UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the Month of August 2017
Commission File Number: 001-37452
CELYAD SA
(Translation of registrant’s name into English)
Rue Edouard Belin 2
1435 Mont-Saint-Guibert, Belgium
(Address of principal executive offices)
Indicate by check mark whether
the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Amended Agreements with Celdara Medical, LLC and Dartmouth College
Summary
On August 4, 2017, Celyad SA (the “Company”) announced that it had amended its existing agreements with Celdara Medical, LLC (“Celdara”) and Dartmouth College (“Dartmouth”). The principal agreements for these transactions are summarized below.
Background
In January 2015, the Company entered into a stock purchase agreement with Celdara pursuant to which the Company purchased all of the outstanding membership interests of OnCyte, LLC (“OnCyte”). In connection with this transaction, the Company, Celdara and OnCyte entered into an asset purchase agreement pursuant to which Celdara sold to OnCyte certain data, protocols, regulatory documents and intellectual property, including the rights and obligations under two license agreements between OnCyte and Dartmouth, related to the Company’s CAR-T development programs. In connection with the asset purchase agreement, OnCyte and Celdara entered into a services agreement under which Celdara provided certain development activities related to the development of CAR-T products.
Amended Asset Purchase Agreement
On August 3, 2017, the Company, Celdara and OnCyte, now a wholly-owned subsidiary of the Company, entered into an amendment to the asset purchase agreement described above. In connection with the amendment, the following payments were made to Celdara: (i) an amount in cash equal to $10.5 million, (ii) newly issued shares of Celyad valued at $12.5 million, as further described below, (iii) an amount in cash equal to $6.0 million in full satisfaction of any payments owed to Celdara in connection with a clinical milestone related to the Company’s CAR-T NKR-2 product candidate, (iv) an amount in cash equal to $0.6 million in full satisfaction of any payments owed to Celdara in connection with the Company’s license agreement with Novartis International Pharmaceutical Ltd., and (v) an amount in cash equal to $0.9 million in full satisfaction of any payments owed to Celdara in connection with the Company’s license agreement with Ono Pharmaceutical Co., Ltd.
Under the amended asset purchase agreement, OnCyte is obligated to make certain development-based milestone payments to Celdara up to $40.0 million for the Company’s clinical-stage product candidate (using autologous NKR-2 T-cells), the first product candidate in the first of four defined product groups. The Company is also obligated to make certain development-based milestone payments up to $36.5 million for the first product candidate in one of three additional defined preclinical-stage product groups. Under the prior agreement these payments were payable once per licensed product whereas under the amended asset purchase agreement these payments are now payable for the first CAR-T product in each of these four defined CAR-T product groups. The Company is also obligated to make sales-based milestone payments up to $76.0 million for the first CAR-T product in the first of the four defined CAR-T product groups and up to $80.0 million for the first CAR-T product in the next three defined CAR-T product groups. Under the amended asset purchase agreement, OnCyte is required to make tiered single-digit royalty payments to Celdara in connection with the sales of CAR-T products within each of the four defined CAR-T product groups, subject to reduction in countries in which there is no patent coverage for the applicable product or in the event OnCyte is required to secure licenses from third parties to commercialize the applicable product. Such royalties are payable on a product-by-product and country-by-country basis until the later of (i) the last day that at least one valid patent claim covering the applicable product exists, or (ii) the tenth anniversary of the day of the first commercial sale of the applicable product in such country.
Under the amended asset purchase agreement, in lieu of royalties previously payable on sales by sublicensees, OnCyte is now required to pay Celdara a percentage of sublicense income, including royalty payments, for each sublicense ranging from the mid-single digits to the mid-twenties, depending on which of a specified list of clinical and regulatory milestones the applicable product has achieved at the time the sublicense is executed. These percentages will be applied on a product-by-product basis to each payment included within sublicense income that is attributable to the grant of rights in, or the achievement of a milestone with respect to a specific product that is subject to, such sublicense. Under the amended asset purchase agreement, OnCyte is required to pay Celdara a single-digit percentage of any research and development funding received by OnCyte for each of the four defined CAR-T product groups, not to exceed $7.5 million for each product group. The Company can opt out of the development of any product if the data does not meet the scientific criteria of success. The Company may also opt out of development of any product for any other reason upon payment of a termination fee of $2.0 million to Celdara.
In connection with the amended asset purchase agreement, the OnCyte and Celdara terminated the services agreement related to certain development activities related to the development of CAR-T products in consideration of a cash payment to Celdara in the amount of $0.9 million out of the $1.8 million remaining contractual amount.
Subscription Agreement
In connection with the amended asset purchase agreement described above, on August 3, 2017, the Company and Celdara entered into a subscription agreement pursuant to which the Company agreed to issue and sell to Celdara $12.5 million (or €10.6 million using an agreed upon exchange rate) of the Company’s ordinary shares, no nominal value, consisting of 328,275 ordinary shares, or approximately 3.33% of the Company’s outstanding ordinary shares as at the date of the agreement, at the agreed price per share of €32.35. Pursuant to the subscription agreement, Celdara has agreed not to transfer, sell or otherwise dispose of 52,524 ordinary shares for a six-month period and 275,751 ordinary shares for a one-year period, and thereafter only under specified circumstances and as set forth in the agreement. These shares were issued to Celdara on August 23, 2017.
The offer and sale of the shares issued pursuant to the subscription agreement was made in a private placement in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), for transactions by an issuer not involving a public offering, and/or Regulation D under the Securities Act. All certificates evidencing the shares will bear a standard restrictive legend under the Securities Act.
Amended Dartmouth License
As described above, as a result of the Company’s acquisition of all of the outstanding membership interests of OnCyte and the asset purchase agreement among the Company, Celdara and OnCyte, OnCyte became a wholly-owned subsidiary of the Company and acquired certain data, protocols, regulatory documents and intellectual property, including the rights and obligations under two license agreements between OnCyte and Dartmouth. The first of these two license agreements concerned patent rights related, in part, to methods for treating cancer involving chimeric NK and NKP30 receptor targeted therapeutics and T cell receptor-deficient T cell compositions in treating tumor, infection, GVHD, transplant and radiation sickness (the “CAR-T License”) and the second of these two license agreements concerned patent rights related, in part, to anti-B7-H6 antibody, fusion proteins and methods of using the same (the “B7H6 License”). On August 2, 2017, OnCyte and Dartmouth entered into an amendment agreement in order to combine OnCyte’s rights under B7H6 Agreement with OnCyte’s rights under the CAR-T License, resulting in the termination of the B7H6 License, and in order to make certain other changes to the agreement. In connection with the amendment, OnCyte paid Dartmouth a non-refundable, non-creditable amendment fee in the amount of $2.0 million.
Under the amended license agreement, Dartmouth granted OnCyte an exclusive, worldwide, royalty-bearing license to certain know-how and patent rights to make, have made, use, offer for sale, sell, import and commercialize any product or process for human therapeutics, the manufacture, use or sale of which, is covered by such patent rights or any platform product. Dartmouth reserves the right to use the licensed patent rights and licensed know-how, in the same field, for education and research purposes only. The patent rights included in the amended license agreement also include the patents previously covered by the B7H6 License.
In consideration for the rights granted to us under the amended license agreement, OnCyte is required to pay to Dartmouth an annual license fee as well as a low single-digit royalty based on annual net sales of the licensed products by OnCyte, with certain minimum net sales obligations beginning April 30, 2024 and continuing for each year of sales thereafter. Under the amended license agreement, in lieu of royalties previously payable on sales by sublicensees, OnCyte is now required to pay Dartmouth a percentage of sublicense income, including royalty payments, (i) for each product sublicense ranging from the mid-single digits to low-single digits, depending on which of a specified list of clinical and regulatory milestones the applicable product has achieved at the time the sublicense is executed and (ii) for each platform sublicense in the mid-single digits. These percentages will be applied on a product-by-product basis to each payment included within sublicense income that is attributable to the grant of rights in, or the achievement of a milestone with respect to a specific product that is subject to, such sublicense. Additionally, the agreement requires that OnCyte exploit the licensed products, and OnCyte has agreed to meet certain developmental and regulatory milestones. Upon successful completion of such milestones, OnCyte is
obligated to pay to Dartmouth certain clinical and regulatory milestone payments up to an aggregate amount of $1.5 million and a commercial milestone payment in the amount of $4.0 million. The Company is responsible for all expenses in connection with the preparation, filing, prosecution and maintenance of the patents covered under the agreement.
After April 30, 2024, Dartmouth may terminate the amended license if OnCyte fails to meet the specified minimum net sales obligations for any year, unless OnCyte pays to Dartmouth the royalty OnCyte would otherwise be obligated to pay had OnCyte met such minimum net sales obligation. Dartmouth may also terminate the license if OnCyte fails to meet a milestone within the specified time period, unless OnCyte pays the corresponding milestone payment. Either party may terminate the agreement in the event the other party defaults or breaches any of the provisions of the agreement, subject to 30 days’ prior notice and opportunity to cure. In addition, the agreement automatically terminates in the event OnCyte becomes insolvent, make an assignment for the benefit of creditors or file, or have filed against us, a petition in bankruptcy. Absent early termination, the agreement will continue until the expiration date of the last to expire patent right included under the agreement in the last to expire territory. The Company expects that the last to expire patent right included under this agreement will expire in 2033, absent extensions or adjustments.
* * *
The foregoing descriptions of the terms of the amended asset purchase agreement, subscription agreement and amended license agreement do not purport to be complete and are qualified in their entirety by reference to the full text of such agreements, copies of which are filed as exhibits to this Report of Foreign Private Issuer on Form 6-K and which are incorporated by reference herein.
EXHIBITS
|
Exhibit |
Description |
|
| 10.1# | First Amendment to Asset Purchase Agreement, dated as of August 3, 2017, by and among the registrant; Celdara Medical, LLC; and OnCyte, LLC | |
| 10.2 | Subscription Agreement, dated as of August 3, 2017, by and between the registrant and Celdara Medical, LLC | |
| 10.3# | Fourth Amendment to Exclusive License Agreement, dated as of August 2, 2017, by and between OnCyte, LLC and Trustees of Dartmouth College | |
| # | Confidential treatment has been requested for portions of this exhibit. These portions have been omitted from this Report of Foreign Private Issuer on Form 6-K and filed separately with the U.S. Securities and Exchange Commission. |
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, thereunto duly authorized.
| CELYAD SA | ||||||
| Date: August 31, 2017 | By: |
/s/ Patrick Jeanmart |
||||
| Patrick Jeanmart | ||||||
| Chief Financial Officer | ||||||
Exhibit 10.1
E XECUTION C OPY
C ONFIDENTIAL
CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[…***…].” A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE U.S. SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934.
FIRST AMENDMENT TO
ASSET PURCHASE AGREEMENT
This First Amendment to Asset Purchase Agreement (this “ Amendment ”) is made and entered into as of this 3 rd day of August, 2017 (the “ Amendment Effective Date ”), by and among Celyad S.A., a corporation organized under the laws of Belgium (as successor-in-interest to Cardio3 Biosciences S.A.) (“ Celyad ”), Celdara Medical, LLC, a Delaware limited liability company (“ Seller ”) and OnCyte, LLC, a Delaware limited liability company (“OnCyte” or the “ Company ”).
WHEREAS, the parties to this Amendment entered into that certain Asset Purchase Agreement dated January 21, 2015 (the “ Agreement ”; capitalized terms used but not defined in this Amendment shall have the meaning provided in the Agreement); and
WHEREAS, the parties now desire to amend the Agreement as set forth in this Amendment.
NOW, THEREFORE, for and in consideration of the mutual agreement of the parties set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties, intending to be legally bound, and upon the terms set forth herein, agree as follows:
| 1. | Amendment of Agreement . |
| (a) | Definitions . |
| (i) | All references in the Agreement to “C3BS” are hereby deleted and replaced with “Celyad.” |
| (ii) | The definition of the term “Net Sales” is hereby amended by deleting the phrase “or sublicensees” everywhere such phrase appears in such definition. |
| (iii) | The definition of the term “Preclinical OnCyte Product” is hereby deleted and replaced by the following text: |
“ Preclinical OnCyte Product ” means any pharmaceutical product covered by a Valid Claim of any Patent included in the Preclinical OnCyte Assets, including, in each case, all formulations, line extensions and modes of administration thereof , but excluding any Platform Product.
| (iv) | The definition of the term “Clinical OnCyte Product” is hereby deleted and replaced by the following text: |
CONFIDENTIAL
“ Clinical OnCyte Product ” means any pharmaceutical product covered by a Valid Claim of any Patent included in the Clinical OnCyte Assets, including, in each case, all formulations, line extensions and modes of administration thereof.
| (v) | The following additional defined terms are hereby added to the Agreement: |
“ B7H6 Products ” means any pharmaceutical product containing or comprising a construct covered by a Valid Claim of a Patent directly or indirectly claiming priority of [...***...], whether or not such construct is the sole active ingredient in such product, including in each case, all formulations, line extensions and modes of administration thereof. If the Company acquires rights with respect to [...***...], the Parties will amend this Agreement so that B7H6 Products shall also include any pharmaceutical product containing or comprising a construct covered by a Valid Claim of a Patent directly or indirectly claiming priority of [...***...], whether or not such construct is the sole active ingredient in such product, including in each case, all formulations, line extensions and modes of administration thereof.
“ NKG2D Products ” means any pharmaceutical product containing or comprising a construct covered by a Valid Claim of a Patent directly or indirectly claiming priority of [...***...], whether or not such construct is the sole active ingredient in such product, including in each case, all formulations, line extensions and modes of administration thereof.
“ NKP30 Products ” means any pharmaceutical product containing or comprising a construct covered by a Valid Claim of a Patent directly or indirectly claiming priority of [...***...], whether or not such construct is the sole active ingredient in such product, including in each case, all formulations, line extensions and modes of administration thereof.
“ Platform Patents ” means any Patent directly or indirectly claiming priority from [...***...] or [...***...], including but not limited to, [...***...].
“ Platform Products ” means any pharmaceutical product covered by a Platform Patent but excluding any pharmaceutical product that belongs to a Product Group.
“ Platform Sublicense ” means an agreement pursuant to which the Company grants a license or similar rights under intellectual property rights in the Platform Patents (but no such rights are granted under any other Preclinical OnCyte Assets or under any Clinical OnCyte Assets) to a Third Party to commercialize a Platform Product.
| * | Confidential Information, indicated by […***…], has been omitted from this filing and filed separately with the U.S. Securities and Exchange Commission. |
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“ Product Groups ” means each of the four following groups of products: (i) NKG2D Products, (ii) B7H6 Products, (iii) NKP30 Products and (iv) TIM Products.
“ Product Sublicense ” means an agreement pursuant to which the Company grants a license or similar rights under intellectual property rights in the Preclinical OnCyte Assets or the Clinical OnCyte Assets to a Third Party to commercialize a Product. For clarity, all Product Sublicenses will include rights pertaining to a Product but may be combined with a license or similar rights under the Platform Patents and such combined sublicenses shall be treated as a Product Sublicense (and not a Platform Sublicense) for all purposes under this Agreement.
“ R&D Funding ” means payments received by Company or its Affiliates from a Third Party sublicensee, to fund research and development activities to be performed by Company or an Affiliate with respect to a Product that is, at such time, subject to a sublicense, whether such payment obligation is contained in the sublicense or a separate agreement.
“ Sublicensee Sales-based Income ” means net sales a Third Party sublicensee earns in respect of sales of Products by such Third Party sublicensee or its Affiliates or sublicensees.
“ Sublicense Income ” means any consideration received by the Company or its Affiliates from a Third Party sublicensee and reasonably allocable to the grant of a sublicense of any intellectual property rights in the Clinical OnCyte Assets or the Preclinical OnCyte Assets pursuant to a Product Sublicense or a Platform Sublicense, including any license signing fee, license maintenance fee, milestone payment and royalty payment. Sublicense Income shall exclude: (i) payments received as reimbursement of out of pocket expenses for patent preparation, prosecution, and maintenance, enforcement or defense of patents covering the Products, (ii) future R&D Funding, (iii) consideration received for an equity investment in the Company or its Affiliates, provided such consideration is not in excess of fair market value of the equity on the date of such investment, and (iv) loan proceeds paid to the Company or its Affiliates by a sublicensee in an arms’ length, full recourse debt financing. For purposes of hereof, unless otherwise mutually agreed, “fair market value” shall mean the closing price of the Company’s ordinary shares on the Euronext Brussels stock exchange on the first full trading day following the first public announcement of the applicable sublicense agreement.
“ TIM-Constructs ” means any DNA or protein product with a DNA or protein sequence as defined by [...***...], or with a homology of at least [...***...]% to any of these sequences.
| * | Confidential Information, indicated by […***…], has been omitted from this filing and filed separately with the U.S. Securities and Exchange Commission. |
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“ TIM Products ” are any pharmaceutical product containing or comprising a TIM Construct covered by a Valid Claim of a Platform Patent, whether or not such construct is the sole active ingredient in such product, including in each case, all formulations, line extensions and modes of administration thereof.
(vi) Amendment of Section 4(b) . The first paragraph of Section 4(b) is hereby amended and replaced by the following text:
“ Development and Non-Sales Based Milestone Payments .
| a) | Within thirty (30) days after the achievement of each of the following milestones by the Company, one of its Affiliates or a sublicensee, for the first Product within each Product Group, the Company will notify the Seller of such achievement; provided that, in the case of such an achievement by a sublicensee, such thirty (30) day period shall not commence until the Company is notified of such achievement. |
| b) | Subject to paragraphs c) and d) below, the Seller will issue an invoice to the Company, and within thirty (30) days after receipt of such invoice, the Company will pay to the Seller the non-refundable, non-creditable milestone payments set forth in the tables below. Further, each milestone payment set forth in the tables below will be payable a maximum of one time per Product Group. |
| c) | For each clinical study of a Product for which the Company is the sponsor, the Company shall provide Seller the protocol for each clinical study of each Product within thirty (30) days after such clinical study is initiated, as well as any amendments to such protocol that are then in effect or that come into effect, and shall also provide Seller the Company’s opinion as to whether such clinical study is a Phase 1 Study, Phase 2 Study or a Phase 3 Study. For each clinical study of a Product for which the Company is not the sponsor, the Company shall provide Seller a summary of the protocol for each such clinical study of each Product within thirty (30) days after such clinical study is initiated, as well as a summary of any material amendments to such protocol that are then in effect or that come into effect, and shall also provide Seller the Company’s opinion as to whether such clinical study is a Phase 1 Study, Phase 2 Study or a Phase 3 Study. |
| d) |
If Seller disagrees with the Company’s opinion as to the proper designation of such clinical study, Seller shall, within thirty (30) days after receipt of the relevant protocol, so notify the Company and the Parties shall negotiate in good faith for a period of up to thirty (30) days towards a resolution of such dispute. If the dispute is not resolved within such thirty (30) day period, each Party shall appoint an expert, and those two (2) experts will, within the next thirty (30) day period, appoint a third independent expert who: (i) has not been engaged by |
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| either Party as an employee, consultant or otherwise during the prior ten (10) years, (ii) does not own equity in either Party and (iii) has substantial experience as an employee of the US Food and Drug Administration or European Medicines Agency and as a private sector employee charged with overseeing the planning and execution of clinical development of bio-pharmaceutical products intended to treat cancer in humans (such three (3) individuals are each an “ Expert ”). The three (3) Experts shall have a period of thirty (30) days to determine, by majority vote, the correct designation of the relevant clinical study as a Phase 1 Study, Phase 2 Study or a Phase 3 Study. The Experts shall notify the Parties of the results of such determination no later than three (3) days after the expiration of such thirty (30) day period. The Experts’ determination shall be final and binding on the parties. |
| e) | For avoidance of doubt: (i) each of the milestone payments set forth in the tables below in this Section 4(b) will be payable only in connection with the first Product from any Product Group to achieve the relevant milestone event, (ii) while the parties anticipate that the Development Milestones will be achieved in sequential order, if they are not, the achievement of any Development Milestone for the first Product in any Product Group shall trigger the payment of any amounts payable for events appearing before such milestone event in the following table in this Section 4(b) for the same Product Group that have not, as of such time, been paid (i.e., if the first Product in a Product Group achieves regulatory approval without the necessity of conducting a Phase 3 Study, the milestone payments for Approval of the First BLA and Success of the first Phase 3 Study shall both then become due and payable) and (iii) if a Product meets the requirements for inclusion in two separate Product Groups, such Product shall trigger milestone payments for either or both such Product Groups, based on the achievement of a single milestone event, if it is the first Product to achieve such milestone event within either or both of such Product Groups.” |
(vii) Amendment of Section 4(c) . The first sentence of the first paragraph of Section 4(c) is hereby amended by replacing “ten (10)” with “thirty (30)” and replacing “for each Product” with “for the first Product in each Product Group.” The last sentence of the first paragraph of Section 4(c) is hereby amended by replacing “payable only one time per Product” with “only one time per Product Group.”
(viii) Amendment of Section 4(c) . The table in Section 4(c) is hereby deleted and replaced with the following text:
“
|
Sales Based Milestones |
Milestones
|
|
|
First calendar year for which cumulative worldwide Net Sales and Sublicensee Sales-based Income of all Products within a Product Group are equal to or exceed US$250,000,000 |
$15,000,000, provided that with respect to the first Product Group to achieve this milestone the payment shall be $11,000,000 |
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|
First calendar year for which cumulative worldwide Net Sales and Sublicensee Sales-based Income of all Products within a Product Group are equal to or exceed US$500,000,000 |
$25,000,000 | |
|
First calendar year for which cumulative worldwide Net Sales and Sublicensee Sales-based Income of all Products within a Product Group are equal to or exceed US$1,000,000,000 |
$40,000,000 |
For avoidance of doubt, each of the above milestone payments may become due and payable up to a maximum of four (4) times, once each for each Product Group. For purposes of determining whether a sales-based milestone described in the above table has been achieved, the cumulative worldwide Net Sales and Sublicensee Sales-based Income of a Product that is included in more than one Product Group shall be allocated as follows: (i) first, to a Product Group that has not yet earned all available milestone payments under this Section 4(c) and (ii) if more than one Product Group that has not yet earned all available milestone payments under this Section 4(c), then such Net Sales and Sublicensee Sales-based Income shall be attributed to the one Product Group that has not yet earned all available milestone payments under this Section 4(c) but which has the highest Net Sales and Sublicensee Sales-based Income for the relevant calendar year.”
(ix) Amendment of Section 4(d) . Section 4(d) is hereby deleted and replaced with the following text:
“(d) Royalties . The Company or its Affiliate (whichever is the selling party) will make its respective annual royalty payments to Seller on Net Sales of all Products within each Product Group by the Company or its Affiliates at the rates indicated below, as determined on a Product Group-by-Product Group basis:
(i) 5% of that portion of the cumulative annual Net Sales of the Products in each Product Group for which the aggregate Net Sales and Sublicensee Sales-based Income are greater than US$0 and less than US$250,000,000;
(ii) 6% of that portion of the cumulative annual Net Sales of the Products in each Product Group for which the aggregate Net Sales and Sublicensee Sales-based Income are greater than US$250,000,000 and less than US$500,000,000;
(iii) 7% of that portion of the cumulative annual Net Sales of the Products in each Product Group for which the aggregate Net Sales and Sublicensee Sales-based Income are greater than US$500,000,000 and less than US$1,000,000,000; and
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(iv) 8% of that portion of the cumulative annual Net Sales of the Products in each Product Group for which the aggregate Net Sales and Sublicensee Sales-based Income are greater than US$1,000,000,000;
provided, however, that such royalty payments shall be reduced by 50% in any country in the event the manufacture, use or sale of such Product in such country would not infringe any Valid Claim of a Patent included in the Transferred Assets if performed by an unlicensed Third Party. For avoidance of doubt, only one royalty, payable at the applicable rate set forth above, shall be payable on the Net Sales of any Product, regardless of how many Valid Claims cover such Product and regardless of whether such Product is included in more than one Product Group. For purposes of determining the royalty rate applicable to Net Sales of a Product that is included in more than one Product Group, such Net Sales shall be allocated to the one Product Group that has the highest Net Sales and Sublicensee Sales-based Income for that calendar year.”
(x) Amendment of Section 4(f) . Section 4(f) is hereby deleted and replaced by the following paragraph:
“(f) Royalty Term . Royalties under Section 4(d) will be payable on a Product-by-Product and country-by-country basis until the later of (a) the expiration of the last-to-expire Valid Claim of a Patent included in the Transferred Assets covering the manufacture, use or sale of such Product in such country or (b) the 10 th anniversary of the First Commercial Sale of the first Product within the relevant Product Group in such country.”
| (ii) | Amendment of Section 4 . Section 4 is hereby amended by adding the following text as a new Section 4(g): |
“(g) Sublicense Income Payments . Within sixty (60) days after the end of each calendar quarter, the Company will pay Seller the percentage of Sublicense Income received by the Company during such calendar quarter indicated below:
Sublicense Income from Product Sublicenses
As is more fully described below, Company will pay to Seller a percentage of its Sublicense Income in respect of each Product Sublicense. The percentages below shall be applied, on a Product-by-Product basis, to each payment included within Sublicense Income that is attributable to the grant of rights in, or the achievement of a milestone with respect to a specific Product that is subject to the Product Sublicense. The specific percentage that will be so applied to Sublicense Income that is so attributable to a specific Product will be determined by the stage of development of the Product at the time the Product Sublicense is entered into. [...***...].
| * | Confidential Information, indicated by […***…], has been omitted from this filing and filed separately with the U.S. Securities and Exchange Commission. |
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The percentages to be payable to Seller are as follows: (i) [...***...]% if the Sublicense is signed prior to [...***...] for such Product; (ii) [...***...]% if the Sublicense is signed prior to the [...***...] for such Product; (iii) [...***...]% if the Sublicense is signed after the [...***...] for such Product and prior to the [...***...] for such Product; (iv) [...***...]% if the Sublicense is signed after the [...***...] for such Product and prior to the [...***...] for such Product; (v) [...***...]% if the Sublicense is signed after the [...***...] for such Product; and (vi) [...***...]% if the Sublicense is signed after [...***...] for such and prior to the [...***...] of such Product. For the avoidance of doubt, a Product may not be considered to be in a [...***...] specified in clauses (iii)-(vi) of this Section 4(g) if a milestone payment under Section 4(b) of this Agreement that is due and payable because such Product completed the [...***...] has not yet been paid to Seller. If a Product Sublicense covers a Product that is included in more than one Product Group, then the applicable Sublicense Income rate for such Product shall equal the simple average of the Sublicense Income rates for the Product in each of the Product Groups that such Product is included within. If a Product Sublicense covers one or more Products and also includes Platform Patents, then the applicable Sublicense Income rate for such Product Sublicense shall be determined as provided in this clause and not as provided below for a Platform Sublicense.
Sublicense Income from Platform Sublicenses :
[...***...]%
| (iii) | Amendment of Section 4 . Section 4 is hereby amended by adding the following text as a new Section 4(k): |
“(k) R&D Funding payments . Within sixty (60) days after the end of each calendar quarter, the Company will pay Seller [...***...] percent ([...***...]%) of R&D Funding received by the Company or its Affiliates during such calendar quarter. R&D Funding will be allocated to the Product Group to which such funded activities relate for purposes of determining the R&D Funding payments hereunder. R&D Funding payments will be determined and made on a Product Group by Product Group basis, provided that the cumulative total of R&D Funding payments that the Company will make to Seller for each Product Group shall not exceed USD$7,500,000.”
| * | Confidential Information, indicated by […***…], has been omitted from this filing and filed separately with the U.S. Securities and Exchange Commission. |
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| (iv) | Amendment of Section 5(a) . Section 5(a) is hereby amended by deleting the phrase “and sublicensees” where such phrase appears in such section. |
| (v) | Amendment of Section 5 . Section 5 is amended to add the following text as a new Section 5(a2) to follow Section 5(a) and to read in full as follows: |
“ Sublicense Income and R&D Funding Reports. The Company shall, along with delivering payment as set forth in Section 4.(g) and 4(k), report to Seller within thirty (30) days of receipt the amount of all Sublicense Income and R&D Funding received by the Company and its Affiliates, and the Company’s calculation of the amount due and paid to Seller from such Sublicense Income and R&D Funding, including an itemized listing of the source of Sublicense Income and R&D Funding, and the name and address of each entity making such payments.”
| (vi) | Amendment of Section 5(d) . Section 5(d) is hereby amended by deleting the first sentence of such section and replacing it with the following text: |
“For a period of three years following each calendar year of sales of each Product, the Company will keep (and will cause its Affiliates and sublicensees to keep, as applicable) complete and accurate records pertaining to the sale or other disposition of such Product in sufficient detail to permit Seller to confirm the accuracy of all Sublicense Income and R&D Funding payments, royalty payments and sales-based milestone payments due hereunder.”
| (vii) | Amendment of Section 15(a) . Section 15(a) is hereby amended by adding the following text to the end of such section: |
“The terms and conditions of this Agreement are hereby deemed to be the Confidential Information of both the Company and the Seller.”
| 2. | Payments . In consideration of this Amendment, OnCyte shall make the following payments to Celdara: |
| a. | An amount of USD$23,000,000 consisting of (i) newly issued shares of Celyad in an amount equal to USD$12,500,000, such shares to be issued in consideration of a receivable of a nominal value of USD$12,500,000 that will be contributed in kind to the share capital of Celyad by Celdara, as set forth in that certain Subscription Agreement between Celdara and Celyad of even date herewith (the “Subscription Agreement”); and (ii) an amount in cash equal to USD$10,500,000, such amount to be paid no later than fifteen (15) days after the Amendment Effective Date; |
| b. |
The Parties disagree on whether or not the “Success of first Phase 1 Study” milestone has been achieved. However, Company or its Affiliates shall pay Seller USD$6,000,000 as a nonrefundable payment, with such amount being in full |
9
CONFIDENTIAL
| satisfaction of the “Success of first Phase 1 Study” milestone under the Agreement, whenever such milestone was or is achieved. Such amount shall be paid no later than fifteen (15) days after the Amendment Effective Date. |
| c. | An amount in cash equal to USD$600,000, which amount represents [...***...] ([...***...]%) of the upfront payment (the “ Novartis Upfront Payment ”) received in connection with that certain License Agreement, dated May 1, 2017, by and between Novartis International Pharmaceutical Ltd. and Celyad (the “ Novartis License Agreement ”), in full satisfaction of any payments owed to OnCyte under the APA, as amended by the APA Amendment, or otherwise, in connection with the Novartis Upfront Payment. Such amount shall be paid no later than fifteen (15) days after the Amendment Effective Date. |
| d. | USD$865,698, which amount represents [...***...] percent ([...***...]%) of the upfront payment, net of taxes withheld (the “ Ono Upfront Payment ”). The Ono Upfront Payment was received in connection with that certain License Agreement, dated July 11, 2016, by and between Ono Pharmaceutical Co., Ltd. and Celyad (the “ Ono License Agreement ”), and such amount shall be paid in full satisfaction of any payments owed to OnCyte under the APA, as amended by the APA Amendment, or otherwise, in connection with the Ono Upfront Payment, such amount to be paid no later than fifteen (15) days after the Amendment Effective Date. For the avoidance of doubt, it is understood and agreed that the [...***...]% payment being made pursuant to this clause is an exception to the amount which would have been payable pursuant to Section 4(g). |
| e. | Celdara will pay any and all taxes levied on account of any payments made to it under this Termination and Release Agreement. If any taxes are required to be withheld by Celyad or OnCyte, Celyad or OnCyte will (i) deduct such taxes from such payment made to Celdara, (ii) timely pay the taxes to the proper taxing authority and (iii) send proof of payment to Celdara and certify its receipt by the taxing authority within 10 days following such payment. |
| 3. | Confirmation of Terms . Except to the extent expressly amended by this First Amendment, all of the terms, provisions and conditions of the Agreement are hereby ratified and confirmed and shall remain in full force and effect. The term “Agreement”, as used in the Agreement, shall henceforth be deemed to be a reference to the Agreement as amended by this Amendment. |
| 4. | General . This Amendment may be executed via facsimile or electronically in portable data format in one or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together shall constitute one and the same instrument. |
[Signature Page Follows]
| * | Confidential Information, indicated by […***…], has been omitted from this filing and filed separately with the U.S. Securities and Exchange Commission. |
10
CONFIDENTIAL
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the Amendment Effective Date.
| CELDARA MEDICAL, LLC | ||
| By: | /s/ Jake Reder | |
| Name: Jake Reder | ||
| Its: Chief Executive Officer | ||
| CELYAD, S.A. | ||
| By: | /s/ Christian Homsy | |
| Name: Christian Homsy | ||
| Its: Chief Executive Officer | ||
|
OnCyte, LLC |
||
|
By: |
Celyad S.A., | |
| Its Sole Member | ||
| By: | /s/ Christian Homsy | |
| Name: Christian Homsy | ||
| Its: Chief Executive Officer | ||
11
Exhibit 10.2
E XECUTION C OPY
3 August 2017
SUBSCRIPTION AGREEMENT
relating to ordinary shares in CELYAD SA
between
CELYAD SA
as Issuer
and
CELDARA MEDICAL, LLC
as Investor
Subscription Agreement
Subscription Agreement
| Between: | (1) | CELYAD SA , a limited liability company (“ naamloze vennootschap ” / “ société anonyme ”) organized and existing under Belgian law, with registered office at 1435 Mont-Saint-Guibert, 2 rue Edouard Belin, Belgium; | ||
| represented for the purposes of this Agreement by Christian Homsy; | ||||
| hereinafter referred to as the “Issuer ”; | ||||
| And: | (2) | CELDARA MEDICAL, LLC, a limited liability company organized and existing under the law of Delaware, with registered office at 16 Cavendish Ct., Lebanon, NH 03766, USA; | ||
| represented for the purposes of this Agreement by Jake Reder; | ||||
| hereinafter referred to as the “Investor” ; | ||||
| The parties sub (1) and (2) above are hereinafter referred to as the “ Parties ” and each individually as a “Party ” . | ||||
Whereas:
| (A) | The Issuer, a Belgian limited liability company listed on the regulated market of Euronext (Brussels and Paris) and the NASDAQ Stock Market, is a clinical-stage biotechnology company specialized in the discovery and development of CAR-T cell therapies. |
| (B) | The Investor is a research-based biopharmaceutical company focused on the discovery, development, and commercialization of innovative medicines. |
| (C) | The Parties, together with OnCyte, LLC, a limited liability company organized and existing under the law of Delaware and a wholly-owned subsidiary of the Issuer (“ OnCyte ”), are party to that certain Asset Purchase Agreement, dated as of January 21, 2015 (the “ APA ”). |
| (D) | The Parties, together with OnCyte, have agreed to amend the APA by entering into that certain First Amendment to Asset Purchase Agreement, dated as of the date hereof (the “ First Amendment to APA ”), in consideration of which OnCyte is obligated to pay the Investor the amount of USD 23 million (twenty-three million USD) (the “ Receivable ”). |
| (E) | The Investor wishes to invest an aggregate amount of USD 12,5 million (twelve million five hundred thousand USD)(the “ Investment Amount ”) in the share capital of the Issuer through a private placement of Ordinary Shares (as defined below) via the contribution in-kind to the Issuer of a portion of the Receivable equal to the Investment Amount, in its capacity of owner of 100% interest in its Affiliate OnCyte, and, in the financial, commercial and strategic interest of the Issuer and its Affiliates, the Issuer wishes to issue such Ordinary Shares to the Investor in consideration of the contribution in-kind of the Receivable. Thereto the Issuer intends to increase its share capital by an aggregate amount equal to the Euro equivalent of the Investment Amount, obtained by dividing the Investment Amount by the Fixed Exchange Rate (or €10,620,250.00). The increase in the Issuer’s shall capital shall be effected by means of a capital increase approved by the Issuer’s Board of Directors (defined below) within the framework of the authorized capital. |
| (F) | The Investor has agreed to subscribe to such capital increase to the extent and on the terms and subject to the conditions set forth in this Agreement. |
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Subscription Agreement
It is agreed as follows:
| 1 | Definitions and Interpretation |
| 1.1 | Definitions |
Affiliate means, with respect to a particular person, any person, corporation, partnership, or other entity that controls, is controlled by or is under common control with such person. For the purposes of this definition, the word “control” (including, with correlative meaning, the terms “controlled by” or “under the common control with”) means the actual power, either directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of such entity, whether by the ownership of more than fifty percent (50%) of the voting stock of such entity, or by contract or otherwise.
Agreement means this subscription agreement.
Applicable Lock-up Period has the meaning given to in Article 5.1.1.
Auditor means BDO, with corporate office at “The Corporate Village” Da Vincilaan 9 – Box E.6 Elsinore Building, B-1935 Zaventem, Belgium.
Belgian Companies Code means the Belgian Companies Code of 7 May 1999, as amended from time to time.
Board of Directors means the Issuer’s board of directors.
Business Day means a day which is not a Saturday, a Sunday or bank or other official public holiday in Brussels, Belgium or Boston, Massachusetts, United States.
Capital Increase has the meaning given to it in Article 2.1.
Closing shall mean the date on which the Capital Increase is effected, which date is set forth in Article 2.5.1 below.
Date of this Agreement means the date on which the Agreement is entered into.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Investment Amount has the meaning given to it in Recital (F).
Fixed Exchange Rate has the meaning given to it in Article 2.3.3 of this Agreement.
Ordinary Shares shall mean ordinary shares of the only existing class in the capital of the Issuer.
SEC means the U.S. Securities and Exchange Commission.
Securities Act means the Securities Act of 1933, as amended.
Subscription Amount means the Euro equivalent of the Investment Amount, obtained by dividing the Investment Amount by the Fixed Exchange Rate and by rounding down the resulting amount to the nearest second decimal place. For the avoidance of doubt, the Investment Amount is €10,620,250.
Subscription Shares has the meaning given to it in Article 2.2 of this Agreement.
| 1.2 | Interpretation |
| 1.2.1 | The titles and headings included in this Agreement are for convenience only and shall not be taken into account in the interpretation of the provisions of this Agreement. |
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Subscription Agreement
| 1.2.2 | The words “herein”, “hereof”, “hereunder”, “hereby”, “hereto”, “herewith” and words of similar import shall refer to this Agreement as a whole and not to any particular Article, paragraph or other subdivision. |
| 1.2.3 | All periods of time set out in this Agreement shall be calculated from midnight to midnight. They shall start on the day following the day on which the event triggering the relevant period of time has occurred. The expiration date shall be included in the period of time. If the expiration date is not a Business Day, it shall be postponed until the next Business Day. Unless otherwise provided herein, all periods of time shall be calculated in calendar days. All periods of time consisting of a number of months (or years) shall be calculated from the day in the month (or year) when the triggering event has occurred until the eve of the same day in the following month(s) (or year(s)) (“ van de zoveelste tot de dag vóór de zoveelste ” / “ de quantième à veille de quantième ”). |
| 2 | Capital Increase and Share Subscription |
| 2.1 | The Issuer agrees to proceed with a capital increase, by contribution in kind of the Receivable, which has been previously decided upon by a unanimous vote of the Board of Directors within the framework of the authorized capital, for the benefit of the Investor in an aggregate amount equal to the Subscription Amount (the “ Capital Increase ”) on the date of the Closing. |
| 2.2 | The Investor agrees to subscribe to the Capital Increase for the full amount of the Subscription Amount, in return for which the Investor shall receive the aggregate number of Ordinary Shares to be determined in accordance with Article 2.3.4 (the “ Subscription Shares ”). |
| 2.3 | Capital Increase and issuance of Subscription Shares |
| 2.3.1 | The Capital Increase has been decided upon by a unanimous vote of the Board of Directors within the framework of the authorized capital for the benefit of the Investor, it being understood that the Board of Directors has approved the special report required under Article 602of the Belgian Companies Code for the issuance of shares through contribution in kind, and will cause the Auditor to issue its valuation report in accordance with said Article 602. |
| 2.3.2 | Price per Subscription Share |
The price per Subscription Share shall be equal to €32.35 (the “ Price per Subscription Share ”).
| 2.3.3 | Fixed Exchange Rate |
The US Dollar-Euro exchange rate of 0.84962 (the “ Fixed Exchange Rate ”).
| 2.3.4 | Number of Subscription Shares |
The number of Subscription Shares to be issued by the Issuer following the Capital Increase is determined as follows:
|
Subscription Amount |
| Price per Subscription Share |
The resulting number of Subscription Shares shall be rounded down to the nearest whole number, with any residual amount of the Receivable paid to the Investor in cash, simultaneously with the issuance of the Subscription Shares. For the avoidance of doubt, the Number of Subscription Shares is 328,275, with a residual amount equal to €23.94.
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| 2.3.5 | Form of Subscription Shares |
The Subscription Shares will be delivered in the form of nominative shares and registered in the Issuer’s shareholder register. Upon the expiration of the Applicable Lock-Up Period (defined below), the Investor may request that the Subscription Shares be converted into dematerialized form.
| 2.4 | Rights attaching to the shares |
| 2.4.1 | The Subscription Shares shall be identical in all respects (including the right to share in the dividends over the accounting year 2017, in any profits (including profits carried forward and reserves) and in any dividends declared as from their issue) to the existing shares. |
| 2.5 | Closing |
| 2.5.1 | The Closing shall occur on or before September 1, 2017. |
| 2.5.2 | On Closing: |
| (i) | The Investor or his delegate will sign a subscription and representation letter in order to give effect to, in front of notary public in Belgium, its decision to contribute in-kind the Receivable to the share capital of the Issuer; |
| (ii) | the Capital Increase shall be effected in front of notary public Berquin Notaires in Brussels; and |
| (iii) | the Subscription Shares shall be issued in registered form. |
| 3 | Representations and Warranties by the Investor |
The Investor represents and warrants to the Issuer on the Date of this Agreement and at the Closing that:
| 3.1 | Validity of the Agreement . This Agreement has been duly authorized and executed by or on behalf of the Investor and constitutes a valid and legally binding obligation of the Investor. |
| 3.2 | Consents . All necessary consents, authorisations, notifications, actions or other things required under the Federal law of the United States or the laws of the State of New Hampshire (the “Applicable Law”) to be taken, fulfilled or done by the Investor in accordance with Applicable Law (including without limitation the obtaining of any consent or license or the making of any filing or registration) for the subscription of the Subscription Shares pursuant to this Agreement, the carrying out of the other transactions contemplated by this Agreement or the compliance by the Investor with the terms of this Agreement have been obtained or made and are, or will on Closing be, in full force and effect. |
| 3.3 |
Restricted Securities . The Investor understands that the Subscription Shares have not been, and will not be, registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Investor’s representations as expressed herein. The Investor understands that the Subscription Shares are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, the Investor must hold the Subscription Shares |
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Subscription Agreement
| indefinitely unless they are registered with the SEC and qualified by state authorities, or an exemption from such registration and qualification requirements is available. The Investor acknowledges that the Issuer has no obligation to register or qualify the Subscription Shares for resale. The Investor further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Subscription Shares, and on requirements relating to the Issuer which are outside of the Investor’s control, and which the Issuer is under no obligation and may not be able to satisfy. |
| 3.4 | Accredited Investor. The Investor is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act. |
| 3.5 | No General Solicitation. Neither the Investor, nor any of its officers, directors, employees, agents, stockholders or partners has either directly or indirectly, including, through a broker or finder (a) engaged in any general solicitation, or (b) published any advertisement in connection with the offer and sale of the Subscription Shares. |
| 4 | Representations and Warranties of the Issuer |
The Issuer represents and warrants to the Investor on the Date of this Agreement that:
| 4.1 | Incorporation and Authority . It is duly incorporated and validly existing and in good standing under the laws of Belgium, with full power and authority to conduct its business and is not in violation of any of the provisions of its organizational documents. The Issuer has the requisite corporate power and authority to enter into and to consummate the actions contemplated by this Agreement, and otherwise to carry out its obligations hereunder and thereunder. The Issuer’s execution of this Agreement has been duly authorized by all necessary corporate action on the part of the Issuer, and no further corporate action, and no additional approval or ratification of its Board of Directors or shareholders (other than the unanimous approval by the Board of Directors before the notary public to make use of the authorized capital in respect of the Capital Increase, which the Issuer has committed to obtain pursuant to Article 2.1) is required by the Issuer. This Agreement has been (or upon delivery will have been) duly executed by the Issuer and is, or when delivered in accordance with the terms hereof, will constitute the legal, valid and binding obligation of the Issuer enforceable against the Issuer in accordance with its terms. |
| 4.2 | Validity of Subscription Shares and Absence of Breach . The Subscription Shares, when issued and subscribed for in accordance with this Agreement, will be validly and duly issued and fully paid shares of the only class of shares of the Issuer in accordance with the applicable provisions of the Issuer’s organizational documents and Belgian law, and will be free and clear of all liens, pledges, encumbrances, mortgages, security interests, or easement or transfer restrictions of any nature whatsoever. None of (i) the execution and delivery of this Agreement, or (ii) the issuance of the Subscription Shares will result in a breach of, default under any material agreement to which the Issuer is a party or the Issuer’s organizational documents or any law, regulation or stock exchange rule, or give rise to the activation of any material rights of third parties under any agreement, law, rule or regulation binding on the Issuer or any of its subsidiaries. |
| 4.3 | Consents . All necessary consents, authorizations, notification, actions or things required to be taken, fulfilled or done under Belgian law (including, without limitation, the obtaining of any consent or license or the making of any filing or registration) for the carrying out by the Issuer of the actions contemplated by this Agreement or the compliance by the Issuer with the terms of this Agreement will, save as otherwise set forth in this Agreement in Article 6, be in full force and effect. |
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Subscription Agreement
| 4.4 | No General Solicitation. Neither the Issuer, nor any of its officers, directors, employees, agents, stockholders or partners has either directly or indirectly, including, through a broker or finder (a) engaged in any general solicitation, or (b) published any advertisement in connection with the offer and sale of the Subscription Shares. |
| 5 | Post-closing commitments of the Investor |
| 5.1 | Lock-up |
| 5.1.1 | During the period running from the Closing through the Applicable Lock-Up Period (as defined below), the Investor shall not, without the sole prior consent of the Issuer, transfer, sell or otherwise dispose of the Subscription Shares (other than transfers, sales or dispositions to the Investor’s Affiliates). For purposes of this Agreement, the “ Applicable Lock-Up Period ” shall mean: (i) in the case of 52,524 Subscription Shares, the period expiring six months from the date of Closing, and (ii) in the case of 275,751 Subscription Shares, the period expiring twelve months from the date of Closing. The Investor acknowledges that the Subscription Shares are “restricted securities” under the Securities Act and accordingly any transfer made during the period expiring twelve months from the date of Closing must be made pursuant to a registration statement filed with the SEC or pursuant to an exemption from such registration requirements, such as pursuant to Rule 144 or a privately negotiated transaction pursuant to Rule 4(a)(7) under the Securities Act. In the event of any permitted transfers pursuant to the immediately preceding sentences, the Investor shall cause the transferee to be bound by the provisions of this Agreement to the same extent as the Investor, including the provisions of this Section 5. |
| 5.1.2 | Upon expiry of the Applicable Lock-up Period, subject to the provisions of this Agreement, the Investor may transfer, sell or otherwise dispose of the Subscription Shares, taking into account that: |
| (i) | when instructing a bank to sell the Subscription Shares (other than in a transaction described in subsections (ii) through (iv) below) – the bank shall be instructed to effect such sale of the Subscription Shares using reasonable commercial efforts to cause minimal disturbances of the share price of the Issuer, as quoted on Euronext Brussels and Paris and the NASDAQ Stock Market; |
| (ii) | when selling the Subscription Shares on the open market – the Investor shall be permitted to sell the Subscription Shares at a daily volume not to exceed 10% of the previous trading day’s total trading volume; |
| (iii) | when selling the Subscription Shares through a privately negotiated transaction – the transaction shall not be subject to the limitations in this Article 5.1.2 if the transaction would not be reported in Euronext’s consolidated tape or NASDAQ Stock Market on the date on which the transaction is agreed by the parties; or |
| (iv) | when selling the Subscription Shares in a “block trade” – the block trade shall not be subject to the limitations in this Article 5.1.2 if it is the only sale by the Investor on the date of the block trade. |
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Subscription Agreement
| 6 | Survival |
The respective provisions contained in Articles 6, 7, 12 and 14 hereof shall remain in full force and effect, regardless of the end of the Applicable Lock-up Period.
| 7 | Expenses |
| 7.1 | Other than the reimbursement of Investor’s fees and expenses as set forth in Section 4(d) of that certain Mutual Release by and among the Issuer, the Investor and OnCyte, LLC, each Party shall bear its own costs and expenses (including legal and other advisory fees) incurred in connection with the preparation of this Agreement, and all related agreements and transactions. |
| 8 | No Assignment |
Except with the prior written consent of the other Party, neither of the Parties hereto shall be entitled to transfer or assign any of its rights or obligations under this Agreement.
| 9 | Entire Agreement |
This Agreement contains the entire agreement between the Parties in respect of its subject matter. It replaces and annuls all prior agreements, communications, offers, proposals or correspondence, oral or written, exchanged or concluded between the Parties relating to the same subject matter.
| 10 | Severability |
| 10.1 | If any provision in this Agreement is held to be illegal, invalid or unenforceable, in whole or in part, under any applicable law, then such provision or part of it shall be deemed not to form part of this Agreement, and the legality, validity or enforceability of the remainder of this Agreement shall not be affected. |
| 10.2 | In such case, each Party shall use its reasonable commercial efforts to promptly negotiate in good faith a valid replacement provision that is as close as possible to the original intention of the Parties and has the same or as similar as possible economic effect. |
| 11 | Limitation of Liability |
NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT OR ANY TORT CLAIMS ARISING HEREUNDER, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.
| 12 | Notices |
Any notice required or permitted to be given under this Agreement shall be in writing, shall specifically refer to this Agreement, and shall be addressed to the appropriate Party at the address specified below or such other address as may be specified by such Party in writing in accordance with this Article 12, and shall be deemed to have been given for all purposes (a) when received, if hand-delivered, sent by a reputable international expedited delivery service or sent by facsimile (with transmission confirmed), or (b) five (5) Business Days after mailing, if mailed by first class certified or registered mail, postage prepaid, return receipt requested. Any notice delivered by facsimile shall be
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Subscription Agreement
confirmed by a hard copy delivered by a reputable international expedited delivery service as soon as practicable thereafter. This Article 12 is not intended to govern the day-to-day business communications necessary between the Parties in performing their obligations under the terms of this Agreement.
If to Issuer:
Philippe Dechamps
Chief Legal Officer
Celyad SA
Rue Edouard Belin 2
1435 Mont-Saint-Guibert
Belgium
With a copy to (which shall
not constitute notice):
Vincent Dirckx
CMS
Chaussée de la Hulpe 178
1170 Brussels
Belgium
If to Investor:
Jake Reder
Celdara Medical, LLC
16 Cavendish Ct.
Lebanon, NH 03766
USA
With copies to (which shall
not constitute notice):
Morgan, Lewis & Bockius LLP
One Federal Street, 34 th Floor
Boston, MA 02110
USA
Attn: Mark B. Stein, Esq.
| 13 | Counterparts |
This Agreement may be signed in counterparts, in the number of originals stated hereinafter on the signature page. When taken together, the counterparts signed by all Parties shall constitute one and the same instrument.
| 14 | Governing Law and Jurisdiction |
| 14.1 | Governing Law |
This agreement and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with New York law, except for those elements of this Agreement which pertain to the corporate actions to be taken by the Issuer, which shall be governed by applicable Belgian law.
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| 14.2 | Jurisdiction |
| 14.2.1 | It is the objective of the Parties to establish procedures to facilitate the resolution of disputes arising under this Agreement in an expedient manner by mutual cooperation and without resort to litigation. In the event of any disputes, controversies or differences which may arise between the Parties out of or in relation to or in connection with this Agreement, including any alleged failure to perform, or breach, of this Agreement, or any issue relating to the interpretation or application of this Agreement, then upon the request of either Party by written notice, the Parties agree to meet and discuss in good faith a possible resolution thereof, which good faith efforts shall include at least one in-person meeting between the Executive Officers of each Party. If the matter is not resolved within thirty (30) days following the written request for discussions, either Party may then invoke the provisions of Article 14.2.2. |
| 14.2.2 | Any dispute, controversy, difference or claim which may arise between the Parties out of or in relation to or in connection with this Agreement (including arising out of or relating to the validity, construction, interpretation, enforceability, breach, performance, application or termination of this Agreement) that is not resolved pursuant to Article 14.2.1, shall be settled by binding arbitration in accordance with the applicable rules of the International Chamber of Commerce (“ICC Rules”) by three (3) arbitrators, one each chosen by the respective Parties and the third chosen by mutual agreement of the first two, and otherwise in accordance with the ICC Rules. The arbitrators shall have significant experience and shall have expertise in Belgian corporate law and the general laws of the State of New York. Either Party, following the end of the thirty (30) day period referenced in Article 14.2.1, may refer such issue to arbitration by submitting a written notice of such request to the other Party. The place of arbitration shall be New York and the language (including all testimony, evidence and written documentation) shall be English. The arbitrators shall establish procedures to facilitate and complete such arbitration as soon and efficiently as practicable. Unless the arbitrators expressly determine otherwise, neither Party shall be required to give general discovery of documents, but may be required only to produce specific, identified documents which are relevant to the dispute. The Parties shall have the right to be represented by counsel. Any judgment or award rendered by the arbitrators shall be final and binding on the Parties, and shall be governed by the terms and conditions hereof, including the limitation on damages set forth in Article 11. The Parties agree that such a judgment or award may be enforced in any court of competent jurisdiction. The statute of limitations of the State of New York applicable to the commencement of a lawsuit shall apply to the commencement of arbitration under this Article 14.2.2. The arbitrators shall determine the allocation of costs and expenses and attorneys’ fees in the arbitration to be borne by each Party. All proceedings and decisions of the arbitrators shall be deemed Confidential Information of each of the Parties. |
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Subscription Agreement
Done on 3 rd August 2017 in 2 originals, each Party acknowledging receipt of its own original.
|
CELYAD SA: |
|
/s/ Christian Homsy |
|
Name: Christian Homsy |
|
Title: Chief Executive Officer |
|
CELDARA MEDICAL, LLC |
|
/s/ Jake Reder |
|
Name: Jake Reder |
|
Title: Director and CEO |
Signature Page to Subscription Agreement
Exhibit 10.3
CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[…***…].” A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE U.S. SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934.
FOURTH AMENDMENT TO
EXCLUSIVE LICENSE AGREEMENT
This Fourth Amendment to Exclusive License Agreement (this “Amendment”) is made and entered into as of this 2 nd day of August, 2017 (the “Amendment Effective Date”), by and among OnCyte, L.L.C., a Delaware limited liability company which is a Subsidiary of Celyad, S.A. (as successor-in-interest to Celdara Medical, LLC) (“Company”) and Trustees of Dartmouth College, a non-profit educational and research institute existing under the laws of the State of New Hampshire, and being located at Hanover, New Hampshire 03755 (“Dartmouth”).
WHEREAS, the parties to this Amendment entered into that certain Exclusive License Agreement dated April 30, 2010 (as amended on February 20, 2012, July 26, 2013, and January 4, 2015, the “Agreement”; capitalized terms used but not defined in this Amendment shall have the meaning provided in the Agreement); and
WHEREAS, the parties to this Amendment entered into that certain Exclusive License Agreement dated June 27, 2014 (as amended on January 4, 2015, the “B7H6 Agreement”); and
WHEREAS, the parties now desire to amend the Agreement to combine Company’s rights under the B7H6 Agreement with the rights granted to Company under the Agreement on the terms and conditions set forth in this Amendment, resulting in the termination of the B7H6 Agreement; and
WHEREAS, the parties now desire to amend the Agreement to address certain modifications to Company’s payment obligations, as set forth in this Amendment.
NOW, THEREFORE, in consideration of the premises and the covenants herein contained, the parties hereby agree to amend the Agreement as follows:
| 1. | Termination of B7H6 Agreement. Subject to the terms and conditions of this Amendment, the B7H6 Agreement is hereby terminated effective as of the Amendment Effective Date. |
| 2. | Amendment of Agreement. |
| (a) | Section 1.02 is hereby amended and restated in its entirety as follows: |
“Section 1.02 Dartmouth Patent Rights. “Dartmouth Patent Rights” shall mean United States Patent Application Serial No.: 11/575,878, filed April 19, 2007, United States Patent Application Serial No.: 12/407,440, filed March 19, 2009, United States Provisional Application Serial No.: 61/255,980, filed October 29, 2009, United States Provisional Application Serial No.: 61/529,410 filed August 31, 2011, and Patent Cooperation Treaty Application Serial No. PCT/US2013/039812, and any applications which claim benefit of priority to said Patent Applications, and any United States or Foreign Patents issuing therefrom, and any continuations, continuations-in-part, divisions, reissues, reexaminations or extensions thereof. Dartmouth shall be the assignee and owner of all such Patents and Patent Applications.”
| (b) | Section 1.03 is hereby amended and restated in its entirety as follows: |
“Section 1.03 Licensed Product. “Licensed Product” means any product within the Product Groups.”
| (c) | Section 1.06 is hereby amended and restated in its entirety as follows: |
“Section 1.06 Subsidiary. “Subsidiary” shall mean any person, corporation or entity directly or indirectly controlled by, controlling or under common control with the Company. For purposes of this definition, “control” (including, with correlative meanings, “controlled by”, “controlling” and “under common control with”) means a direct or indirect beneficial ownership of at least 50% of the voting share capital of a person, corporation or entity.”
| (d) | Section 1.08 is hereby amended and restated in its entirety as follows: |
“Section 1.08 Net Sales. “Net Sales” shall mean the gross billing price Company and its Subsidiaries charge to their customers for Licensed Products and/or Platform Products, less sales, use, occupation and excise taxes, and transportation, discounts, returns and allowances in lieu of returns. Neither Company nor any Subsidiary is a customer for purposes of Net Sales unless the Company or Subsidiary is the final purchaser or final user of the Licensed Product or Platform Product.”
| (e) | The following additional defined terms are hereby added to the Agreement: |
“B7H6 Products” means any pharmaceutical product containing or comprising a construct covered by a Valid Claim of a Dartmouth Patent Right directly or indirectly claiming priority of [...***...], whether or not such construct is the sole active ingredient in such product, including in each case, all formulations, line extensions and modes of administration thereof.
“NKG2D Products” means any pharmaceutical product containing or comprising a construct covered by a Valid Claim of a Dartmouth Patent Right directly or indirectly claiming priority of [...***...], whether or not such construct is the sole active ingredient in such product, including in each case, all formulations, line extensions and modes of administration thereof.
“NKP30 Products” means any pharmaceutical product containing or comprising a construct covered by a Valid Claim of a Dartmouth Patent Right directly or indirectly claiming priority of [...***...], whether or not such construct is the sole active ingredient in such product, including in each case, all formulations, line extensions and modes of administration thereof.
“Platform Patents” means any Dartmouth Patent Right directly or indirectly claiming priority from [...***...] or [...***...], including but not limited to, [...***...].
“Platform Products” means any pharmaceutical product covered by a Platform Patent but excluding any pharmaceutical product that also belongs to a Product Group.
“Platform Sublicense” means an agreement pursuant to which Company or any Subsidiary grants a license or an option to receive a license, or similar rights, under any
| * | Confidential Information, indicated by […***…], has been omitted from this filing and filed separately with the U.S. Securities and Exchange Commission. |
intellectual property rights (but no such rights are granted for any Licensed Products) to a Third Party to develop, manufacture, market, sell or otherwise commercialize a Platform Product, whether or not a Valid Claim is infringed in any of the countries in which such sublicensed rights are exercised.
“Product Groups” means each of the four following groups of products: (i) NKG2D Products, (ii) B7H6 Products, (iii) NKP30 Products, and (iv) TIM Products.
“Product Sublicense” means an agreement pursuant to which Company or any Subsidiary grants a license or an option to receive a license, or similar rights, under any intellectual property rights to a Third Party to develop, manufacture, market, sell or otherwise commercialize a Licensed Product, whether or not a Valid Claim is infringed in any of the countries in which such sublicensed rights are exercised. For clarity, all Product Sublicenses will include rights pertaining to a Licensed Product but may be combined with a license or similar rights for Platform Products and such combined sublicenses shall be treated as a Product Sublicense (and not a Platform Sublicense) for all purposes under this Agreement.
“Sublicense Income” means any consideration received by Company or its Subsidiaries from a Third Party pursuant to a Product Sublicense or a Platform Sublicense, including any license signing fee, license maintenance fee, milestone payment and royalty payment (including, without limitation, (a) royalty payments received on sales made anywhere in the world of Licensed Products and Platform Products, whether or not such sales infringe a Valid Claim in the countries in which such sales have been made, and (b) any payments received for any sales, development or commercialization milestones achieved anywhere in the world applicable to Licensed Products or Platform Products, whether or not the actions to achieve such milestones infringe a Valid Claim in any of the countries in which such actions occurred. Sublicense Income shall exclude: (i) payments received as reimbursement of out-of-pocket expenses incurred after the Effective Date of the relevant Product Sublicense or Platform Sublicense for Patent preparation, prosecution, enforcement or defense, (ii) payments received and allocated by Company in accordance with GAAP to fund future research and development activities, and (iii) consideration received for an equity interest in, extension of credit to or other investment in Company or its Subsidiaries, provided such consideration is not in excess of fair market value. For avoidance of doubt, the parties have expressly agreed that the definition of Sublicense Income includes revenues received by Company throughout the world as a fair and good faith measure of the valuation of the intellectual property licensed and the mutual agreements made under this Agreement, and for the accounting convenience of the parties.
“Third Party” means any entity or person other than the parties and their respective Subsidiaries.
“TIM-Constructs” means any DNA or protein product with a DNA or protein sequence as defined by [...***...].
“TIM Products” are any pharmaceutical product containing or comprising a TIM Construct covered by a Valid Claim of a Platform Patent, whether or not such construct is the sole active ingredient in such product, including in each case, all formulations, line extensions and modes of administration thereof.
| * | Confidential Information, indicated by […***…], has been omitted from this filing and filed separately with the U.S. Securities and Exchange Commission. |
“Valid Claim” means a claim contained in (i) an Issued and unexpired patent which has not been held unenforceable, unpatentable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through abandonment, reissue, disclaimer or otherwise, or (ii) a patent application that has been pending for less than seven (7) years from June 27, 2014. If a claim within a patent application that ceased to be a Valid Claim under clause (ii) of the preceding sentenced ultimately issued, it will again be considered a Valid Claim effective as of the issuance of such patent.”
| (f) | Amendment of Section 2.01. The first sentence is deleted and replaced in its entirety with: |
“Dartmouth hereby grants to Company and its Subsidiaries an exclusive, royalty-bearing license under the Dartmouth Know-How and Dartmouth Patent Rights to make, have made, use, offer for sale, sell, import and commercialize Licensed Products and Platform Products in the Field in the Territory.”
| (g) | Amendment of Section 5.01. Section 5.01 is hereby amended and restated in its entirety as follows: |
“Section 5.01 Payments. For the rights and privileges granted under this license, Company or its Subsidiaries (whichever entity receives the Net Sales or Sublicense Income) shall pay to Dartmouth:
(a) a 2% earned royalty on the value of Net Sales of all Licensed Products within each Product Group by Company and its Subsidiaries, as determined on a Product Group-by-Product Group basis.
For avoidance of doubt, only one royalty, payable at the applicable rate set forth above, shall be payable on the Net Sales of any Licensed Product or Platform Product, regardless of how many claims within the Dartmouth Patent Rights cover such Licensed Product or Platform Product and regardless of whether such Licensed Product is included in more than one Product Group; and
(b) a 2% earned royalty on the value of Net Sales of all Platform Products by Company and its Subsidiaries; and
(c) non-refundable, non-creditable annual license maintenance fee of $40,000 due upon the first anniversary of the Amendment Effective Date and each anniversary of the Amendment Effective Date thereafter; and
(d) within sixty (60) days after the end of each calendar quarter, the percentage of the Sublicense Income from each Product Sublicense received by Company or its Subsidiaries during such calendar quarter indicated below depending on the development stage of the most-advanced Licensed Product at the time said Product Sublicense was executed:
[...***...]
| * | Confidential Information, indicated by […***…], has been omitted from this filing and filed separately with the U.S. Securities and Exchange Commission. |
For avoidance of doubt, the percentage of Sublicense Income to be paid to Dartmouth shall be determined one-time for each Product Sublicense, upon Company or its Subsidiary’s entering into the applicable Product Sublicense, and such percentage shall not be modified during the term of such Product Sublicense without Dartmouth’s express written consent.
(e) within sixty (60) days after the end of each calendar quarter, [...***...]% of the Sublicense Income from each Platform Sublicense received by Company or its Subsidiaries.
(f) The Sublicense Income sharing obligations set forth in the foregoing Section 5.01(d) and 5.01(e) shall be determined on a Platform Sublicense-by-Platform Sublicense and Product Sublicense-by-Product Sublicense basis, as applicable, and shall commence as of the Amendment Effective Date and each such obligation shall continue until the later of (a) the expiration or termination of the last-to-expire or terminate of the Dartmouth Patent Rights claiming the Platform Product or Licensed Product licensed under each such Platform Sublicense or Product Sublicense or (b) the 10th anniversary of the first commercial sale of the first Platform Product or Licensed Product licensed under each such Platform Sublicense or Product Sublicense anywhere in the world. For avoidance of doubt, the parties have expressly agreed that the definition of Sublicense Income, which includes revenue payable to Company or a Subsidiary whether or not any Valid Claim exists in the country in which the event triggering such revenue occurs, is for accounting convenience and represents the fair valuation of the mutual agreements under this Agreement; and
(g) non-refundable, non-creditable development milestone payments set forth in this subsection (g) shall be payable by Company upon the first of Company, a Subsidiary or any sublicensee to achieve such milestone, with payment due within (60) days of such achievement:
|
Filing of IND |
$ | 25,000 | ||
|
Enrollment of first patient into Phase I clinical trial |
$ | 75,000 | ||
|
Enrollment of first patient into Phase II clinical trial |
$ | 250,000 | ||
|
Enrollment of first patient into Phase III clinical trial |
$ | 250,000 | ||
|
Piling BLA |
$ | 400,000 | ||
|
FDA approval |
$ | 500,000 |
It is acknowledged that if Company, its Subsidiary, or a sublicensee does not accomplish the above development milestones for a Licensed Product by the dates specified in Section 4.01, this Agreement may be terminated unless payments in the above amounts are made by Company to Dartmouth within thirty (30) days of the dates specified in Section 4.01.
(h) a one-time, non-refundable, non-creditable commercial milestone payment of $4,000,000 due when [...***...], payable within sixty (60) days after the end of such calendar year.
(i) Notwithstanding any other provision that may be to the contrary, Company shall remain directly liable to Dartmouth for all payments due to Dartmouth under this Section 5.01, regardless of whether Dartmouth has consented or consents to Company’s Subsidiaries making direct payments under this section.
| * | Confidential Information, indicated by […***…], has been omitted from this filing and filed separately with the U.S. Securities and Exchange Commission. |
| (h) | Amendment of Section 5.02. Sections 5.02 is hereby amended by deleting the phrases “and any sublicensees” and “and its sublicensees” where such phrases appear in such section, |
| (i) | Amendment of Section 5.03. Sections 5.03 is hereby amended by deleting the phrase “the royalties” where it appears in such section and replacing it with the phrase “the amounts.” |
| (j) | Amendment of Section 10.02. Sections 10.02 is hereby amended by deleting address for notices to Company and replacing it with the following text: |
“Celyad, S.A.
Legal Department
Rue Edouard Belin 2
1435 Mont-Saint-Guibert
Belgium Attn.: Philippe Dechamps
With a copy to:
Goodwin Procter
100 Northern Avenue
Boston, MA 02210
Attn.: Michael Bison”
| 3. | Upon execution of this Amendment, Company shall pay to Dartmouth a non-refundable, non-creditable Amendment Fee of $2,000,000. |
| 4. | Except as expressly amended by this Amendment, the terms and conditions of this amended Agreement shall remain in full force and effect. |
| 5. | This Amendment shall be construed, governed, interpreted and enforced according to the laws of the State of New Hampshire. |
| 6. | This Amendment may be executed in two counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment by facsimile or email of a scanned copy will be effective as delivery of an original executed counterpart of this Amendment. |
[ Signature Page Follows ]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the Amendment Effective Date.
| ONCYTE, LLC | ||
| By: | /s/ Christian Homsy | |
| Name: Christian Homsy | ||
| Its: Chief Executive Officer. | ||
| TRUSTEES OF DARTMOUTH COLLEGE | ||
| By: | /s/ Nila Bhakuni | |
| Name: |
Nila Bhakuni |
|
| Its: |
Director, Technology Transfer |