Immuron Ltd — Proxy Solicitation & Information Statement 2009

Jun 1, 2009

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2 June 2009

The Manager The Company Announcement Office Australian Stock Exchange Sydney NSW

Dear Sir Extraordinary Meeting of Shareholders.

Please find attached a revised Notice of Meeting in respect of the above meeting to be held on 9 July 2009.

A minor change has been made to the description of royalties payable in schedule A attached to the Explanatory Statement. This notice replaces the Notice of Meeting lodged with the ASX on 1 June 2009.

This Notice of Meeting, together the Explanatory Statement and Chairman’s letter will be dispatched to shareholders this week.

Yours faithfully

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Graeme Stevens Company Secretary

ABN 80 063 114 045 Level 1, 39 Leveson Street North Melbourne VIC 3051 AUSTRALIA

Tel (61) 3 9018 4880 Fax (61) 3 9018 4881

www.immuron.com

29 May 2009

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Dear Shareholder

I am writing to invite you to attend an Extraordinary Meeting of Shareholders to be held on Thursday 9 July at 3.30PM.

The attached notice of meeting sets out the resolutions that will be put to the meeting.

The main resolution to come before the meeting will be to seek your approval for Immuron to proceed with the agreement announced on 20 April 2009 to acquire a novel Oral Immune Modulation technology from Hadasit Medical Research Services & Development Limited (Hadasit). Hadasit is the technology transfer company for the Hadassah Medical Centre (Hadassah) which is based in Jerusalem, Israel.

I am also writing to inform you that on 29 May 2009 Immuron announced that the existing contracts with Dr Zeil Rosenberg and Dr Oren Fuerst, Chief Executive Officer and VP Business Development respectively, will not be renewed and will expire on 31 May 2009. The Board is very confident that these changes will have no impact on the proposed research to be conducted under the terms of the agreement with Hadasit.

Many shareholders will be aware that Hadasit promotes and commercialises the intellectual property and R & D capabilities generated by Hadassah’s physicians and scientists, and that Hadassah has gained global recognition for its development of biomedical technology, including novel therapeutics, diagnostics and medical devices.

The technology and patent being acquired were devised and registered by Professor Yaron Ilan and his fellow scientists at Hadassah. Professor Ilan is a senior member of Hadassah and a highly qualified physician. Upon approval of the acquisition by shareholders it is intended that Professor Ilan will join Immuron as a consultant and will be appointed the Company’s Medical Director to facilitate ongoing aspects of Immuron’s product development work.

The acquisition of the technology and patent follows discussions held over one year ago with senior scientists from Hadassah with expertise in liver diseases and immunology. Certain novel methods were then devised to allow Immuron to target specific important chronic diseases by vaccinating cows using materials associated with those diseases, and to subsequently utilise colostrum obtained from those cows for therapeutic purposes.

The senior scientists at Hadassah have shown that, using their new approach together with Immuron's existing technologies, it is possible to produce immune milk that will affect the level of activity of T regulatory cells. The importance of this lies in the fact that T regulatory cells are a central controller of the body’s immune response and are known to be defective and/or misdirected in many infectious, inflammatory and malignant disorders in humans.

Hadassah’s approach is based on an active process that uses the inherent ability of the gastrointestinal tract’s immune system to control unwanted responses by inducing T regulatory cells in an antigen-specific manner. Professor Yaron Ilan and his team have shown that oral administration of antigen-specific colostrum is particularly effective in influencing the immune

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system through actions on T regulatory cells, more so than antibodies alone, probably because of the presence of adjuvant-like molecules within the colostrum.

The technology Immuron will be acquiring has many potential applications in the treatment of diseases with an autoimmune, infectious, malignant and/or inflammatory disease basis, using oral delivery of specific antibodies within bovine colostrum.

The possible targets for this technology Immuron is acquiring include:

• Metabolic Syndrome – Type II diabetes, atherosclerosis, non-alcoholic steato-hepatopathy (NASH) and hyperlipidaemia.

• Cancer – primary liver cancer, colon cancer, prostate cancer and melanoma.

• Immune-mediated diseases – inflammatory bowel disease, multiple sclerosis, systemic lupus erythematosis, asthma and some forms of arthritis.

• Infectious diseases – Hepatitis B and C virus, diseases associated with infections involving Human Immunodeficiency Virus and others.

The initial targets for the R & D work to be performed at Hadassah will be Metabolic Syndrome and diseases associated with Hepatitis B and C viruses.

Working with trial samples produced by Immuron, Professor Yaron Ilan’s team has already shown that the system works to treat a model of the human Metabolic Syndrome in mice. In those experiments, the key markers of Metabolic Syndrome were significantly reduced or returned to normal with one month’s therapy with the antigen-specific colostrum prepared by Immuron. The evidence obtained to date is supportive of achieving equally effective results in Metabolic Disease and NASH in humans, along with the expectation of an excellent safety profile in humans.

I firmly believe that Immuron’s access to Hadassah’s technology has the potential to significantly expand the commercial potential which exists in Immuron’s current technology, as well as significantly improving Immuron’s IP regarding existing indications.

Together with the acquisition announcement made on 20 April 2009, Immuron also lodged with the Australian Stock Exchange an independent report prepared for Immuron’s board by Biocomm[2] , the purpose of which was to summarise the scientific and economic foundation of the technology being acquired. This report also outlined the current ‘pipeline’ therapies for the diseases that are covered under the initial research to be conducted in conjunction with Hadassah.

The Biocomm[2] report is available to all shareholders on the Company’s website, www.immuron.com, and I suggest that you read the report to obtain an understanding of the technology being obtained and the rapid commercialisation that is possible with the various therapies that are capable of being developed using that technology.

The following paragraphs have been extracted from the Biocomm2 report to outline the potential benefits to be obtained by combining the technologies of Immuron with those at Hadassah:

“The key drivers that will affect the commercial success of Immuron’s potential products relate to their likely product profile. Based on the data described in the patent and accompanying manuscript, as well as information on Immuron’s other colostrum-derived products, its antibodyenriched colostrum for Metabolic syndrome/NASH would:

• Be taken orally as a tablet

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• Demonstrate significant efficacy by generating T regulatory cells, targeted to affected

• tissues that can control the chronic inflammatory response, improving diabetic symptoms, liver inflammation and fibrosis and reducing the risk of stroke, heart attack and liver cancer.

• Have an excellent safety profile.

• Not require medical expertise for administration.

• • Have easy follow-up of its effects.

Most of the current marketed drugs as well as those in clinical trials are either:

• injectable, not a favoured route by patients for chronic use;

• do not directly affect the inflammation that underlies much of the pathology,

• targeting symptoms rather than the drivers of disease progression,

• prone to significant side effects, (e.g. avandia with fractures and inconclusive reports of heart attacks; and acomplia with psychiatric issues)

Sales of several drugs have been badly affected due to side effects that rapidly become obvious due to the large numbers of patients treated in these common conditions, who often have significant cardiovascular risk factors. Many of these will require close follow up by the treating physician, and side effects also reduce patient compliance. In extreme examples the drugs may be withdrawn from use.

Given its likely safety profile as a milk-derived product, and its mode of action in stimulating the production of the body’s own regulatory T cells, it is also likely that it will be used in addition to many of the existing drugs for diabetes, obesity, hypertension and NASH.”

It is expected that the acquired Intellectual Property (IP), as well as the future work by Hadassah’s researchers, will greatly strengthen the scientific credibility of the IP that currently underpins Immuron's existing product portfolio. As part of the Hadasit agreement, Hadasit will receive royalties for new products developed as a result of the agreement, along with lesser royalties on certain other existing Immuron products which gain any benefit as a result of the agreement.

It is the unanimous view of the Board of Immuron, corroborated by discussions held with pharmaceutical analysts and investors, that Hadassah’s technology represents a major development for Immuron with the potential to attract new investors and pharmaceutical company interest.

I look forward to seeing you at the Extraordinary Meeting of Shareholders on Thursday 9 July 2009.

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Professor Colin Chapman Executive Chairman

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IMMURON LIMITED ACN 063 114 045

NOTICE OF EXTRAORDINARY GENERAL MEETING

IMMURON LIMITED (“ Immuron ”) gives notice that the Extraordinary General Meeting of Immuron will be held at the offices of Middletons, Solicitors, Level 25 South Tower, 525 Collins Street Melbourne, Victoria on Thursday 9th July commencing at 3.30PM.

1 RATIFICATION AND APPROVAL OF PRIOR ALLOTMENT

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“That for the purposes of ASX Listing Rule 7.4 and for all other purposes, the shareholders ratify and approve the prior allotment of 16,723,179 fully paid shares in Immuron as detailed in the accompanying Explanatory Statement.”

2 ISSUE OF SHARES TO HADASIT MEDICAL RESEARCH SERVICES & DEVELOPMENT LIMITED (HADASIT)

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

“That for the purposes of ASX Listing rule 7.3 and for all other purposes, approval is given for the issue to Hadasit by Immuron of that number of fully paid shares in Immuron equivalent to 19.99% of the issued share capital in Immuron (after the allotment) as detailed in the accompanying Explanatory Statement.”

3 APPROVAL OF PROPOSED SHARE ISSUE TO SOPHISTICATED OR PROFESSIONAL INVESTORS

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

“That for the purposes of Chapter 7 of the ASX Listing Rules and for all other purposes, the Directors are authorised to issue up to 35,000,000 fully paid ordinary shares to sophisticated and professional investors at an issue price of not less than 90% of the volume weighted average sales price of the shares in Immuron calculated over the last5 days prior to the date of issue and otherwise on the terms detailed in the accompanying Explanatory Statement.”

By order of the Board

Graeme N Stevens Company Secretary 29 May 2009

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Proxy and Voting Information

These notes form part of the Notice of Extraordinary General Meeting.

Shareholders Entitled to Vote

The Directors have determined that, for the purpose of voting at the meeting, shareholders are those persons who are the registered holders of shares at 7.00 pm Melbourne time on Tuesday 7th July 2009.

Appointment of Proxies

If you are entitled to vote at the meeting you have the right to appoint a proxy to attend and vote in your place. To appoint a proxy you should use the attached proxy form. The proxy need not be a shareholder of Immuron. If you are entitled to cast 2 or more votes you may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise.

Proxy forms must be received by Computershare Investor Services Pty Limited, no later than 3.30PM on Tuesday 7th July 2009. If the proxy form is posted; it is to be mailed to Computershare Investor Services Pty Limited, GPO Box 242, Melbourne, Victoria 3001, Australia.

Alternatively, you can fax the proxy to Computershare at 1800 783 447 if within Australia, or 61 3 9473 2555 if faxing from Overseas, or by lodging you proxy with Computershare online by following the instructions outlined on the proxy form.

Bodies Corporate

A body corporate may appoint an individual as its representative to exercise any of the powers the body may exercise at meetings of Immuron’s shareholders. The appointment may be a standing one. Unless the appointment states otherwise, the representative may exercise all of the powers that the appointing body could exercise at a meeting or in voting on a resolution.

The representative should bring to the meeting evidence of his or her appointment, including any authority under which the appointment is signed, unless it has previously been given to Immuron.

Undirected Proxies

The Chairman of Immuron will chair the meeting and will vote all undirected proxies in favour of the resolutions. Immuron encourages all shareholders who submit proxies to direct their proxy how to vote on each resolution.

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Immuron Limited ACN 063 114 045 Explanatory Statement

This Explanatory Statement has been prepared to provide shareholders with information to enable shareholders to make an informed decision in relation to the business to be conducted at the Extraordinary General Meeting of Immuron to be held at Middletons, Solicitors, Level 25 South Tower,525 Collins Street Melbourne, Victoria on Thursday 9th July 2009, commencing at 3.30PM.

This Statement forms part of the Notice of Extraordinary General Meeting.

ITEM 1 - RATIFICATION AND APPROVAL OF PRIOR ALLOTMENT

The resolution contained in item 1 of the Notice of Extraordinary General Meeting is being put before shareholders in accordance with ASX Listing Rules 7.1 and 7.4.

Listing Rule 7.1 prohibits a company from issuing or agreeing to issue equity securities (i.e. shares and/or options) which in aggregate amount to more than 15% of its ordinary securities in any 12 month period without the approval of its shareholders.

Pursuant to ASX Listing Rule 7.4, a company may subsequently obtain shareholder approval for a prior issue of securities provided the prior issue itself did not breach Listing Rule 7.1. If shareholders approve and ratify a prior issue of securities, Immuron will have effectively ‘refreshed’ its ability under Listing Rule 7.1 to issue up to 15% of its issued capital in the following12 month period.

The Directors believe that it is important for Immuron to have the ability to issue securities under Listing Rule 7.1 as it enables Immuron to move quickly to undertake fund raising when necessary.

Details of shares issued for which shareholder approval is requested and their respective dates of approval are as follows:

Name of shareholder Date of issue Alaven Consumer Healthcare, Inc Dec 2008 & March 2009 Francis Alan Hutchinson 10/11/2008 Marie D’Souza 10/11/2008 Linmax Holdings Pty Ltd 10/11/2008 Drill Investments Pty Ltd 10/11/2008 Vestcourt Pty Ltd ( Court Family Super Fund A/C ) 10/11/2008 Peter Carrigan 10/11/2008 John Horton 10/11/2008 Daniel Maxwell Taylor 10/11/2008 Alnbie Pty Ltd 10/11/2008 Private Client Advisers Pty Ltd 10/11/2008 PJ & J Winbanks 10/11/2008 Keith Guiney & Christopher McLoughlin 10/11/2008 Equity Advisers Pty Ltd 10/11/2008 Total Shares Issued

Number of shares Issued 9,017,229 250,000 100,000 200,000 2,789,000 1,000,000 400,000 500,000 800,000 400,000 200,000 500,000 200,000 366,950

16,723,179

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The above fully paid ordinary shares were issued at $0.05 per share and represent 13.08% of the total ordinary shares on issue after the allotment. The above allottees are all sophisticated investors or professional investors, as defined in the Corporations Act 2001. The funds raised from the above share issue were for working capital purposes. None of the above shares were issued to related parties of Immuron.

Voting Exclusion Statement

Immuron will disregard any votes cast (in any capacity) on the resolution in item 1 of the Notice of Extraordinary General Meeting by any person who participated in this prior issue and any of their associates. However, Immuron need not disregard a vote if:

• it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

ITEM 2 - ISSUE OF SHARES TO HADASIT MEDICAL RESEARCH SERVICES & DEVELOPMENT LIMITED (HADASIT)

Background

Immuron has embarked on a strategy of utilising Immuron’s expertise in producing antibodies in bovine colostrum through forming strategic partnerships for the further development of its polyclonal antibody based solutions in respect of infectious and immune-mediated diseases.

On 17 April 2009 Immuron entered into an Assignment and Licence Agreement (“ ALA” ) with Hadasit Medical Research Services & Development Limited (“ Hadasit” ) under which Immuron:

• (a) will acquire Hadasit’s rights, title and interest in:

• (i) the intellectual property relating to compositions for the treatment and prophylaxis of immune related disorders that comprise an active ingredient derived from mammalian colostrum and that regulates the function of immune regulatory cells (“ Invention ”); and

• (ii) PCT Patent Application no. PCT IL 2009/000273 (“ Initial Patent Application ”), together with the exclusive world wide licence to exploit Hadasit’s intellectual property rights that are specific to the field of active oral immune therapy for the treatment and/or prophylaxis of immunemediated disorders and other diseases through the use of colostrum derived antibodies or portions/fragments of antibodies, (collectively, the “ Assigned IPR ”)

• (b) will acquire a licence to exploit certain related intellectual property rights that are not the subject of the Assignment (“ Licensed IPR ”);

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• (c) will produce antibodies in colostrum (including the injection of antigens for the development of such antibodies) and commercialise the Assigned IPR and the Licensed IPR;

• (d) agreed to enter into a services agreement under which Immuron will engage Hadasit to provide certain preclinical and clinical research and development services ( Services Agreement ); and

• (e) agreed to enter into a consulting agreement under which Immuron will engage Professor Yaron Ilan to provide consulting services and act as Immuron’s medical director ( Consulting Agreement ).

A summary of the main terms of the agreements between Immuron and Hadasit is contained in the attached Schedule A.

Issue of shares to Hadasit

Under the ALA Immuron has, subject to Immuron shareholder approval, agreed to issue that number of ordinary fully paid shares in Immuron which once issued would comprise 19.99% of the then issued share capital of Immuron.

As outlined above, ASX Listing Rule 7.1 prohibits a company from issuing or agreeing to issue equity above the 15% limit. A proposed issue of shares in excess of this 15% limit requires prior shareholder approval in accordance with ASX Listing Rule 7.3.

Currently Immuron has on issue 144,569,108 fully paid ordinary shares and the table below outlines the impact on the share capital structure if approval is given by shareholders to the issue of shares to Hadasit in accordance with item 2 of the Notice of Extraordinary General Meeting.

	Number of	% holding
	shares	after issue
Shares currently on issue	144,569,108	80.01%
Shares to be issued to Hadasit, if approved by
members	36,127,820	19.99%
Total shares after issue to Hadasit	180,696,928	100.00%

Under the terms of the ALA, the number of shares to be issued by Immuron to Hadasit is based on the number of shares on issue as at the date of the Extraordinary General Meeting. As it is possible Immuron may issue additional shares during the period from the date this notice of meeting was dispatched to shareholders and the date on which the Extraordinary General Meeting will be held, Immuron is therefore seeking shareholder approval for the following:

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1. Approval to issue 36,127,820 fully paid ordinary shares, based on the number of shares on issue at the date the Notice of Extraordinary General Meeting was prepared; and

2. Approval to issue any additional shares required to ensure, in accordance with the terms of the ALA, Hadasit’s holding represents 19.99% of the total shares, after the issue to Hadasit, as at the date the Extraordinary General Meeting is held.

ASX Listing Rule 7.3 disclosures

The following information is provided in accordance with ASX Listing Rule 7.3:

(a)	Type of security	Ordinary shares fully paid.
(b)	Maximum number of securities to be	That number equivalent to 19.99%
	issued/formula for calculating the	of the issued share capital of
	number of securities to be issued	Immuron as at the date Immuron’s
		shareholders approval of item 2.
(c)	Date by which securities will be issued	The shares will be issued within
		three months of the date of the
		Extraordinary General Meeting.
(d)	Issue price of securities	The volume weighted average price
		of the shares calculated over the
		last 5 days on which the sales in
		the shares were recorded before
		the day on which the issue is to be
		made.
(e)	Name of allottee	Hadasit Medical Research Services
		& Development Limited.
(f)	Terms of the securities	Same terms as and rank equally
		with Immuron’s existing issued
		ordinary shares other than the
		shares to be issued to Hadasit will
		be subject to an escrow period of 2
		years from the date of issue. The
		shares to be issued to Hadasit will
		be quoted on the ASX only after the
		expiration of the escrow period.
(g)	Intended use of the funds raised	No funds will be raised from this
		issue of shares. The issue
		represents the consideration for the
		acquisition of the intellectual
		property as explained in the
		Background section above.

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If item 2 is not approved then the following disadvantages and advantages will accrue.

Disadvantages if item 2 not approved

1. The precondition under the ALA will not be fulfilled and as a result Immuron will not be able to acquire Hadasit’s intellectual property under the ALA nor engage Hadasit to provide the pre-clinical and clinical services.

2. Immuron will need to seek out other opportunities to expand its business.

3. Immuron will have expended considerable costs associated with the Hadasit transaction which it will be unable to recover.

Advantages if item 2 is not approved

1. Shareholders will not be diluted by the issue of shares to Hadasit.

2. Immuron will not be required to pay royalties to Hadasit in respect of the sale or commercialisation of Products.

Voting Exclusion Statement

For the purposes of ASX Listing Rule 7.3, Immuron will disregard: any votes cast on the resolution in item 2 by Hadasit; any other person who may participate or directly benefit in the proposed share issue; and any of their associates, unless it is cast:

• by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Recommendation by Directors

The Directors unanimously recommend that Immuron shareholders vote in favour of item 2 as it is a pre condition to completion under the ALA and will enable shareholders (via their shareholding in Immuron) the unique opportunity to participate in the developing science of oral immune therapy.

ITEM 3 - APPROVAL OF PROPOSED SHARE ISSUE TO SOPHISTICATED OR PROFESSIONAL INVESTORS

The Immuron Board believe that Immuron will require additional working capital to pursue the further development of the Hadasit intellectual property and if item 2 is approved by shareholders, Immuron proposes to issue up to 35,000,000 shares to sophisticated investors or professional investors (as defined in the Corporations Act 2001) within 3 months from the date of this Extraordinary General Meeting.

The issue price of the shares is to be at least 90% of the volume weighted average market price of Immuron shares, calculated over the last 5 days on which sales in the shares were recorded before the day on which the issue is made. For example, if the 5 day volume weighted average price of Immuron’s shares at the time at which the issue is made is $0.10 cents; the shares would be issued at not less than $0.09 cents.

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Background

As at the date of this Explanatory Statement the issued capital of Immuron, assuming approval is obtained for the issues the subject of items 2 and 3, will be as follows:

Current number of shares on issue 144,569,108 Proposed number of shares to be issued to Hadasit for acquisition of Intellectual Property (subject to any adjustment for issues made by Immuron after the date of this notice of meeting) - item 2. 36,127,820 Proposed maximum number of shares to be issued to sophisticated and professional investors - item 3. 35,000,000 Total shares on issue after approval of items 2 and 3. 215,696,928

ASX Listing Rule disclosures

As set out above, Immuron proposes to issue up to 35,000,000 shares to sophisticated and professional investors. The following information is provided in accordance with Listing Rule 7.3:

• The maximum number of shares Immuron is to issue to sophisticated and professional investors is 35,000,000 shares;

• The shares will be issued within three months of the date of the Extraordinary General Meeting;

• The issue price of the shares will be not less than 90% of the volume weighted market price of the shares calculated over the last 5 days on which the sales in the shares were recorded before the day on which the issue is to be made;

• The shares will be issued to sophisticated and professional investors (as defined in the Corporations Act 2001) at the discretion of the Directors, but will not be issued in breach of Chapter 6 of the Corporations Act;

• The shares will be issued on the same terms as and rank equally with the existing fully paid ordinary shares of Immuron and will be quoted on the ASX;

• The intended use of the funds raised under the issue is for additional working capital to enable Immuron to pursue the further development of the Hadasit intellectual property;

• Immuron anticipates allotting the shares progressively throughout the three month period as and when subscriptions from sophisticated and/or professional investors are received.

The Board believes that the proposed issue is beneficial for Immuron and recommends shareholders vote in favour of item 3. Shareholders should note that where item 3 is approved, the issue of up to 35,000,000 shares pursuant to item 3 will not reduce Immuron’s 15% capacity as provided by ASX Listing Rule 7.1.

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Voting Exclusion Statement

For the purposes of Listing Rule 7.3, Immuron will disregard any votes cast on the resolution in item 3 by any person who may participate in the proposed share issue, any person who might obtain a benefit and any of their associates, unless it is cast:

• by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

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Schedule A - Summary of Hadasit Transaction Documents

ASSIGNMENT AND LICENCE AGREEMENT, EXECUTED ON 17 APRIL 2009 BETWEEN IMMURON AND HADASIT (ALA)

Transfer of Intellectual Property

• (Assignment) Subject to the fulfillment of certain conditions (see below under “ Conditions Precedent ”) Immuron will acquire by assignment from Hadasit, the rights, title and interest, in the Assigned IPR. Immuron will, at its own cost and expense and after consultation with Hadasit, file and prosecute the Initial Patent Application and maintain all resulting registered patents.

• (License from Hadasit to Immuron) Subject to the fulfillment of the Conditions Precedent, Hadasit grants Immuron an exclusive license throughout the world to exploit in the field of active, oral immune therapy for the treatment and/or prophylaxis of immune-mediated disorders and other diseases through the use of Colostrum derived antibodies or portions thereof (“ Field” ), Hadasit’s intellectual property rights that relate specifically and exclusively to the Field (“ Licensed IPR” ). Sublicenses are permitted by Immuron subject to certain conditions. Notwithstanding the exclusive nature of the license to Immuron, Hadasit retains the right to grant to Hadassah Medical Organization (“ HMO ”) a non-exclusive right to use the Hadasit Licensed IPR for the sole purpose of exercising its rights and performing its obligations under the Services Agreement and otherwise carrying out its internal research and development.

• (License Back from Immuron to Hadasit) Subject to the fulfillment of the Conditions Precedent, Immuron grants Hadasit a fully paid up, perpetual and non-exclusive license to use the Assigned IPR for the purpose of Hadasit exercising its rights and performing its obligations under the Services Agreement (see below) and/or otherwise carrying out its research, development, academic and clinical activities and/or those of the HMO.

The Conditions Precedent

The assignment of the Assigned IPR and the licence of the Licensed IPR are conditional upon certain “Conditions” being completed within three (3) months of the Agreement Date (“ Conditional Period” ). The material conditions include:

• (a) the shareholders of Immuron approving (i) the issue of the “Consideration Shares” to Hadasit, and (ii) the appointment of Professor Yaron Ilan, or such other person as Hadasit may designate, as a medical director (but not a member of the board of directors) of Immuron;

• (b) the adoption of all required resolutions approving Immuron’s execution and performance of the ALA, the Services Agreement and the Consulting Agreement and the execution of those agreements by all parties;

• (c) completion of Hadasit's due diligence, to the satisfaction of Hadasit;

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• (d) Immuron advancing to Hadasit a pre-payment of US$500,000 on account of (and to be credited against) the services to be provided by Hadasit under the Services Agreement;

• (e) certain representations, warranties and undertakings made by Immuron in the ALA being true and correct; and

• (f) Immuron securing all required permits, consents and authorizations relevant to the ALA and to conduct all relevant clinical trials.

1. Consideration

• (Shares) Subject to shareholder approval, Immuron will issue to Hadasit fully paid ordinary shares (“ Consideration Shares” ) which, once issued, will comprise 19.99% of Immuron’s shares on a fully diluted basis as at the date Immuron’s shareholders approve to such effect. These shares will be subject to a voluntary restriction from trading for a period of two year (“ Restriction Period ”) commencing on the date upon which all the conditions precedent to the ALA (see below) will be satisfied or waived (“ Effective Date” ).

• (Royalties) Immuron agrees to pay Hadasit on a quarterly basis, a royalty in US dollars equal to 5% of the gross revenue that Immuron, its agents, marketers, distributors, permitted assigns, licensees and sublicensees, receives from selling Immuron products, processes and services.

2. Infringement and legal action

• Immuron may at its own cost take reasonable steps including commencing proceedings to prevent infringement of the Assigned IPR or the Licensed IPR.

• If Immuron fails to commence legal action within 90 days Hadasit may, at its own cost, undertake reasonable steps including commencing proceedings to prevent infringement and protect Hadasit and Immuron’s interests in the Assigned IPR. All proceeds from such actions taken by Hadasit shall be retained by Hadasit.

• Any award or settlement payment must be used first to reimburse documented out-of-pocket expenses by both parties and the balance shall be deemed gross revenue, out of which royalties must be paid.

• Subject to certain conditions, the consent of Hadasit is required for every settlement of any action with respect to the Licensed IPR and the Assigned IPR.

3. Warranties and Disclaimer

• The warranties that would ordinarily be found in this type of transaction are included in the agreements.

• Immuron acknowledges that nothing in the ALA constitutes or is construed as a warranty or representation by Hadasit, express or implied, regarding the safety, usage, merchantability and fitness for a particular purpose of the Assigned IPR and the Licensed IPR. Hadasit makes no warranties or representations other than those stated in the ALA.

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4. Immuron’s Indemnity

Immuron provides an indemnity in Hadasit’s favour with respect to any breach or non-performance by Immuron of the ALA, breach of third party rights and any wrongful, willful or negligent act or omission by Immuron and its employees, agents and contractors. Immuron’s liability under the indemnity is limited to the market value of Immuron’s shares. Further, Immuron will not be liable for any indirect or consequential loss or damage, loss of profits, economic loss, loss of business opportunity, loss of data, or loss or damage resulting from wasted management time.

Immuron must maintain adequate insurance coverage, including contractual liability coverage for Immuron’s indemnification obligations and product liability insurance.

5. Default and Termination

Immuron may terminate the license with respect to each product considered separately at any time by providing at least 60 days written notice to Hadasit.

Either party may terminate the ALA with immediate effect if an event of default (other than an insolvency event) occurs in relation to the other party and the other party does not remedy the default within 30 days of receiving a default notice. Either party may terminate the ALA with immediate effect if the other party is the subject of an insolvency event.

If Immuron terminates the ALA for any reason, Immuron is entitled to repurchase the Consideration Shares from Hadasit for no consideration. However, Immuron will still be liable to pay Hadasit royalties under the ALA.

If Hadasit terminates the ALA due to a default by Immuron, the intellectual property rights Hadasit assigned and licences to Immuron pursuant to the ALA, shall revert to the absolute ownership of Hadasit, free of any encumbrances.

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SERVICES AGREEMENT

1. Services

Under the Service Agreement, Immuron engages Hadasit for a period of 3 years to provide pre-clinical and clinical research and development of therapeutic, prophylactic and/or diagnostic product candidates with respect to two mutually selected indications with the aim of developing products based on colostrum that Immuron produces (“ Services” ). The Service Agreement can be terminated prior to the expiration of three years, or extended beyond3 years with the consent of both parties.

The Services will be provided by Hadasit in Israel and will be assisted by Immuron with the production and supply of hyper-immunised colostrum containing antibodies against the selected antigens.

Hadasit will deliver to Immuron the deliverables and will make reasonable commercial efforts to provide them within the agreed time frame.

Hadasit may subcontract any part of the services to any person with prior written notice to Immuron, provided that it remains liable for the performance of the services.

The details of the services to be provided by Hadasit still need to be agreed to between the parties. The Company intends to agree the extent of the Services prior to the commencement of the Service Agreement.

2. Key personnel

The key personnel for Hadasit shall consist of Professor Yaron Ilan and the key personnel for Immuron shall consist of Dr Grant Rawlin.

3. Payment

The US$500,000 prepayment described under the heading “Conditions Precedent” above will be applied in payment of the Services in amounts equal to the actual out of pocket costs incurred by Hadasit. Once this prepayment has been exhausted by Hadasit’s performance of the Services, Immuron will pay Hadasit, on a quarterly basis, a service fee at the same rate.

Hadasit shall return to Immuron the portion of the US$500,000 prepayment that it is not entitled to retain by reason of not performing the services under the Service Agreement.

If the provision of Services requires additional resources or expenditures in excess of those agreed, or if the parties agree that Hadasit shall provide its Services with respect to more than two antigens, Hadasit shall be entitled to charge Immuron on the basis of the “at cost” rates at the time of entering the Services Agreement or Hadasit’s then current “at cost” rates and the Service Fee shall be adjusted accordingly. The Services Fees are exclusive of all taxes, duties and other charges.

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4. Hadasit’s Obligations

Hadasit shall perform the Services. Hadasit shall ensure that sufficient insurance coverage by a credit-worthy insurance company or by form of self-insurance for medical professional and/or medical malpractice liability is secured and maintained in full force and effect through the performance of the services.

5. Condition Precedent

The commencement of the Services Agreement is conditional upon fulfilment of all the conditions set out in the ALA within the timeframe set out therein.

6. Immuron’s indemnity to Hadasit

Immuron is liable to indemnify Hadasit and HMO and any of their respective employees, agents or contractors (“ Indemnitees” ) for any loss or expense arising out of the performance of the Services and/or use, sale or manufacture by Immuron of the Service results and/or of products incorporating or involving such results against product liability claims or claims regarding third party’s intellectual property rights, provided that Immuron’s indemnification obligations are proportionately reduced to the extent the loss was caused by the negligence, reckless or wilful misconduct of the person.

The Indemnitees shall be entitled to instruct Immuron to defend all litigation and legal procedures or to manage their defense at Immuron’s cost.

Immuron is also liable to Hadasit for any reasonable and necessary medical expenses incurred directly for the treatment of adverse reactions by subjects of the trials conducted as part of the Services under the Service Agreement provided that insurance do not cover these expenses. Immuron is not liable for the portion of costs covered by the subjects’ medical or hospital insurance. Immuron will not be liable if the cost was incurred due to the negligence or misconduct of any agent of Hadasit or HMO.

Immuron will maintain insurance coverage of at least $US3 million per occurrence, for drug product liability. This insurance coverage will include sufficient general and malpractice insurance to cover any claims that may arise in connection with Immuron’s responsibilities under this agreement under which Hadasit and HMO are co-insured.

7. Warranties

The warranties that would normally be found in such an agreement are contained in the Services Agreement.

However, there is an express disclaimer that states that nothing in the Services Agreement shall be construed as a warranty by Hadasit, HMO, their directors, officers or employees that the results of the services will be useful or commercially exploitable or of any value whatsoever or that the services or products that contain them are of merchantable quality or fit for a particular purpose. The entire risk arising out of the production and use of the Services, service results and any derived products and accompanying materials remains solely with Immuron.

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8. Intellectual property use and ownership

Hadasit and Immuron must make their background technology available for the performance of the services. To the extent that Immuron provides its background technology and improvements, Immuron grants anon-transferable, non-exclusive and royalty free licence to Hadasit for the sole purpose of performing the services during the term which is sublicensable to Hadasit’s contractors for the same purpose. Hadasit acknowledges that it uses Immuron’s background technology improvements at its own risk and that Immuron has excluded all warranties as to merchantability and fitness for a particular purpose.

All intellectual property rights resulting from the service that exclusively relate to the Field, vest in Immuron. Hadasit retains ownership of all results of the Services that do not relate exclusively to the Field, even if they relate non-exclusively to the Field.

9. Infringement and Indemnity

Each party indemnifies the other party from and against all losses resulting from claims, demands, actions and other proceedings by any third party to the extent arising from a breach of representation, warranty or covenant of the indemnifying party under the Services Agreement, performance of the indemnifying party’s obligations under the Services Agreement and the gross negligence or wilful misconduct of the indemnifying party.

10. Liability

Each party shall be liable for the direct damages that the other party or its Related Bodies Corporate sustains or incurs as a direct or indirect result of a breach or non-performance of obligations and any wrongful, wilful or negligent act or omission of the party, its officers, agents, employees, licensees, subcontractors and representatives.

Each party’s liability to the other party for a breach of the Services Agreement, statutory cause of action, common law or tort arising from the Services Agreement is limited by excluding liability for certain indirect or consequential loss or damage, loss of profits or anticipated profits and by an aggregate of all claims against each, to the total amount of the service fees.

11. Termination

Each party may terminate for cause due to material breach by the other party, the other party being subject to an “Event of Default” or the ALA being terminated.

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CONSULTANCY AGREEMENT

1. Work

Immuron will engage Professor Yaron Ilan as Immuron’s Medical Director (not a director of the board of directors) to act as the Medical Director of Immuron and have such responsibilities and authority consistent with that position (“ Work” ). The initial agreement is for a term of three years although it can be terminated earlier as set out below.

Payments

Professor Yaron Ilan will be paid at the rate of US$5,000 (plus VAT) a month for the Work, and shall be reimbursed approved expenses that he incurs.

2. Obligations of Professor Ilan

Professor Yaron Ilan is required to perform the Work for the equivalent of 8 hours a week in a given month. He will be granted access to Immuron’s facilities, personnel and records for the purpose of carrying out the Work.

3. Indemnification, Insurance, Limited Liabilities

Immuron shall defend, indemnify and hold harmless Professor Ilan, Hadasit and HMO and any of their employees, agents or contractors (“ Hadassah Indemnitees ”) for any loss or damage regarding any responsibility, charges, damages and/or product liability claim which may result from the performance of the Work provided that Immuron’s obligations are proportionately reduced to the extent the loss was caused by the negligence or wilful misconduct of an Hadassah Indemnitee.

There is a disclaimer that nothing contained in the Consultancy Agreement shall be construed as a warranty by Hadasit and Professor Ilan that the results of the Work will be useful or commercially exploitable or of any value or that they are merchantable or fit for a particular purpose. The entire risk arousing out of the Work results remains solely with Immuron, except to the extent that Hadasit, HMO or Professor Ilan commercialise or otherwise use the results.

Immuron shall have and maintain appropriate liability insurance to the benefit of Professor Ilan.

4. Termination

Either party may terminate the Consultancy Agreement upon an insolvency event occurring, where the other party has materially breached the Consultancy Agreement, where Professor Ilan provides 30 days resignation notice or where the ALA or the Services Agreement are terminated. Immuron can, with one month’s notice to Hadasit, terminate this agreement before the first anniversary of the agreement if Immuron determines that this agreement adversely affects its financial solvency.

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