Exhibit 10.2
Certain identified information has been excluded from the exhibit pursuant to Item 601(a)(6) of Regulation S-K due to personal privacy concerns or pursuant to Item 601(b)(10)(iv) because it is both not material and is the type of information that the registrant treats as private or confidential. Redacted information is indicated by: [***]
JOINT VENTURE AGREEMENT
PROMIS - BCNI
STAGE ONE: SERVICES
This Joint Venture Agreement ( “AGREEMENT”) is entered into effective July 8, 2020 (the “Effective Date”), by and between ProMIS Neurosciences, Inc., a Canadian corporation with an address at 1920 Yonge Street, Toronto, ON, M4S 3E2 Canada (“PROMIS”), and BC Neuroimmunology Lab Inc (BCNI) an accredited, CAP certified diagnostic lab in British Columbia, with an address at UBC Hospital, S157-2211 Wesbrook Mall, Vancouver BC V6T 2B5 (“BCNI”).
RECITALS
Whereas ProMIS is a publicly traded (TSX) biotech company focused primarily on the field of neurodegenerative diseases including Alzheimer’s Disease and dementia, with a proprietary technology platform that has created a portfolio of patented or patent pending antibodies and peptide antigens, which can be used as both therapeutics (antibodies, vaccines, gene therapy) and as reagents in proprietary diagnostic assays.; and
Whereas BC Neuroimmunology Lab Inc. (BCNI) is a private full service clinical neuroimmunology lab located in the University of British Columbia (Vancouver) hospital. BCNI is accredited by both the College of American Pathologists (CAP) and Diagnostic accreditation program (DAP) at the College of Physicians and Surgeons of BC (CPSBC) following the ISO15189 guidelines. BCNI is the North American reference center for six high complexity serological immunoassays. BCNI has extensive experience and expertise in Surface Plasmon Resonance (SPR), live and fixed cell-based assays, radio immunoprecipitation assays, ELISA, immunoblot, and immunohistochemistry assays in a clinical assay setting, servicing the neurology community in North America and Worldwide.
and
Whereas PROMIS and BCNI wish to enter into a joint venture business arrangement to provide the services of neurodegenerative disease screening, diagnostics and monitoring, using proprietary blood-based biomarkers (the “JV SERVICE”).
NOW, THEREFORE, in consideration of the mutual covenants and premises set forth herein, the Parties agree as follows
Article I. DEFINITIONS
In this Agreement, unless the context indicates otherwise, the words and expressions set out below shall have the meanings assigned to them and cognate expressions shall have a corresponding meaning, namely:
“Neurodegenerative diseases”
These diseases include but are not limited to Alzheimer’s disease, Parkinson disease, ALS, FTD, traumatic or insidious brain injury; They do not include traditional neuroimmunology diseases such as Myasthenia Gravis, NMOSD, Guillain Barre syndrome and other nodal and paranodal diseases, autoimmune encephalitis and paraneoplastic diseases.
“Agreement” means this Service Joint Venture Agreement, together with any validly executed amendments, schedules and appendices.
“Applicable Law” means, as to any person, any statute, law, rule, regulation, administrative guidance, directive, treaty, judgment, order, decree or injunction of any governmental authority that is applicable to or binding upon such person or any of its properties.
“Background Intellectual Property” means any Intellectual Property excluding Foreground Intellectual Property owned or controlled by either Party prior to commencement of or independently from the JV SERVICES, and which the owning Party contributes or uses in the course of performing the JV SERVICE
“Commercialize” or “Commercialization” includes the development, distribution, sale, license, transfer or any other venture through which the JV SERVICE or a Party seeks to promote, market, sell, distribute, manufacture or develop the JV SERVICES, or having any of the foregoing done on its behalf.
“Confidential Information” means any information disclosed by one Party to the other that is not publicly available information, and which is either identified as confidential at the time of disclosure or which would reasonably be considered to be confidential by its nature or the context of disclosure, including without limitation Background Intellectual Property disclosed by one Party to the other for use in the JV SERVICES/LICENSED SERVICES and identified as confidential before or at the time of disclosure, any business information pertaining to a Party or its products or services, and any products, processes, samples, biological or proprietary materials provided or disclosed pursuant to this Agreement
“Definitive Agreements” means such agreements as may be necessary to set up the JV SERVICE and/or the Newco and complete its organization as contemplated herein.
“Field” means (i) the production and use of biomarker assays for the screening, diagnosis and monitoring of neurodegenerative disease, and/or (ii) the commercialization of such biomarker assays for the diagnosis and monitoring of Alzheimer’s Disease as a service to third parties.
“Foreground Intellectual Property” means any Intellectual Property which is generated or first reduced to practice by either Party directly as a result of the work undertaken in accordance with this Agreement, and which is relevant to the JV SERVICE and the Licensed Services/Licensed Technology.
“Improvement(s)” means any modification, development, alteration, derivative or technical advance in or relating to the Licensed Technology/Licensed Services which cannot be used or practiced without infringing the Background Intellectual Property Rights.
-2-
‘Intellectual Property Rights’ means any and all existing and future legal protection recognized by law (whether by statute, in equity, at common law or otherwise) anywhere in the world in respect of the Licensed Technology and Licensed Services, including without limitation trade secret and confidential information protection, Know-How, patents, Patents, copyright and copyright registration, industrial design registration and trade-marks and trade-mark registrations and other registrations or grants of rights analogous thereto.
“Joint Venture” means the business arrangement between the Parties as described in this Agreement, including the JV SERVICE and a planned Newco.
“JV SERVICE” means the service of providing lab services and blood-based assays for Alzheimer’s Disease diagnosis and monitoring to the scientific, medical and pharmaceutical communities, using Licensed Services and/or Licensed Technology, as well as other technology that may be available to the Joint Venture;
“Know-how” means all the research results, data, reports, dossiers, technical information, expertise, practice, experience, skill and technical knowledge of industrial significance and all unpatented trade secrets, manufacturing methods and technologies, SOP’s, QA and QC procedures, designs, processes, techniques, information, drawings and specifications, and technical data acquired by and in the possession of PROMIS, BCNI, or JV SERVICE, and not in the public domain, and relating to the Licensed Technology or Licensed Services.
‘Licensed Service(s)’ means any assay that is/are derived in whole or in part by the use of any of the Intellectual Property Rights and/or the Licensed Technology, of either Party, including without limitation PROMIS proprietary antibodies and antigen peptides for blood-based biomarker assays for the screening, diagnosis and monitoring of neurodegenerative diseases, as listed in this Agreement or added to it by validly executed amendment.
“Licensed Technology” means the platforms owned by PROMIS and/or BCNI that will be used by the JV SERVICE and NEWCO to develop and provide the neurodegenerative screening, diagnostics and monitoring services, and any Intellectual Property Rights therein or thereto, necessary or useful to develop, manufacture or Commercialize the Licensed Service(s) within the Field in the Territory. The Licensed Technology includes, without limitation, the Technology and Patents listed on Appendix A.
“Net Revenue” shall mean Revenue, less such of the following items but only insofar as they are separately itemized on the invoice and actually paid or allowed: (i) discounts or rebates (ii) credits or allowances upon claims or returns, (iii) taxes or other government charges, and (iv) shipping and insurance costs, brokerage and customs duties.
“Newco” means a corporate entity which is planned in the near future to be established by the Parties to conduct the business and operations of the JV SERVICE.
“Patents” means those patents and patent applications listed in, or which may be added to, Appendix A from time to time hereunder, any divisional applications, continuation applications, continuation-in-part applications, reissues, or re-examinations claiming priority to either of these, and all patent applications and patents corresponding to or derived from any of the above.
-3-
“Party” means PROMIS or BCNI, if individually referred to, and “Parties” shall mean PROMIS and BCNI together.
“Revenue” means the gross amount of consideration received by BCNI, JV SERVICE or NEWCO, as the case may be, in respect of the provision of the JV SERVICE, including money, goods and services, royalties, milestone payments and any other consideration that may be received from a Sale of any of the services provided by the JV SERVICE or Newco.
“Sale” means any sale, lease, use and services associated with provision of a JV SERVICE, Licensed Service or service relating to a Licensed Service and “Sales” and “Sell” have corresponding meanings;
“Technology” includes inventions, discoveries, designs, ideas, works, creations, developments, algorithms, drawings, compilations of information, analyses experiments, data, reports, Know-How, formulae, methods, processes, techniques, moulds, prototypes, products, samples, equipment, tools, machines, software and documentation therefore, flow-charts, specifications and source code listings; and includes any modifications or improvements thereto, whether patentable or not.
“Term” is defined in Section 27.
“Territory” is defined in Section 14.
Article II. PURPOSE OF THE JOINT VENTURE
Section 2.01. STAGE ONE
| (a) | The purpose of this Joint Venture is to establish, fund and operate the JV SERVICE to provide CSF and blood-based Alzheimer’s Disease and other neurodegenerative disease screening, diagnostics and monitoring to the scientific, medical and pharmaceutical communities, through a combination of both Parties’ expertise, intellectual property and relevant assets, including without limitation the Licensed Technology and Licensed Service(s). |
| (b) | Stage One of the Joint Venture will focus on building the foundation for a revenue base providing diagnostic services, (“JV SERVICE”) initially for NfL and pTau181 blood-based assays. |
| (c) | During Stage One, opportunities for an expanded assay portfolio will be explored by the Parties, including the development of proprietary assays using ProMIS’ proprietary reagents, in addition to identification and evaluation of potential third-party assays to offer as part of the JV SERVICE. |
| (d) | The parties will jointly evaluate the feasibility of developing equally accurate or superior assays for NfL and pTau181 on SPR and other high throughput platforms. |
-4-
Section 2.02. Stage Two
| (a) | The parties plan to expand the scope of the Joint Venture in the near future (by October/November 2020) and enter into a Stage Two of the arrangement, and, will enter into such further agreements as may be required at the time, including but not limited to: governance and decision making, revenue recognition, reporting requirements, creating a jointly owned corporation to employ and compensate key staff. The parties agree that the general principles contained in this Agreement, including roles, economic shares, and the Field will be maintained in future additional or updated agreements. |
| (b) | Stage Two will focus on expanding the revenue base of diagnostic services in the Field. The specific activities will be contingent on results and market developments during Stage One, but will likely include: |
| (i) | Expanding diagnostic capacity at BCNI for the JV SERVICE, with equipment, space, and personnel (this expansion can precede the revenue stage, as outlined above, by mutual consent); |
| (ii) | Building or acquiring a USA-based lab facility in 2021. The new USA lab is anticipated to be owned and operated by the Newco, likely via a USA C corporation fully owned by the Newco. BCNI will provide an exclusive license of best in class proprietary and unique neuroimmunology assays to this lab for sole use on the USA market, assuring strong financial stability to the USA lab. Once the USA lab is operating, the service at BCNI will focus on the Canada market together with research and development, while the USA lab will service the USA market only; |
| (iii) | Continuing to build the portfolio of assays offered, both proprietary assays and third-party assays; |
| (iv) | Pursuing sales and marketing approaches to expand the customer base and revenue base in North America; |
| (v) | Conducting R&D, clinical validation, and pursuing regulatory approvals required to develop revenue; and |
| (vi) | Pursuing collaborations with diagnostic labs outside of North America, or potentially licensing/partnering deals with platform companies or global diagnostics players, to develop revenue beyond what the Joint Venture can realize in laboratories it operates in North America. |
Article III. BACKGROUND
Section 3.01. Experience of the Parties
Both Parties bring significant experience with respect to development and provision of diagnostic assay services to this Joint Venture.
-5-
| (a) | Specifically, PROMIS possesses expertise in neurodegenerative diseases including Alzheimer’s Disease and dementia, together with proprietary technology platforms to predict better specificity for diagnostic purposes. ProMIS owns a portfolio of patented or patent pending antibodies and peptide antigens which are useful for the purpose of diagnostics. ProMIS is also well-connected in the scientific, medical and pharmaceutical communities. |
| (b) | BCNI is an accredited, DAP and CAP certified diagnostic lab in British Columbia, with expertise and experience in validating and accrediting assays with DAP and College of American Pathologists. BCNI also has experience in marketing and sales of such assays to the neurologist community, larger labs with vast distribution, and pharmaceutical companies. |
Article IV. CONTRIBUTIONS OF THE PARTIES.
The Parties will faithfully dedicate reasonable commercial and technological resources to help the business of the JV SERVICE succeed.
Section 4.01. Joint Contributions
| (a) | The parties will fund (by loan) equally operating costs associated with Stage One activities, expected not to exceed CAD $[***] per month. Therefore, each Party will contribute CAD $[***] each month following until the JV SERVICE is cashflow positive |
| (b) | Each Party will lend the JV SERVICE CAD $[***] by no later than September 15,2020 for the purchase of a Quanterix SIMOA HD-X. |
| (c) | Any additional capital expenditures, or major expense projects (such as a validation clinical trial) will require the consent of both parties and will be funded 50/50 unless otherwise agreed by both parties. |
| (d) | The Newco, a new BC registered corporation is planned to be established in the near future to provide the JV SERVICE, and additional non-voting shares in the Newco can be sold to familiar and supportive 3rd parties such as ProMIS shareholders and friends and family of the founders up to value of USD $[***] and at a pre-money value agreeable to BCNI and ProMIS. |
Section 4.02. Individual Contributions
| (a) | In addition, PROMIS’s contribution to the JV SERVICE will include: |
| (i) | Provide at cost proprietary antigens and peptides which can be used as reagents in proprietary diagnostic assays for the JV SERVICE; |
| (ii) | Share expertise in neurodegenerative diseases including Alzheimer’s Disease and dementia; |
-6-
| (iii) | License to the JV SERVICE its proprietary technology platforms (“Licensed Technology”) to predict better specificity for diagnostic purposes; |
| (iv) | Apply its existing proprietary reagents to assay development and will continue develop and contribute new proprietary reagents. |
| (v) | Regulatory and clinical development support; |
| (vi) | Take the lead on market related activities, including outreach to KOLs, physician customers, CROs, global distribution partners, other revenue development etc. and will together with BCNI, assign or hire staff in the Newco to lead that effort |
| (vii) | Continuous scientific, technological, marketing, strategic, updating process development, and support. |
| (b) | In addition, BCNI’s contribution to the JV SERVICE will include: |
| (i) | General management of the JV SERVICE: Dr. Hans Frykman of BCNI will serve as lab director at the Vancouver site, with deferred payment until the JV/ Newco is cashflow positive and can carry his salary. These payments to Dr. Hans B Frykman Medical Corp will supersede paying shareholders at that time. BCNI will initially hire and manage capable staff, and will manage the operations of the accredited laboratories. This staff will be paid at cost by JV/Newco, a CEO of the Newco will be jointly appointed by BCNI and ProMIS; |
| (ii) | Perform all Neurodegenerative assays at cost, calculated by an internal standard method normally used; |
| (iii) | Provide guidance in marketing and sales of the assays to the hospital labs, neurologist community in North America, test distributors, larger labs with vast distribution, and pharmaceutical companies; Will together with ProMIS assign and hire staff in Newco to lead this effort |
| (iv) | Contribute (Dr. Hans Frykman at deferred cost as described above and other staff at normal salary cost) its expertise and experience in validating and accrediting the assays with DAP and College of American Pathologists; with aim to also acquire Health Canada and FDA approvals. Particulary for proprietary assays. |
| (v) | Assume primary responsibility for dealing with health and regulatory authorities in the Territory, including, without limitation, presentation, submission and approval of any necessary marketing/regulatory authorizations for the JV SERVICE and Licensed Services; Will together with ProMIS hire staff for this purpose |
-7-
| (vi) | In the case of any clinical trial sponsored by ProMIS, BCNI/JV SERVICE/Newco will supply the NfL and pTau181 assays at cost, based on the jointly acquired Quanterix machine and/or the mutually developed SPR assays. This discount will survive the termination of the Joint Venture, as long as the Quanterix or SPR assays are operational and available at BCNI/JV SERVICE/Newco in exchange for any funds owed to ProMIS for purchase of Quanterix or SPR equipment. |
Article V. ALLOCATION AND DISTRIBUTION OF REVENUES
Section 5.01. Ownership
PROMIS and BCNI (and related companies) shall each own 50% of the JV SERVICE and the Newco is planned to be established to provide the JV SERVICE.
Section 5.02. Revenue
Net Revenue from the JV SERVICE will be distributed to each Party equally, except as otherwise specified in this Agreement. JV SERVICE revenue will be recognized by BCNI/JV SERVICE/Newco. Direct expenses, rental expenses, staff expenses, and capital expenses associated with that revenue will be covered by that revenue to the extent possible before any revenue is distributed.
Section 5.03. Working Capital, Operating Losses
Working capital needs, or operating losses will be covered equally by both parties.
Section 5.04. Investment Decisions
Investment decisions will require mutual consent and will be funded equally, which funding may come from current revenue and operating profit.
Section 5.05. Surplus, Operating Cash Flow
Cash surpluses, operating cash flow after paying current expenses and not allocated to capital investment by mutual consent, will be distributed equally (50/50 split) to both parties on a time schedule to be agreed - not more frequent than monthly, not less frequent than quarterly. (With the exception of cash surpluses generated from partnerships or labs outside of North America, see below)
Section 5.06. Additional Revenue
Notwithstanding the foregoing, however, Net Revenue to the JV SERVICE/Newco which comes from sources other than labs operated by the JV SERVICE in North America will be disbursed equally (50/50 split) for revenue derived from assays not incorporating ProMIS proprietary reagents. For revenue derived from collaborations with labs in regions of the world other than North America, who choose to sell proprietary assays developed by the JV SERVICE/Newco, only if promis proprietary knowledge, reagents/ chemicals were used as a deciding factor to improve accuracy of assay, the disbursement will be 80% to ProMIS and 20% to BCNI (80/20 split). Prior to finalizing any such deal both parties will confirm that this economic split applies and is dependent on the relative contribution of each party into the Intellectual Property Rights developed for such JV SERVICES.
-8-
Article VI. JV Meetings
| (a) | JV meetings will be held weekly. Minutes of the meetings will be maintained on file. |
| (b) | Either ProMIS or BCNI can call a special meeting to resolve urgent issues that require a vote and that cannot wait for the next regularly scheduled meeting. When calling a special meeting, the other party must be provided with reasonable notice. Where a special meeting has been called, the meeting will be restricted to the specific purpose for which the meeting was called. |
| (c) | All meetings will be held at a time and in a location that is reasonable, convenient and practical considering the situation of BCNI and ProMIS. |
Article VII. NAME
The name of JV SERVICE and BC “Newco” shall be as mutually agreed by PROMIS and BCNI.
Article VIII. PRINCIPAL PLACE OF BUSINESS
The principal place of business of JV SERVICE/Newco shall be initially at the BCNI premises in Vancouver, BC, unless PROMIS and BCNI later decide otherwise. The Newco will be a BC corporation.
Article IX. INTELLECTUAL PROPERTY
Section 9.01. Ownership Of Intellectual Property Rights
| (a) | Background Intellectual Property All Background Intellectual Property including any proprietary materials provided and used in connection with the JV SERVICE and/or the Licensed Services shall remain the property of the Party introducing the same. Neither Party will make any representation or do any act which may be taken to indicate that it has any right, title or interest in or to the ownership or use of any of the Background Intellectual Property of the other party except under the terms of this Agreement. Each Party acknowledges and confirms that nothing contained in this Agreement shall give it any right, title or interest in or to the Background Intellectual Property of the other Party save as granted by this Agreement. The Parties agree that any Improvements to a Party’s Background Intellectual Property arising from the Joint Venture will be deemed to form part of that Party’s Background Intellectual Property. |
-9-
| (b) | Foreground Intellectual Property. |
| (i) | Each Party shall own any Foreground Intellectual Property developed solely by it, and shall grant to the JV SERVICE a royalty-free, perpetual non-exclusive license to such Foreground Intellectual Property that is necessary or useful to the JV SERVICE. Such license shall be transferable to any Newco established by the Parties to operate the JV SERVICE. The Party owning such Foreground Intellectual Property shall have the responsibility of registering, maintaining and enforcing any protection for such Foreground Intellectual Property. |
| (ii) | Any Foreground Intellectual Property jointly developed in the JV SERVICE prior to the establishment of any Newco shall be owned jointly by the Parties, with the intention that such ownership shall be transferred to any Newco which is established by the Parties to operate the business of the JV SERVICES. Any IP developed in the Newco will the owned by the Newco. In the interim, the Parties shall be jointly responsible for registering, maintaining and enforcing any protection for such Foreground Intellectual Property, and shall bear the costs equally. |
Article X. LICENSE
The JV SERVICE will have the non-exclusive license to use the Licensed Technology to make, market and sell in the Territory the Licensed Services contemplated by this Agreement. Each Party hereby grants to the JV SERVICE a royalty-based, non-exclusive licence for the duration of the Agreement to use its Background Intellectual Property for the sole purpose of providing the Licensed Services.
Article XI. REPORTS & RECORDS
Section 11.01. Reports and Other Deliveries.
Within thirty (30) days of the receipt of Revenue in respect of any services provided by the JV SERVICE, the JV SERVICE shall provide to PROMIS and
BCNI a written report detailing any Revenue received in respect of the JV SERVICE from any source and the amount thereof, and calculating the payment due to each Party in respect thereof.
Section 11.02. Books and Records.
The JV SERVICE shall keep complete, true and accurate books of account containing all particulars that may be necessary for the purpose of showing the amounts payable to PROMIS and BCNI. Such books of account shall normally be kept at the JV SERVICE’S principal place of business. Upon reasonable notice to the JV SERVICE during regular working hours, all applicable books and the supporting data shall be available for inspection by PROMIS or BCNI or their agents, on a confidential basis, at all reasonable times for up to five years following the end of the calendar year to which they pertain, for the purpose of verifying such JV SERVICE accounting of payments and compliance in other respects with this Agreement. If such inspection determines that any amount that should have been paid has not been paid, the JV SERVICE shall promptly pay such amount. If an additional payment is 5% or greater than the amount previously reported and paid for in the relevant period, then the JV SERVICE shall pay PROMIS/BCNI any such deficiency as well as the expenses of the examination. The cost of accounting services (initially at BCNI) shall be carried by the JV at cost.
-10-
Article XII. NO VIOLATION OF AGREEMENT DUE TO OTHER ACTIVITIES
Subject to any exclusivity provisions set forth in this Agreement, BCNI acknowledges that PROMIS is involved in research and development projects and agreements which involve the development, manufacturing and commercialization of biologic products and that this does not infringe this Agreement between BCNI and PROMIS. PROMIS acknowledge that BCNI is involved in the research and development, manufacturing and commercialization of diagnostic products primarily but not exclusively in the field of Neuroimmunology and that this does not infringe this agreement between BCNI and PROMIS.
Article XIII. STAGE ONE GOVERNANCE AND MANAGEMENT OF JV SERVICE
Section 13.01. Lab Director
| (a) | In Stage One, Hans Frykman of BCNI will serve as lab director at the Vancouver site, or BCNI will initially hire and manage capable staff, and will manage the operations of the accredited laboratories in Canada. Dr. Hans Frykman, will defer his fees for service until the JV is cash flow positive and when it can carry such cost without forsaking future opportunities. His professional fees, paid to Dr. Hans B Frykman Medical Corp., will at that time, have preference to paying shareholders or the JV partners. |
Section 13.02. Key Decisions
| (a) | In Stage One, the Parties will discuss all material decisions affecting the operations, expenditures and commitments of the JV SERVICE / newco, and PROMIS, BCNI or its designates shall not make any key decisions concerning such operations, expenditures and commitments without the prior written consent of PROMIS and BCNI. |
Article XIV. TERRITORY
The Territory in which the JV SERVICE will operate, and for which the licenses hereunder are granted is Worldwide
Article XV. TRANSPARENCY
Subject to applicable confidentiality provisions and Applicable Laws, all financial and commercial documentation is to be transparent, available at all times and to be open for review by both Parties whenever requested.
-11-
Article XVI. CONFIDENTIALITY
All Confidential Information disclosed by one Party to the other pursuant to this Agreement will be treated as strictly confidential, and will not be disclosed to anyone except the agents, employees and representatives of the Parties, and then only on a “need-to-know” basis for the purposes of fulfilling a Party’s role and responsibilities hereunder. Anyone to whom such a disclosure is made shall be subject to confidentiality restrictions to the Party receiving such Confidential Information that is no less stringent than that between the Parties hereto. Neither Party will use the Confidential Information of the other for any purpose other than as set out in this Agreement, and only in compliance with its obligations in the Joint Venture. A Party’s obligation of confidentiality hereunder is for a period of five (5) years after the expiry or termination of this Agreement or any subsequent agreement that supersedes or replaces it.
Article XVII. DUTY OF LOYALTY AND NON-COMPETE
Neither BCNI or ProMIS will engage in any business, venture or transaction, whether directly or indirectly, that might be competitive with the business of the Venture or that would be in direct conflict of interest to the Venture. Any potential conflicts of interest will be deemed an Involuntary Withdrawal.
A dissociated or withdrawing Member will not carry on a similar business to the business of the Venture within any established or contemplated market regions of the Venture for a period of at least one year from the date of dissociation or withdrawal.
Article XVIII. GOVERNING LAW
The interpretation and construction of this Agreement shall be governed by the laws of the Province of British Columbia, excluding any conflicts or choice of law rule or principle that might otherwise refer interpretation or construction of this Agreement to the substantive law of another jurisdiction.
Article XIX. PRESS RELEASES
Any press release pertaining to the JV SERVICE or this Agreement is subject to mutual approval of the Parties. Once Newco is funded and operational, a certain amount of secrecy to operations is warranted to better manage competition.
Article XX. SEVERABILITY; ENFORCEABILITY
If, for any reason, any part of this Agreement is adjudicated invalid, unenforceable or illegal by a court of competent jurisdiction, then such adjudication shall not, to the extent feasible, affect or impair, in whole or in part, the validity, enforceability or legality of any remaining portions of this Agreement. All remaining portions shall remain in full force and effect as if the original Agreement had been executed without the invalidated, unenforceable or illegal part.
-12-
Article XXI. INSURANCE & LIABILITY
Section 21.01. INSURANCE
JV SERVICE/BCNI/ProMIS/Newco, as the case may be, will procure such insurance e.g., commercial general liability insurance, paid by the JV/Newco. Once the JV/Newco is profitable and is operating in a clinical setting, then product liability, clinical trials, public liability insurance will be evaluated by both partners for suitability and cost vs. utility.
Any insurance will be placed with a reputable and financially secure insurance carrier and will:
| (a) | include PROMIS and BCNI, its officers, directors and employees as additional insured; |
| (b) | provide coverage regarding all relevant activities contemplated under this Agreement; |
| (c) | include a waiver of subrogation against PROMIS and BCNI, and a severability of interest and cross-liability clauses; |
| (d) | provide that the insurer will endeavour to notify PROMIS and BCNI at least 30 days prior to the cancellation of the policy; |
| (e) | JV SERVICE/Newco, on request, will provide to PROMIS and BCNI certificates of insurance evidencing the insurance coverages (and any renewals) of the JV SERVICE/Newco, and its subcontractors in respect of the activities of this Agreement; |
Section 21.02. DISCLAIMERS
| (a) | ‘As Is’ Basis: The Licensed Technology is provided by PROMIS and BCNI on an ‘as is’ basis, and neither BCNI or PROMIS makes any warranties, representations or conditions, express or implied, of any nature, and disclaims all warranties, representations or conditions, for the Licensed Technology or Confidential Information including, without limitation, merchantability, quality, fitness for any or a particular purpose, commercial utility or practical purpose, latent or other defects, infringement or non-infringement of Patents or other third party rights. |
| (b) | Disclaimer of Statutorily Implied Warranties: No legal or equitable warranties or conditions implied by law or convention under any domestic, foreign or international legal regime, or from a course of dealing or usage of trade, shall apply to this Agreement. The JV SERVICE/Newco and BCNI, as the case may be, acknowledges this disclaimer and is stopped from relying on any such representations, warranties or conditions against PROMIS. The JV/Newco and ProMIS acknowledge this disclaimer and is stopped from relying on any such representations, warranties or conditions against BCNI. |
-13-
| (c) | Licensee Shall Obtain Regulatory Permissions: JV SERVICE/Newco, or BCNI and ProMIS, as the case may be, shall obtain any authorizations, permits, certificates or other regulatory permissions which may be required in order for JV SERVICE/Newco or BCNI and ProMIS as the case may be, to legally carry out all of its activities under this Agreement, including but not limited to Commercialization. |
Article XXII. ENTIRE AGREEMENT
This Agreement together with any Appendices or attachments, reflects the entire agreement between the Parties with respect to the subject matter hereof and supersedes all other agreements between the Parties concerning such subject matter.
Article XXIII. MODIFICATIONS.
No amendment, modification or supplement of any provision of the Agreement shall be valid or effective unless made in writing and signed by a duly authorized officer or director of each party. No provision of the Agreement shall be waived by any act, omission or knowledge of any party or its agents or employees except by an instrument in writing expressly waiving such provision and signed by a duly authorized officer or director of the waiving party.
Article XXIV. COUNTERPARTS.
The Agreement may be executed in any number of counterparts. A signed Agreement received by a Party hereto via email will be deemed an original, and binding upon the Party who signed it.
Article XXV. TIME.
Time is of the essence in the performance of obligations of this Agreement.
Article XXVI. NOTICES
Any notice to be given under this Agreement must be in writing and delivered either in person, by any method of mail (postage prepaid) requiring return receipt, or by overnight courier or facsimile confirmed thereafter by any of the foregoing, to the Party to be notified at its address given below, or at any address such Party has previously designated by prior written notice to the other.
If to BCNI, notices must be addressed to:
BC Neuroimmunology Lab Inc.
Attn. Dr. Hans B Frykman
C/O MORTON LAW LLP
Corporate & Securities Lawyers
1200-750 W. Pender Street
Vancouver, British Columbia
Canada, V6C 2T8
-14-
If to PROMIS, notices must be addressed to:
ProMIS Neurosciences, Inc.
Attn. Dr. Elliot Goldstein
1920 Yonge St, Suite 200
Toronto Ont. M4S 3E2
In the event of a change of notice address, recipient or both, a Party shall provide the other Party written notice setting forth the new address and/or recipient, as appropriate
Article XXVII. TERM AND TERMINATION
Section 27.01. Term
This Agreement shall come into effect on the Effective Date first written above and shall endure until it is terminated on one of the following possible grounds.
Section 27.02. Termination
This Agreement may be terminated: (i) by mutual agreement of the Parties; (ii) for material breach by one of the Parties hereto of its respective obligations under this Agreement; (iii) if the Parties enter into Definitive Agreements superseding or replacing this Agreement (for instance, upon entering Stage Two of the Joint Venture); or (iv) if JV SERVICE is wound up, acquired by or merged with another entity, or otherwise ceases to exist or to do business as contemplated herein.
Section 27.03. Notice of Termination
The Party seeking to terminate this Agreement shall provide written notice to the other Party, such written notice to specify in reasonable detail the reasons for termination. Any termination based on clause (ii) above, namely material breach, shall provide at least 90 Business Days for the breaching party to cure the material breach before such termination is deemed effective.
Section 27.04. Effects of Termination
If this Agreement is terminated, all licenses of the Intellectual Property Rights, Licensed Services and Licensed Technology granted by ProMIS or BCNI in this Agreement shall be terminated automatically and all rights shall revert to PROMIS or BCNI respectively, unless either party agrees, in writing, in its exclusive judgement and discretion to extend the time period for (ii) above, or to modify this Agreement to allow for its continuance
If this Agreement is terminated, all licenses of the Intellectual Property Rights, Licensed Services and Licensed Technology granted by BCNI in this Agreement shall be terminated automatically and all rights shall revert to BCNI, unless BCNI agrees, in writing, in its exclusive judgement and discretion to extend the time period for (ii) above, or to modify this Agreement to allow for its continuance
Article XXVIII. ASSIGNMENT
This Agreement may not be assigned by a Party without the prior written consent of the other Party except in connection with the sale or transfer of all or substantially all of the assets of such Party relevant to the subject matter hereof, or in connection with a corporate reorganization, provided that the other Party is notified of the assignment and the assignee expressly undertakes in writing to be bound by all of the provisions of this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement by their respective, duly authorized representatives as of the date first written above.
| ProMIS Neurosciences Inc. | BC Neuroimmunology Inc |
| /s/ Elliot Goldstein | /s/ Hans Frykman |
| NAME: Elliot Goldstein, MD | NAME: Dr. Hans Frykman |
| TITLE: CEO | TITLE: CEO |
-15-
APPENDIX A
LICENSED TECHNOLOGY: PATENTS AND APPLICATIONS
ProMIS
[LIST OF RELEVANT ProMIS PATENTS AND APPLICATIONS]
BCNI
[LIST OF RELEVANT BCNI PATENTS AND APPLICATIONS]