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)
 
 British Columbia, Canada
 001-37619
 N/A
 (State or Other Jurisdiction of Incorporation)
 (Commission File Number)
 (IRS Employer Identification No.)
 
 
 
100 Spy Court
Markham, Ontario, Canada L3R 5H6
(Address of Principal Executive Offices)
 
 (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):
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading Symbol(s)
 
Name of exchange on which registered
Common Shares
 
EDSA
 
The Nasdaq Stock Market LLC
 
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
 
 
 
ExhibitNo.
  
Description of Exhibit
 
 
3.1
 
Amended and Restated Articles of Edesa Biotech, Inc.
 
 
 
 
License Agreement by and between Edesa Biotech Research, Inc. and NovImmune SA dated April 17, 2020.
 
 
 
 
Purchase Agreement by and between Edesa Biotech Research, Inc. and NovImmune SA dated April 17, 2020.
 
 
 
 
Securities Purchase Agreement by and between Edesa Biotech, Inc. and NovImmune SA dated April 17, 2020
 
 
 
 
Press Release issued by Edesa Biotech, Inc. dated April 20, 2020.
 
+ 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.
 
 
Edesa Biotech, Inc.
 
 
 
Date: April 23, 2020
By:
/s/ Michael Brooks
 
Name: 
Michael Brooks, PhD
 
Title:
President
 
 
 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.
 
 
 
License 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 LICENSEE)
 
 
 
 
 
 
 
 
 
License Agreement between NovImmune and Edesa Biotech Research
  1|14
 
 
 
 
Table of Contents
 
1.
DEFINITIONS
 5
 
 
 
2.
LICENSE
 5
 
2.1 Construct License
 5
 
2.2 Retained Rights
 5
 
 
 
3.
COST AND RISK; SPECIAL INDEMNITY
 6
 
 
 
4.
LICENSE FEES
 6
 
4.1 Upfront Payment
 6
 
4.2 Royalties
 6
 
4.3 [__] - Milestone Payments
 7
 
4.4 [__] - Milestone Payments
 7
 
4.5 Currency Conversion
 8
 
4.6 Reporting
 8
 
4.7 Payment
 8
 
4.8 Taxation
 9
 
4.9 Right to Purchase
 9
 
 
 
5.
BOOKS AND RECORDS; AUDITS
 9
 
5.1 Procudures
 9
 
5.2 Cost of Audits
 10
 
5.3 Retention Period
 10
 
 
 
6.
INTELLECTUAL PROPERTY
 10
 
6.1 Allocation of IP
 10
 
6.2 IP Responsibility Prosecution
 10
 
6.3 Third Party Infringement
 11
 
6.4 Infringement of Third Party's IP
 11
 
6.5 Transfer of the IND
 11
 
 
 
7.
REPRESENTATIONS AND WARRANTIES; INDEMNITIES
 11
 
7.1 Representations and Warranties
 11
 
7.2 Indemnities
 12
 
7.3 Exclusions and Limitations
 12
 
 
 
8.
CONFIDENTIALITY AND PUBLIC ANNOUNCEMENTS
 12
 
 
 
9.
TERM AND TERMINATION
 12
 
9.1 Term
 12
 
9.2 Termination for Cause
 12
 
9.3 Effects of Termination
 13
License Agreement between NovImmune and Edesa Biotech Research
  2|14
 
 
 
10.
FINAL PROVISIONS
13
 
10.1 Entire Agreement
13
 
10.2 Written Form
13
 
10.3 Severability
13
 
10.4 Assignment
13
 
10.5 Independent Contractor
13
 
10.6 Further Assurances
13
 
10.7 Notices
14
 
10.8 Force Majeure
14
 
10.9 Waiver
14
 
10.10 Annexes
14
 
10.11 Governing Law
14
 
10.12 Arbitration
14
 
 
 
 
 
License Agreement between NovImmune and Edesa Biotech Research
  3| 14
 
 
 
 
Table of Annexes
 
Number of Annex
Name of Annex
Annex 1
Definitions
Annex 2.1(b)
Licensed Patents
Annex 3(c)
Development Plan
Annex 4.1(a)
Preferred Share Terms
Annex 4.1(b)
Securities Purchase Agreement
 
License Agreement between NovImmune and Edesa Biotech Research
  4| 14

 
 
 
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.]
 
NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein and intending to be legally bound hereby, the Parties agree as follows:
 
1.1111.
DEFINITIONS
 
Capitalized terms used in this Agreement (as defined) shall have the meanings assigned to them in Annex 1.
  
2.
LICENSE
 
 
2.1 Construct License
 
(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).
 
(b)
The Construct License shall include rights to exploit: (i) the Licensed Patents (as defined) and (ii) the Know-How (as defined) and other IP controlled by NI as reasonably necessary to commercialize the Constructs or either of them (the latter referred to as “Other Licensed IP”). 
 
(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.
 
2.2 Retained Rights
 
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.
 
 
License Agreement between NovImmune and Edesa Biotech Research
  5| 14
 
 
 
3. COST AND RISK; SPECIAL INDEMNITY
 
(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.
 
4. LICENSE FEES
 
4.1 Upfront Payment
 
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.
 
4.2 Royalties
 
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):
 
Commercialization
Royalty Rate (%)
Net Sales in countries, in which LICENSEE commercializes the Licensed Products on its own (directly or through subsidiaries or distributors)
[___]% of Net Sales
With respect to countries, in which LICENSEE does not commercialize the Licensed Products on its own but through sublicensing
[___]% of Sublicensing Revenue
 
[Royalty rates omitted as competitively sensitive information.]
 
4.3
4.3     [___] – Milestone Payments
 
License Agreement between NovImmune and Edesa Biotech Research
  6| 14

 
 
 
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):
 
Milestone Event regarding [___]
Milestone Payment
 
Dosing of the first patient into the first stage of a Phase II Clinical Trial (as defined)
USD [___]
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
USD [___]
Dosing the first patient in the initial Phase III Clinical Trial (as defined)
USD [___]
Submission of BLA (as defined) to the FDA (as defined)
USD [___]
Upon submission of a BLA or equivalent in Europe
USD [___]
Upon submission of a BLA or equivalent in Japan
USD [___]
Receipt of first marketing authorization by FDA
USD [___]
Receipt of first marketing authorization in Europe
USD [___]
Receipt of first marketing authorization in Japan
USD [___]
First Commercial Sale (as defined) in the United States
USD [___]
First Commercial Sale in Europe
USD [___]
First Commercial Sale in Japan
USD [___]
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.]
 
4.4
4.4      [___]– Milestone Payments
 
As regards [___] and/or the Licensed Products based on [___], upon occurrence of following Milestone Events, LICENSEE shall pay to NI the following Milestone Payments:
 
Milestone Event regarding [___]
Milestone Payment
Dosing the first patient in the initial Phase III Clinical Trial
USD [___]
Submission of BLA to the FDA
USD [___]
Upon submission of a BLA or equivalent in Europe
USD [___]
Upon submission of a BLA or equivalent in Japan
USD [___]
Receipt of first marketing authorization by FDA
USD [___]
Receipt of first marketing authorization in Europe
USD [___]
Receipt of first marketing authorization in Japan
USD [___]
First Commercial Sale in the United States
USD [___]
First Commercial Sale in Europe
USD [___]
First Commercial Sale in Japan
USD [___]
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
 
 
 
4.5 Currency Conversion
 
(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.
 
4.6 Reporting
 
(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.
 
4.7 Payment
 
(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
 
 
 
4.8 Taxation
 
(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.
 
4.9 Right to Purchase
 
(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.]
 
5. BOOKS AND RECORDS; AUDITS
 
5.1 Procedures
 
(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
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(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.
 
5.2 Cost of Audits
 
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.
 
5.3 Retention Period
 
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.
 
6. INTELLECTUAL PROPERTY
 
6.1 Allocation of IP
 
(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).
 
6.2 IP Responsibility | Prosecution
 
(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
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6.3 Third Party Infringement
 
(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.
 
6.4 Infringement of Third Party’s IP
 
(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.
 
6.5 Transfer of the IND
 
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.
 
7. REPRESENTATIONS AND WARRANTIES; INDEMNITIES
 
7.1 Representations and Warranties
 
(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
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7.2 Indemnities
 
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.
 
7.3 Exclusions and Limitations
 
(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.
 
8. CONFIDENTIALITY AND PUBLIC ANNOUNCEMENTS
 
(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.
 
9. TERM AND TERMINATION
 
9.1 Term
 
(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).
 
9.2 Termination for Cause
 
(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
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(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.
 
9.3 Effects of Termination.
 
(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.
 
(e)
Sections 5, 6.1, 6.2, 7.2, 7.3, 8, 9.3 and 10 shall survive any expiry or termination of this Agreement.
 
10. FINAL PROVISIONS
 
10.1 Entire Agreement
 
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.
 
10.2 Written Form
 
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.
 
10.3 Severability
 
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.
 
10.4 Assignment
 
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.
 
10.5 Independent Contractor
 
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.
 
10.6 Further Assurances
 
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
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10.7 Notices
 
(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.
 
10.8 Force Majeure
 
(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.
 
10.9 Waiver
 
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.
 
10.10 Annexes
 
All Annexes are incorporated herein by reference.
 
10.11 Governing Law
 
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).
 
10.12 Arbitration
 
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.
 
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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 to the License Agreement between NovImmune and Edesa Biotech Research
1 | 6
 
 
 
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
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(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
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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
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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
 
Table of Contents
 
1.
Definitions and Interpretation
                                    4
 


2.
Purchase of the Product
                                    4
 
2.1 General   
                                    4
 
2.2 Compliance with Specifications
                                    4
 
2.3 Possession Instruction and Passing of Risk
                                    4



3.
Purchase Price and other Fees
                                    4

3.1 General
                                    4
 
3.2 Payment Terms
                                    5
 
3.3 Taxation
                                    5
 


4. 
Representations, Warranties, and Liability
                                    5
 
4.1 Representations and Warranties
                                    5
 
4.2 Edesa's Obligation to Inspect; Remedies
                                    6
 


5.
Exclusion of Liability       
                                    6
 


6.
General
                                    6

6.1 Written Form
                                    6
 
6.2 Assignment
                                    6
 
6.3 Independent Contractor
                                    6
 
6.4 Notices
                                    7
 
6.5 Force Majeure
                                    7

6.6 Waiver
                                    7
 
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:
 
1. Definitions and Interpretation
 
Capitalized terms shall have the meanings set forth in Annex 1.
 
2. Purchase of the Product
 
2.1 General
 
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.

2.2 Compliance with Specifications
 
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).
 
2.3 Possession Instruction and Passing of Risk
 
(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.
 
3. Purchase Price and other Fees
 
3.1 General
 
(a)
The purchase price shall amount to USD 5,000,000 (five million US dollars), to be paid in two installments pursuant to Section 3.2(a) (the Purchase Price).
 
(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
 
3.2 Payment Terms
 
(a)
The Purchase Price shall be paid in two installments as follows:
 
(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.
 
3.3 Taxation
 
(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.
 
4. Representations, Warranties, and Liability
 
4.1 Representations and Warranties
 
(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
 
4.2 Edesa's Obligation to Inspect; Remedies
 
(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.
 
(c)
Defective quantities of Product that can be used by Edesa for any reasonable purpose shall remain in Edesa's possession, and the Product Price of such defective quantities shall be reduced taking into due account the limitations on their use by Edesa.
 
(d)
Defective quantities of Product that prove to be unusable for any reasonable purpose shall be disposed by Edesa in compliance with applicable standards and regulations at its cost, and no Purchase Price shall become due for such quantities of Product to be disposed.
 
(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.
 
5. Exclusion of Liability
 
(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.
 
6. General
 
6.1 Written Form
 
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.

6.2 Assignment
 
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.
 
6.3 Independent Contractor
 
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
 
6.4 Notices
 
(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.
 
6.5 Force Majeure
 
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.
 
6.6 Waiver
 
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.
 
6.7 Governing Law
 
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).
 
6.8 Dispute Resolution
 
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
 
 
 
 
Annex 1 – Definitions
 
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.
 
 
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(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.
 
 
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(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.
 
 
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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).
 
 
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(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.
 
 
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(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.
 
 
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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.
 
 
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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.
 
 
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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.
 
 
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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)
 
 
 
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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
 
 
 
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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