licensed Product has been administered to the first subject in the Clinical Trial.

2.6 “Commercially Reasonable Efforts”: With respect to the development or commercialization of a Licensed Product, efforts that are consistent with those utilized by companies of similar size as Company with reference to products with similar commercial potential at a similar stage, taking into consideration their safety and efficacy, their cost to develop, the competitiveness of alternative products, the intellectual property landscape, the nature and extent of their market exclusivity, the likelihood of regulatory approval in the material markets, their profitability, the ability of the Company to raise capital to develop and commercialize products, the overall capital markets environment, and all other relevant factors.

2.7 “Company Affiliate”: Any Person which controls, is controlled by, or is under common control with Company. For purposes of this definition only, “control” means (a) to possess, directly or indirectly (through one or more intermediaries), the power to direct the management or policies of a Person, whether through ownership of voting securities or by contract relating to voting rights or corporate governance, or (b) to own, directly or indirectly, more than fifty percent (50%) of the outstanding voting securities or other ownership interest of a Person.

2.8 “Company Improvement”: (a) An Improvement that is invented solely by one or more Company Personnel, or on behalf of Company, without using University resources (other than routine and minimal office use of email, telephones, or printers); or (b) an Improvement in which Company otherwise has an ownership interest, and University has no ownership interest.

2.9 “Company Personnel”: Officers, directors, employees of Company and/or any Company Affiliate. Company Personnel shall also include independent contractors, agents, and representatives of Company and/or any Company Affiliate, when those individuals are acting in such capacity.

2.10 “Confidential Information”: Information (including without limitation documents, notes, drawings, models, designs, data, results, memoranda, tapes, records, hardware, software, formulae, algorithms, biological materials (including without limitation organisms, cells, viruses, cell products, DNA, cDNA, and RNA sequences), other materials of any kind, standard operating procedures (“SOPs”), strategic business plans, product forecasts, communications with government entities, marketing data, business planning or financial information, pricing information, personnel information, and other commercially sensitive or proprietary information or materials, in hard copy form or in electronic form) which is disclosed by a party to the other party in connection with this Agreement, including without limitation information that: (a) is related to, results from, or arises out of use of the Invention, the Improvements, or practice of the Patent Rights, or (b) is reasonably necessary for the use of the Invention, the Improvements, or practice of the Patent Rights, or for the development or commercialization of Licensed Products.

2.12 “Dollar” means a U.S. dollar, and “$” shall be interpreted accordingly.

2.14 “Export Control Laws”: The Arms Export Control Act; the Export Administration Act of 1979; the International Traffic in Arms Regulations; the Export Administration Regulations; or any other rules or regulations pertaining to restrictions on use or disclosure of goods, information, or technology, of any applicable governmental agency.

2.15 “FDA”: The U.S. Food and Drug Administration, or any successor agency thereto.

2.16 “Federal IP Policy”: U.S. law and regulations applicable to intellectual property funded in whole or in part by the U.S. Government, including without limitation 35 U.S.C. §200 et seq., 15 U.S.C. §3710a, and 37 C.F.R. Part 401.

2.17 “First Commercial Sale”: The initial sale of a Licensed Product to a third party end user.

2.18 “HIPAA”: The Health Insurance Portability and Accountability Act of 1996, as amended, and all rules and regulations promulgated in connection therewith, including without limitation the Privacy, Security, Breach Notification, and Enforcement Rules at 45 CFR Part 160 and Part 164.

2.19 “Improvement”: An invention which: (1) is made after the Effective Date; (2) is directly based on, derived, from, or related to the Patent Rights, but is not included within the definition of Patent Rights; (3) is or may be patentable or otherwise protected or protectable under law as intellectual property; and (4) either cannot be practiced without infringing one or more claims of the Patent Rights, or would itself be infringed by the practicing of the Patent Rights.

2.20 “IND”: An Investigational New Drug Application submitted to FDA under §505 of the Food, Drug, and Cosmetic Act, which satisfies the requirements of 21 C.F.R. §312; or a similar application to FDA’s foreign equivalents.

2.21 “Infringe,” “infringe,” “infringement,” or any correlative term: Any infringement (whether direct, indirect, contributory or otherwise) of the intellectual property rights of University (including without limitation under the doctrines of claim construction or differentiation, literal overlap or equivalents); or any misuse, misappropriation, theft, or breach of confidence related to the Invention, Licensed Products, Confidential Information, Improvements, and/or the Patent Rights.

2.23 “IP Policies”: Collectively: (a) The University System of Maryland Policy on Intellectual Property, effective July 1, 2002, as amended, and any predecessor or successor policy adopted by USM regarding intellectual property and applicable to the Invention and Patent Rights; and (b) the UMB Policy on Intellectual Property, and any successor policy adopted by University regarding intellectual property and applicable to the Invention, Confidential Information, and Patent Rights.

2.24 “Joint Improvement”: Any Improvement that is invented: (a) by one or more Company Personnel or on behalf of Company, and by one or more University Personnel or on behalf of University; or (b) by one or more Company Personnel who used University’s resources (other than routine and minimal office use of email, telephones, or printers) in making the Improvement.

2.25 “Licensed Field”: The use of the Invention and Patent Rights in the therapeutic treatment of neuroinflammatory disease.

2.27 “Licensed Product”: Any product, service, or process, the development, making, use, offer for sale, sale, importation, or providing of which: (a) is covered by one or more claims of the Patent Rights; or (b) contains, comprises, utilizes, incorporates, or is derived from the Invention, any technology disclosed in the Patent Rights, University’s Confidential Information, or any information provided to Company by University Personnel (including without limitation under a consulting agreement).

2.29 “NDA”: A New Drug Application submitted to the FDA to market a new drug under §505 of the Food, Drug, and Cosmetic Act, which satisfies the requirements of 21 C.F.R. §313; or a similar application to FDA’s foreign equivalents.

2.30 “Net Revenues”: The gross revenues received from sales of Licensed Products, less the following: (a) sales or use taxes, value added taxes, excise taxes, customs duties, or other governmental charges; (b) amounts invoiced to the customer for outbound transportation, shipping, handling, and insurance; and (c) amounts actually allowed or credited on returns or rejections or billing errors. “Net Revenues” shall not include any consideration designated specifically and solely for research and development of a Licensed Product.

2.35 “OTT”: The Office of Technology Transfer in University’s Office of Research and Development, and any successor to its responsibilities.

2.36 “Patent Challenge”: Any action before a court or governmental authority which disputes the validity or enforceability of, or otherwise opposes or interferes adversely with the prosecution of, any of the claims of the Patent Rights (including without limitation filing an action under the Declaratory Judgment Act, 28 U.S.C. §2201(a)).

2.37 “Patent Expenses”: All fees, charges, expenses, and costs incurred before and after the Effective Date in connection with the preparation, filing, prosecution (including without limitation any issuance, reissuance, reexamination, interference, or opposition), and/or maintenance of patents or patent applications relating to the Patent Rights, including without limitation all fees and charges of outside patent counsel. Patent Expenses shall be considered to be incurred when the fee, charge, expense, or cost is actually incurred (rather than when it is invoiced). For example, charges of outside patent counsel are considered to be incurred as of the date on which the professional services are rendered.

2.38 “Patent Rights”: (a) U.S. and foreign patents and patent applications listed in Schedule A, as it may be amended from time to time by mutual agreement of the parties or to add Licensed Improvements pursuant to Section 3.7.5; (b) all patents and patent applications, whether filed before or after the Effective Date, which claim priority under 35 U.S.C. §119 or the benefit of the filing date under 35 U.S.C. §120 or §371 (but only to the extent of subject matter in a patent or patent application for which priority or benefit is claimed in a patent or patent application described in clause (a)); (c) any divisional, continuation, and continuation-in-part (but only to the extent a claim in a patent or patent application described in clause (a) or (b) covers subject matter disclosed in the continuation-in-part or a claim in the continuation-in-part is directed to subject matter contained in a patent or patent application described in clause (a) or (b)); (d) any patent issuing from any patent or patent application described in clause (a), (b), or (c); (e) any reissue, renewal, reexamination, supplementary protection certificate, or extension of any patent or patent application described in clause (a), (b), (c), or (d); and (f) any foreign counterpart or equivalent of any patent or patent application described in clause (a), (b), (c), (d), or (e).

2.39 “Person”: An individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, estate, incorporated association, joint venture or similar entity or organization, including a government or political subdivision, department, agency, or unit of a government.

2.40 “Phase 1 Clinical Trial”: A Clinical Trial that is intended to initially evaluate the safety and/or pharmacological effect in subjects, or that would otherwise satisfy the requirements of 21 C.F.R. §312.21(a), or its foreign equivalent.

2.41 “Phase 2 Clinical Trial”: A Clinical Trial for which a primary endpoint is a preliminary determination of efficacy for a particular indication in patients with the disease and to determine the common short-term side effects and risks associated with the drug, or that would otherwise satisfy the requirements of 21 C.F.R. §312.21(b), or its foreign equivalent.

2.43 “Sale,” “sale,” “sell,” or any correlative term: The sale, lease, license, transfer, or other disposition of a Licensed Product in return for any type of consideration. Licensed Products shall be considered sold when shipped or invoiced, whichever is first.

2.44 “Sponsored Research Agreement” or “SRA”: As defined in Section 1.4.

2.45 “Sublicense”: A license, grant of rights to, or other similar permission to use all or some of the Patent Rights.

2.46 “Sublicense Income”: Consideration in any form received from a Sublicensee for use of the Invention and Patent Rights, or otherwise in consideration of its rights as a Sublicensee, including without limitation option fees, up-front fees, license signing fees, license maintenance fees, milestone payments, success fees, and any other consideration paid by or on behalf of the Sublicensee. “Sublicense Income” shall not include any royalties based on sales of Licensed Products by any Sublicensee. “Sublicense Income” shall also not include any payment or consideration received from a Sublicensee in consideration for anything other than a Sublicense, including without limitation: amounts paid for equity of Company by a Sublicensee (up to fair market value); loans or extensions of credit by a Sublicensee to Company; consideration for a license granted under technology other than the Invention and Patent Rights; or consideration designated specifically and solely for research and development by Company of a Licensed Product.

2.47 “Sublicensee”: A Person (other than a Company Affiliate) which receives a Sublicense.

2.48 “Term”: The period commencing as of the Effective Date, and ending upon the expiration or termination of this Agreement.

2.49 “University Improvement”: (a) An Improvement which was invented solely by one or more University Personnel or on behalf of University; or (b) an Improvement in which University otherwise has an ownership interest, and Company has no ownership interest.

2.51 “University Personnel”: University Inventors; and University faculty members, employees (including without limitation post-doctoral fellows), and students.

2.52 “University Related Organizations”: USM; any constituent institution, center, or institute that is part of USM; University of Maryland Medical System Corporation (and its subsidiaries and affiliates); faculty practice organizations of University; and the Baltimore Veterans Administration Medical Center.

2.53 “USM”: The University System of Maryland, a public corporation and an instrumentality of the State of Maryland.

3.1.1 University hereby grants to Company, and Company hereby accepts, an exclusive license, but only during the Term, within the Licensed Field, and in the Licensed Territory: (a) to make, have made, use, sell, offer to sell, and import the Licensed Products ; and (b) in connection therewith, to use the Invention, University’s Confidential Information, and to practice the Patent Rights.

3.1.2 However, the license is subject to: (a) rights of the U.S. Government; and (b) the terms and conditions of this Agreement, including without limitation Section 3.2.

3.1.3 All fields of use which are not specifically included in the definition of the “Licensed Field” are excluded, and University grants no license or other right with respect to those excluded fields of use.

3.2 University’s Reservation of Rights. Notwithstanding anything contained in this Agreement to the contrary, University specifically reserves for itself and University Related Organizations the following rights:

3.2.1 To use the Invention, to practice under the Patent Rights, and to make and use Licensed Products on a royalty-free basis for research, scholarly use, teaching, education, patient care incidental to the foregoing, and other similar uses (“Non-Commercial Uses”);

3.2.2 To license government agencies, universities or other educational institutions, organizations of the type described in §501(c)(3) of the Internal Revenue Code, scientific or educational organizations qualified under a state nonprofit organization statute (or foreign equivalents of the foregoing) (“Non-Commercial Organizations”) to use the Invention, to practice under the Patent Rights, and to make and use Licensed Products, on a royalty-free basis solely for Non-Commercial Uses; and to provide material and information (excluding Confidential Information of Company and Company Affiliates) to Non-Commercial Organizations solely for Non-Commercial Uses;

3.2.3 Subject to Article 7 (Confidentiality), to disseminate and publish scientific findings from research related to the Invention and Patent Rights, and to permit University Personnel to do the same; and

3.2.4 To license the Patent Rights, and to provide material and information (excluding Confidential Information of Company and of Company Affiliates), to third parties for uses outside the Licensed Field.

3.3.1 Company may assign, sublicense, grant, or otherwise convey any rights or obligations under this Agreement to a Company Affiliate, without obtaining University’s prior written consent. No license is conveyed under this Agreement to any Company Affiliate, except pursuant to this Section 3.3.

3.3.2 In the event of an assignment, sublicense, grant, or other conveyance to a Company Affiliate:

(a) The terms and conditions of the assignment, sublicense, grant, or other conveyance must be consistent with this Agreement;

(b) Company shall identify to University the name and address of any such Company Affiliate, and shall promptly provide to University a true and complete copy of each relevant agreement or document and any amendments;

(c) The Company Affiliate shall be bound by all of Company’s duties, obligations, and responsibilities under this Agreement;

(d) Company and that Company Affiliate shall be jointly and severally liable for all of their respective duties, obligations, and responsibilities under this Agreement, including without limitation the payment of royalties and Sublicense Income, whether or not paid to Company by Company Affiliate; and

(e) Unless the context specifically indicates otherwise, the definition of “Company” as used in this Agreement shall be construed to mean “Silo Pharma, Inc. and those Company Affiliates which have received an assignment, sublicense, grant, or other conveyance pursuant to Section 3.3, as the case may be.”

(a) Company may grant Sublicenses of some or all of the rights granted by this Agreement, provided that there is no uncured default or breach of any material term or condition of this Agreement by Company at the time of the grant, and that the grant complies with the terms and conditions of this Section 3.4. Company shall be and remain responsible for the performance by each Sublicensee of the Company’s obligations under this Agreement.

(b) Prior to entering into any Sublicense, Company shall provide University a draft of the proposed sublicense in substantially final form. University shall have fifteen (15) Business Days after receipt of the draft agreement to provide Company with comments. University’s comments shall be limited to ensuring that the Sublicense satisfies the requirements of Section 3.4.2. Company shall make reasonable revisions to accommodate any such University comments. If Company disputes any University comment, Company shall advise University prior to finalizing the Sublicense, and the parties shall negotiate in good faith to resolve any disagreement.

(c) Company shall promptly provide to University a true and complete copy of each executed Sublicense and any amendments. Any documents provided under this Section shall be subject to Article 7 (Confidentiality).

(d) Any purported Sublicense entered into by Company in violation of the requirements of this Section 3.4 or over University’s objection that it is inconsistent with this Agreement shall be voidable in whole or in part by University in its sole discretion.

(e) Company shall be responsible to ascertain, compute, audit, and collect all consideration that is payable by the Sublicensee, and to enforce the performance by the Sublicensee of its obligations under the Sublicense.

(f) To the extent required by this Agreement, Company shall establish standards regarding the quality of Licensed Products made or sold by the Sublicensee, and shall monitor and enforce those standards.

(g) Company shall be required to pay Sublicense Income, pursuant to Section 5.6.

3.4.2 Required Terms of Sublicenses. Any Sublicense shall be consistent with and subject to the terms and conditions of this Agreement, and shall incorporate terms and conditions sufficient to enable Company to comply with this Agreement. In addition, any Sublicense shall:

(a) Expressly include provisions for the benefit of University substantially similar to and at least as restrictive as this Section 3.4 (Sublicenses), Section 3.8 (Patent Challenges), Section 5.7 (Royalty Stacking), Article 7 (Confidentiality), Article 8 (Reports, Payments, and Accounting), Article 11 (Other Agreements), and Section 12.2 (Disclaimer of Warranties);

(b) Require the Sublicensee to maintain insurance consistent with the requirements of Section 13.1, and to defend, indemnify, and hold harmless consistent with Section 13.2;

(c) Prohibit further sublicensing by Sublicensee without the prior written consent of University (which consent shall not be unreasonably withheld, conditioned, or delayed);

(d) Require that any permitted Sublicense from a Sublicensee to a downstream Sublicensee satisfy the requirements of this Section (and Company shall notify University of the identity of any such further Sublicensees);

(e) Require that any dispute between Sublicensee and University shall be subject to dispute resolution on the terms and conditions set forth in Article 14 (Dispute Resolution) of this Agreement; and

(f) Provide that if this Agreement terminates or expires: (1) if requested by University, all of Sublicensee’s duties and obligations under the Sublicense shall be transferred from Company to University or its designee; and (2) any Sublicensee not in default may request a license from University to the rights sublicensed to the Sublicensee under the Sublicense (it being understood that otherwise no rights shall become directly licensed from University to any Sublicensee).

3.4.3 Limitations. Notwithstanding anything contained in this Agreement to the contrary, University shall not be bound by any of the following with respect to a Sublicense: (1) duties or obligations of the Company to Sublicensee which cannot be assumed or performed by University because they are inconsistent with the laws of the State of Maryland or written USM or University policy then in effect; (2) duties or obligations of the Company that exceed the obligations of University as licensor in this Agreement; and/or (3) duties or obligations of the Company contained in any Sublicense that are not contained in this Agreement, or which extend beyond the Term.

3.5 No Implied Rights. This Agreement confers no license or rights by implication, estoppel, or otherwise in any intellectual property, except as explicitly set forth in this Agreement. Any rights not expressly granted to Company under this Agreement are expressly reserved by University.

3.6.1 The U.S. Government retains certain rights in the Invention under Federal IP Policy. This Agreement is subject in all respects to Federal IP Policy.

3.6.2 As a condition of the licenses granted under this Agreement, Company agrees to comply with and acknowledges all aspects of Federal IP Policy which are applicable to the Invention and Patent Rights (unless duly waived or exempted by the U.S. Government). This includes without limitation the obligation that Licensed Products used or sold in the U.S. be manufactured substantially in the U.S., unless the U.S. Government determines that reasonable attempts to do so have been unsuccessful or domestic manufacture is not commercially feasible. Nothing contained in this Agreement shall obligate University to take any action that would conflict in any respect with its past, current, or future obligations to the U.S. Government under Federal IP Policy.

3.6.3 The use and disclosure of Confidential Information acquired pursuant to this Agreement and the exercise of the license granted by this Agreement are subject to the Export Control Laws, assets, and financial control regulations of the U.S., including without limitation restrictions under regulations of the U.S. that may be applicable to direct or indirect re-exportation of Confidential Information or of equipment, products, or services directly produced by use of Confidential Information. Company is responsible for complying with those regulations, in addition to the obligations set forth in Section 7.8.

3.6.4 The U.S. Government retains the right in certain circumstances set forth in Federal IP Policy to require University to grant to a responsible applicant a nonexclusive, partially exclusive, or exclusive license to use the Invention or Patent Rights in the applicant’s field of use on terms that are reasonable under the circumstances; or, if University fails to do so, to grant a license itself. The U.S. Government also retains the nonexclusive, nontransferable, irrevocable, royalty-free, paid-up right to practice or have practiced the Invention or Patent Rights throughout the world by or on behalf of the U.S. Government and on behalf of any foreign government or international organization pursuant to any existing or future treaty or agreement to which the U.S. Government is a signatory.

(d) Notwithstanding the foregoing, Company grants to University, and University hereby accepts, a non-exclusive, non-transferable, irrevocable, and royalty-free license to practice Company Improvements consistent with the reservation of rights set forth in Sections 3.2.1 and 3.2.3.

(e) The parties hereby agree that, notwithstanding anything in this Agreement or the SRA to the contrary:

(1) If any University Improvement also constitutes “UMB Arising IP” (as defined in the SRA), then such University Improvement shall be subject to and shall be governed by the terms of this Agreement, and the SRA shall not apply to such University Improvement;

(2) If any Joint Improvement also constitutes “Joint Arising IP” (as defined in the SRA), then such Joint Improvement shall be subject to and shall be governed by the terms of this Agreement, and the SRA shall not apply to such Joint Improvement; and

(3) If any Company Improvement also constitutes “Sponsor Arising IP” (as defined in the SRA), then such Company Improvement shall be subject to and shall be governed by the terms of this Agreement, and the SRA shall not apply to such Company Improvement.

(a) University Personnel (including without limitation University Inventors) are required to promptly disclose to OTT any University Improvement or Joint Improvement made during the Term. University shall report promptly to Company in writing each University Improvement and/or Joint Improvement made during the Term by University Personnel which is disclosed to OTT; provided, however, that University’s duty to disclose shall be subject to any confidentiality obligations imposed by a third party which collaborates on or sponsors the research at University as a result of which the Improvement was made.

(b) Company shall report promptly to University in writing each Company Improvement and/or Joint Improvement made by Company during the Term.

(c) These reports shall be subject to Article 7 (Confidentiality), and shall be in sufficient detail to determine inventorship and an appropriate intellectual property protection strategy, if any.

3.7.3 Company and University shall discuss whether a patent application or applications pertaining to each University Improvement and/or Joint Improvement should be filed. If Company notifies University in writing that patent application(s) should be filed with respect to any University Improvement and/or Joint Improvement, then University shall be responsible for preparing and filing those patent applications in accordance with Sections 6.1 and 6.2, and Company shall be responsible for Patent Expenses incurred for those filings in accordance with Section 3.7.7. If Company notifies University in writing that Company is not interested in having patent application(s) filed with respect to a particular University Improvement and/or Joint Improvement, or if Company fails to notify University of its interest within sixty (60) days from the date on which the Improvement was disclosed by University to Company, Company shall have no further right to that University Improvement and/or University’s rights to that Joint Improvement. In all events, Company shall reasonably cooperate with University’s filing of patent application(s) pertaining to a University Improvement and/or Joint Improvement.

3.7.4 Subject to rights of a third party which collaborates on or sponsors the research at University which results in the University Improvement and/or Joint Improvement, University hereby grants to Company an exclusive option to obtain an exclusive license to any University Improvement and to University’s rights in any Joint Improvement (the “Option”) during the Option Term (as defined below), provided that: (a) this Agreement is in full force and effect at the time of exercise of the Option; (b) there are no uncured material defaults or breaches by Company of this Agreement or any other agreement between Company and University at the time of exercise of the Option; (c) Company timely exercises the Option in accordance with Section 3.7.5; and (d) Company pays Patent Expenses in accordance with Section 3.7.7.

(a) Company may exercise the Option by giving written notice to University within sixty (60) days after Company receives written notice from University under Section 3.7.2 concerning the particular University Improvement and/or Joint Improvement (the “Option Term”). Promptly following University’s receipt of that notice, the parties shall negotiate diligently and in good faith for a period of ninety (90) days or such longer period agreed by the parties (the “Negotiation Period”) an amendment to this Agreement adding that Improvement to the Patent Rights set forth on Schedule A.

(b) If and after an amendment is executed by the parties, but only in that event, the licensed University Improvement and/or licensed University’s rights in Joint Improvement (the “Licensed Improvement”) shall be deemed to constitute part of the Patent Rights and the Invention for all purposes hereunder.

(c) The amendment shall contain the terms and conditions of the license to the Licensed Improvement (including without limitation licensed field, royalties and other payments, milestones, etc.), which may differ from those contained in this Agreement regarding the Patent Rights.

(d) If the parties are unable to agree upon a royalty rate for the Licensed Improvement during the Negotiation Period, the determination of a royalty rate shall be submitted to the dispute resolution process set forth in Article 14.

3.7.6 If the Negotiation Period ends and the parties have not executed an amendment with respect to a particular University Improvement or Joint Improvement, Company shall have no rights with respect to the University Improvement or the University’s interest in the Joint Improvement, and University may license all or a portion of the University Improvement or the University’s interest in the Joint Improvement to one or more third parties.

3.7.7 In consideration for the Option, Company shall be responsible for payment of all Patent Expenses with respect to Improvements reported by University under Section 3.7.2. Patent Expenses shall be due and payable within thirty (30) days of receipt by Company of a written invoice from University detailing such Patent Expenses.

(a) If Company fails to pay timely any invoice for the Patent Expenses, the Option with respect to the relevant University Improvement or University’s interest in the Joint Improvement shall terminate and be of no further force or effect, if the failure is not cured within thirty (30) days of receiving written notice thereof from University.

(b) If (1) Company notifies University of its intent not to exercise the Option with respect to any particular University Improvement and/or University’s interest in any Joint Improvement, (2) Company does not timely exercise the Option, or (3) the parties have not executed an amendment by the end of the Negotiation Period, then Company shall have no obligation to pay Patent Expenses related to the University Improvement and/or University’s interest in any Joint Improvement which are incurred more than thirty (30) days after the relevant time; provided, however, Company shall reimburse University for any Patent Expenses that result from Company’s instructions to perform any such service(s). University shall use reasonable efforts to minimize the Patent Expenses incurred during the thirty (30) day period.

3.7.8 For purposes of this Agreement, inventorship or authorship of any Improvement or other invention shall be determined solely in accordance with U.S. intellectual property law, notwithstanding that the laws of other countries where patent, trademark, or copyright applications are filed may follow rules of inventorship or authorship that differ from U.S. intellectual property law. For purposes of this Agreement, an Improvement or other invention shall be deemed to be “made” when it is conceived.

3.8.1 Prior to taking or causing the taking of any Patent Challenge concerning the Patent Rights in any forum outside of the USPTO, Company agrees to first pursue an appropriate proceeding, filing, or other action in the USPTO in the form of an Inter Partes Review or Post Grant Review. Company agrees to await a final determination of any Inter Partes Review or Post Grant Review pursuant to this Section by the tribunal of last resort having jurisdiction prior to taking or causing the taking of the Patent Challenge in a forum outside of the USPTO. Company and University agree that this Section does not prohibit or limit Company’s ability to take or cause the taking of any Patent Challenge, but merely dictates the procedure for a Patent Challenge falling under the scope and kind that the USPTO is authorized to adjudicate.

3.8.2 If Company takes or causes the taking of any Patent Challenge (but excluding a request for Inter Partes Review or Post Grant Review under Section 3.8.1), University shall have the right: (a) to convert the exclusive license granted in this Agreement to a nonexclusive license (which shall be subject to all of the terms and conditions of the Agreement); and (b) to grant nonexclusive licenses to third parties.

3.8.3 If Company takes or causes the taking of any Patent Challenge, Company agrees to pay directly to University (and not into any escrow or other account) all royalties, milestone payments, Sublicense Income, and any other payment due under this Agreement during the period of challenge. If such a Patent Challenge is successful, Company shall have no right to recoup any amounts paid before or during the period of the Patent Challenge.

3.8.4 The provisions of this Section 3.8 shall apply in all events jointly and severally to Company and all Company Affiliates.

4.1.1 Company has delivered to University prior to execution of this Agreement a commercialization plan, in form and substance reasonably acceptable to University. A true and complete copy of the commercialization plan is attached hereto as Schedule B (the “Commercialization Plan”). The Commercialization Plan sets forth the Company’s plan for research and development required in order to develop Licensed Product(s), and Company’s commercialization strategy regarding Licensed Product(s).

4.1.2 No later than thirty (30) months after the Effective Date, Company shall revise and update the Commercialization Plan, and such revised and updated plan shall then replace Schedule B and thereafter constitute the “Commercialization Plan.” The revised and updated Commercialization Plan must be in form and substance reasonably acceptable to University.

4.1.3 Company shall provide to University semi-annual written reports for the first three (3) years after the Effective Date, and annual written reports thereafter, on progress against the Commercialization Plan. The reports shall be due within thirty (30) days following the expiration of each reporting period. However, no progress reports under this Section shall be due after the First Commercial Sale, because the reporting requirements of Section 8.2 shall apply after that time. Any information or reports provided under this Section shall be treated as Company’s Confidential Information subject to Article 7 (Confidentiality).

4.1.4 Company shall promptly notify University of any substantial change in the Commercialization Plan if such change will materially alter or affect the timely achievement of any diligence milestone set forth on Schedule C. Any amendment of the Commercialization Plan that will materially alter or affect the timely achievement of any diligence milestone shall require the consent and approval of University, which shall not be unreasonably withheld, conditioned, or delayed.

4.1.5 Provisions of this Agreement shall be amended by mutual agreement of the parties to the extent reasonably necessary to conform to any approved modifications of the Commercialization Plan, including without limitation the diligence milestones set forth on Schedule C and the milestone payments set forth on Schedule D. Those amendments shall be negotiated reasonably and in good faith by the parties.

4.2 Performance According to Plans. Company shall use Commercially Reasonable Efforts to timely perform in accordance with the Commercialization Plan, as it may be duly amended pursuant to Section 4.1.5.

4.3 Licensed Products to Market. Company shall use Commercially Reasonable Efforts to bring one or more Licensed Products to market as soon as reasonably practicable in accordance with the Commercialization Plan, as it may be duly amended pursuant to Section 4.1.5.

4.4.1 Company shall timely achieve the diligence milestones set forth on Schedule C, as it may be duly amended pursuant to Section 4.1.5.

4.4.2 The diligence milestones may be re-negotiated upon receipt of the revised Commercialization Plan pursuant to Section 4.1.2.

The parties acknowledge and agree that payment obligations set forth in this Article 5 were established for the convenience of the parties after due consideration was given to alternative payment structures. These payment obligations have been agreed by the parties to be the most appropriate and convenient means of valuing Company’s right to use the Invention, practice the Patent Rights under this Agreement, and receive the benefit of University entering into this Agreement. In consideration of the license and rights granted under this Agreement:

5.1 License Fee. Within thirty (30) days after the Effective Date, Company shall pay to University a license fee of $[*], payable as follows: (a) $[*] shall be due within thirty (30) days following the Effective Date; and (b) $[*] shall be due on or before the first (1^st) anniversary of the Effective Date. The license fee is non-refundable, and is not creditable against any other fee, royalty, or payment.

5.3.1 Company shall pay to University the milestone payments set forth on Schedule D. The milestone payments are not creditable against any other fee, royalty, or payment.

5.3.2 The milestone payments may be re-negotiated upon receipt of the revised Commercialization Plan pursuant to Section 4.1.2.

5.4 Royalties. Company shall pay to University a royalty on sales of Licensed Products by Company, Company Affiliates, and/or Sublicensees, at the following royalty rates:

5.5 Minimum Annual Royalties. If the royalties payable under Section 5.4 for any calendar year do not reach the “Minimum Annual Royalty” set forth below, Company shall pay an additional amount with the first royalty report due on the next January 31, so that the total amount paid for such period reaches the Minimum Annual Royalty:

5.6.1 Company shall pay to University a percentage of all Sublicense Income which is receivable by Company or Company Affiliates as follows:

(a) [*] ([*]%) of Sublicense Income which is receivable with respect to any Sublicense that is executed before the filing of an NDA (or foreign equivalent) for the first Licensed Product; and

(b) [*] percent ([*]%) of Sublicense Income which is receivable with respect to any Sublicense that is executed after the filing of an NDA (or foreign equivalent) for the first Licensed Product.

5.6.2 Any cash payment due to University under this Section 5.6 shall be paid within thirty (30) days after the end of each calendar quarter during which Sublicense Income is received.

(a) University shall have the option, in its sole discretion, to have any non-cash Sublicense Income (including without limitation securities) either: (1) paid in kind by Company transferring and delivering to University the required percentage of Sublicense Income; or (2) paid by the Company in the cash equivalent of the fair market value of the Sublicense Income. If paid to University within thirty (30) days following Company’s receipt, the Sublicense Income shall be valued at the fair market value as of the date of payment to University.

(b) However, if Company cannot transfer and deliver the Sublicense Income within thirty (30) days of Company’s receipt without violating an applicable law, regulation, or other legal requirement, or the terms of any agreement or other arrangement with a third party (including the Sublicensee), then Company shall transfer and deliver the share of the Sublicense Income to University as soon as the transfer is permitted.

(c) Any dispute as to the proper valuation of the share of Sublicense Income shall be resolved pursuant to the dispute resolution procedures set forth in Article 14.

(d) As to any other form of Sublicense Income that cannot be valued as contemplated by this Section 5.6.2, the parties shall negotiate diligently and in good faith to arrive at a mutually agreeable solution under which University shall receive its required share.

5.7.1 This Section 5.7 shall apply with respect to the sales of Licensed Product(s), if the Company was legally required to obtain a license from a third party in order to avoid infringing such third party’s patent(s) in the sale of the Licensed Product(s) (a “Required Third Party License”).

5.7.2 Company may deduct up to fifty percent (50%) of any royalties due under Required Third Party Licenses for sales of a Licensed Product from any royalties due to University under this Agreement; provided, however:

(a) The royalties due to University shall not be reduced by more than fifty percent (50%) of the royalties that would have been payable to University absent the effects of this Section 5.7;

(b) The royalties due to University shall not be reduced below the Minimum Annual Royalty due under Section 5.5; and

(c) Any such deduction shall only apply with respect to a Required Third Party License that contains similar royalty stacking provisions so that the royalty rates payable under this Agreement and such Required Third Party License are reduced on a similar or pro rata basis.

5.7.3 Company shall provide prompt written notice to University upon entering into any Required Third Party License. Such notice shall contain a calculation of the percentage by which royalties payable to University will be reduced as a result.

6.1.1 As of the Effective Date, University has filed the patent applications set forth on Schedule A.

6.1.2 University is responsible for preparing, filing, prosecuting (including without limitation defending the applications in an Inter Partes Review, interference proceeding, reexamination, post-grant administrative proceeding, or associated litigation), and maintaining the Patent Rights.

6.1.4 University shall not seek to narrow substantially the scope of or irrevocably abandon a pending application or an issued patent without obtaining Company’s consent, which shall not be unreasonably withheld, conditioned, or delayed.

6.1.5 University is solely responsible for selection of patent counsel and for matters regarding the scope and content of U.S. and foreign patent applications and other filings.

6.1.6 University shall provide written notice to Company of any determination to cease prosecution or maintenance of any Patent Right within sufficient time for Company to undertake that prosecution or maintenance, and Company shall thereafter have the right, but not the obligation, at its sole expense, to prosecute or maintain that Patent Right , and to have such Patent Right assigned, conveyed, and transferred to Company; provided, however, that the foregoing shall be subject to any obligation of University under Federal IP Policy or the IP Policies to assign the Invention to the University Inventors.

6.1.7 Each party shall cooperate with the other party in connection with the prosecution, filing, and maintenance of any Patent Rights. Each party shall advise the other party reasonably promptly as to material developments with respect to the Patent Rights. Each party shall promptly provide the other party with copies of all communications relating to the Patent Rights within the Licensed Field received by it from the USPTO and any foreign patent office.

6.1.8 Neither party shall be liable for any loss, as a whole or in part, of a patent or patent term extension granted by the USPTO (or any foreign patent office) on a patent included in the Patent Rights, including without limitation if the loss results from acts or omissions of outside patent counsel retained by a party that are outside such party’s control.

6.1.9 At University’s option, and subject to Section 6.1.2, Company shall be responsible, at Company’s sole expense, for defense of any issued patent regarding the Patent Rights in an Inter Partes Review, interference proceeding, reexamination, post-grant administrative proceeding, or associated litigation.

6.2 Foreign Prosecution. With respect to any non-U.S. territory in which it proposes to file a patent application, University shall notify Company ninety (90) days before the applicable national phase filing deadline. Company may elect, by written notice to University, whether or not to have University file a patent application in any such territory. If Company elects by written notice to have University file a patent application in a territory, then University shall file and prosecute an application in such territory; provided, however, that: (a) the written notice is received by University at least sixty (60) days before the applicable national phase filing deadline; (b) Company complies with Section 6.3.1; and (c) Company is not in default of any of its obligations under this Agreement as of the date written notice is received by University.

6.3.1 Subject to Section 6.4, Company shall be solely responsible for all Patent Expenses incurred before the Effective Date and during the Term. Company shall pay each invoice for Patent Expenses in full to University within thirty (30) days after receipt of invoice. Such obligation shall survive any expiration or termination of this Agreement.

6.3.2 In addition to any other remedy provided in this Agreement (including without limitation under Section 10.2.1), Company’s failure to pay any invoice on time shall result in a loss of input into patenting decisions until the failure is cured, together with accrued interest and late fees, if any.

6.4.1 Upon at least ninety (90) days prior written notice to University, Company may elect to discontinue payment of Patent Expenses with respect to any or all countries.

6.4.2 If Company elects to discontinue payment of Patent Expenses, Company shall be responsible for reasonable Patent Expenses which are incurred during the ninety (90) day period following the effective date of the notice, provided that University shall use reasonable efforts to minimize the Patent Expenses incurred during that period.

6.4.3 With respect to any countries as to which Company elects to discontinue payment of Patent Expenses, or any countries not specified by Company pursuant to Section 6.2: Company shall not have any right to give input into patenting strategy or decisions in those countries; and the definition of “Licensed Territory” shall be appropriately amended; and Company shall not have any Option rights with respect to Improvements in those countries. University shall have the right, at its option, to file, prosecute, or maintain any of those patents or patent applications, at its own expense. Company shall execute documents as University may reasonably request to confirm the termination of those rights.

7.1.1 A party (in its capacity as the “Discloser”) may disclose Confidential Information to the other party (the “Recipient”). For a period of five (5) years following its disclosure, Recipient shall hold the Confidential Information in confidence, and may disclose or use the Discloser’s Confidential Information only as permitted by this Agreement. Recipient shall not use the Confidential Information for any other purpose without the prior written consent of Discloser. Recipient shall notify Discloser immediately, and shall cooperate fully, at Discloser’s reasonable request, upon Recipient’s discovery of any loss or compromise of the Confidential Information.

7.1.2 Recipient may give access to or disclose the Discloser’s Confidential Information only to its Personnel who (a) have a need to know the Confidential Information for the purposes permitted by this Agreement, and (b) are required to comply with the obligations of confidentiality and restricted use contained within this Agreement.

7.1.3 The provisions of this Article 7, when applicable to Company, shall also be applicable in all events to all Company Affiliates. In the event of any disclosure of Confidential Information to a Company Affiliate, Company and any such Company Affiliate will be jointly and severally liable for all of Company’s and the Company Affiliate’s obligations with respect to this Agreement. Company shall promptly identify to University by name and address all Company Affiliates that have or previously had access to any of University’s Confidential Information.

7.2.1 The confidentiality obligations created by this Agreement shall not apply if and to the extent that: (a) the information is or becomes generally available to the public (other than through Recipient’s breach of this Agreement or any other agreement, violation of applicable law, or unauthorized act); (b) the information was already in the possession of Recipient at the time of the disclosure (other than pursuant to a confidential disclosure agreement or Recipient’s unauthorized act); (c) the information is or was developed by Recipient independent of and with no reliance upon Confidential Information of Discloser; (d) the information was disclosed to Recipient by a third party which did not acquire the information under an obligation of confidentiality to Discloser; (e) the disclosure or use is reasonably necessary to fulfill or comply with requirements of governmental authorities having jurisdiction, including without limitation the U.S. Securities and Exchange Commission, National Institutes of Health, FDA, and USPTO, and foreign equivalents of the foregoing; or (f) disclosure is required by applicable law.

7.2.2 In the event of disclosure required by applicable law, Recipient shall (to the extent legally permissible) use reasonable efforts to give Discloser prior written notice of disclosure. Recipient, consistent with its counsel’s advice, shall take reasonable and lawful actions to obtain confidential treatment for the Confidential Information and to minimize the extent of the disclosure, or allow Discloser the opportunity to take those actions.

7.3 Markings and Legends. Discloser shall use reasonable efforts to mark all Confidential Information disclosed to Recipient as “Confidential.” If the Confidential Information is not in written or tangible form and marked “Confidential” when disclosed, Discloser shall use reasonable efforts to summarize the information in writing, mark the summary “Confidential,” and provide the summary to Recipient within thirty (30) days after disclosure of the Confidential Information to Recipient. Failure to meet the marking requirements shall not affect Recipient’s confidentiality obligations under this Agreement to the extent that: (a) Recipient has actual knowledge that the information is Confidential Information; (b) the information by its nature would reasonably be considered to be confidential; or (c) the information is disclosed or otherwise made available under circumstances that reasonably indicate that it is confidential or proprietary.

7.4 Confidentiality Practices. Recipient shall only be required to use reasonable efforts to protect the confidentiality of the Discloser’s Confidential Information in a manner consistent with the efforts used by Recipient to protect its own Confidential Information. Company acknowledges that University is an educational and research institution with practices for protection of confidential information which may differ from Company’s standards and practices.

7.5 Government and Sponsor Rights. University’s Confidential Information may have been developed under a grant or contract or in collaboration with the government of the U.S., the State of Maryland, or other entities or research sponsors. The entities or sponsors may have rights in University’s Confidential Information and may have the right to license or use University’s Confidential Information, including the Invention.

7.6 Public Information Act. This Agreement and Confidential Information provided to University under this Agreement is a public record when in the possession of University, which may be subject to inspection pursuant to §4-101 et seq., General Provisions Article, Annotated Code of Maryland (the “Public Information Act”). Any Confidential Information which is a trade secret, confidential financial information, or confidential commercial information is exempt from disclosure under §4-335 of the Public Information Act.

7.7 Medical Information. Any Confidential Information that would identify human research subjects or patients shall be maintained confidentially in accordance with applicable law. Use of medical information in connection with this Agreement shall be subject to and conducted in accordance with HIPAA, and the Maryland Confidentiality of Medical Records Act (§4-301 et seq., Health-General Article, Annotated Code of Maryland). If Company is a “Business Associate” (as defined in HIPAA): (a) Company shall promptly execute a standard Business Associate Agreement as required by HIPAA, and (b) Company shall also cause any Sublicensee, subcontractor, agent, or other Person under Company’s direction or control that is participating in this Agreement to promptly execute a standard HIPAA Business Associate Agreement as required by HIPAA.

7.8 Export Control Laws. Each party shall comply with applicable Export Control Laws and regulations of the United States and other relevant countries as such laws currently exist and as they may be amended from time to time, with respect to any export of Confidential Information and any immediate products and services based thereupon.

7.9 Title. As between Discloser and Recipient, title to the Confidential Information remains exclusively with Discloser.

7.10.1 Upon expiration or termination of this Agreement for any reason, Recipient shall either return or destroy the Discloser’s Confidential Information, together with all copies and descriptions of the Confidential Information made by Recipient, and shall provide written certification of the same to Discloser upon request.

7.10.2 Recipient may retain one (1) copy of the Confidential Information for the sole purpose of being able to determine the scope of its obligations of confidentiality under this Agreement. Recipient shall not be required to return or destroy Discloser’s Confidential Information (a) created or maintained as electronic files automatically saved pursuant to standard archiving or back-up procedures, or (b) required to be retained in accordance with applicable law. Recipient may not otherwise use or disclose any of such retained Confidential Information.

7.10.3 If and to the extent any regulatory agency requests access to Recipient’s files after the return of Confidential Information to Discloser, Recipient may either refer that agency to Discloser, or Discloser shall grant Recipient limited access again to that Confidential Information to allow compliance with the request.

8.1 Records; Audits. During the Term and for five (5) years after its expiration or termination, Company shall keep (and shall require each Sublicensee to keep) complete, true, and accurate records containing all the particulars that may be reasonably necessary to determine all amounts payable to University. The records shall be subject to inspection at any time during regular business hours upon reasonable notice by an independent auditor appointed by University for this purpose and reasonably acceptable to Company, but not more than once with respect to any 12-month period. This audit shall be at University’s expense; provided, however, if the audit determines that Company underpaid by an amount which is greater than the cost of the audit, the audit expense shall be payable by Company.

8.2 Reports. Within thirty (30) days after the close of each calendar quarter, Company shall deliver to University a complete, true, and accurate report, giving particulars of the business conducted by Company and Sublicensees, if any, in the preceding period that are pertinent to any accounting for amounts payable under Article 5 (Consideration) and Article 9 (Infringement). These reports shall be certified complete, true, and accurate by an authorized officer of Company, and shall include at least the following information for the period:

8.2.1 Accounting for all Licensed Products that were sold and Net Revenues received, including without limitation the number of units of Licensed Products that were sold, total billings for Licensed Products that were sold, and deductions applied in determining Net Revenues;

8.2.3 Names and addresses of all Company Affiliates with rights to use the Invention and Patent Rights, and names and addresses of all Sublicensees (including without limitation downstream Sublicensees); and

8.2.4 Accounting for expenses and recoveries pursuant to Article 9, as applicable.

8.3.1 With each report submitted in accordance with Section 8.2, Company must pay to University the royalties, fees, or other payments due and payable under this Agreement for the period covered by the report. If no royalties, fees, or other payments are due, Company shall so report.

8.3.2 Payments shall be made in U.S. Dollars by check(s) drawn to the order of University or by wire transfer of immediately available funds to an account designated by University in writing.

8.3.3 Payment shall be made in accordance with the instructions set forth on Schedule F, as it may be changed from time to time by University.

8.4 Milestones. Company shall report in writing to University no later than ten (10) Business Days following the occurrence or satisfaction of each of the diligence milestones set forth on Schedule C, as such diligence milestones may from time to time be amended as contemplated by Section 4.1.5. Company shall make milestone payments due upon achievement of the items set forth on Schedule D.

8.5 Interest on Late Payments. Interest is due on any payment to University required under this Agreement that is more than thirty (30) days late. The interest rate is one and one-half percent (1.5%) simple interest per month accruing from the due date.

8.6 Taxation. University is a unit of the government of the State of Maryland, and therefore is exempt from taxation. Company shall assert to all applicable governmental authorities that University is exempt from tax by virtue of its governmental status. If Company nevertheless is required to withhold tax on royalties, fees or other payments due to University under this Agreement, it shall pay promptly any tax to the appropriate governmental authority, and shall gross up the amount owed to University so that after the tax is withheld, the amount payable to University is the same amount as originally due. In that event, it shall furnish University with proof of payment of the tax together with official or other appropriate written evidence issued by the competent governmental authority sufficient to enable University to support a claim for tax exemption, credit, or refund with respect to any sum so withheld. Company shall cooperate with University if University elects to seek, at its own expense, administrative or judicial determination of tax exemption, credit, or refund.

8.7.1 Royalties, Sublicense Income, and other payments under this Agreement are payable from the country in which they are earned and are subject to foreign exchange regulations then prevailing in the country. Payments must be paid to University in U.S. Dollars wire transfer or by check(s) drawn to the order of University. To the extent payments are due on amounts earned in a foreign country, those payments shall be determined first in the currency of the country in which they are earned, and then converted to their equivalent in U.S. Dollars. The buying rates of exchange for converting the currencies involved into the currency of the U.S. quoted by the Wall Street Journal (or any successor), averaged on the last Business Day of each of three (3) consecutive calendar months constituting the period in which the royalties were earned, shall be used to determine any conversion. Company shall bear any loss of exchange or value or pay any expenses incurred in the transfer or conversion to U.S. dollars.

8.7.2 If any applicable law or regulation (including without limitation currency exchange regulations) prevents or limits payments in any country, Company shall render to University annual reports of sales, Sublicense Income, or other applicable activities in that country. All monies due and owing University as provided in the annual reports shall, at University’s option: (a) be deposited promptly in a local bank in that country in an account to be designated by University in writing; or (b) be paid promptly to University or deposited in its account, as directed in writing by University in any other country where the payment or deposit is lawful.

8.8 Contact Information for Payments and Reports. Each party’s contract information for payments and reports is set forth on Schedule G. Each party shall promptly notify the other party of any change of such information.

9.1 Notification. Any party which becomes aware of substantial, credible evidence that a third party is infringing the Patent Rights in the Licensed Field shall promptly deliver to the other party written notice of that infringement together with all such evidence available to such party.

9.2.1 Subject to Section 9.5, if any Patent Rights licensed to Company are infringed by a third party, Company shall have the first and primary right, but not the obligation, to institute, prosecute, and control any action or proceeding with respect to such infringement (including without limitation any declaratory judgment action arising from such infringement), by counsel of its choice and at its own expense. Before Company commences any such action, in making its decision whether or not to sue, Company shall in good faith consider the views of University and the potential effects on the public interest. Company shall not exercise its right to sue in an arbitrary, capricious, or baseless manner.

9.2.2 From the proceeds of any recovery in such litigation (including without limitation pursuant to any settlement), Company (and University, if applicable) shall be entitled to reimbursement for reasonable, documented out-of-pocket costs incurred in obtaining or negotiating such recovery (including without limitation reasonable attorneys’ fees, expert witness fees, court costs and other costs and expenses of litigation at trial and appellate levels), to the extent that such costs are not otherwise reimbursed (including without limitation by a Sublicensee or other third party) (“Unreimbursed Litigation Costs”).

9.2.3 Any recovery in excess of Unreimbursed Litigation Costs shall be allocated as between Company and University as follows:

(a) Any monetary damages for Company’s lost profits or lost sales due to the infringement (including without limitation monetary damages for future sales by the infringer, or damages in the nature of a reasonable royalty under 35 U.S.C. §284 or any successor thereto) will be treated as Net Revenues, and Company shall pay to University a percentage of that amount in accordance with Section 5.4 (Royalties).

(b) Any other type of damages (including without limitation damages for willful infringement), will be treated as Sublicense Income, and Company shall pay to University [*] percent ([*]%) of that amount in accordance with Section 5.6 (Sublicense Income).

(c) With respect to any non-cash portion of the recovery or non-cash cross-license, the parties will negotiate appropriate compensation to University reasonably and in good faith.

9.3.1 If a third party claims patent infringement against Company as a result of Company’s use of the Patent Rights, Company shall promptly notify University thereof in writing, setting forth the facts of that claim in reasonable detail. Subject to Section 9.5, Company shall have the primary right, but not the obligation, to defend and control the defense of any such claim against Company, by counsel of its own choice and at its own expense.

9.3.2 Subject to applicable law and the written policies of USM, University agrees to cooperate reasonably with Company’s defense of any such action; provided, however, University shall not be required to incur any out-of-pocket expense.

9.4.1 Company shall diligently pursue any suit or action under Section 9.2 or 9.3. Company shall keep University reasonably apprised of all material developments. Company shall seek University’s input and approval on any substantive submissions or positions taken regarding the scope, validity, and/or enforceability of the Patent Rights, such approval not to be unreasonably withheld, conditioned, or delayed. Company shall not prosecute or defend any suit in a manner that is reasonably expected to materially adversely affect the interests of University or any University Related Organization, unless University grants its prior written consent.

9.4.2 Company may enter into a settlement, consent judgment, or other voluntary disposition of any suit or action under Section 9.2 or 9.3; provided, however, University shall have the right of prior approval (such approval not to be unreasonably withheld, conditioned, or delayed) regarding any settlement, consent judgment, or other voluntary disposition of any such claim. Company’s request for such approval shall include complete copies of final settlement documents, a detailed summary of such settlement, and any other information material to such settlement. University shall provide Company notice of its approval or denial within fifteen (15) Business Days of receipt of any request for such approval by Company. If University wishes to deny such approval, such notice shall include a detailed written description of University’s reasonable objections.

9.4.3 Subject to Section 9.6.1 and upon reasonable request stating that Company has determined that it is necessary for University to join in order to prosecute or defend any suit or action under Section 9.2 or 9.3, University may agree to join in the suit or action as a nominal party, but only if: (a) Company’s and University’s respective counsel recommend that such joinder is necessary in their reasonable opinion to achieve standing or to avoid dismissal; (b) the joinder is approved by the Maryland Attorney General; (c) University is not the first named party in the suit or action; (d) the pleadings and any public statements about the suit or action state that Company is pursuing the suit or action and that University has joined only as a nominal party; (e) University shall otherwise have no obligations in connection with the suit or action, other than as specifically set forth in this Agreement; and (f) Company reimburses, indemnifies, and holds harmless the University from any costs, expenses, or fees (including without limitation reasonable attorneys’ fees and litigation costs) which University incurs as a result of such joinder.

9.5.1 If Company fails to bring suit under Section 9.2 or otherwise commence negotiations to abate infringement by any required filing deadline (but not later than three (3) months after receiving notice or otherwise having knowledge of infringement), University shall have the right, but not the obligation, in its sole discretion, to take any action it deems appropriate.

9.5.2 If Company fails to notify University of its intent to respond in opposition to a legal action under Section 9.3 within ten (10) Business Days after Company’s receipt of notice of the filing of the action, or if Company notifies University that it does not intend to oppose the action, University shall have the right, but not the obligation, in its sole discretion, to take any action it deems appropriate, including without limitation responding to the action.

9.5.3 Notwithstanding the foregoing, University shall have a continuing right, but not the obligation, in its sole discretion, to join any legal action involving the Invention and Patent Rights, and to participate through counsel of its own choosing, if University reasonably determines that the failure to join would have a materially adverse effect upon the University.

9.5.4 If University files suit, responds to, or otherwise joins in any legal action, University shall be responsible for its own litigation expenses, and shall be entitled to all recoveries which it obtains in connection therewith; provided, however, with respect to any legal action under Section 9.2 in which Company is also actively participating in the prosecution, then the recoveries in that legal action shall be shared by the parties in accordance with Section 9.2.2 and 9.2.3.

9.5.5 Notwithstanding anything in this Agreement to the contrary, if University files suit, responds to, or otherwise joins in any legal action, University shall be entitled to settle any action on terms to be established by University in its sole but reasonable discretion.

9.6.1 Nothing in this Agreement shall be construed in any way which would limit the authority of the Maryland Attorney General.

9.6.2 Each party shall cooperate at its own expense with the other party in connection with any action under this Article 9. Each party shall provide prompt access to all necessary documents and shall render reasonable assistance in response to requests by the other party.

9.6.3 Any party which commences a suit and then decides to abandon it shall give written notice to the other party reasonably in advance of the next material deadline in the suit (but in no event less than thirty (30) days). The other party may continue prosecution of the suit, in which event the parties shall negotiate in good faith regarding the sharing of expenses and any recovery in the suit.

9.6.4 Neither party shall be liable for any losses incurred as a result of an action for infringement brought against the other party as a result of the other party’s actions or omissions, including without limitation its exercise of any right granted under this Agreement.

10.1.2 The Term of this Agreement shall continue in full force and effect on a Licensed Product-by-Licensed Product and country-by-country basis until the later of: (a) the date of expiration of the last to expire claim of the Patent Rights covering such Licensed Product in such country; (b) the expiration of data protection, new chemical entity, orphan drug exclusivity, regulatory exclusivity, or other legally enforceable market exclusivity, if applicable; or (c) ten (10) years after the First Commercial Sale of a Licensed Product in that country.

10.1.3 The Term of this Agreement shall expire fifteen (15) years after the Effective Date with respect to any country in which: (a) there were never any Patent Rights; (b) there was never any data protection, new chemical entity, orphan drug exclusivity, regulatory exclusivity, or other legally enforceable market exclusivity with respect to a Licensed Product; and (c) there was never a First Commercial Sale of a Licensed Product.

10.2.1 Failure to Pay. If Company or a Company Affiliate fails to pay any sum due and payable under this Agreement, University may terminate this Agreement and the license(s) granted under this Agreement, if the failure is not cured within thirty (30) days of receiving written notice thereof from University.

10.2.2 Failure to Achieve a Milestone. If Company fails to timely achieve any of the diligence milestones set forth on Schedule C (as it may be duly amended pursuant to Section 4.1.5), University may terminate this Agreement and the license(s) granted under this Agreement upon written notice to the Company.

10.2.3 Other Failure to Perform. In the event of any non-payment breach, default, or other failure by Company or a Company Affiliate to perform any material provision of this Agreement (other than those covered by another subsection of this Section 10.2), University may terminate this Agreement and the license(s) granted under this Agreement, if the breach, default, or other failure is not cured within the time period set forth in a relevant Section of this Agreement, or if none is so stated, within sixty (60) days of written notice thereof.

10.2.4 Bankruptcy. University may terminate this Agreement and the license granted under this Agreement upon Company’s making of an assignment for the benefit of creditors or being adjudicated bankrupt; the placing of all or substantially all of Company’s assets in the control of a receiver or trustee for the benefit of creditors and the receivership or trusteeship continues for a period of at least ninety (90) days; Company’s instituting proceedings under federal bankruptcy laws relating to insolvency of debtors, in which Company seeks to be adjudicated bankrupt or to be discharged of its debts, or to effect a plan of liquidation or reorganization; or the instituting by others of those proceedings against Company, where Company consents or acquiesces by pleading or default, or where those proceedings are not contested and discharged within ninety (90) days. (The foregoing are collectively referred to as “Bankruptcy.”)

10.3 Termination by Company. Company may terminate this Agreement as to one or more or all countries. In that event, Company shall provide University with ninety (90) days’ advance written notice of termination specifying the country(ies), and shall pay to University all payments due through the effective date of the termination with respect to those country(ies), including without limitation royalties, Sublicense Income, fees, and Patent Expenses. If the ninety (90) days encompasses a patent prosecution or maintenance deadline, University shall be relieved of its obligations under Article 6 (Patent Prosecution) with respect to meeting that deadline.

10.4 Survival. Expiration or termination of this Agreement does not relieve either party of any obligation which arises before expiration or termination, including without limitation obligations for payment and reporting. Any provision of this Agreement which contemplates performance or observance subsequent to any termination or expiration of this Agreement shall survive any termination or expiration of this Agreement and continue in full force and effect, including without limitation Article 7 (Confidentiality), Article 8 (Reports, Payments, and Accounting), Section 13.1.6 (Insurance), Section 13.2 (Indemnification by Company), and Article 14 (Dispute Resolution).

10.5 Effect of Termination. Upon termination of this Agreement in whole or in part for any reason prior to expiration of the Term (except that, in the case of partial termination, the following shall apply only regarding the terminated portion):

10.5.1 Company shall not thereafter have any license or other rights to the Invention and Patent Rights;

10.5.2 On or before the effective date of expiration or termination, Company shall pay to University all amounts due under this Agreement, including without limitation royalties, fees, Sublicense Income, and Patent Expenses;

10.5.3 Company shall be obligated to pay Patent Expenses incurred during the following period after the effective date of termination or expiration: (a) sixty (60) days in the event of expiration or termination by University pursuant to Section 10.2; or (b) until the effective date of termination in the event of a termination by the Company pursuant to Section 10.3; provided, however, that University shall use reasonable efforts to minimize the Patent Expenses incurred during the applicable period;

10.5.4 Company shall not thereafter grant to any Company Affiliate, Sublicensee, or third party any rights in the Invention and/or the Patent Rights;

10.5.5 Each party shall comply with the requirements of Section 7.10 (Return or Destruction of Confidential Information);

10.5.6 Company shall immediately either deliver to University, or destroy and certify to University in writing the destruction of, the following which it received from or on behalf of University: physical embodiments or manifestations of the Invention and/or the Patent Rights;

10.5.7 Each party shall execute and deliver any agreements, instruments, and documents as are reasonably necessary or appropriate to carry out the terms and conditions of this Agreement, including without limitation in connection with prosecuting any patent application(s) or otherwise obtaining Patent Rights; and

10.5.8 The licenses granted to University pursuant to Section 3.7.1(d) shall survive.

11.1.1 During the Term, Company and Company Affiliates shall not knowingly employ or compensate, directly or indirectly, any University Personnel working on matters related to the Invention and/or the Patent Rights, or involved in negotiating this Agreement on behalf of University, during employment by University or for two (2) years thereafter, unless consented to in writing by University’s President (or his/her designee); provided, however, that nothing in this Section 11.1.1 shall prohibit Company and Company Affiliates from hiring any University Personnel who respond to general employment solicitation not targeted at University Personnel, including general advertisement. “Compensation” includes without limitation: stock option or stock purchase agreements, consulting agreements, any other form of agreement, and cash payments. “Employment” includes both uncompensated and compensated service. The Maryland Public Ethics Law (Title 5, General Provisions Article, Annotated Code of Maryland) may apply to a decision by the University President in regard to the matter.

11.1.2 This Section 11.1 is not intended to prevent University Inventors from: (a) owning equity of Company or a Company Affiliate received by University Inventor as a distribution of licensing revenues under the IP Policies; (b) serving on the Scientific Advisory Board of Company or a Company Affiliate, and receiving compensation for such service; (c) performing research pursuant to a sponsored research agreement between University and Company or a Company Affiliate; or (d) serving as a consultant to the Company or a Company Affiliate and receiving compensation for such service. However, all of those cases are subject to and contingent upon compliance with the conflict of interest and other provisions of the Maryland Public Ethics Law, and with applicable policies and procedures of USM and University, including without limitation those regarding consulting arrangements. This provision is not intended to prevent Company from placing any reasonable restrictions upon University Inventor’s stock that may be necessary to satisfy federal or state laws or regulations applicable to Company or to development or commercialization of Licensed Products.

11.2 Non-Employment of Company Personnel. During the Term, University shall not knowingly employ or compensate, directly or indirectly, any Company Personnel working on matters related to the Invention and/or the Patent Rights or involved in negotiating this Agreement on behalf of Company, during employment by Company or for two (2) years thereafter, unless consented in writing by Company; provided, however, that nothing in this Section 11.2 shall prohibit University from hiring any Company Personnel who respond to general employment solicitation not targeted at Company Personnel, including general advertisement.

11.3.1 Neither party shall use the name, seal, logo, trademark, or service mark of the other party, any Affiliate, or any University Related Organization, or any of their respective Personnel, or any adaptation thereof, in any advertising, publicity, or other public statements without prior written consent obtained from such other party, Affiliate, University Related Organization, or individual, as the case may be, except where required by applicable law or regulation. Company hereby grants to University and UMVentures the right to display its logo on their websites in promoting technologies licensed to industry.

11.3.2 Either party may publicize the fact that the parties have entered into this Agreement. However, press releases or other public releases of information shall be agreed upon by the parties prior to release.

11.3.3 University does not directly or indirectly endorse any product or service provided or to be provided by Company, its successors, assigns, or Sublicensees by entering into this Agreement or otherwise. Company shall not in any way advertise, publicize, or imply that University endorses any of those products or services.

11.4 Patent Marking. Company shall cause “Patent Pending,” the Patent Rights patent number, or other patent markings to appear on all Licensed Products, their labels or their packaging to the extent required by and in accordance with the law in each country where Licensed Products are sold or offered for sale.

11.5 Inspection. Company shall allow University to inspect, at any time during regular business hours and upon reasonable notice, all Company correspondence regarding the Patent Rights and/or Licensed Products to and from the FDA and any other applicable U.S. regulatory agency, and any foreign equivalent.

11.6 Non-Disparagement. Each party acknowledges, agrees, and covenants that it will not make any public statement, comment, or communication that could constitute disparagement of, or that may be considered to be derogatory or detrimental to the name or reputation of, the other party or any of its Personnel. Both parties further agree that they will not in any way solicit any such statements, comments, or communications from a third party. This non-disparagement covenant applies to any public or private statements, comments, or communications in any form, whether oral, non-verbal, written, or electronic. Notwithstanding the foregoing, each party may disclose information to its attorneys or in response to a lawful subpoena or court order requiring disclosure of information.

11.7 Compliance with Applicable Law. Company shall comply with all applicable laws, rules, and regulations in connection with this Agreement.

12.1.1 Based upon assignments from the University Inventors (who, to the actual knowledge of OTT, are the only University Personnel who were the Inventors of the Invention), University has full right, title, and interest in and to the Patent Rights, subject to any rights of the U.S. Government under grants to University and Federal IP Policy.

12.1.2 To the actual knowledge of OTT, the Patent Rights are not the subject matter of any currently pending litigation involving University, and OTT has no actual knowledge of any related litigation contemplated either by University or by any third party.

12.1.3 To the actual knowledge of OTT, no Person disputes ownership of Patent Rights as described in this Agreement.

12.1.4 The execution, delivery and performance of this Agreement and the transactions contemplated under this Agreement have been duly approved; this Agreement has been properly executed by an authorized officer of University; and this Agreement is the valid and binding obligation of University and is enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, reorganization, insolvency, and similar laws affecting the rights of creditors generally, general principles of equity, and Maryland law with regard to actions in contract against the State of Maryland.

12.1.5 To the actual knowledge of OTT, the execution, delivery, and performance of this Agreement do not violate any agreement to which University is a party, or any order, judgment, or decree applicable to University.

12.1.6 To the actual knowledge of OTT, no consent, approval, or authorization of, or designation, declaration, or filing with any governmental authority or other Person, is required on the part of University in connection with the execution, delivery, or performance of this Agreement.

12.2.1 EXCEPT AS SET FORTH IN SECTION 12.1: THE INVENTION, THE PATENT RIGHTS, LICENSED PRODUCTS, LICENSED SERVICES, AND UNIVERSITY’S CONFIDENTIAL INFORMATION ARE PROVIDED “AS IS.” EXCEPT AS SET FORTH IN SECTION 12.1: ALL EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES REGARDING THE INVENTION, THE PATENT RIGHTS, PATENT APPLICATIONS, LICENSED PRODUCTS, OR UNIVERSITY’S CONFIDENTIAL INFORMATION ARE HEREBY DISCLAIMED, INCLUDING WITHOUT LIMITATION AS TO: SCOPE, VALIDITY OR ENFORCEABILITY; WHETHER A PATENT APPLICATION WILL BE APPROVED OR THAT A PATENT WILL ISSUE; RELIABILITY, COMPLETENESS, OR ACCURACY OF UNIVERSITY’S CONFIDENTIAL INFORMATION; INFRINGEMENT OR NON-INFRINGEMENT; THE PERFORMANCE OF LICENSED PRODUCTS, INCLUDING WITHOUT LIMITATION AS TO THEIR SAFETY, EFFECTIVENESS, OR COMMERCIAL VIABILITY; AND THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, COURSE OF DEALING, USAGE OF TRADE, OR NON-INFRINGEMENT.

12.2.2 EXCEPT AS SET FORTH IN SECTION 12.1: UNIVERSITY HAS MADE NO INVESTIGATION AND MAKES NO REPRESENTATION THAT THE INVENTION, THE PATENT RIGHTS, THE LICENSED PRODUCTS, UNIVERSITY’S CONFIDENTIAL INFORMATION, OR THE METHODS USED IN MAKING OR USING THE LICENSED PRODUCTS IS OR WILL BE FREE FROM INFRINGEMENT OF PATENTS, COPYRIGHTS, TRADEMARKS, OR OTHER INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD PARTY.

12.2.3 UNIVERSITY SHALL NOT BE LIABLE FOR ANY DAMAGES OF ANY NATURE WHATSOEVER RESULTING FROM RECEIPT OR USE BY COMPANY OF UNIVERSITY’S CONFIDENTIAL INFORMATION OR IN CONNECTION WITH ANY CLAIM BY COMPANY OR A THIRD PARTY AGAINST UNIVERSITY. ANY ACTIONS TAKEN BY COMPANY IN RESPONSE TO THE DISCLOSURE OF UNIVERSITY’S CONFIDENTIAL INFORMATION SHALL BE SOLELY AT THE RISK OF COMPANY.

12.3 By Company. Company represents and warrants to University as of the Effective Date that:

12.3.1 Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. Company has all requisite corporate power and authority to own, operate, and lease its properties, to carry on its business as now being conducted and as contemplated by this Agreement, to enter into this Agreement, and to carry out the transactions contemplated under this Agreement.

12.3.2 The execution, delivery and performance of this Agreement and the transactions contemplated under this Agreement have been duly approved; this Agreement has been properly executed and attested by the duly authorized officer(s) of Company; and this Agreement is the valid and binding obligation of Company and is enforceable in accordance with its terms, except as the enforceability may be limited by applicable bankruptcy, reorganization, insolvency, and similar laws affecting the rights of creditors generally, and general principles of equity.

12.3.3 The execution, delivery, and performance of this Agreement do not violate the terms of Company’s organizational documents, any agreement to which Company (or, to Company’s knowledge, any of Company’s Personnel) is a party, or any order, judgment, or decree applicable to Company (or, to Company’s knowledge, any of Company’s Personnel).

12.3.4 No consent, approval, or authorization of or designation, declaration, or filing with any governmental authority or other Person is required on the part of Company in connection with the execution, delivery, or performance of this Agreement, except as specifically set forth in this Agreement.

12.3.5 Company (and to Company’s knowledge, any of Company’s Personnel) is not a party to any agreement or instrument or subject to any charter or other corporate restriction or any judgment, order, writ, injunction, or, to Company’s knowledge, any rule or regulation which materially adversely affects the operations, prospects, properties, assets, or condition (financial or otherwise) of Company.

12.3.6 No suit, action, litigation, administrative proceeding, arbitration proceeding, governmental proceeding, investigation, inquiry, or other proceeding is pending or, to the Company’s knowledge, threatened against Company (or, to Company’s knowledge, any of Company’s Personnel) which would materially adversely affect Company’s ability to perform its obligations under this Agreement.

12.3.7 Company has not received oral or written notice of any claim or violation under any inquiry, law, ordinance, requirement, regulation, or order as it relates to Company’s performance under this Agreement, and does not have knowledge of any act or omission by Company or any Company Personnel that may potentially result in such a claim or violation.

12.3.8 To the Company’s knowledge, Company has substantially complied with all federal, state, and local laws, rules, regulations, and administrative directives where the failure to do so has, or would be reasonably expected to have, a materially adversely effect upon the conduct and operation of its business.

12.3.9 Company warrants and represents that, as of the Effective Date, a true and complete list of its Company Affiliates is set forth on Schedule E.

12.3.10 Company qualifies as a small entity that meets the size standards set forth in 37 C.F.R. §1.27 to be eligible for reduced patent fees, and Company shall promptly provide written notice to University if it has knowledge that Company no longer qualifies as a small entity.

13.1.1 Company shall maintain insurance coverage (or an equivalent program of self-insurance) that is reasonably sufficient to fulfill its obligations under this Agreement for itself, Company Affiliates, and their Personnel, including without limitation the following:

(a) Commercial General Liability insurance with coverage of not less than $1,000,000 for any single occurrence and $3,000,000 in the aggregate;

(b) Umbrella coverage that is reasonably sufficient to fulfill Company’s obligations under this Agreement, but not less than $5,000,000 in the aggregate;

(c) During any period that the one or more Clinical Trials is being conducted by or on behalf of Company: Clinical trial insurance (or professional liability insurance/errors and omissions) with coverage of not less than $1,000,000 for any single occurrence and $3,000,000 in the aggregate; and

(d) Upon commencing testing or sales of Licensed Products , product liability insurance with coverage of not less than $1,000,000 for any single occurrence and $3,000,000 in the aggregate.

13.1.2 All of such insurance shall have reasonable deductibles. Beginning on the third (3^rd) anniversary of the Effective Date of this Agreement, and every three (3) years thereafter, University may require that the types or the amount of the insurance to be maintained on behalf of Company under this Section 13.1 be modified so that University’s interests are adequately protected (as determined in University’s reasonable discretion). However, unless Company otherwise agrees: (a) University may not require that the amount of such insurance be increased to an amount equal to more than the then current amounts plus five percent (5%); and (b) any such increase shall be required to be effected only upon the expected renewal date of the relevant policy. University may modify or waive any of the requirements in this Section 13.1 in its reasonable discretion.

13.1.3 Company will deposit with University insurance certificate(s), satisfactory in form and substance to University: (a) on or before execution of this Agreement; (b) each time there is a material change in Company’s insurance coverage; and (c) each time Company’s insurance coverage is renewed. Failure to deposit those policies shall not relieve Company of its obligations to obtain and keep in force insurance coverage required by this Agreement. The insurance required under this Agreement may be maintained by means of a policy or policies of blanket insurance so long as the provisions of this Agreement are fully satisfied.

13.1.4 All insurance required to be carried by Company by this Section 13.1 shall provide that the policy shall not be subject to cancellation, termination, or reduction in coverage, except after thirty (30) days’ prior written notice to University. All of those policies shall name University as an additional insured as its interest may appear. All policies shall be endorsed to indicate that they provide primary coverage without any right of contribution from any other insurance that University may have. A waiver of subrogation in favor of the Indemnitees shall also be endorsed to the policies.

13.1.5 All such policies shall be issued by duly licensed companies with a rating of A- or better in the current Best’s Insurance Reports, published by A.M. Best Company, Inc.

13.1.6 If Company’s liability insurance is written on a claims-made basis (rather than on an occurrence basis), Company shall maintain such insurance coverage during the Term of this Agreement and for five (5) years thereafter, or Company shall purchase an extending reporting privilege covering such period.

13.2.1 Company agrees to defend, indemnify, and hold harmless the State of Maryland, USM, University, University Related Organizations, and each of their respective current and future regents, directors, trustees, officers, faculty, medical and professional staff, employees, students, trainees, and agents, and their respective successors, heirs, and assigns (each individually an “Indemnitee” and all, collectively the “Indemnitees”) against any claim, liability, cost, damage, deficiency, loss, expense or obligation of any kind or nature (including without limitation reasonable attorneys’ fees, expert witness fees, court costs and other costs and expenses of litigation at trial and appellate levels) incurred by or imposed upon the Indemnitees or any one of them in connection with any claims, suits, actions, demands or judgments:

(a) Arising out of or relating to the actions or omissions, failure to comply with applicable laws or regulations, or non-performance or breach of this Agreement of or by Company (or any Company Affiliate; Company Personnel; Sublicensee; or any other Person acting on behalf of or under authorization from Company, a Company Affiliate, or a Sublicensee);

(b) Arising out of the use of or relating to the Invention, Patent Rights, Licensed Products, or Confidential Information by Company (or any Company Affiliate, Company Personnel, Sublicensee, or any other Person acting on behalf of or under authorization from Company, a Company Affiliate, or a Sublicensee);

(c) Arising out of or relating to any claim against an Indemnitee that any Licensed Product, Company Improvement, or use, infringes upon the intellectual property rights of any third party; or

(d) Arising out of or relating to any theory of product liability (including without limitation actions in the form of tort, warranty, or strict liability) concerning any Licensed Product or any other product, process or service made, used, or sold pursuant to any right or license granted under this Agreement; or

(e) Arising out of or relating to use by an Indemnitee of a product, process, service, or protocol developed using the Invention, Patent Rights, Confidential Information, or Licensed Product by Company (or any Company Affiliate, Company Personnel, Sublicensee, or any other Person acting on behalf of or under authorization from Company, a Company Affiliate, or a Sublicensee), provided the use was consistent with any instructions, protocols, or supervision provided or approved by Company, the Company Affiliate, or the Sublicensee.

13.2.2 The agreement to defend, indemnify and hold harmless an Indemnitee is conditioned upon: (a) an Indemnitee promptly notifying Company in writing after Indemnitee receives notice of any claim; provided, however, the failure to so notify Company will not relieve Company of any obligation which it may have to an Indemnitee under this Agreement or otherwise to the extent that such failure or delay does not actually and materially prejudice Company; and (b) the Indemnitee cooperating with Company in the defense of the claim (but at Company’s expense). The agreement to defend, indemnify, and hold harmless an Indemnitee shall not apply if the claim, cost, or liability was solely caused by the negligence or intentional misconduct of that Indemnitee. Notwithstanding the foregoing, each Indemnitee shall have the right to participate at its own expense in the defense of any claims through counsel of its own choosing. Company will not settle any claim in any manner that affects an Indemnitee’s rights without that Indemnitee’s prior written consent, which will not be unreasonably withheld, conditioned, or delayed.

14.1 Negotiation. If there is a dispute between the parties related to this Agreement, either party, by notice to the other party, may have the dispute referred to the parties’ respective officers designated below, or their successors, for attempted resolution by good faith negotiations within thirty (30) days after the notice is received. The designated officers are as follows:

14.2 Mediation. If the designated officers are not able to resolve the dispute within this thirty (30) day period, or any agreed extension, they shall confer in good faith with respect to the possibility of resolving the matter through mediation with a mutually acceptable third party or a nationally recognized U.S. mediation organization. If the parties agree to attempt to resolve the matter through mediation, they shall participate in any mediation sessions in good faith in an effort to resolve the dispute in an informal and inexpensive manner. All expenses of the mediator shall be shared equally by the parties. The parties will attempt to conclude mediation within six (6) months after the notice referred to in Section 14.1.

14.3 Disputes Regarding Payment Calculation or Royalty Rate. Any dispute regarding the calculation of payments due from Company to University, or the determination of a royalty rate for a Licensed Improvement under Section 3.7, which is not timely resolved through the dispute resolution procedures of Section 14.1 and 14.2, shall be submitted to a national independent certified public accounting firm or other independent expert, to be appointed by agreement of University and Company, whose decision shall be final and binding upon the parties. The costs and expenses of the consultant shall be paid by the non-prevailing party.

14.4 Admissibility of Evidence. Evidence of anything said or any admission made in the course of any dispute resolution procedure shall not be admissible in evidence in any civil action between the parties. In addition, no document prepared for the purpose of, or in the course of, or pursuant to, the dispute resolution procedure, or copy thereof, shall be admissible in evidence in any civil action between the parties. However, the admissibility of evidence shall not be limited if both parties consent to disclosure of the evidence.

14.5 Jurisdiction; Waiver of Trial by Jury. With respect to any dispute that is not resolved pursuant to other provisions of this Article, each party consents to the jurisdiction of the Circuit Court of Baltimore City or Anne Arundel County, Maryland for any suit against the other party relating to this Agreement, and agrees to file any such suit in one of those courts. UNIVERSITY AND COMPANY WAIVE THEIR RIGHTS TO TRIAL BY JURY IN ANY LITIGATION BETWEEN THEM ARISING FROM THIS AGREEMENT.

14.6 State Immunity and Limitations of Liability. No provision of this Agreement shall constitute or be construed as a limitation, abrogation, or waiver of any defense or limitation of liability available to the State of Maryland or its units (including without limitation USM and University), officials, or employees under Maryland or Federal law, including without limitation the defense of sovereign immunity or any other governmental immunity. Section 12-202, State Government Article, Annotated Code of Maryland, applies to claims based on this Agreement.

14.7 Maryland Tort Claims Act. University and University Personnel acting within the scope of their employment by University are subject to the Maryland Tort Claims Act (Title 12, Subtitle 1, State Government Article, Annotated Code of Maryland) (the “Tort Claims Act”). The Tort Claims Act permits claims in tort against the State of Maryland only under certain circumstances and subject to limits provided by law, based on the negligent acts or omissions of State employees acting within the scope of their employment.

15.1 Notices. Notices under this Agreement shall be in writing and shall be delivered personally as proven by a signed receipt, sent by a reputable, recognized national overnight delivery service, charges prepaid, or sent by certified mail return receipt requested. Notices shall be addressed to a party at the address specified below, or at those other place or places as shall from time to time be specified in a notice similarly given. All notices shall be effective upon receipt. Each party shall promptly notify the other party of any change of address for the delivery of notices or invoices.

15.2 Invoices. Invoices to Company under this Agreement may be sent to the following address or at those other place or places as shall from time to time be specified in a notice similarly given:

16.1 General. This Agreement shall be binding upon and inure to the benefit of the parties and their respective legal representatives, successors, and permitted assigns. Any reference in this Agreement to a party shall be construed to include that party’s successors and permitted assigns. Any purported assignment in violation of this Article shall be null and void.

(a) The rights and licenses granted in this Agreement are personal to Company. Without the prior written consent of University, which consent shall not be unreasonably withheld, conditioned, or delayed: (1) Company shall not assign or transfer any right or obligation under this Agreement; and (2) this Agreement may not be assigned or otherwise transferred (by operation of law, in connection with a Change of Control, or otherwise); provided, however, this Section shall not apply to an assignment to a Company Affiliate (which shall be subject to Section 3.3), or in connection with a Change of Control (which shall be subject to Section 16.2.2). A Change of Control (no matter how the transaction is structured) constitutes an assignment or transfer.

(b) This Agreement and Company’s rights and obligations under this Agreement shall not be transferred or assigned separate from all or substantially all of Company’s other business assets, including without limitation those assets that are the subject of this Agreement.

(c) Any assignment or transfer in violation of this Section 16.2 shall be voidable in whole or in part by University in its sole discretion.

(d) In the event of a permitted assignment or transfer, Company shall remain primarily liable for all of its own obligations under this Agreement, and for the obligations of its assignee or transferee, including without limitation all payments required by this Agreement. No assignment shall relieve Company of responsibility for the payment or performance of any accrued obligation under this Agreement.

(a) Notwithstanding Section 16.2.1, Company may, without University’s consent, assign this Agreement and its rights and obligations under this Agreement in connection with a Change of Control, but only if the Change of Control complies with this Section 16.2.2.

(b) The Change of Control transaction must be: (1) an arm’s-length transaction for a legitimate business purpose; (2) duly approved by Company’s board of directors in accordance with applicable law; (3) an assignment or transfer of all or substantially all of Company’s assets, and not an assignment or transfer of the assets that are the subject of this Agreement separate from an assignment or transfer of all or substantially all of Company’s assets; and (4) not in connection with a Bankruptcy of Company.

(c) The purported assignee: (1) shall not be in default of its material obligations under any agreement with University, USM, or the State of Maryland, and be current on all of its financial obligations to University, USM, or the State of Maryland (including without limitation taxes); (2) shall not be a party to a litigation proceeding adverse to University or USM, if in the reasonable judgment of University the proceeding would materially adversely affect the assignee’s ability to fulfill its obligations under this Agreement; (3) shall not be in Bankruptcy; (4) shall have financial capacity and resources at least as great as the Company’s to develop, commercialize, and/or sell the Licensed Products, and to fulfill its financial obligations under this Agreement; and (5) shall be able to fulfill the diligence obligations required by this Agreement.

(d) Unless prohibited by law or a written agreement, Company shall give University written notice identifying the prospective assignee and the material terms of the transaction (subject to confidentiality obligations) within a reasonable time prior to the closing of the transaction.

(e) The assignee shall assume in writing all accrued and prospective obligations of Company under this Agreement.

(f) The assignee shall meet with representatives of University within sixty (60) days of the closing of the transaction to discuss the assignee’s plans for the future development, commercialization, and/or sales of Licensed Products, and the Patent Rights. If the assignee determines that it does not wish to continue that development, commercialization, and/or sales, then the assignee shall immediately give notice terminating this Agreement under Section 10.3. Failure of the assignee to give notice shall entitle University to terminate this Agreement immediately upon delivery of written notice.

(a) In the event of (1) a permitted assignment or transfer pursuant to Section 16.2.1, or (2) a Change of Control pursuant to Section 16.2.2, Company shall pay to University five percent (5%) of any consideration received in connection therewith, including without limitation any cash or stock.

(b) Such payment shall be due within thirty (30) days following the effective date of the assignment/transfer or Change of Control, as the case may be.

16.3 Assignment by University. Without Company’s consent, University may assign this Agreement: (a) to a successor-in-interest; or (b) to the University Inventors, in the event of an assignment of the Inventions to the University Inventors pursuant to Federal IP Policy or the IP Policies. University may not otherwise assign or transfer this Agreement without the prior written consent of Company, which shall not be unreasonably withheld, conditioned, or delayed.

17.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Maryland (without reference to any conflicts of laws principles that would require the application of the laws of any other jurisdiction).

17.2 Entire Agreement. This Agreement embodies the entire understanding between the parties with respect to the subject matter of this Agreement. There are no contracts, understandings, conditions, warranties or representations, oral or written, express or implied, with reference to the subject matter of this Agreement that are not merged in this Agreement (other than the SRA and a Confidential Disclosure Agreement dated June 22, 2020, which are not merged in this Agreement). No oral statements or prior written material not specifically incorporated in this Agreement shall be of any force and effect. The parties acknowledge that in entering into this Agreement, the parties relied solely upon the representations and agreements contained in this Agreement and no others. All prior representations or agreements with respect to the subject matter of this Agreement, whether written or oral, not incorporated in this Agreement are superseded.

17.3 Severability. If any clause or provision of this Agreement shall be determined by any court or governmental body to be illegal, invalid, or unenforceable under present or future laws effective during the Term: (a) the remainder of this Agreement shall not be affected by such illegality, invalidity, or unenforceability; and (b) in lieu of each clause or provision that is illegal, invalid, or unenforceable, there shall be added as a part of this Agreement a clause or provision as similar in terms to such illegal, invalid, or unenforceable clause or provision as may be possible and be legal, valid and enforceable.

17.4 Force Majeure. Neither party shall be liable for any failure to perform its obligations where that failure is as a result of any of the following occurrences, if beyond the reasonable control and without the fault or negligence of the party in question: (a) strike, lock-out or other labor troubles, (b) city, county, State or other governmental restrictions, injunctions or limitations, including the nonissuance of any required permit(s), (c) failure or shortage of raw materials, electrical power, water, fuel, oil, or other utility or service, (d) riot, war, insurrection, terrorism, or other national or local emergency, (e) accident, flood, fire, earthquake, or other casualty, (f) adverse weather conditions, (g) generalized health restrictions (including without limitation epidemics or pandemics), public health emergencies, quarantine restrictions, or (h) other act of God. Any party asserting force majeure as an excuse shall have the burden of proving that reasonable steps were taken to minimize delay or damages caused by foreseeable events, that all non-excused obligations were substantially fulfilled, and that the other party was timely notified of the likelihood or actual occurrence that would justify such an assertion.

17.5 Amendments; Waivers; Cumulative Remedies. This Agreement may not be amended unless the amendment is in writing and signed by a duly authorized representative of each party. No right or remedy of either party may be waived, unless the waiver is in writing and signed by a duly authorized representative of the party granting the waiver. A failure or delay by a party in exercising any of its rights or remedies under this Agreement does not constitute a waiver of the rights or remedies, nor does any single or partial exercise of any right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy. The rights and remedies of the parties provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

17.6 Relationship between the Parties. University and Company are not (and nothing in this Agreement may be construed to constitute them as) partners, joint venturers, agents, representatives or employees of the other. Neither party has any responsibility nor liability for the actions of the other party except as specifically provided in this Agreement. No party has any right or authority to bind or obligate the other party in any manner or make any representation or warranty on behalf of the other party.

17.7 Expenses. Except as otherwise specifically set forth in this Agreement, all costs and expenses incurred in connection with this Agreement shall be paid by the party which incurs the cost or expense, and the other party has no liability for the cost or expense.

17.8 No Third Party Beneficiaries. This Agreement is not intended to create, and does not create, enforceable legal rights as a third party beneficiary or through any other legal theory on the part of any University Personnel or any other Person, except as otherwise provided by Section 13.2 (Indemnification by Company).

17.9 Interpretation. Each party to this Agreement participated in the drafting of this Agreement. Each party was represented by counsel, or had the opportunity to be represented by counsel. Therefore, no party shall be considered to be the “draftsman,” and ambiguities shall not be construed against any particular party. The section and subsection headings have been included for convenience only, are not part of this Agreement, and shall not be taken as an interpretation thereof. The singular includes the plural and the plural includes the singular. The use of any gender, tense, or conjugation includes all genders, tenses, and conjugations. The words “including,” “inclusive,” or words of similar import shall be construed to mean “including without limitation,” unless the context clearly indicates otherwise. References to “writing” or “written” include printing, typing, lithography, and other means of reproduction in a visible form. References to agreements and other contractual instruments include all subsequent amendments thereto or changes entered into in accordance with their respective terms and which are not prohibited by this Agreement. References to “days” shall mean calendar days, unless the context clearly indicates that it should be construed to mean “Business Days.” All Schedules and Exhibits attached to this Agreement are hereby incorporated in this Agreement.

17.10 Further Assurances. The parties shall execute and deliver and cause to be executed and delivered further agreements, instruments, and documents and shall take further actions as may reasonably be required or appropriate to carry out the terms and conditions of this Agreement.

17.11 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including PDF or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com), or other transmission method. Any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

IN WITNESS WHEREOF, each party has caused this Agreement to be executed under seal by its duly authorized representative.

U.S. Provisional 62/444,776, titled “Central Nervous System Homing Peptides and Uses Thereof,” filed January 10, 2017;

PCT Application PCT/US2018/013159, titled “Central Nervous System Homing Peptides and Uses Thereof,” filed January 10, 2018;

U.S. Patent Application 16/477,125, titled “Central Nervous System Homing Peptides and Uses Thereof,” filed July 10, 2019.

Silo Pharma, Inc is a developmental stage biopharmaceutical company focused in the development of novel therapeutics that merge traditional therapeutic approaches with leading research in psychedelic drugs to address unmet medical conditions. The company was founded in 2020.

All of the assets currently in development are licensed technologies identified through academic research. Silo Pharma does not have an internal R&D department, however, partners with leading academic researchers from top research institutions across the United States.

Silo Pharma is committed to bringing new technologies from academic research for development into commercial products.

Silo Pharma plans to use contract manufacturing organizations specializing in the specific drug dosage form to be manufactured. Silo intends to partner with commercial pharmaceutical organizations for the marketing of therapeutic products developed by Silo Pharma.

As a publicly traded company, Silo Pharma has a unique ability to raise capital and funding for the development of its pipeline on an as needed basis.

Silo Pharma has access to key opinion leaders and scientific experts as part of the collaborative relationships established with academic universities. We plan to use the knowledge and experience of these collaborators in the development of the proposed licensed technology.

The most recent annual report can be found in the EDGAR archives for Silo Pharma, Inc. (UCUT, SILO) (CIK 0001514183) at sec.gov.

The most recent SEC filings for Silo Pharma can be found at the following site: https://ir.silopharma.com/sec-filings/

To our knowledge, the subject of the patent has not been marketed as a commercially available drug in the US for any therapeutic indication.

The initial development cycle with the licensed technology will be focused in treating acute exacerbations associated with recurrent multiple sclerosis. Approximately 80% of all multiple sclerosis (MS) patients present, initially, with a relapsing form of the disease.[1] Exacerbations continue to occur throughout the relapsing remitting stage of MS. It is during this stage of the disease that incomplete resolutions of relapses accrue over time and result in disability.

Corticosteroids, such as dexamethasone, are considered first line treatment for acute exacerbations associated with MS [1]. The approved labeling for Decadron states that “In the treatment of acute exacerbations of multiple sclerosis, daily doses of 30 mg of dexamethasone for a week followed by 4 to 12 mg every other day for one month have been shown to be effective.”

The global market for drugs for MS was valued at USD 20 billion in 2019, and is projected to reach USD 31.5 billion by 2027. The liposome drug delivery market is expected to reach US$ 6,992.95 million by 2027 from US$ 3,594.41 million in 2019, and the market is estimated to grow at a CAGR of 8.8% from 2020 to 2027.

1. Transparent Market Research NY. https://www.transparencymarketresearch.com/multiple-sclerosis-drugs.html. 2020.

2. ReportLinker NY. https://www.globenewswire.com/news-release/2020/05/07/2029023/0/en/The-liposome-drug-delivery-market-is-expected-to-reach-US-6-992-95-million-by-2027-from-US-3-594-41-million-in-2019.html. 2020

Delaware	000-54872	27-3046338
(State or jurisdiction of	(Commission File	(IRS Employer
incorporation or organization)	Number)	Identification No.)

Exhibit No.		Description
10.1#		Master License Agreement, dated February 12, 2021, by and between the Company and the University of Maryland, Baltimore
10.2#		Letter of Intent, dated February 12, 2021, by and between the Company and Aikido Pharma, Inc.

	SILO PHARMA, INC.

Date: February 16, 2021	By:	/s/ Eric Weisblum
		Eric Weisblum, Chief Executive Officer

Article 1.	BACKGROUND	1
Article 2.	DEFINITIONS	1
Article 3.	GRANT OF LICENSE	6
Article 4.	DILIGENCE REQUIREMENTS	13
Article 5.	CONSIDERATION	14
Article 6.	PATENT PROSECUTION	16
Article 7.	CONFIDENTIALITY	18
Article 8.	REPORTS, PAYMENTS, AND ACCOUNTING	20
Article 9.	INFRINGEMENT	22
Article 10.	TERM AND TERMINATION	25
Article 11.	OTHER AGREEMENTS	27
Article 12.	REPRESENTATIONS AND WARRANTIES	28
Article 13.	INSURANCE AND INDEMNIFICATION	30
Article 14.	DISPUTE RESOLUTION	33
Article 15.	NOTICES AND INVOICES	34
Article 16.	ASSIGNMENT	34
Article 17.	MISCELLANEOUS	36

Increment of Net Revenues During the Applicable Calendar Year	Royalty Rate
Less than $[*] Million	[*]	%
Greater than $[*] Million	[*]	%

Year		Minimum Annual Royalty
Prior to First Commercial Sale		N/A
Year of First Commercial Sale		N/A
First (1^st) calendar year following the First Commercial Sale	$	[*]
Second (2^nd) calendar year following the First Commercial Sale	$	[*]
Third (3^rd) calendar year following the First Commercial Sale, and each calendar year thereafter	$	[*]

	For Company:	Chief Executive Officer

	For University:	Senior Vice President and Chief Enterprise and Economic Development Officer

If to University:	If to Company:

Associate Vice President, OTT Office of Research and Development University of Maryland, Baltimore 620 West Lexington Street, 4^th Floor Baltimore, Maryland 21201-1508	Silo Pharma, Inc. 560 Sylvan Avenue, Suite 3160 Englewood Cliffs, NJ 07632 Attn: Chief Executive Officer

Copy to:	Copy to:

University Counsel University of Maryland, Baltimore 220 Arch Street, Room 03-111 Baltimore, Maryland 21201-1531	Legal counsel to Company, as may be designated from time to time.

	University of Maryland, Baltimore

	By:	/s/ Bruce E. Jarrell, MD, FACS (SEAL)
		Bruce E. Jarrell, MD, FACS
		President

	Date:	2/12/2021

	Silo Pharma, Inc.

	By:	/s/ Eric Weisblum (SEAL)
		Eric Weisblum
		Chief Executive Officer

	Date:	2/12/2021

	1.	In consideration of the Sublicense, Aikido shall pay Silo a one-time license fee of [] dollars ($[]).

ACCEPTED AND AGREED to

this 12 day of February, 2021

Silo Pharma, Inc.

/s/ Eric Weisblum
Eric Weisblum, CEO