License Option Agreement

Both Parties: The Parties shall agree to use commercially reasonable efforts to perform their respective responsibilities under the Initial Product development plan that shall be attached as an exhibit to the License Agreement and shall reflect the commitment to initiate a clinical trial of Product within 12 months.

NPT: NPT shall use reasonable commercial efforts to develop, obtain regulatory approval for, and market the Product in the Territory (including arranging for manufacturing and supply of Product) subject to the responsibilities of Immune outlined below.

NPT will be responsible for raising at least $20M of capital in the first 12 months following the license agreement from its investor network as well a broader group of investors which will be secured through an investment bank to be selected by both parties. In addition, NPT shall use reasonable efforts to become publicly traded on a national stock exchange within 18 months of the effective date of the License Agreement.

Immune: Immune shall have responsibility for participating and/or completing but not financing all Product development activities as provided in the initial development plan after execution of the License Agreement. Immune shall promptly provide documents and materials related to Product and reasonable assistance in the transition of know-how to NPT and such other assistance as NPT may reasonably request. 

The Parties shall establish a joint steering committee comprised of senior executives of the Parties to oversee development and commercialization efforts (“JSC”). Each Party shall be entitled to designate two representatives to the JSC, which shall meet at least once every 6 months to review the development plan as it may be revised from time to time and NPT’s written report setting forth material development and commercialization activities. 

Governance 

(Cont’d)

NPT shall consult with the JSC regarding significant decisions but, for the avoidance of doubt, the JSC shall be a forum for the exchange of information between the Parties and shall act only in an advisory capacity and shall not have decision-making powers.

Immune shall have the right to nominate one board member to the board of directors of NPT and shall have veto rights on specific board decisions to be mutually agreed by the Parties. 

NPT shall have the right to terminate the License Agreement upon 180-days prior written notice plus other usual and reasonable termination provisions including material breach, and bankruptcy of either Party and failure to diligently pursue the product development plan as mutually agreed will be considered.

Upon termination of the License Agreement, NPT’s right to Product and related intellectual property shall immediately terminate. NPT shall promptly provide Immune copies of any Product related intellectual property developed by NPT and shall execute documents, if any, necessary to perfect Immune’s ownership of any IND’s, NDA’s, patents and patent applications or other Product related intellectual property and, where applicable, insure orderly transition of sales of Product.

NPT will be responsible for all payments due according to the Licensing Agreement until the effective termination date.

In the event NPT does not raise $20M within one year, Immune may take the leadership for further financing of NPT or alternatively elect to terminate the License .. In the latter case, Immune will have to offer to other NPT investors registered Immune shares of stock in Immune at the then market value deemed paid by the sum paid on account of the NPT shares purchased. 

Compensation shall be in the form of reimbursement of Immune’s Product Research and Development (“R&D”) Costs, Equity, Development and Commercial Milestone Payments, Royalties, and Sublicense Fees as provided below.

R&D Costs: NPT shall make minimum payments for external Product R&D costs and for Immune Product R&D support costs (both external costs plus internal administrative expenses equal to 150% of Immune’s cost of direct FTE personnel) incurred in accordance with the initial development plan attached in appendix of the License Agreement as follows: 

· At Execution of License Agreement

· 60 days of Execution of License Agreement

· Monthly thereafter until $10M raised

· Once the company has raised at least $10M

$0.5 Million

no less than $0.5 Million

no less than $0.5 Million  

according to development plan

Compensation 

(cont’d)

Equity: Immune will be granted shares of common stock in NPT equivalent to 33% of the common stock of NPT at a pre-money valuation of no less than $30 M, with no dilution in NPT for sums raised up to $15 M.

Development Milestone Payments: Upon achievement of development milestones by NPT payments shall be made in NPT shares valued at the then market price as follows: 

· Successful completion of initial P3 clinical trial 

· NDA Filing

· FDA approval

$5 Million

$10 Million

$10 Million

Commercial Milestone Payments: Upon first achievement of trailing 12-month Net Sales of Product by NPT (and not any sublicensee(s)) as follows, payable in cash or equivalent shares of NPT valued at then then market price at election:

· $250 Million or more of Net Sales

· $500 Million or more of Net Sales 

· $750 Million or more of Net Sales 

· $1 Billion or more of Net Sales 

$10 Million  

$25 Million 

$35 Million 

$50 Million

Royalties: Tiered royalties based on Net Sales of Product by NPT(and not any sub-licensee(s)) as follows:

· Annual Net Sales up to and including $250 Million

· Annual Net Sales over $250 Million

7.5%

10%

Sublicense Fees: Immune shall receive fees based on sub-license revenue received by NPT from one or more sublicensees, including but not limited to milestone payments and royalties on net sales of Product by the sublicensees, but excluding any direct equity financing at market value or reimbursement of R&D costs actually expended by NPT. The Sublicense Fee percentage shall be based on the level of equity raised by NPT as follows: 

· Equity of less than $10 Million

· Equity of $10 Million to less than $20 Million

· Equity of $20 Million or more

50%  

35% 

25%

Other terms and conditions customary for agreements of this nature negotiated between arm’s length parties, including, without limitation, clauses relating to definitions, representations and warranties, indemnification and confidentiality.