License Agreement by and between Edesa Biotech Research, Inc. and NovImmune SA dated April 17, 2020

Subject to the terms and conditions of this Agreement, NI agrees to grant and hereby grants to LICENSEE an exclusive, worldwide license, with the right to sublicense, to develop, test, register (including, without limitation, to file and amend applications for, and to hold marketing authorisations as well as regulatory approvals), manufacture, contract manufacture, modify, market, sell, distribute and promote the Constructs and Licensed Products (as defined) in the Licensed Field (as defined) (the Construct License).

The Construct License shall include rights to exploit: (i) the Licensed Patents (as defined) and (ii) the Know-How (as defined) and other IP controlled by NI as reasonably necessary to commercialize the Constructs or either of them (the latter referred to as “Other Licensed IP”). 

For the avoidance of doubt, LICENSEE shall have the right to appoint sub-distributors and/or sub-contractors for, developing, marketing, testing, selling and manufacturing of the Licensed Products.

To the extent available and/or permissible in any given jurisdiction, LICENSEE shall have the right to register the Construct License, and NI shall support any of LICENSEE's filings to such end by issuing and executing deeds and other documents required to perfect such license registrations upon LICENSEE's due request.

LICENSEE shall be responsible at its own cost and risk for the research, development, testing, registration, manufacture, use, marketing, distribution and commercialization of the Constructs and Licensed Products and to obtain all necessary licenses, rights and authorizations as necessary, however, in accordance with the terms and conditions of this Agreement.

Notwithstanding any general liability and indemnity under this Agreement but subject to the provisions of Section 7.3, LICENSEE shall indemnify and hold NI and its Affiliates (as defined) and each of their officers, directors, employees, agents and representatives from and against any and all third party liabilities, claims, demands, actions, suits, losses, damages, costs, and expenses (including reasonable attorneys' fees) arising out of or in connection with LICENSEE's and its sub-licensees' and sub-contractors' actions and omissions in the course of the research, development, testing, registration, making, use, marketing, distribution and commercialization of the Constructs and any of the Licensed Products.

LICENSEE will be responsible for the development of the Constructs in accordance with the plan set forth in Annex 3(c) (the Development Plan), including the development targets (the Development Targets) referenced therein. LICENSEE shall provide NI with progress updates in accordance with the Development Plan by no later than sixty (60) days from the end of each 6-month period following the Effective Date, for the first two years of this Agreement and, thereafter, within sixty (60) days following each twelve (12) month anniversary of the Effective Date. The Parties acknowledge and agree the Development Plan is based on the best estimation of goals and timelines at the time of execution of this Agreement and may be amended by mutual agreement in writing over the course of its implementation by LICENSEE. After the submission by LICENSEE of a Development Plan update, the Parties shall meet (in person or through other means) and work in good faith to agree on an amendment and adjustment of the Development Plan as reasonably needed.

Currency conversions, if any, shall be made at the average rates of exchange rates reported by Thomson Reuters or OANDA (or any other qualified source that is acceptable and agreed upon by both Parties) for the applicable Calendar Quarter (as defined).

All payments owed under this Agreement shall be made in USD and by wire transfer to a bank and account designated in writing by NI, unless otherwise specified in writing by NI.

Net Sales and Sublicensing Revenues of Licensed Products and Royalty Payments and Milestone Payments thereon in accordance with this Agreement shall be calculated on a Licensed Product-by-Licensed Product and country-by-country basis and reported for each Calendar Quarter within forty-five (45) calendar days following the end of the quarter.

Each quarterly report shall include the following pieces of information provided for each Licensed Products and each country where sales have actually been made:

Licensed Product and country of sales;

gross sales and sublicensing revenue in local currency;

exchange rates used in determining the amount of USD;

gross sales and sublicensing revenue in USD;

deductions from sales and sublicensing revenue to calculate Net Sales and Sublicensing Revenue pursuant to the definition of Net Sales and Sublicensing Revenue; for the avoidance of doubt, the amount of each deduction listed in the definition of Net Sales shall be detailed;

Royalty rate applied to calculate Royalty Payments;

Net Sales and Sublicensing Revenue in USD to be divided into (i) Net Sales relating to Licensed Products based on [___] and (ii) Net Sales relating to Licensed Products based on [___]; [Nature of constructs omitted as competitively sensitive information.];

gross Royalty Payments in USD;

withholding taxes, if any, required by law to be deducted from gross Royalty Payments or Milestone Payments;

net Royalty Payments actually owed and to be paid to NI.

Based on the quarterly reports received, and further upon the occurrence of any Milestone Event, NI will provide to LICENSEE correct and duly detailed invoices, and invoices shall be paid within thirty (30) days of receipt.

In the event that any payment due hereunder is not made when due, the payment shall accrue interest from the due date at the rate of five percent (5%) per annum The payment of such interest shall not limit NI from exercising any other rights it may have because of non-payment or late payment.

All fees and royalties are being understood and agreed as net of taxes such as VAT (as defined) or other levies. To the extent any fees and royalties are subject to taxation in any jurisdiction, LICENSEE agrees to bear such taxes.

All fees and royalties shall be paid free and clear of all deductions and withholdings whatsoever, unless the deduction or withholding is required by law or any governmental agency. If any deduction or withholding is required by law, LICENSEE shall pay to NI such sum as will, after the deduction or withholding has been made, leave NI with the same amount as it would have been entitled to receive in the absence of any such requirement to make a deduction or withholding.

The Parties shall cooperate and exercise their Commercially Reasonable Efforts (as defined) to ensure that any withholding taxes imposed on LICENSEE are reduced as far as possible under the provisions of the applicable double tax treaty. LICENSEE shall furnish NI with the best available evidence of payment whenever LICENSEE deducts such tax from any payments due to NI.

If VAT is owed on fees and royalties hereunder and cannot be settled by filing a notification instead of paying the VAT, VAT (or equivalent tax) shall be added to the applicable fee or LICENSEE shall pay the royalty and such VAT (or equivalent tax) owing. The Parties shall cooperate and exercise their Commercially Reasonable Efforts (as defined) to allow to the extent possible under applicable laws and regulations recovery of any such VAT (or equivalent tax) paid. In particular, NI shall provide invoices in accordance with applicable VAT law and any other documentation reasonably required by LICENSEE to obtain a refund of such VAT.

As from completion of the [___], the LICENSEE shall have the right to notify NI in writing at any point in time henceforth during the Term of its interest to purchase (i) the Licensed Patents (as defined) and (ii) the Know-How (as defined) and a royalty-free license for other IP controlled by NI as reasonably necessary to commercialize the Constructs. Upon receipt by NI of such notification, the Parties shall negotiate in good faith and endeavour to agree on the terms of such IP purchase, including, without limitation, on the purchase price [___].

For the avoidance of doubt, however, failing an agreement to execute the requested IP purchase by LICENSEE, the Construct License shall continue unaffected, and LICENSEE shall have the right to notify its interest to purchase again at any time [___]. If and when an agreement can be reached, the parties will work expeditiously to complete the purchase and sale contemplated within this Section 4.9 within [___] days of LICENSEE's written notice upon customary terms acceptable to both Parties acting reasonably and in good faith.

During the Term, NI shall not assign, sell or transfer any of Licensor’s right, title or interest in or to Licensed Patents or the Know-How to a Third Party unless:

NI has first, by written notice to LICENSEE, offered to LICENSEE the right to acquire from NI such right, title or interest proposed to be assigned, sold or transferred by NI [___]; and

LICENSEE has not accepted NI’s offer by written notice of acceptance within [___] days after receipt by LICENSEE of NI’s offer;

LICENSEE shall keep full and accurate accounting records related to the Net Sales and Sublicensing Revenues of Licensed Products and all reporting obligations according to this Agreement in sufficient detail and in compliance with internationally accepted accounting and bookkeeping standards (International Financial Reporting Standards (IFRS) or Generally Accepted Accounting Principles (GAAP)). Such records, together with all necessary supporting data, shall be kept at LICENSEE's offices at the address set forth above or such other address as LICENSEE may communicate in writing to NI.

Upon reasonable notice to LICENSEE, NI shall have the right during normal business hours to have an independent certified public accountant, selected by NI and reasonably acceptable to LICENSEE, to audit on a confidential basis LICENSEE's records pertaining to Net Sales and Sublicensing Revenue of Licensed Products to verify fees and royalties payable pursuant to this Agreement; provided, however, that such audit shall not (a) take place more frequently than once in a Calendar Year (as defined), or (b) cover records for more than the preceding three (3) years.

If deemed necessary in the sole discretion of the accountant, the accountant shall, at NI’s expense, be permitted to consult with and obtain the assistance of consultants selected by the accountant and reasonably acceptable to LICENSEE.

The results of the examination shall be final and binding on the Parties, subject to either Party's right to bring the case to arbitration in accordance with Section 10.12, but solely on the ground of arbitrary findings of the examination.

NI shall own any and all existing IP in the Constructs.

LICENSEE shall own any and all newly created IP resulting from the exploitation of the Construct License, such as, without limitation, IP in Construct modifications, improvements and innovative combinations of either of the Constructs with newly developed or existing other constructs and any filings with regulators, including, without limitation, IND, and any marketing authorisations and other regulatory approvals filed or obtained by or under the control of LICENSEE during the Term (all together referred to as Edesa IP).

LICENSEE shall be responsible to prosecute, maintain and enforce upon its sole discretion (such discretion to be exercised, however, in compliance with, and to be without prejudice to, the terms and conditions of this Agreement, including, without limitation, this Section 6) the Licensed Patents and Edesa IP.

In the event that LICENSEE decides to cease prosecution or maintenance of any Licensed Patent and/or Edesa IP, it shall promptly (but in any case not less than three months prior to such ceasing of prosecution or maintenance) notify NI of that election, and it shall be NI's sole and unrestricted option to prosecute or not at its own expense.

For the avoidance of doubt, if any of the Licensed Patent or Other Licensed IP belongs to a patent family disclosing and claiming inventions other than the Constructs, then NI shall control its prosecution. In the event that NI decides to cease prosecution or maintenance of such Licensed Patent or Other Licensed IP, it shall promptly (but in any case not less than three months prior to such ceasing of prosecution or maintenance) notify LICENSEE of that election, and it shall be LICENSEE's sole and unrestricted option to prosecute or not at its own expense.

If, during the term of this Agreement, either Party becomes aware that any Third Party is infringing any Licensed Patents, Know-how or Other Licensed IP, it shall promptly notify the other Party and provide to the other Party all non-privileged information in its possession concerning such infringement.

LICENSEE shall have the first right to instigate action and legal proceedings against such Third Party, and NI shall provide such assistance as LICENSEE may reasonably request. LICENSEE shall bear the expense of any legal proceeding instigated by it. If LICENSEE does not timely instigate appropriate action or legal proceedings against the Third Party infringement, or if any action or legal proceedings instigated by LICENSEE do not reasonably protect NI's interest in the Licensed Patents, NI shall have the right but no obligation whatsoever to instigate any action and/or legal proceedings against the Third Party as NI deems reasonable in its own discretion.

If an infringement concerns a patent or any other IP owned by LICENSEE, LICENSEE shall have sole discretion in the decision to instigate legal proceedings at its expense.

To the knowledge of NI and as per the Effective Date, there are no current, pending or threatened legal claims, objections, litigation, judgments or settlements against the Licensed Patents and the Know-How pursuant to the Construct License and to the knowledge of NI, the Licensed Patents and the Know-How pursuant to the Construct License do not infringe on any IP of a Third Party. However, LICENSEE acknowledges that NI has not conducted, and was under no obligation to conduct, any FTO analysis or other research of potential conflicts with Third Party IP.

NI does not represent nor warrant or covenants, nor does NI assume any liability whatsoever towards LICENSEE or any other person, that the exploitation of the Construct License does not or may not infringe upon any IP of a Third Party. It shall be LICENSEE's sole responsibility to conduct due FTO analyses in view of any intended exploitation.

Each Party represents, warrants and covenants that: (i) it has the requisite power and authority to enter into, execute, deliver and perform its obligations under this Agreement; and (ii) it is in compliance with all applicable laws related to such performance, including having obtained all necessary permits and licenses; and (iii) it has not entered and will not enter into any agreements inconsistent with the provisions hereof.

Other than expressly provided for in section 6.4(a), no Party does represent or warrant nor does it assume any liability of any kind for the validity and/or enforceability of any IP involved in the exploitation of the Construct License, nor for the efficacy or merchantability of the Constructs or Licensed Products.

NI does not represent or warrant nor does it assume any liability that governmental authorities or any other institution or supervisory board or similar agencies shall approve the Licensed Products. NI does not represent or warrant that any Licensed Products made or having been made by LICENSEE nor any other activities by LICENSEE under or in relation with this Agreement do not infringe upon IP of Third Parties, subject however to the representations and warranties set forth in sub-paragraph (f).

NI represents and warrants that, to the knowledge of NI and as per the Effective Date, there are no legal claims, litigation, judgments or settlements, whether against or owed by NI or pending legal claims or litigation, in each case relating to the Constructs, the Licensed Patents and the Know-How or NI’s rights thereto, and to the knowledge of NI, there are no current, pending or threatened legal claims or objections relating to the Licensed Patents, Constructs, or NI’s rights thereto.

NI represents and warrants that it owns all right, title and interest in and to the Licensed Patents, Know-how and Other Licensed IP, and has the right to grant the LICENSEE the rights and licenses that it purports to grant hereunder and has not granted any Third Party rights that would interfere or be inconsistent with the LICENSEE’s rights hereunder.

Notifications of and/or claims for misrepresentations and/or breaches of warranties may be made, raised and filed as provided for by the applicable law.

Neither Party shall be liable to the other Party, under whatever theory, for any indirect, special, punitive or consequential damages, or loss of profit, loss revenue, or loss of opportunity, for any cause of action a Party may have against the other Party arising hereunder.

All liabilities and obligations for indemnification hereunder shall expire two (2) years from the date of termination or expiry of this Agreement, except with respect to claims already notified to the other Party prior to the end of such two (2) year period.

Each Party shall keep strictly confidential all Confidential Information (as defined) obtained from or about the other Party, and it shall have its officers and employees execute confidentiality covenants duly protecting such Confidential Information of the other Party.

Each Party agrees (i) not to use Confidential Information received from the other for any purpose other than the performance of its obligations hereunder, and (ii) not to disclose Confidential Information so received to any Third Party, except as is required by mandatory statutes or a court, stock exchange or governmental authority or otherwise for the good faith performance of its obligations and exercise of its rights hereunder (e.g., for patent filings, for the filing of applications for regulatory approvals, etc.).

In the event that a disclosure of Confidential Information to a Third Party becomes necessary or required, and such disclosure is not otherwise permitted under this Agreement, the Receiving Party (as defined) requested to disclose shall give to the Disclosing Party (as defined) the greatest practical prior written notice so as to permit the latter to take all possible action to perfect and/or safeguard its rights in the Confidential Information.

The obligations of the Parties relating to Confidential Information shall expire five (5) years after termination or expiry of this Agreement.

Each Party shall be as careful to preserve the confidential nature of the other Party's Confidential Information as it is with its own proprietary information.

Subject to any statutory, governmental or stock exchange disclosure requirements, neither Party shall make any public announcement concerning the transactions contemplated herein or make any public statement which includes the name of the other Party or any of its Affiliates, or otherwise use the name of the other Party or any of its Affiliates in any public statement or document without the written consent of the other Party.

This Agreement shall enter into force on the Effective Date and shall remain in effect for twenty-five (25) years from the First Commercial Sale in the first country (the Initial Period).

Subsequently, the Agreement shall automatically and repeatedly renew for five (5) year periods (the Renewal Periods) unless either Party terminates the Agreement by giving notice of termination to the other Party at least six (6) months prior to the expiry of the Initial Period or a Renewal Period (the Initial Period and the Renewal Periods constitute the Term of the Agreement).

This Agreement may be terminated upon written notice by NI if the LICENSEE (i) makes a general assignment for the benefit of creditors; (ii) files any petition, or commences any proceeding voluntarily, for any relief under any bankruptcy or insolvency laws or any law relating to the relief of debtors; (iii) consents to the entry of an order in an involuntary bankruptcy or insolvency case; (iv) is the subject of an order or decree for relief against it by a court of competent jurisdiction in an involuntary case under any bankruptcy or insolvency laws or any law relating to the relief of debtors, which order or decree is unstayed and in effect for a period of 60 consecutive days; (v) is subject to appointment, with or without its consent, of any receiver, liquidator, custodian, assignee, trustee, sequestrator or other similar official of such other Party or any substantial part of its property; or (vi) admits in writing of its inability to pay its debts generally as they become due.

If NI alleges that the LICENSEE has failed to use Commercially Reasonable Efforts to develop the Constructs in accordance with the Development Plan by failing to meet the Development Targets, NI shall provide the LICENSEE with written notice. If Commercially Reasonable Efforts to develop the Constructs in accordance with the Development Plan have not commenced within sixty (60) days of receipt of written notice of such failure by the LICENSEE, or if such Commercially Reasonable Efforts have commenced in time but are discontinued and not resumed by LICENSEE within thirty (30) days of another written notice, NI may serve notice of termination with immediate effect of the Agreement.

Upon termination or expiry of this Agreement, LICENSEE shall remain entitled to continue to use any Know-How available to LICENSEE as of the date of the termination or expiry of this Agreement. For the avoidance of doubt, this right of continued use does not refer to the use of (i) any of the Licensed Patents or Other Licensed IP still in force at the time of termination and (ii) any additions to the Know-How as available upon termination or expiry of the Agreement.

To the extent the sale of Licensed Products is still covered by Licensed Patents or Other Licensed IP upon termination of this Agreement, LICENSEE and its Affiliates and sub-licensees shall be permitted to sell Licensed Products during a period of one-hundred-twenty (120) days of termination, provided, however, that the sale of such Licensed Products will be subject to the terms of this Agreement including, but not limited to, the payments due and at the rates and times provided herein and the rendering of reports in connection therewith.

The termination or expiry of this Agreement for any reason shall not relieve the Parties of any obligations accruing prior thereto and shall be without prejudice to the rights and remedies of either Party with respect to the breach of any of the provisions of this Agreement.

Upon Termination for Cause of this Agreement by NI, LICENSEE shall provide, and hereby grants, a non-exclusive, irrevocable, and royalty-free license to make use of Edesa IP as is reasonably necessary for NI to commercialize the Constructs.

Sections 5, 6.1, 6.2, 7.2, 7.3, 8, 9.3 and 10 shall survive any expiry or termination of this Agreement.

All notices hereunder shall be in writing and shall be delivered personally, mailed by overnight delivery, registered or certified mail, postage prepaid, mailed by express mail service or given by facsimile or by electronic mail to the designated representative(s) of the Parties at the following addresses of the respective Parties:

Notices shall be effective upon receipt if personally delivered, on the third Business Day (as defined) following the date of mailing if sent by certified or registered mail, and on the second Business Day following the date of delivery to the express mail service if sent by express mail, or the date of transmission if sent by facsimile. A Party may change its address listed above by written notice to the other Party.

Any delay in the performance of any of the duties or obligations of either Party under this Agreement caused by an event outside the affected Party's reasonable control shall not be considered a breach of this Agreement, and the time required for performance shall be extended for a period equal to the period of such delay. Such events shall include, without limitation: acts of God; acts of terrorism; riots; embargoes; labour disputes, including strikes, lockouts, job actions, or boycotts; fires; explosions; earthquakes; floods; shortages of material or energy; or other unforeseeable causes beyond the reasonable control and without the fault or negligence of the Party so affected. The Party so affected shall give prompt notice to the other Party of such cause and shall take whatever reasonable steps are necessary to relieve the effect of such cause as rapidly as possible.

Notwithstanding the foregoing, the Parties acknowledge that uncertainties and events outside control of the Parties related to the ongoing COVID-19 pandemic, such as emergency proclamations by national governments, quarantines and travel restrictions, may prevent performance under this Agreement. The Parties agree to enter into good faith negotiations to amend development and milestones timelines specified in this Agreement if a Party provides notice to the other Party that such events prevent the Party, in spite of its good faith and diligent efforts, to meet its performance obligations.

as reasonably evidenced by the Receiving Party, was generally available to the public at the time of disclosure, or information that becomes available to the public after disclosure by the Disclosing Party other than through fault (whether by action or inaction) of the Receiving Party or its Affiliates,

can be evidenced by written records to have been already known to the Receiving Party or its Affiliates prior to its receipt from the Disclosing Party,

is obtained at any time lawfully from a Third Party under circumstances permitting its use or disclosure, as reasonably evidenced by the Receiving Party,

is developed independently by the Receiving Party or its Affiliates as evidenced by written records other than through knowledge of Confidential Information,

is required to be disclosed by the Receiving Party of its Affiliates to comply with a court or administrative order provided the Receiving Party or its Affiliates furnishes prompt notice (in no event less than three (3) Business Days) to the Disclosing Party to enable it to resist such disclosure, provided however that the exception in this sub-paragraph (e) shall apply only for the purpose of complying with such court or administrative order and that, for the avoidance of doubt, such disclosed information shall otherwise remain Confidential Information,

is required to be disclosed by the Receiving Party to fulfill stock exchange disclosure requirements, or

is approved in writing by the Disclosing Party for release by the Receiving Party.

credits, reserves or allowances granted for (i) damaged, outdated, returned, rejected, withdrawn or recalled Licensed Product, (ii) wastage replacement and short-shipments; (iii) billing errors and (iv) indigent patient and similar programs (e.g., price capitation);

governmental price reductions and government mandated rebates;

chargebacks, including those granted to wholesalers, buying groups and retailers;

customer credits, rebates, including cash sales incentives for prompt payment, cash and volume discounts, wholesaler and pharmacy allowances including initial distribution allowances;

freight, fees for services charges, postage and duties, shipping and insurance charges relating to such Licensed Product;

taxes, duties and any other governmental charges or levies imposed upon or measured by the import, export, use, manufacture or sale of a Licensed Product (excluding income or franchise taxes).