Item 1.01Entry into a Material Definitive Agreements.
Amendment to Amended and Restated License Agreement
On September 22, 2020, Cell Science Holdings Ltd., (“Cell Science”) and Bakhu Holdings Corp. (“Bakhu”), entered into an Amendment to the Amended and Restated Patent Technology License Agreement (the “Amendment”). Cell Science and Bakhu are parties to that certain Patent and Technology License Agreement, dated December 20, 2018, which on December 31, 2019, was restated in its entirety by the Amended and Restated Patent and Technology License Agreement (the “Restated License”, and was further amended by the Amendment (collectively the “Amended Restated License Agreement”). Pursuant to the Amended Restated License Agreement, Cell Science is referred to as the Licensor and Bakhu is referred to as the Licensee.
Pursuant to the Amendment, the Restated License was revised and amended as follows:
1.Exhibit 1 attached to the Amendment entitled “Revised Laboratory Testing Requirements for Section 4.2” (“Efficacy Demonstration”) fully replaces and supersedes the Exhibit 1 attached to the Restated License.
2.Section 4.1 of the Restated License was amended to provide that 190,000,000 of the 210,000,000 shares of Bakhu Common Stock previously delivered to Cell Science by Bakhu shall remain subject to forfeiture (the “Contingent Shares”), and 20,000,000 shares will be free from possible forfeiture and be released to Cell Science (the “Released Shares”).
3.To clarify the criteria and procedure to be applied in the Efficacy Demonstration in determining the percentage of achievement against the Standard Results claim by the Inventor, which would be used to calculate the number of Contingent Shares to be forfeited and delivered by Cell Science to Bakhu, as provided in Section 4.1 of the Amended Restated License Agreement, and the amount of the reduction to
the one-time payment of U.S. $3.5 million, less an amount equal to all cash and expense advances to Cell Science representatives to the Science Team.
4.To provide that the one-time cash payment under the Amended Restated License Agreement, as adjusted, upon the final determination of the percent of achievement, will be paid pursuant to the promissory note to be executed by Bakhu in favor of Cell Science, in the form attached as Exhibit 2 to the Amendment.
5.To provide that concurrently with the execution of the Amendment, Cell Science will execute, have acknowledged, and deliver to Bakhu the Patent and Technology License in the form attached as Exhibit 3, to the Amendment, which will be held in trust by Bakhu. Upon Bakhu’s delivery of the License Consideration as provided in the Amendment, Bakhu will record the form of Patent and Technology License in the form of Exhibit 3 attached to the Amendment.
6.To provide that upon payment of the License Consideration as provided in the Amendment, Bakhu will be deemed to have satisfied all representations, warranties, terms, covenants, and conditions required under the Amended Restated License Agreement to have been performed, satisfied, or met by Bakhu under the Amended Restated License Agreement. Thereafter, no right, remedy, cause of action, or claim for relief will be based thereon. No further misrepresentation, statement, warranty, act, failure to make any statement, action, or failure to act by Bakhu, including failure to fully and timely perform any term, covenant, or condition of the Note, including payment of all amounts due, will alter or affect in any way the right and license granted to Bakhu hereunder or the rights granted by Bakhu to sublicensees. Notwithstanding the foregoing, the Amended Restated License Agreement provides that if Bakhu is found in any final, non-appeal order by a court having jurisdiction in the premises, liable to Cell Science for any breach of or default under the Amended Restated License Agreement or any material misrepresentation or failure to state a material fact required to be stated in order to make any statement that is made not misleading, Cell Science’s remedy will be limited to substitution as sublicensor under any sublicense granted by Bakhu, subject to generally prevailing equitable principles and applicable rights and limitation under U.S. Bankruptcy Law
7.To provide that any breach of or default by Bakhu under Section 7 of the Restated License, “Patent Expenses and Prosecution”, will not alter, affect, or result in the forfeiture of the rights and license granted hereunder or any sublicense or similar rights granted by Bakhu in accordance with its rights and license.
The foregoing summary descriptions of the terms of the Amendment is a summary only and does not purport to be complete, may not contain all information that is of interest to the reader and is qualified in its entirety by reference to the full text such Amendment, attached as Exhibit 10.01 to this Current Report on Form 8-K.
Agreement, Assignment, Waiver and Estoppel
On September 22, 2020, Peter Whitton (“Whitton”), Mentone Ltd., a corporation organized under the laws of England and Wales (“Mentone”), Cell Science, and its stockholders Inter-M Traders FZ LLE (“Inter-M”), The OZ Corporation (“OZ”), and Mentone, along with Bakhu, entered into an Agreement, Assignment, Waiver and Estoppel (the “Estoppel Agreement”). Pursuant to the Estoppel Agreement Whitton and Mentone acknowledged and confirmed their previous successive assignments of the Intellectual Property (as defined in the Estoppel) to Cell Science and waived any right of reversion or other claim to regain any right, title or interest in the Intellectual Property. Additionally the parties ratified and acknowledged that Cell Science is the sole ownership of the Intellectual Property and confirmed the license by Cell Science, as Licensor of the Intellectual Property and the Bakhu Licensed Technology (as defined in the Estoppel), to Bakhu, as licensee, pursuant to the Amended Restated License Agreement.
The foregoing summary descriptions of the terms of the Estoppel Agreement is a summary only and does not purport to be complete, may not contain all information that is of interest to the reader and is qualified in its entirety by reference to the full text of the Estoppel Agreement, attached as Exhibit 10.02 to this Current Report on Form 8-K.
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Indemnification Agreement
In order to protect its current officers and directors and to assure them of adequate protection supplemental to and in furtherance of the protection provided by the Articles of Incorporation, the Bylaws and the applicable Nevada law, on September 22, 2020, Bakhu entered into Indemnification Agreements with its directors, Thomas K. Emmitt, Peter Whitton, Aristotle Popolizio and Evripides Drakos, in the form attached as Exhibit 10.03 to this Current Report on Form 8-K.
Assignment and Assumption Agreement
OZ and Bus Dev Centre, Inc., a Nevada Corporation ("BDC") are parties to that certain Consulting Agreement dated August 15, 2018, as revised on August 17, 2018 (the "BDC Consulting Agreement") under which BDC provides advisory and consultancy services to OZ in furtherance of the Efficacy Demonstration on behalf of Bakhu, including without limitation services related to, the validation and commercialization of the licensed science, requirements for Bakhu to prepare a compliant sublicensing and business model, guidance for the compliant operations of a commercial facility by Bakhu, and general overview of prospective strategies in the Cannabis and CBD related industry.
Bakhu, OZ, and BDC have determined that the services provided by BDC to OZ have been, and will continue to be, in furtherance of the interest of Bakhu, and on September 22, 2020, Bakhu and OZ and BDC entered an Assignment and Assumption Agreement (the “Assignment and Assumption Agreement”) under which OZ transferred and assigned to Bakhu, and Bakhu assumed all rights and obligations to BDC under the BDC Consulting Agreement, and BDC will consents to such assignment and assumption of the BDC Consulting Agreement.
The foregoing summary descriptions of the terms of the Assignment and Assumption Agreement is a summary only and does not purport to be complete, may not contain all information that is of interest to the reader and is qualified in its entirety by reference to the full text of such agreement, attached as Exhibit 10.04 to this Current Report on Form 8-K.
Office Cost Sharing Agreement
On September 22, 2020, Bakhu and OZ entered into an Office Cost Sharing Agreement under which Bakhu agrees to share the office costs and expenses associated with the office space, equipment, telephone and internet service, utilities, answer services and support staff provided by OZ to Bakhu for a fixed amount of $34,000 per month. Bakhu uses these facilities for Thomas K. Emmitt the President and CEO of Bakhu, Bakhu’s accounting staff, and Bus Dev Centre, Inc. and its principal, Donald Clark, who provides advisory and consulting services in furtherance of, among other things, the efficacy demonstration and Bakhu’s anticipated sublicensing efforts.
The foregoing summary descriptions of the terms of the Office Cost Sharing Agreement is a summary only and does not purport to be complete, may not contain all information that is of interest to the reader and is qualified in its entirety by reference to the full text of such agreement, attached as Exhibit 10.05 to this Current Report on Form 8-K.