UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 17,
2020
Edesa Biotech, Inc.
(Exact Name of Registrant as Specified in its Charter)
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British
Columbia, Canada
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001-37619
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N/A
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(State or Other
Jurisdiction of
Incorporation)
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(Commission
File
Number)
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(IRS
Employer Identification
No.)
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100 Spy Court
Markham, Ontario, Canada L3R 5H6
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(Address
of Principal Executive Offices)
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(289) 800-9600
Registrant’s
telephone number, including area code
N/A
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
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☐
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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☐
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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☐
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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☐
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Securities
registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of exchange on which registered
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Common
Shares
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EDSA
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The
Nasdaq Stock Market LLC
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Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging
growth company ☒
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act. ☒
Item 1.01
Entry into a Material Definitive Agreement.
On April 17, 2020, Edesa Biotech, Inc.
(“Edesa”), through its wholly-owned subsidiary Edesa
Biotech Research, Inc., entered into an exclusive license agreement
with NovImmune SA,
which operates under the brand Light Chain Bioscience (“Light
Chain”). Pursuant to the license agreement, Edesa
obtained exclusive rights throughout
the world to certain know-how, patents and data relating to
the monoclonal antibodies targeting TLR4 and CXCL10 (the
“Constructs”). Edesa will
use the exclusive rights to develop products containing the
Constructs (the “Licensed Products”) for therapeutic,
prophylactic and diagnostic applications in humans and
animals.
Unless earlier terminated, the term of the license
agreement will remain in effect for twenty-five years from the date
of first commercial sale of Licensed Products. Subsequently,
the license agreement will automatically renew for five (5) year
periods unless either party terminates the agreement in accordance
with its terms.
Pursuant
to the license agreement, Edesa is exclusively responsible, at its
expense, for the research, development manufacture, marketing,
distribution and commercialization of the Constructs and Licensed
Products and to obtain all necessary licenses and rights. Edesa is
required to use commercially reasonable efforts to develop and
commercialize the Constructs in accordance with the terms of a
development plan established by the parties. Subject to certain
conditions, Edesa is permitted to engage third parties to perform
its activities or obligations under the agreement.
In
exchange for the exclusive rights to develop and commercialize the
Constructs, Edesa issued to Light Chain $2.5 million of its newly
designated Series A-1 Convertible Preferred Shares (the
“Series A-1 Shares”) pursuant to the terms of a
securities purchase agreement entered into between the parties
concurrently with the license agreement. In addition, Edesa is
committed to payments of various amounts to Light Chain upon
meeting certain development, approval and commercialization
milestones as outlined in the license agreement up to an aggregate
amount of $363.5 million. Edesa also has a commitment to pay Light
Chain a royalty based on net sales of Licensed Products in
countries where Edesa directly commercializes Licensed Products and
a percentage of sublicensing revenue received by Edesa in the
countries where Edesa does not directly commercialize Licensed
Products.
The license agreement provides that Light Chain
will remain the exclusive owner of existing intellectual property
in the Constructs and that Edesa will be the exclusive owner of all
intellectual property resulting from the exploitation of the
Constructs pursuant to the license. Subject to certain limitations,
Edesa is responsible for prosecuting, maintaining and enforcing all
intellectual property relating to the Constructs. During the
term of the agreement, Edesa also has the option to purchase the
licensed patents and know-how at a price to be negotiated by the
parties.
If
Edesa defaults or fails to perform any of the terms, covenants,
provisions or its obligations under the license agreement, Light
Chain has the option to terminate the license agreement, subject to
providing Edesa an opportunity to cure such default. The license
agreement is also terminable by Light Chain upon the occurrence of
certain bankruptcy related events pertaining to Edesa.
In
connection with the license agreement and pursuant to a purchase
agreement entered into by the parties on April 17, 2020, Edesa will
purchase from Light Chain its inventory of the TLR4 antibody for an
aggregate purchase price of $5.0 million, payable in two
installments.
The foregoing summaries of the license agreement, securities
purchase agreement and purchase agreement do not purport to be
complete and are qualified in their entirety by reference to the
definitive transaction documents, copies of which are filed as
exhibits to this Current Report. Each of the license
agreement, securities purchase agreement and purchase agreement
contain representations and warranties that the respective parties
made to, and solely for the benefit of, the other party thereto in
the context of all of the terms and conditions of that agreement
and in the context of the specific relationship between the
parties. The provisions of the license agreement, securities
purchase agreement and purchase agreement, including the
representations and warranties contained therein, are not for the
benefit of any party other than the parties to such agreements or
as stated therein and are not intended as documents for investors
and the public to obtain factual information about the current
state of affairs of the parties to those documents and agreements.
Rather, investors and the public should look to other disclosures
contained in the company’s filings with the SEC.
Item
2.01
Completion
of Acquisition or Disposition of Assets.
The
information set forth in Item 1.01 with respect to the
acquisition of the TLR4
antibody inventory is incorporated by reference into this
Item 2.01.
Item 3.02
Unregistered Sales of Equity
Securities.
Pursuant to the license
agreement and securities purchase agreement, Edesa issued 250 of
its Series A-1 Shares to Light Chain. Information regarding the
Series A-1 Shares is contained in Item 5.03 of this Current Report
on Form 8-K, and is incorporated by reference into this Item
3.02.
The
Series A-1 Shares issued to Light Chain were issued in a
transaction exempt from registration under Regulation S promulgated
under the Securities Act of 1933, as amended (the
“Act”), because the offer and sale of such securities
was made to a non-U.S. person (as that term is defined in
Regulation S under the Act) in an offshore
transaction.
Item
3.03
Material
Modification to Rights of Security Holders.
The
information set forth in Item 5.03 with respect to the rights,
preferences, restrictions and other matters pertaining to the
Series A-1 Shares is incorporated by reference into this
Item 3.03.
Item
5.03
Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
In
connection with the execution of the license agreement, Edesa filed
Amended and Restated Articles to establish the rights, preferences,
restrictions and other matters pertaining to the Series A-1 Shares.
The Series A-1 Shares have no par value and a stated value of
$10,000 per share and rank, with respect to redemption payments,
rights upon liquidation, dissolution or winding-up of Edesa, or
otherwise, senior in preference and priority to Edesa’s
common shares. A holder of Series A-1 Shares shall not be entitled
to receive dividends unless declared by Edesa’s Board of
Directors. Subject to certain exceptions and adjustments for share
splits, each Series A-1 Share is convertible six months after its
date of issuance into a number of Edesa’s common shares
calculated by dividing (i) the sum of the stated value of such
Series A-1 Share plus a return equal to 3% of the stated value of
such Series A-1 Share per annum (collectively, the “Preferred
Amount”) by (ii) a fixed conversion price of $2.26.
A holder of
Series A-1 Shares will not have the right to convert any portion of
its Series A-1 Shares if the holder, together with its affiliates,
would beneficially own in excess of 4.99% of the number of common
shares outstanding immediately after giving effect to such
conversion (the “Beneficial Ownership Limitation”);
provided, however, that upon notice to Edesa, the holder may
increase the Beneficial Ownership Limitation to a maximum of
9.99%. The Series A-1 Shares do not have the right to vote
on any matters except as required by law and do not contain any
variable pricing features, or any price-based anti-dilutive
features.
In the
event of any liquidation, dissolution or winding-up of Edesa, a
holder of Series A-1 Shares shall be entitled to receive, before
any distribution or payment may be made with respect to
Edesa’s common shares, an amount in cash equal to the
Preferred Amount per share, plus all unpaid accrued dividends on
all such shares.
At any
time, Edesa may redeem some or all outstanding Series A-1 Shares
for a cash payment per share equal to the Preferred Amount. Subject
to certain restrictions, a holder of Series A-1 Shares may require
Edesa to redeem the Series A-1 Shares for cash beginning 18 months
after issuance. In the event of a required redemption, at the
election of Edesa, the redemption amount (which is equal to the
Preferred Amount) may be paid in full or in up to twelve equal
monthly payments with any unpaid redemption amounts accruing
interest at a rate of 3% annually, compounded monthly. On the third
anniversary of the date of issuance of the Series A-1 Shares, Edesa
has the right to convert any outstanding Series A-1 Shares into
common shares.
The
foregoing summary of the rights, preferences, restrictions and
other matters pertaining to the Series A-1 Shares does not purport
to be complete and is qualified in its entirety by reference to
Part 27 of the Amended and Restated Articles of Edesa –
Special Rights and Restriction Attaching to the Series A-1
Convertible Preferred Shares, a copy of which is attached
hereto as Exhibit 3.1 and incorporated herein by
reference.
Item 8.01.
Other Events
On
April 20, 2020, Edesa issued a press release regarding the
transactions described in Item 1.01, a copy of which is attached
hereto as Exhibit 99.1 and incorporated herein by
reference.
Item
9.01
Financial
Statements and Exhibits.
(d) Exhibits
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ExhibitNo.
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Description of Exhibit
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Amended
and Restated Articles of Edesa Biotech, Inc.
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10.1+
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License
Agreement by and between Edesa Biotech Research, Inc. and NovImmune
SA dated April 17, 2020.
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10.2+
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Purchase
Agreement by and between Edesa Biotech Research, Inc. and NovImmune
SA dated April 17, 2020.
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10.3+
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Securities
Purchase Agreement by and between Edesa Biotech, Inc. and NovImmune
SA dated April 17, 2020
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Press
Release issued by Edesa Biotech, Inc. dated April 20,
2020.
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+ Portions
of this exhibit have been omitted pursuant to Rule 601(b)(10)(iv)
of Regulation S-K.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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Edesa
Biotech, Inc.
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Date:
April 23, 2020
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By:
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/s/
Michael Brooks
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Name:
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Michael
Brooks, PhD
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Title:
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President
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Exhibit
3.1
Exhibit 10.1
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT
BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE
HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.
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License Agreement
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dated
April 17, 2020
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between
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NovImmune SA
Chemin
des Aulx 14, 1228 Plan-les-Ouates, Switzerland
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(hereinafter
NI)
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and
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Edesa Biotech Research, Inc.
100 Spy
Court, Markham, Ontario, Canada, L3R 5H6]
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(hereinafter
LICENSEE)
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License
Agreement between NovImmune and Edesa Biotech Research
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1|14
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1.
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DEFINITIONS
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5
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2.
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LICENSE
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5
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2.1 Construct License
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5
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2.2 Retained Rights
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5
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3.
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COST AND RISK; SPECIAL INDEMNITY
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6
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4.
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LICENSE FEES
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6
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4.1 Upfront Payment
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6
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4.2 Royalties
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6
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4.3 [__] - Milestone Payments
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7
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4.4 [__] - Milestone Payments
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7
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4.5 Currency Conversion
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8
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4.6 Reporting
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8
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4.7 Payment
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8
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4.8 Taxation
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9
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4.9 Right to Purchase
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9
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5.
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BOOKS AND RECORDS; AUDITS
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9
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5.1 Procudures
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9
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5.2 Cost of Audits
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10
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5.3 Retention Period
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10
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6.
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INTELLECTUAL PROPERTY
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10
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6.1 Allocation of IP
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10
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6.2 IP Responsibility Prosecution
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10
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6.3 Third Party Infringement
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11
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6.4 Infringement of Third Party's IP
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11
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6.5 Transfer of the IND
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11
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7.
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REPRESENTATIONS AND WARRANTIES;
INDEMNITIES
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11
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7.1 Representations and Warranties
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11
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7.2 Indemnities
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12
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7.3 Exclusions and Limitations
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12
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8.
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CONFIDENTIALITY AND PUBLIC
ANNOUNCEMENTS
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12
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9.
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TERM AND TERMINATION
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12
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9.1 Term
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12
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9.2 Termination for Cause
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12
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9.3 Effects of Termination
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13
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License Agreement
between NovImmune and Edesa Biotech Research
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2|14
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10.
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FINAL PROVISIONS
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13
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10.1 Entire Agreement
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13
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10.2 Written Form
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13
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10.3 Severability
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13
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10.4 Assignment
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13
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10.5 Independent Contractor
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13
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10.6 Further Assurances
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13
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10.7 Notices
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14
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10.8 Force Majeure
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14
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10.9 Waiver
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14
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10.10 Annexes
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14
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10.11 Governing Law
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14
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10.12 Arbitration
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14
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License
Agreement between NovImmune and Edesa Biotech Research
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3|
14
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Table of Annexes
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Number of Annex
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Name of Annex
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Annex
1
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Definitions
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Licensed
Patents
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Development
Plan
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Annex
4.1(a)
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Preferred Share
Terms
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Annex
4.1(b)
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Securities Purchase
Agreement
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License
Agreement between NovImmune and Edesa Biotech Research
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4|
14
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WHEREAS, NI has developed, generated and produced certain
monoclonal antibodies (the Monoclonal Antibodies) and NI owns IP
(as defined) in the Monoclonal Antibodies;
WHEREAS, LICENSEE is interested in the development and
commercialization of the Monoclonal Antibodies known as [___]
(Anti-TLR4) ([___]) and [___] (Anti-CXCL10) ([___]) (each a
Construct, jointly the
Constructs); [Nature of constructs omitted
as competitively sensitive information.]
WHEREAS, NI is willing to grant LICENSEE
the license rights necessary to do so;
WHEREAS, NI has an existing inventory of
[___], and the Parties (as defined) shall enter into a separate
supply agreement concurrently with the signing of this agreement
pursuant to which NI intends to supply to LICENSEE, and LICENSEE
intends to purchase from NI, certain amounts of [___];[Nature of constructs omitted
as competitively sensitive information.]
Capitalized
terms used in this Agreement (as defined) shall have the meanings
assigned to them in Annex 1.
(a)
Subject to the
terms and conditions of this Agreement, NI agrees to grant and
hereby grants to LICENSEE an exclusive, worldwide license, with the
right to sublicense, to develop, test, register (including, without
limitation, to file and amend applications for, and to hold
marketing authorisations as well as regulatory approvals),
manufacture, contract manufacture, modify, market, sell, distribute
and promote the Constructs and Licensed Products (as defined) in
the Licensed Field (as defined) (the Construct License).
(c)
For the avoidance
of doubt, LICENSEE shall have the right to appoint sub-distributors
and/or sub-contractors for, developing, marketing, testing, selling
and manufacturing of the Licensed Products.
(d)
To the extent
available and/or permissible in any given jurisdiction, LICENSEE
shall have the right to register the Construct License, and NI
shall support any of LICENSEE's filings to such end by issuing and
executing deeds and other documents required to perfect such
license registrations upon LICENSEE's due request.
Unless
expressly provided for in this Agreement, this Agreement does not
grant any right or license to a Party under any of the other
Party’s IP or to the IP of Third Parties (as defined).
Notwithstanding anything in this Agreement, NI shall be free to
make use of all Monoclonal- and Bispecific Antibodies that are not
subject to the Construct License.
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License
Agreement between NovImmune and Edesa Biotech Research
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5|
14
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(a)
LICENSEE shall be
responsible at its own cost and risk for the research, development,
testing, registration, manufacture, use, marketing, distribution
and commercialization of the Constructs and Licensed Products and
to obtain all necessary licenses, rights and authorizations as
necessary, however, in accordance with the terms and conditions of
this Agreement.
(b)
Notwithstanding any
general liability and indemnity under this Agreement but subject to
the provisions of Section 7.3, LICENSEE
shall indemnify and hold NI and its Affiliates (as defined) and
each of their officers, directors, employees, agents and
representatives from and against any and all third party
liabilities, claims, demands, actions, suits, losses, damages,
costs, and expenses (including reasonable attorneys' fees) arising
out of or in connection with LICENSEE's and its sub-licensees' and
sub-contractors' actions and omissions in the course of the
research, development, testing, registration, making, use,
marketing, distribution and commercialization of the Constructs and
any of the Licensed Products.
(c)
LICENSEE will be
responsible for the development of the Constructs in accordance
with the plan set forth in Annex 3(c) (the Development Plan), including the
development targets (the Development Targets) referenced therein.
LICENSEE shall provide NI with progress updates in accordance with
the Development Plan by no later than sixty (60) days from the end
of each 6-month period following the Effective Date, for the first
two years of this Agreement and, thereafter, within sixty (60) days
following each twelve (12) month anniversary of the Effective Date.
The Parties acknowledge and agree the Development Plan is based on
the best estimation of goals and timelines at the time of execution
of this Agreement and may be amended by mutual agreement in writing
over the course of its implementation by LICENSEE. After the
submission by LICENSEE of a Development Plan update, the Parties
shall meet (in person or through other means) and work in good
faith to agree on an amendment and adjustment of the Development
Plan as reasonably needed.
Within
thirty (30) calendar days of the Effective Date (as defined),
LICENSEE shall pay to NI a non-refundable fee of USD 2,500,000 for
the Construct License (the "Upfront
Payment"). At the option of the LICENSEE, the Upfront
Payment will be paid in either cash or through the issuance,
assignment and transfer to NI of Series A-1 Preferred Shares in the
share capital of Edesa Biotech, Inc. in accordance with the terms
set out in Annexes 4.1(a) and 4.1(b), or a combination of cash payment and
Series A-1 Preferred Shares.
LICENSEE
shall pay to NI tiered royalties on Net Sales (as defined) or, as
the case may be, Sublicensing Revenues of Licensed Products, each
on a Licensed Product-by-Licensed Product and country-by-county
basis as follows (the Royalty
Payments):
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Commercialization
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Royalty
Rate (%)
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Net
Sales in countries, in which LICENSEE commercializes the Licensed
Products on its own (directly or through subsidiaries or
distributors)
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[___]% of Net Sales
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With
respect to countries, in which LICENSEE does not commercialize the
Licensed Products on its own but through sublicensing
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[___]%
of Sublicensing Revenue
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[Royalty
rates omitted as competitively sensitive
information.]
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License
Agreement between NovImmune and Edesa Biotech Research
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6|
14
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As
regards [___] and/or Licensed Products based on [___], upon
occurrence of following events (the Milestone Event), LICENSEE shall pay to
NI the following payments (the Milestone Payments):
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Milestone
Event regarding [___]
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Milestone
Payment
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Dosing of the first patient into the first stage of a Phase II
Clinical Trial (as defined)
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USD
[___]
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Earlier
of either (i) dosing of the first patient into the second stage of
a Phase II Clinical Trial or
(ii) completion of the Phase II
Clinical Trial
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USD
[___]
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Dosing
the first patient in the initial Phase
III Clinical Trial (as defined)
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USD
[___]
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Submission
of BLA (as defined) to the FDA (as defined)
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USD
[___]
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Upon
submission of a BLA or equivalent in Europe
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USD
[___]
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Upon
submission of a BLA or equivalent in Japan
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USD
[___]
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Receipt
of first marketing authorization by FDA
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USD
[___]
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Receipt
of first marketing authorization in Europe
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USD
[___]
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Receipt
of first marketing authorization in Japan
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USD
[___]
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First
Commercial Sale (as defined) in the United States
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USD
[___]
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First
Commercial Sale in Europe
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USD
[___]
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First
Commercial Sale in Japan
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USD
[___]
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First
annual occurrence of global Net Sales of USD
50,000,000
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USD
[___]
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First
annual occurrence of global Net Sales of USD
100,000,000
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USD
[___]
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First
annual occurrence of global Net Sales of USD
250,000,000
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USD
[___]
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First
annual occurrence of global Net Sales of USD
500,000,000
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USD
[___]
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First
annual occurrence of global Net Sales of USD
1,000,000,000
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USD
[___]
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[Nature
of constructs and quantum of milestone payments omitted as
competitively sensitive information.]
As
regards [___] and/or the Licensed Products based on [___], upon
occurrence of following Milestone Events, LICENSEE shall pay to NI
the following Milestone Payments:
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Milestone
Event regarding [___]
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Milestone
Payment
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Dosing
the first patient in the initial Phase
III Clinical Trial
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USD
[___]
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Submission
of BLA to the FDA
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USD
[___]
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Upon
submission of a BLA or equivalent in Europe
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USD
[___]
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Upon
submission of a BLA or equivalent in Japan
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USD
[___]
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Receipt
of first marketing authorization by FDA
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USD
[___]
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Receipt
of first marketing authorization in Europe
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USD
[___]
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Receipt
of first marketing authorization in Japan
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USD
[___]
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First
Commercial Sale in the United States
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USD
[___]
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First
Commercial Sale in Europe
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USD
[___]
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First
Commercial Sale in Japan
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USD
[___]
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|
First
annual occurrence of global Net Sales of USD
50,000,000
|
USD
[___]
|
|
First
annual occurrence of global Net Sales of USD
100,000,000
|
USD
[___]
|
|
First
annual occurrence of global Net Sales of USD
250,000,000
|
USD
[___]
|
|
First
annual occurrence of global Net Sales of USD
500,000,000
|
USD
[___]
|
|
First
annual occurrence of global Net Sales of USD
1,000,000,000
|
USD
[___]
|
[Nature
of constructs and quantum of milestone payments omitted as
competitively sensitive information.]
|
License
Agreement between NovImmune and Edesa Biotech Research
|
7|
14
|
(a)
Currency
conversions, if any, shall be made at the average rates of exchange
rates reported by Thomson Reuters or OANDA (or any other qualified
source that is acceptable and agreed upon by both Parties) for the
applicable Calendar Quarter (as defined).
(b)
All payments owed
under this Agreement shall be made in USD and by wire transfer to a
bank and account designated in writing by NI, unless otherwise
specified in writing by NI.
(a)
Net Sales and
Sublicensing Revenues of Licensed Products and Royalty Payments and
Milestone Payments thereon in accordance with this Agreement shall
be calculated on a Licensed Product-by-Licensed Product and
country-by-country basis and reported for each Calendar Quarter
within forty-five (45) calendar days following the end of the
quarter.
(b)
Each quarterly
report shall include the following
pieces of information provided for each Licensed Products and each
country where sales have actually been made:
(i)
Licensed Product
and country of sales;
(ii)
gross sales and
sublicensing revenue in local currency;
(iii)
exchange rates used
in determining the amount of USD;
(iv)
gross sales and
sublicensing revenue in USD;
(v)
deductions from
sales and sublicensing revenue to calculate Net Sales and
Sublicensing Revenue pursuant to the definition of Net Sales and
Sublicensing Revenue; for the avoidance of doubt, the amount of
each deduction listed in the definition of Net Sales shall be
detailed;
(vi)
Royalty rate
applied to calculate Royalty Payments;
(vii)
Net Sales and
Sublicensing Revenue in USD to be divided into (i) Net Sales
relating to Licensed Products based on [___] and (ii) Net Sales
relating to Licensed Products based on [___]; [Nature of constructs omitted as competitively
sensitive information.];
(viii)
gross Royalty
Payments in USD;
(ix)
withholding taxes,
if any, required by law to be deducted from gross Royalty Payments
or Milestone Payments;
(x)
net Royalty
Payments actually owed and to be paid to NI.
(a)
Based on the
quarterly reports received, and further upon the occurrence of any
Milestone Event, NI will provide to LICENSEE correct and duly
detailed invoices, and invoices shall be paid within thirty (30)
days of receipt.
(b)
In the event that
any payment due hereunder is not made when due, the payment shall
accrue interest from the due date at the rate of five percent (5%)
per annum The payment of such interest shall not limit NI from
exercising any other rights it may have because of non-payment or
late payment.
|
License
Agreement between NovImmune and Edesa Biotech Research
|
8|
14
|
(a)
All fees and
royalties are being understood and agreed as net of taxes such as
VAT (as defined) or other levies. To the extent any fees and
royalties are subject to taxation in any jurisdiction, LICENSEE
agrees to bear such taxes.
(b)
All fees and
royalties shall be paid free and clear of all deductions and
withholdings whatsoever, unless the deduction or withholding is
required by law or any governmental agency. If any deduction or
withholding is required by law, LICENSEE shall pay to NI such sum
as will, after the deduction or withholding has been made, leave NI
with the same amount as it would have been entitled to receive in
the absence of any such requirement to make a deduction or
withholding.
(c)
The Parties shall
cooperate and exercise their Commercially Reasonable Efforts (as
defined) to ensure that any withholding taxes imposed on LICENSEE
are reduced as far as possible under the provisions of the
applicable double tax treaty. LICENSEE shall furnish NI with the
best available evidence of payment whenever LICENSEE deducts such
tax from any payments due to NI.
(d)
If VAT is owed on
fees and royalties hereunder and cannot be settled by filing a
notification instead of paying the VAT, VAT (or equivalent tax)
shall be added to the applicable fee or LICENSEE shall pay the
royalty and such VAT (or equivalent tax) owing. The Parties shall
cooperate and exercise their Commercially Reasonable Efforts (as
defined) to allow to the extent possible under applicable laws and
regulations recovery of any such VAT (or equivalent tax) paid. In
particular, NI shall provide invoices in accordance with applicable
VAT law and any other documentation reasonably required by LICENSEE
to obtain a refund of such VAT.
(a)
As from completion
of the [___], the LICENSEE shall have
the right to notify NI in writing at any point in time henceforth
during the Term of its interest to purchase (i) the Licensed
Patents (as defined) and (ii) the Know-How (as defined) and a
royalty-free license for other IP controlled by NI as reasonably
necessary to commercialize the Constructs. Upon receipt by NI of
such notification, the Parties shall negotiate in good faith and
endeavour to agree on the terms of such IP purchase, including,
without limitation, on the purchase price [___].
[Commencement of option period
and methodology of calculating
purchase price omitted as competitively sensitive
information.]
(b)
For the avoidance
of doubt, however, failing an agreement to execute the requested IP
purchase by LICENSEE, the Construct License shall continue
unaffected, and LICENSEE shall have the right to notify its
interest to purchase again at any time [___]. If and when an
agreement can be reached, the parties will work expeditiously to
complete the purchase and sale contemplated within this Section 4.9
within [___] days
of LICENSEE's written notice upon customary terms acceptable to
both Parties acting reasonably and in good faith.
[Information pertaining to
option period and timing to complete purchase and sale omitted as
competitively sensitive information.]
(c)
During the Term, NI
shall not assign, sell or transfer any of Licensor’s right,
title or interest in or to Licensed Patents or the Know-How to a
Third Party unless:
(i)
NI has first, by
written notice to LICENSEE, offered to LICENSEE the right to
acquire from NI such right, title or interest proposed to be
assigned, sold or transferred by NI [___]; and
(ii)
LICENSEE has not
accepted NI’s offer by written notice of acceptance within
[___] days after receipt by LICENSEE of NI’s
offer;
in
which event NI may assign, sell or transfer to such Third Party the
right, title or interest in or to Licensed Patents or the Know-How
on the terms set out in [___]; provided that such Third Party
acquiring such right, title or interest in or to the Licensed
Patents or Know-How shall agree in writing: (x) to be bound to the
terms and conditions of this Agreement to the same extent as and
instead of NI; and (y) that, therefore, LICENSEE shall be direct
beneficiary of such agreement with the right to enforce such
agreement on such Third Party. If LICENSEE accepts an offer from NI
under this paragraph, the parties will work expeditiously to
complete the purchase and sale to LICENSEE contemplated in this
paragraph.
[Information pertaining to
right of first refusal terms and timing omitted as competitively
sensitive information.]
(a)
LICENSEE shall keep
full and accurate accounting records related to the Net Sales and
Sublicensing Revenues of Licensed Products and all reporting
obligations according to this Agreement in sufficient detail and in
compliance with internationally accepted accounting and bookkeeping
standards (International Financial Reporting Standards (IFRS) or
Generally Accepted Accounting Principles (GAAP)). Such records,
together with all necessary supporting data, shall be kept at
LICENSEE's offices at the address set forth above or such other
address as LICENSEE may communicate in writing to NI.
|
License
Agreement between NovImmune and Edesa Biotech Research
|
9|
14
|
(b)
Upon reasonable
notice to LICENSEE, NI shall have the right during normal business
hours to have an independent certified public accountant, selected
by NI and reasonably acceptable to LICENSEE, to audit on a
confidential basis LICENSEE's records pertaining to Net Sales and
Sublicensing Revenue of Licensed Products to verify fees and
royalties payable pursuant to this Agreement; provided, however,
that such audit shall not (a) take place more frequently than once
in a Calendar Year (as defined), or (b) cover records for more than
the preceding three (3) years.
(c)
If deemed necessary
in the sole discretion of the accountant, the accountant shall, at
NI’s expense, be permitted to consult with and obtain the
assistance of consultants selected by the accountant and reasonably
acceptable to LICENSEE.
(d)
The results of the
examination shall be final and binding on the Parties, subject to
either Party's right to bring the case to arbitration in accordance
with Section 10.12, but solely on the
ground of arbitrary findings of the examination.
The
fees and expenses of an audit shall be borne by NI; provided,
however, that if an audit reveals that LICENSEE underpaid fees or
royalties due to NI under this Agreement as to the period being
audited by more than seven point five percent (7.5%) of the amount
that was payable for such period, then LICENSEE shall, in addition
to paying immediately to NI any such shortfall, reimburse NI for
the cost of such audit.
Subject
to any statutory provisions on the keeping of records applicable,
LICENSEE shall retain all books and records required to be
maintained under Section 5 for
not less than five (5) years from the date of the Royalty Payment
to which they pertain.
(a)
NI shall own any
and all existing IP in the Constructs.
(b)
LICENSEE shall
own any and all newly created IP resulting from the exploitation of
the Construct License, such as, without limitation, IP in Construct
modifications, improvements and innovative combinations of either
of the Constructs with newly developed or existing other constructs
and any filings with regulators, including, without limitation,
IND, and any marketing authorisations and other regulatory
approvals filed or obtained by or under the control of LICENSEE
during the Term (all together referred to as Edesa IP).
(a)
LICENSEE shall be
responsible to prosecute, maintain and enforce upon its sole
discretion (such discretion to be exercised, however, in compliance
with, and to be without prejudice to, the terms and conditions of
this Agreement, including, without limitation, this
Section 6) the Licensed Patents
and Edesa IP.
(b)
In the event that
LICENSEE decides to cease prosecution or maintenance of any
Licensed Patent and/or Edesa IP, it shall promptly (but in any case
not less than three months prior to such ceasing of prosecution or
maintenance) notify NI of that election, and it shall be NI's sole
and unrestricted option to prosecute or not at its own
expense.
(c)
For the avoidance
of doubt, if any of the Licensed Patent or Other Licensed IP
belongs to a patent family disclosing and claiming inventions other
than the Constructs, then NI shall control its prosecution. In the
event that NI decides to cease prosecution or maintenance of such
Licensed Patent or Other Licensed IP, it shall promptly (but in any
case not less than three months prior to such ceasing of
prosecution or maintenance) notify LICENSEE of that election, and
it shall be LICENSEE's sole and unrestricted option to prosecute or
not at its own expense.
|
License
Agreement between NovImmune and Edesa Biotech Research
|
10|
14
|
(a)
If, during the term
of this Agreement, either Party becomes aware that any Third Party
is infringing any Licensed Patents, Know-how or Other Licensed IP,
it shall promptly notify the other Party and provide to the other
Party all non-privileged information in its possession concerning
such infringement.
(b)
LICENSEE shall have
the first right to instigate action and legal proceedings against
such Third Party, and NI shall provide such assistance as LICENSEE
may reasonably request. LICENSEE shall bear the expense of any
legal proceeding instigated by it. If LICENSEE does not timely
instigate appropriate action or legal proceedings against the Third
Party infringement, or if any action or legal proceedings
instigated by LICENSEE do not reasonably protect NI's interest in
the Licensed Patents, NI shall have the right but no obligation
whatsoever to instigate any action and/or legal proceedings against
the Third Party as NI deems reasonable in its own
discretion.
(c)
If an infringement
concerns a patent or any other IP owned by LICENSEE, LICENSEE shall
have sole discretion in the decision to instigate legal proceedings
at its expense.
(a)
To the knowledge
of NI and as per the Effective Date, there are no current, pending
or threatened legal claims, objections, litigation, judgments or
settlements against the Licensed Patents and the Know-How pursuant
to the Construct License and to the knowledge of NI, the Licensed
Patents and the Know-How pursuant to the Construct License do not
infringe on any IP of a Third Party. However, LICENSEE acknowledges
that NI has not conducted, and was under no obligation to conduct,
any FTO analysis or other research of potential conflicts with
Third Party IP.
(b)
NI does not
represent nor warrant or covenants, nor does NI assume any
liability whatsoever towards LICENSEE or any other person, that the
exploitation of the Construct License does not or may not infringe
upon any IP of a Third Party. It shall be LICENSEE's sole
responsibility to conduct due FTO analyses in view of any intended
exploitation.
Subject
to the terms of this Agreement, within 30 days of the Effective
Date, the Parties will file a request to transfer the IND for the
Licensed Products from NI to the LICENSEE.
(a)
Each Party
represents, warrants and covenants that: (i) it has the requisite
power and authority to enter into, execute, deliver and perform its
obligations under this Agreement; and (ii) it is in compliance with
all applicable laws related to such performance, including having
obtained all necessary permits and licenses; and (iii) it has not
entered and will not enter into any agreements inconsistent with
the provisions hereof.
(b)
Other than
expressly provided for in section 6.4(a), no Party
does represent or warrant nor does it assume any liability of any
kind for the validity and/or enforceability of any IP involved in
the exploitation of the Construct License, nor for the efficacy or
merchantability of the Constructs or Licensed
Products.
(c)
NI does not
represent or warrant nor does it assume any liability that
governmental authorities or any other institution or supervisory
board or similar agencies shall approve the Licensed Products. NI
does not represent or warrant that any Licensed Products made or
having been made by LICENSEE nor any other activities by LICENSEE
under or in relation with this Agreement do not infringe upon IP of
Third Parties, subject however to the representations and
warranties set forth in sub-paragraph (f).
(d)
NI represents and
warrants that, to the knowledge of NI and as per the Effective
Date, there are no legal claims, litigation, judgments or
settlements, whether against or owed by NI or pending legal claims
or litigation, in each case relating to the Constructs, the
Licensed Patents and the Know-How or NI’s rights thereto, and
to the knowledge of NI, there are no current, pending or threatened
legal claims or objections relating to the Licensed Patents,
Constructs, or NI’s rights thereto.
(e)
NI represents and
warrants that it owns all right, title and interest in and to the
Licensed Patents, Know-how and Other Licensed IP, and has the right
to grant the LICENSEE the rights and licenses that it purports to
grant hereunder and has not granted any Third Party rights that
would interfere or be inconsistent with the LICENSEE’s rights
hereunder.
(f)
Notifications of
and/or claims for misrepresentations and/or breaches of warranties
may be made, raised and filed as provided for by the applicable
law.
|
License
Agreement between NovImmune and Edesa Biotech Research
|
11|
14
|
The
Parties shall indemnify, defend, and hold harmless each other and
their Affiliates and their officers, directors, employees, agents
and representatives from and against any and all liabilities,
claims, demands, actions, suits, losses, damages, costs, and
expenses (including reasonable attorneys' fees) arising out of or
in connection with a breach of warranty or misrepresentation or any
other breach of contract; provided that no Party shall be required
to indemnify the other or its Affiliates to the extent that the
other Party's gross negligence or wilful misconduct has contributed
to the damage.
(a)
Neither Party shall
be liable to the other Party, under whatever theory, for any
indirect, special, punitive or consequential damages, or loss of
profit, loss revenue, or loss of opportunity, for any cause of
action a Party may have against the other Party arising
hereunder.
(b)
All liabilities and
obligations for indemnification hereunder shall expire two (2)
years from the date of termination or expiry of this Agreement,
except with respect to claims already notified to the other Party
prior to the end of such two (2) year period.
(a)
Each Party shall
keep strictly confidential all Confidential Information (as
defined) obtained from or about the other Party, and it shall have
its officers and employees execute confidentiality covenants duly
protecting such Confidential Information of the other
Party.
(b)
Each Party agrees
(i) not to use Confidential Information received from the other for
any purpose other than the performance of its obligations
hereunder, and (ii) not to disclose Confidential Information so
received to any Third Party, except as is required by mandatory
statutes or a court, stock exchange or governmental authority or
otherwise for the good faith performance of its obligations and
exercise of its rights hereunder (e.g., for patent filings, for the
filing of applications for regulatory approvals,
etc.).
(c)
In the event that a
disclosure of Confidential Information to a Third Party becomes
necessary or required, and such disclosure is not otherwise
permitted under this Agreement, the Receiving Party (as defined)
requested to disclose shall give to the Disclosing Party (as
defined) the greatest practical prior written notice so as to
permit the latter to take all possible action to perfect and/or
safeguard its rights in the Confidential Information.
(d)
The obligations of
the Parties relating to Confidential Information shall expire five
(5) years after termination or expiry of this
Agreement.
(e)
Each
Party shall be as careful to preserve the confidential nature of
the other Party's Confidential Information as it is with its own
proprietary information.
(f)
Subject
to any statutory, governmental or stock exchange disclosure
requirements, neither Party shall make any public announcement
concerning the transactions contemplated herein or make any public
statement which includes the name of the other Party or any of its
Affiliates, or otherwise use the name of the other Party or any of
its Affiliates in any public statement or document without the
written consent of the other Party.
(a)
This Agreement
shall enter into force on the Effective Date and shall remain in
effect for twenty-five (25) years from the First Commercial Sale in
the first country (the Initial
Period).
(b)
Subsequently, the
Agreement shall automatically and repeatedly renew for five (5)
year periods (the Renewal
Periods) unless either Party terminates the Agreement by
giving notice of termination to the other Party at least six (6)
months prior to the expiry of the Initial Period or a Renewal
Period (the Initial Period and the Renewal Periods constitute the
Term of the
Agreement).
(a)
Either Party may
terminate this Agreement upon written notice to the other Party in
the event the other Party materially breaches this Agreement and
fails to cure such breach, if curable, within sixty (60) calendar
days after receipt of written notice of breach from the
non-breaching Party requesting the remedy of the breach and
expressly threatening to otherwise terminate the Agreement. In case
of incurable breach of contract, the right to terminate arises with
the breach immediately and is to be exercised within sixty (60)
days thereof.
|
License
Agreement between NovImmune and Edesa Biotech Research
|
12|
14
|
(b)
This Agreement may
be terminated upon written notice by NI if the LICENSEE (i) makes a
general assignment for the benefit of creditors; (ii) files any
petition, or commences any proceeding voluntarily, for any relief
under any bankruptcy or insolvency laws or any law relating to the
relief of debtors; (iii) consents to the entry of an order in an
involuntary bankruptcy or insolvency case; (iv) is the subject of
an order or decree for relief against it by a court of competent
jurisdiction in an involuntary case under any bankruptcy or
insolvency laws or any law relating to the relief of debtors, which
order or decree is unstayed and in effect for a period of 60
consecutive days; (v) is subject to appointment, with or without
its consent, of any receiver, liquidator, custodian, assignee,
trustee, sequestrator or other similar official of such other Party
or any substantial part of its property; or (vi) admits in writing
of its inability to pay its debts generally as they become
due.
(c)
If NI alleges that
the LICENSEE has failed to use Commercially Reasonable Efforts to
develop the Constructs in accordance with the Development Plan by
failing to meet the Development Targets, NI shall provide the
LICENSEE with written notice. If Commercially Reasonable Efforts to
develop the Constructs in accordance with the Development Plan have
not commenced within sixty (60) days of receipt of written notice
of such failure by the LICENSEE, or if such Commercially Reasonable
Efforts have commenced in time but are discontinued and not resumed
by LICENSEE within thirty (30) days of another written notice, NI
may serve notice of termination with immediate effect of the
Agreement.
(a)
Upon termination or
expiry of this Agreement, LICENSEE shall remain entitled to
continue to use any Know-How available to LICENSEE as of the date
of the termination or expiry of this Agreement. For the avoidance
of doubt, this right of continued use does not refer to the use of
(i) any of the Licensed Patents or Other Licensed IP still in force
at the time of termination and (ii) any additions to the Know-How
as available upon termination or expiry of the
Agreement.
(b)
To the extent the
sale of Licensed Products is still covered by Licensed Patents or
Other Licensed IP upon termination of this Agreement, LICENSEE and
its Affiliates and sub-licensees shall be permitted to sell
Licensed Products during a period of one-hundred-twenty (120) days
of termination, provided, however, that the sale of such Licensed
Products will be subject to the terms of this Agreement including,
but not limited to, the payments due and at the rates and times
provided herein and the rendering of reports in connection
therewith.
(c)
The termination or
expiry of this Agreement for any reason shall not relieve the
Parties of any obligations accruing prior thereto and shall be
without prejudice to the rights and remedies of either Party with
respect to the breach of any of the provisions of this
Agreement.
(d)
Upon Termination
for Cause of this Agreement by NI, LICENSEE shall provide, and
hereby grants, a non-exclusive, irrevocable, and royalty-free
license to make use of Edesa IP as is reasonably necessary for NI
to commercialize the Constructs.
This
Agreement, together with the annexes and any other document
referred to in this Agreement, constitutes the entire agreement
between the Parties concerning the subject matter hereof and
supersedes all written or oral prior agreements or understandings
with respect thereto.
The
termination and any changes or amendments of this Agreement,
including the waiver of any provisions, are effective only if made
in writing. This also applies to a waiver of this formal
requirement.
In the
event that any provision, clause or application of this Agreement
is invalidated or unenforceable for any reason whatsoever, this
Agreement shall remain binding and in full force and effect except
for such invalidated or unenforceable provision, clause or
application. The Parties agree to use all Commercially Reasonable
Efforts to substitute any provision that shall be illegal or
unenforceable in good faith by another suitable provision that
maintains the economic purpose and the intent originally pursued by
them.
Other
than to an Affiliate or to a Party's successor to a part or all of
the business to which this Agreement relates (including in
connection with any company merger, company trade sale, sale of
stock, sale of assets or other similar transaction), neither this
Agreement nor any interest herein shall be assignable or otherwise
transferable by a Party without the other Party’s prior
written consent, which shall not be unreasonably
withheld.
The
relationship of NI to LICENSEE is that of independent contractor.
In no event shall either Party hold itself out to others or allow
itself to be considered the agent, employee, or representative of
the other Party.
Each
Party will, from time to time and at all times, without further
consideration perform the acts and execute and deliver the
documents and give the assurances necessary to give effect to this
Agreement.
|
License
Agreement between NovImmune and Edesa Biotech Research
|
13|
14
|
(a)
All notices
hereunder shall be in writing and shall be delivered personally,
mailed by overnight delivery, registered or certified mail, postage
prepaid, mailed by express mail service or given by facsimile or by
electronic mail to the designated representative(s) of the Parties
at the following addresses of the respective Parties:
|
If
to NI:
|
NovImmune
SA
Chemin
des Aulx 14
1228
Plan-les-Ouates
Switzerland
Attn:
Oliver Eckelmann
Fax
No.:
Email:
|
|
If
to LICENSEE:
|
Edesa Biotech
Research, Inc.
100
Spy Court
Markham,
Ontario, L3R 5H6
Canada
Attn:
Michael Brooks
Fax
No.:
Email:
|
[Personal information
omitted.]
(b)
Notices shall be
effective upon receipt if personally delivered, on the third
Business Day (as defined) following the date of mailing if sent by
certified or registered mail, and on the second Business Day
following the date of delivery to the express mail service if sent
by express mail, or the date of transmission if sent by facsimile.
A Party may change its address listed above by written notice to
the other Party.
(a)
Any delay in the
performance of any of the duties or obligations of either Party
under this Agreement caused by an event outside the affected
Party's reasonable control shall not be considered a breach of this
Agreement, and the time required for performance shall be extended
for a period equal to the period of such delay. Such events shall
include, without limitation: acts of God; acts of terrorism; riots;
embargoes; labour disputes, including strikes, lockouts, job
actions, or boycotts; fires; explosions; earthquakes; floods;
shortages of material or energy; or other unforeseeable causes
beyond the reasonable control and without the fault or negligence
of the Party so affected. The Party so affected shall give prompt
notice to the other Party of such cause and shall take whatever
reasonable steps are necessary to relieve the effect of such cause
as rapidly as possible.
(b)
Notwithstanding the
foregoing, the Parties acknowledge that uncertainties and events
outside control of the Parties related to the ongoing COVID-19
pandemic, such as emergency proclamations by national governments,
quarantines and travel restrictions, may prevent performance under
this Agreement. The Parties agree to enter into good faith
negotiations to amend development and milestones timelines
specified in this Agreement if a Party provides notice to the other
Party that such events prevent the Party, in spite of its good
faith and diligent efforts, to meet its performance
obligations.
No
waiver of any of the terms of this Agreement shall be valid unless
in writing and signed by an authorized representative of the
Parties. Failure by either Party to enforce any rights under this
Agreement shall not be construed as a waiver of such rights, nor
shall a waiver by either Party in one or more instances be
construed as constituting a continuing waiver or as a waiver in
other instances.
All
Annexes are incorporated herein by reference.
This
Agreement has been construed in accordance with and shall be
governed by the substantive laws of Switzerland with the exclusion
of the UN Convention on International Sales of Goods (Vienna
Convention).
All
disputes arising out of or in connection with this Agreement,
including disputes on its conclusion, binding effect, amendment and
termination, shall be resolved, to the exclusion of the ordinary
courts, by arbitration in accordance with the Rules of Arbitration
of the International Chamber of Commerce in force on the date when
the notice of arbitration is submitted in accordance with these
Rules. The number of arbitrators shall be three (3), and they shall
be appointed in accordance with the Rules of Arbitration. The seat
of the arbitration shall be in London. The arbitral proceedings
shall be conducted in English.
|
License
Agreement between NovImmune and Edesa Biotech Research
|
14|
14
|
IN WITNESS WHEREOF, each Party has caused this Agreement to
be executed on its behalf by its duly authorized representatives as
of the Effective Date.
|
Place
and Date: _Switzerland April 17, 2020
NovImmune SA
|
|
|
/s/
Nicolas Fischer
|
/s/
Oliver Eckelmann
|
|
Nicolas
Fischer
|
Oliver
Eckelmann
|
|
Place
and Date: _Canada April 17, 2020__
Edesa Biotech Research, Inc.
|
|
|
/s/
Pardeep Nijhawan
|
/s/
Michael Brooks
|
|
Pardeep Nijhawan
|
Michael
Brooks
|
Annex 1
Definitions
As used
in this Agreement and in any of the Annexes thereto in capitalized
form, the terms set forth below shall have the following meaning,
irrespective of whether used in the singular or plural. To the
extent terms are also defined in one or several Sections of the
Agreement and discrepancies in definitions occur, the definitions
set forth in this Annex 1 shall
prevail.
Affiliate shall mean any individual, corporation,
association or other business entity that directly or indirectly
controls, is controlled by, or is under common control with the
Party in question. As used in this definition, the term control
shall mean the direct or indirect ownership of more than fifty
percent (>50%) of the stock having the right to vote for
directors thereof or the ability to otherwise control the
management of the corporation or other business entity whether
through the ownership of voting securities, by contract,
resolution, regulation or otherwise.
Agreement shall mean this present License Agreement with its
Annexes.
Annex shall mean any of the numbered Annexes to this
Agreement.
BLA shall mean Biologic Application License as regulated
under FDA 21 CFR 600 – 680.
Business Day shall mean a day other than a Saturday or
Sunday or other day on which commercial banks in Zurich,
Switzerland are authorized or required by law to
close.
Calendar Quarter shall mean the four quarters of a Calendar
Year, each Calendar Quarter starting on January 1, April 1, July 1
and October 1.
Calendar Year shall mean the period of time beginning on
January 1 and ending December 31, except for the first year which
shall begin on the Effective Date and end on December
31.
Commercially Reasonable Efforts shall mean the level of
diligence, effort and resources required to carry out a particular
task or obligation in a manner consistent with the reasonable
general practices that a company within the pharmaceutical industry
at a similar size and similarly situated to NI or LICENSEE (as
applicable) applies in the exercise of its reasonable business
discretion relating to other pharmaceutical products which are of
similar market potential and at a similar stage in their
development or product life.
Confidential Information shall mean any and all information,
data or know-how, whether technical or non-technical, oral or
written, that is disclosed by one Party or its Affiliates
(Disclosing Party) to the
other Party or its Affiliates (Receiving Party). Confidential
Information shall not include any information, data or know-how
that:
(a)
as reasonably
evidenced by the Receiving Party, was generally available to the
public at the time of disclosure, or information that becomes
available to the public after disclosure by the Disclosing Party
other than through fault (whether by action or inaction) of the
Receiving Party or its Affiliates,
(b)
can be evidenced by
written records to have been already known to the Receiving Party
or its Affiliates prior to its receipt from the Disclosing
Party,
(c)
is obtained at any
time lawfully from a Third Party under circumstances permitting its
use or disclosure, as reasonably evidenced by the Receiving
Party,
(d)
is developed
independently by the Receiving Party or its Affiliates as evidenced
by written records other than through knowledge of Confidential
Information,
(e)
is required to be
disclosed by the Receiving Party of its Affiliates to comply with a
court or administrative order provided the Receiving Party or its
Affiliates furnishes prompt notice (in no event less than three (3)
Business Days) to the Disclosing Party to enable it to resist such
disclosure, provided however
that the exception in this sub-paragraph (e) shall apply
only for the purpose of complying with such court or administrative
order and that, for the avoidance of doubt, such disclosed
information shall otherwise remain Confidential
Information,
|
Annex 1 to the
License Agreement between NovImmune and Edesa Biotech
Research
|
2| 6
|
(f)
is required to be disclosed by the Receiving Party
to fulfill stock exchange disclosure requirements,
or
(g)
is approved in
writing by the Disclosing Party for release by the Receiving
Party.
The
terms of this Agreement shall be considered Confidential
Information of either of the Parties.
Construct(s) shall have the meaning set forth in the second
whereas clause.
Construct License shall have the meaning set forth in
Section 2.1(a).
Development Plan shall have the meaning set forth in Section
3(c) and shall be further detailed in Annex 3.
Development Targets shall have the meaning set forth in
Section 3(c) and shall be further detailed in Annex 3
Disclosing Party shall have the meaning set forth in the
definition of Confidential Information.
Edesa IP shall have the meaning set forth in Section
6.1(b).
Effective Date shall mean the date on which the last Party
executes this Agreement.
FDA shall mean the U.S. Food and Drug Administration
or any successor entity as defined in the U.S. Federal Food, Drug
and Cosmetic Act.
First Commercial Sale shall mean, on a country-by-country
basis, the first invoiced sale of a Licensed Product to a Third
Party by or for LICENSEE following the receipt of any regulatory
approval required for the sale of such Licensed Product, or if no
such regulatory approval is required, the date of the first
invoiced sale of a Licensed Product to a Third Party by or for
LICENSEE in such country.
FTO shall mean Freedom to Operate.
IND shall mean an Investigational New Drug application in
the United States, a Clinical Trial Application in Canada, or a
foreign equivalent application or submission for approval to
conduct human clinical investigations filed with or submitted to a
Regulatory Authority in conformance with the requirements of such
Regulatory Authority.
Initial Period shall have the meaning set forth in Section
9.1.
IP stands for Intellectual Property rights and shall mean
patents along with all applications, reissues, continuations,
continuations-in-part, revisions, divisions, extensions and
re-examinations, supplementary protection certificates, any other
rights to inventions, copyright and related rights as well as, to
the extent required in the context, trademarks, trade names and
domain names, rights in get-up, rights in goodwill or rights to sue
for passing off, rights in designs, rights in computer software,
rights in data and database rights and any other intellectual
property rights, in each case whether registered or unregistered
and including all applications (and rights to apply) for and all
similar or equivalent rights or forms of protection which subsist
in any part of the world.
Know-How shall mean all documented information relating to
the Constructs as controlled by and reasonably available at NI. For
the avoidance of doubt, Know-How shall also include access to all
Constructs-related clinical, non-clinical data, manufacturing and
safety information available at NI for purposes of obtaining and
maintaining regulatory approvals. For avoidance of doubt, Know-How
shall include any draft and any completed and submitted regulatory
filings, including but not limited to INDs.
|
Annex 1 to the
License Agreement between NovImmune and Edesa Biotech
Research
|
3| 6
|
Licensed Field shall mean all therapeutic, prophylactic and
diagnostic applications of the Constructs in humans and
animals.
Licensed Patent(s) shall mean all patents and patent
applications owned by NI listed and/or to be listed during the Term
in Annex
2.1(b), claiming any of the
Constructs or their manufacture, formulation or use in the Licensed
Field, including any patents issuing on such patent applications,
and further including any substitution, extension or supplementary
protection certificate, reissue, re-examination, renewal, division,
continuation or continuation-in-part of any of the
foregoing.
Licensed Product shall mean any product in the Licensed
Field which is, contains or comprises any of the Constructs,
regardless of such product’s methods of application (such as
systemically, locally into tumors, intravenously, subcutaneously,
orally, etc.), forms (e.g.
active pharmaceutical ingredient (API), finished dose forms,
kits) or formulations
or dosages, or the manufacture, use, or sale.
Milestone Events shall have the meaning set forth in Section
4.3.
Milestone Payments shall have the meaning set forth in
Section 4.3.
Monoclonal Antibodies shall have the meaning set forth in
the first whereas clause.
Net Sales shall mean, with respect to each given country or
jurisdiction, the gross amount invoiced for sales of Licensed
Products by LICENSEE, its Affiliates and its distributors,
exclusive of inter-company or group transfers or sales and
exclusive of transfers of samples of Licensed Products; less the
gross-to-net deductions taken in accordance with internationally
accepted financial reporting standards as of the date of the
invoice for such sales, to the extent actually allowed and incurred
with respect to such sales and accounted for on a Licensed
Product-by-Licensed Product basis.
By way
of example, the gross-to-net deductions taken in accordance with
internationally accepted financial reporting standards as of the
Effective Date include the following:
(a)
credits, reserves
or allowances granted for (i) damaged, outdated, returned,
rejected, withdrawn or recalled Licensed Product, (ii) wastage
replacement and short-shipments; (iii) billing errors and (iv)
indigent patient and similar programs (e.g., price
capitation);
(b)
governmental price
reductions and government mandated rebates;
(c)
chargebacks,
including those granted to wholesalers, buying groups and
retailers;
(d)
customer credits,
rebates, including cash sales incentives for prompt payment, cash
and volume discounts, wholesaler and pharmacy allowances including
initial distribution allowances;
(e)
freight, fees for
services charges, postage and duties, shipping and insurance
charges relating to such Licensed Product;
(f)
taxes, duties and
any other governmental charges or levies imposed upon or measured
by the import, export, use, manufacture or sale of a Licensed
Product (excluding income or franchise taxes).
Any
such deductions need to be customary under applicable International
Financial Reporting Standards (IFRS) or Generally Accepted
Accounting Principles (GAAP), as applicable, to the extent actually
incurred, allowed, accrued or paid.
|
Annex 1 to the
License Agreement between NovImmune and Edesa Biotech
Research
|
4| 6
|
Notice of Conversion shall have the meaning as set forth in Annex
5.
Other Licensed IP shall have the meaning set forth in
Section 2.1(b).
Parties shall mean both NI and LICENSEE.
Party shall mean either NI or LICENSEE.
Phase II Clinical Trial shall mean a human clinical trial in
any country that would satisfy the requirements of 21 C.F.R. §
312.21(b) FDCA, as amended from time to time, and the foreign
equivalent thereof.
Phase III Clinical Trial shall mean a human clinical trial
that is prospectively designed to demonstrate statistically whether
a product is safe and effective for use in humans in a manner
sufficient to obtain regulatory approval to market such product in
patients having the disease or condition being studied as described
in 21 C.F.R. § 312.21(c) FDCA, as amended from time to time,
and the foreign equivalent thereof.
Receiving Party shall have the meaning set forth in the
definition of Confidential Information.
Regulatory Authority means a government agency or entity
that exercises a legal right to control the use or sale of the
Licensed Products in a jurisdiction and may take enforcement action
to ensure that such Licensed Products commercialized within such
jurisdiction comply with applicable law.
Renewal Period(s) shall have the meaning as set forth in Section
9.1.
Royalty Payments shall have the meaning as set forth in
Section 4.2.
Sublicensee shall mean any Third Party to which LICENSEE
permits the commercialization of Constructs or Licensed Products in
countries where LICENSEE does not commercializes such Construct(s)
or Licensed Products on its own, whether directly or through
Affiliates or distributors.
Sublicensing Revenue shall mean the gross amount of all
revenues, royalties, receipts, and monies, including upfront
payments, milestone payments, and license fees, earned or received
by the LICENSEE from Sublicensee(s) with respect to the Constructs
minus any reasonable costs of goods and/or costs incurred by
LICENSEE as directly related to ongoing commercialization
activities by Sublicensee(s) of the Constructs incurred by the
LICENSEE. Accounting for any such revenues needs to be customary
under applicable International Financial Reporting Standards (IFRS)
or Generally Accepted Accounting Principles (GAAP), as applicable,
to the extent actually earned, allowed, accrued or
received.
Term shall have the meaning as
set forth in Section 9.1.
Third Party shall mean a
natural person, corporation, partnership, joint venture, trust, any
governmental authority or other business entity or organization,
and any other recognized organization other than the Parties and/or
their Affiliates.
Upfront Payment shall have the meaning as set forth in
Section 4.1.
USD shall mean US Dollars, being the lawful currency in the
United States of America.
VAT shall mean value-added tax.
[Annexes
4.1(a) and 4.1(b) have been filed as separate exhibits to this
filing with the Securities and Exchange
Commission.]
|
Exhibit 10.2
|
|
|
Execution
Copy
|
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT
BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE
HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.
|
|
|
Purchase Agreement
|
|
|
|
|
dated
April 17, 2020
|
|
|
|
|
between
|
|
|
|
|
NovImmune SA
Chemin
des Aulx 14, 1228 Plan-les-Ouates, Switzerland
|
(hereinafter
NI)
|
|
|
|
and
|
|
|
|
|
Edesa Biotech Research, Inc.
100 Spy
Court, Markham, Ontario, Canada, L3R 5H6
|
(hereinafter
Edesa)
|
|
|
|
|
|
|
Purchase
Agreement
|
2|
8
|
|
1.
|
Definitions and Interpretation |
4 |
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|
||
|
2.
|
Purchase of the Product |
4 |
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|
2.1 General |
4 |
|
|
2.2 Compliance with
Specifications |
4 |
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|
2.3 Possession Instruction and Passing of
Risk |
4 |
|
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||
|
3.
|
Purchase Price and other Fees |
4 |
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3.1 General |
4 |
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3.2 Payment Terms |
5 |
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3.3 Taxation |
5 |
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||
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4.
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Representations, Warranties, and
Liability |
5 |
|
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4.1 Representations and
Warranties |
5 |
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4.2 Edesa's Obligation to Inspect;
Remedies |
6 |
|
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||
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5.
|
Exclusion of Liability
|
6 |
|
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||
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6.
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General |
6 |
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6.1 Written Form |
6 |
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6.2 Assignment |
6 |
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6.3 Independent Contractor |
6 |
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6.4 Notices |
7 |
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|
6.5 Force Majeure |
7 |
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6.6 Waiver |
7 |
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|
6.7 Governing Law |
7 |
|
|
6.8 Dispute Resolution |
7 |
|
Purchase
Agreement
|
3|
8
|
List of Annexes
|
Number
of Annex
|
Name of
Annex
|
|
Annex 1
|
Definitions
|
|
Annex
2.1
|
Product
and Purchase Price
|
|
Annex
2.2(a)
|
Specifications
|
|
Annex
2.2(b)
|
Quality
Assistance Report No. B802533/1
|
|
Annex
2.2(c)
|
Lonza
Certificate of Analysis
|
|
|
|
|
Purchase
Agreement
|
4|
8
|
WHEREAS, NI is a company active in the development,
generation and manufacturing of monoclonal and bi-specific
antibodies, and NI owns IP (as defined) in such
antibodies;
WHEREAS, Edesa is interested in the further development and
commercialization of the NI monoclonal antibodies known as [___]
(Anti-TLR4) ([___]) and [___] (Anti-CXCL10) ([___]); [Nature of constructs omitted
as competitively sensitive information.]
WHEREAS, by entry into a license
agreement as of today, NI has granted Edesa an exclusive license
rights necessary to further develop and commercialize [___] and
[___];[Nature of constructs omitted
as competitively sensitive information.]
WHEREAS, NI owns an inventory of
approximately 3.9 Kgs of GMP manufactured [___] drug substance (the
Product), and Edesa wishes
to purchase the Product. The Parties have a mutual understanding
that payment of the Purchase Price (as defined) shall be made in
two instalments contingent upon successfully progressing to Phase
II and Phase III trials of therapies or drugs making use of
[___];[Nature of products omitted as
competitively sensitive information.]
WHEREAS, on NI's behalf, the Product is stored at and in
possession of [___]. [Place of Product storage
omitted as competitively sensitive information.]
WHEREAS, the Parties wish to set forth the terms of purchase
of the Product in this present purchase agreement (the Agreement);
NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein and intending to be legally bound
hereby, the Parties agree as follows:
Edesa
hereby agrees to purchase the Product in accordance with
Annex 2.1, and NI agrees to change of
ownership of the Product to Edesa accordingly.
NI
shall deliver the Product and quality assurance documentation,
including certificates of analysis and GMP compliance, in
compliance with the Specifications (as defined) set forth in
Annexes 2.2(a) to 2.2(c).
(a)
Within thirty (30)
days of execution of this Agreement, NI shall instruct [___] to
store and possess the Product on Edesa's instead of NI's behalf at
the Place of Storage (as defined) without delivery (Besitzanweisung) (the Possession Instruction). For the
avoidance of doubt, as a result of the Possession Instruction,
Edesa will acquire ownership of the Product.[Place of Product storage
omitted as competitively sensitive information.]
(b)
Within thirty (30)
days after the time of Possession Instruction given by NI (the
Possession Instruction
Date), with effect as of the Possession Instruction Date,
Edesa shall enter into a new storage agreement with [____]
pertaining to the storage of the Product by [____]. [Place of Product storage
omitted as competitively sensitive information.]
(c)
Notwithstanding
relevant provisions of the New Storage Agreement, the risk of the
Product shall pass to Edesa as of the Possession Instruction
Date.
(b)
For the avoidance
of doubt, as of the Possession Instruction Date, Edesa shall pay
all fees to be paid under the New Storage Agreement.
|
Purchase
Agreement
|
5|
8
|
(i)
[__] % of the
Purchase Price upon Edesa's notification to NI of being ready to
initiate a Phase II Trial of any therapy or drug making use of
[___], however no later than [____];
(ii)
[__] % of the
Purchase Price upon Edesa's notification to NI of being ready to
initiate a Phase III Trial of any therapy or drug making use of
[___], however no later than [____].
[Information relating to timing
and amount of payments and nature of constructs omitted
as competitively sensitive information.]
(a)
Upon an installment
becoming due, NI will provide Edesa with a correct and duly
detailed invoice. Edesa shall effect payment by bank transfer
within thirty (30) days of invoice's receipt.
(b)
In the event that
any payment hereunder is not made in time, the payment shall accrue
interest from the agreed date of payment at the rate of five
percent (5%) per annum. The payment of such interest shall not
limit NI from exercising any other rights it may have in case of
non-payment or late payment.
(a)
To the extent the
supply of the Product is subject to taxation in any jurisdiction,
Edesa agrees to bear such taxes, thus the Product Price being
understood and agreed as net of taxes such as VAT (as defined) or
other levies.
(b)
If and to the
extent Swiss VAT is applicable, NI shall specify on its invoices
the applicable rate (%) and amount of VAT owed, and such amount
shall be added to the Product Price and Edesa shall pay the Product
Price and such Swiss VAT. Edesa shall provide NI with all relevant
information and documentation required to issue such invoice in
accordance with applicable Swiss VAT law.
(c)
For any import
levies, VAT or other levies applicable in the county of delivery of
the Products shall, it shall be the sole responsibility and
liability of Edesa to correctly account for, declare and pay such
taxes.
(d)
The Parties shall
cooperate with each other using their reasonable best efforts to
obtain, to the extent possible under applicable laws and
regulations, a recovery of any VAT or other tax paid.
(a)
NI represents and
warrants to Edesa that, at the Possession Instruction Date at the
Place of Storage:
(i)
the Product will
meet and conform to the Specifications, and will be free from
material defects;
(ii)
NI has complied
with all laws and regulations applicable at its place (Switzerland)
relating to the Product;
(iii)
to NI's best
knowledge, the Product does not infringe any IP rights of any Third
Party (as defined);
(iv)
no Third Party has
any right or lien to deprive Edesa entirely, or partially, of the
intended use of the Product;
(b)
Other than the
representations and warranties given in this Section 4.1, NI
does not make any representations or give any warranties of any
kind, express or implied. In particular, NI does not warrant the
fitness of the Product for Edesa’s use or
application.
|
Purchase
Agreement
|
6|
8
|
(a)
No later than
thirty (30) calendar days after the date of notifications set forth
in section 3.2, Edesa or, if appointed, a third-party
representative shall inspect the Product at the Place of Storage
for any defects and deviations from the Specifications and shall
immediately notify NI of such defects or deviations, if any, in
writing or by e-mail.
(b)
If Edesa fails to
inspect the Product or to notify NI pursuant to
Section 4.2(a), claims arising out of such defects or
deviations shall be deemed waived by Edesa.
(e)
Remedies other than
those expressly set forth in paragraph (c) and (d), whether
statutory or otherwise and whether express or implied, are
excluded. For the avoidance of doubt, NI will not become liable for
direct, indirect or consequential damage whatsoever in case of
defects.
(a)
Unless expressly
provided for to the contrary, neither Party shall become liable to
the other Party for any direct, indirect, special, punitive or
consequential damage for any cause of action. Any such liability,
whether by contract, tort or any statute, is hereby
excluded.
(b)
No provision of
this Agreement shall be understood, however, to exclude or limit
the liability of a Party to the other for damage caused by
(i) gross negligence, willful misconduct, fraud or fraudulent
misrepresentation by such Party, or (ii) any other liability
that may not be limited or excluded by applicable law.
This
Agreement shall become effective upon its due execution by both
Parties. Changes or amendments of this Agreement are effective only
if made in writing. This also applies to a waiver of this form
requirement.
Other
than to an Affiliate or to a Party's successor to part or all of
the business to which this Agreement relates (including in
connection with any company merger, company trade sale, sale of
stock, sale of assets or other similar transaction), neither this
Agreement nor any interest therein shall be assigned or otherwise
transferred by a Party without the other Party’s prior
written consent.
The
relationship of the Parties is that of independent contractors. In
no event shall either Party hold itself out to others or allow
itself to be considered the agent, employee, or representative of
the other Party.
|
Purchase
Agreement
|
7|
8
|
(a)
All notices
hereunder shall be in writing and shall be delivered personally,
mailed by overnight delivery, registered or certified mail, postage
prepaid, mailed by express mail service or given by facsimile, to
the following addresses of the respective Parties:
|
If
to NI:
|
NovImmune
SA
Chemin
des Aulx 14
1228
Plan-les-Ouates
Switzerland
Attn:
Oliver Eckelmann
Fax
No.:
Email:
|
|
If
to Edesa:
|
Edesa Biotech
Research Inc
100
Spy Court,
Markham,
Ontario, L3R5H6
Canada
Attn:
Michael Brooks
Fax
No.:
Email:
|
[Personal information
omitted.]
(b)
Notices shall be
effective upon receipt if personally delivered, on the third
Business Day (as defined) following the date of mailing if sent by
certified or registered mail, and on the second Business Day
following the date of delivery to the express mail service if sent
by express mail, or the date of transmission if sent by facsimile.
A Party may change its address listed above by written notice to
the other Party.
Any
delay in the performance of any of the duties or obligations of
either Party under this Agreement caused by an event outside the
affected Party's reasonable control shall not be considered a
breach of this Agreement. Such events shall include acts of God;
acts of terrorism; riots; embargoes; sanctions; labour strikes;
fires; explosions; earthquakes; floods; shortages of material or
energy; or other unforeseeable causes beyond the reasonable control
of the Party so affected, including events related to the ongoing
COVID-19 pandemic, such as emergency proclamations by national
governments, quarantines and travel restrictions. The Party so
affected shall give prompt notice to the other Party of such cause
and shall take whatever reasonable steps are necessary to relieve
the effect of such cause as rapidly as possible.
No
waiver of any of the terms of this Agreement shall be valid unless
in writing and signed by an authorized representative of the
Parties. Failure by either Party to enforce any rights under this
Agreement shall not be construed as a waiver of such rights, nor
shall a waiver by either Party in one or more instances be
construed as constituting a continuing waiver or as a waiver in
other instances.
This
Agreement has been construed in accordance with and shall be
governed by the substantive laws of Switzerland with the exclusion
of the UN Convention on International Sales of Goods (Vienna
Convention).
All
disputes arising out of or in connection with this Agreement,
including disputes on its conclusion, binding effect, amendment and
termination, shall be resolved, to the exclusion of the ordinary
courts, by arbitration in accordance with the Rules of Arbitration
of the International Chamber of Commerce in force on the date when
the notice of arbitration is submitted in accordance with these
Rules. The number of arbitrators shall be three (3), and they shall
be appointed in accordance with the Rules of Arbitration. The seat
of the arbitration shall be in London. The arbitral proceedings
shall be conducted in English.
[Signature Page to follow]
|
Purchase
Agreement
|
8|
8
|
IN WITNESS WHEREOF, each Party has caused this Agreement to
be executed on its behalf by its duly authorized representatives as
of the Effective Date.
|
Place
and Date: _Switzerland April 17, 2020
NovImmune SA
|
|
|
/s/
Nicolas Fischer
|
/s/
Oliver Eckelmann_
|
|
Name:
Nicolas Fischer
|
Name:
Oliver Eckelmann
|
|
Place
and Date: _Canada April 17, 2020___
Edesa Biotech Research Inc.
|
|
|
/s/
Pardeep Nijhawan
|
/s/
Michael Brooks
|
|
Name:
Pardeep Nijhawan
|
Name:
Michael Brooks
|
|
Annex
2.1 to Purchase Agreement
|
1 | 2
|
Affiliate shall mean any individual, corporation,
association or other business entity that directly or indirectly
controls, is controlled by, or is under common control with the
Party in question. As used in this definition, the term control
shall mean the direct or indirect ownership of more than fifty
percent (>50%) of the stock having the right to vote for
directors thereof or the ability to otherwise control the
management of the corporation or other business entity whether
through the ownership of voting securities, by contract,
resolution, regulation or otherwise.
Agreement shall mean this purchase agreement including its
Annexes.
Annex shall mean any of the numbered Annexes to this
Agreement.
Edesa shall meen Edesa Biotech Research, Inc. shown as a
Party on the cover page of this Agreement.
GMP shall mean current Good Manufacturing Practices as
applied to active pharmaceutical ingredients in accordance with
International Council for Harmonisation.
IP stands for Intellectual Property and shall mean patents
along with all applications, reissues, continuations,
continuations-in-part, revisions, divisions, extensions and
re-examinations, supplementary protection certificates, any other
rights to inventions, copyright and related rights as well as, to
the extent required in the context, trademarks, trade names and
domain names, rights in get-up, rights in goodwill or rights to sue
for passing off, rights in designs, rights in computer software and
database and any other intellectual property rights, in each case
whether registered or unregistered and including all applications
(and rights to apply) for and all similar or equivalent rights or
forms of protection which subsist in any part of the
world.
New Storage Agreement shall have the meaning set forth in
section 2.3(b).
NI shall mean NovImmune SA shown as a Party on the cover
page of this Agreement.
[___]
shall have the meaning set forth in the second
whereas-clause.
[___]
shall have the meaning set forth in the second
whereas-clause.
[Nature of
constructs omitted as competitively sensitive
information.]
Parties shall mean both NI and Edesa.
Party shall mean either NI or Edesa.
Phase II Trial shall mean a human clinical trial in any
country that would satisfy the requirements of applicable
regulations and aims at testing efficacy and side effects of a
certain drug.
Phase III Trial shall mean a human clinical trial in any
country that would satisfy the requirements of applicable
regulations and aims at testing efficacy, effectiveness and safety
of a certain drug evidencing to be sufficient to obtain regulatory
approval to market such drug for patients having the disease or
condition being studied.
Place of Storage shall mean the place where the Product is
stored at the date of execution of this Agreement as specified in
Annex 2.1.
Possession Instruction shall have the meaning set forth in
section 2.3(a).
Possession Instruction Date shall have the meaning set forth
in section 2.3(b).
Product shall have the meaning set forth in the fourth
whereas-clause.
Purchase Price shall have the meaning set forth in section
3.1(a).
Specifications shall mean, with respect to the Product, all
applicable specifications set forth and analyzed and tested as
evidenced in Annexes 2.2(a) to 2.2(c), respectively.
[___] shall have the meaning set forth in the fifth
whereas-clause. [Place of product
storage omitted as competitively sensitive
information.]
Third Party shall mean a
natural person, corporation, partnership, joint venture, trust, any
governmental authority or other business entity or organization,
and any other recognized organization other than the Parties and/or
their Affiliates.
|
Annex
2.1 to Purchase Agreement
|
1 | 2
|
Annex 2.1 – Product and Purchase Price
|
Quantity
|
Intended
Possession Instruction Date
|
Place
of Storage
|
Purchase
Price
|
|
Approximately 3.9 Kgs with an accepted range of inaccuracy of
10%
|
Within 30 days of execution of this Agreement
|
[Place
of product storage omitted as competitively sensitive
information.]
|
USD
5,000,000
|
Exhibit 10.3
Execution
Copy
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT
BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE
HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.
SECURITIES
PURCHASE AGREEMENT
This
Securities Purchase Agreement (this “Agreement”) is dated as
of April 17, 2020, between Edesa Biotech, Inc., a British Columbia
corporation (the “Company”), and NovImmune
SA (“Purchaser”).
WHEREAS, Purchaser has developed,
generated and produced certain monoclonal antibodies (the
“Monoclonal
Antibodies”) and Purchaser owns certain intellectual
property in the Monoclonal Antibodies;
WHEREAS, the Company and its
subsidiaries are interested in the development and
commercialization of the Monoclonal Antibodies known as [__]
(Anti-TLR4) (“[__]”) and [__] (Anti-CXCL10)
(“[__]”) (each a “Construct”, jointly the
“Constructs”); [Nature of constructs omitted
as competitively sensitive information.]
WHEREAS, on even date herewith, Edesa
Biotech Research, Inc., a wholly-owned subsidiary of the Company
(“Edesa
Research”), and Purchaser are entering into a License
Agreement (the “License Agreement”)
pursuant to which Edesa Research will obtain an exclusive worldwide
license to develop, register, manufacture, contract manufacture,
modify, market, sell, distribute and promote the Constructs on the
terms set forth therein (the “License”);
and
WHEREAS, as partial consideration for
the License and as contemplated by the License Agreement, the
Company has agreed to enter into this Agreement pursuant to which
the Company shall issue to Purchaser and Purchaser shall acquire
from the Company 250 shares of Series A-1 Convertible Preferred
Shares of the Company with no par value per share, (the
“Shares”) at an issue
price of $10,000 per share, subject to the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, IN CONSIDERATION of the
mutual covenants contained in this Agreement, and for other good
and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Company and Purchaser agree as
follows:
ARTICLE I.
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement, for
all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.1:
“Action” means action,
suit, inquiry, notice of violation, proceeding or investigation
before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, provincial. state, county,
local or foreign).
“Affiliate” means any
Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under
Rule 405 under the Securities Act.
“Articles” means the
articles of the Company, as amended from time to time.
“Board of Directors” means
the board of directors of the Company.
“Business Day” means any
day except any Saturday, any Sunday, any day which is a statutory
holiday or any other day on which banking institutions in Toronto,
Ontario, Canada are authorized or required by law or other
governmental action to close.
“Canadian Commissions”
shall have the meaning ascribed to such term in Section
4.8.
“Closing” means the
closing of the issuance and sale of the Shares pursuant to Section
2.1.
“Closing Date” means the
date of this Agreement.
“Commission” means the
United States Securities and Exchange Commission.
“Common Shares” means the
common shares of the Company, with no par value per share, and any
other class of securities into which such securities may hereafter
be reclassified or changed.
1
“Common Share Equivalents”
means any securities of the Company or the Subsidiaries which would
entitle the holder thereof to acquire at any time Common Shares,
including, without limitation, any debt, preferred shares, right,
option, warrant or other instrument that is at any time convertible
into or exercisable or exchangeable for, or otherwise entitles the
holder thereof to receive, Common Shares.
“Conversion Shares” means
the Common Shares issuable upon conversion of the Shares pursuant
to the Articles.
“Exchange
Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated
thereunder.
“GAAP” shall have the
meaning ascribed to such term in Section 3.1(h).
“International
Jurisdiction” shall have the meaning ascribed to such
term in Section 3.2(i).
“Legend Removal Date”
shall have the meaning assigned to such term in Section
4.1(d).
“Liens” means a lien,
charge, pledge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.
“Material Adverse Effect”
shall have the meaning assigned to such term in Section
3.1(b).
“Person” means an
individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability
company, joint share company, government (or an agency or
subdivision thereof) or other entity of any kind.
“Proceeding” means an
action, claim, suit, investigation or proceeding (including,
without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or
threatened.
“Public Information
Failure” shall have the meaning ascribed to such term
in Section 4.9(b).
“Public Information Failure
Payments” shall have the meaning ascribed to such term
in Section 4.9(b).
“Purchaser
Information” shall have the meaning ascribed to such
term in Section 4.8.
“Required Approvals” shall
have the meaning ascribed to such term in Section
3.1(e).
“Rule 144” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended or interpreted from time to time, or any
similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“SEC Reports” shall have
the meaning ascribed to such term in Section 3.1(h).
“Securities” means,
collectively, the Shares and the Conversion Shares.
“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Shares” has the meaning
ascribed to such term in the Recitals to this
Agreement.
“Short Sales” means all
“short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include locating
and/or borrowing Common Shares).
“Subsidiary” means any
subsidiary of the Company as set forth on Exhibit 21.1 of the
Company’s Annual Report on Form 10-K for the nine-month
period ended September 30, 2019 filed with the Commission on
December 12, 2019.
2
“Trading Day” means a day
on which the principal Trading Market is open for
trading.
“Trading Market” means any
of the following markets or exchanges on which the Common Shares
are listed or quoted for trading on the date in question: the NYSE
American, the Nasdaq Capital Market, the Nasdaq Global Market, the
Nasdaq Global Select Market, the New York Stock Exchange (or any
successors to any of the foregoing).
“Transaction Documents”
means this Agreement and the Articles.
“Transfer Agent” means
Computershare Investor Services Inc., the current transfer agent of
the Company, with a mailing address of 100 University Avenue, 8th
Floor, Toronto, Ontario M5J 2Y1, and any successor transfer agent
of the Company.
ARTICLE II.
PURCHASE
AND SALE
2.1 Closing.
As partial consideration for Purchaser’s granting of a
license to certain assets to the Company as contemplated in the
License Agreement, at the Closing and upon the terms and subject to
the conditions set forth herein, the Company agrees to issue and
deliver to Purchaser, and Purchaser agrees to acquire from the
Company, the Shares. The Closing shall occur at the offices of the
Company or such other location as the parties shall mutually
agree.
2.2 Deliveries.
(a) On
or prior to the Closing Date, the Company shall deliver or cause to
be delivered to Purchaser the following:
(i) this Agreement and
the License Agreement duly executed by the Company;
and
(ii) a
DRS statement indicating the Shares registered
in the name of Purchaser.
(b) On or prior to the
Closing Date, Purchaser shall deliver or cause to be delivered to
the Company this Agreement and the License Agreement duly executed
by Purchaser.
2.3 Closing
Conditions.
(a) The
obligations of the Company hereunder in connection with the Closing
are subject to the following conditions being
met:
(i) the accuracy in all
material respects (or, to the extent representations or warranties
are qualified by materiality or Material Adverse Effect, in all
respects) when made and on the Closing Date of the representations
and warranties of Purchaser contained herein (unless as of a
specific date therein in which case they shall be accurate as of
such date);
(ii) all
obligations, covenants and agreements of Purchaser required to be
performed at or prior to the Closing Date shall have been
performed; and
(iii) the
delivery by Purchaser of the items set forth in Section 2.2(b) of
this Agreement.
(b) The obligations of
Purchaser hereunder in connection with the Closing are subject to
the following conditions being met:
(i) the accuracy in all
material respects (or, to the extent representations or warranties
are qualified by materiality or Material Adverse Effect, in all
respects) when made and on the Closing Date of the representations
and warranties of the Company contained herein (unless as of a
specific date therein in which case they shall be accurate as of
such date);
(ii) all
obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing Date shall have been
performed; and
(iii) the
delivery by the Company of the items set forth in Section 2.2(a) of
this Agreement.
3
ARTICLE III.
REPRESENTATIONS
AND WARRANTIES
3.1 Representations
and Warranties of the Company.
Except as set forth in the SEC Reports, which SEC Reports shall
qualify any representation or warranty made herein, the Company
hereby makes the following representations and warranties to
Purchaser:
(a) Subsidiaries.
The Company owns, directly or indirectly, all of the capital share
or other equity interests of each Subsidiary free and clear of any
Liens, and all of the issued and outstanding shares of capital
share of each Subsidiary are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities.
(b) Organization and Qualification.
The Company and each of the Subsidiaries is an entity duly
incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, with the requisite power and authority to own and use
its properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation
nor default in any material respect of any of the provisions of its
respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. Each of the Company and
the Subsidiaries is duly qualified to conduct business and is in
good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the
case may be, could not have or reasonably be expected to result in:
(i) a material adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material adverse
effect on the results of operations, assets, business, prospects or
condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or (iii) a material adverse effect
on the Company’s ability to perform in any material respect
on a timely basis its obligations under any Transaction Document
(any of (i), (ii) or (iii), a “Material Adverse Effect”)
and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.
(c) Authorization; Enforcement. The
Company has the requisite corporate power and authority to enter
into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder. The
execution and delivery of this Agreement by the Company and the
consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the
Company, the Board of Directors or the Company’s shareholders
in connection herewith or therewith other than in connection with
the Required Approvals. This Agreement has been duly executed by
the Company and, when delivered in accordance with the terms hereof
and thereof, will constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with its
terms, except (i) as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or
other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable
law.
(d) No Conflicts or Breach. The
execution, delivery and performance by the Company of this
Agreement , the issuance and sale of the Securities at Closing and
the consummation by the Company of the transactions contemplated
hereby and thereby do not and will not (i) conflict with or violate
any provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time
or both would become a default) under, result in the creation of
any Lien upon any of the properties or assets of the Company or any
Subsidiary, or give to others any rights of termination, amendment,
anti-dilution or similar adjustments, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company or
Subsidiary debt or otherwise) or other understanding to which the
Company or any Subsidiary is a party or by which any property or
asset of the Company or any Subsidiary is bound or affected, or
(iii) subject to the Required Approvals, conflict with or result in
a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or
governmental authority to which the Company or a Subsidiary is
subject (including federal, provincial and state securities laws
and regulations), or by which any property or asset of the Company
or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not have or reasonably be
expected to result in a Material Adverse Effect. Neither the
Company, its subsidiaries nor, to its knowledge, any other party is
in violation, breach or default of any agreement, lease, credit
facility, debt, note, bond, mortgage, indenture or other instrument
to which the Company or its subsidiaries is a party to that is
reasonably likely to result in a Material Adverse
Effect.
(e) Filings, Consents and
Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal,
state, provincial, local or other governmental authority or other
Person in connection with the execution, delivery and performance
by the Company of this Agreement, other than: (i) application(s) to
each applicable Trading Market for the listing of the Conversion
Shares for trading thereon in the time and manner required thereby,
and (ii) such consents, waivers and authorizations that shall be
obtained prior to Closing (collectively, the “Required
Approvals”).
(f) Issuance of the Securities;
Registration. The Shares are duly authorized and duly and
validly issued, fully paid and non-assessable, free and clear of
all Liens imposed by the Company. The Conversion Shares, when
issued in accordance with the terms of the Articles, will be
validly issued, fully paid and non-assessable, free and clear of
all Liens imposed by the Company. The Company has reserved from its
duly authorized capital shares the maximum number of Shares and
Conversion Shares issuable pursuant to this Agreement.
4
(g) Capitalization. The Company has
not issued any capital shares since its most recently filed periodic report under the
Exchange Act, other than pursuant to the exercise of share
options under the Company’s share option plans and pursuant
to the conversion and/or exercise of Common Share Equivalents
outstanding as of the date of the most recently filed periodic
report under the Exchange Act. No Person has any right of first
refusal, preemptive right, right of participation, or any similar
right to participate in the transactions contemplated by this
Agreement. Except as a result of the purchase and sale of the
Securities and as set forth in the SEC Reports, there are no
outstanding options, warrants, scrip rights to subscribe to, calls
or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exercisable
or exchangeable for, or giving any Person any right to subscribe
for or acquire, any Common Shares or the capital share of any
Subsidiary, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may
become bound to issue additional Common Shares or Common Share
Equivalents or capital share of any Subsidiary. The issuance and
sale of the Securities will not obligate the Company or any
Subsidiary to issue Common Shares or other securities to any Person
(other than Purchaser). There are no outstanding securities or
instruments of the Company or any Subsidiary with any provision
that adjusts the exercise, conversion, exchange or reset price of
such security or instrument upon an issuance of securities by the
Company or any Subsidiary. There are no outstanding securities or
instruments of the Company or any Subsidiary that contain any
redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or
any Subsidiary is or may become bound to redeem a security of the
Company or such Subsidiary. The Company does not have any share
appreciation rights or “phantom share” plans or
agreements or any similar plan or agreement. All of the outstanding
shares of capital share of the Company are duly authorized, validly
issued, fully paid and non-assessable, have been issued in
compliance with all federal, provincial and state securities laws,
and none of such outstanding shares was issued in violation of any
preemptive rights or similar rights to subscribe for or purchase
securities. No further approval or authorization of any
shareholder, the Board of Directors or others is required for the
issuance and sale of the Securities. There are no shareholders
agreements, voting agreements or other similar agreements with
respect to the Company’s capital share to which the Company
is a party or, to the knowledge of the Company, between or among
any of the Company’s shareholders. Except as a result of the
purchase and sale of the Securities and as set forth in the SEC
Reports, there are no outstanding options, warrants, scrip rights
to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into
or exercisable or exchangeable for, or giving any Person any right
to subscribe for or acquire, any Common Shares or the capital share
of any Subsidiary, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may
become bound to issue additional Common Shares or Common Share
Equivalents or capital share of any Subsidiary. The issuance and
sale of the Securities will not obligate the Company or any
Subsidiary to issue Common Shares or other securities to any Person
(other than Purchaser).
(h) SEC Reports; Financial
Statements. The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by the
Company under the Securities Act and the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the twelve months
preceding the date hereof (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports”) on a timely
basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC Reports complied
in all material respects with the requirements of the Securities
Act and the Exchange Act, as applicable, and none of the SEC
Reports, when filed, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the
SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing.
Such financial statements have been prepared in accordance with
United States generally accepted accounting principles applied on a
consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not
contain all footnotes required by GAAP, and fairly present in all
material respects the financial position of the Company and its
consolidated Subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
5
(i) Material Changes; Undisclosed Events,
Liabilities or Developments. Since the date of the latest
audited financial statements included within the SEC Reports, (i)
there has been no event, occurrence or development that has had or
that could reasonably be expected to result in a Material Adverse
Effect, except for the outbreak of the COVID-19 pandemic, (ii) the
Company has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B)
liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or disclosed in filings made
with the Commission, (iii) the Company has not altered its method
of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its
shareholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital share and (v) the
Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company share
option plans.
(j) Registration Rights. Except as
described in the SEC Reports, no Person has any right to cause the
Company or any Subsidiary to effect the registration under the
Securities Act of any securities of the Company or any
Subsidiary.
(k) Listing and Maintenance
Requirements. The Common Shares are registered pursuant to
Section 12(b) or 12(g) of the Exchange Act, and the Company has
taken no action designed to, or which to its knowledge is likely to
have the effect of, terminating the registration of the Common
Shares under the Exchange Act nor has the Company received any
notification that the Commission is contemplating terminating such
registration. The Company has not, in the 12 months preceding the
date hereof, received notice from any Trading Market on which the
Common Shares are or have been listed or quoted to the effect that
the Company is not in compliance with the listing or maintenance
requirements of such Trading Market. The Company is, and has no
reason to believe that it will not in the foreseeable future
continue to be, in compliance with all such listing and maintenance
requirements. The Common Shares are currently eligible for
electronic transfer through the Depository Trust Company or another
established clearing corporation and the Company is current in
payment of the fees to the Depository Trust Company (or such other
established clearing corporation) in connection with such
electronic transfer. The issuance and sale of the Securities
hereunder does not contravene the rules and regulations of the
Trading Market.
6
3.2 Representations
and Warranties of Purchaser.
Purchaser hereby represents and warrants as of the date hereof to
the Company as follows (unless as of a specific date therein, in
which case they shall be accurate as of such
date):
(a) Organization; Authority.
Purchaser is an entity duly incorporated or formed, validly
existing and in good standing under the laws of the jurisdiction of
its incorporation or formation with full right, corporate,
partnership, limited liability company or similar power and
authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its
obligations hereunder . The execution and delivery of this
Agreement and performance by Purchaser of the transactions
contemplated hereby have been duly authorized by all necessary
corporate, partnership, limited liability company or similar
action, as applicable, on the part of Purchaser. This Agreement has
been duly executed by Purchaser, and when delivered by Purchaser in
accordance with the terms hereof, will constitute the valid and
legally binding obligation of Purchaser, enforceable against it in
accordance with its terms, except: (i) as limited by general
equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be
limited by applicable law. Purchaser is a resident in, or otherwise
subject to applicable securities laws of, Switzerland.
(b) Understandings or Arrangements.
Purchaser understands that the Securities are “restricted
securities” and have not been registered under the Securities
Act or any applicable state securities law or the laws of any
Canadian or foreign jurisdiction and are being issued in reliance
upon the exemption from the registration requirements thereof
afforded by Regulation S and/or other exemptions under the
Securities Act, or with any state securities commission or agency,
and applicable Canadian securities laws. Purchaser is acquiring
such Securities for investment and as principal for its own account
(and not for the account of any U.S. Person within the meaning of Rule 902(a) of
Regulation S) and not with a view to or for distributing or
reselling such Securities or any part thereof, including in
violation of the Securities Act or any applicable state securities
law or Canadian or foreign securities law. Purchaser has no present
intention of distributing any of such Securities in violation of
the Securities Act or any applicable state securities law or
Canadian or foreign securities law and has no direct or indirect
arrangement or understandings with any other persons to distribute
or regarding the distribution of such Securities in violation of
the Securities Act or any applicable provincial, state or Canadian
securities law or foreign securities law. No sale by Purchaser of the Securities
has been pre-arranged with any prospective buyer in the United
States or Canada. In
connection with the transactions that are the subject of this
Agreement, Purchaser acknowledges that offers respecting the sale
of the Securities directed by the Company were received outside of
the United States and that Purchaser has not and is not engaged in
or directed any unsolicited offers to buy the Securities in the
United States on behalf of any U.S. Person. Purchaser agrees
and acknowledges that the Company will issue stop transfer
instructions to its registrar and transfer agent prohibiting the
transfer of the Shares and Conversion Shares delivered under this
Agreement made in violation of applicable securities
laws. The Company
has advised Purchaser that the Company is relying on an exemption
from the requirements to provide Purchaser with a prospectus and to
sell the Shares through a person registered to sell securities
under Canadian securities laws and, as a consequence of acquiring
the Shares pursuant to these exemptions, certain protections,
rights and remedies provided by Canadian securities laws, including
applicable statutory rights of rescission or damages, will not be
available to Purchaser, and no prospectus or registration statement
has been filed by the Company with any securities commission or
similar regulatory authority in any jurisdiction in connection with
the issuance of the Shares. Purchaser currently does not own any
Common Shares.
(c) Purchaser Status. At the time
Purchaser was offered the Securities, it was not, and as of the
date hereof it is not a
U.S. Person within the meaning of Rule 902(a) of Regulation
S. At the time Purchaser was offered the Securities, it was,
and as of the date hereof it is an “accredited investor” as
defined in National Instrument 45-106 - Prospectus
Exemptions and as
described in paragraph (m) of that definition. Purchaser pre-existed the
offering of Securities, has a bona fide purpose other than
investment in the Securities and was not created or used solely to
purchase or hold securities as an “accredited investor”
as described in paragraph (m) of the definition of
“accredited investor” in section 1.1 of National
Instrument 45-106 - Prospectus
Exemptions.
(d) Experience of Purchaser.
Purchaser, either alone or together with its representatives, has
such knowledge, sophistication and experience in business and
financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment. Purchaser is
able to bear the economic risk of an investment in the Securities
and, at the present time, is able to afford a complete loss of such
investment.
(e) Access to Information.
Purchaser acknowledges that it has had the opportunity to review
the Transaction Documents (including all exhibits and schedules
thereto) and the SEC Reports and has been afforded, (i) the
opportunity to ask such questions as it has deemed necessary of,
and to receive answers from, representatives of the Company
concerning the terms and conditions of the offering of the
Securities and the merits and risks of investing in the Securities;
(ii) access to information about the Company and its financial
condition, results of operations, business, properties, management
and prospects sufficient to enable it to evaluate its investment;
and (iii) the opportunity to obtain such additional information
that the Company possesses or can acquire without unreasonable
effort or expense that is necessary to make an informed investment
decision with respect to the investment. Purchaser has not
received, nor has it requested, nor does it have any need to
receive, any offering memorandum or any other document describing
the business and affairs of the Company that constitutes an
offering memorandum as such term is defined under applicable
Canadian securities laws, nor has any such document been prepared
for delivery to, or review by, prospective purchasers in order to
assist them in making an investment decision in respect of the
Securities. The Shares are not being purchased by Purchaser, as a
result of any material information concerning the Corporation that
has not been publicly disclosed, including any “material
fact” as such term is defined in the Securities Act (British
Columbia).
7
(f) Certain Transactions. Other
than consummating the transactions contemplated hereunder, such
Purchaser has not, nor has any Person acting on behalf of or
pursuant to any understanding with such Purchaser, directly or
indirectly executed any purchases or sales, including Short Sales,
of the securities of the Company during the period commencing as of
the time that such Purchaser first received a communication from
the Company or any other Person representing the Company setting
forth the terms of the transactions contemplated hereunder and
ending immediately prior to the execution hereof.
(g) General Solicitation. Purchaser
is not purchasing the Securities as a result of any advertisement,
article, notice or other communication regarding the Securities
published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or, to the
knowledge of Purchaser, any other general solicitation or general
advertisement.
(h) Restricted Securities.
Purchaser agrees that the
Securities acquired by it pursuant to this Agreement shall not be
voluntarily sold, transferred or otherwise disposed of in the
United States or Canada or to any U.S. Person except pursuant to an
available exemption from the registration requirements of the
Securities Act or pursuant to an effective registration statement
thereunder or pursuant to an available exemption from the
prospectus requirements of applicable Canadian securities laws, and
otherwise in compliance with any applicable state or provincial
securities laws. Purchaser agrees that there are restrictions on
Purchaser’s ability to resell the Securities under applicable
Canadian securities laws and it is the responsibility of Purchaser
to find out what those restrictions are and to comply with them
before selling the Securities. Purchaser acknowledges that no
transfer of the Securities shall be made by the Company’s
registrar and transfer agent upon the Company’s transfer
books or records unless there has been compliance with the terms of
this Agreement, including the above provisions. Purchaser agrees to
indemnify and hold the Company harmless from and against
liabilities, claims, damages and expenses (including reasonable
attorneys’ fees) that may result from or arise out of any
disposition of the Securities in violation of this
Agreement.
(i) International Jurisdiction.
Purchaser is resident in a jurisdiction other than Canada or the
United States (an “International
Jurisdiction”) and purchasing as principal, and the
decision to subscribe the Shares was made in such International
Jurisdiction. The delivery of the Subscription Agreement, the
acceptance of it by the Company and the issuance of the Shares to
Purchaser complies with all laws applicable to Purchaser, including
the laws of Purchaser’s jurisdiction of residence, and all
other applicable laws, and will not cause the Company to become
subject to, or require it to comply with, any disclosure,
prospectus, filing or reporting requirements under any applicable
laws of the International Jurisdiction. Purchaser is knowledgeable
of, or has been independently advised as to, the application or
jurisdiction of the laws of the International Jurisdiction that
would apply to the purchase. The Company is offering and selling
the Shares and Purchaser is purchasing the Securities pursuant to
exemptions from the prospectus and registration requirements under
the applicable securities laws of the International Jurisdiction
or, if such is not applicable, the Company is permitted to offer
and sell the Shares and Purchaser is permitted to purchase the
Shares under the applicable securities laws of such International
Jurisdiction without the need to rely on any such exemptions. The
applicable securities laws do not require the Company to register
any of the Shares, file a prospectus, registration statement,
offering memorandum or similar document, or make any filings or
disclosures or seek any approvals of any kind whatsoever from any
regulatory authority of any kind whatsoever in the International
Jurisdiction. Purchaser will not sell, transfer or dispose of the
Shares except in accordance with all applicable laws, including the
securities laws applicable in Canada and the United States, and
Purchaser acknowledges that the Company shall have no obligation to
register any such purported sale, transfer or disposition which
violates applicable Canadian or United States securities
laws.
(j) Limited
Resale. Purchaser understands
that it may not be able to resell the Shares except in accordance
with limited exemptions available under applicable securities laws,
and that Purchaser is solely responsible for Purchaser’s
compliance with applicable resale restrictions. Subject to any
exemptions available under applicable securities laws, Purchaser
will comply with all applicable securities laws concerning the
resale of the Shares and will not resell any of the Shares except
in accordance with the provisions of applicable securities
laws.
ARTICLE IV.
OTHER
AGREEMENTS OF THE PARTIES
4.1 Removal
of Legends.
(a) The Securities may
only be disposed of in compliance with provincial, state and
federal securities laws and the laws of any applicable foreign
jurisdiction. In connection with any transfer of the Securities
other than pursuant to an effective registration statement, to the
Company or to an Affiliate of a Purchaser, the Company may require
the transferor thereof to provide to the Company an opinion of
counsel selected by the transferor and reasonably acceptable to the
Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred
Securities under the Securities Act or any applicable foreign
securities law.
8
(b) Purchaser agrees to
the imprinting, so long as is required by this Section 4.1, of a
legend on any of the Securities in the following form:
“NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS.”
(c) Purchaser also
agrees to the imprinting of an additional legend on any of the
Securities (to the extent that such Securities are issued prior to
the expiry of the applicable hold period) in the following
form:
“UNLESS
PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY
MUST NOT TRADE THE SECURITY BEFORE [the date which is four months
and one day after the Closing Date will be
inserted].”
(d) In connection with
a sale of Conversion Shares by Purchaser in reliance on Rule 144,
Purchaser or its broker shall deliver to the Company a broker
representation letter reasonably acceptable to the Company and the
Transfer Agent, providing to the Company the information required
under Rule 144 to determine that the sale of such Conversion Shares
is made in compliance with Rule 144, including, as may be
appropriate, a certification that Purchaser is not an affiliate of
the Company (as defined in Rule 144) and a certification as to the
length of time that such securities have been held. Upon receipt of
such representation letter, the Company shall promptly remove the
notation of a restrictive legend in Purchaser’s book-entry
account maintained by the Company, including the legend referred to
in Section 4.1(b), and the Company shall bear all costs associated
with the removal of such legend in the Company’s books. The
Company shall cooperate with Purchaser to effect the removal of the
legend referred to in Section 4.1(b) at any time such legend is no
longer appropriate. Without limiting the foregoing, upon the
written request of Purchaser, any legend (including the legend set
forth in Section 4.1(b) hereof) on Conversion Shares shall be
removed (i) while a registration statement covering the resale of
such security is effective under the Securities Act, (ii) if such
Conversion Shares are eligible for sale under Rule 144 without the
requirement to be in compliance with Rule 144(c)(1), or (iii) if
such legend is not required under applicable requirements of the
Securities Act (including judicial interpretations and
pronouncements issued by the staff of the Commission), subject in
the case of clauses (ii) and (iii) to receipt from Purchaser by the
Company and the Transfer Agent of customary representations
reasonably acceptable to the Company and the Transfer Agent in
connection with such request. Upon such request and receipt of such
representations, the Company shall (A) deliver to the Transfer
Agent irrevocable instructions to the Transfer Agent to remove the
legend, and (B) cause its counsel to deliver to the Transfer Agent
one or more legal opinions to the effect that the removal of such
legend in such circumstances may be effected under the Securities
Act if required by the Transfer Agent to effect the removal of the
legend in accordance with the provisions of this Agreement. If all
or any portion of a Share is converted into Conversion Shares and
either (i) a registration statement covering the resale of such
security is then effective under the Securities Act, (ii) the
Conversion Shares issuable upon such exercise are then eligible for
sale under Rule 144 without the requirement to be in compliance
with Rule 144(c)(1), or (iii) if a legend is not required under
applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the
Commission), then such Conversion Shares shall be issued free of
all legends, subject in the case of clauses (ii) and (iii) to
receipt from Purchaser by the Company and the Transfer Agent of
customary representations reasonably acceptable to the Company and
the Transfer Agent in connection therewith. The Company agrees that
following the effective date of a registration statement covering
the resale of the Conversion Shares or at such time as such legend
is no longer required under this Section 4.1(d), it will, no later
than two (2) Trading Days following the delivery by Purchaser to
the Company or the Transfer Agent of a request for legend removal,
and if relying on Rule 144, receipt from Purchaser by the Company
and the Transfer Agent of customary representations reasonably
acceptable to the Company and the Transfer Agent in connection
therewith (such second Trading Day, the “Legend Removal Date”),
deliver or cause to be delivered to Purchaser, as may be requested
by Purchaser, a certificate or book-entry position evidencing such
Conversion Shares that is free from all restrictive and other
legends or by crediting the account of Purchaser’s or its
designee’s account with the Depository Trust Company or
another established clearing corporation through its Deposit or
Withdrawal at Custodian system if the Company is then a participant
in such system.
(e) If the Company
fails to deliver any such Conversion Shares free from all
restrictive legends on or before the applicable Legend Removal Date
and if after the Legend Removal Date, due to the Company’s
continuing failure to deliver such Conversion Shares, Purchaser
purchases (in an open market transaction or otherwise) Common
Shares to deliver in satisfaction of a sale by Purchaser of all or
any portion of the Conversion Shares anticipated receiving from the
Company without any restrictive legend, then the Company shall pay
in cash to Purchaser in an amount equal to the excess of such
Purchaser’s total purchase price (including brokerage
commissions, if any) for the Common Shares so purchased over the
product of (A) such number of Conversion Shares the Company was
required to deliver to Purchaser by the Legend Removal Date
multiplied by (B) the lowest closing sale price of the Common
Shares on any Trading Day during the period commencing on the date
of the delivery by such Purchaser to the Company of the applicable
Conversion Shares and ending on the date of such delivery and
payment under this subsection 4.1(e).
4.2 Integration.
The Company shall not sell, offer for sale or solicit offers to buy
or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Securities in a manner that would require the
registration under the Securities Act of the sale of the Securities
or that would be integrated with the offer or sale of the
Securities for purposes of the rules and regulations of any Trading
Market such that it would require shareholder approval prior to the
closing of such other transaction unless shareholder approval is
obtained before the closing of such subsequent
transaction.
9
4.3 Publicity.
The Company and Purchaser shall consult with each other in issuing
any other press releases with respect to the transactions
contemplated hereby, and neither the Company nor Purchaser shall
issue any such press release nor otherwise make any such public
statement without the prior consent of the Company, with respect to
any press release of Purchaser, or without the prior consent of
Purchaser, with respect to any press release of the Company, which
consent shall not unreasonably be withheld or delayed, except if
such disclosure is required by law, in which case the disclosing
party shall promptly provide the other party with prior notice of
such public statement or communication.
4.4 Indemnification.
Subject to the provisions of this
Section 4.4, the Company and Purchaser will indemnify and hold each
other and each other’s directors, officers, members,
partners, employees and agents (and any other Persons with a
functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each
Person who controls such Purchaser (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act), and
the directors, officers, shareholders, agents, members, partners or
employees (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such
title or any other title) of such controlling persons (each, an
“Indemnified
Party”) harmless from any
and all losses (excluding loss of profit), liabilities,
obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs
and reasonable attorneys’ fees and costs of investigation
that any such Indemnified Party may suffer or incur as a result of
or relating to any breach of any of the representations,
warranties, covenants or agreements made by the other party in this
Agreement. If any action shall be brought against an Indemnified
Party in respect of which indemnity may be sought pursuant to this
Agreement, such Indemnified Party shall promptly notify the other
party in writing, and the other party shall have the right to
assume the defense thereof with counsel of its own choosing
reasonably acceptable to the Indemnified Party. Any Indemnified
Party shall have the right to employ one separate counsel in any
such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such
Indemnified Party except to the extent that (a) the employment
thereof has been specifically authorized by the other party in
writing, (b) the other party has failed after a reasonable period
of time to assume such defense and to employ counsel or (c) in such
action there is, in the reasonable opinion of counsel, a material
conflict on any material issue between the position of the other
party and the position of such Indemnified Party, in which case the
other party shall be responsible for the reasonable fees and
expenses of no more than one such separate counsel. The other party
will not be liable to any Indemnified Party under this Agreement
(1) for any settlement by an Indemnified Party effected without the
other party’s prior written consent, which shall not be
unreasonably withheld or delayed; or (2) to the extent, but only to
the extent that a loss, claim, damage or liability is attributable
to any Indemnified Party’s breach of any of the
representations, warranties, covenants or agreements made by such
Indemnified Party in this Agreement. The indemnification required
by this Section 4.4 shall be made by periodic payments of the
amount thereof during the course of the investigation or defense,
as and when bills are received or are incurred.
4.5 Reservation
of Common Shares. As of the
date hereof, the Company has reserved and the Company shall
continue to reserve and keep available at all times, free of
preemptive rights, a sufficient number of Common Shares for the
purpose of enabling the Company to issue the Conversion
Shares.
4.6 Listing
of Common Shares. The Company
hereby agrees to use reasonable best efforts to maintain the
listing or quotation of the Common Shares on the Trading Market on
which it is currently listed and will comply in all respects with
the Company’s reporting, filing and other obligations under
the bylaws or rules of the Trading Market. If required by the
Trading Market, the Company shall apply to list or quote all of the
Conversion Shares on such Trading Market and promptly secure the
listing of all of the Conversion Shares on such Trading Market. The
Company further agrees, if the Company applies to have the Common
Shares traded on any other Trading Market, it will then include in
such application all of the Conversion Shares, and will take such
other action as is necessary to cause all of the Conversion Shares
to be listed or quoted on such other Trading Market as promptly as
possible. The Company will then take all action reasonably
necessary to continue the listing or quotation and trading of its
Common Shares on a Trading Market and will comply in all respects
with the Company’s reporting, filing and other obligations
under the bylaws or rules of the Trading Market. The Company agrees
to maintain the eligibility of the Common Shares for electronic
transfer through the Depository Trust Company or another
established clearing corporation, including, without limitation, by
timely payment of fees to the Depository Trust Company or such
other established clearing corporation in connection with such
electronic transfer.
4.7 Blue
Sky Filings. The Company shall
take such action, if any, as the Company shall reasonably determine
is necessary in order to obtain an exemption for, or to qualify the
Securities for, issuance to Purchaser at the Closing under
applicable securities or “Blue Sky” laws of the states
of the United States, and shall provide evidence of such actions
promptly upon request of Purchaser.
10
4.8 Privacy.
By accepting this Agreement, the
Company agrees that it will not collect any information about
Purchaser except that which is provided by Purchaser in this
Agreement (collectively, the “Purchaser
Information”). The
Company also agrees that it will keep all Purchaser Information
confidential, and will use and disclose the Purchaser Information
only for the purposes described below, unless (a) the Company
informs Purchaser of a proposed use or disclosure of the Purchaser
Information and Purchaser consents; or (b) the use or disclosure is
permitted by law to be made without the consent of Purchaser, or is
required by law, or by the by-laws, rules, regulations or policies
or any regulatory organization governing the Company. By signing
this Agreement, Purchaser agrees that the Company may collect and
use the Purchaser Information for the following purposes and
consents to the following: (c) the Company delivering to the
applicable securities regulatory authorities, including the British
Columbia Securities Commission, (collectively, the
“Canadian
Commissions”) any
personal information provided by Purchaser respecting itself
including such Purchaser’s full name, residential address and
telephone number, the amount of securities purchased, the purchase
price, the exemption relied on by Purchaser and the date of
distribution, such information being collected indirectly by the
Canadian Commissions under the authority granted to in applicable
securities laws for the purposes of the administration and
enforcement of applicable securities laws in British Columbia, (d)
to provide Purchaser with information; (e) to otherwise administer
Purchaser’s investment in the Company in accordance with the
terms of this Agreement; (f) for internal use with respect to
managing the relationships between and contractual obligations of
the Company and Purchaser; (g) for use and disclosure for income
tax related purposes, including without limitation, where required
by law, disclosure to Canada Revenue Agency; (h) for disclosure to
a governmental or other authority to which the disclosure is
required by court order or subpoena compelling such disclosure and
where there is no reasonable alternative to such disclosure; (i)
for disclosure to professional advisers of the Company in
connection with the performance of their professional services; (j)
for disclosure to any person where such disclosure is necessary for
legitimate business reasons and is made with Purchaser’s
prior written consent; (k) for disclosure to a court determining
the rights of the parties under this Agreement; and (l) for use and
disclosure as otherwise required or permitted by law. Purchaser
acknowledges and consents to the Company retaining the personal
information for as long as permitted or required by applicable law
or business practices. Purchaser consents to the indirect
collection of such information by the Canadian Commissions and
acknowledges that it may contact the following public official in
British Columbia , with respect to questions about the British
Columbia Securities Commission’s indirect collection of such
information at the following address and telephone number: British
Columbia Securities Commission: P.O. Box 10142, Pacific Centre 701
West Georgia Street Vancouver, British Columbia V7Y 1L2 Inquiries:
(604) 899-6854 Toll free in Canada: 1-800-373-6393 Facsimile: (604)
899-6581 Email: inquiries@bcsc.bc.ca.
4.9 Furnishing
of Information; Current Public Information.
(a) Until the time that
Purchaser owns no Securities, the Company covenants to maintain the
registration of the Common Shares under Section 12(b) or 12(g) of
the Exchange Act and to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act even if the Company is not then
subject to the reporting requirements of the Exchange
Act.
(b) At any time during
the period commencing from the six (6) month anniversary of the
Closing Date and ending at such time that Conversion Shares may be
sold pursuant to Rule 144 without the requirement for the Company
be in compliance with Rule 144(c)(1), if the Company shall (i) fail
for any reason to satisfy the requirements of Rule 144(c)(1),
including, without limitation, the failure to satisfy the current
public information requirements under Rule 144(c) or (ii) if the
Company has ever been an issuer described in Rule 144(i)(1)(i) or
becomes such an issuer in the future, and the Company shall fail to
satisfy any condition set forth in Rule 144(i)(2) (each, a
“Public Information
Failure”) then, as partial relief for the damages to
the Purchaser by reason of any such delay in or reduction of its
ability to sell Securities (which remedy shall not be exclusive of
any other remedies available at law or in equity), the Company
shall pay to the Purchaser an amount in cash equal to one and a
half percent (1.5%) of the aggregate stated value of the Shares on
the day of a Public Information Failure and on every thirtieth day
(pro-rated for periods totaling less than thirty days) thereafter
until the earlier of (i) the date such Public Information Failure
is cured and (ii) such time that such Public Information Failure no
longer prevents a holder of Securities from selling such Conversion
Shares pursuant to Rule 144 without any restrictions or
limitations. The payments to which a holder shall be entitled
pursuant to this Section 4.9(b) are referred to herein as
“Public Information
Failure Payments”. Public Information Failure Payments
shall be paid on the earlier of (A) the last day of the calendar
month during which such Public Information Failure Payments are
incurred and (B) the third (3rd) Business Day after the event or
failure giving rise to the Public Information Failure Payments is
cured. In the event the Company fails to make Public Information
Failure Payments in a timely manner, such Public Information
Failure Payments shall bear interest at the rate of one and a half
percent (1.5%) per month (prorated for partial months) until paid
in full.
4.10 Disclosure
of Transaction and Other Material Information. Within four (4) Business Days of the date of
this Agreement, the Company shall file a Current Report on Form 8-K
describing the terms and conditions of the transactions
contemplated by this Agreement and the License Agreement in the
form required by the Exchange Act.
4.11 Non-Public
Information. After the date of
this Agreement, except pursuant to the terms of the License
Agreement, the Company covenants and agrees that neither the
Company nor any other Person acting on its behalf will provide
Purchaser or its agents or counsel with any information that
constitutes, or the Company reasonably believes constitutes,
material non-public information, unless prior thereto Purchaser
shall have consented to the receipt of such information and agreed
with the Company to keep such information
confidential.
4.12 Issuance
of Preferred Shares. For so
long as Purchaser holds Shares, the Company shall not, without the
prior written consent of Purchaser, create or issue any preferred
shares pursuant to the Articles where such preferred shares rank in
parity or priority to any right or special right attached to the
Shares under the Business Corporations
Act (British Columbia) or the
Articles.
11
ARTICLE V.
MISCELLANEOUS
5.1 Fees
and Expenses. Except as
expressly set forth in this Agreement to the contrary, each party
shall pay the fees and expenses of its advisers, counsel,
accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement. The Company
shall pay all Transfer Agent fees, stamp taxes and other taxes and
duties levied in connection with the delivery of any Securities to
Purchaser.
5.2 Entire
Agreement. The Transaction
Documents, together with the exhibits and schedules thereto,
contain the entire understanding of the parties with respect to the
subject matter hereof and thereof and supersede all prior
agreements and understandings, oral or written, with respect to
such matters, which the parties acknowledge have been merged into
such documents, exhibits and schedules.
5.3 Notices.
Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the time of
transmission, if such notice or communication is delivered via
facsimile at the facsimile number or email attachment at the email
address as set forth on the signature pages attached hereto at or
prior to 5:30 p.m. (Toronto, Ontario time) on a Trading Day, (b)
the next Trading Day after the time of transmission, if such notice
or communication is delivered via facsimile at the facsimile number
or email attachment at the email address as set forth on the
signature pages attached hereto on a day that is not a Trading Day
or later than 5:30 p.m. (Toronto, Ontario time) on any Trading Day,
(c) the second (2nd)Trading
Day following the date of mailing, if sent by Canadian nationally
recognized overnight courier service or (d) upon actual receipt by
the party to whom such notice is required to be given. The address
for such notices and communications shall be as set forth on the
signature pages attached hereto.
5.4 Amendments;
Waivers. No provision of this
Agreement may be waived, modified, supplemented or amended except
in a written instrument signed by the Company and Purchaser. No
waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of any party to exercise any right
hereunder in any manner impair the exercise of any such right. Any
amendment effected in accordance with this Section 5.4 shall be
binding upon Purchaser, any holder of Securities and the
Company.
5.5 Headings.
The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
5.6 Successors
and Assigns. This Agreement
shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The Company may not assign
this Agreement or any rights or obligations hereunder without the
prior written consent of Purchaser. Purchaser may assign any or all
of its rights under this Agreement to any Person to whom Purchaser
assigns or transfers any Securities, provided that such transferee
agrees in writing to be bound, with respect to the transferred
Securities, by the provisions of this Agreement that apply to the
“Purchaser.”
5.7 No
Third-Party Beneficiaries. This
Agreement is intended for the benefit of the parties hereto and
their respective successors and permitted assigns and is not for
the benefit of, nor may any provision hereof be enforced by, any
other Person, except as otherwise set forth in Section
4.4.
5.8 Governing
Law and Disputes. This
Agreement has been construed in accordance with and shall be
governed by the substantive laws of Switzerland with the exclusion
of the UN Convention on International Sales of Goods (Vienna
Convention) except that: (i) the Articles and all matters in
respect of corporate law in this Agreement have been construed in
accordance with and shall be governed by the substantive laws of
the Province of British Columbia; and (ii) all matters in respect
of securities law has been construed in accordance with and shall
be governed by the substantive securities laws of, to the extent
applicable, the Province of British Columbia and the laws of the
United States of America. All disputes arising out of or in
connection with the Transaction Documents, including disputes on
its conclusion, binding effect, amendment and termination, shall be
resolved, to the exclusion of the ordinary courts, by arbitration
in accordance with the Rules of Arbitration of the International
Chamber of Commerce in force on the date when the notice of
arbitration is submitted in accordance with these Rules. The number
of arbitrators shall be three (3), and they shall be appointed in
accordance with the Rules of Arbitration. The seat of the
arbitration shall be in London. The arbitral proceedings shall be
conducted in English.
5.9 Survival.
The representations and warranties contained herein shall survive
the Closing and the delivery of the Securities for a period of one
(1) year.
5.10 Execution.
This Agreement may be executed in two or more counterparts, all of
which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been
signed by each party and delivered to each other party, it being
understood that the parties need not sign the same counterpart. In
the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file,
such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed)
with the same force and effect as if such facsimile or
“.pdf” signature page were an original
thereof.
12
5.11 Severability.
If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their
commercially reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It
is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or
unenforceable.
5.12 Saturdays,
Sundays, Holidays,
etc. If
the last or appointed day for the taking of any action or the
expiration of any right required or granted herein shall not be a
Business Day, then such action may be taken or such right may be
exercised on the next succeeding Business Day.
5.13 Construction.
The parties agree that each of them and/or their respective counsel
have reviewed and had an opportunity to revise this Agreement and,
therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not
be employed in the interpretation of this Agreement or any
amendments hereto. In addition, each and every reference to share
prices and Common Shares in this Agreement shall be subject to
adjustment for reverse and forward share splits, share dividends,
share combinations and other similar transactions of the Common
Shares that occur after the date of this
Agreement.
(Signature Page Follows)
13
IN
WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.
|
EDESA BIOTECH, INC.
|
Address
for Notice:
|
|
By:
/s/Pardeep
Nijhawan
Name:
Pardeep Nijhawan
Title:
CEO
With
copies to (which shall not constitute notice):
|
100 Spy
Court
Markham,
ON, L3R 5H6 Canada
Attention:
Chief Executive Officer
Email:
notices@edesabiotech.com
Fax:
1-805-4882889
|
|
Stubbs
Alderton & Markiles, LLP
15260
Ventura Blvd., 20th Floor
Sherman
Oaks, CA 91403 U.S.A.
Attention:
Jonathan Friedman
Email:
jfriedman@stubbsalderton.com
Fax:
818-444-4500
|
Fasken
Martineau DuMoulin LLP
333 Bay
Street, Suite 2400, Toronto, ON, M5H 2T6 Canada
Attention:
Wojtek Baraniak
Email:
wbaraniak@fasken.com
Fax:
416-364-7813
|
|
NOVIMMUNE SA
|
Address
for Notice:
|
|
By:
/s/ Oliver
Eckelmann
Name:
Oliver Eckelmann
Title:
COO & CFO
With a
copy to (which shall not constitute notice):
|
Chemin
des Aulx 14
1228
Plan-les-Ouates
Switzerland
Attention:
Oliver Eckelmann
Email:
Fax:
[Personal information
omitted.]
|
|
Davies
Ward Phillips & Vineberg LLP
1501
McGill College Avenue, 26th Floor
Montréal,
QC H3A 3N9 Canada
Attention:
Olivier Désilets
Email:
odesilets@dwpv.com
Fax:
514-841-6499
|
|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
14
Exhibit
99.1
Edesa Biotech and Light Chain Bioscience Sign License Agreement to
Develop Treatments for COVID-19 Pneumonia and Other
Disorders
TORONTO, ON / ACCESSWIRE / April 20, 2020 / Edesa Biotech,
Inc. (NASDAQ:EDSA), a clinical-stage biopharmaceutical company,
today announced a strategic agreement with Light Chain Bioscience
(a brand of NovImmune SA), a leading Swiss pharmaceutical
development company, for an exclusive worldwide license to develop
and commercialize two Phase 2-ready biologic drug candidates for
all therapeutic, prophylactic and diagnostic
applications.
The
monoclonal antibodies licensed from Light Chain Bioscience block
certain signaling proteins, known as TLR4 and CXCL10. These
molecules are associated with a broad range of diseases, including
infectious diseases. Edesa plans to pursue the development of these
signaling molecules as potential treatments for acute respiratory
distress syndrome and lung injury resulting from viral respiratory
infections, such as the coronavirus that causes COVID-19, and other
disorders.
Par
Nijhawan, MD, Chief Executive Officer of Edesa, said that the
company's work has been made more urgent by the COVID-19 crisis.
"While we originally sought these assets primarily for use in
indications in line with our strategic focus areas, there is
compelling data that these drug candidates could help regulate the
exaggerated immune response that causes acute injury to the
respiratory tract in patients with coronavirus pneumonia and other
respiratory infections."
Dr.
Nijhawan noted that the administration of TLR4 and CXCL10
antagonists have been demonstrated to rescue mice from lethal
influenza infection and ameliorate virus-induced acute lung injury.
"With human safety data available and the lead drug already
manufactured, we are preparing regulatory applications for clinical
studies and plan to seek expedited government approval and support,
including potential non-dilutive funding," he said.
In
consideration for the late-stage clinical assets, Edesa will issue
to Light Chain Bioscience Series A-1 Convertible Preferred Shares
at an agreed value of $2.5 million with a fixed conversion price
and, subject to meeting certain business and clinical milestones,
provide near-term consideration of up to $6.0 million for drug
product inventory and other milestone fees. Edesa will be
responsible for development, product registration and
commercialization. Light Chain Bioscience will be eligible to
receive up to $363.5 million in aggregate development, approval and
commercial sales milestone payments and other consideration. Light
Chain Bioscience is also eligible to receive royalties based on
sales. During the term of the agreement, Edesa has the option to
purchase the assets.
"Light
Chain Bioscience has been at the forefront of antibody development
technology for the last two decades and is a world leader in
antibody engineering, and we are pleased to have been able to
identify and in-license two potential best-in-class biologics for
use in a broad range of therapeutic areas. As we learned more about
these assets we were excited to recognize their potential
application for acute respiratory distress syndrome and lung
injury," said Dr. Nijhawan. "Our strategic agreement with Light
Chain Bioscience is structured to allow us to rapidly advance these
experimental therapies into the clinic while minimizing immediate
cash outlays."
Light
Chain Bioscience's Chief Executive Officer Nicolas Fischer
commented, "This global agreement with Edesa provides further
validation of our unique expertise in the discovery and development
of antibody-based therapeutics. We believe that the scientific
rationale behind Edesa's therapeutic targets are sound and the
company is well positioned to advance these assets and unlock their
therapeutic potential."
About COVID-19 Acute Respiratory Distress Syndrome
(ARDS)
Nearly
all serious cases of COVID-19 feature rapidly progressive
pneumonia, diffuse alveolar damage, severe acute respiratory
distress syndrome, respiratory failure and fibrosis. As in other
viral pneumonia, the infection causes inflammation and injury to
the respiratory tract as a result of direct viral injury and, often
to a greater extent, from an exaggerated innate immune response.
According to evolving data the current global pandemic, the most
common cause of death in COVID-19 patients is ARDS.
About Edesa Biotech, Inc.
Edesa Biotech, Inc. (Nasdaq: EDSA) is a clinical-stage
biopharmaceutical company focused on efficiently developing
innovative treatments that address significant unmet medical needs.
Edesa's lead product candidate, EB01, is a novel non-steroidal
anti-inflammatory molecule (sPLA2 inhibitor) for the treatment of
chronic allergic contact dermatitis which has demonstrated
statistically significant improvements in multiple clinical
studies. A Phase 2b clinical study of EB01 was initiated in October
2019. Edesa also intends to expand the utility of its sPLA2
inhibitor technology, which forms the basis for EB01, across
multiple indications and expand its portfolio with assets that can
drive long-term growth opportunities. The company is based in
Markham, Ontario, Canada, with U.S. offices in Southern
California.
About Light Chain Bioscience
Light
Chain Bioscience is a brand of NovImmune SA, a privately held Swiss
pharmaceutical development company focused on the discovery and
development of therapies based on bispecific and multi-specific
antibody formats. Since 1998 the company has brought seven
monoclonal antibodies to clinical development stage, one of which,
Emapalumab, a monoclonal antibody that binds and neutralizes
interferon gamma, was approved by the FDA in 2018. In 2019, Swedish
Orphan Biovitrum AB, acquired NovImmune's Emapalumab business for
US$519 million. Since the successful divestment of Emapalumab, the
company has focused on its bispecific technology to build a
pipeline of multispecific antibodies under its Light Chain
Bioscience business. For more information, visit www.lightchainbio.com
Edesa Forward-Looking Statements
This press release may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements may be identified by the use of
words such as "anticipate," "believe," "plan," "estimate,"
"expect," "intend," "may," "will," "would," "could," "should,"
"might," "potential," or "continue" and variations or similar
expressions, including statements related to the potential value,
success and timing of project milestones as well as disease
treatments of interest. Readers should not unduly rely on these
forward-looking statements, which are not a guarantee of future
performance. There can be no assurance that forward-looking
statements will prove to be accurate, as all such forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause actual results or future events to differ
materially from the forward-looking statements. Such risks include:
the ability of Edesa to obtain regulatory approval for or
successfully commercialize any of its product candidates, the risk
that access to sufficient capital to fund Edesa's operations may
not be available or may be available on terms that are not
commercially favorable to Edesa, the risk that Edesa's product
candidates may not be effective against the diseases tested in its
clinical trials, the risk that Edesa fails to comply with the terms
of license agreements with third parties and as a result loses the
right to use key intellectual property in its business, Edesa's
ability to protect its intellectual property and the timing and
success of submission, acceptance and approval of regulatory
filings. Many of these factors that will determine actual results
are beyond the company's ability to control or predict. For a
discussion of further risks and uncertainties related to Edesa's
business, please refer to Edesa's public company reports filed with
the U.S. Securities and Exchange Commission and the British
Columbia Securities Commission. All forward-looking statements are
made as of the date hereof and are subject to change. Except as
required by law, Edesa assumes no obligation to update such
statements.
Contacts
Gary
Koppenjan
Edesa Biotech,
Inc.
(805) 488-2800 ext.
150
investors@edesabiotech.com
Oliver
Eckelmann
Light
Chain Bioscience
+41 22
552 72 00
oliver.eckelmann@lightchainbio.com
SOURCE: Edesa Biotech