Document:

Exhibit
4.23

 

Proposal
for XORTX Therapeutics Inc.

 

Development
of Prototype Capsule and Tablet Formulations for Potential Phase III Clinical Studies

 

Document:
QUO.XOR.002

 

Covar Pharmaceuticals
Inc. 

2/21/2022

 

     

     

    

Document: QUO.XOR.002

 

Table of Contents

 

Table of Contents 

 

	1.        Introduction	3
	2.        Environmental,
    Health and Safety	3
	3.        Analytical
    Method Transfer and Development	4
	       3.1       Cleaning
    Assay by HPLC Transfer	4
	       3.2       Analytical
    Method Development	4
	4.        API
    Characterisation	4
	5.        Granulate
    Size Reduction	4
	6.        Excipient
    Compatibility (optional)	6
	7.        Development
    of Capsule Formulation	7
	8.        Development
    of Tablet Formulation	7
	9.        Tablet
    Film Coating (Optional)	8
	10.      Cleaning
    Qualification	8
	11.      Stability
    Assessment of Formulations	8
	12.      Report	9
	13.      API
    Requirement	9
	14.      Project
    Management	9
	15.      Timeline	9
	16.      Budget
    Summary	10
	17.      Terms
    and Conditions	14

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1.         Introduction

 

XORTX Therapeutics Inc. (XORTX)
is a biotechnology company with three drug development programs, two of which are clinically advanced products under development
— XRx-008 for Autosomal Dominant Polycystic Kidney Disease (ADPKD), XRx-101 for Coronavirus / COVID-19 infection and XRx-225
for Type 2 Diabetic Nephropathy (T2DN). XORTX is working to advance its clinical development stage products — XRx-008 and
XRx-101 - that target xanthine oxidase to inhibit production of uric acid.

 

The drug substance of interest
in this proposal is Oxypurinol for the treatment of ADPKD and COVID-19. The molecule was previously formulated as a capsule and
conditionally approved by the FDA. The innovator company never sought full approval. XORTX gained the rights to the drug and intends
to file an NDA via the 505(b)(2) pathway for treatment of ADPKD in mid-2025.

 

The current drug formulations
are based on powder filled capsules including an organic base (L-arginine) to increase the drug substance bioavailability which
was a factor in the earlier application.

 

L-arginine is hygroscopic and
exposure to moisture may adversely affect the manufacturability, stability and performance of the product. Therefore, exposure
to excessive moisture and humidity will be avoided during development, manufacturing and storage of the product.

 

The intent of this proposal is
to develop prototype, immediate release, capsule and tablet formulations with the following characteristics:

 

		●	Each
                                         formulation will contain Oxypurinol (200 mg), L-arginine (600 mg), and other appropriate
                                         excipients

		●	Use
                                         of appropriate excipients to facilitate product performance and manufacturability

		●	Comparative
                                         dissolution profiles for existing formulation and the formulations being developed will
                                         be evaluated, apply f2 comparison if acceptable

		●	Scalable
                                         to large-scale manufacturing.

 

The development work in this
proposal will be conducted under non-GMP condition.

 

2.         Environmental, Health and Safety

 

The Environmental, Health and
Safety (EH&S) requirements for handling the active pharmaceutical ingredient (API) was provided by client.

 

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		3.	Analytical Method Transfer
and Development

 

		3.1	Cleaning Assay by HPLC
Transfer

 

A validated HPLC method for the
API cleaning assay will be transferred to Covar to support cleaning qualification of equipment for the manufacture of oxypurinol
products.

 

		3.2	Analytical Method Development

 

The following test methods will
be developed for the present study

 

		●	Content
                                         and related impurities assay for tablets and capsules by HPLC

 

It is assumed that the same dissolution
method by HPLC for existing capsules will be suitable for use in the present study.

 

Phase appropriate method validation
may be conduct upon request at additional cost.

 

The following compendial tests
may be evaluated before testing

 

		●	Appearance

		●	ID
                                         by FTIR (ATR)

		●	Disintegration

		●	Loss
                                         on drying

 

		4.	API Characterisation

 

The following physical properties
of oxypurinol drug substance will be studied:

 

		●	Appearance

		●	Flow
                                         properties by Flodex

		●	Optical
                                         microscopy

		●	Bulk
                                         and tap density (compressibility)

		●	Particle
                                         size distribution by sieve analysis

		●	Particle
                                         size distribution by laser diffraction if aggregates can be dispersed in water

		●	Powder
                                         x-ray diffraction

		●	Differential
                                         scanning calorimetry

 

		5.	Granulate Size Reduction

 

The API is expected to be supplied
as an agglomerated material. Different granule size reduction approaches will be evaluated in the following order:

 

1. Granule size reduction
by high shear mixing

 

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Oxypurinol and L-arginine
(mass ratio to be defined) will be mixed under different conditions in a conventional high shear granulator at different chopper
speeds and time. The powder blend will be examined under an optical microscope after high shear mixing. Based on the results,
a powder blend (after high shear mixing) will be dispersed in water to dissolve the L-arginine and the particle size distribution
of the sheared drug substance will be determined by laser diffraction. The powder blend will also be filled into gelatin capsules
and tested for dissolution (3 vessels)

 

2. Granule size reduction
by sieving

 

Oxypurinol and L-arginine (mass
ratio to be defined) will be blended (e.g. using a V-blender) and sieved (screen size to be defined). The sieved blend will be
examined under the optical microscope and the particle size distribution of the API will be determined by laser diffraction. The
dissolution profile of the powder blend after sieving will also be determined.

 

3. Milling in the presence
of L-arginine or a suitable excipient

 

Milling trials will be conducted
using a Quadro Comil U5, which is a milling equipment known to be scalable by design. The following strategies will be considered:

 

		●	Milling
                                         of a mixture of API and excipient such as L-arginine or microcrystalline cellulose (e.g.
                                         Avicel PH102).

		●	Milling
                                         of API and excipient such as L-arginine or microcrystalline cellulose using a screen
                                         with larger openings than that being used (screen with a openings of 150 micron). A multiple
                                         pass process may be considered and evaluated.

		●	Milling
                                         of API alone at sub-ambient temperature may be considered. A low milling temperature
                                         may be maintained by addition of dry ice to the input milling material.

		●	Milling
                                         of a mixture of API and excipient such as L-arginine or microcrystalline cellulose at
                                         sub-ambient temperature may be considered. A low mill temperature may be maintained by
                                         addition of dry ice to the input milling material.

 

In each milling trial, sufficient
quantity of oxypurinol with or without L-arginine/excipient (mass ratio to be defined) will be blended (e.g. using a v-blender)
and milled using the Quadro Comil (screen size 150 micron, except for multiple pass trials) for up to one hour. The temperature
of the impeller will be monitored using an infrared thermometer during the milling process and the milling rate will be monitored
online using a suitable balance.

 

A de-agglomeration method will
be selected, and the de-agglomerated material will be examined by:

 

		●	Appearance

		●	Particle
                                         size distribution by laser diffraction

 

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		●	Optical
                                         microscopy

		●	Powder
                                         X-ray diffraction (optional, non-GMP in-house or by third party)

		●	Differential
                                         scanning calorimetry (DSC)

		●	Assay
                                         and related impurities by HPLC

 

		6.	Excipient Compatibility
(optional)

 

Preformulation data such as those
collected from existing formulations and API characterisation will be studied. Excipient candidates will be proposed to client
for the excipient compatibility study.

 

The following will be considered
for potential excipients:

 

		●	Degradation
                                         pathway and potential degradation pathway of the API

		●	Moisture
                                         content and hygroscopicity

		●	Compression
                                         behavior

		●	Particle
                                         size distribution

		●	Regulatory
                                         acceptance

		●	Bioavailability
                                         impact

		●	Supplier
                                         sourcing

 

Effort will be made to avoid
excessive use of excipients to preserve the impact of L-arginine on the bioavailability of the drug substance.

 

Up to 10 powder blends of formulations
will be prepared and compressed into round biconvex tablets (compression weight around 1000 mg) using a tabletop single-station
(manual) compression machine. The samples will be packaged in 40mL HDPE bottle and induction sealed with and without desiccant.
The packaged tablets will be stored at 25, 40 and 50°C. The 50°C samples will be evaluated using the following tests:

 

		●	Appearance

		●	Assay
                                         and impurities

		●	Disintegration

 

Samples stored under other conditions
will be tested if needed with additional cost.

 

Based on the excipient compatibility
study results, a lead formulation and a backup formulation will be identified and tested for dissolution for further formulation
development.

 

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		7.	Development of Capsule
Formulation

 

Based on the composition of the
lead formulation from excipient compatibility study and/or existing formulation development data, up to five prototype capsules
blends will be prepared and evaluated for the following properties:

 

		●	Appearance
                                         before and after storage with and without desiccant

		●	Flow
                                         properties by Flodex

		●	Tap
                                         and bulk density

 

Based on the blend testing results,
a lead blend and a backup capsule blend will identified for processability and physical stability, The lead formulation will be
filled into white opaque size 00 elongated or 000 hard gelatin capsules using a manual encapsulation machine and tested for:

 

		●	Appearance

		●	Fill
                                         weight

		●	Disintegration

		●	Dissolution

 

		8.	Development of Tablet Formulation

 

Based on the composition of the
lead capsule blend and background stability information from oxypurinol formulations, up to 6 prototype blends (about 500 g each)
will be prepared. The composition of the prototype blends may be taken directly from those of the capsule blends. The prototype
blends may also be prepared to evaluate to the effect of lubricant, disintegrant, and binder levels on their flow and compression
properties.

 

The compression blends will be
evaluated before compression for:

 

		●	Appearance

		●	Flow
                                         properties by Flodex

		●	Bulk
                                         and tap densities

 

The compression blends will be
compressed into tablets (of different tablet hardness) of plain biconvex capsule shaped tablets of 1 g or less. Plain, biconcave,
capsule shape tooling will be used for tablet compression. It is assumed that the formulation blends will be directly compressible.
Otherwise, a dry granulation method will be employed by slugging or by roller compaction using a tabletop roller compactor to
be acquired by Covar a its own cost. At present, several used tabletop roller compactors is available for purchase in North America
and for immediate delivery.

 

The formulations will be prepared
using the following equipment

 

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		●	PK
                                         V-blender

		●	Instrumented
                                         Piccola bilayer tablet press (partially tooled, B tooling)

 

The compressed tablets will be
evaluated for:

 

		●	Appearance

		●	Crushing
                                         strength

		●	Friability

		●	Thickness

 

Based on the results, a suitable
batch of tablets will be prepared at 1 kg scale. 500 g of the compressed tablets will be packaged in induction sealed (HDPE, 40
mL) bottles with and without desiccant and stored at 25°C ± 2°C / 60% ± 5% RH and 40°C ± 2°C
/ 75% ± 5% RH.

 

		9.	Tablet Film Coating (Optional)

 

About 250 g of the compressed
tablets will be aqueous film coated using a moisture barrier coating composition, Opadry® amb II. An enhanced O’Hara pan coater
(Labcoat M10, 8 inch perforated coating pan) will be used for the coating operation. The coated tablets will be evaluated for
dissolution and packaged in induction sealed (HDPE, 40 mL) bottles with and without desiccant and stored at 25°C ±
2°C / 60% ± 5% RH and 40°C ± 2°C / 75% ± 5% RH, for further stability testing if required with
additional cost.

 

		10.	Cleaning Qualification

 

Cleaning qualification campaign
will be performed for the process training. The cleaning process is considered validated if three satisfactory cleaning verification
is achieved using the same equipment.

 

		11.	Stability Assessment of
Formulations

 

The package capsules and uncoated
tablets packaged without desiccant will be tested in accordance with the following schedule:

 

		●	Initial

		●	2
                                         wk, 1 and 3 months at 40°C ± 2°C / 75% ± 5% RH (accelerated condition)

		●	2
                                         wk, 1 and 3 months at 25°C ± 2°C / 60% ± 5% RH (long term condition;
                                         optional testing)

 

The packaged capsules and uncoated
tablets with desiccant will also be tested after storage at 40°C ± 2°C / 75% ± 5% RH (accelerated condition)
for 2 wk, 1 and 3 months.

 

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The following tests will be conducted:

 

		●	Appearance

		●	Content
                                         uniformity by HPLC (initial only)

		●	Assay
                                         and related impurities by HPLC

		●	Water
                                         content by LOD

		●	Disintegration

		●	Dissolution
                                         by HPLC

		●	Crushing
                                         strength (tablets only)

		●	Friability
                                         (tablets only)

		●	Weight
                                         (bottle and tablets) loss on storage

 

The coated tablets (if prepared)
and the rest of the formulations packaged with or without desiccant will be tested upon requested with additional cost.

 

Because of the known satisfactory
chemical stability of the drug substance, it may be possible to define the composition and the packaging components for the potential
Phase III clinical formulation using the 2 week (accelerated and long term) stability data.

 

		12.	Report

 

A development report will be
prepared by Covar.

 

		13.	API Requirement

 

API (GMP API and/or non-GMP)
and reference standards for analytical testing will be supplied by the client. Contract service for reference standard preparation
and qualification by a third party is available upon request.

 

	Preformulation, API milling trial and excipient compatibility	= 1 kg
	Capsule development	= 0.5 kg
	Tablet development including film coating	= 1.5 kg
	Contingency	= 1 kg
	Total     	= 4 kg

 

		14.	Project Management

 

A project manager will be assigned
to coordinate project activities with project team members. A kickoff meeting will be held after execution of agreement and deposit
is received. A dedicated project team from Covar will teleconference with the Client on regular basis.

 

		15.	Timeline

 

See MS Project file.

 

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		16.	Budget Summary

 

	Activity	Estimated
    

    Cost (CAD)
	Material
    Management	1,796.88
	Material
    purchase and management	 
	Method
    Transfer and Development	11,767.38
	Cleaning
    Assay by HPLC method transfer	 
	Method
    Development for content and related impurities assay for tablets and capsules by HPLC	 
	API
    Characterisation	3,346.50
	Appearance	 
	Flow
    properties by Flodex	 
	Optical
    microscopy	 
	Bulk
    and tap density (compressibility)	 
	Particle
    size distribution by sieve analysis	 
	Particle
    size distribution by laser diffraction if aggregation can be dispersed in sample preparation	 
	Powder
    x-ray diffraction	 
	Differential
    scanning calorimetry	 
	Data
    analysis and reporting	 
	Granule
    Size Reduction of API	14,961.50
	Granule
    size reduction by high shear mixing trials	 
	Granule
    size reduction by sieving	 
	Milling
    in the presence of L-arginine or a suitable excipient	 
	Setup
    and cleanup	 
	Appearance	 
	Particle
    size distribution by laser diffraction	 
	Optical
    microscopy	 
	Powder
    X-ray diffraction (optional, non-GMP by third party)	 
	Differential
    scanning calorimetry (DSC)	 
	Assay
    and related impurities by HPLC	 
	Data
    analysis and reporting	 
	Excipient
    Compatibility (optional)	13,943.75
	Sample
    preparation	 
	Appearance	 
	Assay
    and impurities	 
	Disintegration	 
	Report
    results	 
	Development
    of Capsule Formulation	8,420.88
	Sample
    preparation	 
	Appearance
    before and after storage with and without desiccant	 
	Setup
    and cleanup	 
	Flow
    properties by Flodex	 
	Tap
    and bulk density	 
	Encapsulation	 

 

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	Activity	Estimated
    

    Cost (CAD)

	Appearance	 
	Fill
    weight of capsules	 
	Disintegration	 
	Dissolution	 
	Development
    of Tablet Formulation	22,482.50
	Set
    up	 
	Prototype
    preparation (6 batches)	 
	●         
    Appearance	 
	●         
    Flow properties by Flodex	 
	Bulk
    and tap densities	 
	Packaging	 
	Clean
    up	 
	Data
    analysis and reporting	 
	Tablet
    Film Coating (Optional)	6,307.75
	Setup	 
	Coating	 
	Clean
    up	 
	Dissolution	 
	Packaging	 
	Dissolution	 
	Cleaning
    Qualification	10,511.00
	Protocol	 
	Sampling	 
	Testing	 
	Reporting	 
	QA
    approval	 
	Stability
    Assessment of Capsule and Tablet Formulations	 
	Protocol	8,711.25
	Set
    up	 
	Initial	10,084.06
	Appearance	 
	Content
    uniformity by HPLC (initial only)	 
	Assay
    and related impurities by HPLC	 
	Water
    content by LOD	 
	Disintegration	 
	Dissolution
    by HPLC	 
	Crushing
    strength (tablets only)	 
	Friability
    (tablets only)	 
	Weight
    (bottle and tablets) loss on storage	 
	2
    weeks	15,306.50
	Appearance	 
	Assay
    and related impurities by HPLC	 
	Water
    content by LOD	 
	Disintegration	 

 

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	Activity	Estimated
    

    Cost (CAD)

	Dissolution
    by HPLC	 
	Crushing
    strength (tablets only)	 
	Friability
    (tablets only)	 
	Weight
    (bottle and capsules/tablets) loss on storage	 
	1
    month	15,306.50
	Appearance	 
	Assay
    and related impurities by HPLC	 
	Water
    content by LOD	 
	Disintegration	 
	Dissolution
    by HPLC	 
	Crushing
    strength (tablets only)	 
	Friability
    (tablets only)	 
	Weight
    (bottle and capsules/tablets) loss on storage	 
	3
    months	15,306.50
	Appearance	 
	Assay
    and related impurities by HPLC	 
	Water
    content by LOD	 
	Disintegration	 
	Dissolution
    by HPLC	 
	Crushing
    strength (tablets only)	 
	Friability
    (tablets only)	 
	Weight
    (bottle and capsules/tablets) loss on storage	 
	Development
    Report	13,800.00
	Subtotal	172,052.94
	Project
    management fee (5%)	25,807.94
	Total	197,860.88

 

Third-party contractor fees will
be cross charged plus 5% service fee. Other fees, including but not limited to input processing materials, shipping, customs duties,
and consumables such as chromatography columns and solvents will be cross charged at cost plus 10% service fee.

 

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	Xortx
    Therapeutics Inc.	 	Covar
    Pharmaceuticals Inc.	 
	 	 	 	 	 	 	 	 	 	 
	By:	/s/
    Allen Davidoff	 	By:	/s/ Kwok Chow	 
	 	 	 	 	 	 	 	 	 	 
	Name:	Allen
    Davidoff	 	Name:	 	Kwok Chow, PhD	 
	 	 	 	 	 	 	 	 	 	 
	Title:	CEO	 	Title:	President	 
	 	 	 	 	 	 	 	 	 	 
	Date:	Feb
    24, 2022	 	Date:	Feb 25, 2022	 
	 	 	 	 	 	 	 	 	 	 

 

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		17.	Terms and Conditions

 

Services

 

Covar Pharmaceuticals Incorporated
(Covar) agrees to perform the pharmaceutical development services described in the Project Scope (“Services”)
of this Agreement. Services will be performed in the Preferred Provider Laboratories (Provider) selected by Covar.
Unless otherwise stated the Services will be non-GMP.

 

Parties must agree on Changes
to the Services (“Changes”).

 

Minor Changes will be confirmed
by electronic mail, or other written document. Significant Changes (such as a request by the Client to change the Project
Scope) will be confirmed by a Change of Scope Agreement.

 

Payment

 

Client will pay Covar
for the Services.

 

Client will pay Covar
a refundable deposit equal to 30% of the estimated cost provided in this proposal. The deposit will be used for the final
payments of the project.

 

Services Covar may issue
an invoice upon completion of each milestone set out in the Budget Summary or revised Budget Summary in Changes.

 

Covar invoice will be
due and payable within 30 days of the date of the invoice. 

 

Interest on past due accounts
will accrue at a rate of 1.5% per month.

 

In the event that payment in
full is not received by Covar within thirty (30) days of Client’s receipt of the data and results, this Agreement
may be terminated at Covar’s sole discretion and all right and title to the data and results.

 

Ownership
of Data

 

Client will own all data
and information specifically and directly arising from the provision of the Services, and as such Covar will have no claim
on any intellectual property that may be derived from any such data and information.

 

Intellectual
Property

 

The term “Intellectual
Property” includes, without limitation, rights in patents, patent applications, formulae, trade-marks, trade-mark applications,
trade-names, trade secrets, inventions, copyright, industrial designs and know-how.

 

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For the term of this Agreement,
Client hereby grants to Covar, a non-exclusive, paid-up, royalty-free, non-transferable license of Client’s Intellectual Property
which Covar must use in order to perform the Services.

 

All Intellectual Property generated
or derived by Covar in the course of performing the Services, to the extent it is specific to the development, manufacture, use
and sale of the Client’s Product that is the subject of the Services, will be the exclusive property of Client.

 

All Intellectual Property generated
or derived by Covar while performing the Services which is not specific to, or dependent upon, Client’s Product and which has
application to manufacturing processes or formulation development of drug products or drug delivery systems will be the exclusive
property of Covar. Covar hereby grants to Client, a non-exclusive, paid-up, royalty-free, transferable license of the Intellectual
Property which Client may use for the manufacture of Client’s Product.

 

Confidentiality

 

The confidentiality agreement
entered into between the parties will apply to all confidential information about the parties and the Services to be conducted
under this Agreement and the Confidentiality Agreement is deemed to be incorporated herein by reference. If the
Confidentiality Agreement expires or terminates prior to the expiration or termination of this Agreement, then the
terms of the Confidentiality Agreement will nonetheless continue to govern the parties’ obligations of confidentiality
for the term of this Agreement and for five years thereafter. Covar shall have the right to disclose confidential
information hereunder to its Preferred Providers solely for the purpose of performing the Services. Covar represents that
it has entered into confidentiality Agreements with each Preferred Provider consist with the terms hereof.

 

Providers shall hold in
confidence and not disclose or use for any purpose other than for the provision of the Services any “Confidential Information”
provided by Client. “Confidential Information” means any information provided by the Client to Providers
in confidence and any Client samples and/or materials associated with the Services, and shall further include any information
and all related data and information generated pursuant to the provision of the Services.

 

Confidential Information shall
not include or otherwise encompass any information and materials which:

 

		●	are
                                         part of the public domain, or become part of the public domain through no fault of Providers;

 

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		●	are
                                         obtained from a third party who is not under a duty of confidentiality respecting the
                                         Confidential Information and said third party has a legal right to disclose such information;

		●	are
                                         identified by the Client as no longer constituting Confidential Information of
                                         the Client;

		●	are
                                         already known at the time of disclosure by Client to Providers, as can
                                         be demonstrated by written or other records/information; or

		●	are
                                         developed independently by Providers without access to the Confidential Information
                                         of the Client, as can be demonstrated by written or other records/information.

 

In the event that Covar is
required to disclose Client Confidential Information by law or an order of a court, tribunal or government agency, Covar
shall promptly notify Client and give Client a reasonable opportunity to seek a confidentiality order or take
other appropriate action in respect of the proposed disclosure.

 

This obligation of confidentiality
in respect of any particular Confidential Information shall survive for a period of three (3) years from the earlier of
(i) the full and final provision of the specific Services associated with the particular Confidential Information, or (ii) the
expiration or earlier termination of this Agreement.

 

Term
and/or Termination

 

Notwithstanding, a Party may
earlier terminate this Agreement upon the provision of thirty (30) day notice to the other Party, and the Parties shall
immediately cease all unnecessary activities and shall cooperate to minimize all costs associated with this cessation/termination
of activities associated with the provision of said Services.

 

Either party may terminate this
Agreement if a party is in material breach of any part of this Agreement and that party fails to remedy the breach
within 30 days after receiving notice of the breach from the non-breaching party.

 

Client may terminate this
Agreement upon 5 days prior written notice for any business reason.

 

Covar may terminate the
Agreement if the Client requests to reschedule any part of the Services beyond 180 days.

 

Upon completion or expiry of
the Agreement or if the Client terminates the Agreement for any business reason or if Covar terminates
the Agreement because of: (i) Client’s failure to cure any default within the 30 day notice period; or (ii) Client
rescheduling any part of the Services beyond the 180 days, then Client will pay to Covar any fees and expenses
due to Covar and any additional costs incurred by Covar with the Services.

 

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Client will arrange for
the pickup from the Covar site of all materials owned by Client within ten days after the earlier of the completion,
or termination of this Agreement.

 

Shipping
of API and Materials

 

Client will, at its expense,
supply Covar with sufficient quantities of API for Covar to perform the Services. For all shipments of API and materials
from Client to Covar, Client will pay all costs including transportation, import duties and taxes. All shipments
of API will be accompanied by appropriate Safety Data Sheet (e.g. MSDS).

 

For import of API, Client
or Client’s broker will be the “Importer of Record.” Client’s obligation will include obtaining
the proper release of API from the local customs and health authorities.

 

For shipments (if applicable)
of Client’s Product or Client’s API, the Client will pay all transportation costs and also bear the risks
for bringing the goods to their final destination.

 

Indemnity

 

Client shall indemnify
and save harmless Covar against all costs, actions, suits, claims, losses or damages and for all other matters arising
out of its (i.e Client’s) use or any other exploitation of the data, results, conclusions, and products derived therefrom,
arising out of, or resulting from, this Agreement (and any intellectual property associated therewith), except to the extent
that such were caused by Covar’s gross negligence, willful misconduct or material breach of this Agreement.

 

Covar will defend, indemnify
and hold the Client harmless against Covar of any of its obligations or warranties under this Agreement except
to the extent that these Losses are determined to have resulted from the negligence or willful misconduct of Client.

 

Limitation
of Liability

 

Covar (and its directors,
officers, employees, staff members, students, research trainees and agents) shall not be liable for any direct, indirect, consequential,
or other damages suffered by Client or any others resulting from the use of the data, results or conclusions, and any products
and intellectual property associated therewith, conceived, discovered, or otherwise premised on, or developed under or as a result
of, or consequential to, this Agreement. The entire risk as to any use of said data, conclusions or results (and any products
and intellectual property associated therewith), and the design, development, manufacture, offering for sale, sale, or other disposition
and/or performance of the data, results, conclusions and products arising therefrom (and any intellectual property associated
therewith) is assumed entirely by Client, without any legal or equitable recourse to Covar

 

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If Covar fails to materially
perform any part of the Services in accordance with the terms of this Agreement, Covar may repeat that part of the
Service at Covar’s costs if Client supplies the API. Under no circumstances whatsoever will Covar reimburse
Client for the cost of the API. Under no circumstances whatsoever will either party be liable to the other in Agreement,
tort, negligence, breach of statutory duty or otherwise for (i) any (direct or indirect) loss of profits, of production, of anticipated
savings, of business or goodwill or (ii) any other liability, damage, cost or expense of any kind incurred by the other party
of an indirect or consequential nature, regardless of any notice of the possibility of the damages.

 

No
Warranty

 

Covar makes no warranty of any
kind, either expressed or implied, by fact or law, other than those expressly set forth in this Agreement. Covar makes no warranty
for any particular results from the performance of the services or with respect to any data or information generated therefrom,
or of fitness for a particular purpose or warranty of merchantability for the Client’s product.

 

Disputes

 

All negotiations under this provision
shall be considered confidential and shall be treated as compromise and settlement negotiations and deemed to be “off the
record” and without prejudice.

 

General
Provisions

 

This Agreement shall be
construed according to the laws of the Province of Ontario and the federal laws of Canada applicable therein.

 

Each provision of this Agreement
shall be deemed separate, severable and distinct. If any part of any provision of this Agreement is found by a court
to be invalid, illegal or unenforceable in any way, the finding shall not limit or affect the validity, legality or enforceability
of the remaining provisions.

 

For the purposes of this Agreement
and all services to be provided under it, each Party shall be deemed to be an independent Agreement or and not an agent
or employee of the other Party. No Party shall have the authority to make any statements, representations or commitments of any
kind, or take any action which shall be binding on the other Party, except as may be explicitly provided for herein or authorized
by the other Party in writing.

 

Except as otherwise required
by law, neither Party shall, without the consent of the other Party, (i) use the name(s), logo(s), trade-mark(s) or trade-name(s)
of the other Party in connection with any products, publicity, promotion, news release, advertising or similar public statements
in respect of the Agreement and the Services provided, and (ii) make any other public disclosure in respect of this
Agreement and its subject matter. Notwithstanding, Covar may disclose the general subject matter and monies received further
to this Agreement without any further consent of Client.

 

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This Agreement constitutes
the entire Agreement and understanding between the Parties and supersedes any prior Agreements between or among
the Parties with respect to the Services.

 

This Agreement may be
signed in separate counterparts and delivered by mail, facsimile or electronically, and, when so signed and delivered, all the
counterparts will together constitute one and the same instrument which is deemed to be an original.

 

Neither this Agreement,
nor any of either party’s rights hereunder, may be assigned or otherwise transferred by either party without the prior written
consent of the other party, which consent will not be unreasonably withheld.

 

Except for payment obligations,
neither party will be responsible for delay or failure in performance resulting from acts beyond the reasonable control and without
the fault or negligence of the party, including, but not limited to, strikes or other labour disturbances, wars, riot, crime,
communicable disease outbreaks„ acts of terrorism, fires, floods, storms, interruption of or delay in transportation, defective
equipment, power or regulation compliance of any government or act of God.

 

Any termination or expiration
of this Agreement will not affect any outstanding obligations or payments due hereunder prior to the termination or expiration,
nor will it prejudice any other remedies that the parties may have under this Agreement.

 

    Page | 19
ConfidentialExhibit
4.24

 

Proposal
for XORTX Therapeutics Inc.

 

Oxypurinol
Capsules for Phase 1 Bioavailability Study

 

Document:
QUO.XOR.001

 

Covar
Pharmaceuticals Inc.

12/6/2021

 

     

     

    

 

Document: QUO.XOR.001

 

Table of Contents

 

Table of Contents

 

	1.	Introduction	3
	3.	Method
    Transfer	4
	 	3.1	Assay and Related Impurities by HPLC	4
	 	3.2	Method development and validation (Phase 1)	4
	4.	Milling	4
	5.	Manufacture
    of Development Batches	5
	6.	Manufacture
    of Stability/CTM Batches	6
	 	6.1	Batch Manufacture	6
	 	6.2	ICH Stability Study for CTM Batches	6
	7.	Report	7
	8.	API
    Requirements	7
	9.	Project
    Management	7
	10.	High
    Level Timeline	7
	11.	Budget
    Summary	8
	12.	Terms
    and Conditions	13

 

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		1.	Introduction

 

Xortx
Therapeutics Inc. (Client) is developing Oxypurinol for the treatment of ADPKD and COVID-19. The molecule was previously
formulated as a capsule and conditionally approved by the FDA. XORTX intends to file an NDA via the 505(b)(2) pathway for treatment
of ADPKD in mid-2025. The drug formulation will be a powder filled capsule including an organic base to increase the drug substance
bioavailability.

 

This
proposal provides the scope and budget estimate for preparation and testing of the following formulations to support a Phase I
bioavailability study in Canada. The CTA filing and bioavailability study are targeted for 1Q2022

 

Capsule
A

 

		●	Hard
                                         gelatin capsules

		●	Target
                                         fill weight of 200 mg

		●	Hard
                                         gelatin capsules containing Oxypurinol and L-Arginine at a weight ratio of 1:1 and magnesium
                                         stearate of not more than 1% w/w

 

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		3.	Method
Transfer

 

		3.1	Assay
and Related Impurities by HPLC

 

A
validated HPLC method for the API assay and related impurities testing will be transferred to Covar to support the development
program.

 

To
accelerate the program, dedicated equipment such as change parts for semi-automatic encapsulator, and milling equipment will be
used for processing (estimated cost of not more than CAN $10,000). The contact parts for blending will be passivated before and
after GMP manufacture. Alternatively, cleaning qualification using an HPLC method may be conducted. An estimated cost for cleaning
qualification can be provided upon request.

 

		3.2	Method
development and validation (Phase 1)

 

The
following test methods will be developed and validated for Phase 1 bioavailability study:

 

		●	Product
                                         assay and related impurities by HPLC

		●	Dissolution
                                         by UV

		●	Product
                                         Microbial Enumeration Test <USP 61> including E Coli by a GMP contract laboratory

		●	API
                                         Particle size distribution by laser diffraction

 

The
following compendial tests may be evaluated before testing

 

		●	Appearance

		●	ID
                                         by FTIR (ATR)

		●	Disintegration

		●	Loss
                                         on drying

 

		4.	Milling

 

A
milling trial will be conducted using one or more of the following milling equipment to establish milling parameters and to achieve
target particle size distribution:

 

		●	Jet
                                         milling (for micronization)

		●	Microfine
                                         grinder (IKA) with appropriate screen size

		●	Comil
                                         (tabletop Quadro Comil, U5)

 

A
target of 3 milling trials is planned. Representative samples of milled and unmilled API will be evaluated using the following
methods:

 

		●	Appearance

		●	Particle
                                         size distribution by laser diffraction (sieve analysis by Sonic Sifter may be used for
                                         unmilled API)

		●	Optical
                                         microscopy

		●	Powder
                                         X-ray diffraction (optional, non-GMP by third party)

		●	Differential
                                         scanning calorimetry (DSC)

 

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		●	Assay
                                         and related impurities by HPLC

 

The
results will be used to confirm whether milling will cause solid state transition or chemical degradation of the API. The crystallinity
of milled material will be evaluated using DSC and/or powder x-ray diffraction.

 

		5.	Manufacture
of Development Batches

 

One
non-GMP batch (100 to 200 capsules) of each capsule formulation will be manufactured and packaged in induction sealed HDPE bottles
(40mL) using the following procedure:

 

		●	Dispensing

		●	Particle
                                         size reduction of API

		●	Blending

		●	Encapsulation

		●	Packaging

 

The
following equipment will be used to manufacture and packaging the development batches:

 

		●	Balance
                                         & scale

		●	Jet
                                         mill (for micronization), microfine grinder (IKA) or Comil (tabletop Quadro Comil, U5)

		●	Patterson-Kelley
                                         Blend Master Lab Blender (or equivalent)

		●	Semi-automatic
                                         encapsulator

		●	Induction
                                         sealer

 

The
milling procedure will be included as part of secondary manufacture. Alternately a separate batch of milled API will be prepared
from unmilled API and tested on stability under ICH storage conditions at additional cost for CTA filing.

 

Based
on the capsule drug loading, high shear mixing may not be required. However, mixing with high shear equipment can be performed,
if needed to achieve acceptable content uniformity. An optional content uniformity assay by HPLC for the lowest drug loading formulation
(Capsule B) may be performed for information only, at additional cost. The content uniformity assay by HPLC will not be validated.

 

One
month stability data will be collected under ICH conditions (25°C/60%RH, 30°C/65%RH (optional at additional cost) and
40°C/75%RH) for Capsule B and Capsule C batches. The results may be included as supporting data in the Quality Overall Summary
of the CTA.

 

The
stability tests for the development batches include:

 

		●	Appearance

		●	Assay
                                         and related impurities by HPLC

		●	Dissolution
                                         by UV

		●	Content
                                         uniformity by weight (initial only)

		●	Disintegration
                                         (initial only)

		●	Water
                                         content by loss on drying

 

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MET
data will be collected from CTM batches and included in the CTA.

 

Development
batch records will be used for the stability batches.

 

		6.	Manufacture
of Stability/CTM Batches

 

		6.1	Batch
Manufacture

 

One
GMP (CTM) batch (approximately 700 capsules per batch) of each capsule formulation (Capsule A, Capsule B, or Capsule C; total
of three batches) will be manufactured and packaged in induction sealed in HDPE bottles (40 mL HDPE bottles and polypropylene
caps with induction seal liner) using the following procedure:

 

		●	Dispensing

		●	Particle
                                         size reduction of API

		●	Blending

		●	Encapsulation

		●	Packaging

 

The
following equipment will be used for the manufacture and packaging of the CTM batches:

 

		●	Balance
                                         & scale

		●	Jet
                                         mill (for micronization), microfine grinder (IKA) or Comil (tabletop Quadro Comil)

		●	Patterson-Kelley
                                         Blend Master Lab Blender

		●	Semi-automatic
                                         encapsulator

		●	Induction
                                         sealer

 

The
milling procedure will be included as part of the secondary (product) manufacture.

 

USP-NF
ingredients will be used and capsule shells will be certified BSE free. Packaging components with DMF (FDA) filing will be sourced
for the development program.

 

Elemental
impurities content of the input materials will be reviewed for justification of product specifications without the inclusion of
elemental impurities. ICP MS testing of elemental impurities of input materials including the API, as well as capsule products
may be conducted by a contractor if needed at additional cost.

 

		6.2	ICH
Stability Study for CTM Batches

 

The
following stability program is proposed for the three CTM batches.

 

		●	Initial

		●	1,
                                         3 and 6 months at 40°C ± 2°C / 75% ± 5% RH (accelerated condition)

		●	1,
                                         3, 6, 9, and 12 months at 30°C ± 2°C / 65% ± 5% RH (intermediate
                                         condition)*

		●	1,
                                         3, 6, 9, 12, 18 and 24 months at 25°C ± 2°C / 60% ± 5% RH
                                         (long term condition)

*optional
with additional cost

 

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The
stability program for Capsule C CTM will discontinue when dosing of the human subjects is completed.

 

The
following tests will be conducted for the stability studies:

 

		●	Appearance

		●	Assay
                                         and related impurities by HPLC

		●	Disintegration
                                         (initial only)

		●	Dissolution
                                         by UV

		●	Water
                                         content by loss on drying

		●	Uniformity
                                         of content by weight (initial only)

		●	MET
                                         including E Coli

		●	Elemental
                                         impurities by ICP MS (optional)

 

A
stability time point report will be generated for each pull-point.

 

		7.	Report

 

A
development report will be prepared by Covar.

 

		8.	API
Requirements

 

GMP
API, non-GMP API and reference standards for analytical testing will be supplied by the client. Contract service for reference
standard preparation and qualification by a third party is available upon request.

 

		9.	Project
Management

 

A
project manager will be assigned to coordinate project activities with project team members. A kickoff meeting will be held after
execution of agreement and deposit is received. A dedicated project team from Covar will teleconference with the Client on regular
basis.

 

		10.	High
Level Timeline

 

 

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		11.	Budget
Summary

 

	Item	Estimated
    Cost 

    (CAD)
	Material
    Management	1,562.50
	Material
    management, BSE statement, LOA for DMF, customs	 
	Method
    Development and Validation	76,500.00
	API
    method transfer	 
	Product
    assay/impurity development	 
	Product
    assay/impurity validation	 
	Dissolution
    method development	 
	Dissolution
    method validation	 
	Particle
    size method validation	 
	MET
    validation	 
	Particle
    Size Reduction of API	7,745.00
	Milling
    trials	 
	API
    assay before and after milling (one set)	 
	Appearance/Description	 
	Particle
    Size, Laser Diffraction (non-GMP)	 
	X-ray
    diffraction, powder	 
	DSC	 
	Optical
    microscopy	 
	Development
    Batches Preparation (3 batches)	9,605.00
	Development
    batch record	 
	Jet
    milling	 
	Blending	 
	Encapsulation	 
	Packaging	 
	Stability
    Testing of Development Batches (2 batches)	27,920.00
	Protocol	 
	On
    stability	 
	Initial	 
	Appearance	 
	Assay
    and related impurities	 
	Dissolution	 
	Disintegration	 
	Loss
    on drying	 
	Weight
    uniformity	 
	Timepoint
    report	 
	2
    week	 
	Appearance	 
	Assay
    and related impurities	 
	Dissolution	 
	Loss
    on drying	 
	Timepoint
    report	 
	1
    month	 
	Appearance	 

 

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	Item	Estimated
    Cost 

    (CAD)
	Assay
    and related impurities	 
	Dissolution	 
	Loss
    on drying	 
	Timepoint
    report	 
	CTM
    Batches Preparation	42,625.00
	Set
    up Specifications for API and product	 
	Set
    up Specifications for input materials and pack	 
	Master
    batch record batch record	 
	Issue
    batch record	 
	Release
    testing of API	 
	Release
    testing of packaging material	 
	Release
    testing of excipients	 
	Set
    up	 
	Jet
    milling	 
	Blending	 
	Encapsulation	 
	Packaging	 
	Labelling
    of CTM	 
	Clean
    up	 
	Batch
    record review and approval	 
	ICH
    Stability Assessment for 3 CTM batches for 6, 24 and 24 months	 
	Protocols
    (total of 3 protocols)	7,425.00
	On
    stability, stability set up (3 batches), coordination up to 24 months	3,937.50
	Initial	11,353.75
	Appearance	 
	Assay
    and related impurities	 
	Dissolution	 
	MET
    with E coli	 
	Loss
    on drying	 
	Weight
    uniformity	 
	Disintegration	 
	Timepoint
    report	 
	1
    month	11,935.00
	Appearance	 
	Assay
    and related impurities	 
	Dissolution	 
	Loss
    on drying	 
	Timepoint
    report	 

 

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	Item	Estimated
    Cost 

    (CAD)
	3
    month	11,935.00
	Appearance	 
	Assay
    and related impurities	 
	Dissolution	 
	Loss
    on drying	 
	Timepoint
    report	 
	6
    month	12,222.50
	Appearance	 
	Assay
    and related impurities	 
	Dissolution	 
	Loss
    on drying	 
	MET
    with E coli	 
	Timepoint
    report	 
	9
    month	5,395.00
	Appearance	 
	Assay
    and related impurities	 
	Dissolution	 
	Loss
    on drying	 
	Timepoint
    report	 
	12
    month	5,682.50
	Appearance	 
	Assay
    and related impurities	 
	Dissolution	 
	Loss
    on drying	 
	MET
    with E coil	 
	Timepoint
    report	 
	18
    month	5,395.00
	Appearance	 
	Assay
    and related impurities	 
	Dissolution	 
	Loss
    on drying	 
	Timepoint
    report	 
	24
    month	5,682.50
	Appearance	 
	Assay
    and related impurities	 
	Dissolution	 
	Loss
    on drying	 
	MET
    with E coli	 
	Timepoint
    report	 

 

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	Item	Estimated
    Cost 

    (CAD)
	Report	12,000.00
	Development
    report
	Subtotal	271276.25
	Project
    management fee (5%)	13563.81
	Total
    (CAD)	284840.06

 

Third-party
contractor fees will be cross charged plus 5% service fee. Other fees, including but not limited to input processing materials,
shipping, customs duties, and consumables such as chromatography columns and solvents will be cross charged at cost plus 10% service
fee.

 

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	Xortx
    Therapeutics Inc.	 	Covar
    Pharmaceuticals Inc.	 
	 	 	 	 	 	 	 	 	 	 
	By:	/s/
    Allen Davidoff	 	By:	/s/
    Kwok Chow, PhD	 
	 	 	 	 	 	 	 	 	 	 
	Name:	Allen
    Davidoff	 	Name:	 	Kwok Chow, PhD	 
	 	 	 	 	 	 	 	 	 	 
	Title:	CEO	 	Title:	President	 
	 	 	 	 	 	 	 	 	 	 
	Date:	Dec
    8, 2021	 	Date:	Dec 9, 2021	 
	 	 	 	 	 	 	 	 	 	 

 

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		12.	Terms
and Conditions

 

Services

 

Covar
Pharmaceuticals Incorporated (Covar) agrees to perform the pharmaceutical development Services described in
the Project Scope (“Services”) of this Agreement. Services will be performed in the Preferred Provider
Laboratories (Provider) selected by Covar. Unless otherwise stated the Services will be non-GMP.

 

Parties
must agree on Changes to the Services (“Changes”).

 

Minor
Changes will be confirmed by electronic mail, or other written document. Significant Changes (such as a request by the Client
to change the Project Scope) will be confirmed by a Change of Scope Agreement.

 

Payment

 

Client
will pay Covar for the Services.

 

Client
will pay Covar a refundable deposit equal to 30% of the estimated cost provided in this proposal. The deposit will
be used for the final payments of the project.

 

Services
Covar may issue an invoice upon completion of each milestone set out in the Budget Summary or revised Budget Summary in Changes.

 

Covar
invoice will be due and payable within 30 days of the date of the invoice.

 

Interest
on past due accounts will accrue at a rate of 1.5% per month.

 

In
the event that payment in full is not received by Covar within thirty (30) days of Client’s receipt of the
data and results, this Agreement may be terminated at Covar’s sole discretion and all right and title to the
data and results.

 

Ownership
of Data

 

Client
will own all data and information specifically and directly arising from the provision of the Services, and as such
Covar will have no claim on any intellectual property that may be derived from any such data and information.

 

Intellectual
Property

 

The
term “Intellectual Property” includes, without limitation, rights in patents, patent applications, formulae, trade-marks,
trade-mark applications, trade-names, trade secrets, inventions, copyright, industrial designs and know-how.

 

For
the term of this Agreement, Client hereby grants to Covar, a non-exclusive, paid-up, royalty-free, non-transferable license of
Client’s Intellectual Property which Covar must use in order to perform the Services.

 

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All
Intellectual Property generated or derived by Covar in the course of performing the Services, to the extent it is specific to
the development, manufacture, use and sale of the Client’s Product that is the subject of the Services, will be the exclusive
property of Client.

 

All
Intellectual Property generated or derived by Covar while performing the Services which is not specific to, or dependent upon,
Client’s Product and which has application to manufacturing processes or formulation development of drug products or drug
delivery systems will be the exclusive property of Covar. Covar hereby grants to Client, a non-exclusive, paid-up, royalty-free,
transferable license of the Intellectual Property which Client may use for the manufacture of Client’s Product.

 

Confidentiality

 

The
confidentiality agreement entered into between the parties will apply to all confidential information about the parties and the
Services to be conducted under this Agreement and the Confidentiality Agreement is deemed to be incorporated herein
by reference. If the Confidentiality Agreement expires or terminates prior to the expiration or termination of this Agreement,
then the terms of the Confidentiality Agreement will nonetheless continue to govern the parties’ obligations of confidentiality
for the term of this Agreement and for five years thereafter. Covar shall have the right to disclose confidential
information hereunder to its Preferred Providers solely for the purpose of performing the Services. Covar represents
that it has entered into confidentiality Agreements with each Preferred Provider consist with the terms hereof.

 

Providers
shall hold in confidence and not disclose or use for any purpose other than for the provision of the Services any “Confidential
Information” provided by Client. “Confidential Information” means any information provided by the
Client to Providers in confidence and any Client samples and/or materials associated with the Services,
and shall further include any information and all related data and information generated pursuant to the provision of the Services.

 

Confidential
Information shall not include or otherwise encompass any information and materials which:

 

		●	are
                                         part of the public domain, or become part of the public domain through no fault of Providers;

		●	are
                                         obtained from a third party who is not under a duty of confidentiality respecting the
                                         Confidential Information and said third party has a legal right to disclose such information;

		●	are
                                         identified by the Client as no longer constituting Confidential Information of
                                         the Client;

		●	are
                                         already known at the time of disclosure by Client to Providers, as can
                                         be demonstrated by written or other records/information; or

		●	are
                                         developed independently by Providers without access to the Confidential Information
                                         of the Client, as can be demonstrated by written or other records/information.

 

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In
the event that Covar is required to disclose Client Confidential Information by law or an order of a court, tribunal
or government agency, Covar shall promptly notify Client and give Client a reasonable opportunity to seek
a confidentiality order or take other appropriate action in respect of the proposed disclosure.

 

This
obligation of confidentiality in respect of any particular Confidential Information shall survive for a period of three (3)
years from the earlier of (i) the full and final provision of the specific Services associated with the particular Confidential
Information, or (ii) the expiration or earlier termination of this Agreement.

 

Term
and/or Termination

 

Notwithstanding,
a Party may earlier terminate this Agreement upon the provision of thirty (30) day notice to the other Party, and the Parties
shall immediately cease all unnecessary activities and shall cooperate to minimize all costs associated with this cessation/termination
of activities associated with the provision of said Services.

 

Either
party may terminate this Agreement if a party is in material breach of any part of this Agreement and that party
fails to remedy the breach within 30 days after receiving notice of the breach from the non-breaching party.

 

Client
may terminate this Agreement upon 5 days prior written notice for any business reason.

 

Covar
may terminate the Agreement if the Client requests to reschedule any part of the Services beyond 180 days.

 

Upon
completion or expiry of the Agreement or if the Client terminates the Agreement for any business reason or
if Covar terminates the Agreement because of: (i) Client’s failure to cure any default within the 30
day notice period; or (ii) Client rescheduling any part of the Services beyond the 180 days, then Client will pay
to Covar any fees and expenses due to Covar and any additional costs incurred by Covar with the Services.

 

Client
will arrange for the pickup from the Covar site of all materials owned by Client within ten days after the earlier
of the completion, or termination of this Agreement.

 

Shipping
of API and Materials

 

Client
will, at its expense, supply Covar with sufficient quantities of API for Covar to perform the Services. For
all shipments of API and materials from Client to Covar, Client will pay all costs including transportation,
import duties and taxes. All shipments of API will be accompanied by appropriate Safety Data Sheet (e.g. MSDS).

 

For
import of API, Client or Client’s broker will be the “Importer of Record.” Client’s
obligation will include obtaining the proper release of API from the local customs and health authorities.

 

For
shipments (if applicable) of Client’s Product or Client’s API, the Client will pay all transportation
costs and also bear the risks for bringing the goods to their final destination.

 

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Indemnity

 

Client
shall indemnify and save harmless Covar against all costs, actions, suits, claims, losses or damages and for all other
matters arising out of its (i.e Client’s) use or any other exploitation of the data, results, conclusions, and products
derived therefrom, arising out of, or resulting from, this Agreement (and any intellectual property associated therewith),
except to the extent that such were caused by Covar’s gross negligence, willful misconduct or material breach of this Agreement.

 

Covar
will defend, indemnify and hold the Client harmless against Covar of any of its obligations or warranties under
this Agreement except to the extent that these Losses are determined to have resulted from the negligence or willful misconduct
of Client.

 

Limitation
Of Liability

 

Covar
(and its directors, officers, employees, staff members, students, research trainees and agents) shall not be liable for any
direct, indirect, consequential, or other damages suffered by Client or any others resulting from the use of the data,
results or conclusions, and any products and intellectual property associated therewith, conceived, discovered, or otherwise premised
on, or developed under or as a result of, or consequential to, this Agreement. The entire risk as to any use of said data,
conclusions or results (and any products and intellectual property associated therewith), and the design, development, manufacture,
offering for sale, sale, or other disposition and/or performance of the data, results, conclusions and products arising therefrom
(and any intellectual property associated therewith) is assumed entirely by Client, without any legal or equitable recourse
to Covar.

 

If
Covar fails to materially perform any part of the Services in accordance with the terms of this Agreement, Covar
may repeat that part of the Service at Covar’s costs if Client supplies the API. Under no circumstances
whatsoever will Covar reimburse Client for the cost of the API. Under no circumstances whatsoever will either party
be liable to the other in Agreement, tort, negligence, breach of statutory duty or otherwise for (i) any (direct or indirect)
loss of profits, of production, of anticipated savings, of business or goodwill or (ii) any other liability, damage, cost or expense
of any kind incurred by the other party of an indirect or consequential nature, regardless of any notice of the possibility of
the damages.

 

No
Warranty

 

Covar
makes no warranty of any kind, either expressed or implied, by fact or law, other than those expressly set forth in this Agreement.
Covar makes no warranty for any particular results from the performance of the Services or with respect to any data
or information generated therefrom, or of fitness for a particular purpose or warranty of merchantability for the Client’s
product.

 

Disputes

 

All
negotiations under this provision shall be considered confidential and shall be treated as compromise and settlement negotiations
and deemed to be “off the record” and without prejudice.

 

    Page | 16
Confidential

    Document: QUO.XOR.001

    

 

General
Provisions

 

This
Agreement shall be construed according to the laws of the Province of Ontario and the federal laws of Canada applicable
therein.

 

Each
provision of this Agreement shall be deemed separate, severable and distinct. If any part of any provision of this Agreement
is found by a court to be invalid, illegal or unenforceable in any way, the finding shall not limit or affect the validity,
legality or enforceability of the remaining provisions.

 

For
the purposes of this Agreement and all Services to be provided under it, each Party shall be deemed to be an independent
Agreement or and not an agent or employee of the other Party. No Party shall have the authority to make any statements,
representations or commitments of any kind, or take any action which shall be binding on the other Party, except as may be explicitly
provided for herein or authorized by the other Party in writing.

 

Except
as otherwise required by law, neither Party shall, without the consent of the other Party, (i) use the name(s), logo(s), trademark(s)
or trade-name(s) of the other Party in connection with any products, publicity, promotion, news release, advertising or similar
public statements in respect of the Agreement and the Services provided, and (ii) make any other public disclosure
in respect of this Agreement and its subject matter. Notwithstanding, Covar may disclose the general subject matter
and monies received further to this Agreement without any further consent of Client.

 

This
Agreement constitutes the entire Agreement and understanding between the Parties and supersedes any prior Agreements
between or among the Parties with respect to the Services.

 

This
Agreement may be signed in separate counterparts and delivered by mail, facsimile or electronically, and, when so signed
and delivered, all the counterparts will together constitute one and the same instrument which is deemed to be an original.

 

Neither
this Agreement, nor any of either party’s rights hereunder, may be assigned or otherwise transferred by either party
without the prior written consent of the other party, which consent will not be unreasonably withheld.

 

Except
for payment obligations, neither party will be responsible for delay or failure in performance resulting from acts beyond the
reasonable control and without the fault or negligence of the party, including, but not limited to, strikes or other labour disturbances,
wars, riot, crime, communicable disease outbreaks„ acts of terrorism, fires, floods, storms, interruption of or delay in
transportation, defective equipment, power or regulation compliance of any government or act of God.

 

Any
termination or expiration of this Agreement will not affect any outstanding obligations or payments due hereunder prior
to the termination or expiration, nor will it prejudice any other remedies that the parties may have under this Agreement.

 

    Page | 17
Confidential

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