Nevada
|
|
000-55136
|
|
45-0692882
|
(State or other jurisdiction
of incorporation)
|
|
(Commission
File Number)
|
|
(IRS Employer
Identification No.)
|
Table of Contents
|
Page No.
|
|||
|
||||
Item 1.01 |
3
|
|||
Item 2.01 |
3
|
|||
4
|
||||
21
|
||||
22
|
||||
49
|
||||
Properties | 53 | |||
53
|
||||
55
|
||||
59
|
||||
60
|
||||
Legal Proceedings | 61 | |||
61
|
||||
62
|
||||
63
|
||||
66
|
||||
67
|
||||
67
|
||||
Item 3.02 |
67
|
|||
Item 4.01 |
67
|
|||
Item 5.01 |
69
|
|||
Item 5.02 |
69
|
|||
Item 5.03 |
70
|
|||
Item 9.01 |
70
|
1) | UM 1490 – transmucosal delivery of cannabinoids |
2) | UM 5070 – treatment for methicillin-resistant Staphylococcus aureus infections |
3) | UM 8790 – ocular delivery of cannabanoids |
· | Glaucoma and other optic nerve-related disorders |
· | Conditions associated with muscle spasticity |
· | Anxiety |
· | Epilepsy |
· |
Therapeutics directed against MRSA
|
|
Product Candidate
|
|
Indication
|
|
Status
|
|
NB1111
|
|
Glaucoma
|
|
Preclinical
|
|
NB2221
|
|
MS Spasticity
|
|
Preclinical
|
|
NB31R1
|
|
MRSA
|
|
Research
|
|
NB23R1
|
|
Epilepsy
|
|
Research
|
|
NB51R1
|
|
Anxiety
|
|
Research
|
· | selection of potential clinical targets based on internal and external published data, access to appropriate cannabinoids, and the impact of both developmental and market conditions; |
· | prioritization of product candidates based on associated target indications; |
· | utilization, where feasible, of both naturally-derived and synthetic cannabinoids; |
· | development and execution of an intellectual property strategy; |
· | development and advancement of our current product pipeline; |
· | outsourcing services, such as use of Clinical Research Organizations, or CROs, and contract manufacturers for the active pharmaceutical ingredient, or API, where possible and appropriate; |
· | obtaining necessary DEA registrations; |
· | obtaining regulatory approval from the FDA and European Medicines Agency, or EMA, for products candidates; |
· | research and development of additional target indications for cannabinoid product candidates; and |
· | partnering, out-licensing, or selling approved products, if any, to optimize Company efficiencies to bring state-of-the-art therapeutics to patients. |
●
|
obtain and maintain patent and other legal protections for the proprietary technology, inventions and improvements we consider important to our business;
|
●
|
prosecute our patent applications and defend any issued patents we obtain;
|
●
|
preserve the confidentiality of our trade secrets; and
|
●
|
operate without infringing the patents and proprietary rights of third parties.
|
· | completion of preclinical laboratory tests, animal studies and formulation studies in compliance with good laboratory practice, or GLP, regulations |
· | submission to the FDA of an IND, which must become effective before human clinical trials may begin |
· | approval by an independent institutional review board, or IRB, at each clinical site before each trial may be initiated |
· | performance of adequate and well-controlled human clinical trials in accordance with good clinical practice, or GCP, requirements to establish the safety and efficacy of the proposed drug for each indication; |
· | submission of an NDA to the FDA; |
· | satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with current good manufacturing practices, or cGMP, requirements and to assure that the facilities, methods and controls are adequate to preserve the drug's identity, strength, quality and purity; and |
· | FDA review and approval of the NDA. |
· | Phase 1: The drug is initially introduced into healthy human subjects or patients with the target disease or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness. |
· | Phase 2: The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage. |
· | Phase 3: The drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product. |
· | r estrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; |
· | f ines, warning letters or holds on post-approval clinical trials; |
· | r efusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product license approvals; |
· | p roduct seizure or detention, or refusal to permit the import or export of products; or |
· | i njunctions or the imposition of civil or criminal penalties. |
· | t he required patent information has not been filed; |
· | t he listed patent has expired; |
· | t he listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration; or |
· | t he listed patent is invalid, unenforceable or will not be infringed by the new product. |
· | the results of our research and development activities, including uncertainties relating to the discovery of potential product candidates and the preclinical and clinical testing of our product candidates; |
· | the early stage of our product candidates presently under development; |
· | our need for substantial additional funds in order to continue our operations, and the uncertainty of whether we will be able to obtain the funding we need; |
· | our ability to obtain and, if obtained, maintain regulatory approval of our current product candidates, and any of our other future product candidates, and any related restrictions, limitations, and/or warnings in the label of any approved product candidate; |
· | our ability to retain or hire key scientific or management personnel; |
· | our ability to protect our intellectual property rights that are valuable to our business, including patent and other intellectual property rights; |
· | our dependence on the University of Mississippi, third-party manufacturers, suppliers, research organizations, testing laboratories and other potential collaborators; |
· | our ability to develop successful sales and marketing capabilities in the future as needed; |
· | the size and growth of the potential markets for any of our approved product candidates, and the rate and degree of market acceptance of any of our approved product candidates; |
· | competition in our industry; and |
· | regulatory developments in the United States and foreign countries |
· | receipt of necessary controlled substance registrations from DEA ; |
· | successful completion of preclinical studies and clinical trials; |
· | receipt of marketing approvals from FDA and other applicable regulatory authorities; |
· | obtaining, maintaining and protecting our intellectual property portfolio, including patents and trade secrets, and regulatory exclusivity for our product candidates; |
· | identifying, making arrangements and ensuring necessary registrations with third-party manufacturers , or establishing, commercial manufacturing capabilities for applicable product candidates; |
· | launching commercial sales of the products, if and when approved, whether alone or in collaboration with others; |
· | acceptance of our products, if and when approved, by patients, the medical community and third-party payors; |
· | effectively competing with other therapies; |
· | obtaining and maintaining healthcare coverage and adequate reimbursement of our products; and |
· | maintaining a continued acceptable safety profile of our products following approval. |
· | the clinical indications for which the drug is approved and efficacy and safety as demonstrated in clinical trials; |
· | the timing of market introduction of the product candidate and/or competitive products; |
· | acceptance of the drug as a safe and effective treatment by physicians and patients; |
· | the potential and perceived advantages of the product candidate over alternative treatments; |
· | the cost of treatment in relation to alternative treatments; and |
· | the prevalence and severity of adverse side effects. |
· | o ur inability to demonstrate to the satisfaction of the FDA or the applicable foreign regulatory body that the product candidate is safe and effective for the requested indication; |
· | t he FDA's or the applicable foreign regulatory agency's disagreement with the interpretation of data from preclinical studies or clinical trials; |
· | o ur inability to demonstrate that the clinical and other benefits of the product candidate outweigh any safety or other perceived risks; |
· | t he FDA's or the applicable foreign regulatory agency's requirement for additional preclinical or clinical studies; |
· | t he FDA's or the applicable foreign regulatory agency's non-approval of the formulation, labeling or the specifications of the product candidate; |
· | t he FDA's or the applicable foreign regulatory agency's failure to approve the manufacturing processes or facilities of third-party manufacturers with which we contract; or |
· | t he potential for approval policies or regulations of the FDA or the applicable foreign regulatory agencies to significantly change in a manner rendering our clinical data insufficient for approval. |
· | FDA, DEA or NIDA may not authorize the use and distribution of sufficient quantities of product for clinical testing; |
· | r egulators or IRBs may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; |
· | w e may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites; |
· | c linical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; |
· | t he number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate; |
· | o ur third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; |
· | w e may have to suspend or terminate clinical trials of our product candidates for various reasons, including a finding that the participants are being exposed to unacceptable health risks; |
· | r egulators or institutional review boards may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; |
· | t he cost of clinical trials of our product candidates may be greater than we anticipate; |
· | t he supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; and |
· | o ur product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators or institutional review boards to suspend or terminate the trials. |
· | b e delayed in obtaining marketing approval for our product candidates; |
· | n ot obtain marketing approval at all; |
· | o btain approval for indications or patient populations that are not as broad as intended or desired; |
· | o btain approval with labeling that includes significant use or distribution restrictions or safety warnings; |
· | b e subject to additional post-marketing testing requirements; or |
· | h ave the product removed from the market after obtaining marketing approval. |
· | t he severity of the disease under investigation; |
· | t he eligibility criteria for the study in question; |
· | t he perceived risks and benefits of the product candidate under study; |
· | t he efforts to facilitate timely enrollment in clinical trials; |
· | t he patient referral practices of physicians; |
· | t he ability to monitor patients adequately during and after treatment; and |
· | t he proximity and availability of clinical trial sites for prospective patients. |
· | w arning letters or untitled letters; |
· | m andated modifications to promotional materials or the required provision of corrective information to healthcare practitioners; |
· | r estrictions imposed on the product or its manufacturers or manufacturing processes |
· | r estrictions imposed on the labeling or marketing of the product; |
· | r estrictions imposed on product distribution or use; |
· | r equirements for post-marketing clinical trials; |
· | s uspension of any ongoing clinical trials; |
· | s uspension of or withdrawal of regulatory approval; |
· | v oluntary or mandatory product recalls and publicity requirements; |
· | r efusal to approve pending applications for marketing approval of new products or supplements to approved applications filed by us; |
· | r estrictions on operations, including costly new manufacturing requirements; |
· | s eizure or detention of our products; |
· | r efusal to permit the import or export of our products; |
· | r equired entry into a consent decree, which can include imposition of various fines (including restitution or disgorgement of profits or revenue), reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance; |
· | c ivil or criminal penalties; or |
· | i njunctions. |
· | r egulatory authorities may withdraw the approval of such product; |
· | r egulatory authorities may require additional warnings on the label or impose distribution or use restrictions; |
· | r egulatory authorities may require one or more post-market studies; |
· | w e may be required to create a medication guide outlining the risks of such side effects for distribution to patients; |
· | w e could be sued and held liable for harm caused to patients; and |
· | o ur reputation may suffer. |
· | withdrawal of clinical trial volunteers, investigators, patients or trial sites; |
· | the inability to commercialize our product candidates; |
· | decreased demand for our product candidates; |
· | regulatory investigations that could require costly recalls or product modifications; |
· | loss of revenue; |
· | substantial costs of litigation; |
· | liabilities that substantially exceed our product liability insurance, which we would then be required to pay ourselves; |
· | an increase in our product liability insurance rates or the inability to maintain insurance coverage in the future on acceptable terms, if at all; |
· | the diversion of management's attention from our business; and |
· | damage to our reputation and the reputation of our products. |
· | increases the minimum level of Medicaid rebates payable by manufacturers of brand-name drugs from 15.1% to 23.1%; |
· | requires collection of rebates for drugs paid by Medicaid managed care organizations; |
· | requires manufacturers to participate in a coverage gap discount program, under which they must agree to offer 50 percent point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer's outpatient drugs to be covered under Medicare Part D; and |
· | imposes a non-deductible annual fee on pharmaceutical manufacturers or importers who sell "branded prescription drugs" to specified federal government programs. |
· | our ability to set a price we believe if fair for our products; |
· | our ability to generate revenues and achieve or maintain profitability; |
· | the availability of capital; and |
· | our ability to obtain timely approval of our products. |
· | the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs; |
· | federal civil and criminal false claims laws and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent; |
· | the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created federal criminal statutes that prohibit executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters; |
· | HIPAA, as amended by the Health Information Technology and Clinical Health Act and its implementing regulations, which imposes certain requirements relating to the privacy, security, and transmission of individually identifiable health information; |
· | the federal physician sunshine requirements under the ACA, which require manufacturers of drugs, devices, biologics, and medical supplies to report annually to the U.S. Department of Health and Human Services information related to payments and other transfers of value to physicians, other healthcare providers, and teaching hospitals, and ownership and investment interests held by physicians and other healthcare providers and their immediate family members; and |
· | state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws that may apply to items or services reimbursed by any third-party payor, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry's voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures, and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. |
•
|
variations in our operating results;
|
•
|
changes in expectations of our future financial performance, including financial estimates by securities analysts and investors;
|
•
|
changes in operating and stock price performance of other companies in our industry;
|
•
|
additions or departures of key personnel; and
|
•
|
future sales of our common stock.
|
· | Exercise price - We determined the exercise price based on valuations using the best information available to management at the time of the valuations. |
· | Volatility – We estimate the stock price volatility based on industry peers who are also in the early development stage given the limited market data available in the public arena. |
· | Expected term - The expected term is based on a simplified method which defines the life as the average of the contractual term of the options and warrants and the weighted-average vesting period for all open employee awards. |
· | Risk-free rate - The risk-free interest rate for the expected term of the option or warrant is based on the average market rate on U.S. treasury securities in effect during the quarter in which the awards were granted. |
· | Dividends - The dividend yield assumption is based on our history and expectation of paying no dividends. |
· | Each person known to be the beneficial owner of 5% or more of our outstanding common stock; |
· | Each executive officer; |
· | Each director; and |
· | All of the executive officers and directors as a group. |
Title
of Class
|
Name and Address
of Beneficial Owner
|
Amount and Nature
of Beneficial Ownership
|
Percent
of Class
|
|
|
|
|
Common Stock
|
John B. Hollister
650 Town Center Drive, Suite 620
Costa Mesa, CA 92626
|
480,000 shares (1)
Chief Executive Officer,
Director
|
3.00%
|
|
|
|
|
Common Stock
|
Dr. Brian S. Murphy
650 Town Center Drive, Suite 620
Costa Mesa, CA 92626
|
480,000 shares (2)
Chief Medical Officer
|
3.00%
|
|
|
|
|
Common Stock
|
Elizabeth M. Berecz
650 Town Center Drive, Suite 620
Costa Mesa, CA 92626
|
100,000 shares (3)
Chief Financial Officer
|
*
|
|
|
|
|
Common Stock
|
Gerald W. McLaughlin
650 Town Center Drive, Suite 620
Costa Mesa, CA 92626
|
20,000 shares (4)
Director
|
*
|
|
|
|
|
Common Stock
|
Cosmas N. Lykos
650 Town Center Drive, Suite 620
Costa Mesa, CA 92626
|
4,484,400 shares (5)
Co-Founder, Chairman of the Board
|
28.02%
|
|
|
|
|
Common Stock
|
Reg Lapham
375 Redondo Ave., #137
Long Beach, CA 90814
|
5,017,200 shares (6)
Beneficial Owner
|
31.35%
|
|
|
|
|
Common Stock
|
All officers and directors
as a group
|
4,484,400 (7)
|
28.02%
|
(1) | Includes 480,000 shares of common stock underlying options granted to John B. Hollister on October 31, 2014, which are subject to a five year vesting schedule with 1/5 vesting on each of the first, second, third, fourth and fifth anniversaries of the date of the grant. |
(2) | Includes 480,000 shares of common stock underlying options granted to Dr. Brian S. Murphy on October 31, 2014, which are subject to a five year vesting schedule with 1/5 vesting on each of the first, second, third, fourth and fifth anniversaries of the date of the grant. |
(3)
|
Includes 100,000 shares of common stock underlying options granted to Elizabeth M. Berecz on October 31, 2014, which are subject to a five year vesting schedule with 1/5 vesting on each of the first, second, third, fourth and fifth anniversaries of the date of the grant.
|
(4)
|
Includes 20,000 shares of common stock underlying options granted to Gerald W. McLaughlin on October 31, 2014, which are subject to a five year vesting schedule with 1/5 vesting on each of the first, second, third, fourth and fifth anniversaries of the date of the grant.
|
(5)
|
Includes 1,110,000 shares of common stock underlying warrants granted to Cosmas N. Lykos.
|
(6) | Includes 1,110,000 shares of common stock underlying warrants granted to Reg Lapham. |
(7)
|
Includes 1,110,000 shares of common stock underlying warrants
granted to Cosmas N. Lykos
.
|
Name
|
Age
|
Position
|
John B. Hollister
|
54
|
Chief Executive Officer and Director
|
Dr. Brian S. Murphy
|
57
|
Chief Medical Officer
|
Elizabeth M. Berecz
|
51
|
Chief Financial Officer
|
Cosmas N. Lykos
|
46
|
Co-Founder and Chairman of the Board
|
Gerald W. McLaughlin
|
46
|
Director
|
1.
|
any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
|
2.
|
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
|
3.
|
being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
|
4.
|
being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
|
Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)
|
Stock Awards
($)
|
Option Awards
($)
|
Non-Equity Incentive Plan Compensation
($)
|
Nonqualified Deferred Compensation Earnings
($)
|
All
Other
Compensation
($)
|
|
|
Total
($)
|
|
||||
Reg Lapham
|
|
2013
|
|
|
-
|
|
|
|
-
|
|
-
|
-
-
|
-
|
|
120,000
|
|
|
|
120,000
|
|
Former President,
Secretary
|
|
2012
|
|
|
-
|
|
|
|
-
|
|
-
|
-
-
|
-
|
|
60,000
|
|
|
|
60,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David Skibinski
Former Chief Financial Officer
|
|
2013
|
|
|
-
|
|
|
|
-
|
|
-
|
-
-
|
-
|
|
-
|
|
|
|
-
|
|
|
|
2012
|
|
|
-
|
|
|
|
-
|
|
-
|
-
-
|
-
|
|
-
|
|
|
|
-
|
|
(1) | Resigned as President, Secretary and a director on October 1, 2014. |
(2) | Resigned as Chief Financial Officer on September 18, 2014. |
Name
|
|
Fees Earned
or Paid in
Cash
($)
|
|
Stock
Awards
($)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
|
|
All Other
Compensation
($)
|
|
Total
($)
|
|
||||
Reg Lapham(1)
|
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
|
-
|
|
120,000
|
|
|
120,000
|
|
David Skibinski(2)
|
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
|
-
|
|
(1) | Resigned as President, Secretary and a director on October 1, 2014. |
(2) | Resigned as a director on August 18, 2014. |
· | deemed issuance date; |
· | expiration date; |
· | number of shares covered by the award; |
· | acceptable means of payment; |
· | price per share payable upon exercise; |
· | applicable vesting schedule; |
· | individual performance criteria; |
· | company or group performance criteria; |
· | continued employment requirement; |
· | transfer restrictions; or |
· | any other terms or conditions deemed appropriate by the Committee, in each case not inconsistent with the Plan. |
· | required or advisable in order for us, the Plan or the award to satisfy any law or regulation or to meet the requirements of any accounting standard, or |
· | not reasonably likely to significantly diminish the benefits provided under such award, or that any such diminishment has been adequately compensated. |
· | warrants to purchase 3,000,000 shares of common stock at a exercise price of $1.00 per share and expire on June 20, 2023; |
· | warrants to purchase 550,000 shares of common stock at a exercise price of $1.00 per share and expire on August 22, 2020; and |
· | warrants to purchase 450,000 shares of common stock at a exercise price of $1.00 per share and expire on June 12, 2020. |
● | for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; or |
●
|
for unlawful payments of dividends or unlawful stock purchase or redemption by the corporation.
|
Item 4.01 Changes in Registrant's Certifying Accountant.
|
· | 480,000 options to John B. Hollister; |
· | 480,000 options to Dr. Brian S. Murphy; |
· | 100,000 options to Elizabeth M. Berecz; and |
· | 20,000 options to Gerald W. McLaughlin. |
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
|
|
|
|
Exhibit Number
|
Description of Exhibit
|
|
2.1
|
Agreement and Plan of Merger by and among the Registrant and Nemus, and Nemus Acquisition Corp. dated October 17, 2014 (1)
|
|
3.1
|
Articles of Incorporation of Registrant (2)
|
|
3.2
|
Amendment to the Articles of Incorporation of the Registrant (2)
|
|
3.3
|
Bylaws of Registrant (2)
|
|
3.4
|
Certificate of Change of Registrant(3)
|
|
3.5
|
||
4.1
|
||
4.2
|
||
10.1
|
||
10.2
|
||
10.3
|
||
10.4
|
||
10.5
|
||
10.6
|
||
10.7
|
||
10.8
|
||
10.9
|
||
10.10
|
||
10.11
|
||
10.12
|
||
10.13
|
||
10.14
|
||
10.15
|
||
10.16
|
||
10.17
|
||
10.18
|
||
10.19
|
||
14.1
|
||
16.1
|
||
21.1
|
||
99.1
|
||
99.2
|
||
|
|
|
|
|
(1) | Included as exhibit to our Current Report on Form 8-K filed on October 17, 2014. |
(2) | Included as exhibit to our Registration Statement on Form S-1 filed on January 30, 2013 |
(3) | Included as exhibit to our Current Report on Form 8-K filed on October 30, 2014. |
† | Confidential treatment has been requested with respect to the omitted portions of this Exhibit pursuant to Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended, which portions have been filed separately with the Securities and Exchange Commission. |
|
Nemus Bioscience, Inc.
|
|
|
|
|
|
|
Date: November 3, 2014
|
By:
|
/s/ John Hollister
|
|
|
|
John Hollister
Chief Executive Officer
|
|
Warrant No.: _______
|
|
Warrant Shares: ________
|
Initial Exercise Date: _______, 2013
|
NEMUS
|
|
By:__________________________________________
Name:
Title: President
|
Warrant No.: _______
|
|
Warrant Shares: ________
|
Initial Exercise Date: ______, 2015
|
NEMUS
|
|
By:__________________________________________
Name:
Title: President
|
|
PARENT:
LOAD GUARD LOGISTICS, INC.
By:
/s/ Yosbani Mendez
____________________________
Name: Yosbani Mendez
Title: President
SUB:
LGT, INC.
By:
/s/ Francisco Mendez
___________________________
Name: Francisco Mendez
Title: Secretary
|
|
|
|
LOAD GUARD LOGISTICS, INC.
|
|
|
|
|
|
|
/s/ Yosbani Mendez
|
|
By:
|
Name: Yosbani Mendez
Title: President |
|
|
|
|
YOSBANI MENDEZ
|
|
|
/s/ Yosbani Mendez
|
|
|
Yosbani Mendez
|
|
|
|
|
|
FRANCISCO MENDEZ
|
|
|
/s/ Francisco Mendez
|
|
|
Francisco Mendez
|
By: |
_________________ |
Date of Grant
: ____________
|
Type of Option
:
[Incentive/Non-Qualified]
Stock Option
|
Exercise Price per Share
: $____
|
Expiration Date
: ____________
|
Total Number of
Shares Granted : _______ |
Total Exercise Price
: $______
|
Vesting Schedule
:
[1/5 vesting on each of the first, second, third, fourth and fifth anniversaries of the date of the grant]
|
|
Exercise After Termination of Service
:
Termination of Service for any reason
: any non-vested portion of the Option expires immediately;
Termination of Service due to death or Disability
: vested portion of the Option is exercisable by the Optionee (or, in the event of the Optionee's death, the Optionee's Beneficiary) for ______
[months/years]
[MUST BE AT LEAST 6 MONTHS] after the Optionee's Termination;
Termination of Service for any reason other than death or Disability (except for termination for cause as defined by applicable law)
: vested portion of the Option is exercisable for a period of _____
[days/months]
[MUST BE AT LEAST 30 DAYS] following the Optionee's Termination.
In no event may this Option be exercised after the Expiration Date as provided above
.
|
Participant
|
|
Nemus Bioscience, Inc.
|
||
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
Title:
|
|
Date:
|
|
|
Date:
|
|
1. | The cooperative activities to be covered by this Agreement include extracting, manipulating and studying Cannabis in any form, including but not limited to it's individual molecules, in dried flower form or any combinations thereof, as well as synthetic versions of any and all; developing related IP, including but not limited to trade secrets, patents, copyrights and trademarks; with intentions to create and commercialize medicines using such. |
2. | Confidential Information exchanged between the parties will be protected under the terms of the Confidential Disclosure Agreement with an Effective Date of July 2, 2013. |
3. | The parties will negotiate a separate Research Agreement that will detail, among other things, how research findings will be published while protecting the intellectual property of each party. |
3. | NEMUS will own all right, title and interest in and to any invention, whether or not patentable, invented solely by employees of NEMUS. MISSISSIPPI will own all right, title and interest in and to any invention, whether or not patentable, invented solely by employees of MISSISSIPPI. Right, title and interest in and to inventions, whether or not patentable, invented jointly by employees of NEMUS and MISSISSIPPI will be owned jointly by NEMUS and MISSISSIPPI, each party having an equal and undivided interest. The Parties will negotiate a separate License Agreement in good faith. |
4. | The term of this Agreement is five (5) years after the Effective Date and may be extended in writing by mutual agreement of the Parties. The Agreement may be terminated by either Party with a minimum of three (3) months written notice to the other Party. |
5. | Delivery of an executed counterpart of a signature page to this Agreement by e-mail shall be effective as delivery of a manually executed counterpart of this Agreement. |
THE UNIVERSITY OF MISSISSIPPI
|
||
|
|
|
By:
|
/s/ Walter G. Chambliss
|
7/31/13
|
Name:
|
Walter G. Chambliss, Ph.D.
|
Date
|
Title:
|
Director of Technology Management
|
|
|
Office of Research and Sponsored Programs
|
|
|
|
|
Acknowledged:
|
||
|
|
|
By:
|
/s/ Dr. Mahmoud A. ElSohly
|
|
Name:
|
Mahmoud A. ElSohly, Ph.D.
|
|
Title:
|
Research Professor, National Center for Natural Products Research
|
|
|
|
|
NEMUS, a California Corporation
|
||
|
|
|
By:
|
/s/ Red A. Lapham
|
07/31/13
|
Name:
|
Reg A. Lapham
|
Date
|
Title:
|
CEO
|
|
1. | UM hereby grants to NEMUS, on the terms and conditions herein set forth, a nonassignable, exclusive option to exclusively license UM's rights to NPC 4718, as defined in Appendix A, within three (3) months of the Effective Date of this Agreement (the "Option Period"). UM hereby waives its normal monthly option fee during the Option Period. If the Option Period is extended beyond three (3) months in accordance with Section V.1., UM will charge NEMUS an option fee of $7,500 per month for each month beyond three (3) months. In exchange for this exclusive option, NEMUS agrees to provide UM with a copy of all research and development, manufacturing, and commercialization related information and data generated by NEMUS or otherwise obtained by NEMUS related to NPC 4718 (collectively the "Studies") during the Option Period. |
2. | UM represents to NEMUS that UM has the right to grant licenses to NPC 4718, and NPC 4718 is not subject to any lien, license, assignment, security interest, or other encumbrances. |
3. | During the term of this Agreement UM agrees to notify 3rd parties who express interest in licensing NPC 4718 that the technology is under an exclusive option with another company. NEMUS understands and agrees that UM retains the right to list NPC 4718 as available for licensing on UM's website and in UM technology related publications during the term of this Agreement. |
1. | NEMUS will exercise diligence during the term of this Agreement in evaluating its interest in NPC 4718. |
2. | If NEMUS decides not to exercise the option, NEMUS agrees to provide UM within thirty (30) days after expiration or termination of this Agreement copies of all Studies as defined in Section I.1. NEMUS agrees and understands that UM shall own all right, title and interest in these Studies with no financial obligation to NEMUS. |
1. | This AGREEMENT will expire on August 15, 2014 and may be extended by mutual agreement of the parties in writing under the financial terms detailed in Section I.1. |
2. | NEMUS may terminate this AGREEMENT at any time by notifying UM in writing of its intent to terminate and the effective termination date. In such event, NEMUS will provide UM a copy of all Studies as defined in Section I.1 within thirty (30) days. |
THE UNIVERSITY OF MISSISSIPPI
|
||
|
|
|
By:
|
/s/ Walter G Chambliss
|
4/15/14
|
Name:
|
Walter G. Chambliss, Ph.D.
|
Date
|
Title:
|
Director of Technology Management
|
|
|
Office of Research and Sponsored Programs
|
|
|
|
|
Acknowledged:
|
||
|
|
|
By:
|
/s/ Mahmoud A. ElSohly
|
4/15/14
|
Name:
|
Mahmoud A. ElSohly, Ph.D.
|
Date
|
Title:
|
Research Professor, National Center for Natural Products Research
|
|
|
|
|
NEMUS, a California Corporation
|
||
|
|
|
By:
|
/s/ Reg A. Lapham
|
4/16/14
|
Name:
|
Reg A. Lapham
|
Date
|
Title:
|
CEO
|
|
· | U.S. Patent No. 5,389,375 "Stable Suppository Formulations Effecting Bioavailability of Delta 9-THC," Issued Date: February 14, 1995. Expired. |
· | U.S. Patent No. 5,508,037, "Stable Suppository Formulations Effecting Bioavailability of Delta 9-THC", Issued Date: April 16, 1996. Expired. |
· | U.S. Patent No. 6,008,383 "Method of Preparing Delta-9-Tetrahydrocannabinol Esters", Issued Date: December 28, 1999. Expiration date: October 26, 2018. |
Licensed Field
|
All uses
|
Licensed Territory
|
Worldwide
|
Term
|
Ten (10) years after first commercial sale. Will be extended for up to ten (10) additional years on an annual basis if there is no generic competition to a Licensed Product in the U.S. market. Generic competition does not including any generic product to a Licensed Product in which Nemus receives financial considerations including but not limited to royalties on sales, revenue sharing, marketing sharing or equity.
|
License
|
UM will grant to NEMUS an exclusive worldwide
license to UM Know-How and Technical Information related to NPC 4718, with the right to make, have made, use, lease, distribute, import, sell, offer for sale and otherwise exploit Licensed Products in the Licensed Field, subject to agreement on final terms.
|
Diligence Requirements
|
UM and NEMUS will agree to development milestones to accompany a Development Plan that will be an exhibit to the License Agreement. NEMUS must use commercially reasonable efforts to commercialize and market all Products as soon as practicable in accordance with the development milestones.
|
License Issue Fee
|
$65,000 upfront payment
|
Upfront Equity
|
Waived
|
License Maintenance Fees
|
$25,000 per year per Licensed Product due on the anniversary of the Effective Date – credited against royalties in the current fiscal year.
|
Milestone Payments
|
$200,000 within thirty (30) day of submission of an NDA or a 505b(2) application to the FDA.
$400,000 within thirty (30) days of receiving approval of a NDA or a 505b(2) application to the FDA.
|
Running Royalties
|
Five and one-half percent (5.5%) of Net Sales of all Licensed Products paid to UM quarterly. No royalty will be due on Licensed Products used in clinical trials or other pre-FDA approved development studies.
|
Sublicensing
|
With written permission of UM. Share of sublicensing income including upfront and milestone payments, equity, and royalties: 60% NEMUS, 40% UM with minimum of five and one-half percent (5.5%) royalty to UM.
|
Indemnification
|
NEMUS will indemnify, defend and hold harmless UM, the State of Mississippi, officers, employees, students, and agents from and against any and all liability, loss, damage, action, claim or expense that results from or arises out of actions or omissions of NEMUS and its Affiliates in the performance of the License Agreement. As a state agency, UM and is unable to indemnify NEMUS.
|
Insurance
|
NEMUS and its Affiliates will procure and maintain policies of insurance for comprehensive general liability and products liability coverage in the larger amount of $6.5 million per claim and $6.5 million in aggregate or that amount deemed customary and appropriate in the pharmaceutical industry for the stage of development.
|
Miscellaneous:
|
1.
Due to UM's status as a state agency, UM will not agree to: (a) allow the License Agreement to be governed by another state's laws, (b) settle disputes by arbitration, or (c) pay attorney's fees of NEMUS under any circumstances.
2.
NEMUS, Affiliates, and their employees, and agents will not use UM's or UM's name, seal, logo, trademark, or service mark, or any adaptation of them, or the name, mark, or logo of any representative or organization of UM or UM in any way without the prior written consent of UM or UM, in its sole discretion.
3.
The Know-How and Technical Information are provided on an "AS IS" basis, and UM makes no representations, express or implied.
4.
Until execution of a final License Agreement acceptable to the parties containing the above terms and conditions, this Term Sheet is a non-binding expression of the intent of the parties. This Term Sheet is only a list of proposed points that may or may not become part of an eventual contract. It is not based on any agreement between the parties. It is not intended to impose any obligation whatsoever on either party, including without limitation an obligation to bargain in good faith or in any way other than at arms-length. The parties do not intend to be bound by any agreement until both agree to and sign a License Agreement, and neither party may reasonably rely on any promises inconsistent with this paragraph.
|
1. | Appendix A is replaced with the revised Appendix A attached to this Amendment adding an additional patent thereby expanding the possible number of active pharmaceutical ingredients that can be delivered rectally. The field of use of U.S. Patent No. 6,008,383 and U.S. Patent Application No. 2011/027555 has been limited to rectal delivery to differentiate this Option Agreement from other Option Agreements to be executed between NEMUS and UM covering other routes of delivery |
2. | Appendix B is replaced with the revised Appendix B attached to this Amendment adding a $100,000 milestone payment for the submission of an IND application to the FDA or an equivalent application to a regulatory agency anywhere in the world. This licensing term was inadvertently left off the original Option Agreement. |
THE UNIVERSITY OF MISSISSIPPI
|
||
|
|
|
By:
|
/s/ Walter G. Chambliss
|
6/26/14
|
Name:
|
Walter G. Chambliss, Ph.D.
|
Date
|
Title:
|
Director of Technology Management
|
|
|
Office of Research and Sponsored Programs
|
|
|
|
|
Acknowledged:
|
||
|
|
|
By:
|
/s/ Mahmoud A. ElSohly
|
7/22/14
|
Name:
|
Mahmoud A. ElSohly, Ph.D.
|
Date
|
Title:
|
Research Professor, National Center for Natural Products Research
|
|
|
|
|
NEMUS, a California Corporation
|
||
|
|
|
By:
|
/s/ Reg A. Lapham
|
06-26-14
|
Name:
|
Reg A. Lapham
|
Date
|
Title:
|
President
|
|
• | U.S. Patent No. 5,389,375 "Stable Suppository Formulations Effecting Bioavailability of Delta 9-THC," Issued Date: February 14, 1995. Expired. |
• | U.S. Patent No. 5,508,037, "Stable Suppository Formulations Effecting Bioavailability of Delta 9-THC", Issued Date: April 16, 1996. Expired. |
• | U.S. Patent No. 6,008,383 "Method of Preparing Delta-9-Tetrahydrocannabinol Esters", Issued Date: December 28, 1999. Expiration date: October 26, 2018. Field of use limited to rectal delivery. |
•
|
U.S. Patent Application No.
2011/0275555, "Compositions Containing Delta-9-THC Amino Acid Esters and Process of Preparation". Filing date: October 31, 2008, Notice of Allowance Received by not yet issued. Field of use limited to rectal delivery.
|
Licensed Field
|
All therapeutics uses of cannabinoids.
|
Licensed Territory
|
Worldwide
|
Term
|
Ten (10) years after first commercial sale of until expiration of last licensed patent, whichever comes last. Will be extended for up to ten (10) additional years on an annual basis if there is no generic competition to a Licensed Product in the U.S. market. Generic competition does not including any generic product to a Licensed Product in which Nemus receives financial considerations including but not limited to royalties on sales, revenue sharing, marketing sharing or equity.
|
License
|
UM will grant to NEMUS an exclusive worldwide license to UM Know-How and Technical Information related to UM 1490, with the right to make, have made, use, lease, distribute, import, sell, offer for sale and otherwise exploit Licensed Products in the Licensed Field, subject to agreement on final terms.
|
Diligence
Requirements
|
UM and NEMUS will agree to development milestones to accompany a Development Plan that will be an exhibit to the License Agreement. NEMUS must use commercially reasonable efforts to commercialize and market all Products as soon as practicable in accordance with the development milestones.
|
License Issue Fee
|
$65,000 upfront payment
|
Upfront Equity
|
Waived
|
License Maintenance Fees
|
$25,000 per year per Licensed Product due on the anniversary of the Effective Date - credited against royalties in the current fiscal year.
|
Milestone Payments
|
$100,000 within thirty (30) days of submission of an IND application to the FDA or an equivalent application to a regulatory agency anywhere in the world.
$200,000 within thirty (30) days of submission of an NDA or a 505b(2) application to the FDA or an equivalent application to a regulatory agency anywhere in the world.
$400,000 within thirty (30) days of receiving approval of a NDA or a 505b(2) application to the FDA or an equivalent approval from a regulatory agency anywhere in the world.
|
Running Royalties
|
Five and one-half percent (5.5%) of Net Sales of all Licensed Products paid to UM quarterly. No royalty will be due on Licensed Products used in clinical trials or other pre- FDA approved development studies.
|
Sublicensing
|
With written permission of UM. Share of sublicensing income including upfront and milestone payments, equity, and royalties: 60% NEMUS, 40% UM with minimum of five and one-half percent (5.5%) royalty to UM.
|
Indemnification
|
NEMUS will indemnify, defend and hold harmless UM, and the State of Mississippi, the officers, employees, students, and agents of UM from and against any and all liability, loss, damage, action, claim or expense that results from or arises out of actions or omissions of NEMUS and its Affiliates in the performance of the License Agreement. As state agencies, UM are unable to indemnify NEMUS.
|
Insurance
|
NEMUS and its Affiliates will procure and maintain policies of insurance for comprehensive general liability and products liability coverage in the larger amount of $6.5 million per claim and $6.5 million in aggregate or that amount deemed customary and appropriate in the pharmaceutical industry for the stage of development.
|
CONFIDENTIAL
|
Miscellaneous:
|
1.
Due to UM's status as state agencies, UM will not agree to: (a) allow the License Agreement to be governed by another state's laws, (b) settle disputes by arbitration, or (c) pay attorney's fees of NEMUS under any circumstances.
2.
NEMUS, Affiliates, and their employees, and agents will not use UM's name, seal, logo, trademark, or service mark, or any adaptation of them, or the name, mark, or logo of any representative or organization of UM in any way without the prior written consent of UM in its sole discretion.
3.
The Know-How and Technical Information are provided on an "AS IS" basis, and UM makes no representations, express or implied.
4.
Until execution of a final License Agreement acceptable to the parties containing the above terms and conditions, this Term Sheet is a non-binding expression of the intent of the parties. This Term Sheet is only a list of proposed points that may or may not become part of an eventual contract. It is not based on any agreement between the parties. It is not intended to impose any obligation whatsoever on either party, including without limitation an obligation to bargain in good faith or in any way other than at arms-length. The parties do not intend to be bound by any agreement until both agree to and sign a License Agreement, and neither party may reasonably rely on any promises inconsistent with this paragraph.
|
1. | UM hereby grants to NEMUS, on the terms and conditions herein set forth, a nonassignable, exclusive option expiring on October 15, 2014 (the "Option Period"), to exclusively license UM's rights to UM 1490, as defined in Appendix A. UM will charge NEMUS an option fee of $7,500 per month for each month starting on August 15, 2014. In exchange for this exclusive option, NEMUS agrees to provide UM with a copy of all research and development, manufacturing, and commercialization related information and data generated by NEMUS or otherwise obtained by NEMUS related to UM 1490 (collectively the "Studies") during the Option Period. |
2. | UM represents to NEMUS that UM has the right to grant licenses to UM 1490, and UM 1490 is not subject to any lien, license, assignment, security interest, or other encumbrances. |
3. | During the term of this Agreement UM agrees to notify 3rd parties who express interest in licensing UM 1490 that the technology is under an exclusive option with another company. NEMUS understands and agrees that UM retains the right to list UM 1490 as available for licensing on UM's website and in UM technology related publications during the term of this Agreement. |
1. | NEMUS will exercise diligence during the term of this Agreement in evaluating its interest in UM 1490. |
2. | If NEMUS decides not to exercise the option, NEMUS agrees to provide UM within thirty (30) days after expiration or termination of this Agreement copies of all Studies as defined in Section I.1. NEMUS agrees and understands that UM shall own all right, title and interest in these Studies with no financial obligation to NEMUS. |
1. | This AGREEMENT will expire on October 15, 2014 and may be extended by mutual agreement of the parties in writing under the financial terms detailed in Section I.1. |
2. | NEMUS may terminate this AGREEMENT at any time by notifying UM in writing of its intent to terminate and the effective termination date. In such event, NEMUS will provide UM a copy of all Studies as defined in Section I.1 within thirty (30) days. |
THE UNIVERSITY OF MISSISSIPPI
|
||
|
|
|
By:
|
/s/ Walter G. Chambliss
|
6/30/14
|
Name:
|
Walter G. Chambliss, Ph.D.
|
Date
|
Title:
|
Director of Technology Management
|
|
|
Office of Research and Sponsored Programs
|
|
|
|
|
Acknowledged:
|
||
|
|
|
By:
|
/s/ Mahmoud A. ElSohly
|
7/22/14
|
Name:
|
Mahmoud A. ElSohly, Ph.D.
|
Date
|
Title:
|
Research Professor, National Center for Natural Products Research
|
|
|
|
|
NEMUS, a California Corporation
|
||
|
|
|
By:
|
/s/ Reg A. Lapham
|
6/30/14
|
Name:
|
Reg A. Lapham
|
Date
|
Title:
|
President
|
|
· | U.S. Patent No. 6,375,963; "Bioadhesive Hot-Melt Extruded Film for Topical and Mucosal Adhesion Applications and Drug Delivery and Process for Preparation Thereof. Issued Date: April 23, 2002. Expiration date: June 16, 2019. This Option Agreement is limited to the delivery of cannabinoids using this patented delivery system. The delivery of any active pharmaceutical ingredient that is not in the cannabinoid class of compounds is outside the field of use granted in this Option Agreement. |
· | U.S. Patent No. 6,008,383 "Method of Preparing Delta-9-Tetrahydrocannabinol Esters". Issued Date: December 28, 1999. Expiration date: October 26, 2018. Field of use limited to oral mucosal delivery. |
· | U.S. Patent Application No. 2011/0275555, "Compositions Containing Delta-9-THC Amino Acid Esters and Process of Preparation". Filing date: October 31, 2008, Notice of Allowance Received by not yet issued. Field of use limited to oral mucosal delivery. |
Licensed Field
|
All therapeutics uses of cannabinoids.
|
Licensed Territory
|
Worldwide
|
Term
|
Ten (10) years after first commercial sale of until expiration of last licensed patent, whichever comes last. Will be extended for up to ten (10) additional years on an annual basis if there is no generic competition to a Licensed Product in the U.S. market. Generic competition does not including any generic product to a Licensed Product in which Nemus receives financial considerations including but not limited to royalties on sales, revenue sharing, marketing sharing or equity.
|
License
|
UM will grant to NEMUS an exclusive worldwide
license to UM Know-How and Technical Information related to UM 1490, with the right to make, have made, use, lease, distribute, import, sell, offer for sale and otherwise exploit Licensed Products in the Licensed Field, subject to agreement on final terms.
|
Diligence Requirements
|
UM and NEMUS will agree to development milestones to accompany a Development Plan that will be an exhibit to the License Agreement. NEMUS must use commercially reasonable efforts to commercialize and market all Products as soon as practicable in accordance with the development milestones.
|
License Issue Fee
|
$65,000 upfront payment
|
Upfront Equity
|
Waived
|
License Maintenance Fees
|
$25,000 per year per Licensed Product due on the anniversary of the Effective Date – credited against royalties in the current fiscal year.
|
Milestone Payments
|
$100,000 within thirty (30) days of submission of an IND application to the FDA or an equivalent application to a regulatory agency anywhere in the world.
$200,000 within thirty (30) days of submission of an NDA or a 505b(2) application to the FDA or an equivalent application to a regulatory agency anywhere in the world.
$400,000 within thirty (30) days of receiving approval of a NDA or a 505b(2) application to the FDA or an equivalent approval from a regulatory agency anywhere in the world.
|
Running Royalties
|
Five and one-half percent (5.5%) of Net Sales of all Licensed Products paid to UM quarterly. No royalty will be due on Licensed Products used in clinical trials or other pre-FDA approved development studies.
|
Sublicensing
|
With written permission of UM. Share of sublicensing income including upfront and milestone payments, equity, and royalties: 60% NEMUS, 40% UM with minimum of five and one-half percent (5.5%) royalty to UM.
|
Indemnification
|
NEMUS will indemnify, defend and hold harmless UM, the University of Texas ("UT"), the State of Mississippi, the State of Texas, officers, employees, students, and agents of UM and UT from and against any and all liability, loss, damage, action, claim or expense that results from or arises out of actions or omissions of NEMUS and its Affiliates in the performance of the License Agreement. As state agencies, UM and UT are unable to indemnify NEMUS.
|
Insurance
|
NEMUS and its Affiliates will procure and maintain policies of insurance for comprehensive general liability and products liability coverage in the larger amount of $6.5 million per claim and $6.5 million in aggregate or that amount deemed customary and appropriate in the pharmaceutical industry for the stage of development.
|
Miscellaneous:
|
1.
Due to UM's and UT's status as state agencies, UM and UT will not agree to: (a) allow the License Agreement to be governed by another state's laws, (b) settle disputes by arbitration, or (c) pay attorney's fees of NEMUS under any circumstances.
2.
NEMUS, Affiliates, and their employees, and agents will not use UM's or UT's name, seal, logo, trademark, or service mark, or any adaptation of them, or the name, mark, or logo of any representative or organization of UM or UT in any way without the prior written consent of UM or UT, in its sole discretion.
3.
The Know-How and Technical Information are provided on an "AS IS" basis, and UM makes no representations, express or implied.
4.
Until execution of a final License Agreement acceptable to the parties containing the above terms and conditions, this Term Sheet is a non-binding expression of the intent of the parties. This Term Sheet is only a list of proposed points that may or may not become part of an eventual contract. It is not based on any agreement between the parties. It is not intended to impose any obligation whatsoever on either party, including without limitation an obligation to bargain in good faith or in any way other than at arms-length. The parties do not intend to be bound by any agreement until both agree to and sign a License Agreement, and neither party may reasonably rely on any promises inconsistent with this paragraph.
|
1. | UM hereby grants to NEMUS, on the terms and conditions herein set forth, a nonassignable, exclusive option expiring on October 15, 2014 (the "Option Period"), to exclusively license UM's rights to UM 5070, as defined in Appendix A. UM will charge NEMUS an option fee of *** per month for each month starting on August 15, 2014. In exchange for this exclusive option, NEMUS agrees to provide UM with a copy of all research and development, manufacturing, and commercialization related information and data generated by NEMUS or otherwise obtained by NEMUS related to UM 5070 (collectively the "Studies") during the Option Period. |
2. | UM represents to NEMUS that UM has the right to grant licenses to UM 5070, and UM 5070 is not subject to any lien, license, assignment, security interest, or other encumbrances. |
3. | During the term of this Agreement UM agrees to notify 3rd parties who express interest in licensing UM 5070 that the technology is under an exclusive option with another company. NEMUS understands and agrees that UM retains the right to list UM 5070 as available for licensing on UM's website and in UM technology related publications during the term of this Agreement. |
1. | NEMUS will exercise diligence during the term of this Agreement in evaluating its interest in UM 5070. |
2. | If NEMUS decides not to exercise the option, NEMUS agrees to provide UM within thirty (30) days after expiration or termination of this Agreement copies of all Studies as defined in Section I.1. NEMUS agrees and understands that UM shall own all right, title and interest in these Studies with no financial obligation to NEMUS. |
1. | This AGREEMENT will expire on October 15, 2014 and may be extended by mutual agreement of the parties in writing under the financial terms detailed in Section I.1. |
2. | NEMUS may terminate this AGREEMENT at any time by notifying UM in writing of its intent to terminate and the effective termination date. In such event, NEMUS will provide UM a copy of all Studies as defined in Section I.1 within thirty (30) days. |
THE UNIVERSITY OF MISSISSIPPI
|
||
|
|
|
By:
|
/s/ Walter G. Chambliss
|
6/24/14
|
Name:
|
Walter G. Chambliss, Ph.D.
|
Date
|
Title:
|
Director of Technology Management
|
|
|
Office of Research and Sponsored Programs
|
|
|
|
|
Acknowledged:
|
||
|
|
|
By:
|
/s/ Mahmoud A. ElSohly
|
7/22/14
|
Name:
|
Mahmoud A. ElSohly, Ph.D.
|
Date
|
Title:
|
Research Professor, National Center for Natural Products Research
|
|
|
|
|
NEMUS, a California Corporation
|
||
|
|
|
By:
|
/s/ Reg A. Lapham
|
06/26/14
|
Name:
|
Reg A. Lapham
|
Date
|
Title:
|
CEO
|
|
· | UM Research Disclosure entitled "Compositions for the Treatment of Methicillin-Resistant Staphylococcus aureus Infections". |
Licensed Field
|
All therapeutic uses of cannabinoids.
|
Licensed Territory
|
Worldwide
|
Term
|
Ten (10) years after first commercial sale of until expiration of last licensed patent, whichever comes last. Will be extended for up to ten (10) additional years on an annual basis if there is no generic competition to a Licensed Product in the U.S. market. Generic competition does not including any generic product to a Licensed Product in which Nemus receives financial considerations including but not limited to royalties on sales, revenue sharing, marketing sharing or equity.
|
License
|
UM will grant to NEMUS an exclusive worldwide
license to UM Know-How and Technical Information related to UM 5070, with the right to make, have made, use, lease, distribute, import, sell, offer for sale and otherwise exploit Licensed Products in the Licensed Field, subject to agreement on final terms.
|
Diligence Requirements
|
UM and NEMUS will agree to development milestones to accompany a Development Plan that will be an exhibit to the License Agreement. NEMUS must use commercially reasonable efforts to commercialize and market all Products as soon as practicable in accordance with the development milestones.
|
License Issue Fee
|
***
|
Upfront Equity
|
Waived
|
License Maintenance Fees
|
*** per year per Licensed Product due on the anniversary of the Effective Date – credited against royalties in the current fiscal year.
|
Milestone Payments
|
*** within thirty (30) days of submission of an IND application to the FDA or an equivalent application to a regulatory agency anywhere in the world.
*** within thirty (30) days of submission of an NDA or a 505b(2) application to the FDA or an equivalent application to a regulatory agency anywhere in the world.
*** within thirty (30) days of receiving approval of a NDA or a 505b(2) application to the FDA or an equivalent approval from a regulatory agency anywhere in the world.
|
Running Royalties
|
*** of Net Sales of all Licensed Products paid to UM quarterly. No royalty will be due on Licensed Products used in clinical trials or other pre-FDA approved development studies.
|
Sublicensing
|
With written permission of UM. Share of sublicensing income including upfront and milestone payments, equity, and royalties: *** with minimum of *** royalty to UM.
|
Indemnification
|
NEMUS will indemnify, defend and hold harmless UM, the State of Mississippi, officers, employees, students, and agents of UM from and against any and all liability, loss, damage, action, claim or expense that results from or arises out of actions or omissions of NEMUS and its Affiliates in the performance of the License Agreement. As state agencies, UM and UT are unable to indemnify NEMUS.
|
Insurance
|
NEMUS and its Affiliates will procure and maintain policies of insurance for comprehensive general liability and products liability coverage in the larger amount of $6.5 million per claim and $6.5 million in aggregate or that amount deemed customary and appropriate in the pharmaceutical industry for the stage of development.
|
Miscellaneous:
|
1.
Due to UM's status as a state agency, UM will not agree to: (a) allow the License Agreement to be governed by another state's laws, (b) settle disputes by arbitration, or (c) pay attorney's fees of NEMUS under any circumstances.
2.
NEMUS, Affiliates, and their employees, and agents will not use UM's name, seal, logo, trademark, or service mark, or any adaptation of them, or the name, mark, or logo of any representative or organization of UM in any way without the prior written consent of UM, in its sole discretion.
3.
The Know-How and Technical Information are provided on an "AS IS" basis, and UM makes no representations, express or implied.
4.
Until execution of a final License Agreement acceptable to the parties containing the above terms and conditions, this Term Sheet is a non-binding expression of the intent of the parties. This Term Sheet is only a list of proposed points that may or may not become part of an eventual contract. It is not based on any agreement between the parties. It is not intended to impose any obligation whatsoever on either party, including without limitation an obligation to bargain in good faith or in any way other than at arms-length. The parties do not intend to be bound by any agreement until both agree to and sign a License Agreement, and neither party may reasonably rely on any promises inconsistent with this paragraph.
|
1. | UM hereby grants to NEMUS, on the terms and conditions herein set forth, a nonassignable, exclusive option expiring on October 15, 2014 (the "Option Period"), to exclusively license UM's rights to UM 8790, as defined in Appendix A. UM will charge NEMUS an option fee of $7,500 per month for each month starting on August 15, 2014. In exchange for this exclusive option, NEMUS agrees to provide UM with a copy of all research and development, manufacturing, and commercialization related information and data generated by NEMUS or otherwise obtained by NEMUS related to UM 8790 (collectively the "Studies") during the Option Period. |
2. | UM represents to NEMUS that UM has the right to grant licenses to UM 8790 , and UM 8790 is not subject to any lien, license, assignment, security interest, or other encumbrances. |
3. | During the term of this Agreement UM agrees to notify 3rd parties who express interest in licensing UM 8790 that the technology is under an exclusive option with another company. NEMUS understands and agrees that UM retains the right to list UM 8790 as available for licensing on UM's website and in UM technology related publications during the term of this Agreement. |
1. | NEMUS will exercise diligence during the term of this Agreement in evaluating its interest in UM 8790 . |
2. | If NEMUS decides not to exercise the option, NEMUS agrees to provide UM within thirty (30) days after expiration or termination of this Agreement copies of all Studies as defined in Section I.1. NEMUS agrees and understands that UM shall own all right, title and interest in these Studies with no financial obligation to NEMUS. |
1. | This AGREEMENT will expire on October 15, 2014 and may be extended by mutual agreement of the parties in writing under the financial terms detailed in Section I.1. |
2. | NEMUS may terminate this AGREEMENT at any time by notifying UM in writing of its intent to terminate and the effective termination date. In such event, NEMUS will provide UM a copy of all Studies as defined in Section I.1 within thirty (30) days. |
THE UNIVERSITY OF MISSISSIPPI
|
||
|
|
|
By:
|
/s/ Walter G. Chambliss
|
6/30/14
|
Name:
|
Walter G. Chambliss, Ph.D.
|
Date
|
Title:
|
Director of Technology Management
|
|
|
Office of Research and Sponsored Programs
|
|
|
|
|
Acknowledged:
|
||
|
|
|
By:
|
/s/ Mahmoud A.ElSohly
|
7/22/14
|
Name:
|
Mahmoud A. ElSohly, Ph.D.
|
Date
|
Title:
|
Research Professor, National Center for Natural Products Research
|
|
|
|
|
NEMUS, a California Corporation
|
||
|
|
|
By:
|
/s/ Reg A. Lapham
|
06-30-14
|
Name:
|
Reg A. Lapham
|
Date
|
Title:
|
President
|
|
· | U.S. Patent No. 6,008,383 "Method of Preparing Delta-9-Tetrahydrocannabinol Esters". Issued Date: December 28, 1999. Expiration date: October 26, 2018. Field of use limited to ocular delivery. |
· | U.S. Patent Application No. 2011/0275555, "Compositions Containing Delta-9-THC Amino Acid Esters and Process of Preparation". Filing date: October 31, 2008, Notice of Allowance Received by not yet issued. Field of use limited to ocular delivery. |
· | Pending. UM Research Disclosure covering ocular delivery of cannabinoids. |
Licensed Field
|
All therapeutic uses of cannabinoids.
|
Licensed Territory
|
Worldwide
|
Term
|
Ten (10) years after first commercial sale of until expiration of last licensed patent, whichever comes last. Will be extended for up to ten (10) additional years on an annual basis if there is no generic competition to a Licensed Product in the U.S. market. Generic competition does not including any generic product to a Licensed Product in which Nemus receives financial considerations including but not limited to royalties on sales, revenue sharing, marketing sharing or equity.
|
License
|
UM will grant to NEMUS an exclusive worldwide
license to UM Know-How and Technical Information related to UM 8790, with the right to make, have made, use, lease, distribute, import, sell, offer for sale and otherwise exploit Licensed Products in the Licensed Field, subject to agreement on final terms.
|
Diligence Requirements
|
UM and NEMUS will agree to development milestones to accompany a Development Plan that will be an exhibit to the License Agreement. NEMUS must use commercially reasonable efforts to commercialize and market all Products as soon as practicable in accordance with the development milestones.
|
License Issue Fee
|
$65,000 upfront payment
|
Upfront Equity
|
Waived
|
License Maintenance Fees
|
$25,000 per year per Licensed Product due on the anniversary of the Effective Date – credited against royalties in the current fiscal year.
|
Milestone Payments
|
$100,000 within thirty (30) days of submission of an IND application to the FDA or an equivalent application to a regulatory agency anywhere in the world.
$200,000 within thirty (30) days of submission of an NDA or a 505b(2) application to the FDA or an equivalent application to a regulatory agency anywhere in the world.
$400,000 within thirty (30) days of receiving approval of a NDA or a 505b(2) application to the FDA or an equivalent approval from a regulatory agency anywhere in the world.
|
Running Royalties
|
Five and one-half percent (5.5%) of Net Sales of all Licensed Products paid to UM quarterly. No royalty will be due on Licensed Products used in clinical trials or other pre-FDA approved development studies.
|
Sublicensing
|
With written permission of UM. Share of sublicensing income including upfront and milestone payments, equity, and royalties: 60% NEMUS, 40% UM with minimum of five and one-half percent (5.5%) royalty to UM.
|
Indemnification
|
NEMUS will indemnify, defend and hold harmless UM, the State of Mississippi, officers, employees, students, and agents of UM from and against any and all liability, loss, damage, action, claim or expense that results from or arises out of actions or omissions of NEMUS and its Affiliates in the performance of the License Agreement. As state agencies, UM and UT are unable to indemnify NEMUS.
|
Insurance
|
NEMUS and its Affiliates will procure and maintain policies of insurance for comprehensive general liability and products liability coverage in the larger amount of $6.5 million per claim and $6.5 million in aggregate or that amount deemed customary and appropriate in the pharmaceutical industry for the stage of development.
|
Miscellaneous:
|
1.
Due to UM's status as a state agency, UM will not agree to: (a) allow the License Agreement to be governed by another state's laws, (b) settle disputes by arbitration, or (c) pay attorney's fees of NEMUS under any circumstances.
2.
NEMUS, Affiliates, and their employees, and agents will not use UM's name, seal, logo, trademark, or service mark, or any adaptation of them, or the name, mark, or logo of any representative or organization of UM in any way without the prior written consent of UM, in its sole discretion.
3.
The Know-How and Technical Information are provided on an "AS IS" basis, and UM makes no representations, express or implied.
4.
Until execution of a final License Agreement acceptable to the parties containing the above terms and conditions, this Term Sheet is a non-binding expression of the intent of the parties. This Term Sheet is only a list of proposed points that may or may not become part of an eventual contract. It is not based on any agreement between the parties. It is not intended to impose any obligation whatsoever on either party, including without limitation an obligation to bargain in good faith or in any way other than at arms-length. The parties do not intend to be bound by any agreement until both agree to and sign a License Agreement, and neither party may reasonably rely on any promises inconsistent with this paragraph.
|
1.1 | Unless otherwise provided in this Agreement, the following terms when used with initial capital letters shall have the meanings set forth below: |
2.1 | Grant of License . Subject to the terms and conditions contained in this Agreement, UM hereby grants to Licensee an exclusive, perpetual, non-transferrable except otherwise allowed in this Agreement, worldwide, royalty-bearing right and license to use and practice the Licensed Technology to develop, make, have made, use, sell, offer for sale and import Products in the Field. Notwithstanding the foregoing, UM expressly reserves a non-transferable royalty-free right to use the Licensed Technology in the Field itself, including use by its faculty, staff and researchers, for educational and non-commercial research purposes only. |
2.3 | No Rights by Implication . No rights or licenses with respect to the Licensed Technology are granted or deemed granted hereunder or in connection herewith, other than those rights or licenses expressly granted in this Agreement. |
3.1 | Upfront, Annual License Maintenance Fee and Milestone Payments . In consideration of the license granted hereunder, Licensee shall pay UM the following non-refundable payments: |
(c) | One-Time Milestone Payments . |
(a). | In further consideration of the rights and licenses granted hereunder, Licensee shall pay UM a royalty of *** of Net Sales of all Products sold by Licensee or its Affiliate for commercial use. |
(b). | No royalty shall be due on Products used for clinical trial or other research or developmental uses. No additional royalty will be due for the use of an amino acid ester of THC in a Product containing an amino acid ester of THC that otherwise is generating royalties under this Agreement. For avoidance of doubt, Licensee's obligation to pay UM a royalty on sales will not be calculated twice - once for the use of an amino acid ester of THC in a formulation for ocular delivery and once for the sale of a Product containing THC for ocular delivery. |
(f). | If no Valid Claim covers a Product in a country at the time such Product is sold in such country, then the royalties payable under this Section 3.2 on Net Sales of Products by Licensee or its Affiliates shall be reduced by ***. This reduction in royalties does not apply if a patent application that is part of the Patents licensed under this Agreement is pending in the country and the intention of UM is to obtain a Valid Claim that covers the Product in the country. In no event would the royalty due to UM with respect to Net Sales of Products sold in a given country be reduced by operation of the foregoing offsets and reductions to less than *** of Net Sales of Products in such country. |
3.3 | Payments . Royalties and other amounts payable under this Agreement shall be paid within forty five (45) days following the last day of the Calendar Quarter in which royalties and other amounts accrue. The last such payment shall be made within forty five (45) days after termination of this Agreement. Payments shall be deemed paid as of the day on which they are received by UM. |
3.5 | Reports . Licensee shall deliver to UM within forty five (45) days after the end of each Calendar Quarter following commercial sale of a Product a report setting forth in reasonable detail the calculation of the royalties and other amounts payable to UM for such Calendar Quarter pursuant to this Article 3, including, without limitation, the Products sold in each country during such Calendar Quarter, the Net Sales thereof, and, within sixty (60) days after the end of each Calendar Quarter, similar reports containing corresponding information relating to royalties payable due to sales by permitted sub-licensees pursuant to Article 3.2 . An example of an acceptable royalty report is provided in Appendix D. |
3.6 | Currency, Place of Payment, Interest . |
(a) | All dollar amounts referred to in this Agreement are expressed in United States dollars. All payments to UM under this Agreement shall be made in United States dollars (or other legal currency of the United States), as directed by UM, by check payable to the University of Mississippi" or by wire transfer to an account as UM may designate from time to time. |
(b) | If Licensee receives revenues from sales of Products in a currency other than United States dollars, royalties shall be converted into United States dollars at the applicable conversion rate for the foreign currency as published in the "Exchange Rates" table in the eastern edition of The Wall Street Journal as of the last date of the Calendar Quarter. |
(c) | Amounts that are not paid when due shall accrue interest-from the due date until paid, at an annual rate equal to the "Prime Rate" plus 2% as published in the "Money Rates" table in the eastern edition of The Wall Street Journal as of the due date. |
3.7 | Records . Licensee will maintain complete and accurate books and records that enable the royalties payable hereunder to be verified. The records for each Calendar Quarter shall be maintained for two years after the submission of each report under Article 3.4 hereof. Upon reasonable prior notice to Licensee, UM and its accountants shall have access to the books and records of Licensee to conduct a review or audit thereof no more than one (1) time per years. Such access shall be available during normal business hours. In the event such audit reveals any error in the computation of amounts due pursuant to Section 3.2 exceeding 5% of the amount owed, the Licensee shall promptly reimburse UM for all reasonable expenses and costs incurred in the conduct of such review or audit. |
(a) | Licensee shall use its reasonable efforts to develop for commercial use and to market Products as soon as practicable, and to continue to market Products as long as commercially viable, all as is consistent with sound and reasonable business practice. |
(b) | Licensee shall provide UM once per Calendar Year on December 1 with written reports, setting forth in such detail as UM may reasonably request, the progress of the development, evaluation, testing and commercialization of Products. Licensee shall notify UM within thirty (30) days of the end of the first Calendar Quarter in which the first commercial sale of a Product occurs. |
4.2 | Compliance with Laws . Licensee shall use its best efforts to comply in all material respects with all prevailing laws, rules and regulations pertaining to the development, testing, manufacture, marketing and import or export of Products. Without limiting the foregoing, Licensee acknowledges that the transfer of certain commodities and technical data is subject to United States laws and regulations controlling the export of such commodities and technical data, including all Export Administration Regulations of the United States Department of Commerce. These laws and regulations, among other things, prohibit or require a license for the export of certain types of technical data to specified countries. Licensee will comply in all material respects with all United States laws and regulations controlling the export of commodities and technical data. |
4.3 | Government Approvals . Licensee will be responsible for obtaining, at its cost and expense, all governmental approvals required to commercially market Products. |
4.4 | Patent Notices. Licensee shall mark or cause to be marked all Products made or sold in the United States with all applicable patent numbers where necessary to preserve the ability to claim damages for infringement, upon advice of counsel. If it is not practical for a Product to be so marked, then Licensee shall mark or cause to be marked the package for each Product with all applicable patent numbers. |
4.5 | Bankruptcy or Equivalent . Licensee will provide written notice to UM prior to the filing of a petition in bankruptcy or equivalent if Licensee intends to file a voluntary petition, or, if known by Licensee through statements or letters from a creditor or otherwise, if a third party intends to file an involuntary petition in bankruptcy against Licensee. Notice will be given at least 75 days before the planned filing or, if such notice is not feasible, as soon as Licensee is aware of the planned filing. Licensee's failure to perform this obligation is deemed to be a material pre-petition incurable breach under this Agreement not subject to the 60-day notice requirement of Section 9.2, and UM is deemed to have terminated this Agreement forty-five (45) days prior to the filing of the bankruptcy. |
5.1 | Representations of UM . UM represents to Licensee as follows: |
(a) | this Agreement, when executed and delivered by UM, will be the legal, valid and binding obligation of UM, enforceable against UM in accordance with its terms; |
(b) | UM subject to certain rights under 37 CFR 401.14 retained by the federal government in inventions resulting from federally supported work is the owner of all right, title and interest in and to the Licensed Technology, and has not granted rights in or to the Licensed Technology to any person other than Licensee; |
(c) | UM has not received any written notice that the Licensed Technology infringes the proprietary rights of any third party; |
(d) | the inventions claimed in the Patents to the knowledge of UM have not been publicly used, offered for sale, or disclosed in a printed publication by employees of UM more than one year prior to the filing of the U.S. application for the Patents. |
5.2 | Representations and Warranties of Licensee . Licensee represents and warrants to UM as follows: |
(a) | Licensee is a corporation duly organized, validly existing and in good standing under the laws of California and has all requisite corporate power and authority to execute, deliver and perform this Agreement; |
(b) | This Agreement, when executed and delivered by Licensee, will be the legal, valid and binding obligation of Licensee, enforceable against Licensee in accordance with its terms; |
(c) | the execution, delivery and performance of this Agreement by Licensee does not conflict with, or constitute a breach or default under, |
(i) | the charter documents of Licensee, |
(ii) | any law, order, judgment or governmental rule or regulation applicable to Licensee, or |
(iii) | any provision of any agreement, contract, commitment or instrument to which Licensee is a party; and the execution, delivery and performance of this Agreement by Licensee does not require the consent, approval or authorization of, or notice, declaration, filing or registration with, any governmental or regulatory authority. |
6.1 | No warranties; Limitation on Liability . EXCEPT AS EXPLICITLY SET FORTH IN THIS AGREEMENT, UM MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO: (I) COMMERCIAL UTILITY; OR (II) MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE; OR (III) THAT THE USE OF THE LICENSED TECHNOLOGY WILL NOT INFRINGE ANY PATENT, COPYRIGHT OR TRADEMARK OR OTHER PROPRIETARY OR PROPERTY RIGHTS OF OTHERS. UM SHALL NOT BE LIABLE TO LICENSEE, LICENSEE'S SUCCESSORS OR ASSIGNS OR ANY THIRD PARTY WITH RESPECT TO ANY CLAIM ON ACCOUNT OF, OR ARISING FROM, THE USE OF INFORMATION IN CONNECTION WITH THE LICENSED TECHNOLOGY SUPPLIED HEREUNDER OR THE MANUFACTURE, USE OR SALE OF PRODUCTS OR ANY OTHER MATERIAL OR ITEM DERIVED THEREFROM. |
6.2 | Liability . UM is an agency of the State of Mississippi under the management and control of the Board of Trustees of the State Institutions of Higher Learning (IHL). As authorized by law, IHL maintains a program of self-insurance for purposes of workers' compensation and general liability, pursuant to the Mississippi Tort Claims Act as set forth in Chapter 46, Title 11, Mississippi Code 1972, as amended. Accordingly, any liability of UM for any damages, losses, or costs arising out of or related to acts performed by UM or it employees under this Agreement is governed by the Tort Claims Act. |
6.3 | Licensee Indemnification . Licensee will indemnify, defend and hold harmless UM, its trustees, officers, agents and employees (collectively, the "Indemnified Parties"), from and against any and all liability, loss, damage, action, claim or expense suffered or incurred by the Indemnified Parties which results from or arises out of third party claims in connection with (individually, a "Liability" and collectively, the "Liabilities"): |
(a) | breach by Licensee of any duty, covenant or agreement contained in this Agreement or a lawsuit, action, or claim brought by any third party that includes any allegation which, if proven true, would constitute a breach by Licensee of any duty, covenant or agreement contained in this Agreement; |
(b) | the development, use, manufacture, promotion, sale, distribution or other disposition of any Products by Licensee, its Affiliates, assignees, vendors or other third parties, for personal injury, including death, or property damage arising from any of the foregoing. The indemnification obligation under Article 6.3 shall not apply to any contributory negligence or product liability of the Indemnified Party which may have occurred prior to the execution of this Agreement. Licensee will indemnify and hold harmless the Indemnified Parties from and against any Liabilities resulting from: |
(i) | any product liability or other claim of any kind related to the use by a third party of a Product that was manufactured, sold, distributed or otherwise disposed by Licensee, its Affiliates, assignees, vendors or other third parties; |
(ii) | clinical trials or studies conducted by or on behalf of Licensee relating to any Products, including, without limitation, any claim by or on behalf of a human subject of any such clinical trial or study, any claim arising from the procedures specified in any protocol used in any such clinical trial or study, any claim of deviation, authorized or unauthorized, from the protocols of any such clinical trial or study, any claim resulting from or arising out of the manufacture or quality control by a third party of any substance administered in any clinical trial or study; |
(iii) | Licensee's failure to comply with all prevailing laws, rules and regulations pertaining to the development, testing, manufacture, marketing and import or export of Products. |
6.4 | Procedures . The Indemnified Party shall promptly notify Licensee of any claim or action giving rise to a Liability subject to the provisions of Article 6.3. Licensee shall have the duty to defend any such claim or action, at its cost and expense. Indemnified Party must have the right, however, to approve counsel through the Mississippi Attorney General and through its governing board to represent it, and such approval will not be unreasonably withheld. In the event Licensee or any of its parents, affiliates or subsidiaries is also named in a particular claim, Licensee may choose the same attorneys who defend the Indemnified Parties to defend Licensee unless there arises a conflict of interest between the Licensee and one or more of the Indemnified Parties or among the Indemnified Parties. The indemnification rights of UM or other Indemnified Party contained herein are in addition to all other rights which such Indemnified Party may have at law or in equity or otherwise. |
6.5 | Product Liability Insurance . Beginning with the commencement of human clinical trials of any Product and continuing for a period of time after Licensee ceases manufacturing and marketing Products that is reasonable based upon industry standards, Licensee shall maintain general liability and product liability insurance that is reasonable based upon industry standards, but not less than $5 million per incident and $5 million in the aggregate. The insurance amounts specified herein shall not be deemed a limitation on Licensee's indemnification liability under this Agreement. Licensee shall provide UM with copies of such policies, upon request of UM. Licensee shall notify UM at least ten (10) days prior to cancellation of any such coverage. |
7.1 | Prosecution of Patents . |
(a) | Responsibilities for Patent Prosecution and Maintenance. |
(i) | UM using one of its approved outside patent attorneys is responsible for preparing, filing, and prosecuting any patent applications, maintaining any issued patents, and prosecuting and maintaining any and all continuations, continuations-in-part, divisional, substitutions, reissues, or re-examinations (or the foreign equivalent of these) related to the Patent rights in accordance with the process summarized in Appendix C. Licensee will reimburse UM for Patent Expenses subject to 3.1.c. hereof. |
(ii) | UM will prepare, file, and prosecute Patent(s), including Improvements in the United States. In the event of Improvements UM may also prepare, file, and prosecute international applications under the Patent Cooperation Treaty. Licensee will specify in writing to UM the foreign countries in which patent applications for Improvements are to be filed and prosecuted. UM will notify Licensee ninety (90) days in advance of a national stage filing deadline, and Licensee will specify such additional countries no later than thirty (30) days before the national stage filing deadline for the pertinent patent application. |
(iv) | Licensee will cooperate with UM in the filing, prosecution, and maintenance of any Patents. UM will advise Licensee promptly as to all material developments with respect to the applications. Copies of all papers received and filed in connection with prosecution of applications in all countries will be provided promptly after receipt or filing to Licensee to enable it to advise UM concerning the applications. |
(v) | No party shall be liable for any loss, as a whole or in part, of a patent term extension granted by the U.S. Patent and Trademark Office (or its foreign equivalents) on a Patent, even if such loss results from acts or omissions of the prosecuting party or its personnel. |
(b) | Any recovery obtained by the prosecuting party as a result of such proceeding, by settlement or otherwise, shall be applied first to the prosecuting party, an amount equal to two times its costs and expenses of the litigation, with the remainder to be paid 80% to the prosecuting party and 20% to the other party. |
8.1 | Confidentiality . To the extent allowed by law, both parties shall maintain in confidence and shall not disclose to any third party the Confidential Information received pursuant to this Agreement, without the prior written consent of the disclosing party except that the Confidential Information may be disclosed by either party only to those third parties (x) who have a need to know the information in connection with the exercise by either party of its rights under this Agreement and who agreed in writing to keep the information confidential to the same extent as is required of the parties under this Article 8.1, or (y) to whom either party is legally obligated to disclose the information. The foregoing obligation shall not apply to information which: |
(a) | is, at the time of disclosure, publicly known or available to the public, provided that Information will not be deemed to be within the public domain merely because individual parts of such Information are found separately within the public domain, but only if all the material features comprising such Confidential Information are found in combination in the public domain; |
(b) | is known to recipient at the time of disclosure of such Confidential Information not under confidentiality provided that recipient promptly notifies disclosing party in writing of this prior knowledge within thirty (30) days of receipt; |
(c) | is hereafter furnished to recipient by a third party, as a matter of right and without restriction on disclosure, provided that recipient promptly notifies disclosing party in writing of this third party disclosure after receipt thereof; |
(d) | is made public by disclosing party; |
(e) | is disclosed with the written approval of either party; |
(f) | is the subject of a legally binding court order compelling disclosure, provided that recipient must give disclosing party notice of any request for disclosure pursuant to any legal proceeding, within two (2) days of receipt of such request by recipient, and recipient must cooperate with disclosing party in obtaining appropriate protective orders to preserve the confidentiality of the Confidential Information; |
(g) | must be disclosed to comply with applicable laws, rules, regulations or rules of a securities exchange, provided that the party subject thereto uses reasonable efforts to minimize the scope of disclosure and to seek confidential treatment thereof. |
8.3 | Use of Name; Disclosure of Agreement . Neither Licensee nor UM shall directly or indirectly use the other party's name, seal, logo, trademark, or service mark, or any adaptation of them, or the name of any trustee, officer or employee thereof, without that party's prior written consent, or disclose the terms of this Agreement to third parties except that UM or Licensee may disclose this Agreement to any sublicenses or Affiliate and may disclose an accurate description of the terms of this Agreement to the extent required under federal or state securities, tax, grant administration, or other governmental disclosure laws, rules or regulations or rules of a securities exchange, provided that UM shall take steps to preserve the confidentiality of such information to the extent allowed by law. |
9.2 | Termination by UM . Upon the occurrence of any of the events set forth below ("Events of Default"), UM shall have the right to terminate this Agreement by giving writtennotice of termination, such termination effective with the giving of such notice: |
(a) | nonpayment of any material amount payable to UM that is continuing sixty (60) calendar days after UM gives Licensee written notice of such nonpayment; |
(b) | any material breach by Licensee of any covenant (other than a payment breach referred to in clause (a) above or a Development Plan breach referred to in section 9.3 below) or any representation or warranty contained in this Agreement that is continuing sixty (60) calendar days after UM gives Licensee written notice of such breach; |
(c) | Licensee fails to comply in any material respect with the terms of the license granted under Article 2 hereof and such noncompliance is continuing sixty (60) calendar days after UM gives Licensee notice of such noncompliance; |
9.3 | Development Plan. Licensee will provide UM with a Development Plan reasonably acceptable to UM within six (6) months of the Effective Date of this Agreement. Such Development Plan will be added to this Agreement as Appendix B. UM shall be entitled to terminate this Agreement if Licensee fails to meet the pre-established development milestones contained in the Development Plan. The milestones may be changed as agreed upon in advance in writing by both parties. UM shall give written notice of its decision to terminate this Agreement specifying a failure of the Development Plan milestones. Unless Licensee has remedied such failure or both parties have agreed, in writing, to a revised milestone schedule (which agreement will not be unreasonably withheld) within sixty (60) days after receipt of such notice, this Agreement will be deemed to terminate as of the expiration of such sixty (60) day period. |
9.4 | Termination by Licensee . Licensee shall have the right to terminate this Agreement, at any time with or without cause, upon sixty (60) days' written notice to the UM. |
9.6 | Provisions Surviving Termination . Licensee's obligation to pay any royalties accrued but unpaid prior to termination of this Agreement shall survive such termination. Licensee shall owe UM royalties on sales when Licensee has received payments from a sub-licensee or Affiliate. In addition, all provisions required to interpret the rights and obligations of the parties arising prior to the termination date shall survive expiration or termination of this Agreement. |
10.1 | Assignment . This Agreement and the rights and benefits conferred upon Licensee hereunder may not be transfered or assigned to any Person, directly or by merger, by sale or assignment of membership interests in Licensee, or by other operation of law, without the express written permission of UM, which permission will not be unreasonably withheld. Notwithstanding the requirement set forth in the preceding sentence, Licensee may assign or transfer its interests in this Agreement without written permission from UM in the following circumstances: |
(a) | an assignment in connection with the sale or transfer of all or substantially all of Licensee's assets which relate to the development or use of the Licensed Technology or a Product(s) provided that the buyer or transferee is at least as financially stable as Licensee and following the sale or transfer would be as capable of performing its obligations under this Agreement as Licensee would be; or |
(b) | an assignment by Licensee to an Affiliate of Licensee; or |
(c) | an assignment of a security interest in this Agreement as a part of a security interest in all or substantially all of the Licensee's assets which relate to the Licensed Technology. or a Product(s). |
10.2 | No Waiver . A waiver by either party of a breach or violation of any provision of this Agreement will not constitute or be construed as a waiver of any subsequent breach or violation of that provision or as a waiver of any breach or violation of any other provision of this Agreement. |
10.3 | Independent Contractor . Nothing herein shall be deemed to establish a relationship of principal and agent between UM and Licensee, nor any of their agents or employees for any purpose whatsoever. This Agreement shall not be construed as constituting UM and Licensee as partners, or as creating any other form of legal association or arrangement which could impose liability upon one party for the act or failure to act of the other party. No employees or staff of UM shall be entitled to any benefits applicable to employees of Licensee. Neither party shall be bound by the acts or conduct of the other party. |
10.4 | Notices . Any notice under this Agreement shall be sufficiently given if sent in writing by prepaid, first class, certified or registered mail, return receipt requested, addressed as follows: |
10.5 | Entire Agreement . This Agreement, together with the attachments hereto, embodies the entire understanding between the parties relating to the subject matter hereof and supersedes all prior understandings and agreements, whether written or oral. This Agreement may not be modified or varied except by a written document signed by duly authorized representatives of both parties. |
10.6 | Severability . In the event that any provision of this Agreement shall be held to be unenforceable, invalid or in contravention of applicable law, such provision shall be of no effect, the remaining portions of this Agreement shall continue in full force and effect, and the parties shall negotiate in good faith to replace such provision with a provision which effects to the extent possible the original intent of such provision. |
10.7 | Force Majeure. In the event that either party's performance of its obligations under this Agreement shall be prevented by any cause beyond its reasonable control, including without limitation acts of God, acts of government, shortage of material, accident, fire, delay or other disaster, provided that the effected party shall have used its reasonable best efforts to avoid or remove the cause of such nonperformance and to minimize the duration and negative affect of such nonperformance, then such effected party's performance shall be excused and the time for performance shall be extended for the period of delay or inability to perform due to such occurrence. The affected party shall continue performance under this Agreement using its best efforts as soon as such cause is removed. |
10.8 | Headings . Any headings and captions used in this Agreement are for convenience of reference only and shall not affect its construction or interpretation. |
10.9 | No Third Party Benefits . Nothing in this Agreement, express or implied, is intended to confer on any person other than the parties hereto or their permitted assigns, any benefits, rights or remedies. |
10.10 | Governing Law . This Agreement shall be construed in accordance with and governed by the internal laws of the State of Mississippi, excluding such state's rules relating to conflicts of laws, and its form, execution, validity, construction and effect shall be determined in accordance with such internal laws. |
10.11
|
Counterparts
. This Agreement shall become binding when any one or more counterparts hereof,individually or taken together, shall bear the signatures of each of the parties hereto. ThisAgreement may be executed in any number of counterparts, each of which shall be deemed an original as against the party whose signature appears thereon, but all of which taken together shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by e-mail shall be effective as delivery of a manually executed counterpart of this Agreement.
|
UNIVERSITY OF MISSISSIPPI
|
|
|
|
/s/ WALTER G. CHAMBLISS
|
9/29/14
|
Walter G. Chambliss, Ph.D.
|
Date
|
Director of Technology Management, Office of Research & Sponsored Programs
|
|
|
|
|
|
Acknowledged by:
|
|
|
|
/S/ MAHMOUD A. ELSOHLY
|
9/29/14
|
Mahmoud A. ElSohly, Ph.D.
|
Date
|
Research Professor, National Center for Natural Products Research
|
|
|
|
|
|
/S/ DAVID D. ALLEN
|
9/29/14
|
David D. Allen, Ph.D.
|
Date
|
Dean, School of Pharmacy
|
|
|
|
|
|
NEMUS
|
|
|
|
/S/ REG A. LAPHAM
|
9/29/14
|
Reg A. Lapham
|
Date
|
President
|
|
1. | UM 5050 Compositions Containing Delta-9-THC Amino Acid Esters and Process of Preparation |
1. | Outside Patent Counsel ("OPC") will notify DTM when an office action is received from the United States Patent and Trademark Office "USPTO") or foreign counterpart and send a copy to DTM. If the office action is straightforward (e.g. very similar to a previously submitted response in another country or minor claim changes to be consistent with patent law), DTM will ask patent counsel to draft a response/amendment for review by DTM and Licensee. DTM will send a copy of the office action to Licensee and to the Principal Investigator(s) at UM. If the office action requires a strategic discussion, DTM will schedule a conference call between Licensee (and Licensee's counsel if desired), DTM, the PI(s) and OPC. At any time, regardless of the complexity of the office action, Licensee may request a conference call to discuss the pending office action and DTM will set one up. The same procedures are used when dealing with prosecution timelines and deadlines (including but not limited to 30/31 national entries on PCT applications and claim amendments following Search Reports). |
2. | OPC will send a "final" draft version of the response/amendment to DTM for review/approval. DTM will forward it to Licensee and the PI(s) and ask for comments. This generally requires a quick turnaround time (e.g. 24 to 48 hours) depending on how many drafts have been exchanged. |
3. | OPC will file the response/amendment and send DTM a copy of the filed document. DTM will forward the document to Licensee and the PI(s). |
4. | Improvements to the patented pending technology will be documented in accordance with UM's Patent and Invention Policy by researchers using DTMs Research Disclosure Form. DTM will send a copy of the Research Disclosure Form to Licensee if Licensee has not already reviewed the disclosure. The disclosure will be sent to OPC for review and a conference call will be set up with DTM, Licensee (and Licensee's counsel if desired), the PI(s) (and other researchers as appropriate) and the OPC to discuss strategies of incorporating the Improvement. |
5. | When OPC receives a notice of allowance for the pending claims, OPC will send the notice to DTM. DTM will forward the notice to Licensee, and the PI(s). DTM will ask Licensee and the PI(s) if there are any Improvements that need to be considered for incorporation before the patent issues (typically 3 to 6 weeks). DTM will ask Licensee and the PI if the issue fee should be paid or if the claims should be further amended. |
6. | DTM will send Licensee a monthly IP report, usually the first week of every month, detailing all issued and pending patents. The report will include a status item for every docket as well as timeline for any pending deadlines with a countries patent office. Estimates for each action item will be included if they are available from OPC. |
Licensee:
___________________________________________________________
|
UM Agreement ID:
_________________________________________________
|
|
|
Period Covered:
___________________________________________
|
through
________________________________________________
|
|
|
|
|
||
Prepared by:
______________________________________________________________________________
|
Date:
______________________________________________
|
|
|
(Company Representative)
|
|
|
|
|
|
|
|
Approved by:
________________________________________________________________________
|
Date:
______________________________________________
|
|
|
|
(Company Representative)
|
|
|
Report Type:
|
o
|
Single Product or Process Line Report:
____________________________________________
|
|
|
|
|
(product name)
|
|
|
|
|
|
o
|
Multiproduct Summary Report, Page ____ of ____
|
|
|
|
|
|
Other Compensation:
|
o
|
Annual Payments, milestones, or other fees & compensation
|
|
|
|
Annual Payments, milestones, or other fees & compensation Amount Due:
__________________________
|
|
|
|
|
|
|
o
|
|
Country
|
Quantity Produced
|
Quantity Sold
|
Gross Sales ($)
|
*Net Sales ($)
|
Royalty Rate
|
Conversion Rate (if applicable)
|
Royalty Due this Period
|
USA
|
|
|
|
|
|
|
|
Canada
|
|
|
|
|
|
|
|
Japan
|
|
|
|
|
|
|
|
Other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL:
|
|
|
|
|
|
|
|
1.1 | Unless otherwise provided in this Agreement, the following terms when used with initial capital letters shall have the meanings set forth below: |
2.1 | Grant of License . Subject to the terms and conditions contained in this Agreement, UM hereby grants to Licensee an exclusive, perpetual, non-transferrable except otherwise allowed in this Agreement, worldwide, royalty-bearing right and license to use and practice the Licensed Technology to develop, make, have made, use, sell, offer for sale and import Products in the Field. Notwithstanding the foregoing, UM expressly reserves a non-transferable royalty-free right to use the Licensed Technology in the Field itself, including use by its faculty, staff and researchers, for educational and non-commercial research purposes only. |
2.3 | No Rights by Implication . No rights or licenses with respect to the Licensed Technology are granted or deemed granted hereunder or in connection herewith, other than those rights or licenses expressly granted in this Agreement. |
3.1 | Upfront, Annual License Maintenance Fee and Milestone Payments . In consideration of the license granted hereunder, Licensee shall pay UM the following non-refundable payments: |
(c) | One-Time Milestone Payments . |
(a). | In further consideration of the rights and licenses granted hereunder, Licensee shall pay UM a royalty of *** of Net Sales of all Products sold by Licensee or its Affiliate for commercial use. |
3.3 | Payments . Royalties and other amounts payable under this Agreement shall be paid within forty five (45) days following the last day of the Calendar Quarter in which royalties and other amounts accrue. The last such payment shall be made within forty five (45) days after termination of this Agreement. Payments shall be deemed paid as of the day on which they are received by UM. |
3.5 | Reports . Licensee shall deliver to UM within forty five (45) days after the end of each Calendar Quarter following commercial sale of a Product a report setting forth in reasonable detail the calculation of the royalties and other amounts payable to UM for such Calendar Quarter pursuant to this Article 3, including, without limitation, the Products sold in each country during such Calendar Quarter, the Net Sales thereof, and, within sixty (60) days after the end of each Calendar Quarter, similar reports containing corresponding information relating to royalties payable due to sales by permitted sub-licensees pursuant to Article 3.2 . An example of an acceptable royalty report is provided in Appendix D. |
3.6 | Currency, Place of Payment, Interest . |
(a) | All dollar amounts referred to in this Agreement are expressed in United States dollars. All payments to UM under this Agreement shall be made in United States dollars (or other legal currency of the United States), as directed by UM, by check payable to the University of Mississippi" or by wire transfer to an account as UM may designate from time to time. |
(b) | If Licensee receives revenues from sales of Products in a currency other than United States dollars, royalties shall be converted into United States dollars at the applicable conversion rate for the foreign currency as published in the "Exchange Rates" table in the eastern edition of The Wall Street Journal as of the last date of the Calendar Quarter. |
(c) | Amounts that are not paid when due shall accrue interest-from the due date until paid, at an annual rate equal to the "Prime Rate" plus 2% as published in the "Money Rates" table in the eastern edition of The Wall Street Journal as of the due date. |
3.7 | Records . Licensee will maintain complete and accurate books and records that enable the royalties payable hereunder to be verified. The records for each Calendar Quarter shall be maintained for two years after the submission of each report under Article 3.4 hereof. Upon reasonable prior notice to Licensee, UM and its accountants shall have access to the books and records of Licensee to conduct a review or audit thereof no more than one (1) time per years. Such access shall be available during normal business hours. In the event such audit reveals any error in the computation of amounts due pursuant to Section 3.2 exceeding 5% of the amount owed, the Licensee shall promptly reimburse UM for all reasonable expenses and costs incurred in the conduct of such review or audit. |
(a) | Licensee shall use its reasonable efforts to develop for commercial use and to market Products as soon as practicable, and to continue to market Products as long as commercially viable, all as is consistent with sound and reasonable business practice. |
(b) | Licensee shall provide UM once per Calendar Year on December 1 with written reports, setting forth in such detail as UM may reasonably request, the progress of the development, evaluation, testing and commercialization of Products. Licensee shall notify UM within thirty (30) days of the end of the first Calendar Quarter in which the first commercial sale of a Product occurs. |
4.2 | Compliance with Laws . Licensee shall use its best efforts to comply in all material respects with all prevailing laws, rules and regulations pertaining to the development, testing, manufacture, marketing and import or export of Products. Without limiting the foregoing, Licensee acknowledges that the transfer of certain commodities and technical data is subject to United States laws and regulations controlling the export of such commodities and technical data, including all Export Administration Regulations of the United States Department of Commerce. These laws and regulations, among other things, prohibit or require a license for the export of certain types of technical data to specified countries. Licensee will comply in all material respects with all United States laws and regulations controlling the export of commodities and technical data. |
4.3 | Government Approvals . Licensee will be responsible for obtaining, at its cost and expense, all governmental approvals required to commercially market Products. |
4.4 | Patent Notices. Licensee shall mark or cause to be marked all Products made or sold in the United States with all applicable patent numbers where necessary to preserve the ability to claim damages for infringement, upon advice of counsel. If it is not practical for a Product to be so marked, then Licensee shall mark or cause to be marked the package for each Product with all applicable patent numbers. |
4.5 | Bankruptcy or Equivalent . Licensee will provide written notice to UM prior to the filing of a petition in bankruptcy or equivalent if Licensee intends to file a voluntary petition, or, if known by Licensee through statements or letters from a creditor or otherwise, if a third party intends to file an involuntary petition in bankruptcy against Licensee. Notice will be given at least 75 days before the planned filing or, if such notice is not feasible, as soon as Licensee is aware of the planned filing. Licensee's failure to perform this obligation is deemed to be a material pre-petition incurable breach under this Agreement not subject to the 60-day notice requirement of Section 9.2, and UM is deemed to have terminated this Agreement forty-five (45) days prior to the filing of the bankruptcy. |
5.1 | Representations of UM . UM represents to Licensee as follows: |
(a) | this Agreement, when executed and delivered by UM, will be the legal, valid and binding obligation of UM, enforceable against UM in accordance with its terms; |
(b) | UM subject to certain rights under 37 CFR 401.14 retained by the federal government in inventions resulting from federally supported work is the owner of all right, title and interest in and to the Licensed Technology, and has not granted rights in or to the Licensed Technology to any person other than Licensee; |
(c) | UM has not received any written notice that the Licensed Technology infringes the proprietary rights of any third party; |
(d) | the inventions claimed in the Patents to the knowledge of UM have not been publicly used, offered for sale, or disclosed in a printed publication by employees of UM more than one year prior to the filing of the U.S. application for the Patents. |
5.2 | Representations and Warranties of Licensee . Licensee represents and warrants to UM as follows: |
(a) | Licensee is a corporation duly organized, validly existing and in good standing under the laws of California and has all requisite corporate power and authority to execute, deliver and perform this Agreement; |
(b) | This Agreement, when executed and delivered by Licensee, will be the legal, valid and binding obligation of Licensee, enforceable against Licensee in accordance with its terms; |
(c) | the execution, delivery and performance of this Agreement by Licensee does not conflict with, or constitute a breach or default under, |
(i) | the charter documents of Licensee, |
(ii) | any law, order, judgment or governmental rule or regulation applicable to Licensee, or |
(iii) | any provision of any agreement, contract, commitment or instrument to which Licensee is a party; and the execution, delivery and performance of this Agreement by Licensee does not require the consent, approval or authorization of, or notice, declaration, filing or registration with, any governmental or regulatory authority. |
6.1 | No warranties; Limitation on Liability . EXCEPT AS EXPLICITLY SET FORTH IN THIS AGREEMENT, UM MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO: (I) COMMERCIAL UTILITY; OR (II) MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE; OR (III) THAT THE USE OF THE LICENSED TECHNOLOGY WILL NOT INFRINGE ANY PATENT, COPYRIGHT OR TRADEMARK OR OTHER PROPRIETARY OR PROPERTY RIGHTS OF OTHERS. UM SHALL NOT BE LIABLE TO LICENSEE, LICENSEE'S SUCCESSORS OR ASSIGNS OR ANY THIRD PARTY WITH RESPECT TO ANY CLAIM ON ACCOUNT OF, OR ARISING FROM, THE USE OF INFORMATION IN CONNECTION WITH THE LICENSED TECHNOLOGY SUPPLIED HEREUNDER OR THE MANUFACTURE, USE OR SALE OF PRODUCTS OR ANY OTHER MATERIAL OR ITEM DERIVED THEREFROM. |
6.2 | Liability . UM is an agency of the State of Mississippi under the management and control of the Board of Trustees of the State Institutions of Higher Learning (IHL). As authorized by law, IHL maintains a program of self-insurance for purposes of workers' compensation and general liability, pursuant to the Mississippi Tort Claims Act as set forth in Chapter 46, Title 11, Mississippi Code 1972, as amended. Accordingly, any liability of UM for any damages, losses, or costs arising out of or related to acts performed by UM or it employees under this Agreement is governed by the Tort Claims Act. |
6.3 | Licensee Indemnification . Licensee will indemnify, defend and hold harmless UM, its trustees, officers, agents and employees (collectively, the "Indemnified Parties"), from and against any and all liability, loss, damage, action, claim or expense suffered or incurred by the Indemnified Parties which results from or arises out of third party claims in connection with (individually, a "Liability" and collectively, the "Liabilities"): |
(a) | breach by Licensee of any duty, covenant or agreement contained in this Agreement or a lawsuit, action, or claim brought by any third party that includes any allegation which, if proven true, would constitute a breach by Licensee of any duty, covenant or agreement contained in this Agreement; |
(b) | the development, use, manufacture, promotion, sale, distribution or other disposition of any Products by Licensee, its Affiliates, assignees, vendors or other third parties, for personal injury, including death, or property damage arising from any of the foregoing. The indemnification obligation under Article 6.3 shall not apply to any contributory negligence or product liability of the Indemnified Party which may have occurred prior to the execution of this Agreement. Licensee will indemnify and hold harmless the Indemnified Parties from and against any Liabilities resulting from: |
(i) | any product liability or other claim of any kind related to the use by a third party of a Product that was manufactured, sold, distributed or otherwise disposed by Licensee, its Affiliates, assignees, vendors or other third parties; |
(ii) | clinical trials or studies conducted by or on behalf of Licensee relating to any Products, including, without limitation, any claim by or on behalf of a human subject of any such clinical trial or study, any claim arising from the procedures specified in any protocol used in any such clinical trial or study, any claim of deviation, authorized or unauthorized, from the protocols of any such clinical trial or study, any claim resulting from or arising out of the manufacture or quality control by a third party of any substance administered in any clinical trial or study; |
(iii) | Licensee's failure to comply with all prevailing laws, rules and regulations pertaining to the development, testing, manufacture, marketing and import or export of Products. |
6.4 | Procedures . The Indemnified Party shall promptly notify Licensee of any claim or action giving rise to a Liability subject to the provisions of Article 6.3. Licensee shall have the duty to defend any such claim or action, at its cost and expense. Indemnified Party must have the right, however, to approve counsel through the Mississippi Attorney General and through its governing board to represent it, and such approval will not be unreasonably withheld. In the event Licensee or any of its parents, affiliates or subsidiaries is also named in a particular claim, Licensee may choose the same attorneys who defend the Indemnified Parties to defend Licensee unless there arises a conflict of interest between the Licensee and one or more of the Indemnified Parties or among the Indemnified Parties. The indemnification rights of UM or other Indemnified Party contained herein are in addition to all other rights which such Indemnified Party may have at law or in equity or otherwise. |
6.5 | Product Liability Insurance . Beginning with the commencement of human clinical trials of any Product and continuing for a period of time after Licensee ceases manufacturing and marketing Products that is reasonable based upon industry standards, Licensee shall maintain general liability and product liability insurance that is reasonable based upon industry standards, but not less than $5 million per incident and $5 million in the aggregate. The insurance amounts specified herein shall not be deemed a limitation on Licensee's indemnification liability under this Agreement. Licensee shall provide UM with copies of such policies, upon request of UM. Licensee shall notify UM at least ten (10) days prior to cancellation of any such coverage. |
7.1 | Prosecution of Patents . |
(a) | Responsibilities for Patent Prosecution and Maintenance. |
(i) | UM using one of its approved outside patent attorneys is responsible for preparing, filing, and prosecuting any patent applications, maintaining any issued patents, and prosecuting and maintaining any and all continuations, continuations-in-part, divisional, substitutions, reissues, or re-examinations (or the foreign equivalent of these) related to the Patent rights in accordance with the process summarized in Appendix C. Licensee will reimburse UM for Patent Expenses subject to 3.1.c. hereof. |
(ii) | UM will prepare, file, and prosecute Patent(s), including Improvements in the United States. In the event of Improvements UM may also prepare, file, and prosecute international applications under the Patent Cooperation Treaty. Licensee will specify in writing to UM the foreign countries in which patent applications for Improvements are to be filed and prosecuted. UM will notify Licensee ninety (90) days in advance of a national stage filing deadline, and Licensee will specify such additional countries no later than thirty (30) days before the national stage filing deadline for the pertinent patent application. |
(iv)
|
Licensee will cooperate with UM in the filing, prosecution, and maintenance of any Patents. UM will advise Licensee promptly as to all material developments with respect to the applications. Copies of all papers received and filed in connection with prosecution of applications in all countries will be provided promptly after receipt or filing to Licensee to enable it to advise UM concerning the applications.
|
(v) | No party shall be liable for any loss, as a whole or in part, of a patent term extension granted by the U.S. Patent and Trademark Office (or its foreign equivalents) on a Patent, even if such loss results from acts or omissions of the prosecuting party or its personnel. |
(b) | Any recovery obtained by the prosecuting party as a result of such proceeding, by settlement or otherwise, shall be applied first to the prosecuting party, an amount equal to two times its costs and expenses of the litigation, with the remainder to be paid 80% to the prosecuting party and 20% to the other party. |
8.1 | Confidentiality . To the extent allowed by law, both parties shall maintain in confidence and shall not disclose to any third party the Confidential Information received pursuant to this Agreement, without the prior written consent of the disclosing party except that the Confidential Information may be disclosed by either party only to those third parties (x) who have a need to know the information in connection with the exercise by either party of its rights under this Agreement and who agreed in writing to keep the information confidential to the same extent as is required of the parties under this Article 8.1, or (y) to whom either party is legally obligated to disclose the information. The foregoing obligation shall not apply to information which: |
(a) | is, at the time of disclosure, publicly known or available to the public, provided that Information will not be deemed to be within the public domain merely because individual parts of such Information are found separately within the public domain, but only if all the material features comprising such Confidential Information are found in combination in the public domain; |
(b) | is known to recipient at the time of disclosure of such Confidential Information not under confidentiality provided that recipient promptly notifies disclosing party in writing of this prior knowledge within thirty (30) days of receipt; |
(c) | is hereafter furnished to recipient by a third party, as a matter of right and without restriction on disclosure, provided that recipient promptly notifies disclosing party in writing of this third party disclosure after receipt thereof; |
(d) | is made public by disclosing party; |
(e) | is disclosed with the written approval of either party; |
(f) | is the subject of a legally binding court order compelling disclosure, provided that recipient must give disclosing party notice of any request for disclosure pursuant to any legal proceeding, within two (2) days of receipt of such request by recipient, and recipient must cooperate with disclosing party in obtaining appropriate protective orders to preserve the confidentiality of the Confidential Information; |
(g) | must be disclosed to comply with applicable laws, rules, regulations or rules of a securities exchange, provided that the party subject thereto uses reasonable efforts to minimize the scope of disclosure and to seek confidential treatment thereof. |
8.3 | Use of Name; Disclosure of Agreement . Neither Licensee nor UM shall directly or indirectly use the other party's name, seal, logo, trademark, or service mark, or any adaptation of them, or the name of any trustee, officer or employee thereof, without that party's prior written consent, or disclose the terms of this Agreement to third parties except that UM or Licensee may disclose this Agreement to any sublicenses or Affiliate and may disclose an accurate description of the terms of this Agreement to the extent required under federal or state securities, tax, grant administration, or other governmental disclosure laws, rules or regulations or rules of a securities exchange, provided that UM shall take steps to preserve the confidentiality of such information to the extent allowed by law. In addition, Licensee shall not directly or indirectly use the name, seal, logo, trademarks, or service marks, or any adaptation of them of the University of Texas, The Board of Regents of the University of Texas System, the university system it governs, or any member institution, or the name of any trustee, officer or employee without prior written consent. |
9.2 | Termination by UM . Upon the occurrence of any of the events set forth below ("Events of Default"), UM shall have the right to terminate this Agreement by giving writtennotice of termination, such termination effective with the giving of such notice: |
(a) | nonpayment of any material amount payable to UM that is continuing sixty (60) calendar days after UM gives Licensee written notice of such nonpayment; |
(b) | any material breach by Licensee of any covenant (other than a payment breach referred to in clause (a) above or a Development Plan breach referred to in section 9.3 below) or any representation or warranty contained in this Agreement that is continuing sixty (60) calendar days after UM gives Licensee written notice of such breach; |
(c) | Licensee fails to comply in any material respect with the terms of the license granted under Article 2 hereof and such noncompliance is continuing sixty (60) calendar days after UM gives Licensee notice of such noncompliance; |
9.3 | Development Plan. Licensee will provide UM with a Development Plan reasonably acceptable to UM within six (6) months of the Effective Date of this Agreement. Such Development Plan will be added to this Agreement as Appendix B. UM shall be entitled to terminate this Agreement if Licensee fails to meet the pre-established development milestones contained in the Development Plan. The milestones may be changed as agreed upon in advance in writing by both parties. UM shall give written notice of its decision to terminate this Agreement specifying a failure of the Development Plan milestones. Unless Licensee has remedied such failure or both parties have agreed, in writing, to a revised milestone schedule (which agreement will not be unreasonably withheld) within sixty (60) days after receipt of such notice, this Agreement will be deemed to terminate as of the expiration of such sixty (60) day period. |
9.4 | Termination by Licensee . Licensee shall have the right to terminate this Agreement, at any time with or without cause, upon sixty (60) days' written notice to the UM. |
9.6 | Provisions Surviving Termination . Licensee's obligation to pay any royalties accrued but unpaid prior to termination of this Agreement shall survive such termination. Licensee shall owe UM royalties on sales when Licensee has received payments from a sub-licensee or Affiliate. In addition, all provisions required to interpret the rights and obligations of the parties arising prior to the termination date shall survive expiration or termination of this Agreement. |
10.1 | Assignment . This Agreement and the rights and benefits conferred upon Licensee hereunder may not be transfered or assigned to any Person, directly or by merger, by sale or assignment of membership interests in Licensee, or by other operation of law, without the express written permission of UM, which permission will not be unreasonably withheld. Notwithstanding the requirement set forth in the preceding sentence, Licensee may assign or transfer its interests in this Agreement without written permission from UM in the following circumstances: |
(a) | an assignment in connection with the sale or transfer of all or substantially all of Licensee's assets which relate to the development or use of the Licensed Technology or a Product(s) provided that the buyer or transferee is at least as financially stable as Licensee and following the sale or transfer would be as capable of performing its obligations under this Agreement as Licensee would be; or |
(b) | an assignment by Licensee to an Affiliate of Licensee; or |
(c) | an assignment of a security interest in this Agreement as a part of a security interest in all or substantially all of the Licensee's assets which relate to the Licensed Technology. or a Product(s). |
10.2 | No Waiver . A waiver by either party of a breach or violation of any provision of this Agreement will not constitute or be construed as a waiver of any subsequent breach or violation of that provision or as a waiver of any breach or violation of any other provision of this Agreement. |
10.3 | Independent Contractor . Nothing herein shall be deemed to establish a relationship of principal and agent between UM and Licensee, nor any of their agents or employees for any purpose whatsoever. This Agreement shall not be construed as constituting UM and Licensee as partners, or as creating any other form of legal association or arrangement which could impose liability upon one party for the act or failure to act of the other party. No employees or staff of UM shall be entitled to any benefits applicable to employees of Licensee. Neither party shall be bound by the acts or conduct of the other party. |
10.4 | Notices . Any notice under this Agreement shall be sufficiently given if sent in writing by prepaid, first class, certified or registered mail, return receipt requested, addressed as follows: |
10.5 | Entire Agreement . This Agreement, together with the attachments hereto, embodies the entire understanding between the parties relating to the subject matter hereof and supersedes all prior understandings and agreements, whether written or oral. This Agreement may not be modified or varied except by a written document signed by duly authorized representatives of both parties. |
10.6 | Severability . In the event that any provision of this Agreement shall be held to be unenforceable, invalid or in contravention of applicable law, such provision shall be of no effect, the remaining portions of this Agreement shall continue in full force and effect, and the parties shall negotiate in good faith to replace such provision with a provision which effects to the extent possible the original intent of such provision. |
10.7 | Force Majeure. In the event that either party's performance of its obligations under this Agreement shall be prevented by any cause beyond its reasonable control, including without limitation acts of God, acts of government, shortage of material, accident, fire, delay or other disaster, provided that the effected party shall have used its reasonable best efforts to avoid or remove the cause of such nonperformance and to minimize the duration and negative affect of such nonperformance, then such effected party's performance shall be excused and the time for performance shall be extended for the period of delay or inability to perform due to such occurrence. The affected party shall continue performance under this Agreement using its best efforts as soon as such cause is removed. |
10.8 | Headings . Any headings and captions used in this Agreement are for convenience of reference only and shall not affect its construction or interpretation. |
10.9 | No Third Party Benefits . Nothing in this Agreement, express or implied, is intended to confer on any person other than the parties hereto or their permitted assigns, any benefits, rights or remedies. |
10.10 | Governing Law . This Agreement shall be construed in accordance with and governed by the internal laws of the State of Mississippi, excluding such state's rules relating to conflicts of laws, and its form, execution, validity, construction and effect shall be determined in accordance with such internal laws. |
10.11
|
Counterparts
. This Agreement shall become binding when any one or more counterparts hereof,individually or taken together, shall bear the signatures of each of the parties hereto. ThisAgreement may be executed in any number of counterparts, each of which shall be deemed an original as against the party whose signature appears thereon, but all of which taken together shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by e-mail shall be effective as delivery of a manually executed counterpart of this Agreement.
|
UNIVERSITY OF MISSISSIPPI
|
|
|
|
/s/ WALTER G. CHAMBLISS
|
9/29/14
|
Walter G. Chambliss, Ph.D.
|
Date
|
Director of Technology Management, Office of Research & Sponsored Programs
|
|
|
|
|
|
Acknowledged by:
|
|
|
|
/s/ MAHMOUD A. ELSOHLY
|
9/29/14
|
Mahmoud A. ElSohly, Ph.D.
|
Date
|
Research Professor, National Center for Natural Products Research
|
|
|
|
|
|
/s/ DAVID D. ALLEN
|
9/29/14
|
David D. Allen, Ph.D.
|
Date
|
Dean, School of Pharmacy
|
|
|
|
|
|
NEMUS
|
|
|
|
/s/ REG A. LAPHAM
|
9/29/14
|
Reg A. Lapham
|
Date
|
President
|
|
1. | UM 5050 Compositions Containing Delta-9-THC Amino Acid Esters and Process of Preparation |
2. | UM 1520 Bioadhesive Hot-Melt Extruded Film for Topical and Mucosal Adhesion Application and Drug Delivery |
1. | Outside Patent Counsel ("OPC") will notify DTM when an office action is received from the United States Patent and Trademark Office "USPTO") or foreign counterpart and send a copy to DTM. If the office action is straightforward (e.g. very similar to a previously submitted response in another country or minor claim changes to be consistent with patent law), DTM will ask patent counsel to draft a response/amendment for review by DTM and Licensee. DTM will send a copy of the office action to Licensee and to the Principal Investigator(s) at UM. If the office action requires a strategic discussion, DTM will schedule a conference call between Licensee (and Licensee's counsel if desired), DTM, the PI(s) and OPC. At any time, regardless of the complexity of the office action, Licensee may request a conference call to discuss the pending office action and DTM will set one up. The same procedures are used when dealing with prosecution timelines and deadlines (including but not limited to 30/31 national entries on PCT applications and claim amendments following Search Reports). |
2. | OPC will send a "final" draft version of the response/amendment to DTM for review/approval. DTM will forward it to Licensee and the PI(s) and ask for comments. This generally requires a quick turnaround time (e.g. 24 to 48 hours) depending on how many drafts have been exchanged. |
3. | OPC will file the response/amendment and send DTM a copy of the filed document. DTM will forward the document to Licensee and the PI(s). |
4. | Improvements to the patented pending technology will be documented in accordance with UM's Patent and Invention Policy by researchers using DTMs Research Disclosure Form. DTM will send a copy of the Research Disclosure Form to Licensee if Licensee has not already reviewed the disclosure. The disclosure will be sent to OPC for review and a conference call will be set up with DTM, Licensee (and Licensee's counsel if desired), the PI(s) (and other researchers as appropriate) and the OPC to discuss strategies of incorporating the Improvement. |
5. | When OPC receives a notice of allowance for the pending claims, OPC will send the notice to DTM. DTM will forward the notice to Licensee, and the PI(s). DTM will ask Licensee and the PI(s) if there are any Improvements that need to be considered for incorporation before the patent issues (typically 3 to 6 weeks). DTM will ask Licensee and the PI if the issue fee should be paid or if the claims should be further amended. |
6. | DTM will send Licensee a monthly IP report, usually the first week of every month, detailing all issued and pending patents. The report will include a status item for every docket as well as timeline for any pending deadlines with a countries patent office. Estimates for each action item will be included if they are available from OPC. |
Licensee:
___________________________________________________________
|
UM Agreement ID:
_________________________________________________
|
|
|
Period Covered:
___________________________________________
|
through
________________________________________________
|
|
|
|
|
||
Prepared by:
______________________________________________________________________________
|
Date:
______________________________________________
|
|
|
(Company Representative)
|
|
|
|
|
|
|
|
Approved by:
________________________________________________________________________
|
Date:
______________________________________________
|
|
|
|
(Company Representative)
|
|
|
Report Type:
|
o
|
Single Product or Process Line Report:
____________________________________________
|
|
|
|
|
(product name)
|
|
|
|
|
|
o
|
Multiproduct Summary Report, Page ____ of ____
|
|
|
|
|
|
Other Compensation:
|
o
|
Annual Payments, milestones, or other fees & compensation
Details: ___________
Amount Due: ______________
|
|
|
|
|
|
|
o
|
No Compensation of Royalty Due this Period
Reason:
____________________________
|
Country
|
Quantity Produced
|
Quantity Sold
|
Gross Sales ($)
|
*Net Sales ($)
|
Royalty Rate
|
Conversion Rate (if applicable)
|
Royalty Due this Period
|
USA
|
|
|
|
|
|
|
|
Canada
|
|
|
|
|
|
|
|
Japan
|
|
|
|
|
|
|
|
Other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL:
|
|
|
|
|
|
|
|
1.1 | Unless otherwise provided in this Agreement, the following terms when used with initial capital letters shall have the meanings set forth below: |
2.1 | Grant of License . Subject to the terms and conditions contained in this Agreement, UM hereby grants to Licensee an exclusive, perpetual, non-transferrable except otherwise allowed in this Agreement, worldwide, royalty-bearing right and license to use and practice the Licensed Technology to develop, make, have made, use, sell, offer for sale and import Products in the Field. Notwithstanding the foregoing, UM expressly reserves a non-transferable royalty-free right to use the Licensed Technology in the Field itself, including use by its faculty, staff and researchers, for educational and non-commercial research purposes only. |
2.3 | No Rights by Implication . No rights or licenses with respect to the Licensed Technology are granted or deemed granted hereunder or in connection herewith, other than those rights or licenses expressly granted in this Agreement. |
3.1 | Upfront, Annual License Maintenance Fee and Milestone Payments . In consideration of the license granted hereunder, Licensee shall pay UM the following non-refundable payments: |
(c) | One-Time Milestone Payments . |
(a). | In further consideration of the rights and licenses granted hereunder, Licensee shall pay UM a royalty of *** of Net Sales of all Products sold by Licensee or its Affiliate for commercial use. |
3.3 | Payments . Royalties and other amounts payable under this Agreement shall be paid within forty five (45) days following the last day of the Calendar Quarter in which royalties and other amounts accrue. The last such payment shall be made within forty five (45) days after termination of this Agreement. Payments shall be deemed paid as of the day on which they are received by UM. |
3.5 | Reports . Licensee shall deliver to UM within forty five (45) days after the end of each Calendar Quarter following commercial sale of a Product a report setting forth in reasonable detail the calculation of the royalties and other amounts payable to UM for such Calendar Quarter pursuant to this Article 3, including, without limitation, the Products sold in each country during such Calendar Quarter, the Net Sales thereof, and, within sixty (60) days after the end of each Calendar Quarter, similar reports containing corresponding information relating to royalties payable due to sales by permitted sub-licensees pursuant to Article 3.2 . An example of an acceptable royalty report is provided in Appendix D. |
3.6 | Currency, Place of Payment, Interest . |
(a) | All dollar amounts referred to in this Agreement are expressed in United States dollars. All payments to UM under this Agreement shall be made in United States dollars (or other legal currency of the United States), as directed by UM, by check payable to the University of Mississippi" or by wire transfer to an account as UM may designate from time to time. |
(b) | If Licensee receives revenues from sales of Products in a currency other than United States dollars, royalties shall be converted into United States dollars at the applicable conversion rate for the foreign currency as published in the "Exchange Rates" table in the eastern edition of The Wall Street Journal as of the last date of the Calendar Quarter. |
(c) | Amounts that are not paid when due shall accrue interest-from the due date until paid, at an annual rate equal to the "Prime Rate" plus 2% as published in the "Money Rates" table in the eastern edition of The Wall Street Journal as of the due date. |
3.7 | Records . Licensee will maintain complete and accurate books and records that enable the royalties payable hereunder to be verified. The records for each Calendar Quarter shall be maintained for two years after the submission of each report under Article 3.4 hereof. Upon reasonable prior notice to Licensee, UM and its accountants shall have access to the books and records of Licensee to conduct a review or audit thereof no more than one (1) time per years. Such access shall be available during normal business hours. In the event such audit reveals any error in the computation of amounts due pursuant to Section 3.2 exceeding 5% of the amount owed, the Licensee shall promptly reimburse UM for all reasonable expenses and costs incurred in the conduct of such review or audit. |
(a) | Licensee shall use its reasonable efforts to develop for commercial use and to market Products as soon as practicable, and to continue to market Products as long as commercially viable, all as is consistent with sound and reasonable business practice. |
(b) | Licensee shall provide UM once per Calendar Year on December 1 with written reports, setting forth in such detail as UM may reasonably request, the progress of the development, evaluation, testing and commercialization of Products. Licensee shall notify UM within thirty (30) days of the end of the first Calendar Quarter in which the first commercial sale of a Product occurs. |
4.2 | Compliance with Laws . Licensee shall use its best efforts to comply in all material respects with all prevailing laws, rules and regulations pertaining to the development, testing, manufacture, marketing and import or export of Products. Without limiting the foregoing, Licensee acknowledges that the transfer of certain commodities and technical data is subject to United States laws and regulations controlling the export of such commodities and technical data, including all Export Administration Regulations of the United States Department of Commerce. These laws and regulations, among other things, prohibit or require a license for the export of certain types of technical data to specified countries. Licensee will comply in all material respects with all United States laws and regulations controlling the export of commodities and technical data. |
4.3 | Government Approvals . Licensee will be responsible for obtaining, at its cost and expense, all governmental approvals required to commercially market Products. |
4.4 | Patent Notices. Licensee shall mark or cause to be marked all Products made or sold in the United States with all applicable patent numbers where necessary to preserve the ability to claim damages for infringement, upon advice of counsel. If it is not practical for a Product to be so marked, then Licensee shall mark or cause to be marked the package for each Product with all applicable patent numbers. |
4.5 | Bankruptcy or Equivalent . Licensee will provide written notice to UM prior to the filing of a petition in bankruptcy or equivalent if Licensee intends to file a voluntary petition, or, if known by Licensee through statements or letters from a creditor or otherwise, if a third party intends to file an involuntary petition in bankruptcy against Licensee. Notice will be given at least 75 days before the planned filing or, if such notice is not feasible, as soon as Licensee is aware of the planned filing. Licensee's failure to perform this obligation is deemed to be a material pre-petition incurable breach under this Agreement not subject to the 60-day notice requirement of Section 9.2, and UM is deemed to have terminated this Agreement forty-five (45) days prior to the filing of the bankruptcy. |
5.1 | Representations of UM . UM represents to Licensee as follows: |
(a) | this Agreement, when executed and delivered by UM, will be the legal, valid and binding obligation of UM, enforceable against UM in accordance with its terms; |
(b) | UM subject to certain rights under 37 CFR 401.14 retained by the federal government in inventions resulting from federally supported work is the owner of all right, title and interest in and to the Licensed Technology, and has not granted rights in or to the Licensed Technology to any person other than Licensee; |
(c) | UM has not received any written notice that the Licensed Technology infringes the proprietary rights of any third party; |
(d) | the inventions claimed in the Patents to the knowledge of UM have not been publicly used, offered for sale, or disclosed in a printed publication by employees of UM more than one year prior to the filing of the U.S. application for the Patents. |
5.2 | Representations and Warranties of Licensee . Licensee represents and warrants to UM as follows: |
(a) | Licensee is a corporation duly organized, validly existing and in good standing under the laws of California and has all requisite corporate power and authority to execute, deliver and perform this Agreement; |
(b) | This Agreement, when executed and delivered by Licensee, will be the legal, valid and binding obligation of Licensee, enforceable against Licensee in accordance with its terms; |
(c) | the execution, delivery and performance of this Agreement by Licensee does not conflict with, or constitute a breach or default under, |
(i) | the charter documents of Licensee, |
(ii) | any law, order, judgment or governmental rule or regulation applicable to Licensee, or |
(iii) | any provision of any agreement, contract, commitment or instrument to which Licensee is a party; and the execution, delivery and performance of this Agreement by Licensee does not require the consent, approval or authorization of, or notice, declaration, filing or registration with, any governmental or regulatory authority. |
6.1 | No warranties; Limitation on Liability . EXCEPT AS EXPLICITLY SET FORTH IN THIS AGREEMENT, UM MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO: (I) COMMERCIAL UTILITY; OR (II) MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE; OR (III) THAT THE USE OF THE LICENSED TECHNOLOGY WILL NOT INFRINGE ANY PATENT, COPYRIGHT OR TRADEMARK OR OTHER PROPRIETARY OR PROPERTY RIGHTS OF OTHERS. UM SHALL NOT BE LIABLE TO LICENSEE, LICENSEE'S SUCCESSORS OR ASSIGNS OR ANY THIRD PARTY WITH RESPECT TO ANY CLAIM ON ACCOUNT OF, OR ARISING FROM, THE USE OF INFORMATION IN CONNECTION WITH THE LICENSED TECHNOLOGY SUPPLIED HEREUNDER OR THE MANUFACTURE, USE OR SALE OF PRODUCTS OR ANY OTHER MATERIAL OR ITEM DERIVED THEREFROM. |
6.2 | Liability . UM is an agency of the State of Mississippi under the management and control of the Board of Trustees of the State Institutions of Higher Learning (IHL). As authorized by law, IHL maintains a program of self-insurance for purposes of workers' compensation and general liability, pursuant to the Mississippi Tort Claims Act as set forth in Chapter 46, Title 11, Mississippi Code 1972, as amended. Accordingly, any liability of UM for any damages, losses, or costs arising out of or related to acts performed by UM or it employees under this Agreement is governed by the Tort Claims Act. |
6.3 | Licensee Indemnification . Licensee will indemnify, defend and hold harmless UM, its trustees, officers, agents and employees (collectively, the "Indemnified Parties"), from and against any and all liability, loss, damage, action, claim or expense suffered or incurred by the Indemnified Parties which results from or arises out of third party claims in connection with (individually, a "Liability" and collectively, the "Liabilities"): |
(a) | breach by Licensee of any duty, covenant or agreement contained in this Agreement or a lawsuit, action, or claim brought by any third party that includes any allegation which, if proven true, would constitute a breach by Licensee of any duty, covenant or agreement contained in this Agreement; |
(b) | the development, use, manufacture, promotion, sale, distribution or other disposition of any Products by Licensee, its Affiliates, assignees, vendors or other third parties, for personal injury, including death, or property damage arising from any of the foregoing. The indemnification obligation under Article 6.3 shall not apply to any contributory negligence or product liability of the Indemnified Party which may have occurred prior to the execution of this Agreement. Licensee will indemnify and hold harmless the Indemnified Parties from and against any Liabilities resulting from: |
(i) | any product liability or other claim of any kind related to the use by a third party of a Product that was manufactured, sold, distributed or otherwise disposed by Licensee, its Affiliates, assignees, vendors or other third parties; |
(ii) | clinical trials or studies conducted by or on behalf of Licensee relating to any Products, including, without limitation, any claim by or on behalf of a human subject of any such clinical trial or study, any claim arising from the procedures specified in any protocol used in any such clinical trial or study, any claim of deviation, authorized or unauthorized, from the protocols of any such clinical trial or study, any claim resulting from or arising out of the manufacture or quality control by a third party of any substance administered in any clinical trial or study; |
(iii) | Licensee's failure to comply with all prevailing laws, rules and regulations pertaining to the development, testing, manufacture, marketing and import or export of Products. |
6.4 | Procedures . The Indemnified Party shall promptly notify Licensee of any claim or action giving rise to a Liability subject to the provisions of Article 6.3. Licensee shall have the duty to defend any such claim or action, at its cost and expense. Indemnified Party must have the right, however, to approve counsel through the Mississippi Attorney General and through its governing board to represent it, and such approval will not be unreasonably withheld. In the event Licensee or any of its parents, affiliates or subsidiaries is also named in a particular claim, Licensee may choose the same attorneys who defend the Indemnified Parties to defend Licensee unless there arises a conflict of interest between the Licensee and one or more of the Indemnified Parties or among the Indemnified Parties. The indemnification rights of UM or other Indemnified Party contained herein are in addition to all other rights which such Indemnified Party may have at law or in equity or otherwise. |
6.5 | Product Liability Insurance . Beginning with the commencement of human clinical trials of any Product and continuing for a period of time after Licensee ceases manufacturing and marketing Products that is reasonable based upon industry standards, Licensee shall maintain general liability and product liability insurance that is reasonable based upon industry standards, but not less than $5 million per incident and $5 million in the aggregate. The insurance amounts specified herein shall not be deemed a limitation on Licensee's indemnification liability under this Agreement. Licensee shall provide UM with copies of such policies, upon request of UM. Licensee shall notify UM at least ten (10) days prior to cancellation of any such coverage. |
7.1 | Prosecution of Patents . |
(a) | Responsibilities for Patent Prosecution and Maintenance. |
(i) | UM using one of its approved outside patent attorneys is responsible for preparing, filing, and prosecuting any patent applications, maintaining any issued patents, and prosecuting and maintaining any and all continuations, continuations-in-part, divisional, substitutions, reissues, or re-examinations (or the foreign equivalent of these) related to the Patent rights in accordance with the process summarized in Appendix C. Licensee will reimburse UM for Patent Expenses subject to 3.1.c. hereof. |
(ii) | UM will prepare, file, and prosecute Patent(s), including Improvements in the United States. In the event of Improvements UM may also prepare, file, and prosecute international applications under the Patent Cooperation Treaty. Licensee will specify in writing to UM the foreign countries in which patent applications for Improvements are to be filed and prosecuted. UM will notify Licensee ninety (90) days in advance of a national stage filing deadline, and Licensee will specify such additional countries no later than thirty (30) days before the national stage filing deadline for the pertinent patent application. |
(iv) | Licensee will cooperate with UM in the filing, prosecution, and maintenance of any Patents. UM will advise Licensee promptly as to all material developments with respect to the applications. Copies of all papers received and filed in connection with prosecution of applications in all countries will be provided promptly after receipt or filing to Licensee to enable it to advise UM concerning the applications. |
(v) | No party shall be liable for any loss, as a whole or in part, of a patent term extension granted by the U.S. Patent and Trademark Office (or its foreign equivalents) on a Patent, even if such loss results from acts or omissions of the prosecuting party or its personnel. |
(b) | Any recovery obtained by the prosecuting party as a result of such proceeding, by settlement or otherwise, shall be applied first to the prosecuting party, an amount equal to two times its costs and expenses of the litigation, with the remainder to be paid 80% to the prosecuting party and 20% to the other party. |
8.1 | Confidentiality . To the extent allowed by law, both parties shall maintain in confidence and shall not disclose to any third party the Confidential Information received pursuant to this Agreement, without the prior written consent of the disclosing party except that the Confidential Information may be disclosed by either party only to those third parties (x) who have a need to know the information in connection with the exercise by either party of its rights under this Agreement and who agreed in writing to keep the information confidential to the same extent as is required of the parties under this Article 8.1, or (y) to whom either party is legally obligated to disclose the information. The foregoing obligation shall not apply to information which: |
(a) | is, at the time of disclosure, publicly known or available to the public, provided that Information will not be deemed to be within the public domain merely because individual parts of such Information are found separately within the public domain, but only if all the material features comprising such Confidential Information are found in combination in the public domain; |
(b) | is known to recipient at the time of disclosure of such Confidential Information not under confidentiality provided that recipient promptly notifies disclosing party in writing of this prior knowledge within thirty (30) days of receipt; |
(c) | is hereafter furnished to recipient by a third party, as a matter of right and without restriction on disclosure, provided that recipient promptly notifies disclosing party in writing of this third party disclosure after receipt thereof; |
(d) | is made public by disclosing party; |
(e) | is disclosed with the written approval of either party; |
(f) | is the subject of a legally binding court order compelling disclosure, provided that recipient must give disclosing party notice of any request for disclosure pursuant to any legal proceeding, within two (2) days of receipt of such request by recipient, and recipient must cooperate with disclosing party in obtaining appropriate protective orders to preserve the confidentiality of the Confidential Information; |
(g) | must be disclosed to comply with applicable laws, rules, regulations or rules of a securities exchange, provided that the party subject thereto uses reasonable efforts to minimize the scope of disclosure and to seek confidential treatment thereof. |
8.3 | Use of Name; Disclosure of Agreement . Neither Licensee nor UM shall directly or indirectly use the other party's name, seal, logo, trademark, or service mark, or any adaptation of them, or the name of any trustee, officer or employee thereof, without that party's prior written consent, or disclose the terms of this Agreement to third parties except that UM or Licensee may disclose this Agreement to any sublicenses or Affiliate and may disclose an accurate description of the terms of this Agreement to the extent required under federal or state securities, tax, grant administration, or other governmental disclosure laws, rules or regulations or rules of a securities exchange, provided that UM shall take steps to preserve the confidentiality of such information to the extent allowed by law. |
9.2 | Termination by UM . Upon the occurrence of any of the events set forth below ("Events of Default"), UM shall have the right to terminate this Agreement by giving writtennotice of termination, such termination effective with the giving of such notice: |
(a) | nonpayment of any material amount payable to UM that is continuing sixty (60) calendar days after UM gives Licensee written notice of such nonpayment; |
(b) | any material breach by Licensee of any covenant (other than a payment breach referred to in clause (a) above or a Development Plan breach referred to in section 9.3 below) or any representation or warranty contained in this Agreement that is continuing sixty (60) calendar days after UM gives Licensee written notice of such breach; |
(c) | Licensee fails to comply in any material respect with the terms of the license granted under Article 2 hereof and such noncompliance is continuing sixty (60) calendar days after UM gives Licensee notice of such noncompliance; |
9.3 | Development Plan. Licensee will provide UM with a Development Plan reasonably acceptable to UM within six (6) months of the Effective Date of this Agreement. Such Development Plan will be added to this Agreement as Appendix B. UM shall be entitled to terminate this Agreement if Licensee fails to meet the pre-established development milestones contained in the Development Plan. The milestones may be changed as agreed upon in advance in writing by both parties. UM shall give written notice of its decision to terminate this Agreement specifying a failure of the Development Plan milestones. Unless Licensee has remedied such failure or both parties have agreed, in writing, to a revised milestone schedule (which agreement will not be unreasonably withheld) within sixty (60) days after receipt of such notice, this Agreement will be deemed to terminate as of the expiration of such sixty (60) day period. |
9.4 | Termination by Licensee . Licensee shall have the right to terminate this Agreement, at any time with or without cause, upon sixty (60) days' written notice to the UM. |
9.6 | Provisions Surviving Termination . Licensee's obligation to pay any royalties accrued but unpaid prior to termination of this Agreement shall survive such termination. Licensee shall owe UM royalties on sales when Licensee has received payments from a sub-licensee or Affiliate. In addition, all provisions required to interpret the rights and obligations of the parties arising prior to the termination date shall survive expiration or termination of this Agreement. |
10.1 | Assignment . This Agreement and the rights and benefits conferred upon Licensee hereunder may not be transfered or assigned to any Person, directly or by merger, by sale or assignment of membership interests in Licensee, or by other operation of law, without the express written permission of UM, which permission will not be unreasonably withheld. Notwithstanding the requirement set forth in the preceding sentence, Licensee may assign or transfer its interests in this Agreement without written permission from UM in the following circumstances: |
(a) | an assignment in connection with the sale or transfer of all or substantially all of Licensee's assets which relate to the development or use of the Licensed Technology or a Product(s) provided that the buyer or transferee is at least as financially stable as Licensee and following the sale or transfer would be as capable of performing its obligations under this Agreement as Licensee would be; or |
(b) | an assignment by Licensee to an Affiliate of Licensee; or |
(c) | an assignment of a security interest in this Agreement as a part of a security interest in all or substantially all of the Licensee's assets which relate to the Licensed Technology. or a Product(s). |
10.2 | No Waiver . A waiver by either party of a breach or violation of any provision of this Agreement will not constitute or be construed as a waiver of any subsequent breach or violation of that provision or as a waiver of any breach or violation of any other provision of this Agreement. |
10.3 | Independent Contractor . Nothing herein shall be deemed to establish a relationship of principal and agent between UM and Licensee, nor any of their agents or employees for any purpose whatsoever. This Agreement shall not be construed as constituting UM and Licensee as partners, or as creating any other form of legal association or arrangement which could impose liability upon one party for the act or failure to act of the other party. No employees or staff of UM shall be entitled to any benefits applicable to employees of Licensee. Neither party shall be bound by the acts or conduct of the other party. |
10.4 | Notices . Any notice under this Agreement shall be sufficiently given if sent in writing by prepaid, first class, certified or registered mail, return receipt requested, addressed as follows: |
10.5 | Entire Agreement . This Agreement, together with the attachments hereto, embodies the entire understanding between the parties relating to the subject matter hereof and supersedes all prior understandings and agreements, whether written or oral. This Agreement may not be modified or varied except by a written document signed by duly authorized representatives of both parties. |
10.6 | Severability . In the event that any provision of this Agreement shall be held to be unenforceable, invalid or in contravention of applicable law, such provision shall be of no effect, the remaining portions of this Agreement shall continue in full force and effect, and the parties shall negotiate in good faith to replace such provision with a provision which effects to the extent possible the original intent of such provision. |
10.7 | Force Majeure. In the event that either party's performance of its obligations under this Agreement shall be prevented by any cause beyond its reasonable control, including without limitation acts of God, acts of government, shortage of material, accident, fire, delay or other disaster, provided that the effected party shall have used its reasonable best efforts to avoid or remove the cause of such nonperformance and to minimize the duration and negative affect of such nonperformance, then such effected party's performance shall be excused and the time for performance shall be extended for the period of delay or inability to perform due to such occurrence. The affected party shall continue performance under this Agreement using its best efforts as soon as such cause is removed. |
10.8 | Headings . Any headings and captions used in this Agreement are for convenience of reference only and shall not affect its construction or interpretation. |
10.9 | No Third Party Benefits . Nothing in this Agreement, express or implied, is intended to confer on any person other than the parties hereto or their permitted assigns, any benefits, rights or remedies. |
10.10 | Governing Law . This Agreement shall be construed in accordance with and governed by the internal laws of the State of Mississippi, excluding such state's rules relating to conflicts of laws, and its form, execution, validity, construction and effect shall be determined in accordance with such internal laws. |
10.11
|
Counterparts
. This Agreement shall become binding when any one or more counterparts hereof,individually or taken together, shall bear the signatures of each of the parties hereto. ThisAgreement may be executed in any number of counterparts, each of which shall be deemed an original as against the party whose signature appears thereon, but all of which taken together shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by e-mail shall be effective as delivery of a manually executed counterpart of this Agreement.
|
UNIVERSITY OF MISSISSIPPI
|
|
|
|
/s/ WALTER G. CHAMBLISS
|
9/29/14
|
Walter G. Chambliss, Ph.D.
|
Date
|
Director of Technology Management, Office of Research & Sponsored Programs
|
|
|
|
|
|
Acknowledged by:
|
|
|
|
/s/ MAHMOUD A. ELSOHLY
|
9/29/14
|
Mahmoud A. ElSohly, Ph.D.
|
Date
|
Research Professor, National Center for Natural Products Research
|
|
|
|
|
|
/s/ DAVID D. ALLEN
|
9/29/14
|
David D. Allen, Ph.D.
|
Date
|
Dean, School of Pharmacy
|
|
|
|
|
|
NEMUS
|
|
|
|
/s/ REG A. LAPHAM
|
9/29/14
|
Reg A. Lapham
|
Date
|
President
|
|
1. | UM 5050 Compositions Containing Delta-9-THC Amino Acid Esters and Process of Preparation |
1. | Outside Patent Counsel ("OPC") will notify DTM when an office action is received from the United States Patent and Trademark Office "USPTO") or foreign counterpart and send a copy to DTM. If the office action is straightforward (e.g. very similar to a previously submitted response in another country or minor claim changes to be consistent with patent law), DTM will ask patent counsel to draft a response/amendment for review by DTM and Licensee. DTM will send a copy of the office action to Licensee and to the Principal Investigator(s) at UM. If the office action requires a strategic discussion, DTM will schedule a conference call between Licensee (and Licensee's counsel if desired), DTM, the PI(s) and OPC. At any time, regardless of the complexity of the office action, Licensee may request a conference call to discuss the pending office action and DTM will set one up. The same procedures are used when dealing with prosecution timelines and deadlines (including but not limited to 30/31 national entries on PCT applications and claim amendments following Search Reports). |
2. | OPC will send a "final" draft version of the response/amendment to DTM for review/approval. DTM will forward it to Licensee and the PI(s) and ask for comments. This generally requires a quick turnaround time (e.g. 24 to 48 hours) depending on how many drafts have been exchanged. |
3. | OPC will file the response/amendment and send DTM a copy of the filed document. DTM will forward the document to Licensee and the PI(s). |
4. | Improvements to the patented pending technology will be documented in accordance with UM's Patent and Invention Policy by researchers using DTMs Research Disclosure Form. DTM will send a copy of the Research Disclosure Form to Licensee if Licensee has not already reviewed the disclosure. The disclosure will be sent to OPC for review and a conference call will be set up with DTM, Licensee (and Licensee's counsel if desired), the PI(s) (and other researchers as appropriate) and the OPC to discuss strategies of incorporating the Improvement. |
5. | When OPC receives a notice of allowance for the pending claims, OPC will send the notice to DTM. DTM will forward the notice to Licensee, and the PI(s). DTM will ask Licensee and the PI(s) if there are any Improvements that need to be considered for incorporation before the patent issues (typically 3 to 6 weeks). DTM will ask Licensee and the PI if the issue fee should be paid or if the claims should be further amended. |
6. | DTM will send Licensee a monthly IP report, usually the first week of every month, detailing all issued and pending patents. The report will include a status item for every docket as well as timeline for any pending deadlines with a countries patent office. Estimates for each action item will be included if they are available from OPC. |
Licensee:
___________________________________________________________
|
UM Agreement ID:
_________________________________________________
|
|
|
Period Covered:
___________________________________________
|
through
________________________________________________
|
|
|
|
|
||
Prepared by:
______________________________________________________________________________
|
Date:
______________________________________________
|
|
|
(Company Representative)
|
|
|
|
|
|
|
|
Approved by:
________________________________________________________________________
|
Date:
______________________________________________
|
|
|
|
(Company Representative)
|
|
|
Report Type:
|
o
|
Single Product or Process Line Report:
____________________________________________
|
|
|
|
|
(product name)
|
|
|
|
|
|
o
|
Multiproduct Summary Report, Page ____ of ____
|
|
|
|
|
|
Other Compensation:
|
o
|
Annual Payments, milestones, or other fees & compensation
Details: ___________
Amount Due: ______________
|
|
|
|
|
|
|
o
|
No Compensation of Royalty Due this Period
Reason:
____________________________
|
Country
|
Quantity Produced
|
Quantity Sold
|
Gross Sales ($)
|
*Net Sales ($)
|
Royalty Rate
|
Conversion Rate (if applicable)
|
Royalty Due this Period
|
USA
|
|
|
|
|
|
|
|
Canada
|
|
|
|
|
|
|
|
Japan
|
|
|
|
|
|
|
|
Other:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL:
|
|
|
|
|
|
|
|
1.
|
Building
|
|
The Innovation Hub
Insight Park
850 Insight Park Avenue
University, Mississippi 38677
|
|
|
|
|
|
|
2.
|
Premises
|
|
|
|
|
|
|
|
|
|
Suite:
|
|
Scale-up Lab
|
|
|
|
|
|
|
|
Floor:
|
|
2
|
|
|
|
|
|
|
|
Rentable Square Feet:
|
|
3415
|
|
|
|
|
|
|
3.
|
Term:
|
|
36 months
|
|
|
|
|
|
|
4.
|
Base Rent
|
|
|
|
|
|
|
|
|
|
Lease Year
|
Rate Per Rentable Square Foot of Premises per Annum
|
||
|
|
|
|
|
|
1
|
|
$31.62
|
|
|
|
|
|
|
|
2
|
|
$32.55
|
|
|
|
|
|
|
|
3
|
|
$33.52
|
|
|
|
|
|
|
|
4
|
|
_______________
|
|
|
|
|
|
|
|
5
|
|
_______________
|
|
|
|
|
|
|
6.
|
Security Deposit:
|
|
$9,000
|
|
|
|
|
|
|
7.
|
Tenant's Broker:
|
|
N/A
|
1. | Definitions : |
6. | Late Payment . |
7. | Partial Payment . |
11. | Use of Premises. |
12. | Rules and Regulations. |
15. | Services. |
16. | Parking. |
17. | Entire Agreement; Special Stipulations and Supplemental Conditions . |
18. | Notices. |
|
LANDLORD:
UNIVERSITY OF MISSISSIPPI RESEARCH FOUNDATION, INC.,
an Mississippi non-profit corporation
By:___________________________
Name:Insight Park
Its:Assistant Director
|
|
TENANT:
NEMUS
By:___________________________
Name:Nemus
Its:_
President
___________________________
|
a. | The initial Base Rent payable under the Lease is $9,000/mo. and will commence on October 1, 2014. |
a. | The following punch list items are all that remain to be completed by Landlord or Landlord's contractor. We agree to pay 50% of the cost associated with the modifications to the suite. |
TENANT:
NEMUS
By:
_______________________________________
Name:
Nemus
Its:
President
|
LANDLORD:
UNIVERSITY OF MISSISSIPPI RESEARCH FOUNDATION, INC., a Mississippi non-profit corporation
By: _______________________
Name:
Insight Park
Its:
Assistant Director
|
1.
|
Building Name:
|
Center Tower
|
Floor: 6th
|
Address:
|
650 Town Center Drive
Costa Mesa, CA 92626
|
Suite: 620
|
|
2.
|
Rentable Area:
|
3,684 square feet (See Exhibit "A-3")
|
|
3.
|
Expense Percentage
|
0.8390 %
|
|
4.
|
Initial Basic Annual Rent:
|
$64,470.00
|
|
5.
|
Initial Monthly Basic Rent Installments:
|
$5,372.50
|
|
6.
|
Basic Annual Rent Increases:
|
None.
|
|
7.
|
Term:
|
Two (2) years.
|
|
8.
|
Commencement Date:
|
November 1, 2014
|
|
9.
|
Security Deposit:
|
$9,593.75.
|
|
10.
|
Broker(s):
|
Cushman & Wakefield of California, Inc., for both Landlord and Tenant.
|
|
11.
|
Permitted Use:
|
General office, sales, training and administrative uses consistent with the operation of a first class office building together with such other legally permitted uses as may be approved by Landlord in its sole and absolute discretion. Sales, as described above, shall not include on-site retail activities.
|
|
12.
|
Space Plan Approval Date:
|
Not Applicable.
|
|
13.
|
Addresses for Notices:
|
|
|
1.
|
TERM
|
1
|
2.
|
BASIC ANNUAL RENT
|
1
|
3.
|
ADDITIONAL RENT
|
1
|
4.
|
SECURITY DEPOSIT
|
2
|
5.
|
REPAIRS
|
2
|
6.
|
IMPROVEMENTS AND ALTERATIONS
|
3
|
7.
|
LIENS
|
4
|
8.
|
USE OF PREMISES
|
4
|
9.
|
HAZARDOUS MATERIALS
|
5
|
10.
|
UTILITIES AND SERVICES
|
7
|
11.
|
RULES AND REGULATIONS
|
9
|
12.
|
TAXES ON TENANT'S PROPERTY
|
9
|
13.
|
BUILDING SPACE MANAGEMENT
|
9
|
14.
|
FIRE OR CASUALTY
|
10
|
15.
|
EMINENT DOMAIN
|
10
|
16.
|
ASSIGNMENT AND SUBLETTING
|
10
|
17.
|
ACCESS
|
13
|
18.
|
SUBORDINATION; ATTORNMENT; ESTOPPEL CERTIFICATES; FINANCIAL STATEMENTS
|
13
|
19.
|
SALE BY LANDLORD
|
14
|
20.
|
NONLIABILITY AND INDEMNIFICATION OF LANDLORD; INSURANCE
|
14
|
21.
|
WAIVER OF SUBROGATION
|
16
|
22.
|
ATTORNEYS' FEES
|
17
|
23.
|
WAIVER
|
17
|
24.
|
NOTICES
|
17
|
25.
|
INSOLVENCY OR BANKRUPTCY
|
17
|
26.
|
DEFAULTS AND REMEDIES
|
17
|
27.
|
HOLDOVER
|
19
|
28.
|
CONDITION OF PREMISES
|
20
|
29.
|
QUIET POSSESSION
|
20
|
30.
|
TENANT'S SIGNS
|
20
|
31.
|
CONFLICT OF LAWS
|
20
|
32.
|
COMMON FACILITIES
|
20
|
33.
|
SUCCESSORS AND ASSIGNS
|
21
|
34.
|
BROKERS
|
21
|
1. | Damp wipe with a micro fiber cloth all interior doors as needed. |
2. | Vacuum offices and common area fabric furniture. |
3. | Damp wipe all vinyl and leather furniture |
4. | Dust all ledges, files, baseboards, and sills under 7'. |
5. | Dust low and high surfaces of all furniture. |
6. | Sweep and damp mop full tile or cement floor areas. |
7. | Thoroughly detail vacuum entire carpet areas. Remove staples and other debris. |
1. | Wipe down with a damp microfiber cloth all desktops upon request. |
2. | Completely clean all furniture systems partitions as needed. |
3. | Dust all ledges, walls, moldings, pictures, shelves, etc. over 7'. |
4. | Completely vacuum all drapes (3420 Bristol only) |
5. | Completely clean air conditioning grills. |
6. | Scrub and wax all tile floors. |
7. | Mop and clean buff all hardwood, parquet and composition floors. |
8. | Clean all vinyl baseboards. |
THE UNIVERSITY OF MISSISSIPPI
|
||
|
|
|
By:
|
/s/ WALTER G. CHAMBLISS
|
8/15/14
|
Name:
|
Walter G. Chambliss, Ph.D
|
Date
|
Title:
|
Director of Technology Management
|
|
|
Office of Research and Sponsored Programs
|
|
|
|
|
Acknowledged:
|
||
|
|
|
By:
|
/
s/ MAHMOUD A. ELSOHLY
|
8/15/14
|
Name:
|
Mahmoud A. ElSohly, Ph.D.
|
Date
|
Title:
|
Research Professor, National Center for Natural Products Research
|
|
|
|
|
NEMUS, a California Corporation
|
||
|
|
|
By:
|
/s/ REG A. LAPHAM
|
8/14/14
|
Name:
|
Reg A. Lapham
|
Date
|
Title:
|
CEO
|
|
1. | UM hereby grants to NEMUS, on the terms and conditions herein set forth, a nonassignable, exclusive option expiring on March 31, 2014 (the "Option Period"), to exclusively license additional routes of administration of amino acid esters of delta-9- tetrahydrocannabinol . NEMUS agrees to pay a non-refundable upfront option fee of *** within thirty (30) days of the Effective Date of this Agreement. This option fee covers the entire Option Period. In exchange for this exclusive option, NEMUS agrees to provide UM with a copy of all research and development, manufacturing, and commercialization related information and data generated by NEMUS or otherwise obtained by NEMUS related to other routes of administration of amino acid esters of delta-9- tetrahydrocannabinol ( collectively the "Studies") during the Option Period. |
2. | UM represents to NEMUS that UM has the right to grant licenses to other routes of administration of amino acid esters of delta-9- tetrahydrocannabinol and the patent rights described in Appendix A are not subject to any lien, license, assignment, security interest, or other encumbrances with the exception of the three License Agreements executed between NEMUS and UM. |
3. | During the term of this Agreement UM agrees to notify 3rd parties who express interest in licensing other routes of administration that the technology is under an exclusive option with another company. |
1. | NEMUS will exercise diligence during the term of this Agreement in evaluating its interest in other routes of administration. |
2. | If NEMUS decides not to exercise the option, NEMUS agrees to provide UM within thirty (30) days after expiration or termination of this Agreement copies of all Studies as defined in Section I.1. NEMUS agrees and understands that UM shall own all right, title and interest in these Studies with no financial obligation to NEMUS. |
1. | This AGREEMENT will expire on March 31, 2015 and may be extended by mutual agreement of the parties in writing under the financial terms detailed in Section I.1. |
2. | NEMUS may terminate this Agreement at any time by notifying UM in writing of its intent to terminate and the effective termination date. In such event, NEMUS will provide UM a copy of all Studies as defined in Section I.1 within thirty (30) days. |
3.
|
Upon termination of this Agreement, the parties shall have no further rights or
obligations except as expressly set forth herein.
|
THE UNIVERSITY OF MISSISSIPPI
|
||
|
|
|
By:
|
/s/ WALTER G. CHAMBLISS
|
10/15/14
|
Name:
|
Walter G. Chambliss, Ph.D
|
Date
|
Title:
|
Director of Technology Management
|
|
|
Office of Research and Sponsored Programs
|
|
|
|
|
Acknowledged:
|
||
|
|
|
By:
|
/s/ MAHMOUD A. ELSOHLY
|
10/20/14
|
Name:
|
Mahmoud A. ElSohly, Ph.D.
|
Date
|
Title:
|
Research Professor, National Center for Natural Products Research
|
|
|
|
|
NEMUS, a California Corporation
|
||
|
|
|
By:
|
/s/ ELIZABETH M. BERECZ
|
10/15/14
|
Name:
|
Elizabeth Berecz
|
Date
|
Title:
|
Chief Financial Officer
|
|
THE UNIVERSITY OF MISSISSIPPI
|
||
|
|
|
By:
|
/s/ WALTER G. CHAMBLISS
|
10/20/14
|
Name:
|
Walter G. Chambliss, Ph.D
|
Date
|
Title:
|
Director of Technology Management
|
|
|
Office of Research and Sponsored Programs
|
|
|
|
|
Acknowledged:
|
||
|
|
|
By:
|
/s/ MAHMOUD A. ELSOHLY
|
10/20/14
|
Name:
|
Mahmoud A. ElSohly, Ph.D.
|
Date
|
Title:
|
Research Professor, National Center for Natural Products Research
|
|
|
|
|
NEMUS, a California Corporation
|
||
|
|
|
By:
|
/s/ REG A. LAPHAM
|
10/17/14
|
Name:
|
Reg A. Lapham
|
Date
|
Title:
|
CEO
|
|
1. | Introduction |
2. | Compliance with Laws, Rules and Regulations |
3. | Trading on Inside Information |
4. | Protection of Confidential Proprietary Information |
5. | Conflicts of Interest |
– | Working, in any capacity, for a competitor, customer or supplier while employed by the Company. |
– | Accepting gifts of more than modest value or receiving personal discounts or other benefits as a result of your position in the Company from a competitor, customer or supplier. |
– | Competing with the Company for the purchase or sale of property, services or other interests. |
– | Having an interest in a transaction involving the Company, a customer or supplier other than as an employee, officer or director of the Company (not including routine investments in publicly traded companies). |
– | Receiving a loan or guarantee of an obligation as a result of your position with the Company. |
– | Directing business to a supplier owned or managed by, or which employs, a relative or friend. |
6. | Protection and Proper Use of Company Assets |
7. | Corporate Opportunities |
8. | Fair Dealing |
9. | Quality of Public Disclosures |
10. | Compliance with This Code and Reporting of Any Illegal or Unethical Behavior |
11. | Waivers and Amendments |
12. | Equal Opportunity, Non-Discrimination and Fair Employment |
13. | Compliance with Antitrust Laws |
14. | Political Contributions and Activities |
15. | Environment, Health and Safety |
Messineo & Co., CPAs LLC
2471 N McMullen Booth Road, Suite 302
Clearwater, FL 33759-1362
T: (518) 530-1122
F: (727) 674-0511
|
|
ASSETS
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
December 31,
|
||||||||||
|
2014
|
2013
|
2012
|
|||||||||
Current assets
|
|
|
|
|||||||||
Cash and cash equivalents
|
$
|
528,494
|
$
|
-
|
$
|
-
|
||||||
Prepaid expenses and other current assets
|
16,029
|
-
|
-
|
|||||||||
|
||||||||||||
Total assets
|
$
|
544,523
|
$
|
-
|
$
|
-
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
December 31,
|
||||||||||
|
2014
|
2013
|
2012
|
|||||||||
Current liabilities
|
|
|
|
|||||||||
Accounts payable
|
$
|
-
|
$
|
2,153
|
$
|
1,750
|
||||||
Accrued expenses
|
9,717
|
180,000
|
60,000
|
|||||||||
|
||||||||||||
Total current liabilities
|
9,717
|
182,153
|
61,750
|
|||||||||
|
||||||||||||
Commitments and contingencies
|
||||||||||||
(Note 3)
|
||||||||||||
|
||||||||||||
Stockholders' equity (deficit)
|
||||||||||||
Common stock, no par value; 100 million shares
|
||||||||||||
authorized; 9,570,000 issued and outstanding as
|
||||||||||||
of June 30, 2014 and 7,770,000 issued and
|
||||||||||||
outstanding as of December 31, 2013 and 2012
|
805,480
|
1,000
|
1,000
|
|||||||||
Warrants issued and outstanding - 3,450,000 at
|
||||||||||||
June 30, 2014; and 3,000,000 at
|
||||||||||||
December 31, 2013 and 2012, respectively
|
85,500
|
-
|
-
|
|||||||||
Accumulated deficit
|
(356,174
|
)
|
(183,153
|
)
|
(62,750
|
)
|
||||||
|
||||||||||||
Total stockholders' equity (deficit)
|
534,806
|
(182,153
|
)
|
(61,750
|
)
|
|||||||
|
||||||||||||
Total liabilities and stockholders' equity
|
$
|
544,523
|
$
|
-
|
$
|
-
|
|
|
(Unaudited)
|
|
Inception
|
||||||||||||
|
Six Months Ended
|
Six Months Ended
|
Year Ended
|
(July 17, 2012)
|
||||||||||||
|
June 30,
|
June 30,
|
December 31,
|
to December 31,
|
||||||||||||
|
2014
|
2013
|
2013
|
2012
|
||||||||||||
|
|
|
|
|
||||||||||||
Operating expenses
|
|
|
|
|
||||||||||||
General and administrative
|
$
|
173,021
|
$
|
60,202
|
$
|
120,403
|
$
|
62,750
|
||||||||
|
||||||||||||||||
Total operating expenses
|
173,021
|
60,202
|
120,403
|
62,750
|
||||||||||||
|
||||||||||||||||
Operating loss
|
(173,021
|
)
|
(60,202
|
)
|
(120,403
|
)
|
(62,750
|
)
|
||||||||
|
||||||||||||||||
Provision for income taxes
|
-
|
-
|
-
|
-
|
||||||||||||
|
||||||||||||||||
Net loss
|
$
|
(173,021
|
)
|
$
|
(60,202
|
)
|
$
|
(120,403
|
)
|
$
|
(62,750
|
)
|
|
Common Stock
|
|
|
|
||||||||||||||||
|
|
|
|
Accumulated
|
|
|||||||||||||||
|
Shares
|
Amounts
|
Warrants
|
Deficit
|
Total
|
|||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Balance, Inception Date, July 17, 2012
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||||||
|
||||||||||||||||||||
Issue common stock to founders
|
7,770,000
|
1,000
|
-
|
-
|
1,000
|
|||||||||||||||
|
||||||||||||||||||||
Net loss from inception date (July 17, 2012)
|
||||||||||||||||||||
to December 31, 2012
|
-
|
-
|
-
|
(62,750
|
)
|
(62,750
|
)
|
|||||||||||||
|
||||||||||||||||||||
Balance
, December 31, 2012
|
7,770,000
|
1,000
|
-
|
(62,750
|
)
|
(61,750
|
)
|
|||||||||||||
|
||||||||||||||||||||
Net loss for the year
|
||||||||||||||||||||
ended December 31, 2013
|
-
|
-
|
-
|
(120,403
|
)
|
(120,403
|
)
|
|||||||||||||
|
||||||||||||||||||||
Balance
, December 31, 2013
|
7,770,000
|
1,000
|
-
|
(183,153
|
)
|
(182,153
|
)
|
|||||||||||||
|
||||||||||||||||||||
Issuance of common stock and
|
||||||||||||||||||||
warrants, net of $10,020
|
||||||||||||||||||||
of offering costs
|
1,800,000
|
804,480
|
85,500
|
-
|
889,980
|
|||||||||||||||
|
||||||||||||||||||||
Net loss for the six months
|
||||||||||||||||||||
ended June 30, 2014
|
-
|
-
|
-
|
(173,021
|
)
|
(173,021
|
)
|
|||||||||||||
|
||||||||||||||||||||
Balance
, June 30, 2014
|
9,570,000
|
$
|
805,480
|
$
|
85,500
|
$
|
(356,174
|
)
|
$
|
534,806
|
|
|
(Unaudited)
|
|
|
||||||||||||
|
For The Six
|
For The Six
|
For The
|
Inception
|
||||||||||||
|
Months Ended
|
Months Ended
|
Year Ended
|
(July 17, 2012) to
|
||||||||||||
|
June 30,
|
June 30,
|
December 31,
|
December 31,
|
||||||||||||
|
2014
|
2013
|
2013
|
2012
|
||||||||||||
|
|
|
|
|
||||||||||||
Cash flows from operating activities:
|
|
|
|
|
||||||||||||
Net loss
|
$
|
(173,021
|
)
|
$
|
(60,202
|
)
|
$
|
(120,403
|
)
|
$
|
(62,750
|
)
|
||||
Adjustments to reconcile net loss to net cash
|
||||||||||||||||
used in operating activities:
|
||||||||||||||||
Changes in assets and liabilities:
|
||||||||||||||||
Prepaid expenses, deposits, and other assets
|
(16,029
|
)
|
-
|
-
|
-
|
|||||||||||
Accounts payable and accrued expenses
|
(172,436
|
)
|
60,202
|
120,403
|
61,750
|
|||||||||||
|
||||||||||||||||
Net cash used in operating activities
|
(361,486
|
)
|
-
|
-
|
(1,000
|
)
|
||||||||||
|
||||||||||||||||
Cash flows from financing activities:
|
||||||||||||||||
Proceeds from common stock issuance,
|
889,980
|
-
|
-
|
1,000
|
||||||||||||
net of offering costs of $10,020
|
||||||||||||||||
|
||||||||||||||||
Net cash provided by financing activities
|
889,980
|
-
|
-
|
1,000
|
||||||||||||
|
||||||||||||||||
Net decrease in cash and cash equivalents
|
528,494
|
-
|
-
|
-
|
||||||||||||
|
||||||||||||||||
Cash and cash equivalents,
beginning of period
|
-
|
-
|
-
|
-
|
||||||||||||
|
||||||||||||||||
Cash and cash equivalents, end of period
|
$
|
528,494
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
|
||||||||||||||||
Supplemental disclosures of cash-flow information:
|
||||||||||||||||
|
||||||||||||||||
Cash paid during the year for:
|
||||||||||||||||
|
||||||||||||||||
Interest
|
$
|
-
|
$
|
202
|
$
|
403
|
$
|
-
|
1.
|
Nature of Operations and Summary of Significant Accounting Policies
|
Level 1: | Valuations for assets and liabilities traded in active markets from readily available pricing sources such as quoted prices in active markets for identical assets or liabilities. |
Level 2: | Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. |
Level 3: | Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. |
· | Exercise price - We determined the exercise price based on valuations using the best information available to management at the time of the valuations. |
· | Volatility – We estimate the stock price volatility based on industry peers who are also in the early development stage given the limited market data available in the public arena. |
· | Expected term - The expected term is based on a simplified method which defines the life as the average of the contractual term of the options and warrants and the weighted-average vesting period for all open awards. |
· | Risk-free rate - The risk-free interest rate for the expected term of the option or warrant is based on the average market rate on U.S. treasury securities in effect during the quarter in which the awards were granted. |
· | Dividends – The dividend yield assumption is based on our history and expectation of paying no dividends. |
2. | University of Mississippi ("UM") Agreements |
· | Contemporaneous valuation prepared by an independent third-party valuation specialist effective as of June 30, 2014, |
· | Its results of operations, financial position and the status of research and development efforts and achievement of enterprise milestones, |
· | The composition of, and changes to, the Company's management team and board of directors, |
· | The lack of liquidity of its common stock as a private company, |
· | The Company's stage of development, business strategy and the material risks related to its business and industry, |
· | The valuation of publicly-traded companies in the biotechnology sectors, |
· | External market conditions affecting the biotechnology industry sectors, |
· | The likelihood of achieving a liquidity event for the holders of its common stock, such as an initial public offering, or IPO, or a sale of the Company, given prevailing market conditions, and |
· | The state of the IPO market for similarly situated privately held biotechnology companies. |
5. | Income Taxes |
1) | UM 1490 – transmucosal delivery of cannabinoids |
2) | UM 5070 – treatment for methicillin-resistant Staphylococcus aureus infections |
3) | UM 8790 – ocular delivery of cannabanoids |
|
|
|
|
(a)
|
|
|
||||||||||||
|
|
Load Guard
|
|
Proforma
|
|
Proforma
|
||||||||||||
|
Nemus
|
Logistics
|
|
Adjustments
|
|
Combined
|
||||||||||||
|
|
|
|
|
|
|
||||||||||||
Sales, net
|
$
|
-
|
$
|
339,926
|
|
$
|
(339,926
|
)
|
|
$
|
-
|
|||||||
|
|
|
||||||||||||||||
Operating expenses
|
|
|
||||||||||||||||
Fuel and fuel taxes
|
-
|
131,341
|
|
(131,341
|
)
|
|
-
|
|||||||||||
Salaries and wages
|
-
|
87,870
|
|
(87,870
|
)
|
|
-
|
|||||||||||
Operations and maintenance
|
-
|
67,298
|
|
(67,298
|
)
|
|
-
|
|||||||||||
Professional fees
|
-
|
32,164
|
|
(32,164
|
)
|
|
-
|
|||||||||||
General and administrative
|
120,403
|
28,495
|
|
(28,495
|
)
|
|
120,403
|
|||||||||||
|
|
|
||||||||||||||||
Total operating expenses
|
120,403
|
347,168
|
|
(347,168
|
)
|
|
120,403
|
|||||||||||
|
|
|
||||||||||||||||
Operating loss
|
(120,403
|
)
|
(7,242
|
)
|
|
7,242
|
|
(120,403
|
)
|
|||||||||
|
|
|
||||||||||||||||
Other (expense) income
|
|
|
||||||||||||||||
Interest expense
|
-
|
(2,151
|
)
|
|
2,151
|
|
-
|
|||||||||||
Interest income
|
-
|
789
|
|
(789
|
)
|
|
-
|
|||||||||||
Gain on insurance claim
|
-
|
6,506
|
|
(6,506
|
)
|
|
-
|
|||||||||||
Loss on disposal of equipment
|
-
|
(1,684
|
)
|
|
1,684
|
|
-
|
|||||||||||
|
|
|
||||||||||||||||
Total other expense
|
-
|
3,460
|
|
(3,460
|
)
|
|
-
|
|||||||||||
|
|
|
||||||||||||||||
Loss before provision for income taxes
|
(120,403
|
)
|
(3,782
|
)
|
|
3,782
|
|
(120,403
|
)
|
|||||||||
|
|
|
||||||||||||||||
Provision for income taxes
|
-
|
-
|
|
-
|
|
-
|
||||||||||||
|
|
|
||||||||||||||||
Net loss
|
$
|
(120,403
|
)
|
$
|
(3,782
|
)
|
|
$
|
3,782
|
|
$
|
(120,403
|
)
|
|||||
|
|
|
||||||||||||||||
Net loss per common share - basic and diluted
|
$
|
(0.02
|
)
|
$
|
0.00
|
|
|
$
|
(0.01
|
)
|
||||||||
|
|
|
||||||||||||||||
Weighted-average common shares outstanding -
|
|
|
||||||||||||||||
basic and diluted
|
7,770,000
|
7,361,274
|
(b)
|
(4,241,274
|
)
|
(c)
|
10,890,000
|
|
|
|
|
(e)
|
|
|
||||||||||||
|
|
Load Guard
|
|
Proforma
|
|
Proforma
|
||||||||||||
|
Nemus
|
Logistics
|
|
Adjustments
|
|
Combined
|
||||||||||||
|
|
|
|
|
|
|
||||||||||||
Sales, net
|
$
|
-
|
$
|
136,175
|
|
$
|
(136,175
|
)
|
|
$
|
-
|
|||||||
|
|
|
||||||||||||||||
Operating expenses
|
|
|
||||||||||||||||
Fuel and fuel taxes
|
-
|
44,129
|
|
(44,129
|
)
|
|
-
|
|||||||||||
Salaries and wages
|
-
|
39,873
|
|
(39,873
|
)
|
|
-
|
|||||||||||
Operations and maintenance
|
-
|
30,917
|
|
(30,917
|
)
|
|
-
|
|||||||||||
Professional fees
|
-
|
20,293
|
|
(20,293
|
)
|
|
-
|
|||||||||||
General and administrative
|
173,021
|
15,727
|
|
(15,727
|
)
|
|
173,021
|
|||||||||||
|
|
|
||||||||||||||||
Total operating expenses
|
173,021
|
150,939
|
|
(150,939
|
)
|
|
173,021
|
|||||||||||
|
|
|
||||||||||||||||
Operating loss
|
(173,021
|
)
|
(14,764
|
)
|
|
14,764
|
|
(173,021
|
)
|
|||||||||
|
|
|
||||||||||||||||
Other (expense) income
|
|
|
||||||||||||||||
Interest expense
|
-
|
(717
|
)
|
|
717
|
|
-
|
|||||||||||
Interest income
|
-
|
632
|
|
(632
|
)
|
|
-
|
|||||||||||
Gain on insurance claim
|
-
|
4,853
|
|
(4,853
|
)
|
|
-
|
|||||||||||
|
|
|
||||||||||||||||
Total other expense
|
-
|
4,768
|
|
(4,768
|
)
|
|
-
|
|||||||||||
|
|
|
||||||||||||||||
Loss before provision for income taxes
|
(173,021
|
)
|
(9,996
|
)
|
|
9,996
|
|
(173,021
|
)
|
|||||||||
|
|
|
||||||||||||||||
Provision for income taxes
|
-
|
-
|
|
-
|
|
-
|
||||||||||||
|
|
|
||||||||||||||||
Net loss
|
$
|
(173,021
|
)
|
$
|
(9,996
|
)
|
|
$
|
9,996
|
|
$
|
(173,021
|
)
|
|||||
|
|
|
||||||||||||||||
Net loss per common share - basic and diluted
|
$
|
(0.02
|
)
|
$
|
0.00
|
|
|
$
|
(0.01
|
)
|
||||||||
|
|
|
||||||||||||||||
Weighted-average common shares outstanding -
|
|
|
||||||||||||||||
basic and diluted
|
9,570,000
|
8,551,460
|
(f)
|
(5,431,460
|
)
|
(g)
|
12,690,000
|
|
|
Load Guard
|
Proforma
|
|
Proforma
|
||||||||||||
ASSETS
|
Nemus
|
Logistics
|
Adjustments
|
|
Combined
|
||||||||||||
Current assets
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
528,494
|
$
|
49,952
|
$
|
(49,952
|
)
|
(d)
|
$
|
528,494
|
|||||||
Accounts receivable
|
-
|
35,425
|
(35,425
|
)
|
(d)
|
-
|
|||||||||||
Prepaid expenses and other current assets
|
16,029
|
-
|
-
|
|
16,029
|
||||||||||||
Notes receivable
|
-
|
2,538
|
(2,538
|
)
|
(d)
|
-
|
|||||||||||
|
|
||||||||||||||||
Total current assets
|
544,523
|
87,915
|
(87,915
|
)
|
|
544,523
|
|||||||||||
|
|
||||||||||||||||
Property and equipment, net
|
-
|
34,813
|
(34,813
|
)
|
(d)
|
-
|
|||||||||||
|
|
||||||||||||||||
Other assets
|
-
|
-
|
-
|
|
-
|
||||||||||||
|
|
||||||||||||||||
Total assets
|
$
|
544,523
|
$
|
122,728
|
$
|
(122,728
|
)
|
|
$
|
544,523
|
|||||||
|
|
||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
||||||||||||||||
Current liabilities
|
|
||||||||||||||||
Accounts payable and accrued expenses
|
$
|
9,717
|
$
|
13,992
|
$
|
(13,992
|
)
|
(d)
|
$
|
9,717
|
|||||||
Notes payable, related parties
|
-
|
35,355
|
(35,355
|
)
|
(d)
|
-
|
|||||||||||
|
|
||||||||||||||||
Total current liabilities
|
9,717
|
49,347
|
(49,347
|
)
|
|
9,717
|
|||||||||||
|
|
||||||||||||||||
Noncurrent liabilities
|
-
|
-
|
-
|
|
-
|
||||||||||||
|
|
||||||||||||||||
Commitments and contingencies
|
|
||||||||||||||||
|
|
||||||||||||||||
Stockholders' equity
|
|
||||||||||||||||
Common stock
|
805,480
|
3,623
|
(805,480
|
)
|
(h)
|
12,690
|
|||||||||||
|
(3,623
|
)
|
(d)
|
||||||||||||||
|
12,690
|
(i)
|
|||||||||||||||
Additional paid in capital
|
83,077
|
(83,077
|
)
|
(d)
|
792,790
|
||||||||||||
|
805,480
|
(i)
|
|||||||||||||||
|
(12,690
|
)
|
(l)
|
||||||||||||||
Warrants
|
85,500
|
|
85,500
|
||||||||||||||
Accumulated deficit
|
(356,174
|
)
|
(13,319
|
)
|
13,319
|
(d)
|
(356,174
|
)
|
|||||||||
|
|
||||||||||||||||
Total stockholders' equity
|
534,806
|
73,381
|
(73,381
|
)
|
|
534,806
|
|||||||||||
|
|
||||||||||||||||
Total liabilities and stockholders' equity
|
$
|
544,523
|
$
|
122,728
|
$
|
(122,728
|
)
|
|
$
|
544,523
|
(1) | DESCRIPTION OF TRANSACTION AND BASIS OF PRESENTATION |
(2) | PRO FORMA ADJUSTMENTS for the year ended December 31, 2013 (Note Unaudited) |
(a) | To eliminate the results of operations for LGT, a subsidiary of LGL, that is not being acquired by Nemus. |
(b) | To record 2.36 to 1 forward stock split of LGL shares prior to the merger. The weighted average common shares outstanding as of December 31, 2013 for LGL have been adjusted to reflect this split. |
(c) | To reflect share repurchase by LGL's principal shareholder of 4,241,274 shares prior to the effective date of the merger; such amount has been adjusted for shares issued subsequent to 12/31/13. |
(3) | PRO FORMA ADJUSTMENTS for the six months ended June 30, 2014 (Note Unaudited) |
(d) | To eliminate the historical stockholders' equity accounts of LGL, the accounting acquiree, and the related assets and liabilities which are not being assumed by Nemus. |
(e) | To eliminate the results of operations for LGT, a subsidiary of LGL, that is not being acquired by Nemus. |
(f) | To record 2.36 to 1 forward stock split of LGL shares prior to the merger. The weighted average common shares outstanding as of June 30, 2014 for LGL have been adjusted to reflect this split. |
(g) | To reflect share repurchase by LGL's principal shareholder of 5,431,460 shares prior to the effective date of the merger. |
(h) | To record the cancellation of 12,880,000 shares of Nemus common stock and 3,120,000 shares of LGL common stock held by its former stockholders and the issuance of 16,000,000 shares issued to Nemus shareholders at $.001 per share. Such amounts have been adjusted to omit share issuances that occurred subsequent to the pro forma balance sheet date of 2,200,000 shares in August of 2014, and 1,110,000 shares in October of 2014. |
(i) | To record $.001 par value for common stock outstanding immediately after closing. |