INTELLECTUAL PROPERTY RIGHTS PURCHASE AND TRANSFER AGREEMENT

This Intellectual Property Rights Purchase and Transfer Agreement (this “IP Purchase Agreement” or “Agreement”) is effective this 17th day of December 2020, by and between Advanced Neural Dynamics, Inc. (“AND”) located at the Pennsylvania Biotechnology Center (“PBC”) at 3805 Old Easton Road, Doylestown, PA 18902; and Fox Chase Chemical Diversity Center, Inc. (“FOX”) located at the PBC at 3805 Old Easton Road, Doylestown, PA 18902; Douglas Brenneman, Ph.D, located at 121 Kingston Way, North Wales, PA 19454 (“Brenneman”), (collectively, “TRANSFERORS”) and Neuropathix, Inc., a Delaware corporation (“NPTX”) (hereinafter, “Acquiror” or “NPTX”). Each of Transferor and the Acquiror shall be referred to separately herein as a “Party” and together as the “Parties.”

RECITALS

A.  TRANSFERORS currently own certain Intellectual Property Rights identified on Exhibit A – Schedule of Assets (the “Assets”), including but not limited to Patents, Pending Patents, and Continuation in Part, Applications, etc. listed thereon.

B.  Upon the Closing Date, TRANSFERORS shall transfer to Acquiror the Assets free of any and all encumbrances, third party licenses and sub-licenses, liens and debts owing and outstanding thereunder the Assets; and Acquiror accepts all rights to the Assets and wishes to purchase the Assets for the Consideration set forth in Section 2 below (the “Transaction”).

C.  Acquiror wishes to purchase the Assets for the Purchase Price set forth in Section 2 below.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

Definitions

As used herein, the following terms shall have the following meanings:

A.  Intellectual Property Rights. The term “Intellectual Property Rights” means all rights, titles and interests that would otherwise belong to TRANSFERORS as described in Exhibit A hereto, including but not limited to: (i.) royalties, and milestone payments; (ii.) patents, patent applications, patent disclosures and inventions; (iii.) trade secrets and other confidential information (including ideas, formulas, compositions, inventions (whether patentable or unpatentable and whether or not reduced to practice); (iv.) know-how, manufacturing and production processes and techniques, research and development information, drawings, specifications, designs, plans, proposals, technical data; and (vii) copies and tangible embodiments thereof (in whatever form or medium).

B.  Closing. The term “Closing” or “Closing Date(s)” shall have the meaning ascribed to it in Section 3.

C.  Closing Date Payment. The term “Closing Date Payment” shall have the meaning ascribed to it in Section 3.

D.  Agreement. The term “Agreement” shall mean this instrument and all Schedules and Exhibits attached hereto.

E.  Closing. The term “Closing” or “Closing Date” shall have the meaning ascribed to it in Section 3.

F.  Closing Date Payment. The term “Closing Date Payment” shall have the meaning ascribed to it in Section 3.

G.  Material Adverse Effect. The term “Material Adverse Effect” shall mean events which have an adverse effect in the aggregate which, measured in dollars, exceeds the sum of $15,000.

H.  Material Contract. The term “Material Contract” shall have the meaning ascribed to it in Section 5(C.).

I.  Proration Date. The term “Proration Date” shall mean the specific date set for Closing in Section 3 or any subsequent date set for Closing, provided that the actual date of Closing occurs within five (5) business days after said date set for Closing.

J.  Affiliate of TRANSFERORS. The term “Affiliate of TRANSFERORS” shall mean (i) any individual, partnership, corporation, or other entity or person which is owned or controlled directly or indirectly by TRANSFERORS; (ii) any other individual, partnership, corporation, or other entity or person which controls or is controlled by or under common control with TRANSFERORS; and (iii) any officer, director, partner, or owner of 10 percent or greater equity or voting interest in any such other corporation, partnership, or other entity or person.

K.  Code. The term “Code” shall mean the Internal Revenue Code of 1986, as amended.

L.  Agreement. The term “Agreement” shall mean this instrument and all Schedules and Exhibits attached hereto.

Terms and Conditions

1.  Sale, Purchase and Transfer of Intellectual Property Rights.

A.  Assets. Subject to the terms and conditions of this Agreement, at the Closing referred to herein, TRANSFERORS agree to sell, transfer and assign and Acquiror agrees to purchase and accept on the terms stated herein, all of TRANSFERORS' right, title and interest in and to the Assets as listed in Exhibit A, including, without limitation, all contracts, contract rights, licenses, licenses, notifications, approvals and authorizations.

B.  Transferring Assets and Licenses. At the Closing, TRANSFERORS will assign, transfer or convey, or cause to be assigned, transferred or conveyed to ACQUIROR or a Designee, if applicable, the Assets as listed in Exhibit A.

2.  Purchase Price / Consideration.

Purchase Price. Six Hundred Thousand Dollars ($600,000), payable with the quantity of shares of Neuropathix, Inc. restricted Common Stock, par value $.001 per share pursuant to the schedule of closings and issuances outlined on Exhibit B – Schedule Issuance of Shares (the “ACQUIROR Shares” or “Consideration”). Closing shall occur in one (1) installment for Reitz and five (5) installments for Brenneman. In addition to the issuances of the ACQUIROR Shares, additional cash payments shall be made by the Acquiror to Brenneman pursuant to Exhibit B – Schedule of Issuance of Shares (the “Additional Consideration”) to cover the tax liability that may or may not occur in relation to the issuances of shares to Brenneman. Such Additional Consideration shall not exceed Brenneman’s tax costs incurred based upon the issuance of ACQUIROR Shares to Brenneman.

B. Delivery of Shares. Immediately upon execution and delivery of this Agreement, ACQUIROR shall cause the ACQUIROR Shares to be delivered to TRANSFERORS.

3. Closing.

The Initial Closing of the Transaction (“Initial Closing”) shall be held at the offices of Neuropathix, Inc., 3805 Old Easton Road, Doylestown, PA 18902 on or before December 21, 2020 (the “Initial Closing Date”).

4.  ACQUIROR’s Representations and Warranties.

ACQUIROR represents and warrants to TRANSFERORS the following, each of which is true and correct as of the date hereof:

A.  Ownership of the Shares.

ACQUIROR owns all right, title and interest to the ACQUIROR Shares free and clear of all voting trusts, agreements, arrangements, encumbrances, liens, claims, equities and liabilities. ACQUIROR has full and complete authority to transfer the ACQUIROR Shares and is conveying clear and unencumbered title to the ACQUIROR Shares to TRANSFERORS.

B.  No Other Representations and Warranties.

Other than as set forth in Section 4(a) above, the ACQUIROR Shares are being transferred “as-is,” and ACQUIROR makes no other representations or warranties in connection with the ACQUIROR Shares or the Transaction.

C.  Shares Currently Subject to SEC Rule 144 Resale Restriction.

The ACQUIROR Shares being sold hereunder are subject to a Rule 144 Resale Restriction and bear the following restrictive legend:

“The securities evidenced hereby have not been registered under the Securities Act of 1933, as amended (the ‘Act’) nor qualified under the securities laws of any states, and have been issued in reliance upon exemptions from such registration and qualification for nonpublic offerings.  Accordingly, the sale, transfer, pledge, hypothecation, or other disposition of any such securities or any interest therein may not be accomplished except pursuant to an effective registration statement under the Act and qualification under applicable State securities laws, or pursuant to an opinion of counsel, satisfactory in form and substance to the Company to the effect that such registration and qualification are not required.”

D.  Delivery of Shares on Statement of Account.

ACQUIROR shall cause Securities Transfer Corporation, the Company’s SEC registered transfer agent to produce a statement of account evidencing the TRANSFERORS’ ownership of Shares. The total number of shares of the restricted Common Stock, par value $.001 per share of Neuropathix, Inc. to be issued to each Transferor is set forth in accordance with the schedule of closings and issuances outlined on Exhibit B – Schedule Issuance of Shares.

E.  Inventor Royalty License Agreement (Exhibit C)

F.  Assignment of Patents and Intellectual Property (Exhibit D)

After the intial closing, but prior to January 31, 2021, ACQUIROR shall deliver separate Scientific Advisory Board Agreements and Stock Option Agreements to Allen Reitz and Douglas Brenneman.

5.  TRANSFERORS’ Representations and Warranties.

TRANSFERORS, jointly and severally, represents and warrants to ACQUIROR the following, each of which is true and correct as of the date hereof:

i.TRANSFERORS represents to ACQUIROR that:

a.  Organization, Standing and Authority.

Fox Chase Chemical Diversity, Inc. is a legally organized corporation under the laws of the state of Delaware and Allen Reitz is a co-owner with >50% ownership of the company; and

Advanced Neural Dynamics, Inc. is a legally organized corporation under the laws of the state of Delaware and under the control and ownership of Douglas Brenneman.

B.  Authorization of Agreement; Authority.

The execution, delivery and performance of this Agreement by TRANSFERORS has been duly authorized by all necessary corporate and partnership actions of TRANSFERORS, and this Agreement constitutes the valid and binding obligation of TRANSFERORS, enforceable in accordance with its terms, except to the extent enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights in general and subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

The execution, delivery and performance of this Agreement by TRANSFERORS will not (a) violate or conflict with TRANSFERORS corporate power and authority; (b) constitute a violation of any law, regulation, order, writ, judgment, injunction or decree applicable to TRANSFERORS; or (c) subject to the receipt of appropriate consents as specified in this Agreement as of the Closing Date, conflict with, or result in the breach of the provisions of, or constitute a default under, any agreement, license, permit or other instrument to which TRANSFERORS is a party or is bound or by which the Assets are bound.

C.  Material Contracts.

All of the Material Contracts which are to be transferred to ACQUIROR at Closing, if any, have not been further modified, or amended. A Material Contract shall mean a Contract which involves payments, performance of services or delivery of goods by or to TRANSFERORS after the Closing Date in an amount with any value.

To the extent that any invention included within Exhibit A has been funded in whole or in part by the United States government through the National Institutes of Health (“NIH”), the United States government retains certain rights in such invention as set forth in 35 U.S.C. §200-212 and all regulations promulgated thereunder, as amended, and any successor statutes and regulations.  ACQUIROR acknowledges and shall comply with these regulations, including the obligation that commercial products derived thereof used or sold in the United States be manufactured substantially in the United States.  Nothing contained in this Agreement obligates or shall obligate AND or FOX to take any action that would conflict in any respect with its past, current or future obligations to the United States Government.

D.  Litigation and Compliance with Laws.

There are no judicial or administrative actions, proceedings or investigations pending or, to the best of TRANSFERORS’ knowledge, threatened, that question the validity of this Agreement or any action taken or to be taken by TRANSFERORS in connection with this Agreement. There is no claim of infringement, litigation, proceeding or governmental investigation pending or, to the best of TRANSFERORS’ knowledge, threatened, or any order, injunction or decree outstanding which, if decided unfavorably, would have a Material Adverse Effect on ACQUIROR.

E.  Delivery of the Assets.

TRANSFERORS have, or will have on the Closing Date, good and marketable title (which includes leasehold title if applicable) to the Assets to be transferred to ACQUIROR on the Closing Date. (see: Exhibit A – Schedule of Assets; Exhibit F – Assignment of Patents and Intellectual Property).

F.  Authorization of Transaction. TRANSFERORS have the full power and authority to execute and deliver this Agreement and any other agreements contemplated hereby or thereby, and to perform TRANSFERORS’ obligations hereunder and thereunder. This Agreement constitutes the valid and legally binding obligation of TRANSFERORS, enforceable against TRANSFERORS in accordance with its terms and conditions. TRANSFERORS need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement. However, TRANSFERORS and ACQUIROR acknowledge that the NIH have certain rights to the Intellectual Property listed in Exhibit A including a non-exclusive license to use such Intellectual Property and that the NIH will be notified as to the change in assignment of the Intellectual Property and the transaction once complete.

G.  Disposition of ACQUIROR Shares.

i.  Generally. TRANSFERORS has no present intention to divide TRANSFERORS’ participation with others or to resell or otherwise dispose of all or any part of the ACQUIROR Shares. TRANSFERORS has no present intention of participating in the formulation, determination or direction of the basic business decisions of the Company.

ii.Compliance with Securities Act. TRANSFERORS agrees that if TRANSFERORS sells or distributes the ACQUIROR Shares in the future, TRANSFERORS shall sell or distribute them pursuant to the requirements of the Securities Act of 1933, as amended (the “Securities Act”) and any applicable “Blue Sky” laws. TRANSFERORS agree that TRANSFERORS will not transfer any part of the ACQUIROR Shares without (i.) effective registration under the Securities Act and applicable Blue Sky laws, or (ii.) obtaining an opinion of counsel satisfactory in form and substance to counsel for the Company stating that the proposed transaction will not result in a prohibited transaction under the Securities Act and the applicable Blue Sky laws.

6.  Indemnification.

A.  Subject only to Section 6(B) of this Agreement, in no event shall TRANSFERORS be liable for any use by ACQUIROR of the Assets. ACQUIROR assumes all liability for damages which may arise from its use, storage, disposal or sale of the Assets and/or a product containing an Asset. TRANSFERORS shall not be liable to ACQUIROR for any loss, claim or demand made by ACQUIROR, or made against ACQUIROR by any other party, due to or arising from the use of the Assets by ACQUIROR. ACQUIROR agrees to defend, indemnify, and hold harmless TRANSFERORS, its trustees, officers, employees, and agents from any loss, claim, injury, damage, expense or liability (including attorney's fees), of whatsoever kind or nature, which may arise from or in connection with this Agreement, including but not limited to: (i.) ACQUIROR’s use, handling, storage or sale of the Assets or a product containing an Asset; (ii.) any act or omission by ACQUIROR or any ACQUIROR employee, agent, director, or officer; and (iii.) any breach of this Agreement.

B.  TRANSFERORS agree, jointly and severally, to save, defend, indemnify and hold ACQUIROR and its officers and directors, parents, subsidiaries, shareholders, affiliates, predecessors, successors and assigns (and their respective officers, directors, employees and agents) harmless from and against any loss, claims, liabilities, damages, costs and expenses, including attorneys' fees incurred with respect to third party claims resulting from, based upon, or related to ACQUIROR’s right, title or interest in and to the Assets.

7.  Defense of Claims by Third Parties.

If any claim is made against a party that, if sustained, would give rise to a liability of the other under this Agreement, ACQUIROR or TRANSFERORS, as the case may be, shall promptly cause notice of the claim to be delivered to the other and shall notify the other party and its counsel of its obligation to defend such claim, at such other party’s sole expense. The obligation to defend indemnity claims shall be the responsibility of each party for a period of two (2) years, with counsel satisfactory to the party against which such claim is made.

8.  Miscellaneous.

A.  Expenses.

Except as otherwise provided for herein, each Party hereto shall be responsible for its or his own expenses accrued in connection with the negotiation, execution and consummation of the transactions contemplated by this Agreement, including fees of his or its respective attorneys, accountants or consultants.

B.  Successors and Assignees.

All covenants, representations, warranties and agreements of the Parties contained herein shall be binding upon and inure to the benefit of their respective heirs, executors, administrators, personal representatives, successors and assignees.

C.  Binding Effect; Assignment.

This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Except as expressly set forth herein, nothing in this Agreement shall create or be deemed to create any third party beneficiary rights in any person or entity not a party to this Agreement, including any such person or entity asserting rights as a third party beneficiary with respect to intellectual property matters. No assignment of this Agreement or any rights or obligations hereunder may be made by either party (by operation of law or otherwise) without the prior written consent of the other party and any attempted assignment without the required consent shall be void.

D.  Entire Agreement.

This Agreement constitutes the entire agreement among the Parties pertaining to the subject matter hereof and thereof and supersedes all prior and contemporaneous agreements and understandings of the Parties in connection herewith and therewith.

E.  Governing Law.

This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflicts of law principles.

F.  Attorneys’ Fees.

If either Party hereto commences an arbitration or other action against the other Party to enforce any of the terms hereof or because of the breach by such other Party of any of the terms hereof, the prevailing Party shall be entitled, in addition to any other relief granted, to all actual out-of-pocket costs and expenses incurred by such prevailing Party in connection with such action, including, without limitation, all reasonable attorneys’ fees, and a right to such costs and expenses shall be deemed to have accrued upon the commencement of such action and shall be enforceable whether or not such action is prosecuted to judgment.

G.  Severability.

Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

H.  Notices.

If to TRANSFERORS:

Fox Chase Chemical Diversity Center, Inc.

3805 Old Easton Road

Doylestown, PA

c/o: Allen Reitz, CEO

Email: AReitz@fc-cdci.com

With Additional Notice to:

Allen B. Reitz, Ph.D

109 Greenbriar Road

Lansdale, PA 19446

Email: AReitz@fc-cdci.com

If to TRANSFERORS:

Advanced Neural Dynamics, Inc.

3805 Old Easton Road

Doylestown, PA

c/o: Douglas Brenneman, CEO

Email: dbrenneman@advneuraldynamics.com

With Additional Notice to:

Douglas Brenneman

121 Kingston Way

North Wales, PA 19454

c/o: Douglas Brenneman

Email: dbrenneman@advneuraldynamics.com

If to ACQUIROR:

Neuropathix, Inc.

3805 Old Easton Road

Doylestown, PA 18902

c/o: Dean Petkanas, CEO

Email: dean@neuropathix.com

I.  Captions. The captions, headings and arrangements used in this Agreement are for convenience only and do not in any way limit or amplify the terms and provisions hereof.

J.  Counterparts. This Agreement may be executed in one or more counterparts, all of which when fully executed and delivered by all Parties hereto and taken together shall constitute a single agreement, binding against each of the Parties. To the maximum extent permitted by law or by any applicable governmental authority, any document may be signed and transmitted by facsimile with the same validity as if it were an ink-signed document.

[SIGNATURE PAGE TO FOLLOW]

IN WITNESS WHEREOF, each of the Parties has executed this Intellectual Property Rights Purchase and Transfer Agreement on the day and year first written above.

ACQUIROR:

NEUROPATHIX, INC.

/s/ Dean Petkanas 

By: Dean Petkanas

Its: CEO

TRANSFERORS:

FOX CHASE CHEMICAL DIVERSITY CENTER, INC.

/s/ Allen B. Reitz 

By: Allen B. Reitz, Ph.D.

Its: CEO

EXHIBIT A – SCHEDULE OF ASSETS

All patents, patents applications, trademarks, research and development materials including in issued patents, published patent applications or that are unpublished, and raw materials, including compounds in storage, comprised of the anti-seizure and neuroprotective compounds listed in the attached Excel spreadsheet entitled “AND-FCCDC Anticonvulsants 10 Dec 2020”, including, but not limited to, AND-257, AND-283, AND-287, AND-302, AND-363, AND-378, AND-380, AND-381, AND-383, AND-406, AND-407, and AND-408, also referenced in and by the following (the “Intellectual Property” or “IP”):

US 2012/0302546 A1 (Nov. 29 2012),

WO 2011/097337 A1 (Aug. 11, 2011),

US 2013/0253022 A1 (Sept. 26, 2013), and

WO 2012/074784 A2 (June 7, 2012).

EXHIBIT B – SCHEDULE ISSUANCE OF SHARES

EXHIBIT C – INVENTOR ROYALTY LICENSE AGREEMENT

EXHIBIT D – ASSIGNMENT OF PATENTS AND INTELLECTUAL PROPERTY

PHARMACEUTICAL ROYALTY AGREEMENT

This Pharmaceutical Royalty Agreement dated as of December 17, 2020 (the “Royalty Agreement”) is made by and between Neuropathix, Inc., (“NPTX”) a Delaware corporation, having its principal place of business at 3805 Old Easton Road, Doylestown, PA 18902; and Fox Chase Chemical Diversity Center, Inc. (“FOX”) located at the PBC at 3805 Old Easton Road, Doylestown, PA 18902; and Advanced Neural Dynamics, Inc. (“AND”) located at the Pennsylvania Biotechnology Center (“PBC”) at 3805 Old Easton Road, Doylestown, PA 18902, collectively (the “INVENTORS”)

Introduction

INVENTORS have developed and owns patent rights to certain Drug Technology (as defined below). Pursuant to the signed Intellectual Property Rights Purchase and Transfer Agreement (the “IP Purchase Agreement”) dated on November 30, 2020 between INVENTORS and NPTX, NPTX is acquiring the INVENTORS’ ownership of certain technology described in the IP Purchase Agreement – Exhibit A – Schedule of Assets. Such acquisition of the technology and patent rights from INVENTORS also includes the right to develop, market, make, use, and sell certain drug formulations which are applied to humans through the use of the Drug Technology. As part of the acquisition of the INVENTORS’ Technology, NPTX agrees to the mutual covenants and promises contained in this Royalty Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, NPTX and INVENTORS agree as follows:

I.        Definitions

As used in this Royalty Agreement, the following terms, whether used in the singular or plural, shall have the following meanings:

I.1       “Confidential Information” means all materials, trade secrets, or other information, including, without limitation, proprietary information and materials (whether or not patentable) regarding a Party’s technology, products, business information, or objectives, which is designated as confidential in writing by the disclosing Party, whether by letter or by the use of an appropriate stamp or legend, prior to or at the time any such material, trade secret, or other information is disclosed by the disclosing Party to the other Party. Notwithstanding the foregoing to the contrary, materials, trade secrets, or other information which is orally or visually disclosed by a Party, or is disclosed in writing without an appropriate letter, stamp, or legend, shall constitute Confidential Information if the disclosing Party, within thirty (30) days after such disclosure, delivers to the other Party a written document or documents describing the materials, trade secrets, or other information and referencing the place and date of such oral, visual, or written disclosure and the names of the persons to whom such disclosure was made.

I.2.        “Drug Technology” means any technology owned and assignable by INVENTORS which relates to pharmaceutical compositions described in Exhibit A of the IP Purchase Agreement.

I.3.        “INVENTORS’ Patent Rights” means all patents and patent applications (which for all purposes of this Royalty Agreement shall be deemed to include certificates of invention, applications for certificates of invention, and utility models) throughout the world, covering or relating to the Drug Technology, including any substitutions, extensions, reissues, reexaminations, renewals, divisions, continuations, or continuations-in-part, which INVENTORS own or control, and under which INVENTORS have the right to grant sublicenses to NPTX, as of the date of this Royalty Agreement and thereafter including, but not limited to, the assets to be purchased (“Assets To Be Purchased”), as described in the Binding Letter of Intent – Terms and Conditions dated, November 17, 2020 and listed on Exhibit A – Schedule of Assets in the IP Purchase Agreement dated November 30, 2020. All current patents and patent applications in the INVENTORS’ Patent Rights are also listed in Schedule A hereto.

I.4.        “INVENTORS’ Technology Rights” means all technical information owned or possessed by INVENTORS as of the date of this Royalty Agreement and thereafter, whether patentable or otherwise, relating to the Drug Technology, which information is necessary or useful for NPTX and its sublicensees to develop, manufacture, use, and/or sell Manufactured Products hereunder.

I.5.        “Field” means the human use of the Manufactured Products in pharmaceutical preparations, including but not limited to per os (oral tablets or capsules), intravenous, topical skin, intranasal cavaties, anal suppositories, or subcutaneous implants.

I.6.        “Manufactured Products” means a product which, or the manufacture, use, or sale of which, is covered by a Valid Claim of any of the INVENTORS’ Patent Rights in the country where the product is manufactured, used or sold and/or embodies any INVENTORS’ Technology Rights.

I.7.        “Net Sales” shall mean the gross amount actually received by NPTX on sales of Manufactured Products, less: (a) credits or allowances, if any, actually granted; (b) discounts actually allowed; (c) freight, postage, and insurance charges and additional special packaging charges; (d) customs duties, and excises, sales, taxes, duties or other taxed imposed upon and paid with respect to such sales (excluding what is commonly known as income taxes); and (e) any royalties fees, credits and/or discounts payable to the United States Government through the National Institutes of Health (“NIH”) in accordance with Paragraph 5(C) of the IP Purchase Agreement. In the case of any Manufactured Products supplied to NPTX by INVENTORS, “Net Sales” shall mean the amount as defined in the preceding sentence, less the amount paid by NPTX to INVENTORS for INVENTORS’ to supply the Manufactured Products.

I.8.        “Party” means NPTX or INVENTORS; “Parties” means NPTX and INVENTORS.

I.9.        “Valid Claim” means a claim of any unexpired United States or foreign patent or patent application which shall not have been withdrawn, canceled, or disclaimed, nor held invalid by a court of competent jurisdiction in an unappealed or unappealable decision.

II. Assignment

II.1. Assignment.

Subject to the fulfillment of the terms and conditions contained in the corresponding IP Purchase Agreement, INVENTORS irrevocably sell, transfer and assign to NPTX all of the INVENTORS’ Patent Rights and INVENTORS’ Technology Rights, including the right to sublicense any or all of such rights, to make, have made, use, have used, sell, and have sold the Drug Technology in the Field.

To the extent that any invention included within Exhibit A has been funded in whole or in part by the United States government through the National Institutes of Health (“NIH”), the United States government retains certain rights in such invention as set forth in 35 U.S.C. §200-212 and all regulations promulgated thereunder, as amended, and any successor statutes and regulations.  NPTX acknowledges and shall comply with these regulations, including the obligation that commercial products derived thereof used or sold in the United States be manufactured substantially in the United States.  Nothing contained in this Agreement obligates or shall obligate AND or FOX to take any action that would conflict in any respect with its past, current or future obligations to the United States Government.

II.2. Assistance.

INVENTORS shall provide NPTX with all information related to the INVENTORS’ Patent Rights and INVENTORS’ Technology Rights as may be known or possessed by INVENTORS and as may be reasonably necessary for NPTX to exploit the licenses granted in Section II.1., including any materials related to the acquisition of any government approvals for the Manufactured Products.

INVENTORS shall provide NPTX with reasonable technical assistance in connection with such transfer of the information related to the INVENTORS’ Patent Rights and INVENTORS’ Technology Rights.

III. Royalties; Sublicense Fees; Reversion Rights and Milestone Payments

III.1. Royalties.

(a)               NPTX shall pay to each FOX and AND, during the applicable term described in Section III.1(b) below, a royalty of 1% of Net Sales by NPTX of Manufactured Products coverd by a Valid Claim of a patent or patent application of the INVENTORS’ Patent. The royalty shall be paid up to $500,000 per year, per participant (total of 2% of Net Sales up to a $1,000,000 per year maximum payout for both Fox Chase Chemical Diversity Center, Inc. and Advanced Neural Dynamics, Inc., (the “CO-INVENTORS”). The combined Royalty Fee payable to the CO-INVENTORS shall not exceed two percent (2%) of Net Sales and limted to a maximum payout of One Million Dollars ($1,000,000) per year, and shall continue in force in perpetuity but shall discontinue immediately upon an outright sale of the technology and/or any Reversion which eliminates on going revenue streams to Neuropathix, Inc.

(b)               The obligation of NPTX to pay royalties on sales of Manufactured Products covered by a Valid Claim of a patent of the INVENTORS’ Patent Rights shall terminate on a country-by-country basis concurrently with the expiration or termination of the applicable Valid Claim under the INVENTORS’ Patent Rights in the country in which the product is manufactured, used, or sold. The obligation of NPTX to pay royalties on sales of Manufactured Products covered by a Valid Claim of a patent application of the INVENTORS’ Patent Rights shall terminate on a country-by-country basis concurrently with the withdrawal, cancellation, or disclaiming of the applicable Valid Claim under the INVENTORS’ Patent Rights in the country in which the product is manufactured, used, or sold.

(c)        In no event shall more than one royalty be due INVENTORS for any Assigned Product sold by NPTX.

(d)        Upon the expiration of the royalty obligations of Section III.1(a) in accordance with Section III.1(b) for all or any portion of the INVENTORS’ Patent Rights, the licenses granted pursuant to Section II.1 shall become, with respect to such INVENTORS’ Patent Rights and the INVENTORS’ Technology Rights, or portion thereof, fully paid.

III.2. Sublicense Fees.

NPTX shall pay to each of INVENTORS one percent (1.0%) of all upfront sublicense fees paid to NPTX on account of sublicenses under the INVENTORS’ Patent Rights and INVENTORS’ Technology.

III.3. Reversion and Milestone Payments.

NPTX shall pay to each of INVENTORS one percent (1%) of future milestone payments received in connection with monetization of AND-Fox Chase Intellectual Property, per participant. NPTX shall not pay more than the aggregate total of two percent (2%) of Reversion Rights for all INVENTORS. This includes receipt of payments by Neuropathix, Inc. from any third parties for option rights; initiation fees; milestone payments; up-front fees; minimum annual royalties (in absence of actual commercial royalty streams); up-front licensing rights; sales and marketing rights, or outright sale of the technology.

IV. Representations, Warranties, and Covenants

IV.1. Representations and Warranties of INVENTORS.

INVENTORS hereby represent and warrant that: (i) INVENTORS have the authority to grant to NPTX all of the rights granted hereunder; (ii) Except as subject to the Government Support Clause, INVENTORS own or control all rights to the INVENTORS’ Patent Rights and the INVENTORS’ Technology Rights; and (iii) INVENTORS are unaware of any rights superior to INVENTORS’ rights in the Drug Technology which would prevent NPTX from fully exercising the rights assigned to it herein.

IV.2. Covenant of NPTX.

NPTX, at its own expense hereby covenants and agrees to use reasonable efforts to develop, and obtain all necessary regulatory approvals and intellectual property protection for, and commercialize certain formulations which can be delivered to humans through Manufactured Products. In the event that NPTX breaches its obligations under this Section IV.2, NPTX shall not be liable for any damages or other compensation as a result thereof, and INVENTORS’ sole and exclusive remedy shall be the termination of this Royalty Agreement pursuant to Section VII.2.

V.        Intellectual Property Rights

V.1. Original Co-Ownership.

Subject ot the Government Support Clause, FOX and AND are co-owners of the entire right, title, and interest in and to all INVENTORS’ Patent Rights and INVENTORS’ Technology Rights subject to sale, transfer, assignment to NPTX pursuant to the IP Purchase Agreement dated November 30, 2020.

V.2. Right of NPTX to Prosecute Applications.

NPTX agrees that as part of the IP Purchase Agreement and during the term of this Royalty Agreement, NPTX shall provide INVENTORS with copies of all substantive communications to and from patent offices regarding applications or patents relating to the Drug Technology promptly after the receipt thereof. Copies of proposed substantive communications to such patent offices shall be provided to INVENTORS in sufficient time before the due date in order to enable INVENTORS an opportunity to comment on the content thereof. NPTX shall use reasonable efforts to incorporate INVENTORS’ comments into any substantive communications. INVENTORS shall timely notify NPTX (but in no event less than 30 days prior to the expiration of any priority rights period) if it intends not to seek patent protection on the Drug Technology in any country. INVENTORS’ shall have the right, at its expense and in NPTX’s name, to file, prosecute, maintain, and enforce in such country patents relating to the Drug Technology.

V.3. Assistance.

INVENTORS shall provide to NPTX or NPTX’s authorized attorneys, agents, or representatives reasonable assistance, as necessary for NPTX to exploit its right under Section V.2 to file, prosecute, maintain and enforce patent applications and patents. INVENTORS shall use its best efforts to have signed all legal documents necessary to file, prosecute, maintain, and enforce patent applications or patents at no charge to NPTX.

V.4. Infringement:

(a) Each Party shall promptly report in writing to each other Party during the term of this Royalty Agreement any: (i) known infringement or suspected infringement of any of the INVENTORS’ Patent Rights in the Field; or (ii) unauthorized use or misappropriation of the INVENTORS’ Technology Rights in the Field by a third party of which it becomes aware, and shall provide each other Party with all available evidence supporting said infringement, suspected infringement or unauthorized use or misappropriation. Within 30 days after INVENTORS become, or is made, aware of any of the foregoing, then INVENTORS shall notifiy NPTX. NPTX shall decide whether or not to initiate an infringement or other appropriate suit and shall advise INVENTORS of its decision in writing.

(b) At NPTX’s request, INVENTORS shall offer reasonable assistance to NPTX in connection therewith at no charge to NPTX except for reimbursement of reasonable out-of-pocket expenses incurred in rendering such assistance. Without limiting the generality of the preceding sentence, INVENTORS shall cooperate fully in order to enable NPTX to institute any action hereunder. INVENTORS shall have the right to be represented in any such suit by its own counsel at its own expense.

VI. Confidential Information

VI.1. Treatment of Confidential Information.

Each Party hereto shall maintain the Confidential Information of the other party in confidence, and shall not disclose, divulge or otherwise communicate such Confidential Information to others, or use it for any purpose, except pursuant to, and in order to carry out, the terms and objectives of this Royalty Agreement, and hereby agrees to exercise every reasonable precaution to prevent and restrain the unauthorized disclosure (except to the extent required to use or distribute Manufactured Products) of such Confidential Information by any of its directors, officers, employees, consultants, subcontractors, sublicensees, or agents.

VI.2. Release from Restrictions.

The provisions of Section VI.1 shall not apply to any Confidential Information disclosed hereunder which:

(a) was known or used by the receiving Party prior to its date of disclosure to the receiving Party, as evidenced by the prior written records of the receiving Party; or

(b) either before or after the date of the disclosure to the receiving Party is lawfully disclosed to the receiving Party by sources other than the disclosing Party rightfully in possession of the Confidential Information; or

(c) either before or after the date of the disclosure to the receiving Party becomes published or generally known to the public, other than through the sale of Manufactured Products in the ordinary course, through no fault or omission on the part of the receiving Party or an affiliated party; or

(d) is independently developed by or for the receiving Party without reference to or reliance upon the Confidential Information; or

(e) is required to be disclosed by the receiving Party to comply with applicable laws, to defend or prosecute litigation or to comply with governmental regulations, provided that the receiving Party provides prior written notice of such disclosure to the other party and takes reasonable and lawful actions to avoid and/or minimize the degree of such disclosure.

VII. Termination

VII.1. Term.

This Royalty Agreement shall remain in effect in perpetuity or until terminated in accordance with the exhaustion of the commercial life of the Manufactured Products or the outright sale of the Manufactured Products.

VII.2. Termination for Breach.

NPTX shall be entitled to terminate this Royalty Agreement by written notice to INVENTORS in the event that INVENTORS shall be in default of any of its obligations hereunder and shall fail to remedy any such default within 60 days after notice thereof by NPTX. INVENTORS shall be entitled to terminate this Royalty Agreement by written notice to NPTX in the event that NPTX shall be in default of any of its obligations hereunder and shall fail to remedy any such default within 60 days after notice thereof by INVENTORS. Upon termination of this Royalty Agreement pursuant to this Section VII.2, no Party shall be relieved of any obligations incurred prior to such termination.

VII.3. Survival of Obligations; Return of Confidential Information.

Notwithstanding any termination of this Royalty Agreement, the obligations of the Parties with respect to the protection and nondisclosure of Confidential Information (Article VI) and product liability indemnification (Section VIII.1), as well as any other provisions which by their nature are intended to survive any such termination, shall survive and continue to be enforceable. Upon any termination by NPTX pursuant to Section VII.2, the license granted pursuant to Section II.1 shall survive and shall be deemed full paid. Upon any termination of this Royalty Agreement pursuant to Section VII.2, each Party shall promptly return to each other Party all written Confidential Information, and all copies thereof, of such other Party.

VIII. Miscellaneous

VIII.1. Product Liability Indemnification.

NPTX (the “Manufacturing Party” or “Indemnifying Party”) shall defend the other Party (the “Indemnified Party”) at the Manufacturing Party’s cost and expense, and will indemnify and hold harmless the Indemnified Party, from and against any and all claims, losses, costs, damages, fees, or expenses arising out of or in connection with the manufacture or design of the Manufactured Products (other than claims based on infringement or misappropriation), including, but not limited to, any actual or alleged injury, damage, death, or other consequence occurring to any legal or natural person or property, as a result, directly or indirectly, of the possession, use or consumption of any Manufactured Products, claimed by reason of breach of warranty, negligence, product defect, or other similar cause of action, regardless of the form in which any such claim is made. The Party distributing the Manufactured Products under this Royalty Agreement (the “Distributing Party” or “Indemnifying Party”) shall defend the other Party (the “Indemnified Party”) at the Distributing Party’s cost and expense, and will indemnify and hold harmless the Indemnified Party, from and against any and all claims, losses, costs, damages, fees, or expenses arising out of or in connection with the commercialization, marketing or sale of the Manufactured Products (other than claims based on infringement or misappropriation), including, but not limited to, any actual or alleged injury, damage, death, or other consequence occurring to any legal or natural person or property, as a result, directly or indirectly, of the possession, use or consumption of any Manufactured Products, claimed by reason of breach of warranty, negligence, product defect or other similar cause of action, regardless of the form in which any such claim is made. In the event of any such claim against an Indemnified Party, such Indemnified Party shall promptly notify the Indemnifying Party in writing of the claim and the Indemnifying Party shall manage and control, at its sole expense, the defense of the claim and its settlement. The Indemnified Party shall cooperate with the Indemnifying Party and may, at its option and expense, be represented in any such action or proceeding. The Indemnifying Party shall not be liable for any litigation costs or expenses incurred by the Indemnified Party without the Indemnifying Party’s written authorization.

VIII.2. Reports and Payments.

NPTX shall deliver to INVENTORS within 60 days after the end of each calendar quarter a written report showing its computation of royalties and sublicense fees due under this Royalty Agreement for such calendar quarter. Simultaneously with the delivery of each such report, NPTX shall tender payment of all amounts shown to be due thereon. The royalty payments and sublicense fees due on sales in currencies other than U.S. dollars shall be calculated using the appropriate exchange rate for such currency quoted by the Citibank foreign exchange desk on the close of business on the business day immediately preceding the date of such report. All amounts due under this Royalty Agreement shall be paid to INVENTORS in United States dollars (U.S. $) by wire transfer to an account in a United States bank designated by INVENTORS, or in such other form and/or manner as INVENTORS may reasonably request. During the term of this Royalty Agreement, INVENTORS shall have the right from time to time (not to exceed once during each calendar year) to have an independent certified public accountant inspect, during normal business hours, and upon reasonable advance notice (not less than 72 hours), such books, records and other supporting data of NPTX as may be necessary to verify NPTX’s computation of royalties and sublicense fees due under this Royalty Agreement.

VIII.3. Governing Law.

This Royalty Agreement shall be governed by and interpreted in accordance with the laws of the State of Pennsylvania.

VIII.4. Waiver.

The waiver by any Party of a breach or a default of any provision of this Royalty Agreement by any other Party shall not be construed as a waiver of any succeeding breach of the same or any other provision, nor shall any delay or omission on the part of a Party to exercise or avail itself of any right, power or privilege that it has or may have hereunder operate as a waiver of any right, power or privilege by such Party.

VIII.5. Notices.

Any notice or other communication in connection with this Royalty Agreement must be in writing and if by mail, by certified mail, return receipt requested, and shall be effective when delivered to the addressee at the address listed below or such other address as the addressee shall have specified in a notice actually received by the addressor.

If to FOX: Fox

Chase Chemical Diversity Center, Inc.

3805 Old Easton Road

Doylestown, PA 18902

c/o: Allen Reitz, CEO

Email: Areitz@fc-cdci.com

In to AND:

Advanced Neural Dynamics

3805 Old Easton Road

Doylestown, PA 18902

c/o Doug Brenneman, CEO

Email: dbrenneman@advneuraldynamics.com

If to NPTX:

Neuropathix, Inc.

3805 Old Easton Road

Doylestown, PA 18902

c/o: Dean Petkanas, CEO

Email: dean@neuropathix.co 

VIII.6. No Agency.

Nothing herein shall be deemed to constitute NPTX, on the one hand, or INVENTORS, on the other hand, as the agent or representative of the other, or as joint venturers or partners for any purpose. Neither NPTX, on the one hand, nor INVENTORS, on the other hand, shall be responsible for the acts or omissions of the other. No Party will have authority to speak for, represent or obligate the other Party in any way without prior written authority from such other Party.

VIII.7. Entire Agreement.

This Royalty Agreement and the Schedules hereto (which Schedules are deemed to be a part of this Royalty Agreement for all purposes) contain the full understanding of the Parties with respect to the subject matter hereof and supersede all prior understandings and writings relating thereto. No waiver, alteration or modification of any of the provisions hereof shall be binding unless made in writing and signed by the Parties.

VIII.8. Headings.

The headings contained in this Royalty Agreement are for convenience of reference only and shall not be considered in construing this Royalty Agreement.

VIII.9. Severability.

In the event that any provision of this Royalty Agreement is held by a court of competent jurisdiction to be unenforceable because it is invalid or in conflict with any law of any relevant jurisdiction, the validity of the remaining provisions shall not be affected.

VIII.10.        Assignment.

No Party to this Royalty Agreement may assign its rights or obligations hereunder without the prior written consent of each other Party; provided, however, that each Party may assign its rights and obligations hereunder without the prior written consent of the other Party in connection with the sale of all or substantially all of the business or assets of the assigning Party relating to the development, manufacture, use, or sale of Manufactured Products.

VIII.11.        Successors and Assigns.

This Royalty Agreement shall be binding upon and inure to the benefit of the Parties hereto and their successors and permitted assigns.

VIII.12.        Counterparts.

This Royalty Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of such together shall constitute one and the same instrument.

VIII.13.        Force Majeure.

No Party to this Royalty Agreement shall be responsible to the other Party for nonperformance or delay in performance of the terms or conditions of this Royalty Agreement due to acts of God, acts of governments, war, riots, strikes, accidents in transportation, or other causes beyond the reasonable control of such Party.

VIII.14 . Publication

Other than the press release and 8-K SEC filings required to disclose any material agreement, including but not limited to the Binding Term Sheet signed by the Parties on November 17, 2020 and the corresponding press release and 8-K SEC filing, neither NPTX, AND or FOX will make any press release or other public disclosure regarding this Agreement or the transaction contemplated hereby without the other party’s express prior written consent, which consent shall not be unreasonably withheld by either party. Nothing contained herein shall obstruct NPTX from making any timely filing regarding any material agreement between the parties and, or as required under Laws or by any governmental agency, or by the rules of any stock exchange on the which the securities of the disclosing party are listed.  Notwithstanding the foregoing, NPTX, AND and FOX agree to issue a joint press release regarding the Agreement with wording to be mutually agreed upon.

[SIGNATURE PAGE TO FOLLOW]

IN WITNESS WHEREOF, the Parties hereto have caused this Royalty Agreement to be executed in their names by their properly and duly authorized officers or representatives as of the date first above written.

NEUROPATHIX, INC.

/s/ Dean Petkanas 

By: Dean Petkanas

Its: CEO

INVENTORS:

FOX CHASE CHEMICAL DIVERSITY CENTER, INC.

/s/ Akken B. Reitz 

By: Allen B. Reitz, Ph.D.

Its: CEO

ADVANCED NEURAL DYNAMICS, INC.

 /s/ Douglas Brenneman

By: Douglas Brenneman, Ph.D.

Its: CEO

SCHEDULE A

Patents and Patent Applications

(as outlined in EXHIBIT A – Schedule of Assets of the IP Purchase Agreement)

All patents, patents applications, trademarks, research and development materials including in issued patents, published patent applications or that are unpublished, and raw materials, including compounds in storage, comprised of the anti-seizure and neuroprotective compounds listed in the attached Excel spreadsheet entitled “AND-FCCDC Anticonvulsants 10 Dec 2020”, including, but not limited to, AND-257, AND-283, AND-287, AND-302, AND-363, AND-378, AND-380, AND-381, AND-383, AND-406, AND-407, and AND-408, also referenced in and by the following (the “Intellectual Property” or “IP”):

US 2012/0302546 A1 (Nov. 29 2012),

WO 2011/097337 A1 (Aug. 11, 2011),

US 2013/0253022 A1 (Sept. 26, 2013), and

WO 2012/074784 A2 (June 7, 2012).