Exhibit 10.3

 

COLLABORATION AGREEMENT

 

THIS COLLABORATION AGREEMENT (“Agreement”) is made and entered into as of
December 17, 2019 (the “Effective Date”)

 

BETWEEN:

 

GENECOR AI INC., a corporation formed under the laws of the
Province of Ontario (“GENECOR”);

 

-and-

 

FRELII INC., a corporation formed under the laws of the State of Utah;
(“FRELII”)

 

WHEREAS Frelii has developed certain proprietary Artificial Intelligence
software platforms in the area of biomedical analysis; and

 

WHEREAS Frelii has agreed to grant to Genecor certain rights to act as Frelii’s
authorized sales representative, or to directly sublicense, products relating to
Frelii’s software platforms within the Territory, subject to the terms and
conditions of this Agreement.

 

NOW THEREFORE, in consideration of the foregoing premises and the mutual
covenants set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereto, intending to be legally bound, hereby agree as follows:

 

Article I
GENERAL MATTERS

 

1.1Definitions.

 

In this Agreement, the following terms will have the meanings set out below
unless the context requires otherwise:

 

“Affected Obligations” has the meaning set forth in Section 14.1(a).

 

“Affiliate” of a Party means any other individual, corporation, partnership,
joint venture, limited liability company, Governmental Authority, unincorporated
organization, trust, association or other entity that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such individual, corporation, partnership, joint venture,
limited liability company, Governmental Authority, unincorporated organization,
trust, association or other entity. The term “control” (including the terms
“controlled by” and “under common control with”) means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of an individual, corporation, partnership, joint venture, limited
liability company, Governmental Authority, unincorporated organization, trust,
association or other entity, whether through the ownership of voting securities,
by contract or otherwise.

 

“Agreement” means this Collaboration Agreement.

 

   

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“Applicable Law” means any domestic or foreign statute, law (including the
common law), ordinance, rule, regulation, restriction, by-law (zoning or
otherwise), order or any consent, exemption, approval or license of any
Governmental Authority, that applies in whole or in part to the transactions
contemplated by this Agreement, the Products, Genecor, Frelii and their
respective Affiliates, including, without limitation, the Controlled Drugs and
Substances Act (SC 1996, c 19), the Cannabis Act and the Regulations, as the
same may be amended, modified or replaced from time to time.

 

“Audit” has the meaning set forth in Section 8.2(a).

 

“Audit Report” has the meaning set forth in Section 8.2(c).

 

“Bankruptcy Proceeding” means, in relation to a Party: (a) the making of an
assignment or arrangement for the benefit of creditors; (b) the filing by such
Party of a petition or commencement of proceedings under any bankruptcy or
similar law, or having such a petition filed or proceeding commenced with
respect to such Party by another person, where such petition or proceeding of
such other person is not dismissed for a period of 90 calendar days; (c) the
levy of an attachment for execution against the whole or any material part of
its assets; (d) such Party becoming insolvent or unable to pay its debts as they
generally become due as determined by a court of competent jurisdiction; or (e)
such Party stops, suspends or threatens to stop or suspend payment of all or a
material part of its indebtedness or begins negotiations or takes any other step
with a view to the deferral, rescheduling or other readjustment of all or a
material part of its indebtedness.

 

“Board of Directors” means the Board of Directors of Frelii Inc., as the same
may be changed, modified, or replaced from time to time.

 

“Cannabis Act” means Bill C-45 “An Act respecting cannabis and to amend the
Controlled Drugs and Substances Act, the Criminal Code and other Acts” (Canada),
as amended from time to time and as the same may come into force, and includes
all written publicly available notices, guidance, guidelines and ancillary rules
or regulations promulgated thereunder or in connection therewith.

 

“Change of Control” means with respect to Genecor (i) the acquisition of
securities of Genecor representing more than 50% of the combined voting power of
Genecor’s then outstanding securities by any person or group of persons, (ii)
the consummation of a merger or consolidation of Genecor with or into another
entity in which a majority of the voting power of the capital stock of the
continuing or surviving entity will be owned by the persons who were Genecor’s
equity holders immediately prior to such merger or consolidation in
substantially the same proportions as their ownership immediately prior to such
merger or consolidation, (iii) the dissolution, liquidation or winding up of
Genecor, or (iv) the sale, transfer or other disposition of all or substantially
all of the assets of Genecor.

 

“Change of Law” has the meaning set forth in Section 14.1(a).

 

“Change of Law Amendment” has the meaning set forth in Section 14.1(b).

 

“Change of Law Notice” has the meaning set forth in Section 14.1(a).

 

“Change Period” has the meaning set forth in Section 14.1(b).

 

   

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“Confidential Information” means non-public, confidential, personal or
proprietary information concerning a Party and its Affiliates and its and their
respective businesses and affairs that is or has been disclosed by one Party (a
“Disclosing Party”) to the other Party (the “Recipient”) in connection with the
transactions contemplated by this Agreement, including the existence of, the
terms and conditions of, the status of the transaction contemplated by, or any
other facts pertaining to, this Agreement, any information about identifiable
individuals or any other information relating to a Party and its Affiliates,
customers, suppliers, partners, investors, employees and consultants, but in
each case does not include: (a) information that the Recipient can demonstrate:
(i) is or has become generally available to the public other than as a result of
disclosure by the Recipient or its Affiliates or representatives; (ii) is
received by the Recipient or its Affiliates or representatives from an
independent third-party that obtained it lawfully and was under no duty of
confidentiality; (iii) was in its possession or the possession of its Affiliates
or representatives prior to the disclosure of such information by the Disclosing
Party; (iv) was independently developed by the Recipient or its Affiliates or
representatives without the use of or reference to any Confidential Information;
or (v) is disclosed pursuant to a valid and enforceable order of a court or
other Governmental Authority having jurisdiction over a Recipient provided that
the Recipient shall, to the extent possible, first notify the Disclosing Party
in writing of such requirement and fully cooperate with respect to any
reasonable steps possible to further protect the Confidential Information; nor
(b) any information that is disclosed pursuant to a written or verbal demand
from a Governmental Authority provided that the Recipient shall, to the extent
possible, first notify the Disclosing Party of such requirement.

 

“Designated Representative” has the meaning set forth in Section 9.1(a).

 

“Documentation” means any reports, analyses, scripts, code or other work results
which have been delivered by Frelii to Genecor pursuant to this Agreement.

 

“Effective Date” has the meaning set forth in the recitals.

 

“End-User” means each entity located within the Territory who, for its own
internal business purposes (not for resale or use in a time-sharing arrangement
with others) obtains the Products directly from Genecor or its Subcontractor, or
directly from Frelii but pursuant to a purchase order secured by Genecor in its
capacity as of sales representative under Section 2.1(b) hereof, for use solely
within the Field and within the Territory.

 

“End-User License Agreement” means the then-current electronic “click-through”
license or other end-user license between End-User and Frelii or a third party
Software manufacturer, as applicable, governing End-User’s use of the Products.
All such End-User License Agreements shall be on a form provided, or otherwise
approved, by Frelii or the third party Software manufacturer, as applicable.

 

“Event of Default” has the meaning set forth in Section 15.3.

 

“Field” means genetic testing of patients for the purpose of selection and use
of cannabis for medical purposes.

 

“Frelii Property” means all rights of Intellectual Property in and to the
Products or Documentation (including all derivatives or improvements thereof),
any patents, processes, software, code, files, technology, templates, forms,
scripting, trade secrets, any Frelii products, reports, ideas, concepts,
operations, plans or intentions, know-how, market opportunities, customers,
business affairs, development plans and financial information, any suggestions,
information, enhancements, requests, feedback, recommendations or other input
provided by any person or party relating to the Products or Documentation, and
any such item created by Frelii in developing or providing the Products.

 

“Governmental Authority” means any: (a) multinational, national, federal,
provincial, territorial, state, regional, municipal, local or other government
or any governmental or public department, court, tribunal, arbitral body,
statutory body, commission, board, bureau or agency; (b) self-regulatory
organization, regulatory authority, administrative tribunal or authority; (c)
subdivision, agent, commission, board or authority of any of the foregoing; or
(d) quasi-governmental or private body exercising any regulatory, expropriation
or taxing authority under or for the account of any of the foregoing.

 

   

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“Gross Revenue” means all revenue and other cash or like forms of consideration
(accounted for in accordance with GAAP) that is (i) received by, paid to or for
the account of, or for the benefit of Genecor (including as may be paid to
Genecor Affiliates, representatives, Subcontractors, employees, directors or
agents) and generated, directly or indirectly, from the resale of the Products
in accordance with Section 2.1(a) hereof, or (ii) received by, paid to or for
the account of, or for the benefit of Frelii as a result of a sale of Products
resulting solely and exclusively from to a purchase order secured by Genecor in
its capacity of sales representative under Section 2.1(b). For the avoidance of
doubt, “Gross Revenue” shall include, but shall in no way be limited to,
revenues (in any form) received for Product pilots, evaluations, and trials,
royalties, commissions, and consulting fees, and such other ancillary revenues
generated (directly or indirectly) by the sale or licensing of the Products or
any solicitation for such.

 

“Indemnified Party” has the meaning set forth in Section 13.1(a).

 

“Indemnifying Party” has the meaning set forth in Section 13.1(a).

 

“Intellectual Property” means patents, rights to inventions, copyright and
related rights, moral rights, trademarks and service marks, trade names and
domain names, rights in get-up, rights to goodwill or to sue for passing off or
unfair competition, rights in designs, rights in computer software, database
rights, rights in confidential information (including know-how and trade
secrets) and any other intellectual property rights, in each case whether
registered or unregistered and including all applications (or rights to apply)
for, and renewals or extensions of, such rights and all similar or equivalent
rights or forms of protection which subsist or will subsist now or in the future
in any part of the world.

 

“International Territory” means all countries throughout the world, except the
Canadian and US Territories.

 

“Losses” means any loss, injury, liability, damage, cost, expense (including
reasonable legal and consulting fees and disbursements), suffered or incurred by
a Party, including in respect of any proceeding, assessment, judgment,
settlement or compromise relating thereto.

 

“Minimum Sales Quota” means, with respect to Canada, an 18-month rolling average
of Gross Revenue equal to $1,000,000 for the initial term. Subsequent targets
shall be set annually and mutually agreed amongst the parties.

 

“Genecor” has the meaning set forth in the recitals.

 

“Genecor Initial Application” has the meaning set forth in Section 6.1(b).

 

“Overpayment” has the meaning set forth in Section 8.2(d).

 

“Parties” means Genecor and Frelii and “Party” means either one of them.

 

“Products” means Software provided or made available by Frelii to Genecor for
distribution or solicitation for sale under this Agreement, as more specifically
described on Exhibit A hereto, which Exhibit may be updated by Frelii from time
to time in its sole discretion.

 

“Records” means all ancillary, intermediate and final documents, work product,
records, reports, manuals, notes, designs, specifications, configurations and
materials prepared by Genecor or any of its Affiliates or representatives in
connection with the transactions contemplated by this Agreement including all
books, records, logs, files, assessments and reports relating to: (a) the Sales
Reports; (b) the Products; (c) Gross Revenue; (d) Approved Operating Costs;
and/or (e) the Minimum Sales Quota.

 

   

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“Records Request” has the meaning set forth in Section 8.1(c).

 

“Regulations” means the Access to Cannabis for Medical Purposes Regulations
(SOR/2016-230), as the same may be amended, modified or replaced from time to
time, and similar regulations in other parts of the Territory.

 

“Regulatory Approval” means all requisite approvals by a Regulatory Authority,
including but not limited to Health Canada, for Genecor to market, advertise,
promote, and sublicense the Products or solicit the same for sale.

 

“Regulatory Authority” means any applicable government entity regulating or
otherwise exercising authority with respect to the development and
commercialization of the Products.

 

“Retention Period” has the meaning set forth in Section 8.1(b).

 

“Sales Reports” has the meaning set forth in Section 7.2(a).

 

“Shares” means all of the common and preferred shares and other equity
securities of Genecor, regardless of class.

 

“Software” means, Navii, Frelii’s Artificial Intelligence software platform
proprietary to Frelii or third party software as the case may be as a service
platforms that Frelii has the right to license or otherwise distribute, together
with any additional features or functionality developed by Frelii for general
use that augment or enhance such platform.

 

“Third Party” has the meaning set forth in Section 2.2.

 

“Underpayment” has the meaning set forth in Section 8.2(d).

 

1.2Currency

 

Unless otherwise indicated, all dollar amounts referred to in this Agreement are
stated in lawful money of the United States and “$“ refers to United States
dollars. Where Products are licensed or sublicensed for monies other than United
States dollars, payments will first be determined in the foreign currency of the
country in which the Products are licensed or sublicensed, then converted into
equivalent United States dollars. The exchange rate will be the United States
dollar buying rate quoted in the Wall Street Journal on the last day of the
reporting period.

 

1.3Interpretation Not Affected by Headings or Party Drafting

 

The division of this Agreement into articles, sections, paragraphs,
subparagraphs and clauses and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement. The terms “hereof”, “herein”, “hereunder” and similar expressions
refer to this Agreement hereto and not to any particular article, section,
paragraph, clause or other portion hereof and include any agreement or
instrument supplementary or ancillary hereto. The Parties acknowledge that their
respective legal counsel have reviewed and participated in settling the terms of
this Agreement and the Parties hereby agree that any rule of construction to the
effect that any ambiguity is to be resolved against the drafting Party shall not
be applicable in the interpretation of this Agreement.

 

   

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1.4Inclusive Language

 

The words “include”, “includes” and “including” and other derivations thereof
shall be read as if followed by the phrase “without limitation”.

 

1.5Number and Gender

 

In this Agreement, unless there is something in the subject matter or context
inconsistent therewith: (a) words in the singular number include the plural and
such words will be construed as if the plural had been used; (b) words in the
plural include the singular and such words will be construed as if the singular
had been used; and (c) words importing the use of any gender include all genders
where the context or Party referred to so requires, and the rest of the affected
sentence will be construed as if the necessary grammatical and terminological
changes had been made.

 

1.6Statutory References

 

In this Agreement, unless something in the subject matter or context is
inconsistent therewith or unless otherwise herein provided, a reference to any
statute is to that statute as now enacted or as the same may from time to time
be amended, re-enacted or replaced and includes any regulations made thereunder.

 

Article II

GRANT OF RIGHTS

 

2.1Subject to the terms of this Agreement, Frelii hereby appoints Genecor, and
Genecor hereby accepts such appointment:

 

  (a) As Frelii’s independent, authorized sublicensor during the Term, with the
exclusive right to market, license and distribute the Products to End-Users in
Canada, and         (b) To act, during the Term, as the exclusive independent
sales representative of the Products to End-Users in Canada.

 

2.2In exercising the rights granted to it under Section 2.1 hereof, Genecor may,
with the prior written consent of Frelii, elect to engage additional
subcontractors to assist in fulfilling Genecor’s obligations hereunder (each, a
“Subcontractor”). Genecor shall enter into a written agreement with each
Subcontractor, in a form to be approved in advance by Frelii, requiring that
such Subcontractor comply with all applicable terms and conditions of this
Agreement, and naming Frelii as an intended third party beneficiary of such
written agreement. Notwithstanding anything herein to the contrary, Genecor
shall bear full responsibility for any acts or omissions of any Subcontractor,
and the engagement by Genecor of any Subcontractor shall in no way relieve
Genecor of any duty, obligation, or liability set forth in or arising out of
this Agreement. Genecor shall not grant any rights of exclusivity to any
Subcontractor without the express prior written consent of Frelii.

 

2.3During the Term, Frelii will not, directly or indirectly, permit, license or
appoint any other person, firm, business entity, corporation or other third
party (“Third Party”) (i) to license, market or distribute the Products to
End-Users in Canada, or (ii) to act as a sales representative of the Products to
End-Users in Canada.

 

   

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2.4 If Frelii receives notice from Genecor that a Third Party is (i) licensing,
marketing or distributing the Products to End-Users in Canada, or (ii) acting as
a sales representative of the Products to End-Users in Canada, Frelii shall
immediately notify such Third Party to forthwith cease and desist from engaging
in such activities in Canada. Frelii shall take such steps or legal proceedings
as it deems reasonably necessary or advisable, as determined in its sole
discretion.     2.5 Frelii agrees that throughout the Term, Frelii shall use its
commercially reasonable efforts to direct all legitimate inquiries from within
Canada with respect to the Products, which may come directly to it, to Genecor
for completion of such licenses.     2.6 Genecor agrees that neither Frelii nor
anyone acting on its behalf or purporting to represent it have made any
representations or agreements to induce it to enter into this Agreement. No
representations have been made concerning prospects for successful operations,
the level of business or profits that Genecor might reasonably expect, or
similar matters, all of which Genecor acknowledges are dependent upon variables
beyond Frelii’s control, including, without limitation, the ability, motivation,
and amount and quality of effort expended by Genecor. Genecor hereby releases
Frelii, its affiliates, officers, directors, employees or agents from any
claims, suits or demands related to any such representations or risk of
operations of the business. Specifically, Genecor agrees that Frelii has made no
guarantees or representation that: (i) it will find customers or locations for
Genecor, or (ii) it will purchase products or services from Genecor, or (iii)
Genecor will or may derive income of any particular level or will provide a
program which will enable Genecor to derive income of any particular level, or
(iv) that it will provide a marketing plan for Genecor, or (v) that there is a
market for the Products.

 

Article III

GENECOR OBLIGATIONS

 

3.1 With respect to the rights granted it under Section 2.1(a), Genecor shall
order the DNA kits directly from Frelii by submitting written or electronic
purchase orders, signed or otherwise authorized by an authorized representative
of Genecor (each, an “Order”). Each Order must designate the Products and
quantity desired, applicable price, and requested delivery dates. An Order is
binding for both Parties when Frelii has accepted the Order by either sending an
e-mail or other writing, or by making the Products available to Genecor. Frelii
shall provide to Genecor its list of products and update thereto on a timely
basis.     3.2 Genecor shall, in good faith:

 

  (a) Market, advertise, promote, and sublicense or solicit for license, as the
case may be, the Products to End-Users in the Territory consistent with good
business practice, in each case using its commercially reasonable efforts to
maximize the volume of the Products licensed;         (b) Initiate and attend
calls and meetings with prospective and existing customers;         (c) Have
sufficient knowledge of the industry and products competitive with the Products
(including specifications, features and benefits) so as to be able to explain in
detail to the End-User (i) the differences between the Products and competing
products, and (ii) information on standard protocols and features of the
Products;         (d) Promptly inform Frelii of any legal requirements in the
Territory relating to the use or distribution of the Products or marketing
materials;

 

   

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  (e) Market, advertise, promote, sublicense and solicit for license the
Products and conduct business in accordance with Applicable Law, and in a manner
that reflects favorably at all times on the Products and the good name,
goodwill, and reputation of Frelii;         (f) Provide, at its own cost and
expense, adequate End-User support as more specifically set forth in Section
3.5; and         (g) Promptly (i) notify Frelii of any complaint or adverse
claim about any Product or its use of which Genecor becomes aware, and (ii)
diligently resolve, at its expense and to Frelii’s reasonable satisfaction, such
complaint or adverse claim. In connection with the foregoing, Frelii agrees to
provide to Genecor, [at no additional cost], any data reasonably available on
Frelii’s systems and that is required by Genecor for the research and resolution
of such complaints and adverse claims.         (h) Genecor has agreed it may
assist in capital funding initiatives for Frelii. Any capital raised will be
invested directly into Frelii will be taken into consideration when developing
targets for the ensuing business plan. For added clarity, the capital raised
will be grossed-up proportionately to offset the volume targets established by
the parties. Genecor shall be entitled to participated in the capital raised
commensurate to the equity investment held by Frelii at that time.

 

3.3 Notwithstanding anything to the contrary in this Agreement, neither Genecor
nor its representatives, Subcontractors, affiliates, agents, or personnel will:

 

  (a) Make any representations, warranties, guarantees, service level
commitments, indemnities, similar claims, or other commitments (i) actually,
apparently, or ostensibly on behalf of Frelii; or (ii) with respect to the
Products, that are in addition to or in any way inconsistent with any
then-existing representations, warranties, guarantees, service level
commitments, indemnities, similar claims, or other commitments in this Agreement
or any written documentation provided by Frelii to Genecor;         (b) Attempt,
in any way, to circumvent the revenue sharing provisions of Article VII, or to
hide, re-direct, disguise, obscure, withhold, omit, mischaracterize, or in any
way seek to exclude from inclusion in “Gross Revenue” any compensation Genecor
may receive, in any form, in connection with this Agreement;         (c) Engage
in any unfair, competitive, misleading, or deceptive practices respecting
Frelii, Frelii’s trademarks or the Products, including any product
disparagement;         (d) Remove, translate, or in any way modify the contents
or documentation of any Software, including, without limitation, any end user
license agreement or warranty statements; or         (e) Subject to Section 2.2,
hereof, sell, either directly or indirectly, or assign or transfer, any Products
to any person or entity when Genecor knows or has reason to suspect that the
person or entity may sublicense any or all of the Products to a Third Party.

 

3.4 Genecor shall be responsible for, and shall promptly provide at its own cost
and in accordance with industry standards, all direct End-User support,
including, without limitation, implementation and configuration services,
technical support, Product trainings, and general Product information.
Notwithstanding the foregoing, Frelii agrees to provide to Genecor, employee
training and consultation services with respect to complex technical questions.

 

   

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3.5 With respect to the exercise of the rights granted to Genecor under Sections
2.1(a)(i) and 2.1(b)(i) hereof, and beginning on the date that is eighteen (18)
months after the Effective Date, Genecor shall meet the Minimum Sales Quota of
$1M. In the event Genecor fails to achieve the Minimum Sales Quota, Frelii shall
have the right to convert the rights granted to Genecor pursuant to Sections
2.1(a)(i) and 2.1(b)(i) from exclusive to non-exclusive after giving a proper
and agreed cured period not to be less than 6 months. This change in
non-exclusivity will be on a country by country basis (e.g. only apply to the
jurisdiction in which the Minimum Sales Quota was not achieved). The Minimum
Sales Quota may be modified or amended from time to time by written agreement of
the Parties. To avoid any potential disagreement, the parties agree to hold
joint business planning sessions to develop, monitor and achieve Sales Quota
targets.     3.6 Notwithstanding anything to the contrary herein, Genecor is
prohibited from selling or licensing, or soliciting for sale or license, the
Products to any known or suspected competitor of Frelii. Frelii shall have the
absolute right to deny or void, at its discretion and with no liability to
Genecor, any transaction proposed or contemplated in connection with this
Agreement, the effect of which would be the provision, or possible provision, of
Products to any competitor of Frelii. Genecor shall ensure that any written
agreement entered into between Genecor and any End-User, Subcontractor, or other
third party with respect to the Products, contains language (i) prohibiting the
provision or transfer of Products to any competitor or suspected competitor of
Frelii, (ii) granting to Frelii and Genecor an absolute termination right for
any breach of such restriction, and (iii) naming Frelii as an intended third
party beneficiary under such agreement.     3.7 Genecor shall comply with all
Applicable Laws in performance of its obligations hereunder. As between Genecor
and Frelii, Genecor shall be solely and absolutely responsible for compliance
with local laws and regulations in the marketing, advertising, promotion, sale,
and sublicensing, and the solicitation for sale and licensing, of the Products.
Genecor will suggest to Frelii such updates to the Products as is necessary to
comply with local law, and Genecor agrees to reimburse Frelii for the cost of
making any such updates. Frelii disclaims any and all responsibility for legal
compliance in the International Territory.

 

Article IV
LICENSES

 

4.1 Subject to the terms of this Agreement and for the sole and exclusive
purpose of exercising the rights granted to it pursuant to Section 2.1(a),
Frelii grants to Genecor (i) a limited, personal, non-exclusive,
non-transferable, revocable right to distribute the licenses of the Products to
End-Users, subject to the End-User License Agreement, and (ii) a limited,
royalty-free, non-exclusive, non-transferable, revocable license to distribute
the then-current, generally available Documentation (to the extent such exists)
to End-Users in conjunction with the distribution of the applicable ordered
Products, solely for the purpose of supporting the End-User’s use of the
applicable ordered Products.     4.2 From time to time, Frelii may provide
Genecor (in connection with the rights granted to Genecor pursuant to Section
2.1) with demonstration materials, including without limitation, prototypes of
the Products, technical manuals, software, Documentation or materials
(“Demonstration Materials”), to be provided to prospective customers for the
purpose of evaluating the Products. Frelii hereby grants to Genecor a limited,
personal, non-exclusive, non-transferable, revocable right to use the
Demonstration Materials to demonstrate the Products to prospective customers in
strict accordance with all of the terms of this Agreement and solely to the
extent necessary to fulfill the purposes of this Agreement. Except where
Demonstration Materials disclosed contain only publicly available information,
prior to the disclosure of any Demonstration Materials to a prospective
customer, Genecor shall require such prospective customer to execute a
non-disclosure agreement in a form reasonably satisfactory to Frelii.

 

   

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4.3 The rights granted to Genecor with respect to the Products and Documentation
are that of a license only. No title to, or ownership of, the Products or
Documentation is transferred to Genecor. As between Genecor and Frelii, Frelii
shall at all times be and remain the sole and exclusive owner of all Frelii
Property. Frelii shall be under no obligation to update or modify the Products
or Documentation in any way. In providing the Products and Documentation
hereunder, Frelii does not and shall not be deemed to transfer to Genecor or
End-User any intellectual property rights therein, whether as “work-for-hire” or
otherwise, other than the right to use the same in accordance with this
Agreement. Should Genecor be deemed to acquire any ownership interest in the
Products or Documentation or any other Frelii Property, Genecor hereby assigns,
grants and conveys to Frelii all right, title and interest in and to any and all
such Products, Documentation or other Frelii Property. Genecor will execute and
deliver to Frelii such further assignments and take all such further actions as
Frelii may reasonably request to effect or evidence the assignment to and
vesting in Frelii of all such rights. All rights not expressly granted to
Genecor under this Agreement are reserved by Frelii. Genecor shall reproduce and
include copyright and other proprietary notices on and in any copies, including
but not limited to partial, physical or electronic copies of Products and/or
Documentation.     4.4 Except for the licenses expressly granted to Genecor
hereunder, no rights are granted and none shall be implied. Genecor shall not,
nor shall it permit any third party to: (i) cause or permit the copying or
reproduction of the Products or Documentation; (ii) translate, adapt, enhance,
supplement, vary or modify the Product or Documentation; (iii) disclose the
Product or Documentation to any third party; (iv) use or access the Products or
Documentation to build or support, and/or assist a third party in building or
supporting and services competitive to Frelii; (v) remove any proprietary
notices or labels from the Products or Documentation; (vi) disassemble,
decompile or reverse engineer the Products or create any derivative works based
thereon; or (vii) lease or enter into any time share, outsourcing, or service
bureau arrangement with respect to the Products.     4.5 In its exercise of its
rights under Section 4.1, Genecor may, upon the prior written approval of Frelii
and subject to any reasonable Frelii policies, market, advertise, promote,
sublicense or solicit for license the Products under its own name, brand, and
trademarks; provided, however, any and all such activities shall be and remain
subject to the terms and conditions of this Agreement.     4.6 All Product
licenses granted herein are for use of object code only. Genecor shall not,
without Frelii’s prior written consent (i) use Products in a service bureau,
application service provider or similar capacity; or (ii) disclose to any third
party the results of any comparative or competitive analyses, benchmark testing
or analyses of Frelii Products performed by or on behalf of Genecor or
End-Users.     4.7 Genecor shall not, without the prior, express written consent
of Frelii, incorporate any portion of the Frelii Property, including but not
limited to the Products, in any Genecor products or services.     4.8 In
connection with the licenses granted herein, Frelii agrees to:

 

  (a) Issue, from time to time and in its sole discretion, updates, revisions,
improvements, modifications, enhancements, bug fixes, patches or other error
corrections with respect to the Products or the Frelii platform as necessary to
maintain the Products and to facilitate proper functioning thereof;

 

   

 11 

 

  (b) Provide hosting services with respect to the Products; provided that
Frelii reserves the right to bill Genecor or the End-User (and Genecor agrees to
pay or to require the End-User to pay, as the case may be) a reasonable fee for
such hosting services; Frelii and Genecor acknowledge that providing such
hosting services may require or be conditioned on the execution of a separate
hosting agreement; It is hereby agreed that until such time that Genecor has
established sufficient volumes, Frelii will provide all hosting services and
support. Parties agree to discuss SLA’s and execute a separate agreement with
duties and responsibilities or each party.         (c) Provide Genecor employee
training and consultation services with respect to complex technical questions
in accordance with the provisions of Section 3 hereof; and         (d) Provide
customization and implementation services, provided that the terms (including
compensation) for the provision of such customization and implementation
services shall be negotiated on a case-by-case basis by the Parties, and shall
in each case be memorialized in a separate, executed statement of work.

 

Article V

WARRANTIES

 

5.1 Frelii makes no representations or warranties whatsoever with respect to the
Products, Documentation, or Demonstration Materials, or any services rendered by
it hereunder, except to the extent explicitly provided in the End-User License
Agreement. Frelii’s entire liability and Genecor’s and any End-User’s exclusive
remedies with respect to the Frelii representations and warranties shall be as
set forth in the End-User License Agreement.     5.2 THE WARRANTIES, IF ANY, IN
THIS SECTION 5 CONCERNING THE PRODUCTS ARE IN LIEU OF ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, WITH RESPECT TO THIS AGREEMENT OR THE PRODUCTS. FRELII
(INCLUDING ITS SUPPLIERS) MAKES NO OTHER EXPRESS OR IMPLIED WARRANTIES, OR
CONDITIONS WRITTEN OR ORAL. INSOFAR AS PERMITTED UNDER APPLICABLE LAW, ALL OTHER
WARRANTIES ARE SPECIFICALLY EXCLUDED, INCLUDING ANY IMPLIED WARRANTIES OR
CONDITIONS ARISING BY STATUTE, COURSE OF DEALING, OR USAGE OF TRADE, INCLUDING
BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR NON-INFRINGEMENT.

 

Article VI
DEVELOPMENT

 

6.1 Licensing.

 

  (a) It is acknowledged that the sale of the Products in the Territory may need
to be registered or licensed as contemplated under the Regulations and pursuant
to the laws of other jurisdictions in the Territory, and Genecor shall be
responsible for obtaining all such requisite approvals and licenses.         (b)
Frelii agrees that it will provide reasonable assistance to Genecor in preparing
the necessary items to submit an application from Genecor to Health Canada and
other Regulatory Authorities to obtain all necessary approvals permitting
Genecor to market, advertise, promote, and sublicense or solicit for license, as
the case may be, the Products (the “Genecor Initial Application”) in the
Territory and, subject to and in accordance with all Applicable Laws and the
Regulations.         (c) Genecor shall be responsible for all costs, expenses
and fees payable: (i) to third-party consultants which have been sourced and
hired in relation to the Genecor Initial Application; (ii) to any Governmental
Authority in respect of the Genecor Initial Application; and (iii) otherwise
payable to complete and submit the Genecor Initial Application.

 

   

 12 

 

Article VII
PAYMENT TERMS

 

7.1 Fees

 

  7.1.1 Profit Participation         (a) Unless otherwise agreed to by the
Parties in writing, Frelii shall earn 25% (Twenty Five Percent) of all
Normalized Net Income generated by Genecor in Canada. Normalization adjustments
shall be defined and agreed upon by the parties on an annual basis. Payments of
the foregoing shall be made as follows:

 

  (i) Within15 calendar days after the close of each Month, Genecor shall
deliver to Frelii a Sublicensing Report in the form specified in Section 7.2
below, and (y) any Sublicensing Payment Transfers due by Genecor to Frelii as
set forth in such Sublicensing Report.

 

  7.1.2 License Fee         (b) A USD 750,000 one time license fee shall be paid
by Genecor or its parent to Frelii within the terms as agreed in the binding
term sheet dated December 17, 2019.

 

7.2 Profit Participation Payments.

 

  (a) Financial Statements.             (i) On a monthly basis, Genecor shall
furnish to Frelii financial statements, including Profit and Loss and Balance
Sheet no later than 15 days             (ii) On a quarterly basis, Genecor shall
furnish to Frelii U.S. GAAP financial statements, including Profit and Loss,
Balance Sheet, Cashflow Statement and other reports that may be reasonably
required to support Frelii’s public disclosure requirements or auditor requests.

 

7.3 Confidentiality       Any and all information, data or reports supplied by a
Party pursuant to the provisions of this Article VII shall be treated as such
Party’s Confidential Information.

 

   

 13 

 

7.4 Payment Method.       Unless otherwise agreed by the Parties, all amounts
due under this Agreement will be paid by wire transfer in immediately available
funds to accounts designated in writing by the Parties.     7.5 Taxes

 

  (a) All payments hereunder shall be exclusive of any taxes eligible thereon
including. Any such taxes shall be borne solely by the payor and Genecor shall
pay any taxes owing to Frelii simultaneously with, and in addition to, any other
payments contemplated by this Agreement, if eligible.         (b) Subject to any
Applicable Laws, the Parties shall cooperate with each other to minimize each
other’s applicable taxes and each Party shall use its commercially reasonable
efforts to provide the other Party with any reasonable certificates or documents
which are useful for such purpose.

 

7.6 International Rights

 

  (a) This agreement grants licensing Rights for International Territory. Both
parties agree that if Genecor or Frelii is approached by a third party looking
to acquire the rights for a territory, Genecor will act as the lead negotiating
party.         (b) Licensing Rights for International Territory. Frelii agrees
that it will not sell or issue or agree to sell or issue Licensing Rights for
any International Territory. It further agrees to allow Gencor to facilitate the
granting of licensing rights of the International Territory. Frelii and Genecor
shall own any International Territory rights equally.         (c) Any expansion
of Genecor outside of Canada will be in the form of a Joint venture structure
through the formation of a new entity on a country by country basis. Each party
will be entitled to participate equally unless otherwise agreed and have a joint
and equal say with respect to matters relating to strategy, governance and
operations. The same rights, privileges , duties and responsibilities will deem
to apply unless otherwise agreed. Parties agree that depending on local law and
rules some modification may be required, otherwise it is understood the spirit
and intent of all provisions in the agreement are intended to apply and remain
in force for the duration of the licensing agreement.

 

7.7 Genecor Board of Directors       During the Term hereof, Frelii shall have
the authority to appoint no less than 2 of the number of Directors constituting
Genecor’s Board of Directors, as the size of such Board of Directors may be
modified from time to time.     Frelii Board of Directors       During the Term
hereof, Genecor shall have the authority to appoint no less than 1 of the number
of Directors constituting Frelii’s Board of Directors, as the size of such Board
of Directors may be modified from time to time.

 

   

 14 

 

Article VIII
RECORDS AND AUDIT RIGHTS

 

8.1 Record Retention.

 

  (a) Genecor will maintain complete and accurate books, records and accounts
that fairly reflects all amounts and information to be disclosed in a Sales
Report and all of Genecor’s activities related to this Agreement, in sufficient
detail to confirm the accuracy of any payments required hereunder, including:  
          (i) such documents, Records and other information required by
Applicable Law and the provisions of this Agreement;             (ii) detailed,
accurate, complete and current financial Records regarding the sale of Products
during the Term, including the Sales Reports;             (iii) such other
additional documents, books, Records and other information as may be mutually
agreed to in writing from time to time by the Designated Representatives of the
Parties.           (b) Genecor shall retain accurate and complete copies of all
Records for such period of time: (i) as required by Applicable Law; or (ii)
until five years after the expiration or termination of this Agreement,
whichever is greater. Notwithstanding the foregoing, Genecor confirms,
acknowledges and agrees that it shall, and shall cause each of their respective
Affiliates and representatives to, retain accurate and complete copies of all
financial Records relating to Products or this Agreement until five years after
the date that all payments which are payable pursuant to the provisions of this
Agreement have been paid in full (the “Retention Period”).           (c) At any
time, and from time to time, during the Term and the Retention Period, Frelii
may make a written request for a copy of the Records created and maintained by
Genecor (a “Records Request”). Genecor shall provide the requested Records as
soon as reasonably practicable after the date of its receipt of the Records
Request and, in any event, no later than 30 calendar days after its receipt of
the Records Request. For greater certainty, a Records Request shall not be
considered an Audit for the purposes of this Agreement.

 

8.2Audit Rights.

 

  (a) During the Term and for a period of six (6) months thereafter, Frelii
shall have the right at its sole cost and expense to inspect the books and
records of Genecor (including the Records) in respect of all matters pertaining
to this Agreement (each an “Audit”) upon request, acting reasonably, and as may
be mandated by a Regulatory Authority or Applicable Laws.         (b) With
respect to each Audit:

 

  (i) Frelii shall provide Genecor with 15 calendar days prior written notice of
its intention to conduct such Audit unless Frelii determines, in its reasonable
discretion, that a shorter notice period is required;

 

   

 15 

 

  (ii) to the extent permitted by Applicable Laws, Genecor shall provide Frelii
and its external advisors with reasonable access, during normal business days
and hours, to Genecor’s place of business, its books and records (including the
Records), and the Designated Representative of Genecor for the purposes of
conducting the Audit;

 

  (iii) Frelii confirms and acknowledges that Frelii and its external advisors
will at all times be accompanied by a representative of Genecor;         (iv)
the Audit shall be conducted as efficiently as possible and with as little
disruption to the business operations of Genecor as reasonably possible;        
(v) as a condition precedent to the obligation of Genecor to grant Frelii’s
external advisors access to Genecor’s premises and books and records (including
the Records), such external advisors must first execute a confidentiality
agreement in favor of Genecor in a form reasonably satisfactory to Genecor which
provides for obligations of confidentiality which are substantially similar to
the obligations of confidentiality provided for in Section 12.1; and        
(vi) all costs and expenses incurred by Frelii in connection with such Audit
shall be for the sole account of Frelii, provided that if such Audit reveals an
Underpayment which is greater than five percent (5%), Genecor shall reimburse
Frelii for such costs and expenses promptly upon presentment of an invoice
therefor.

 

  (c) The results of each Audit (each an “Audit Report”) shall be provided by
Frelii to the Designated Representative of Genecor within seven calendar days
after receipt by Frelii. With respect to each Audit Report, the Designated
Representatives of the Parties shall meet (in person or by telephone) within 30
calendar days of the provision of the Audit Report to the Designated
Representative of Genecor in order to discuss the findings of the Audit Report.
        (d) If the Designated Representatives of the Parties mutually agree on
the findings set out in the Audit Report, then: (i) any underpayment of any fees
or other payments which are payable by Genecor pursuant to the provisions of
this Agreement during the audited period (each an “Underpayment”) shall be
promptly paid by Genecor to Frelii in immediately available funds; (ii) any
overpayment of any fees or other payments which are payable by Frelii pursuant
to the provisions of this Agreement during the audited period (each an
“Overpayment”) shall be set-off against any outstanding or future payments to
Frelii; and (iii) the Designated Representatives of each Party shall take such
other actions as are reasonably necessary to address any other item, dispute or
deficiency set out in the Audit Report.

 

8.3Confidentiality.

 

Each Party will treat all information subject to review under this Article VIII
in accordance with the confidentiality provisions of Article XII below.

 

   

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Article IX
DESIGNATED REPRESENTATIVES

 

9.1Designated Representative.

 

  (a) Each Party shall appoint a representative that will have general oversight
and management responsibility for the general administration of this Agreement
and to whom the questions and concerns of each Party with respect to the rights,
obligations and performance of this Agreement (each such person a “Designated
Representative”) shall be directed in the first instance. For greater certainty,
each Designated Representative shall have decision-making authority and the
ability to bind his or her respective Party. As at the Effective Date the
Designated Representatives of each Party are as follows:

 

  Genecor: Tejas Shah, Director or then-current CEO, as the case may be        
Frelii: Ian Jenkins, or then-current CEO, as the case may be

 

Each Party may change its Designated Representative upon five business days’
prior written notice of such change to the other Party.

 

  (b) The Designated Representatives of each Party shall:             (i) meet
at least once during each Calendar Quarter, or otherwise as may be mutually
agreed by the Parties;             (ii) generally review the performance of this
Agreement and facilitate the cooperation of the Parties in the performance of
this Agreement;             (iii) maintain the Records as contemplated by
Article VIII;             (iv) perform those obligations designated in this
provisions of this Agreement as responsibilities of the Designated
Representatives;             (v) have overall responsibility for the
consideration of any proposed amendment or modification to this Agreement,
including, without limitation, any Change of Law Amendment; and             (vi)
have such other responsibilities and obligations or perform such other duties as
are expressly contemplated by this Agreement or as the Parties may mutually
agree in writing from time to time.

 

Article X
REPRESENTATIONS AND WARRANTIES

 

10.1 Mutual Representations and Warranties.

 

Each Party hereby represents and warrants to and in favor of, and covenants
with, the other Party as follows, and acknowledges that the other Party is
relying upon the following representations, warranties and covenants in
connection with its execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereunder:

 

  (a) the Party is a corporation validly formed and existing in good standing
under the laws of its jurisdiction of formation;

 

   

 17 

 

  (b) the Party has all necessary power, authority and capacity to enter into
this Agreement and to perform its obligations under this Agreement. The
execution, delivery and performance of this Agreement has been duly authorized
by all necessary action of the Party. This Agreement has been duly and validly
executed by the Party, and constitutes a valid and binding obligation of the
Party enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization and similar laws affecting creditors generally and by general
principles of equity, regardless of whether asserted in a proceeding in equity
or law;         (c) the authorization of, execution and delivery of, and the
performance by the Party of its obligations under, this Agreement and every
other agreement or document to be entered into or delivered hereunder, will not
constitute or result in the violation or breach of or default under, or cause
the acceleration of, any obligations of the Party under:

 

  (i) any term or provision of the articles, by-laws or other organizational
documents of the Party;         (ii) the terms of any material agreement
(written or oral), indenture, instrument or understanding or other obligation or
restriction to which the Party is a party or by which it is bound, except as
would not reasonably be expected to have a material adverse effect on the
Party’s ability to perform its obligations under this Agreement;         (iii)
any Applicable Law or consent or approval issued by a Governmental Authority,
except as would not reasonably be expected to have a material adverse effect on
the Party’s ability to perform its obligations under this Agreement; or        
(iv) any term or provision of any order of any court applicable to the Party,
except as would not reasonably be expected to have a material adverse effect on
the Party’s ability to perform its obligations under this Agreement;

 

  (d) except as contemplated by Article VI, no consent or approval of any
Governmental Authority, or filing with or notice to, any Governmental Authority,
court or other Person, is required in connection with the execution, delivery or
performance of this Agreement by the Party, except for any such consent,
approval, filing or notice that would not have a materially adverse effect on
the Party’s ability to perform its obligations under this Agreement;         (e)
there are no actions, suits or proceedings, judicial or administrative (whether
or not purportedly on behalf of the Party) pending, or to the best of the
knowledge of the Party after due inquiry, threatened against or affecting the
Party at law or in equity, or before or by any court or other Governmental
Authority, domestic or foreign, that would materially adversely affect the
Party’s ability to perform its obligations under this Agreement; and         (f)
there are no Bankruptcy Proceedings pending or being contemplated by the Party
or, to the best of its knowledge after due inquiry, threatened against or
affecting the Party.

 

   

 18 

 

Article XI
LIMITATION OF LIABILITY

 

11.1No Indirect Damages.

 

Except in the case of a willful or fraudulent misrepresentation under Article X,
in no event shall either Party be liable to the other or any of its Affiliates
for any consequential, incidental, indirect, special, punitive or exemplary
damages (including, without limitation, lost profits, business or goodwill)
suffered or incurred by such other Party or its Affiliates, whether based upon a
claim or action of contract, warranty, negligence or tort, or otherwise, arising
out of this Agreement

 

11.2Limitation on Damages.

 

FRELII’S TOTAL LIABILITY AND GENECOR’S SOLE AND EXCLUSIVE REMEDY FOR ANY CLAIM
OF ANY TYPE WHATSOEVER, ARISING OUT OF THE PRODUCTS, DOCUMENTATION,
DEMONSTRATION MATERIALS, OR OTHER SERVICES PROVIDED HEREUNDER SHALL BE LIMITED
TO PROVEN DIRECT DAMAGES CAUSED BY FRELII’S SOLE NEGLIGENCE IN AN AMOUNT NOT TO
EXCEED IN US DOLLARS THE SUM PAID BY GENECOR OR THE APPLICABLE OTHER PARTY FOR
THE SPECIFIC PRODUCT WHICH IS THE SUBJECT OF THE CLAIM OF DAMAGE.

 

Article XII
CONFIDENTIALITY

 

12.1 Confidential Information

 

  (a) The Parties shall treat all Confidential Information as confidential and
may not either disclose Confidential Information or use it other than for bona
fide purposes connected with this Agreement without the prior written consent of
the other Party to this Agreement, except that consent is not required for
disclosure to:             (i) an Affiliate of a Party or their respective
directors, officers, or employees, as long as they in turn are required to treat
the Confidential Information as confidential on terms substantially the same as
those set out in this Section 12.1;             (ii) accountants, professional
advisers and bankers and other lenders, whether current or prospective, as long
as they are subject to statutory professional secrecy rules or similar legal
concepts under Applicable Laws or, in turn, are required to treat the
Confidential Information as confidential on terms substantially the same as
those set out in this Section 12.1;             (iii) any Governmental Authority
having jurisdiction over a Party, to the extent legally required, and then only
after, to the extent permitted by law, informing the other Parties thereof and,
to the extent possible, with sufficient notice in advance to permit the other
Parties to seek a protective order or other remedy;             (iv) any person
to the extent required by any Applicable Laws, judicial process or the rules and
regulations of any recognized stock exchange, and then only subject to prior
consultation with the other Party; or             (v) any intended assignee of
the rights and interests of a Party under this Agreement or to a person
intending to acquire an interest in a Party to this Agreement as long as the
intended assignee or acquirer in turn is required by that Party to treat the
Confidential Information as confidential in favor of the other Party on terms
substantially the same as those set out in this Section 12.1.

 

   

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12.2Irreparable Harm

 

Each Party acknowledges and confirms that the actual or threatened breach of a
Party’s obligations of confidentiality set out herein shall cause the
non-breaching Party immediate and irreparable harm and such non-breaching Party
shall be entitled to seek, subject to Section 16.10, immediate injunctive
relief, without need to post bond, restraining the breaching Party from such
breach or threatened breach, in addition to any other remedies available to it
in law or equity.

 

12.3Public Statements

 

No public announcement or statement concerning the execution and delivery of
this Agreement and the transactions contemplated by this Agreement shall be made
by a Party, its Affiliates or their respective directors, officers, employees or
shareholders without the prior written consent of the other Party (in each such
case such consent not to be unreasonably withheld or delayed) unless such
disclosure is required by Applicable Law, a recognized stock exchange or a
Governmental Authority and, in such circumstances, subject to prior consultation
with the other Party. Notwithstanding the foregoing, if at any time during the
Term there is a mandatory or voluntary recall of a Product or a “serious adverse
reaction” (as that term is defined in the Regulations) by any person to the
Product, the Parties shall consult with one another prior to releasing any
public announcement or statement concerning the foregoing.

 

Article XIII
INDEMNIFICATION

 

13.1Mutual Indemnification

 

  (a) Subject in all cases to the limitations of liability expressly set out in
this Agreement, each Party (each, an “Indemnifying Party”) agrees to indemnify,
defend or hold harmless the other Party, its Affiliates and each of their
respective officers, directors, employees, agents, representatives, successors,
and assigns (each, an “Indemnified Party”) from any and all Losses arising from
or in connection with any of the following:             (i) any material
inaccuracy of any representation or warranty given by the Indemnifying Party in
this Agreement or any agreement, instrument or document executed in connection
with this Agreement;             (ii) any material breach by the Indemnifying
Party of any covenant or provision of this Agreement, including any breach by
the Indemnifying Party that was caused by or contributed to by any act or
omission of its Affiliates, and their respective officers, directors, employees,
agents, representatives, successors, and assigns; and             (iii) the
failure of the Indemnifying Party, its Affiliates, and their respective
officers, directors, employees, agents, representatives, successors, and assigns
to comply with Applicable Law in the performance of its obligations hereunder.  
        (b) In addition, subject in all cases to the limitations of liability
expressly set out in this Agreement, the Genecor Indemnifying Party agrees to
indemnify, defend or hold harmless the Frelii Indemnified Party from any and all
Losses arising from or in connection with (i) any defect or deficiency related
to any combination of the Products with a product of Genecor, including any
Losses arising from or in connection with any adverse reaction experienced by
any person to a Genecor product, and (ii) the acts or omissions of any
Subcontractor.

 

   

 20 

 

13.2Conditions to Indemnity.

 

Each Party’s agreement to indemnify and hold the other harmless is conditioned
upon the Indemnified Party: (a) providing written notice to the Indemnifying
Party of any claim, demand or action arising out of the indemnified activities
within 30 calendar days after the Indemnified Party has knowledge of such claim,
demand or action; (b) permitting the Indemnifying Party to assume full
responsibility to investigate, prepare for and defend against any such claim or
demand; (c) assisting the Indemnifying Party, at the Indemnifying Party’s
reasonable expense, in the investigation of, preparation of and defense of any
such claim or demand; and (d) the Indemnifying Party not compromising or
settling such claim or demand without the Indemnified Party’s prior written
consent, unless such settlement includes as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party a complete release
from all liability in respect of such claim or litigation; provided, however,
that, if the Party entitled to indemnification fails to promptly notify the
Indemnifying Party pursuant to the foregoing clause (a), the Indemnifying Party
shall only be relieved of its indemnification obligation to the extent it is
prejudiced by such failure and provided further that the Indemnified Party is
not obligated to notify the Indemnifying Party of claims, demands and/or actions
made directly against the Indemnifying Party only. Notwithstanding the
foregoing, if in the reasonable judgment of the Indemnified Party, such suit or
claim involves an issue or matter which could have a materially adverse effect
on the business, operations or assets of the Indemnified Party, the Indemnified
Party may waive its rights to indemnity under this Agreement and control the
defense or settlement thereof, but in no event shall any such waiver be
construed as a waiver of any indemnification rights such Indemnified Party may
have at law or in equity.

 

13.3Insurance.

 

Each Party shall maintain, at its own cost, comprehensive product liability
insurance and general commercial liability insurance and Genecor shall maintain
manufacturer’s errors and omissions insurance, each in an amount of not less
than $1,000,000. Such insurance shall be with a reputable insurance company and
where reasonably possible (taking into account the availability of such
insurance) shall be maintained for not less than six years following the expiry
or termination of this Agreement.

 

Article XIV
CHANGE IN LAW

 

14.1Change in Law

 

  (a) The Parties acknowledge and confirm that the business of marketing,
advertising, promoting, sublicensing or soliciting for sale of Products is
subject to extensive regulation and Applicable Law. The Parties have attempted
to structure their relationship pursuant to this Agreement in compliance with
all Applicable Law. However, if, at any time during the Term, (i) there is
discovered to be a compliance failure by a Party with respect to then-current
Applicable Law, or (ii) there is any change in any Applicable Law with which a
Party is required to comply and, as a result of such compliance or in order to
rectify non-compliance, as the case may be, such Party is no longer able to
comply with one or more provisions of this Agreement (each such change, a
“Change of Law”) the affected Party shall promptly notify (a “Change of Law
Notice”) in writing the non-affected Party of the Change of Law and any such
notice shall contain a description of the Change of Law (with supporting
documentation), the exact obligations under this Agreement which the affected
Party is delayed or prevented from performing as a result of such Change of Law
(the “Affected Obligations”).

 

   

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  (b) Upon delivery of a Change of Law Notice, the Designated Representatives of
each Party will meet within 10 calendar days and, in good faith, use their
commercially reasonable efforts to agree on amendments to this Agreement
necessary and appropriate to take account of the Change of Law, so that this
Agreement may continue in force (a “Change of Law Amendment”). All Change of Law
Amendments shall be agreed to by the Designated Representatives of the Parties
no later than 30 calendar days from the date of the Change of Law Notice, or
such later date as the Designated Representatives of the Parties may mutually
agree in writing (the “Change Period”). Without limiting the generality of the
foregoing, where a Change of Law Amendment would result in additional costs
being incurred disproportionately by one Party, the Parties shall negotiate in
good faith to ensure that the contractual arrangements remain beneficial to both
Parties.         (c) During the Change Period the obligation of the affected
Party to perform the Affected Obligations shall be suspended and the affected
Party shall not suffer or incur any liability to the non-affected Party or other
person in connection with its delayed or non-performance of the Affected
Obligations, provided that the affected Party has used and continues to use its
commercially reasonable good faith efforts to minimize the impact of its delay
or non-performance of the Affected Obligations, including cooperating and
collaborating with the non-affected Party to impose interim procedures or
workarounds to minimize the impact of its delay or non-performance of the
Affected Obligations.

 

Article XV
TERM AND TERMINATION

 

15.1 Term.

 

This Agreement shall be for an initial term (the “Initial Term”) of 50 years
commencing on the Effective Date. Following the expiry of the Initial Term, this
Agreement shall automatically be renewed, for additional terms (the “Additional
Terms”) of 5 years each, (the Initial Term and all Additional Terms being
hereinafter collectively called the “Term”) unless either Party gives the other
party notice, at least 60 days in advance of the next renewal date, of such
Party’s intent to terminate this Agreement effective as of such renewal date.

 

15.2Termination.

 

Each of Genecor or Frelii may terminate this Agreement immediately upon written
notice to Genecor or Frelii as the case may be upon the occurrence of an Event
of Default with respect to the other party and vice versa which is not cured
within any applicable curative period as set out in section 15.3 hereof.

 

   

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15.3Event of Default

 

The occurrence of any one or more of the following events shall constitute an
“Event of Default” hereunder:

 

  (a) a Party is in breach of any payment obligation of this Agreement or any
other agreement, document or instrument executed and delivered in connection
therewith, and such breach is not cured within 30 calendar days of written
notice from the non-defaulting Party to the defaulting Party;         (b) a
Party is in breach of any provision not relating to a payment obligation of this
Agreement or any other agreement, document or instrument executed and delivered
in connection therewith, and such breach is not cured within 60 calendar days of
written notice from the non-defaulting Party to the defaulting Party;        
(c) a Party commits an act of fraud or is convicted of committing an indictable
criminal offense, as determined by a court of competent jurisdiction;        
(d) a Party assigns or attempts to assign or transfers or attempts to transfer,
by operation of law or otherwise, including by way of merger or amalgamation,
this Agreement or any rights hereunder, other than in accordance with the
provisions of this Agreement;         (e) the commencement of any Bankruptcy
Proceeding in respect of a Party and such Bankruptcy Proceeding is not abandoned
within 90 calendar days of written notice from the non-defaulting Party;        
(f) in the case of Genecor, any violation of Sections 3.3(b) or 3.7; and        
(g) a Party commences dissolution, liquidation or winding-up proceedings and
such proceedings are not abandoned within 30 calendar days of written notice
from the non-defaulting Party.

 

15.4Effect of Termination

 

  (a) In the event 15.3(e) (g), the following shall apply:

 

  (i) In the case of Frelii, Gencor shall immediately secure permanent ownership
rights of the products, and technology, without limitation. For further clarity,
Frelii shall immediately transfer ownership of all Intellectual Property related
to Navii to Gencor.         (ii) In the case of Gencor, Frelii shall immediately
secure all rights for the contracts in force, and all non-secured assets.

 

  (b) Upon the termination or expiration of this Agreement, each Party shall
promptly return to the other Party or destroy all Confidential Information of
the other Party in the possession or control of the Party or its Affiliates and
their respective officers, directors, employees, agents, Affiliates,
representatives, successors or assigns, except such Confidential Information
retained pursuant to applicable document retention policies and electronic
backup systems.         (c) All terms and conditions set forth herein that
should by their nature survive termination (including, but not limited to,
Sections 3.4, 3.6, 3.9, 4.3, 4.4, 4.6, 4.7, 5.1, 5.2, 7.1(a), 7.4-7.6, Article
VIII, Articles X-XIII, Section 15.4, and Article XVI), and shall continue in
full force and effect after any expiration or termination of this Agreement or
any applicable Order.

 

   

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Article XVI
MISCELLANEOUS

 

16.1Inurement.

 

This Agreement shall inure to the benefit of and be binding upon the Parties and
their respective successors, legal representatives and permitted assigns.

 

16.2Assignment and Change of Control.

 

  (a) Except as otherwise provided in Section 16.2(b) hereof, neither Party may
assign this Agreement or its rights hereunder without the prior written consent
of the other Party, which consent may not be unreasonably withheld or delayed;
provided, however, that Frelii may assign this Agreement and its rights and
obligations hereunder, without the need to obtain consent, to an Affiliate Party
or to a successor in interest to substantially all of the business of Frelii to
which the Agreement relates.         (b) Notwithstanding anything herein to the
contrary, Genecor shall not enter into any Change of Control, except with the
prior written on consent of Frelii. Any breach by Genecor of its obligations
under the preceding sentence shall constitute an Event of Default, which shall
entitle Frelii to terminate this Agreement immediately upon notice to Genecor.

 

16.3Compliance with Anti-Bribery Laws.

 

Genecor represents and warrants that it understands the US Foreign Corrupt
Practices Act, the UK Bribery Act, the Council of Europe Criminal Law Convention
on Corruption, the Council of Europe Civil Law Convention on Corruption, the
European Union Convention Against Corruption Involving Officials, and the OECD
Convention on Combating Bribery of Foreign Public Officials in International
Business Transactions (collectively the “Anticorruption Laws”), and their
applicability to conduct in the Territory. Genecor agrees not to cause Frelii to
breach the Anticorruption Laws, and agrees to comply with the Anticorruption
Laws as if they were applicable to Genecor. Genecor agrees to accurately record
in its books and records any and all expenses related to Frelii business.
Genecor represents that none of the officers, directors, shareholders, or
beneficial owners of Genecor are government officials. All payments to Genecor
by Frelii will be [by check or wire transfer and will be made payable to Genecor
as provided for in this Agreement.] Genecor agrees to grant Frelii reasonable
access to Genecor’s books and records and the right to audit them on a periodic
basis, including if Frelii has reason to believe Genecor may have violated any
of the Anticorruption Laws. The terms of this Agreement may be disclosed to the
relevant government authorities, if deemed appropriate by Frelii in its sole
discretion. Genecor agrees to disclose in advance to Frelii any future
affiliation between Genecor and a government official. Genecor agrees to provide
Frelii with periodic certifications, in a form and manner acceptable to Frelii,
of compliance with the Anticorruption Laws as if Genecor were subject to those
laws. Frelii may terminate this Agreement immediately upon notice to Genecor if
Frelii has reason to believe that Genecor has breached any of the Anticorruption
Laws. Genecor agrees to comply with United States and all applicable export
laws, orders and regulations and obtain all necessary governmental permits,
licenses and clearances.

 

   

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16.4Setoff Permitted.

 

Notwithstanding anything herein to the contrary, and without prejudice to any
other right or remedy it has or may have, Frelii may, at its option and without
notice to Genecor, set off or recoup any liability Genecor owes to Frelii
against any amounts payable to Genecor, whether the liability arises under this
Agreement or otherwise.

 

16.5Notices.

 

All notices or other communications that are required or permitted hereunder
will be in writing and delivered personally with acknowledgement of receipt,
sent by electronic mail (provided receipt is acknowledged), facsimile (and
promptly confirmed by personal delivery, registered or certified mail or
overnight courier as provided herein), sent by nationally-recognized overnight
courier or sent by registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:

 

If to Frelii, to:

 

Frelii Inc.

722 W Shephard Lane, #102

Farmington, UT 84025

USA

 

Attention:           Ian Jenkins, CEO

 

If to Genecor, to:

 

1180 Aerowood Dr, Ste 201

Mississauga, ON L4W 1Y5

Canada

 

or to such other address as the Party to whom notice is to be given may have
furnished to the other Party in writing in accordance herewith. Any such
communication will be deemed to have been given: (a) when delivered, if
personally delivered; (b) on the business day (on the receiving end) after
dispatch, if sent by nationally-recognized overnight courier (third business day
if sent internationally); (c) on the third business day following the date of
mailing, if sent by mail; and (d) on the first business day (on the receiving
end) after being sent by facsimile or by if sent by electronic. It is understood
and agreed that this Section 16.3 is not intended to govern the day-to-day
business communications necessary between the Parties in performing their
duties, in due course, under the terms of this Agreement.

 

16.6Independent Contactors

 

The Parties are independent contractors. There is no relationship of
partnership, joint venture, employment, franchise, or agency between the
Parties. Within this document, any terms used to describe the Parties or the
nature of their activities is purely for convenience, and not of legal
significance. Neither Party shall have any power to bind the other Party or
incur obligations on the other Party’s behalf without the other Party’s prior
written consent. Neither Party shall represent itself in any way that implies
that it is an agent, employee, joint venture, partner or Affiliate of the other
Party. If any provision of this Agreement is deemed to create a franchise
relationship between the Parties, then Frelii may immediately terminate this
Agreement.

 

   

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16.7 Non-Competition

 

During the Term and for five (5) years after the termination of this Agreement
for any reason, Genecor will not directly or indirectly, without the prior
written consent of the Frelii, engage, invest in, manage, operate, finance,
advise, render services to, or be contracted by any person or entity in the
Territory engaged in business involving or related to the Field; provided,
however, that Genecor may acquire or otherwise own less than 3% of the
outstanding capital stock of a company that is listed on any national securities
exchange.

 

16.8Non-Solicitation.

 

During the Term and for five (5) years after the termination of this Agreement
for any reason, Genecor shall not, directly or indirectly through another person
or entity, (i) induce or attempt to induce any employee of Frelii or any of its
Affiliates to leave the employ of Frelii or its Affiliates, or in any way
interfere with the relationship between Frelii or its Affiliates and any
employee thereof, (ii) be involved in hiring or hire or employ any person who is
or was an employee of Frelii or its Affiliates during the six month period prior
to the time of such hire, or (iii) call on, solicit or service any customer,
supplier, licensee, licensor, franchisee or other business relation of Frelii or
its Affiliates with whom Genecor did business or had contact during the Term for
any business that competes with Frelii or any of its Affiliates, or in any way
interfere with the relationship between any such customer, supplier, licensee,
licensor, franchisee or business relation and Frelii or its Affiliates
(including inducing such person or entity to cease doing business with Frelii or
its Affiliates or making any negative statements or communications about Frelii
or any of its Affiliates), other than as expressly instructed by Frelii during
the Term, or in order to carry out Genecor’s duties to Frelii pursuant to this
Agreement.

 

16.9Severability.

 

Each of the provisions contained in this Agreement are distinct and severable
and a declaration of invalidity or unenforceability of any such provision or
part thereof by a court of competent jurisdiction shall not affect the validity
or enforceability of any other provision hereof.

 

16.10Governing Law.

 

This Agreement will be governed by and construed in accordance with the law of
the State of Utah, U.S.A.

 

16.11Dispute Resolution.

 

In the event of any dispute, controversy, or claim arising out of or relating to
this Agreement, or the breach, termination or invalidity thereof, the Parties
shall first, by mutual consent, select an independent mediator to mediate such
dispute, controversy or claim, provided that such mediation will not be binding
upon any of the Parties. In the event that the Parties are unsuccessful in
resolving the dispute through mediation, a Party (the “Initiating Party”) may
submit the dispute for binding arbitration in Salt Lake City, Utah, pursuant to
an Expedited Arbitration Proceeding as follows. “Expedited Arbitration
Proceeding” means a binding arbitration conducted under the expedited procedures
provisions of the Commercial Arbitration Rules of the American Arbitration
Association (“AAA”) then prevailing in the area.

 

   

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  (a) The Initiating Party shall submit the dispute to arbitration by delivering
notice (each such notice being herein called an “Arbitration Notice”) of its
desire to the other Party (the “Responding Party”), which notice shall describe
the dispute in question, indicate the provision(s) of this Agreement under which
such dispute arose and appoint, and set forth, the name and address of, the
person who will act as Arbitrator on the Initiating Party’s behalf in connection
with the dispute in question.         (b) The Responding Party, within 10
business days after its receipt of the Arbitration Notice, shall give notice to
the Initiating Party, which notice shall appoint, and set forth the name and
address of, a second Arbitrator with respect to the dispute in question (it
being agreed that if (x) the Responding Party fails to appoint a second
Arbitrator within such 10-business day period and (y) such failure continues for
two business days after the Responding Party receives a notice of such failure
from the Initiating Party, then the first Arbitrator may appoint such second
Arbitrator).         (c) If, within 20 business days (the “Discussion Period”)
following the appointment of the second Arbitrator (however such second
Arbitrator is appointed), the two appointed Arbitrators are unable to agree with
respect to the issue to be determined, then the two Arbitrators shall, within
five business days following the end of the Discussion Period, appoint, by
written instrument delivered to both the Initiating Party and the Responding
Party, a third Arbitrator with respect to the dispute in question (it being
agreed that if the two Arbitrators fail to appoint a third Arbitrator within the
aforesaid five-business day period, then either the Initiating Party or the
Responding Party may apply to the AAA, or if the AAA refuses or fails to act,
then to a court of competent jurisdiction in the State of Utah, for the
appointment of such third Arbitrator) and the third Arbitrator alone shall be
instructed to render a decision within eight business days of such appointment.
        (d) Frelii and Genecor shall each have the right to appear and be
represented by counsel before the Arbitrators and to submit such data and
memoranda in support of their respective positions in the matter in dispute as
may be reasonably necessary or appropriate in the circumstances.         (e)
Each Arbitrator appointed under this 16.11 (whether by Frelii, Genecor or any
other person(s), organization or court) shall not then be employed by Frelii,
Genecor or any Affiliate of Frelii or Genecor, and, in all other respects, shall
be impartial. In addition, each Arbitrator shall have at least ten years’ of
relevant experience in the areas of software licensing.         (f) The
arbitration shall be conducted as an Expedited Arbitration Proceeding. Any
determination or award in such arbitration shall (i) be in writing, (ii) be
final and conclusive on the Parties (and counterpart copies thereof shall be
delivered to each of the Parties), and (iii) not add to, subtract from or
otherwise modify the provisions of this Agreement. Judgment upon any such
determination or award may be entered in any court having jurisdiction thereof.

 

16.12Entire Agreement; Modifications.

 

This Agreement sets forth and constitutes the entire agreement and understanding
between the Parties with respect to the subject matter hereof and supersedes all
prior agreements, understanding, promises and representations, whether written
or oral. Each Party confirms that it is not relying on any representations or
warranties of the other Party except as specifically set forth herein. No
amendment, modification, release or discharge will be binding upon the Parties
unless in writing and duly executed by authorized representatives of both
Parties.

 

   

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16.13Waiver.

 

Any term or condition of this Agreement may be waived at any time by the Party
that is entitled to the benefit thereof, but no such waiver will be effective
unless set forth in a written instrument duly executed by or on behalf of the
Party waiving such term or condition. Any such waiver will not be deemed a
waiver of any other right or breach hereunder.

 

16.14No Third Party Beneficiaries.

 

The representations, warranties, covenants and agreements set forth in this
Agreement are for the sole benefit of the Parties hereto and their successors
and permitted assigns, and they will not be construed as conferring any rights
on any other parties.

 

16.15Further Assurances.

 

Each Party will duly execute and deliver, or cause to be duly executed and
delivered, such further instruments and do and cause to be done such further
acts and things, including the filing of such assignments, agreements, documents
and instruments, as may be necessary to carry out the provisions and purposes of
this Agreement.

 

16.16Counterparts.

 

This Agreement may be executed in any number of counterparts and by the Parties
on separate counterparts, each of which is an original but all of which together
constitute one and the same instrument.

 

   

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IN WITNESS WHEREOF, the Parties hereto have caused this Collaboration Agreement
to be executed on the date first above written.

 

  FRELII INC.         Per:     Name: Ian Jenkins   Title: CEO         GENECOR AI
INC.         Per:     Name: Tejas Shah   Title: Director

 

   

 

 

EXHIBIT A

 

PRODUCT DESCRIPTION