On December 30, 2022, PDS Biotechnology Corporation entered into a License Agreement with Merck KGaA, Darmstadt, Germany, pursuant to which Merck KGaA, Darmstadt, Germany has granted the Company an exclusive, worldwide, sublicensable, milestone and royalty-bearing right and license to certain patent rights and certain related data (the Licensed Technology") to develop, manufacture, use, commercialize and otherwise exploit any product containing NHS-IL12 fusion protein known as M9241 (the Compound"). Merck KGaA, Darmstadt, Germany retains the right under the Licensed Technology in connection with certain existing collaborations between Merck KGaA, Darmstadt, Germany and academic institutions to allow such academic institutions to exercise their rights granted under such collaborations. The Company agreed to use commercially reasonable efforts to develop, manufacture and commercialize at least one pharmaceutical preparation, substance, or formulation, comprising or employing, the Compound (the Product").

In consideration for the rights granted by Merck KGaA, Darmstadt, Germany, the Company (i) agreed to make a one-time up-front cash payment of $5.0 million to Merck KGaA, Darmstadt, Germany, and (ii) entered into a Share Transfer Agreement dated December 30, 2022 (the Share Transfer Agreement"), pursuant to which the Company issued 378,787 shares of its common stock (the Shares") to Merck KGaA, Darmstadt, Germany in a private placement for an aggregate value of $5.0 million, as measured by the closing price of the Company's common stock on the Nasdaq Capital Market as of December 30, 2022. The Share Transfer Agreement is described in additional detail below under the caption Share Transfer Agreement." Pursuant to the License Agreement, the Company agreed to make (i) development and first commercial sale milestone payments totaling up to $11 million upon the achievement of certain milestones, including the dosing of the fifth patient in a phase III trial of the Product and first commercial sale of the Product for a first and second indications in a major market, and (ii) up to $105 million upon achieving certain aggregate sales levels of the Product. The Company also agreed to pay Merck KGaA, Darmstadt, Germany a royalty of 10% on aggregate net sales of Product as specified in the License Agreement on a Product-by-Product and country-by-country basis until the later of: (i) ten years after the first commercial sale of a Product in a given country; and (ii) the expiration or invalidation of the licensed patents covering the Compound or Product in such country (collectively, the Royalty Term").

The royalty rate is subject to reduction in that event that a Product is not covered by a valid patent claim, a biosimilar to the Compound or the Product comes on the market in a particular country, or if the Company obtains a license to any intellectual property owned or controlled by a third-party which but for such license would be infringed by making, using or selling the Compound. The License Agreement will expire on a Product-by-Product and country-by-country basis upon expiration of the last-to-expire Royalty Term for such Product. On expiration (but not earlier termination), the Company will have a fully paid-up, royalty-free, non-exclusive, transferable, perpetual and irrevocable license under the licensed patent rights and related data to develop, manufacture, use, commercialize and otherwise exploit the Compound.

Either party may terminate the License Agreement for the other party's material breach following a cure period. The License Agreement may not be terminated upon certain insolvency events relating to the Company. The Company may terminate the License Agreement for any reason upon ninety days written notice to Merck KGaA, Darmstadt, Germany.