Document:

EX-10.7

 Exhibit 10.7 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions. 
 AMENDED, RESTATED AND CONSOLIDATED LICENSE AGREEMENT 

This AMENDED, RESTATED AND CONSOLIDATED LICENSE AGREEMENT (this “LICENSE AGREEMENT”) is entered into this 27th day of June,
2012 (the “EFFECTIVE DATE’’) between The University of North Carolina at Chapel Hill having an address at Campus Box 4105, 308 Bynum Hall, Chapel Hill, North Carolina, 27599-4105 (“UNIVERSITY”) and Novan, Inc.,
a corporation organized and existing under the laws of the State of Delaware (“LICENSEE”). 
 WITNESSETH 

WHEREAS, UNIVERSITY entered into a first license agreement with LICENSEE effective July 18, 2007, a FIRST AMENDMENT thereto effective
September 30, 2008 and a SECOND AMENDMENT thereto effective October 29, 2010 (such license agreement, as amended by the FIRST AMENDMENT and the SECOND AMENDMENT thereto, the “FIRST AGREEMENT”); and 

WHEREAS, UNIVERSITY entered into a second license agreement with LICENSEE effective October 1, 2009 and a FIRST AMENDMENT thereto
effective October 29, 2010 (such license agreement, as amended by the FIRST AMENDMENT thereto, the “SECOND AGREEMENT”); and 

WHEREAS, UNIVERSITY and LICENSEE wish to amend, restate and consolidate the FIRST AGREEMENT and the SECOND AGREEMENT into a single agreement
as provided herein. 
 NOW, THEREFORE, in consideration of the premises and mutual promises and covenants contained in this LICENSE
AGREEMENT and for good and valuable consideration, it is agreed by and between UNIVERSITY and LICENSEE as follows: 
 ARTICLE 1:
DEFINITIONS 
 In addition to such terms defined elsewhere in this LICENSE AGREEMENT, the following terms shall have the meanings
described below. 
 1.1 “AFFILIATE” means (a) any person or entity which owns or controls at least fifty percent
(50%) of the equity or voting stock of the LICENSEE, or (b) any person or entity fifty percent (50%) of whose equity or voting stock is owned or controlled by LICENSEE or (c) any person or entity of which at least fifty percent
(50%) of the equity or voting stock is owned or controlled by the same person or entity owning or controlling at least fifty percent (50%) of LICENSEE. 

1.2 “EXISTING PATENT RIGHTS” means all PATENT RIGHTS claiming INVENTIONS or otherwise existing as of the EFFECTIVE DATE. 

  

 1.3 “FIRST COMMERCIAL SALE” means the first sale of commercial quantities of any
LICENSED PRODUCT (as defined below) for human therapeutic use under an approved NDA or BLA (or foreign equivalent thereof) by LICENSEE, an AFFILIATE, or any SUBLICENSEE of either of the foregoing for which the proceeds of such sale qualify as NET
SALES (as defined below). 
 1.4 “IMPROVEMENT” means any (i) modification, enhancement, or improvement of an INVENTION
or any other invention described in the EXISTING PATENT RIGHTS or (ii) other invention, the manufacture, use, or sale of which modification, enhancement, or improvement would, but for the licenses granted hereunder, infringe one or more claims
of the EXISTING PATENT RIGHTS. 
 1.5 “INVENTIONS” means the subject matter of any invention disclosures, patent
applications or patents identified in Appendix A. “UNIVERSITY INVENTIONS” refers to INVENTIONS that have only inventors, as determined under the Patent Laws of the United States of America, that are obligated to assign their
rights in any INVENTIONS to the UNIVERSITY. “JOINT INVENTIONS” refers to INVENTIONS that have inventors, as determined under the Patent Laws of the United States of America, that are obligated to assign their rights in any
INVENTIONS to the UNIVERSITY and inventors that are obligated to assign their rights in any INVENTIONS to LICENSEE or an AFFILIATE. 

1.6 “LICENSED FIELD” means all uses and applications. 

1.7 “LICENSED PRODUCTS” means any method or process, composition, product, or component part thereof claimed in whole or in
part by an issued, unexpired, or pending claim contained in the PATENT RIGHTS whose manufacture, intended use, or sale would, but for the license(s) granted in this LICENSE AGREEMENT, infringe on the PATENT RIGHTS in the country of sale. 

1.8 “LICENSED TERRITORY” means the entire world.  

1.9 “NET SALES” means the total invoiced sales price received for LICENSED PRODUCTS sold by LICENSEE, its AFFILIATES, and
their SUBLICENSEES less (a) sales taxes or other taxes, (b) shipping and insurance charges, (c) actual allowances, rebates, credits, or refunds for returned or defective LICENSED PRODUCTS, (d) trade discounts and quantity
discounts, retroactive price reductions, or other allowances actually allowed or granted from the billed amount and taken, (e) rebates, credits, and chargeback payments (or the equivalent thereof) granted to managed health care organizations,
wholesalers, or to federal, state/provincial, local and other governments, including their agencies, purchasers, and/or reimbursers, or to trade customers, and (f) any import or export duties, tariffs, or similar charges incurred with respect
to the import or export of LICENSED PRODUCTS into or out of any country in the LICENSED TERRITORY. LICENSED PRODUCTS will be considered sold when paid for. Notwithstanding the foregoing, NET SALES shall not include, and shall be deemed zero with
respect to, (1) the distribution of reasonable quantities of promotional samples of LICENSED PRODUCTS, (2) LICENSED PRODUCTS provided for clinical trials or research purposes, or charitable or compassionate use purposes, or
(3) LICENSED PRODUCTS provided to any AFFILIATE, SUBLICENSEE or other strategic partner under an agreement in which NET SALES by such AFFILIATE, SUBLICENSEE or other strategic partner shall be subject to royalties under Section 3.5 or 3.6.

  

 Notwithstanding the foregoing, in the event that LICENSED PRODUCTS are sold by LICENSEE, an
AFFILIATE, or a SUBLICENSEE as part of a combination product or bundled product, or in conjunction with a delivery system, the NET SALES of such product, for the purposes of determining royalty payments due under this LICENSE AGREEMENT, shall be
determined by multiplying the NET SALES (as originally defined above) of the combination product by the fraction A/(A+B), where A is the average sale price of the LICENSED PRODUCT when sold separately in finished form and B is the average sale price
of the other product(s) or system sold separately in finished form, so that A+B is the average sale price of all of the product(s) and, if applicable, the delivery system together, as the case may be. In the event that such average sale price cannot
be determined for both the LICENSED PRODUCT and such other product(s) or system(s) in combination, NET SALES for the purposes of determining royalty payments with respect to such combination or bundled product shall be commercially reasonable and
determined by good faith negotiation between UNIVERSITY and LICENSEE. 
 1.10 “PATENT RIGHTS” means any United States,
foreign or international patents and/or patent applications claiming the INVENTIONS or any IMPROVEMENTS owned or controlled by UNIVERSITY prior to or during the term of this LICENSE AGREEMENT, which shall include but not be limited to those patents
and patent applications listed on Appendix A, attached hereto, as well as any continuations, continuations-in-part (to the extent they are directed to subject matter described in, claimed by, or enabled by the patents or patent applications
set forth on Appendix A, any INVENTIONS, or any IMPROVEMENT), divisionals, provisionals, continued prosecution applications, reexaminations, renewals, extensions, request for continued examinations, or reissues thereof, and any foreign
counterpart of any of the foregoing. 
 1.11 “PHASE I CLINICAL TRIAL” means any human clinical trial, conducted by or on
behalf of LICENSEE, an AFFILIATE, or a SUBLICENSEE with respect to a LICENSED PRODUCT, including typically the first phase of clinical trials conducted in relatively small numbers of healthy volunteers or patients with the targeted condition to
obtain information on a LICENSED PRODUCT’s safety, tolerability, pharmacological activity, pharmacokinetics, drug metabolism and mechanism of action, as more fully defined in 21 C.F.R. § 312.21(a), as may be amended, and, with respect to
any other country or jurisdiction, the equivalent of such a clinical trial in such other country or jurisdiction. 
 1.12 “PHASE II
CLINICAL TRIAL” means any well-controlled clinical trial, conducted by or on behalf of LICENSEE, an AFFILIATE, or a SUBLICENSEE with respect to a LICENSED PRODUCT, in human subjects, including clinical trials conducted in patients with the
targeted condition, and designed to evaluate clinical activity (including but not limited to, pertinent pharmacodynamic effects or biomarker responses) and safety for a LICENSED PRODUCT for one or more indications, as well as to obtain an indication
of the dosage regimen required, as more fully defined in 21 C.F.R. § 312.21(b), as may be amended, and, with respect to any other country or jurisdiction, the material equivalent of such a clinical trial in such other country or jurisdiction.

 1.13 “SUBLICENSEE” means any third party to whom LICENSEE or any AFFILIATE licenses any of the rights granted under this
LICENSE AGREEMENT pursuant to Article 6. 

  

 1.14 “SUBLICENSING REVENUE” means sublicense payments to the extent received by
LICENSEE directly and solely, as reasonably determined by LICENSEE, as consideration for the grant of rights to PATENT RIGHTS, including upfront fees or milestone payments but excluding sales-based royalties, sales-based milestone fees, or other
payments calculated on the basis of SUBLICENSEES’ sales of LICENSED PRODUCTS, purchases of equity or debt of LICENSEE, payments made in connection with research and development agreements or collaborations, or other payments made by a
SUBLICENSEE where LICENSEE is obligated to perform services or to provide goods in connection with such payment shall not be considered sublicense payments for purposes of this LICENSE AGREEMENT. 

1.15 “UNIVERSITY TECHNOLOGY” means any unpublished research and development information, know-how, and technical data in the
possession of UNIVERSITY prior to or following the EFFECTIVE DATE of this LICENSE AGREEMENT which relates to and is necessary for the practice of the INVENTIONS or IMPROVEMENTS and which UNIVERSITY has the right to provide to LICENSEE. 

ARTICLE 2: GRANT OF LICENSE 

2.1 UNIVERSITY hereby grants to LICENSEE and its AFFILIATES to the extent of the LICENSED TERRITORY a non-exclusive right and license to use
UNIVERSITY TECHNOLOGY in the LICENSED FIELD, with the right to sublicense, subject to all the terms and conditions of this LICENSE AGREEMENT. Nothing herein shall constitute a sale of the UNIVERSITY TECHNOLOGY. 

2.2 UNIVERSITY hereby grants to LICENSEE and its AFFILIATES to the extent of the LICENSED TERRITORY an exclusive right and license under the
PATENT RIGHTS to make, have made, use, offer for sale, sell and import LICENSED PRODUCTS in the LICENSED FIELD, with the right to sublicense, subject to all the terms and conditions of this LICENSE AGREEMENT. 

2.3 UNIVERSITY reserves the right to practice under the PATENT RIGHTS, to use UNIVERSITY TECHNOLOGY, and to make, use and provide LICENSED
PRODUCTS for, in each and every case, its own internal, not-for-profit research, public service, teaching and educational purposes, without payment of royalties, provided that the exercise of such reserved rights by UNIVERSITY shall not (i) be
on behalf of, sponsored with funding received from, or subject to any intellectual property rights granted to any commercial third party nor (ii) include any human use or clinical administration without prior written approval from LICENSEE.
Furthermore, UNIVERSITY shall be free to publish UNIVERSITY TECHNOLOGY as it sees fit, provided that (i) UNIVERSITY shall provide LICENSEE with a manuscript of any proposed 

  

 
paper or an abstract of any proposed presentation describing any INVENTIONS, IMPROVEMENTS, or technology claimed or described in the patents and patent applications included in the PATENT RIGHTS
at least [***] ([***]) days prior to its submission for publication or presentation and (ii) as reasonably requested by LICENSEE, UNIVERSITY shall instruct its patent counsel to make such patent filings or conduct the prosecution of the patents
and patent applications included in the PATENT RIGHTS as appropriate prior to publication or presentation of such material to prevent the loss of any rights granted under this LICENSE AGREEMENT. 

2.4 UNIVERSITY may transfer (i) any materials incorporating UNIVERSITY TECHNOLOGY or any of the INVENTIONS or (ii) any materials
whose manufacture, use, or practice would infringe any of the PATENT RIGHTS to nonprofit, academic research institutions for their own internal, not-for-profit, research, teaching, and educational purposes upon such institution’s execution of a
Material Transfer Agreement with UNIVERSITY in a form substantially similar to that attached hereto as Appendix B (any such material transfer agreement entered into, a “Material Transfer Agreement”), provided that (1) any such
third party’s use of, or research concerning, such materials shall not (a) be on behalf of, sponsored with funding received from, or subject to any intellectual property rights granted to any commercial third party nor (b) include any
human use or clinical administration without prior written approval of UNIVERSITY and LICENSEE and (2) the UNIVERSITY shall provide written notification to LICENSEE of any such transfer of materials identifying the party to whom such materials
were transferred and the materials transferred. 
 UNIVERSITY shall promptly notify LICENSEE in writing in the event they receive
(i) disclosure of any INVENTION (as defined in the Material Transfer Agreement) or (ii) a copy of any proposed manuscript describing, referencing, or including the results of any use of materials transferred under any Material Transfer
Agreement from any third party research institution pursuant to any Material Transfer Agreement, and shall include with such notice to LICENSEE a copy of such disclosure or manuscript. 

2.5 Notwithstanding the foregoing, any and all licenses and other rights granted hereunder are limited by and subject to the rights and
requirements of the United States Government which arise out of its sponsorship (if any) of the research which led to the conception or reduction to practice’ of the INVENTIONS covered by PATENT RIGHTS. To the extent applicable due to any such
sponsorship, the United States Government is entitled, as a right, under the provisions of 35 U.S.C. §§ 200-212 and applicable regulations of Title 37 of the Code of Federal Regulations, to a non-exclusive, nontransferable, irrevocable,
paid-up license to practice or have practiced for or on the behalf of the United States Government any of the PATENT RIGHTS throughout the world and LICENSEE agrees to comply and require compliance therewith. 

2.6 Nothing herein grants to UNIVERSITY from LICENSEE any right or interest in any JOINT INVENTIONS or any related patent rights owned by
LICENSEE, or in any other intellectual property conceived or made by or on behalf of LICENSEE unless set forth in a separate 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 
agreement between the Parties. To the extent that a JOINT INVENTION no longer includes any inventors with an obligation to assign their rights to the UNIVERSITY, such JOINT INVENTION and any
related PATENT RIGHTS shall no longer be considered owned by the UNIVERSITY but shall be and hereby are automatically and without further action on the part of any inventors, the UNIVERSITY or LICENSEE assigned to and owned exclusively by LICENSEE
and no longer shall be subject to the terms of this AGREEMENT. The Parties agree to amend the Patent Rights to reflect such change in ownership. 

ARTICLE 3: CONSIDERATION 

3.1 As partial consideration for the licenses granted LICENSEE under the FIRST AGREEMENT, LICENSEE has issued directly to The University of
North Carolina at Chapel Hill Foundation, Inc. (“the Foundation”) on behalf of UNIVERSITY two-hundred twenty nine thousand two hundred and sixty three shares (229,263) of common stock of LICENSEE. LICENSEE’S common stock was
issued pursuant to a Stock Purchase Agreement in a form acceptable to UNIVERSITY. 
 3.2 As partial consideration for the licenses granted
LICENSEE under the SECOND AGREEMENT, LICENSEE has paid UNIVERSITY a license issue fee of five thousand dollars ($5,000). 
 3.3 At all
times, the LICENSEE common stock held by Foundation shall be subject to a shareholders agreement in the form set forth in Appendix C. The Foundation agrees to enter into reasonable or customary agreements required by any future equity
investors regarding subjecting their shares of LICENSEE common stock to rights of first refusal and co-sale, such rights to terminate on an initial public offering of Company stock pursuant to a registration statement filed pursuant to the
Securities Act of 1933, as amended. 
 3.4 LICENSEE shall reimburse UNIVERSITY for reasonable, documented costs ([***]) arising out of the
patenting of the UNIVERSITY INVENTIONS pursuant to Article 8 of this LICENSE AGREEMENT (“PATENT COSTS”) as described in this Section 3.4. The reimbursement of patenting costs shall be non-refundable and shall not be a credit against
any other amounts due hereunder except as may be provided for elsewhere in this LICENSE AGREEMENT. Reimbursement of patenting costs under this LICENSE AGREEMENT shall commence and be due within [***] ([***]) days of billing. 

3.5 Beginning on the EFFECTIVE DATE and continuing for the term of this LICENSE AGREEMENT, on a country-by-country and LICENSED
PRODUCT-by-LICENSED PRODUCT basis, LICENSEE will pay UNIVERSITY a running royalty of [***] percent ([***]%) of all NET SALES of LICENSED PRODUCTS sold by LICENSEE, its AFFILIATES and SUBLICENSEES of the foregoing. For clarity, the obligation to pay
royalties under this Section 3.5 shall be imposed only once (i) with respect to any sale of any LICENSED PRODUCT, and (ii) with respect to any LICENSED PRODUCT, in each case regardless of whether such LICENSED PRODUCT, or the
manufacture, use or sale thereof, is covered by more than one claim contained in the PATENT 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 
RIGHTS. LICENSEE shall pay to UNIVERSITY said royalties on the NET SALES of LICENSED PRODUCTS concurrently with the making of [***] written reports as provided in Section 4.2 below. 

3.6 In respect to sublicenses granted by LICENSEE under Article 6 below, LICENSEE shall pay to UNIVERSITY an amount equal to [***] percent
([***]%) of SUBLICENSING REVENUE received by LICENSEE as consideration for the grant of rights to PATENT RIGHTS. All payments based on SUBLICENSING REVENUE shall be made within [***] days of receipt of the SUBLICENSING REVENUE. 

3.7 Should a compulsory license be granted, or be the subject of a possible grant, to a third party under the applicable laws of any country
in the LICENSED TERRITORY under the PATENT RIGHTS licensed hereunder, LICENSEE shall notify UNIVERSITY, including any material information concerning such compulsory license, and the running royalty rates payable under Section 3.5 for sales of
LICENSED PRODUCTS in such country will be adjusted to equal any lower royalty rate granted to such third party for such country with respect to the sales of such LICENSED PRODUCTS therein (the “COMPULSORY ROYALTY”), provided that during
such periods such third parties sell or offer for sale under the compulsory license articles that compete with the LICENSED PRODUCTS then marketed and sold by LICENSEE or its AFFILIATES or SUBLICENSEES in that country. 

3.8 LICENSEE shall pay UNIVERSITY the following payments within [***] ([***]) days of LICENSEE, an AFFILIATE, or any SUBLICENSEE of either of
the foregoing achieving the indicated milestone for each LICENSED PRODUCT covered by PATENT RIGHTS corresponding to UNIVERSITY INVENTIONS: 
  

							
		 	 Milestone
	  	Payment Due	  	
		 	 [***]
	  	

 Notwithstanding the conduct of clinical trials, submission of applications for regulatory approval, regulatory approval, sale,
or marketing of a particular LICENSED PRODUCT for multiple indications, in multiple dosage or delivery forms, or in multiple bundled or combination products, the milestone fees described above shall only be due and paid once with respect to each
LICENSED PRODUCT. Amounts paid UNIVERSITY under Section 3.6 with respect to SUBLICENSE REVENUE paid to LICENSEE by a SUBLICENSEE for the achievement of a milestone substantially similar to any of those established above shall be creditable
against, and deducted from, the corresponding payment due UNIVERSITY under this Section 3.8. 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 3.9 All fees, royalties, and other payments due to UNIVERSITY under this LICENSE AGREEMENT shall
be made in United States Dollars. All royalties owing with respect to NET SALES or sublicensing revenue stated in currencies other than U.S. dollars shall be converted at an exchange rate which is the arithmetic mean of the opening telegraphic
transfer selling and buying rate published by the American East Coast edition of the Wall Street Journal on the day preceding the payment. 

3.10 In the event royalty payments or fees are not received by UNIVERSITY when due, LICENSEE shall pay to UNIVERSITY interest and charges at
the lower of (a) the then-current prime lending rate as published by the American East Coast edition of the Wall Street Journal or (b) the maximum rate of interest allowed by law on the total royalties or fees overdue. 

ARTICLE 4: REPORTS AND RECORDS 

4.1 UNIVERSITY shall promptly notify LICENSEE in writing of any IMPROVEMENT. 

4.2 Following the FIRST COMMERCIAL SALE of a LICENSED PRODUCT or receipt of SUBLICENSE REVENUE, LICENSEE agrees to make [***] written reports
to UNIVERSITY within [***] ([***]) days following the end of each [***] during the term of this LICENSE AGREEMENT, stating in each such report, if and as applicable, (i) the number, description, and aggregate selling prices of LICENSED PRODUCTS
sold or otherwise disposed of and deductions taken during the such [***] and upon which royalty is payable as provided in Section 3.5 hereof and (ii) the amount of SUBLICENSE REVENUE received. The first such report shall include all such
LICENSED PRODUCTS so sold or otherwise disposed of, and all such sublicensing revenue received, prior to the date of such report. Until the FIRST COMMERCIAL SALE of a LICENSED PRODUCT, a report shall be submitted by LICENSEE at the end of each July
after the EFFECTIVE DATE of this LICENSE AGREEMENT and will include a written report summarizing LICENSEE’S technical and other efforts made towards such first commercial sale for all LICENSED PRODUCTS under development. 

4.3 LICENSEE will keep complete, true and accurate books of account and records, and require AFFILIATES and SUBLICENSEES to do the same, for
the purpose of showing the derivation of all amounts payable to UNIVERSITY under this LICENSE AGREEMENT. Such books and records will be kept at LICENSEE’s, AFFILIATE’s or SUBLICENSEE’s principal place(s) of business for at least [***]
([***]) years following the end of the [***] to which they pertain, and will be open at all reasonable times for inspection by an independent certified public accountant reasonably acceptable to LICENSEE, AFFILIATE or SUBLICENSEE acting on behalf of
UNIVERSITY for the purpose of verifying LICENSEE’s, AFFILIATES’ or SUBLICENSEE’s royalty statements or LICENSEE’s compliance in other respects with this LICENSE AGREEMENT. The representative will be obliged to treat as
confidential all relevant matters but 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 
shall be free to disclose all conclusions of any such inspection(s) to UNIVERSITY and support such conclusions with underlying confidential information if challenged by LICENSEE, provided that
all such disclosures shall be maintained as confidential by such representative and UNIVERSITY with respect to third parties. 
 4.4
Inspections made under Section 4.3 shall be at the expense of UNIVERSITY, unless an underpayment to UNIVERSITY exceeding [***]% of the amount properly due UNIVERSITY with respect to the audited period is discovered in the course of any such
inspection, whereupon all [***] costs of such inspection shall be paid by LICENSEE. LICENSEE will promptly pay to UNIVERSITY the full amount of any underpayment, together with interest thereon at the lower of (a) the then-current prime lending
rate as published by the American East Coast edition of the Wall Street Journal or (b) the maximum rate of interest allowed by law. 

ARTICLE 5: DUE DILIGENCE 

5.1 LICENSEE shall use its commercially reasonable efforts and due diligence to proceed with the research, development, and commercial
exploitation of LICENSED PRODUCTS during the term of this LICENSE AGREEMENT. In making any determination regarding such efforts and diligence, UNIVERSITY shall take into account the normal course of such programs conducted with sound and reasonable
business practices and judgment, the [***], and shall take into account [***]. 
 5.2 In particular, LICENSEE will achieve the performance
milestones set forth in Appendix D, which is attached hereto, on the time frames indicated. Notwithstanding the foregoing, the dates or timelines outlined or established for the achievement of such milestones assume that (i) LICENSEE obtains
reasonably sufficient funding to achieve such milestones consistent with such dates or timelines and (ii) LICENSEE’s product candidates do not cause adverse events in clinical trials or encounter regulatory delays for reasons outside of
LICENSEE’s reasonable control. LICENSEE and UNIVERSITY shall negotiate in good faith the extension of these dates in the event any matters adversely affect achievement of any stated milestones by the dates or timelines outlined or established
therefor. UNIVERSITY’S sole and exclusive remedy with respect to LICENSEE’s breach of this Article 5 or failure to achieve the above-referenced milestones shall be its right to terminate this Agreement in accordance with Section 7.2.

 ARTICLE 6: SUBLICENSING 

6.1 LICENSEE may sublicense any or all of the rights licensed hereunder, provided that LICENSEE notifies UNIVERSITY in writing and provides
UNIVERSITY with a copy of each sublicense agreement and each amendment thereto within [***] ([***]) days after their execution, provided that LICENSEE may redact any portions of such agreements disclosing SUBLICENSEES’ proprietary information,
technology, or research and development plans as reasonably necessary to comply with any confidentiality provisions of such sublicense. 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 6.2 LICENSEE shall require that all sublicenses be materially consistent with the terms,
conditions and limitations of this LICENSE AGREEMENT. UNIVERSITY agrees that all such sublicenses shall survive termination of this LICENSE AGREEMENT and will automatically be assigned to UNIVERSITY upon such termination in the event this LICENSE
AGREEMENT is terminated, to the extent (i) provided for in each such sublicense and (ii) such agreement does not impose any obligations on UNIVERSITY in excess of those imposed on UNIVERSITY herein. 

6.3 Upon execution of each sublicense agreement, LICENSEE agrees to be fully responsible for the performance of its SUBLICENSEES hereunder,
provided that the activities of any SUBLICENSEE of LICENSEE shall be deemed the acts of LICENSEE for purposes of satisfying LICENSEE’s obligations under Article 5 above. 

ARTICLE 7: TERM AND TERMINATION 

7.1 The term of this LICENSE AGREEMENT shall begin on the EFFECTIVE DATE and continue until (i) this LICENSE AGREEMENT is terminated as
provided herein or (ii) on a country-by-country and LICENSED PRODUCT-by-LICENSED PRODUCT basis, the expiration of the last to expire of the PATENT RIGHTS covering a particular LICENSED PRODUCT in each country in which a patent included in the
PATENT RIGHTS and covering such LICENSED PRODUCT may have issued. Upon expiration of this LICENSE AGREEMENT due to the expiration of the last-to-expire of all patents included in the PATENT RIGHTS with respect to a particular country and LICENSED
PRODUCT, LICENSEE shall have the perpetual, unrestricted, fully-paid, royalty-free right, with rights of sublicense, to make, use, and sell, lease, or otherwise dispose of such LICENSED PRODUCT in such country. 

7.2 It is expressly agreed that, notwithstanding the provisions of any other paragraph of this LICENSE AGREEMENT, if LICENSEE should
materially breach a material provision of this LICENSE AGREEMENT and fail to (i) cure any such breach within ninety (90) days of receipt of written notice from UNIVERSITY describing such breach (“BREACH NOTICE”) or
(ii) provide written notification to UNIVERSITY that such breach is not curable within such ninety (90) day period, accompanied by a plan to cure such breach, and initiate commercially reasonable efforts to cure such breach consistent with
such plan within ninety (90) days of receipt of BREACH NOTICE, then UNIVERSITY will have the right to terminate this LICENSE AGREEMENT or render it nonexclusive immediately upon further written notice to LICENSEE, provided that such further
written notice must be given by UNIVERSITY within ten (10) days of the expiration of the ninety (90) period established above. A material breach is a violation of or failure to keep or perform any material covenant, condition, or
undertaking of this LICENSE AGREEMENT, including, but not limited to, the failure to deliver to UNIVERSITY any royalty or other payment at the time or times that the same should be due to UNIVERSITY under this LICENSE AGREEMENT, failure to provide
reports as specified in Section 4.2, failure to meet or achieve performance milestones in accordance with Section 5.2, and failure to possess and maintain insurance as set forth in Section 11.3. Notwithstanding the foregoing,
UNIVERSITY’s right to terminate this LICENSE AGREEMENT or render it nonexclusive for failure to meet or achieve performance milestones in accordance with Section 5.2 shall apply only with respect to the particular PATENT RIGHTS to which
such failure relates, and in such case this LICENSE AGREEMENT and the exclusivity of the license set forth herein will remain in full force and effect with respect to all other PATENT RIGHTS.  

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 7.3 If LICENSEE becomes bankrupt, files a petition for or is the subject of a petition for
bankruptcy, or is placed in the hands of a receiver, assignee, or trustee for the benefit of creditors, whether by the voluntary act of LICENSEE or otherwise, then this LICENSE AGREEMENT may be terminated or rendered non-exclusive by UNIVERSITY upon
written notice to LICENSEE within thirty (30) days of the occurrence of such events. 
 7.4 LICENSEE may terminate this LICENSE
AGREEMENT at any time upon giving written notice of not less than thirty (30) days to UNIVERSITY. In addition, LICENSEE may terminate this LICENSE AGREEMENT solely with respect to any particular PATENT RIGHTS upon similar written notice, and in
such case this LICENSE AGREEMENT will remain in full force and effect with respect to all other PATENT RIGHTS. 
 7.5 Upon termination of
this LICENSE AGREEMENT in whole or in part, LICENSEE shall provide UNIVERSITY with a written inventory of all LICENSED PRODUCTS subject to such termination that are in the process of manufacture by or on behalf of LICENSEE, in use by LICENSEE, or
under LICENSEE’S exclusive control. LICENSEE shall have the privilege of completing the manufacture and disposing of any such LICENSED PRODUCTS within a period of [***] following such termination [***]. LICENSEE will also have the right to
complete performance of all contracts (i) for the marketing, sale, or manufacture of such LICENSED PRODUCTS, (ii) requiring use of UNIVERSITY TECHNOLOGY, any technology claimed in any terminated PATENT RIGHTS, or such LICENSED PRODUCTS
within such [***] period. All such LICENSED PRODUCTS which are not disposed of as provided above shall be delivered to UNIVERSITY or otherwise disposed of in a reasonable manner determined by UNIVERSITY in its sole reasonable discretion at
LICENSEE’s sole expense. 
 7.6 Any termination or cancellation under any provision of this LICENSE AGREEMENT shall not relieve
LICENSEE of its obligation to pay any royalty or other fees (including attorney’s fees pursuant to Section 3.4 hereof) due or owing at the time of such termination or cancellation. 

ARTICLE 8: PATENT PROSECUTION AND MAINTENANCE 

8.1 Subject to the remaining Sections of this Article 8, LICENSEE shall bear the cost of all reasonable, documented patent expenses, [***],
associated with the preparation, filing, prosecuting, issuance and maintenance of U.S. Patent applications and U.S. Patents included within the PATENT RIGHTS. Such filings and prosecution corresponding to UNIVERSITY INVENTIONS shall be by counsel of
UNIVERSITY’s choosing and shall be in the name of UNIVERSITY. UNIVERSITY shall keep LICENSEE advised as to the prosecution of such applications by forwarding, and directing UNIVERSITY’s patent counsel to forward, to

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 
LICENSEE copies of all official correspondence, (including, but not limited to, Applications, Office Actions, responses, etc.) relating thereto. LICENSEE shall have the right to comment and
advise UNIVERSITY and its counsel as to the conduct of such prosecution and maintenance, provided, however, that UNIVERSITY shall have the right to make the final decisions for all matters associated with such prosecution and maintenance.
Notwithstanding the foregoing, UNIVERSITY shall not abandon prosecution of any patent application or maintenance of any issued patent without first, to the extent reasonably possible, giving LICENSEE notice at least [***] ([***]) days prior to the
date on which such patent application or patent will become abandoned, and shall allow LICENSEE to assume prosecution of any such patent application, or maintenance of any such patent, at LICENSEE’s own expense and with counsel of its choosing
and with LICENSEE having the final decision for all matters associated with prosecution and maintenance. If LICENSEE assumes prosecution of any such patent application or maintenance of any such patent, LICENSEE’s obligations for payment under
Article 3 based upon such patent application or patent shall terminate at the time that LICENSEE assumes prosecution or maintenance of such patent. 

8.2 UNIVERSITY shall, [***], keep LICENSEE apprised in writing and in advance of incurring any costs with respect to the filing, prosecution,
and or maintenance of any PATENT RIGHTS. By concurrent written notification to UNIVERSITY, LICENSEE may elect not to pay expenses associated with prosecuting or maintaining any U.S. PATENT RIGHTS corresponding to UNIVERSITY INVENTIONS, provided that
LICENSEE pays for all reasonable, documented costs incurred up to UNIVERSITY’s receipt of such notification, to the extent LICENSEE was provided reasonable advance notice of such costs (or a reasonably detailed estimate of such costs). Upon
such notice with respect to any such PATENT RIGHTS, UNIVERSITY may file, prosecute, and/or maintain such PATENT RIGHTS at its own expense and for its own benefit and any rights or license granted hereunder with respect to such PATENT RIGHTS shall
terminate. 
 8.3 As regards prosecution and maintenance of foreign patent applications corresponding to the U.S. Patent applications
corresponding to UNIVERSITY INVENTIONS, LICENSEE shall designate in writing that country or those countries, if any, in which LICENSEE desires such corresponding patent application(s) to be filed. LICENSEE shall pay all reasonable, documented costs
[***] associated with the preparation, filing, prosecuting, issuance and maintenance of such designated foreign patent applications and foreign patents pursuant to Section 3.4. All such applications shall be in the UNIVERSITY’s name.
UNIVERSITY shall keep LICENSEE advised as to the prosecution of such applications by forwarding, and directing UNIVERSITY’s patent counsel to forward, to LICENSEE copies of all official correspondence, (including, but not limited to,
Applications, Office Actions, responses, etc.) relating thereto. LICENSEE shall have the right to comment and advise UNIVERSITY and its counsel as to the conduct of such prosecution and maintenance, provided, however, that UNIVERSITY shall have the
right to make the final decisions for all matters associated with such prosecution and maintenance. Notwithstanding the foregoing, UNIVERSITY shall not abandon prosecution of any foreign patent application or maintenance of any issued foreign patent
without first, to the extent 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 
reasonably possible, giving LICENSEE notice at least [***] ([***]) days prior to the date on which such patent application or patent will become abandoned, and shall allow LICENSEE to assume
prosecution of any such patent application, or maintenance of any such patent, at LICENSEE’s own expense and with counsel of its choosing and with LICENSEE having the final decision for all matters associated with prosecution and maintenance.
If LICENSEE assumes prosecution of any such foreign patent application or maintenance of any such foreign patent, LICENSEE’s obligations for payment under Article 3 based upon such patent application or patent shall terminate at the time that
LICENSEE assumes prosecution or maintenance of such patent. 
 8.4 By concurrent written notification to UNIVERSITY at least [***] ([***])
days in advance of any filing or response deadline, or fee due date, LICENSEE may elect not to have a patent application filed in any particular foreign country or not to pay expenses associated with prosecuting or maintaining any patent application
or patent in any particular foreign country, in each case corresponding to UNIVERSITY INVENTIONS, provided that LICENSEE pays for all reasonable, documented costs incurred up to UNIVERSITY’s receipt of such notification, to the extent LICENSEE
was provided reasonable advance notice of such costs (or a reasonably detailed estimate of such costs). Failure to provide written confirmation of LICENSEE’s desire to file such a patent application in any particular country or to pay expenses
associated with prosecuting or maintaining any such patent application or patent to UNIVERSITY at least [***] ([***]) days in advance of any filing or response deadline, or fee due date shall be considered by UNIVERSITY to be LICENSEE’s notice
that it no longer wishes to support such particular patent(s) or patent application(s). Upon such notice (or failure to provide such confirmation) with respect to such PATENT RIGHTS in any foreign country, UNIVERSITY may file, prosecute, and/or
maintain such patent applications or patents at its own expense and for its own benefit, and any rights or license granted hereunder with respect to such PATENT RIGHTS, shall terminate. 

8.5 Filings and prosecution corresponding to JOINT INVENTIONS shall be by counsel of LICENSEE’s choosing and shall be in the name of
UNIVERSITY and LICENSEE. LICENSEE shall keep UNIVERSITY advised as to the prosecution of such applications by forwarding, and directing LICENSEE’s patent counsel to forward, to UNIVERSITY copies of all official correspondence, (including, but
not limited to, Applications, Office Actions, responses, etc.) relating thereto. UNIVERSITY shall provide reasonable assistance to LICENSEE related to the preparation, filing, prosecuting, issuance and maintenance of patent applications and patents
corresponding to JOINT INVENTIONS, including, without limitation, providing necessary assignment documents, declarations, power of attorney documents, copies of any supporting data, analysis or reports, and reasonable access to the INVENTORS during
normal working hours. UNIVERSITY shall have the right to comment and advise LICENSEE and its counsel as to the conduct of such prosecution and maintenance, provided, however, that LICENSEE shall have the right to make the final decisions for all
matters associated with such prosecution and maintenance. Notwithstanding the foregoing, LICENSEE shall not abandon prosecution of any patent application or maintenance of any issued patent corresponding to JOINT INVENTIONS without first, to the
extent reasonably possible, giving UNIVERSITY notice at least [***] ([***]) days prior to the date on which such patent application or patent will become abandoned, and shall allow UNIVERSITY 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 
to assume prosecution of any such patent application, or maintenance of any such patent, at UNIVERSITY’s own expense and with counsel of its choosing and with UNIVERSITY having the final
decision for all matters associated with prosecution and maintenance. 
 ARTICLE 9: INFRINGEMENT 

9.1 If the production, sale, import or use of LICENSED PRODUCTS under this LICENSE AGREEMENT results in any claim for patent infringement
against LICENSEE, AFFILIATES, SUBLICENSEEs, or any customer(s) or sublicensee(s) of the foregoing, LICENSEE shall, upon becoming aware of such claim and subject to any applicable confidentiality obligations, promptly notify the UNIVERSITY thereof in
writing, setting forth the facts of such claim in reasonable detail. As between the parties to this LICENSE AGREEMENT, LICENSEE shall have the first and primary right [***] at its own expense to defend and control the defense of any such claim, by
counsel of its own choice. LICENSEE shall be free to enter into a settlement, consent judgment, or other voluntary disposition of any such actions, provided that any settlement, consent judgment or other voluntary disposition of such actions which
(i) [***], (ii) [***], or (iii) [***] must be approved by UNIVERSITY, such approval not being unreasonably withheld. UNIVERSITY shall provide LICENSEE notice of such approval or denial of such approval within [***] ([***]) business
days of any request for such approval by LICENSEE, provided that (i) in the event UNIVERSITY wishes to deny such approval, such notice shall include a detailed written description of UNIVERSITY’s reasonable objections to the proposed
settlement, consent judgment, or other voluntary disposition, and (ii) UNIVERSITY shall be deemed to have approved of such proposed settlement, consent judgment, or other voluntary disposition in the event it fails to provide such notice within
such [***] ([***]) day period in accordance herewith. UNIVERSITY agrees to cooperate with LICENSEE in any reasonable manner deemed by LICENSEE to be necessary in defending any such action. LICENSEE shall reimburse UNIVERSITY for [***] out of pocket
expenses incurred in providing such assistance. 
 9.2 In the event that any PATENT RIGHTS licensed to LICENSEE are infringed by a third
party, LICENSEE shall have the first, primary right, but not the obligation, to institute, prosecute and control any action or proceeding with respect to such infringement, by counsel of its choice, including any declaratory judgment action arising
from such infringement. Subject to Section 9.5, UNIVERSITY shall reasonably cooperate in any such action or proceeding at LICENSEE’s sole expense, including joining in such action or proceeding. LICENSEE shall be free to enter into a
settlement, consent judgment, or other voluntary disposition of such action, provided that any settlement, consent judgment or other voluntary disposition of such actions which (i) [***], (ii) [***], or (iii) [***] must be approved by
UNIVERSITY, such approval not to be unreasonably withheld. UNIVERSITY shall provide LICENSEE notice of its approval or denial of such approval within [***] ([***]) business days of any request for such approval by LICENSEE, provided that (i) in
the event UNIVERSITY wishes to deny such approval, such notice shall include a detailed written description of UNIVERSITY’s reasonable objections to the proposed settlement, consent judgment, or other voluntary disposition, and
(ii) UNIVERSITY shall be deemed to have 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 
approved of such proposed settlement, consent judgment, or other voluntary disposition in the event it fails to provide such notice within such [***] ([***]) day period in accordance herewith. If
LICENSEE recovers monetary damages in the form of lost profits from a third party infringer as a remedy for the infringement of PATENT RIGHTS licensed hereunder, then LICENSEE shall first apply such recovery to the costs and expenses incurred in
obtaining or negotiating for such recovery (including but not limited to attorneys’ fees), and pay to UNIVERSITY the [***] . If LICENSEE recovers monetary damages in the form of an ongoing reasonable royalty as a remedy for the infringement of
PATENT RIGHTS and/or consideration for an ongoing license with respect to such PATENT RIGHTS, then, after applying such royalty to the recovery of the costs and expenses incurred in obtaining or negotiating for such royalty (including but not
limited to attorneys’ fees), the remaining amount of any such royalty shall be [***]. 
 9.3 If, within [***] ([***]) months after
receiving notice of any alleged infringement of the PATENT RIGHTS by a third party, LICENSEE (i) shall have been unsuccessful in persuading the alleged infringer to desist, (ii) shall not have brought and shall not be diligently
prosecuting an infringement action, and (iii) has not entered into settlement discussions with respect to such infringement, or if LICENSEE shall notify UNIVERSITY in writing, at any time prior thereto, of its intention not to undertake any of
the foregoing actions with respect to the alleged infringer, then UNIVERSITY shall have the right, but not the obligation, to prosecute, at its own expense and utilizing counsel of its choice, any infringement of the PATENT RIGHTS, and UNIVERSITY
may, at its own expense and control, take steps to defend or enforce any patent within the PATENT RIGHTS and recover, for its own account, any damages, awards or settlements resulting therefrom. LICENSEE and/or its AFFILIATES shall cooperate as
reasonably requested by UNIVERSITY, including joining in such actions, at the expense of UNIVERSITY. 
 9.4 In any challenge to the PATENT
RIGHTS brought or declaratory judgment action defended not already addressed by the provisions of this Section 9, LICENSEE shall have the first right, exercisable upon written notice to UNIVERSITY within [***] ([***]) days of receipt of notice
of such action, but not the obligation, to defend such action at the sole expense of LICENSEE. UNIVERSITY shall reasonably cooperate in any such defense at LICENSEE’s sole expense, including joining in such actions. If LICENSEE does not so
elect, UNIVERSITY may defend but has no obligation to do so. 
 9.5 Notwithstanding the foregoing, and without limiting LICENSEE’s
rights under Section 9.1 or 9.2 above to enter into any settlement, consent judgment, or other voluntary disposition of any legal or equitable action, UNIVERSITY shall be entitled, in its sole discretion and at its own expense, to participate
through counsel of its own choosing in any legal action involving INVENTIONS and PATENT RIGHTS. LICENSEE acknowledges that UNIVERSITY may not join in any litigation without the approval of authorized agencies of North Carolina, including the Board
of Governors of the University of North Carolina. UNIVERSITY agrees to use its best efforts to obtain such approval promptly in the event that UNIVERSITY is required to be joined in any litigation under this Article 9 to establish standing. Nothing
in the foregoing Sections shall be construed in any way which would limit the authority of the Attorney General of North Carolina. 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 
ARTICLE 10: REPRESENTATIONS 
 10.1 UNIVERSITY makes no warranties that any patent
will issue on UNIVERSITY TECHNOLOGY or INVENTIONS. UNIVERSITY does not warrant the validity or enforceability of any patent included in the PATENT RIGHTS or that practice under such patents shall be free of infringement. 

10.2 UNIVERSITY represents and warrants that, to its actual knowledge and belief, as of EFFECTIVE DATE, (i) the entire right, title, and
interest in the patent applications or patents comprising UNIVERSITY INVENTIONS included in the PATENT RIGHTS and the entire right, title, and interest of inventors with an obligation to assign to the UNIVERSITY the patent applications or patents
comprising JOINT INVENTIONS included in the PATENT RIGHTS have been assigned to it free and clear of all liens, claims and encumbrances of any inventor or any nongovernmental third party, (ii) that UNIVERSITY has all requisite power and
authority to grant the licenses contained in this LICENSE AGREEMENT under said PATENT RIGHTS and UNIVERSITY TECHNOLOGY, (iii) UNIVERSITY has not entered into any agreements other than grants from the U.S. Government which provide for the rights
described in Section 2.5, with any third party with respect to the PATENT RIGHTS, the technology claimed therein, nor INVENTIONS, (iv) its execution and performance of this LICENSE AGREEMENT will not result in a breach of any other
contract to which it is, or will become, a party, and (v) it has not received any notification that the PATENT RIGHTS are invalid or that the exercise by LICENSEE of the rights granted hereunder will infringe on any patent or other proprietary
right of any third party. 
 10.3 EXCEPT AS PROVIDED IN SECTION 10.2, UNIVERSITY DISCLAIMS ALL WARRANTIES WITH REGARD TO INVENTIONS, PATENT
RIGHTS, PRODUCT(S), AND SERVICE(S) LICENSED UNDER THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ALL WARRANTIES, EXPRESSED OR IMPLIED, OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE. 

10.4 EXCEPT WITH RESPECT TO BREACHES OF SECTIONS [***], AND 12.1, THE INDEMNIFICATION PROVIDED UNDER SECTION 11, AND CLAIMS FOR PATENT
INFRINGEMENT, NEITHER PARTY SHALL BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY INDIRECT, CONSEQUENTIAL, SPECIAL, EXEMPLARY, OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT. 

ARTICLE 11: INDEMNIFICATION 

11.1 In exercising its rights under this LICENSE AGREEMENT, LICENSEE shall materially comply with the requirements of any and all applicable
laws, regulations, rules and 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 
orders of any governmental body having jurisdiction over the exercise of rights under this LICENSE AGREEMENT. LICENSEE further agrees to indemnify and hold UNIVERSITY harmless from and against
any costs, expenses, attorney’s fees, citation, fine, penalty and liability of every kind and nature which might be imposed directly against UNIVERSITY by reason of any asserted or established violation of any such laws, order, rules and/or
regulations by LICENSEE. 
 11.2 LICENSEE agrees to indemnify, hold harmless and defend UNIVERSITY, its officers, employees, and agents
against any and all claims, suits, losses, damage, costs, fees, and expenses (“LOSSES”) asserted by third parties, both government and private, resulting from or arising out of the exercise of LICENSEE’s rights under this LICENSE
AGREEMENT, provided such LOSSES do not result from the UNIVERSITY’S or its employees’, faculty’s, students’, or other agents or representatives’ gross negligence, intentional misconduct, breach of this Agreement, or failure
to comply with any applicable laws, rules, or regulations. 
 11.3 LICENSEE is required to maintain in force at its sole cost and expense,
with reputable insurance companies, insurance coverage in amounts and of types reasonably sufficient to protect against liability under Sections 11.1 and 11.2 above. The UNIVERSITY shall have the right to ascertain [***] that such coverage exists,
such right to be exercised in a reasonable manner. 
 ARTICLE 12: MISCELLANEOUS 

12.1 Confidentiality. 

(a) LICENSEE shall keep confidential and not disclose any unpublished UNIVERSITY TECHNOLOGY or any patent applications furnished by UNIVERSITY
pursuant to Sections 2.1 and 2.2 to third parties during the term of this LICENSE AGREEMENT or any time thereafter, provided that LICENSEE shall have the right to disclose such information under conditions of confidentiality to prospective
investors, acquirors, sublicensees, strategic partners, and investment bankers in connection with its financing, acquisition, licensing, development, commercialization, and stockholder relations activities. Notwithstanding the foregoing, disclosure
may be made to third parties of any such UNIVERSITY TECHNOLOGY or document related to or embodying PATENT RIGHTS at any time (a) with the prior written consent of UNIVERSITY, (b) after the same shall have become public through no
unauthorized act or omission of LICENSEE, or (c) as required by governmental authority or applicable law or regulation. 
 (b)
UNIVERSITY shall keep confidential and not disclose to any third party any information provided to it by LICENSEE (i) as a result of LICENSEE’s performance under this LICENSE AGREEMENT or (ii) that may relate to the LICENSEE’s
research, development, technology(ies), or business. Notwithstanding the foregoing, disclosure may be made to third parties of any such research, development, or technology(ies) at any time (a) with the prior written consent of LICENSEE,
(b) after the same shall have become public through no unauthorized act or 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 
omission of UNIVERSITY, or (c) as required by governmental authority or applicable law or regulation, provided that UNIVERSITY (1) provides LICENSEE, to the extent practicable, advance
written notice of any such disclosure, (2) reasonably assists LICENSEE, as reasonably requested by LICENSEE, in obtaining protective or confidential treatment of such information, and (3) minimizes the extent of any such disclosure. 

12.2 Assignability. This LICENSE AGREEMENT is binding upon and shall inure to the benefit of the parties hereto, their successors and
assigns. However, this LICENSE AGREEMENT shall be personal to LICENSEE, and it is not assignable by LICENSEE to any other person or entity without the written consent of UNIVERSITY, which consent shall not be unreasonably withheld. Notwithstanding
the foregoing, (1) LICENSEE shall be free to assign this LICENSE AGREEMENT without such consent (i) to any AFFILIATE of LICENSEE or (ii) in connection with any sale of substantially all of its assets or business (or portion of its
assets or business related to the subject matter hereof), merger, acquisition, consolidation, reorganization, or other similar transaction and (2) in the event lenders to the LICENSEE require a security interest in the LICENSE AGREEMENT as a
term of any loans to LICENSEE, UNIVERSITY shall (a) consent to the assignment of this LICENSE AGREEMENT to such lenders or any assignee thereof in conjunction with the exercise of their rights under such security interest and (b) enter
into any reasonable form of collateral assignment agreement requested by such lenders in conjunction with their exercise of such rights. 

12.3 Waiver. It is agreed that no waiver by either party hereto of any breach or default of any of the covenants or agreements herein
set forth shall be deemed a waiver as to any subsequent and/or similar breach or default. 
 12.4 Use of UNIVERSITY’s Name. The
use of the name of UNIVERSITY, or any contraction thereof, in any manner in connection with the exercise of rights under this LICENSE AGREEMENT is expressly prohibited without the prior written consent of UNIVERSITY, provided that, notwithstanding
the foregoing, LICENSEE shall have the right to identify UNIVERSITY as the licensor and, under conditions of confidentiality, to disclose the terms of this LICENSE AGREEMENT to prospective investors, acquirors, sublicensees, strategic partners,
investment bankers, and regulatory authorities, in connection with its financing, regulatory, licensing, development, and stockholder relations activities or that it may deem to be required in any prospectus, offering memorandum, or other document
or filing prepared in connection with its compliance obligations under applicable securities law or other applicable law or regulation. 

12.5 Independent Contractor Status. Neither party hereto is an agent, joint venture or representative of the other for any purpose.
Neither party shall have the right to obligate or bind the other in any manner. 
 12.6 Notice. Any notice required or permitted to
be given to the parties hereto shall be in writing and deemed to have been properly given if delivered in person or mailed by first-class mail to the other party at the appropriate address as set forth below. Other addresses may be designated in
writing by the parties during the term of this LICENSE AGREEMENT. 

  

			
	UNIVERSITY	  	LICENSEE
	Cathy Innes	  	President
	Director	  	Novan, Inc.
	Office of Technology Development	  	4222 Emperor Boulevard
	[***]	  	

 12.7 Governing Law and Venue. This LICENSE AGREEMENT shall be interpreted and construed in accordance
with the laws of the State of North Carolina. The State and Federal Courts of North Carolina shall have exclusive jurisdiction to hear any legal action arising out of this LICENSE AGREEMENT. 

12.8 Complete Agreement. It is understood and agreed between UNIVERSITY and LICENSEE that, from and after the EFFECTIVE DATE, this
LICENSE AGREEMENT constitutes the entire agreement, both written and oral, between the parties with respect to the subject matter hereof and supersedes the FIRST AGREEMENT and the SECOND AGREEMENT and any amendments thereto. For clarity, all patent
rights, inventions, modifications, enhancements, improvements, information, know-how and technical data that were subject to the FIRST AGREEMENT or the SECOND AGREEMENT prior to the EFFECTIVE DATE are subject to this LICENSE AGREEMENT. This LICENSE
AGREEMENT shall not be amended or modified except by a written agreement signed by all parties. 
 12.9 Severability. In the event
that a court of competent jurisdiction holds any provision of this LICENSE AGREEMENT to be invalid, such holding shall have no effect on the remaining provisions of this LICENSE AGREEMENT, and they shall continue in full force and effect. 

12.10 Survival of Terms. The provisions of Sections 2.3, 2.4, 2.6, 3.3, 6.2, 7.1, 7.5, 7.6, 8.5, 12.1, 12.2, 12.3, 12.4, 12.5, 12.6,
12.7, 12.8, 12.9, and 12.10 and Articles 1, 4, 9, 10 and 11 shall survive the expiration or termination of this LICENSE AGREEMENT. 
 12. 11
Export Controls. It is understood that UNIVERSITY is subject to United States laws and regulations controlling the export of technical data, computer software, laboratory prototypes, and other commodities that may require a license from the
applicable agency of the United States Government and/or may require written assurances by LICENSEE that it will not export data or commodities to certain foreign countries without prior approval of such agency. UNIVERSITY neither represents that a
license is required, nor that, if required, it will be issued. 
 [Signature page to follow.] 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 IN WITNESS WHEREOF, UNIVERSITY and LICENSEE have executed this LICENSE AGREEMENT on the EFFECTIVE
DATE, in duplicate originals, by the duly authorized respective officers. INVENTORS have likewise indicated their acceptance of the terms hereof by signing below. 
  

									
	THE UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL	 		 	NOVAN, INC.
					
	Signature:	 	 /s/ Catherine Innes
	 		 	Signature:	 	 /s/ Nathan Stasko

	(SEAL)	 		 	(SEAL)
			
	Catherine Innes	 		 	Nathan Stasko
	Director	 		 	President

									
					
	Date:	 	 6/29/12
	 		 	Date:	 	 7/9/12

 Acknowledged and Agreed by: 
  

	
	 /s/ Mark Schoenfisch

	Mark Schoenfisch

  

 APPENDIX A PATENT RIGHTS 

UNIVERSITY INVENTIONS 
 [***] 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 [***] 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 JOINT INVENTIONS 

[***] 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 APPENDIX B FORM OF MATERIAL TRANSFER AGREEMENT 

  

 APPENDIX C SHAREHOLDER AGREEMENT 

  

 APPENDIX D MILESTONES 

[***] 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 FIRST AMENDMENT TO AMENDED, RESTATED AND CONSOLIDATED LICENSE AGREEMENT 

This FIRST AMENDMENT to the AMENDED, RESTATED AND CONSOLIDATED LICENSE AGREEMENT (this “FIRST AMENDMENT”) is entered into this 30th
day of November, 2012 (the “EFFECTIVE DATE’’) between The University of North Carolina at Chapel Hill having an address at Campus Box 4105, 308 Bynum Hall, Chapel Hill, North Carolina, 27599-4105 (“UNIVERSITY”) and Novan,
Inc., a corporation organized and existing under the laws of the State of Delaware and having an address at 4222 Emperor Blvd, Suite 470, Durham, NC 27703 (“LICENSEE”). 

WITNESSETH 
 WHEREAS, UNIVERSITY
entered into a first license agreement with LICENSEE effective July 18, 2007, a FIRST AMENDMENT thereto effective September 30, 2008 and a SECOND AMENDMENT thereto effective October 29, 2010 (such license agreement, as amended by the
FIRST AMENDMENT and the SECOND AMENDMENT thereto, the “FIRST AGREEMENT”); and 
 WHEREAS, UNIVERSITY entered into a second license
agreement with LICENSEE effective October 1, 2009 and a FIRST AMENDMENT thereto effective October 29, 2010 (such license agreement, as amended by the FIRST AMENDMENT thereto, the “SECOND AGREEMENT”); and 

WHEREAS, UNIVERSITY entered into an AMENDED, RESTATED AND CONSOLIDATED LICENSE AGREEMENT effective June 27, 2012 (“THIRD
AGREEMENT”) thereby amending, restating and consolidating the FIRST AGREEMENT and the SECOND AGREEMENT into a single agreement; and 

WHEREAS, UNIVERSITY and LICENSEE wish to amend the INVENTIONS and PATENT RIGHTS covered by the THIRD AGREEMENT to include inventions owned by
UNIVERSITY and closely related to the INVENTIONS currently included under the THIRD AGREEMENT, titled “[***]” UNIVERSITY File: [***] and “[***]”, UNIVERSITY File: [***] (the “ADDED
INVENTIONS”); and 
 WHEREAS, the ADDED INVENTIONS were conceived of by Yuan Lu and Mark Schoenfisch. . 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 NOW, THEREFORE, in consideration of the premises and mutual promises and covenants contained in
this FIRST AMENDMENT and for good and valuable consideration, it is agreed by and between UNIVERSITY and LICENSEE as follows: 
 2. The term
“INVENTIONS” is deemed to include the ADDED INVENTIONS and the items set forth in the attached Appendix A. 
 3. The term “PATENT
RIGHTS” is deemed to include the patent rights set forth in the attached Appendix A. 
 4. In consideration for amending the INVENTIONS and PATENT
RIGHTS to include UNC files: [***] and [***], LICENSEE shall pay UNIVERSITY [***] dollars ($[***]) within [***] ([***]) days of the EFFECTIVE DATE of this FIRST AMENDMENT. 

5. Except as expressly amended in this FIRST AMENDMENT, the THIRD AGREEMENT shall continue in full force and effect in accordance with the provisions thereof
prior to the effectiveness of this FIRST AMENDMENT. 
 6. Capitalized terms used herein but not otherwise defined have the meanings assigned to them in the
THIRD AGREEMENT. 
 7. This FIRST AMENDMENT shall be interpreted and construed in accordance with the laws of the State of North Carolina. The State and
Federal Courts of North Carolina shall have exclusive jurisdiction to hear any legal action arising out of this FIRST AMENDMENT. 
 8. This FIRST AMENDMENT
may be executed by one or more of the parties to this FIRST AMENDMENT on any number of separate counterparts (including by facsimile transmission or PDF signature), and all of said counterparts taken together shall be deemed to constitute one and
the same instrument. 
 Signature Page to Follow 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 IN WITNESS WHEREOF, UNIVERSITY and LICENSEE have executed this FIRST AMENDMENT in duplicate originals, by their
respective officers hereunto duly authorized, the day and year first above written. The inventors of the ADDED INVENTION have likewise indicated their acceptance of the terms hereof by signing below. 

 

									
	THE UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL	  		 	NOVAN, INC.
					
	By:	  	 /s/ Jacqueline Quay
	  		 	By:	 	 /s/ Jeff Hunter

	Name:	  	Jacqueline Quay	  		 		 	Jeff Hunter
	Title:	  	Interim Director, OTD	  		 		 	VP of Operations
	Date:	  	12/14/12	  		 	Date:	 	12/28/12

 Acknowledged and agreed: 
  

	
	INVENTORS
	
	 /s/ Yuan Lu            

	Yuan Lu
	
	 /s/ Mark Schoenfisch            

	Mark Schoenfisch

  
  

 APPENDIX A PATENT RIGHTS 

UNIVERSITY INVENTIONS 
 [***] 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 [***] 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 JOINT INVENTIONS 

[***] 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. 

 [***] 

  
 [***] Certain information
in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.EX-10.8

 Exhibit 10.8 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions. 
 Execution Copy 

UNC SUBLICENSE AGREEMENT 
 THIS UNC
SUBLICENSE AGREEMENT (this “Agreement”) is made as of December 29, 2015 (the “Effective Date”) by and between Novan, Inc., a Delaware corporation with a principal place of business at 4222 Emperor
Boulevard, Suite 200, Durham, NC 27703 (“Novan”), and KNOW Bio, LLC, a North Carolina limited liability company with a principal place of business at 627 Davis Drive, Suite 400, Morrisville, NC 27560
(“Licensee”). Novan and Licensee may each be referred to as a “Party,” and together as the “Parties.” 

RECITALS 
 WHEREAS,
as of the Effective Date, Licensee is a wholly-owned subsidiary of Novan; 
 WHEREAS, following the Effective Date, Novan is
transferring all of the ownership interests in Licensee to the stockholders of Novan on a pro rata basis, and Novan will no longer have any ownership interest in Licensee; 

WHEREAS, Novan has licensed certain Patents related to pharmaceutical and medical device applications of nitric oxide pursuant to an
Amended, Restated and Consolidated License Agreement, dated June 27, 2012, between The University of North Carolina at Chapel Hill (“UNC”) and Novan, as amended (the “UNC Agreement”), and Licensee is interested
in developing and commercializing such Patents in the Licensee Field (each as defined below); and 
 WHEREAS, subject to the terms
and conditions set forth in this Agreement, Novan is willing to grant to Licensee a sublicense under the UNC Patents to develop and commercialize, on a worldwide basis, Licensed Products (each as defined below) in the Licensee Field. 

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, the Parties agree as follows: 

AGREEMENT 
 1.
DEFINITIONS. Capitalized terms shall have the meanings ascribed to them below or in this Agreement. 
 1.1
“Affiliate” means: (a) any person or entity which owns or controls at least fifty percent (50%) of the equity or voting stock of a Party; or (b) any person or entity fifty percent (50%) of whose equity or
voting stock is owned or controlled by a Party; or (c) any person or entity of which at least fifty percent (50%) of the equity or voting stock is owned or controlled by the same person or entity owning or controlling at least fifty
percent (50%) of such Party. For clarity, Novan and Licensee shall not be deemed Affiliates. 

  

					
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 1.2 “Confidential Information” means information disclosed (whether
in writing, electronically, orally or by observation) by one Party (the “Disclosing Party”) to the other Party (the “Receiving Party”) unless in each case such information, as shown by competent evidence: 

(a) was known to the Receiving Party or to the general public prior to the Disclosing Party’s disclosure, as
demonstrated by contemporaneous written records; 
 (b) became known to the general public, after the Disclosing
Party’s disclosure hereunder, other than through a breach of the confidentiality provisions of this Agreement by the Receiving Party or any Person to whom such Receiving Party disclosed such information; 

(c) was subsequently disclosed to the Receiving Party by a Person having a legal right to disclose, without any
restrictions, such information; or 
 (d) was developed by the Receiving Party independent of the Disclosing
Party’s Confidential Information. 
 For clarity, the UNC Technology constitutes Confidential Information of Novan. 

1.3 “Control” means, with respect to any Patents, information, know-how or technical data, that a Party or any of its
Affiliates has the ability to grant to the other Party access and a license to the foregoing, including on the terms and conditions set forth in this Agreement, as applicable, without violating the terms of any agreement or other arrangement with
any Third Party. The term “Controlled” shall be construed accordingly. 
 1.4 “Covered Product” means any
Licensed Product comprising a method or process, composition, product, or component part thereof claimed in whole or in part by an issued, unexpired, or pending claim contained in the UNC Patents whose manufacture, intended use, or sale would, but
for the sublicense(s) granted in this Agreement, infringe on the UNC Patents in the country of sale. 
 1.5 “First Commercial
Sale” means the first sale of commercial quantities of any Covered Product for human therapeutic use under an approved NDA or BLA (or foreign equivalent thereof) by Licensee, any of its Affiliates, or any Sublicensee of either of the
foregoing for which the proceeds of such sale qualify as Net Sales (as defined below). 
 1.6 “Licensed Product”
means any pharmaceutical products and medical devices covered by any claim of the UNC Patents, other than any products or devices that incorporate or utilize Novan Particles. For clarity, the products existing as of the Effective Date with the
internal Novan designations NVN1000 and NVN4000 are not Licensed Products. 
 1.7 “Licensee Field” means all
diagnostic, therapeutic, prophylactic and palliative uses for any disease, condition or indication in humans or animals that is outside of the Novan Retained Field. 

  

					
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 1.8 “Net Sales” means the total invoiced sales price received for
Covered Products sold by Licensee, its Affiliates, and their Sublicensees less (a) sales taxes or other taxes, (b) shipping and insurance charges, (c) actual allowances, rebates, credits, or refunds for returned or defective Covered
Products, (d) trade discounts and quantity discounts, retroactive price reductions, or other allowances actually allowed or granted from the billed amount and taken, (e) rebates, credits, and chargeback payments (or the equivalent thereof)
granted to managed health care organizations, wholesalers, or to federal, state/provincial, local and other governments, including their agencies, purchasers, and/or reimbursers, or to trade customers, and (f) any import or export duties,
tariffs, or similar charges incurred with respect to the import or export of Covered Products into or out of any country in the Territory. Covered Products will be considered sold when paid for. Notwithstanding the foregoing, Net Sales shall not
include, and shall be deemed zero with respect to, (1) the distribution of reasonable quantities of promotional samples of Covered Products, (2) Covered Products provided for clinical trials or research purposes, or charitable or
compassionate use purposes, or (3) Covered Products provided to any of Licensee’s Affiliates, Sublicensees or other strategic partners under an agreement in which Net Sales by such Affiliate, Sublicensee or other strategic partner shall be
subject to royalties under Section 2.6(b)(i) or Section 2.6(b)(ii). Notwithstanding the foregoing, in the event that Covered Products are sold by Licensee, or any of its Affiliates or Sublicensees as part of a combination product or
bundled product, or in conjunction with a delivery system, the Net Sales of such product, for the purposes of determining royalty payments due under this Agreement, shall be determined by multiplying the Net Sales (as originally defined above) of
the combination product by the fraction A/(A+B), where A is the average sale price of the Covered Product when sold separately in finished form and B is the average sale price of the other product(s) or system sold separately in finished form, so
that A+B is the average sale price of all of the product(s) and, if applicable, the delivery system together, as the case may be. In the event that such average sale price cannot be determined for both the Covered Product and such other product(s)
or system(s) in combination, Net Sales for the purposes of determining royalty payments with respect to such combination or bundled product shall be commercially reasonable and determined by good faith negotiation between UNC and Licensee. 

1.9 “Novan Particles” means any particles that include: (a) [***]; (b) [***]; (c) [***]; or
(d) [***]. 
  

  

					
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 1.10 “Novan Retained Field” means: (a) all diagnostic,
therapeutic, prophylactic and palliative uses for any disease, condition or disorder of the skin, nails, hair or scalp in humans or animals, including [***], as well as any other dermatological diseases, conditions or disorders (including [***]);
and (b) all cosmetic uses for the skin, nails, hair or scalp. Notwithstanding the foregoing, the Novan Retained Field does not include: (i) wound (i.e., [***]) care by use of pharmaceutical products formulated specifically to treat
chronic wounds, thermal burns, radiation injury, accidental injury, surgical sites or scars; or (ii) therapeutic uses for any form of cancer, excluding basal cell carcinoma, squamous cell carcinoma and any forms of precancerous skin lesions or
precancerous skin conditions, including actinic keratosis, actinic cheilitis, cutaneous horn, Bowen disease, radiation dermatosis, and dysplastic nevi. 

1.11 “Patents” means any of the following, whether existing now or in the future anywhere in the world:
(a) patents and patent applications; (b) continuations, continuations-in-part, provisionals, divisionals and substitute applications with respect to any such patent application; (c) any patents issued based on or claiming priority to
any such patent applications; (d) any reissue, reexamination, renewal, patents of addition, or extension (including any supplemental patent certificate) of any such patents; and (e) any confirmation patent or registration patent or patent
of addition based on any such patents. 
 1.12 “Person” means a natural person, a corporation, a partnership, a
trust, a joint venture, a limited liability company, any governmental authority, or any other entity or organization. 
 1.13
“Phase I Clinical Trial” means any human clinical trial, conducted by or on behalf of Licensee, any of its Affiliates, or a Sublicensee with respect to a Covered Product, including typically the first phase of clinical trials
conducted in relatively small numbers of healthy volunteers or patients with the targeted condition to obtain information on a Covered Product’s safety, tolerability, pharmacological activity, pharmacokinetics, drug metabolism and mechanism of
action, as more fully defined in 21 C.F.R. § 312.21(a), as may be amended, and, with respect to any other country or jurisdiction, the equivalent of such a clinical trial in such other country or jurisdiction. 

1.14 “Post Grant Proceeding” means any and all proceedings before any patent office in the Territory that involves the
review, examination, analysis or any combination thereof of any issued Patent, including without limitation post grant review proceedings, inter partes review proceedings, supplemental examinations, patent interference proceedings, opposition
proceedings, and reexaminations. 
 1.15 “Prosecute” and “Prosecution” means the
preparation, filing, prosecution and maintenance of Patents, including seeking patent extensions and supplementary protection certificate applications pursuant to 35 U.S.C. § 156 or similar statutes, but excluding Post Grant Proceedings.
1.16 “PTO” means, as applicable, the United States Patent and Trademark Office or any other relevant patent office in any country of the Territory other than the United States. 

1.17 “Sublicensee” means any Third Party to whom Licensee or any of its Affiliates sublicenses any of the rights
granted under this Agreement. 
 1.18 “Sublicensing Revenue” means sublicense payments to the extent received by
Licensee directly and solely, as reasonably determined by Licensee, as consideration for the grant of rights to UNC Patents, including upfront fees or milestone payments but excluding sales-based royalties, sales-based milestone fees, or other
payments calculated on the basis of Sublicensees’ sales of Covered Products, purchases of equity or debt of Licensee, payments made in connection with research and development agreements or collaborations, or other payments made by a
Sublicensee where Licensee is obligated to perform services or to provide goods in connection with such payment shall not be considered sublicense payments for purposes of this Agreement. 

 

  

					
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 1.19 “Territory” means the entire world. 

1.20 “Third Party” means any entity other than Licensee or Novan or an Affiliate of Novan or Licensee. 

1.21 “UNC Inventions” means Inventions that have only inventors, as determined under the Patent Laws of the United
States of America, that are obligated to assign their rights in any Inventions to UNC. “Inventions”, for purposes of this definition, means the subject matter of UNC Patents. 

1.22 “UNC Patents” means, to the extent Controlled by Novan: (a) the Patents in Appendix A; (b) any
other Patents licensed by UNC to Novan under the UNC Agreement after the Effective Date, including in accordance with Section 2.5 of this Agreement (“Additional UNC Patents”); and (c) any Patents claiming priority from the
foregoing Patents. The Parties will promptly update Appendix B in writing to reflect any additional Patents that become licensed by UNC to Novan under the UNC Agreement after the Effective Date. 

1.23 “UNC Technology” means, to the extent Controlled by Novan, any unpublished research and development information,
know-how, and technical data in the possession of UNC which relates to and is necessary for the practice of the inventions claimed in the UNC Patents. 

2. LICENSE GRANT 

2.1 Exclusive Sublicense under UNC Patents. Subject to the terms and conditions of this Agreement, Novan hereby grants to Licensee an
exclusive (even as to Novan and its Affiliates), sublicensable (through multiple tiers), sublicense in the Territory, under the UNC Patents, to develop, make, have made, use, sell, offer for sale, import and export Covered Products in the Licensee
Field. 
 2.2 Non-Exclusive Sublicense to UNC Technology. Subject to the terms and conditions of this Agreement, Novan hereby grants
to Licensee a non-exclusive, sublicensable (through multiple tiers), sublicense in the Territory, to use the UNC Technology to develop, make, have made, use, sell, offer for sale, import and export Licensed Products in the Licensee Field. 

2.3 Sublicenses. All sublicenses granted under Section 2.1 and Section 2.2 of this Agreement must be in writing and must be
materially consistent with the terms, conditions and limitations of this Agreement. Licensee promptly shall provide a copy to Novan of any sublicense entered into hereunder. Licensee shall be directly and primarily responsible and liable for any
acts or omissions of its sublicensees in relation to any subject matter of this Agreement. 

  

					
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 2.4 Retained Rights; No Implied Licenses. Only the licenses expressly granted under
this Agreement shall be of legal force and effect. No other licenses shall be created under this Agreement by implication, estoppel or otherwise. For clarity, Novan retains the exclusive rights under the UNC Patents and UNC Technology in the
Territory to develop, make, have made, use, sell, offer to sell and import any and all products and services in the Novan Retained Field. In addition, Novan retains the right under the UNC Patents and UNC Technology to conduct research and
development related to any of the subject matter claimed in the UNC Patents; provided that such research and development is not conducted for the purpose of commercialization of Licensed Products in the Licensee Field. Licensee acknowledges that the
sublicenses granted to Licensee under this Article 2 are subject to the retained rights of UNC under the UNC Agreement, including Section 2.3 and Section 2.4 thereof. In addition, notwithstanding the foregoing, any and all licenses and
other rights granted hereunder are limited by and subject to the rights and requirements of the United States Government which arise out of its sponsorship (if any) of the research which led to the conception or reduction to practice of the
inventions covered by UNC Patents. To the extent applicable due to any such sponsorship, the United States Government is entitled, as a right, under the provisions of 35 U.S.C. §§ 200-212 and applicable regulations of Title 37 of the Code
of Federal Regulations, to a non-exclusive, nontransferable, irrevocable, paid-up license to practice or have practiced for or on the behalf of the United States Government any of the UNC Patents throughout the world and Licensee agrees to comply
and require compliance therewith. 
 2.5 Additional UNC Patents. In the event that UNC notifies Novan of an Improvement (as
defined in the UNC Agreement) that becomes available for license to Novan under the UNC Agreement, Novan will notify Licensee of such Improvement. If Novan includes such Improvement in the license granted to Novan in the UNC Agreement, then the
Patents of UNC claiming such Improvement shall be included in the UNC Patents under this Agreement. In the event that Novan does not desire to include such Improvement in the license granted to Novan in the UNC Agreement, Novan shall inform Licensee
of such fact together with notification of the existence of such Improvement, and Licensee may, by providing written notice to Novan within [***] ([***]) days of receiving notice from Novan of such Improvement, require that such Improvement be
included in the license granted to Novan in the UNC Agreement and the sublicense granted to Licensee under the UNC Patents under Section 2.1, in which case, [***] will be responsible for any and all costs arising from the addition of such
Patents of UNC to the UNC Agreement and from the Prosecution of such Patents. 
 2.6 UNC Agreement. 

(a) Licensee acknowledges and agrees that Novan obtained the rights to the UNC Patents and UNC Technology through the
UNC Agreement and that Licensee has received a copy thereof. Licensee’s rights and obligations under this Agreement as they relate to the license of the UNC Patents and UNC Technology shall be subject to terms and conditions of the UNC
Agreement. Licensee acknowledges that if UNC renders the license granted under the UNC Agreement non-exclusive in accordance with the UNC Agreement with respect to any or all UNC Patents, the statement that the license granted by Novan under
Section 2.1 is “exclusive” shall not include exclusivity as to any non-exclusive rights of UNC under such UNC Patents. 

  

					
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 (b) For so long as Novan is required to make payments under the UNC
Agreement, Licensee shall pay the following payments directly to UNC, and shall copy Novan on all remittances: 
 (i)
During the term of this Agreement, on a country-by-country and Covered Product-by-Covered Product basis, Licensee will pay UNC a running royalty of [***] percent ([***]%) of all Net Sales of Covered Products sold by Licensee, any of its
Affiliates and Sublicensees. For clarity, the obligation to pay royalties under this Section 2.6(b)(i) shall be imposed only once (i) with respect to any sale of any Covered Product, and (ii) with respect to any Covered Product, in
each case regardless of whether such Covered Product, or the manufacture, use or sale thereof, is covered by more than one claim contained in the UNC Patents. Licensee shall pay to UNC said royalties on the Net Sales of Covered Products concurrently
with the making of [***] written reports as provided in Section 2.6(f) below; 
 (ii) In respect to sublicenses
granted by Licensee under this Agreement, Licensee shall pay to UNC an amount equal to [***] percent ([***]%) of Sublicensing Revenue received by Licensee as consideration for the grant of rights to UNC Patents. All payments based on Sublicensing
Revenue shall be made within [***] ([***]) days of receipt of the Sublicensing Revenue; 
 (iii) Should a compulsory
license be granted, or be the subject of a possible grant, to a Third Party under the applicable laws of any country in the Territory under the UNC Patents licensed hereunder, Licensee shall notify UNC and Novan, including any material information
concerning such compulsory license, and the running royalty rates payable under Section 2.6(b)(i) for sales of Covered Products in such country will be adjusted to equal any lower royalty rate granted to such Third Party for such country with
respect to the sales of such Covered Products therein (the “Compulsory Royalty”), provided that during such periods such Third Parties sell or offer for sale under the compulsory 1icense articles that compete with the Covered
Products then marketed and sold by Licensee or its Affiliates or Sublicensees in that country; and 
 (iv) Licensee
shall pay UNC the following payments within [***] ([***]) days of Licensee, any of its Affiliates, or any Sublicensee achieving the indicated milestone for each Covered Product covered by UNC Patents corresponding to UNC Inventions: 

 

			
	Milestone	  	Payment Due
	 [***]

  

					
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 [***] 

Notwithstanding the conduct of clinical trials, submission of applications for regulatory approval, regulatory approval, sale, or marketing of
a particular Covered Product for multiple indications, in multiple dosage or delivery forms, or in multiple bundled or combination products, the milestone fees described above shall only be due and paid once with respect to each Covered Product.
Amounts paid UNC under Section 2.6(b)(ii) with respect to Sublicensing Revenue paid to Licensee by a Sublicensee for the achievement of a milestone substantially similar to any of those established above shall be creditable against, and
deducted from, the corresponding payment due UNC under this Section 2.6(b)(iv). 
 (c) All fees, royalties, and
other payments due to UNC under this Agreement shall be made in United States Dollars. All royalties owing with respect to Net Sales or Sublicensing Revenue stated in currencies other than U.S. dollars shall be converted at an exchange rate which is
the arithmetic mean of the opening telegraphic transfer selling and buying rate published by the American East Coast edition of the Wall Street Journal on the day preceding the payment. 

(d) In the event royalty payments or fees are not received by UNC when due, Licensee shall pay to UNC interest and
charges at the lower of (a) the then-current prime lending rate as published by the American East Coast edition of the Wall Street Journal or (b) the maximum rate of interest allowed by law on the total royalties or fees overdue. 

(e) Licensee acknowledges and agrees that its payment obligations under this Section 2.6 are subject to the terms
and conditions of the UNC Agreement. Without limiting any other provision of this Section 2.6, in the event that Novan is required to make any payment to UNC based on any activity of Licensee or any of its Affiliates or any sublicensees under
this Agreement in order to comply with the UNC Agreement, Licensee shall promptly reimburse Novan for such payment made by Novan to UNC upon request by Novan. 

(f) Following the First Commercial Sale of a Covered Product or receipt of Sublicensing Revenue, Licensee agrees to make
[***] written reports to UNC, and copy Novan on such reports, within [***] ([***]) days following the end of each [***] during the term of this Agreement, stating in each such report, if and as applicable, (i) the number, description, and
aggregate selling prices of Covered Products sold or otherwise disposed of and deductions taken during the such [***] and upon which royalty is payable as provided in Section 2.6(b)(i) hereof and (ii) the amount of Sublicensing Revenue
received. The first such report shall include all such Covered Product so sold or otherwise disposed of, and all such Sublicensing Revenue received, prior to the date of such report. Until the First Commercial Sale of a Covered Product, a report
shall be submitted by Licensee, and a copy thereof delivered to Novan, at the end of each July after the Effective Date and will include a written report summarizing Licensee’s technical and other efforts made towards such first commercial sale
for all Covered Products under development. 

  

					
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 (g) Licensee will keep complete, true and accurate books of account
and records, and require its Affiliates and Sublicensees to do the same, for the purpose of showing the derivation of all amounts payable to UNC under this Agreement. Such books and records will be kept at Licensee’s, its Affiliate’s or
Sublicensee’s principal place(s) of business for at least [***] ([***]) years following the end of the [***] to which they pertain, and will be open at all reasonable times for inspection by an independent certified public accountant reasonably
acceptable to Licensee, its Affiliate or Sublicensee acting on behalf of UNC and/or Novan for the purpose of verifying Licensee’s, its Affiliate’s or Sublicensee’s royalty statements or Licensee’s compliance in other respects
with the terms of this Agreement. The representative will be obliged to treat as confidential all relevant matters but shall be free to disclose all conclusions of any such inspection(s) to UNC and Novan and support such conclusions with underlying
confidential information if challenged by Licensee, provided that all such disclosures shall be maintained as confidential by such representative and UNC and Novan with respect to Third Parties. 

(h) Inspections made under Section 2.6(g) shall be at the expense of UNC or Novan, as applicable, unless an
underpayment to UNC exceeding [***]% of the amount properly due UNC with respect to the audited period is discovered in the course of any such inspection, whereupon all [***] costs of such inspection shall be paid by Licensee. Licensee will promptly
pay to UNC the full amount of any underpayment, together with interest thereon at the lower of (a) the then-current prime lending rate as published by the American East Coast edition of the Wall Street Journal or (b) the maximum rate of
interest allowed by law. 
 (i) Licensee shall use its commercially reasonable efforts and due diligence to proceed
with the research, development, and commercial exploitation of Covered Products during the term of this Agreement. In making any determination regarding such efforts and diligence, Novan shall take into account the normal course of such programs
conducted with sound and reasonable business practices and judgment, the [***], and shall take into account [***]. 
 (j)
Licensee and Novan acknowledge that Section 6.2 of the UNC Agreement provides that sublicenses thereunder shall survive termination of the UNC Agreement and will be automatically assigned to UNC upon such termination in the event that the
UNC Agreement is terminated, to the extent (i) provided for in such sublicense and (ii) such agreement does not impose any obligations on UNC in excess of those imposed on UNC in the UNC Agreement. It is the intent of the Parties that this
Agreement survive termination of the UNC Agreement and be assigned to UNC upon such termination in accordance with Section 6.2 of the UNC Agreement. 

(k) The use of the name of UNC, or any contraction thereof, by Licensee or any of its Affiliates or sublicensees in any
manner in connection with the exercise of rights under this Agreement is expressly prohibited without the prior written consent of UNC, provided that, notwithstanding the foregoing, Licensee shall have the right to identify UNC as the prime licensor
of the UNC Patents and, under conditions of confidentiality, to disclose the terms of this Agreement in accordance with Section 6.3. 

  

					
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 (l) It is understood that Novan and UNC are subject to United States
laws and regulations controlling the export of technical data, computer software, laboratory prototypes, and other commodities that may require a license from the applicable agency of the United States Government and/or may require written
assurances by Licensee that it will not export data or commodities to certain foreign countries without prior approval of such agency. Novan and UNC neither represent that a license is not required, nor that, if required, it will be issued. 

3. PATENT PROSECUTION AND ENFORCEMENT 

3.1 Prosecution of UNC Patents. 

(a) Prosecution by UNC. The Parties acknowledge that UNC has the right to Prosecute UNC Patents under the UNC Agreement.
During such time as UNC is Prosecuting UNC Patents, Novan will keep Licensee reasonably apprised of information it receives from UNC regarding such Prosecution, and will convey comments from Licensee to UNC regarding such Prosecution. In the event
that Novan desires not to continue to pay Prosecution costs to UNC with respect to any UNC Patent, Novan shall notify Licensee in advance of ceasing to pay such costs to UNC, and if Licensee requests in writing that Novan continue to pay such costs
to UNC, then Novan will continue to do so in accordance with the UNC Agreement, [***]. 
 (b) Prosecution by Novan. In
the event that Novan is Prosecuting any UNC Patents pursuant to the UNC Agreement, except as provided for in Section 3.1(c), Novan shall have the exclusive right to Prosecute such UNC Patents, as Novan determines in good faith, [***]. In the
event that Novan desires not to continue to Prosecute any of such UNC Patents, Novan shall notify Licensee sufficiently in advance of any deadlines to afford Licensee an opportunity to request that Novan continue the Prosecution of such Patent prior
to such Patent lapsing or becoming abandoned. If Licensee requests in writing that Novan continue to Prosecute such UNC Patent, then Novan will continue to do so in accordance with this Section 3.1(b), [***]. 

(c) Filing of Continuations, Divisionals and National Applications. If Licensee desires to file a continuation,
divisional or national Patent application to any of the UNC Patents that UNC and Novan have not filed, Licensee will notify Novan of such desire. If UNC is Prosecuting the applicable UNC Patent at such time, Novan will inform UNC of such desire, and
Licensee will reimburse Novan for Prosecution costs paid to UNC in relation to such continuation, divisional or national Patent application. If Novan is Prosecuting the applicable UNC Patent at such time, Novan may elect to Prosecute such Patent
requested by Licensee [***]. Novan will notify Licensee of its election whether or not to Prosecute such Patent within [***] ([***]) days of such notice from Licensee. If Novan does not elect to Prosecute such Patent within such [***]

  

					
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([***]) day period, then Licensee may Prosecute such Patent [***]. Licensee shall control the Prosecution of such Patent (whether Prosecuted by Novan or by Licensee) in consultation with Novan;
provided, however, that all Prosecution decisions will be subject to Novan’s prior written approval (not to be unreasonably withheld). In no event will Licensee be permitted to undertake any act in the Prosecution of such Patent that may
adversely affect the scope, enforceability or patentability of any other UNC Patent, as determined by Novan in good faith. For clarity, any Patent Prosecuted by either Party pursuant to this Section 3.1(c) shall be a UNC Patent and owned solely
by UNC and sublicensed under Section 2.1 of this Agreement to Licensee. 
 (d) Cooperation in Prosecution. The
Party exercising the right to Prosecute UNC Patents pursuant to this Section 3.1 will (i) use reasonable efforts to apprise the other Party of any significant developments in the Prosecution of such UNC Patent, and (ii) copy the other
Party, or have the other Party copied, on all official correspondence relating to the relevant UNC Patents received from or to be filed with the PTO, within [***] ([***]) days of receipt from the PTO and present a draft of any material proposed
response to such correspondence at least [***] ([***]) days prior to filing with the PTO, respectively, including without limitation copies of each patent application, official action, response to official action, declaration, information disclosure
statement, terminal disclaimer filing, and request for reexamination. The Party that is not Prosecuting any particular UNC Patent shall cooperate reasonably with the Party that is conducting Prosecution of such UNC Patent. [***] shall satisfy its
obligations under this Section 3.1 to fund Prosecution costs incurred by [***] by reimbursing [***] on a [***] basis within [***] ([***]) days of receipt of reasonable documentation of such Prosecution costs incurred by Novan in the prior
[***]. 
 (e) Rights of UNC. All rights of Novan and Licensee under this Section 3.1 are expressly subject to the
terms of the UNC Agreement. The Parties agree to cooperate reasonably with UNC with respect to matters described in this Section 3.1 to the extent required by the UNC Agreement. 

3.2 Post Grant Proceedings. 

(a) Third Party Defense. In the event that Novan becomes aware that a Third Party has filed a Post Grant Proceeding with
respect to any UNC Patent, Novan will notify Licensee in writing to that effect within [***] ([***]) days of becoming aware of such filing. Once such a Post Grant Proceeding has commenced, as between the Parties, Novan shall have the first
right to respond to and/or contest such proceeding; provided, however, that if Novan does not take action to respond to and/or contest such proceeding by [***] ([***]) days before the expiration of the time limit, if any, set forth in the applicable
laws and regulations for such response or contest, then Licensee shall have the right to respond to and/or contest such proceeding. The Party that responds to and/or contests such Post Grant Proceeding shall provide the other Party: (i) with a
copy of any action, communication, letter or other correspondence issued by the PTO or the Third 

  

					
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Party within [***] ([***]) days of receipt thereof; (ii) with a copy of any proposed response, amendment, paper or other correspondence to be filed with the PTO no less than [***] ([***])
days prior to filing the same in the PTO, unless otherwise agreed by patent counsel for both Parties; provided that the other Party shall have the right to provide suggestions and recommendations regarding the content of the response, amendment,
paper or other correspondence by no later than [***] ([***]) days prior to its filing; and (iii) with a copy of any response, amendment, paper or other correspondence as filed with the PTO no more than [***] ([***]) days after the
responding/contesting Party receives confirmation from the PTO that the response, amendment, paper or other correspondence has been filed. 

(b) Commencement of Post Grant Proceedings. If either Party desires that Novan commence a Post Grant Proceeding with
respect to a UNC Patent, the Party shall notify the other Party of such desire. The Parties shall then consult with each other and consider each other’s input with respect to whether such a Post Grant Proceeding should be commenced. Novan shall
have the sole right to commence a Post Grant Proceeding with respect to a UNC Patent. Should such a proceeding be commenced: (i) Novan shall provide Licensee with a copy of any action, communication, letter or other correspondence issued by the
PTO within at least [***] ([***]) days of receipt thereof; (ii) Novan shall provide Licensee with a copy of any proposed response, amendment, paper, or other correspondence to be filed with the PTO no less than [***] ([***]) days prior to
filing the same in the PTO, unless otherwise agreed by patent counsel for both Parties; provided that Licensee shall have the right to provide suggestions and recommendations regarding the content for the response, amendment, paper or other
correspondence by no later than [***] ([***]) days prior to its filing; (iii) Novan shall provide Licensee with a copy of any response, amendment, paper, or other correspondence as filed with the PTO no more than [***] ([***]) days after Novan
receives confirmation from the PTO that the response, amendment, paper, or other correspondence has been filed. 
 (c)
Decision-Making Authority; Costs. Novan shall have final decision-making authority with respect to all aspects of Post Grant Proceedings related to the UNC Patents. Each Party shall bear its own costs incurred in connection with any Post Grant
Proceeding under this Section 3.2. 
 (d) Rights of UNC. All rights of Novan and Licensee under this
Section 3.2 are expressly subject to the terms of the UNC Agreement. The Parties agree to cooperate reasonably with UNC with respect to matters described in this Section 3.2 to the extent required by the UNC Agreement. 

3.3 Enforcement and Defense of UNC Patents. 

(a) Notice of Infringement. Each Party shall (i) notify the other Party promptly of any conduct on the part of a
Third Party that it deems to be a potential infringement of any UNC Patent or receipt of any notice of a certification filed pursuant 

  

					
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to 21 U.S.C. § 355(b)(2)(A) or 355(j)(2)(A)(vii)(IV) or its successor provisions or any similar provision in a country in the Territory other than the United States (“Paragraph IV
Notice”) claiming that any UNC Patents are invalid or otherwise unenforceable, or that infringement of UNC Patents will not arise from the manufacture, use, import or sale of a product by a Third Party (collectively,
“Infringement”), and (ii) provide the other Party with such information in its possession regarding the potential Infringement and/or a copy of any Paragraph IV Notices within [***] ([***]) days of receipt thereof. 

(b) Enforcement by Novan. Novan will have the right (but not the obligation), at its sole discretion, to take any and
all action it deems necessary to stop any Infringement (or respond to any Paragraph IV Notice), including the bringing of an action based on the UNC Patents in the Territory. Novan will exclusively control the prosecution or settlement of any such
action; provided that if such Infringement is in the Licensee Field and does not involve Novan Particles, Novan agrees not to settle such action without the prior written approval of Licensee, not to be unreasonably withheld or delayed. Novan will
be permitted to bring any such action in the name of Novan only or in the name of both Novan and Licensee. If such Infringement is in the Licensee Field and does not involve Novan Particles, Licensee shall have the right (but not obligation, other
than use of its name as set forth in the immediately preceding sentence) to participate in such action in a consultative capacity through its own counsel at its cost. Licensee will provide [***] cooperation and assistance requested by Novan in
connection with any action taken by Novan with respect to an Infringement, including by making relevant employees, inventors, documents, materials and information available to Novan. 

(c) Enforcement by Licensee in the Licensee Field. In the event of a material Infringement (including a Paragraph IV
Notice) in the Licensee Field that does not involve Novan Particles, if Novan does not commence an action based on the UNC Patents within (i) [***] ([***]) days after notice of the Infringement or (ii) [***] ([***]) days before the
expiration of the time limit, if any, set forth by applicable law for the filing of such action in response to a Paragraph IV Notice, whichever comes first, and in the case of an Infringement other than one arising by reason of a Paragraph IV
Notice, such Infringement otherwise has not been abated, Licensee will have the right (but not the obligation), at its sole discretion and expense, to take any and all action it deems necessary to stop such Infringement (or respond to such Paragraph
IV Notice), including the bringing of an action based on the UNC Patents. Licensee will control the prosecution or settlement of any such action in consultation with Novan; provided that Licensee agrees not to settle any such action without the
prior written approval of Novan, not to be unreasonably withheld or delayed, and the prior written approval of UNC. Licensee will be permitted to bring such action in the name of Licensee only or in the name of both Licensee and Novan. Novan shall
have the right (but not obligation, other than use of its name as set forth in the immediately preceding sentence) to participate in such action in a consultative capacity through its own counsel at its cost. Novan will provide [***] cooperation and
assistance requested by Licensee in connection with any action taken by Licensee with respect to an Infringement pursuant to this Section 3.3(c), including by making relevant employees, inventors, documents, materials and information available
to Licensee. 

  

					
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 (d) Invalidity Claims. In the event that an action or claim alleging
invalidity, unenforceability or non-infringement of any of the UNC Patents shall be brought or made against Novan or Licensee, Novan, at its sole discretion, shall have the right, but not be obligated, within [***] ([***]) days after the
commencement of such action or claim, to take or regain control of the action or defend such claim at its own expense. If Novan shall determine not to exercise this right, then Licensee may take over or remain in control of the action or defense in
consultation with Novan; provided that Licensee agrees not to settle any such action or defense without the prior written approval of Novan.  

(e) Infringement Costs and Proceeds. Each Party shall bear its own costs incurred in connection with any action
initiated or defended under this Section 3.3. Any monetary proceeds, damages and other relief obtained by a Party in connection with such an action (“Proceeds”) shall be applied in the following order of priority:
(i) first, to reimburse each Party for such costs paid by that Party in connection with such action, and (ii) second, after application of the foregoing clause (i), the Party that initiated or defended the action [***]. Notwithstanding the
foregoing, any such amounts retained by Licensee in the form of lost profits shall be subject to the royalty payment obligation set forth in Section 2.6(b)(i), and any such amounts retained by Licensee in the form of an ongoing reasonable
royalty, and/or consideration for an ongoing sublicense with respect to UNC Patents, shall be treated as Sublicensing Revenue subject to Section 2.6(b)(ii). 

(f) Novan Retained Rights. Except as expressly set forth in Section 3.3(c) and Section 3.3(d), Novan retains
all rights with respect to enforcement and defense of the UNC Patents. 
 (g) Rights of UNC. All rights of Novan and
Licensee under this Section 3.3 are expressly subject to the terms of the UNC Agreement. Novan will use reasonable efforts to cause UNC to comply with its obligations under Article 9 of the UNC Agreement in connection with any Infringement. The
Parties agree to cooperate reasonably with UNC with respect to matters described in this Section 3.3 to the extent required by the UNC Agreement. 

3.4 Infringement Actions by Third Parties. If the production, sale, import or use of Licensed Products under this Agreement results in
any claim for patent infringement against Licensee, any of its Affiliates, Sublicensees, or any customer(s) or sublicensee(s) of the foregoing, Licensee shall, upon becoming aware of such claim and subject to any applicable confidentiality
obligations, promptly notify Novan and UNC thereof in writing, setting forth the facts of such claim in reasonable detail. As between the parties to this Agreement, Licensee shall have the first and primary right [***] at its own expense to defend
and control the defense of any such claim, by counsel of its own choice. Licensee shall be free to enter into a settlement, consent judgment, or other voluntary disposition of any such actions, provided that any

  

					
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settlement, consent judgment or other voluntary disposition of such actions which (i) [***], (ii) [***], or (iii) [***] must be approved by Novan and UNC, as applicable, such
approval not being unreasonably withheld. Novan agrees to cooperate with Licensee in [***] defending any such action, and Novan will use reasonable efforts to cause UNC to cooperate in a similar manner. Licensee shall reimburse Novan and UNC for
[***] out of pocket expenses incurred in providing such assistance. All rights of Novan and Licensee under this Section 3.4 are expressly subject to the terms of the UNC Agreement. 

4. REPRESENTATIONS AND WARRANTIES 

4.1 Power and Authority. Each Party represents and warrants to the other Party that: (a) it has the right, power, and
authority to enter into and perform this Agreement, and to grant the licenses set forth herein, and that the person signing this Agreement on such Party’s behalf has been duly authorized and empowered to enter into this Agreement; (b) the
execution and delivery by such Party of this Agreement and the consummation by such Party of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of such Party and no other corporate
proceedings on the part of such Party are necessary to authorize this Agreement or to consummate the transactions contemplated hereby; (c) this Agreement has been duly executed and delivered by such Party and, assuming the due authorization,
execution and delivery of this Agreement by the other Party, constitutes a legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its terms; (d) the execution, delivery, and performance of and
compliance with this Agreement will not, with or without the passage of time or giving of notice, (i) conflict with, or result in any violation of or default or loss of any benefit under, any provision of the certificate of incorporation or
bylaws (or other company governing instruments) of such Party; (ii) conflict with, or result in any violation of or default or loss of any benefit under, any permit, concession, grant, franchise, law, rule or regulation, or any order to which
such Party is a party or to which any of its property is subject; (iii) conflict with, or result in a breach or violation of or default or loss of any benefit under, or accelerate the performance required by, the terms of any agreement,
contract, indenture or other instrument to which such Party is a party or to which any of its property is subject; or (iv) result in the suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization
or approval applicable to such Party, its business or operations or any of its assets or properties; and (e) no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any
governmental authority or any other person or entity is required to be obtained or filed by such Party in connection with the consummation of the transactions contemplated by this Agreement. 

4.2 Disclaimers. EXCEPT AS SET FORTH IN SECTION 4.1 ABOVE, THE UNC PATENTS ARE PROVIDED “AS IS”, AND NOVAN DISCLAIMS ALL
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE UNC PATENTS, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING, BUT NOT 

  

					
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LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, VALIDITY, NON-INFRINGEMENT, NON-INTERFERENCE AND/OR QUIET ENJOYMENT, OR ARISING FROM A COURSE OF DEALING,
USAGE OR TRADE PRACTICES. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, NOVAN EXPRESSLY DOES NOT REPRESENT OR WARRANT: (A) THE SAFETY OR USEFULNESS FOR ANY PURPOSE OF THE SUBJECT MATTER IT PROVIDES HEREUNDER; (B) THAT ANY PATENT WILL
ISSUE ON ANY UNC PATENT; OR (C) THE VALIDITY OF ANY PATENT INCLUDED IN THE UNC PATENTS. 
 4.3 UNC Disclaimers. Licensee
hereby expressly acknowledges, for the benefit of Novan and UNC, the disclaimers and limitations of liability of UNC set forth in Article 10 of the UNC Agreement. 

5. INDEMNITY; INSURANCE; LIMITATION OF LIABILITY. 

 (a) In exercising its rights under this Agreement, Licensee shall materially comply with the requirements of any
and all applicable laws, regulations, rules and orders of any governmental body having jurisdiction over the exercise of rights under this Agreement. Licensee further agrees to indemnify and hold UNC harmless from and against any costs, expenses,
attorney’s fees, citation, fine, penalty and liability of every kind and nature which might be imposed directly against UNC by reason of any asserted or established violation of any such laws, order, rules and/or regulations by Licensee. 

(b) Licensee agrees to indemnify, hold harmless and defend UNC, its and their respective officers, employees, and agents
against any and all claims, suits, losses, damage, costs, fees, and expenses (“Losses”) asserted by Third Parties, both government and private, resulting from or arising out of the exercise of Licensee’s rights under this Agreement,
provided such Losses do not result from UNC’s or its employees’, faculty’s, students’, or other agents or representatives’ gross negligence, intentional misconduct, breach of this Agreement, or failure to comply with any
applicable laws, rules, or regulations. 
 (c) Licensee is required to maintain in force at its sole cost and expense,
with reputable insurance companies, insurance coverage in amounts and of types reasonably sufficient to protect against liability under Sections 5(a) and 5(b) above. Novan and UNC shall have the right to ascertain [***] that such coverage exists,
such right to be exercised in a reasonable manner. 
 (d) NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL,
INCIDENTAL, PUNITIVE OR INDIRECT DAMAGES OR LOSS OF PROFITS ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS ARTICLE 5 IS INTENDED
TO OR SHALL LIMIT OR RESTRICT LICENSEE’S OBLIGATIONS UNDER THIS ARTICLE 5 OR THE DAMAGES AVAILABLE FOR A PARTY’S BREACH OF CONFIDENTIALITY OBLIGATIONS IN ARTICLE 6 OR [***]. 

  

					
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 6. CONFIDENTIALITY. 

6.1 Confidential Information. The Parties agree that, unless the Receiving Party obtains the prior written consent of the Disclosing
Party, at all times during the term of this Agreement and for a [***] ([***]) year period following its expiration or earlier termination, the Receiving Party will keep completely confidential, will not publish or otherwise disclose and will not use
directly or indirectly for any purpose other than as contemplated by this Agreement any Confidential Information of the Disclosing Party. 

6.2 Limited Disclosure Permitted. Each Party may disclose Confidential Information of the Disclosing Party to the extent that such
disclosure is: 
 (a) required by applicable laws, in the opinion of legal counsel to the Receiving Party; provided,
however, that the Receiving Party will first have given reasonable notice to the Disclosing Party (if practicable) and given the Disclosing Party a reasonable opportunity to obtain a protective order or confidential treatment requiring that the
Confidential Information and documents that are the subject thereof be held in confidence by the recipient or, if disclosed, be used only for purposes required by such law; provided further, however, that if a protective order is not obtained, the
Confidential Information so disclosed will be limited to that information that is legally required to be disclosed by applicable laws; 

(b) made by Receiving Party to a governmental or regulatory authority as required to conduct clinical trials or obtain
or maintain regulatory approval for products or services that are the subject of licenses granted to the Receiving Party under this Agreement; 

(c) made by Receiving Party to a Third Party as may be necessary or useful in connection with the manufacture,
development and commercialization of any products or services that are the subject of licenses granted to the Receiving Party under this Agreement, in connection with financing activities of the Receiving Party, or in connection with the transfer or
sale of all or substantially all of the business of the Receiving Party to which this Agreement relates to a Third Party, whether by merger, sale of stock, sale or transfer of assets or otherwise; provided, however, that: (i) each such Third
Party has, in the reasonable determination of the Receiving Party, a need to know such Confidential Information and is bound by an agreement containing confidentiality and non-use obligations no less protective than those set forth in this Agreement
in any material respect; (ii) the Receiving Party informs each Third Party receiving Confidential Information of its confidential nature; and (iii) the Receiving Party will be responsible for any breach of this Article 6 by any such Third
Parties to the same extent as if the breach were by the Receiving Party; 

  

					
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 (d) made by a Receiving Party in order to comply with applicable
securities law disclosure requirement or any disclosure requirements of any applicable stock market or securities exchange; or 

(e) made by Novan pursuant to the UNC Agreement. 

6.3 Terms of Agreement. The Parties agree that the material terms of this Agreement shall be considered Confidential Information of
both Parties, subject to the special authorized disclosure provisions set forth below in this Section 6.3 (in lieu of the authorized disclosure provisions set forth in Section 6.2, to the extent of any conflict) and without limiting the
generality of the definition of Confidential Information set forth in Article 1. If either Party desires to make a public announcement concerning the terms of this Agreement, such Party shall give reasonable prior advance notice of the proposed text
of such announcement to the other Party for its prior review and approval, such approval not to be unreasonably withheld. A Party shall not be required to seek the permission of the other Party to repeat or disclose any information as to the terms
of this Agreement that has already been publicly disclosed by such Party in accordance with the foregoing or by the other Party, or any similar or comparable information. Either Party may disclose the terms of this Agreement to such Party’s
existing investors, lenders, directors and professional advisors and to potential investors, lenders, acquirors or merger partners and their professional advisors who are bound by written or professional obligations of non-disclosure and non-use
that are at least as stringent as those contained in this Article 6 or are customary for such purpose. Each Party also may disclose the relevant terms of this Agreement to potential sublicensees who agree to be bound by obligations of non-disclosure
and non-use at least as stringent as those contained in this Article 6 in all material respects. Novan may disclose this Agreement to UNC. 

6.4 Publications. Novan shall have the right to review and comment on any material proposed for disclosure or publication by Licensee,
such as by oral presentation, manuscript or abstract, which includes data generated from the use of the UNC Patents or any Confidential Information of Novan. Before any such material is submitted for publication, Licensee shall deliver a complete
copy to Novan at least [***] ([***]) days prior to submitting the material to a publisher or initiating any other disclosure. Novan shall review any such material and give its comments to Licensee within [***] ([***]) days of the delivery of such
material to Novan. Licensee shall comply with Novan’s request to delete references to Novan’s Confidential Information in any such material and agrees to delay any submission for publication or other public disclosure for a period of up to
an additional [***] ([***]) days for the purpose of preparing and filing appropriate Patent applications. 
 7. TERM
AND TERMINATION 
 7.1 Term. The term of this Agreement shall commence on the Effective Date and,
unless earlier terminated in accordance with the provisions of this Article 7, shall expire upon the 

  

					
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expiration of the last-to-expire of the UNC Patents. Upon such expiration (but not the earlier termination of this Agreement), the license granted under Section 2.2 shall continue in
perpetuity on a non-exclusive basis in accordance with the terms of this Agreement. 
 7.2 Termination for Breach. Each Party may
terminate this Agreement by written notice to the other Party at any time, if the other Party breaches any provision of this Agreement and fails to cure such breach within thirty (30) days of receipt of a written notice thereof from the
non-breaching Party. 
 7.3 Termination for Patent Challenge. Novan may terminate this Agreement by written notice if Licensee or its
Affiliate or sublicensee directly, or through assistance granted to a Third Party, commences or participates (except as such participation may be required by applicable law) in any interference, pre- or post-grant opposition or other pre- or
post-grant proceeding related to the validity, enforceability and/or patentability of, or challenges the validity or enforceability of, any UNC Patent before any tribunal or patent office. 

7.4 Additional Termination by Licensee. Licensee may terminate this Agreement for any reason or no reason without penalty on ninety
(90) days written notice to Novan. Such termination shall become effective at the end of such ninety (90) day period. 
 7.5
Effect of Termination. Upon termination of this Agreement all licenses granted to Licensee and any sublicenses thereunder will cease to be in effect. In addition, upon termination of this Agreement, each Party shall return to the other Party, or
destroy, all Confidential Information belonging to the other Party, in each case except as necessary for such Party’s continued enjoyment of any license or right that survives termination of this Agreement. 

7.6 Survival. Expiration or termination of this Agreement for any reason will not relieve either Party of any obligation or liability
accruing prior thereto and will be without prejudice to the rights and remedies of either Party with respect to any antecedent breach of the provisions of this Agreement. The provisions of Sections 2.2 (but only in connection with expiration of this
Agreement and not its earlier termination), 2.4, 2.6 (to the extent required for Novan to comply with the UNC Agreement), 4.2, 4.3, 7.5, 7.6, 7.7 and 7.8, and Articles 1 (to the extent required to enforce other surviving rights and obligations), 5,
6 and 8, are intended to and shall survive termination or expiration of this Agreement in accordance with the terms of such Articles or Sections. 

7.7 Bankruptcy Code. All licenses granted under this Agreement will be deemed licenses of rights to intellectual property for purposes
of Section 365(n) of the United States Bankruptcy Code and a licensee under this Agreement will retain and may fully exercise all of its rights and elections under the United States Bankruptcy Code. 

7.8 Additional Remedies. The remedies set forth in this Article 7 or elsewhere in this Agreement will be in addition to, and will not
be to the exclusion of, any other remedies available to the Parties at law, in equity or under this Agreement. 

  

					
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 8. GENERAL 

8.1 Independent Contractors. The Parties are and at all times will be and remain independent contractors as to each other, and at no
time will either Party be deemed to be the agent or employee of the other. No joint venture, partnership, agency, or other relationship will be created or implied as a result of this Agreement. 

8.2 Governing Law. Any questions, claims, disputes, or litigation concerning or arising from this Agreement shall be governed by the
laws of the State of North Carolina without giving effect to the conflicts of laws principles of that state or other country. Subject to Section 8.3, all disputes with respect to this Agreement shall be brought and heard exclusively either in
the North Carolina state courts located in Durham County, North Carolina, or the federal district court for the Middle District of North Carolina located in Wake County, North Carolina. The Parties each consent to the in personam jurisdiction
and venue of such courts exclusively. 
 8.3 Dispute Resolution. 

(a) Organization Resolution. The Parties will try to settle their differences amicably between themselves. In the event
of any controversy or claim arising out of or relating to any provision of this Agreement or the performance or alleged non-performance of a Party of its obligations under this Agreement (“Dispute”), a Party may notify the other
Party in writing of such Dispute. Upon a Party’s receipt of written notice of a Dispute, the Dispute will be referred to the respective representatives of the Parties with authority to resolve the Dispute. If the designated representatives of
the Parties are unable to resolve the Dispute within [***] ([***]) days of receipt of the written notice by the other Party, the Dispute will be referred to the Chief Executive Officers of each of the Parties (or any other representative designated
by the board of directors of the applicable Party) who will use their good faith efforts to resolve the Dispute within [***] ([***]) days after it was referred to the Chief Executive Officers (or other such representative). 

(b) Arbitration. Any Dispute that is not resolved as provided in Section 8.3(a), whether before or after termination of
this Agreement, will be resolved by final and binding arbitration. Each Party may refer such Dispute for arbitration by written notice to the other Party. Such Disputes will be finally settled by the American Arbitration Association
(“AAA”) under its Commercial Arbitration Rules and Mediation Procedures (the “Rules”), or by such other arbitration tribunal or arbitration rules as the Parties may agree upon. Arbitration proceedings will be held
in Raleigh, North Carolina, U.S.A, or in another place which is mutually agreeable to the Parties. The arbitration shall be conducted and the award shall be rendered in English. The arbitration will be conducted by three (3) arbitrators agreed to by
the Parties within [***] ([***]) days of receipt by respondents of the request for arbitration or, in default of such agreement, according to the Rules’ Expedited Procedures for the Appointment and Qualifications of Arbitrators. [***] selected
shall be a lawyer with 

  

					
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pharmaceutical and medical device industry legal experience. During the period beginning with the selection of the arbitrators and ending upon the conclusion of the arbitration proceedings, the
Parties may conduct such discovery as is permitted under the Rules; provided, however, that the Parties shall be entitled, without any further showing of good cause to the arbitrators, to [***]. In conducting the arbitration, the arbitrators will
apply the Rules as they apply to matters of evidence. The decision by the arbitrators shall be final and binding upon the Parties, their successors and permitted assigns and the Parties will comply with such decision in good faith. The award may be
entered and enforced in any court having jurisdiction. Without limitation of the foregoing, each Party hereby submits itself to the jurisdiction of the courts of the place where the arbitration is held, but only for the entry of judgment with
respect to the decision of the arbitrators hereunder. The fees and expenses of the arbitrators, the fees and expenses of a court reporter, and any expenses for a hearing room, will be [***]. The Parties will otherwise bear [***]. 

(c) [***] Arbitration for Certain Matters. Notwithstanding the foregoing provisions of Section 8.3(b), any Disputes
related to [***] of this Agreement shall be resolved through binding arbitration administered by the AAA as follows: 

(i) Within [***] ([***]) days of receipt by respondent of the request for arbitration, the Parties shall designate in
writing a single arbitrator to resolve the dispute. If the Parties cannot agree on an arbitrator within such [***]-day period, or if the arbitrator agreed to by the Parties declines to serve, an arbitrator shall be selected, within [***] ([***])
days after notice from either Party of such inability to agree on an arbitrator willing to serve, by the AAA. The arbitrator shall be a lawyer with pharmaceutical and medical device industry legal experience who is available to serve on the
timetable established in this Section 8.3(c), and shall not be an Affiliate, or an employee, consultant, legal advisor, officer, director or stockholder of, or have any conflict of interest with respect to, any Party. Arbitration proceedings
will be held in Raleigh, North Carolina, U.S.A, or in another place which is mutually agreeable to the Parties 
 (ii)
The Party submitting a dispute to arbitration shall include with its notice pursuant to Section 8.3(b) a written summary of the disputed issues, not to exceed [***] ([***]) pages per disputed issue, and a proposed ruling on the merits of
each such issue. Within [***] ([***]) days thereafter, the other Party shall provide a written response, not to exceed [***] ([***]) pages per disputed issue, as well as such other Party’s proposed ruling on the merits of each disputed issue,
to the Party initiating such arbitration and to the arbitrator. 

  

					
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 (iii) Within [***] ([***]) days after the selection of the arbitrator
and in any event within [***] ([***]) days after the notice initiating the arbitration, the arbitrator and the Parties shall meet. During such meeting, the arbitrator shall establish a schedule for discovery. Unless the Parties otherwise agree, the
arbitrator shall limit discovery by each Party to [***]. The Parties shall have [***] ([***]) days to respond to written discovery. Depositions shall be scheduled at the mutual convenience of the Parties and the witnesses; provided that all
discovery shall be conducted so as to be completed within [***] ([***]) days after the initiation of arbitration. 
 (iv)
The arbitrator shall set a date for a hearing, which shall be no later than [***] ([***]) days after the notice initiating the arbitration pursuant to Section 8.3(b). At the hearing, in accordance with a schedule established by the
arbitrator, the Parties shall present evidence with respect to each of the disputed issues. 
 (v) Within [***]
([***]) days following the close of the hearing, the Parties shall submit post-hearing briefs to the arbitrator. The post-hearing briefing shall not exceed twenty double-spaced pages. Within [***] ([***]) days after the timely submission of
post-hearing briefs, the arbitrator shall enter a written award that rules on each disputed issue and that sets forth the grounds for the decision, applying the law of the State of North Carolina. The determination of the arbitrator as to the
resolution of any dispute shall be binding and conclusive on all Parties. Either Party may bring an action in any court of competent jurisdiction to enforce a final award entered by the arbitrator. The Parties expressly agree that the state and
federal courts located in the State of North Carolina have jurisdiction to confirm the arbitration award and enter judgment thereon. The Parties hereby waive any and all objections and defenses to such jurisdiction regardless of the nature of such
objection or defense. 
 (vi) The (i) [***], (ii) [***] and (iii) [***], shall be borne by the
non-prevailing Party or, if neither Party is the prevailing Party as to all disputed issues, by the Parties in inverse proportion to the proportion of the dispute on which they prevailed, respectively, as determined by the arbitrator. Prior to such
determination, each Party shall bear its own [***] and [***]; provided that the arbitrator shall, in his or her final award, require the non-prevailing Party (or the Party that prevails on [***]) to reimburse the other Party for the excess share of
such costs and expenses borne by such other Party prior to such determination. 

  

					
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	[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions.

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 (vii) Except as modified by this Section 8.3(c), Disputes subject
to arbitration hereunder shall be governed by the Rules. 
 (d) Confidentiality. Except as may be required by
applicable law, neither a Party nor the arbitrator(s) may disclose the existence, content or results of any arbitration award without the prior written consent of both Parties, unless to protect or pursue a legal right. 

(e) Disputes Not Subject to Arbitration. 

(i) IP Disputes. Notwithstanding the Parties’ agreement to arbitrate, unless the Parties agree in writing in any
particular case, claims and disputes between the Parties relating to or arising out of, or for which resolution depends in whole or in part on a determination of the interpretation, validity, enforceability or infringement of, Patents or the
misappropriation of trade secrets, shall not be subject to arbitration under this Agreement, and the Parties may pursue whatever rights and remedies may be available to them under law or equity, including litigation in a court of competent
jurisdiction, with respect to such claims and disputes. 
 (ii) Emergency Relief. Notwithstanding the Parties’
agreement to arbitrate, the Parties hereby agree that either Party may apply to any court of law or equity of competent jurisdiction for specific performance or injunctive relief to enforce or prevent any violation of this Agreement. Without
prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitral tribunal under this Section 8.3 shall have full authority to grant provisional remedies and to direct the Parties to request that any
court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any Party to respect the arbitral tribunal’s orders to that effect. 

8.4 No Assignment. Neither Party may assign, delegate or otherwise transfer, in whole or in part, any rights or obligations under this
Agreement, by operation of law or otherwise, without the other Party’s express prior written consent, which shall not be unreasonably withheld; provided, however, that a Party may assign or transfer its rights and delegate its obligations under
this Agreement without such consent: (a) to the transferee or successor entity to such Party upon the transfer or sale of all or substantially all of the business of such Party to which this Agreement relates to a Third Party, whether by
merger, sale of stock, sale or transfer of assets or otherwise; or (b) to an Affiliate, provided that the assigning Party shall remain liable and responsible to the other Party for the performance and observance of all such duties and
obligations by such Affiliate for so long as such entity remains an Affiliate of the assigning Party. In the case of any permitted assignment or transfer of or under this Agreement, this Agreement shall be binding upon, and inure to the benefit of,
the transferees, successors and assigns of the Parties hereto. Any attempted assignment, delegation, or transfer in violation of the foregoing will be null and void. 

  

					
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 8.5 Compliance with Laws. Each Party will comply with all applicable federal, state,
provincial and local laws, rules, and regulations in performance of its obligations under this Agreement. 
 8.6 Notices. All notices
or reports permitted or required under this Agreement will be in writing and will be delivered by personal delivery, telecopier, facsimile transmission, or by certified or registered mail, return receipt requested, and shall be deemed given upon
personal delivery, five days after deposit in the mail, or upon acknowledgment of receipt of electronic transmission. Notices shall be sent to the addresses set forth below. Either party may amend its address upon written notice to the other. 

 

			
	If to Novan:	  	If to Licensee:
		
	Novan, Inc.	  	KNOW Bio, LLC
	4222 Emperor Boulevard, Suite 200	  	627 Davis Drive, Suite 400
	Durham, NC 27703	  	Morrisville, NC 27560
	Attn:	  	Attn:
	Fax:	  	Fax:

 8.7 Waivers; Amendment. No waiver of any terms or conditions of this Agreement will be valid or binding
on a Party unless such Party makes the waiver in writing. Any such waiver shall constitute a waiver only with respect to the specific matter described therein and shall in no way impair the rights of the Party granting such waiver in any other
respect or at any other time. The failure of one Party to enforce any of the provisions of this Agreement, or the failure to require at any time the performance of the other Party of any of the provisions of this Agreement, will in no way be
construed to be a present or future waiver of such provisions, nor in any way affect the ability of a Party to enforce each and every provision thereafter. This Agreement may not be altered, amended, modified, or otherwise changed in any way except
by a written instrument signed by the authorized representatives of each Party. 
 8.8 Severability. If any provision of this
Agreement is found or held to be invalid or unenforceable by any tribunal of competent jurisdiction, then the meaning of such provision will be construed, to the extent feasible, so as to render the provision enforceable, and if no feasible
interpretation would save such provision, it will be severed from the remainder of this Agreement, which will remain in full force and effect. 

8.9 Construction. The headings of sections of this Agreement are included solely for convenience of reference and are not to be used to
interpret, construe, define, or describe the scope of any aspect of this Agreement. As used in this Agreement, the word “including” means “including but not limited to”. Each Party represents that it has had the opportunity to
participate in the preparation of this Agreement, and any rule of construction to the effect that ambiguities are to be resolved against the drafting Party will not be followed in connection with the construction or interpretation of this Agreement.
For purposes of this Agreement, the word “will” shall be equivalent in meaning to the word “shall,” both of which describe an act or forbearance which is mandatory under this Agreement. The word “may” describes an act
or forbearance which is optional under this Agreement. Unless otherwise expressly stated to the contrary herein, all remedies are cumulative, and the exercise of any express remedy by either Party does not by itself waive such Party’s right to
exercise its other rights and remedies available at law or in equity. 

  

					
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 8.10 Entire Agreement. This Agreement, including its attached exhibit, constitutes the
entire agreement and final understanding of the Parties with respect to the subject matter hereof, and supersedes any other and all prior or contemporaneous negotiations, representations, understandings, discussions, offers, and agreements between
the Parties, whether written or oral, express or implied, relating in any way to the subject matter hereof. This Agreement is intended by the Parties to be a complete and wholly integrated expression of their understanding and agreement. 

8.11 Counterparts. This Agreement may be executed in counterparts (by facsimile transmission or in Adobe Portable Document Format (PDF)
sent by electronic mail), each of which will be considered an original, but all of which together will constitute one and the same instrument. 

Signature Page to Follow 

  

					
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 IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their
duly authorized representatives. 
  

									
	Novan, Inc.	  		  	KNOW Bio, LLC
					
	By:	  	 /s/ Nathan Stasko
	  		  	By:	  	 /s/ Neal Hunter

	 Name:
	  	Nathan Stasko, PhD	  		  	Name:	  	Neal Hunter
	Title:	  	President	  		  	Title:	  	Managing Director

  

					
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 Appendix A 

UNC Patents 
 [***]

  

					
	
	[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
			
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 [***] 

  

					
	
	[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
			
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 [***] 

  

					
	
	[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
			
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 [***] 

  

					
	
	[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
			
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 Appendix B 

Additional UNC Patents 

[***] 

  

					
		  	31	 	
	
	[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.
			
	Confidential Information

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