Item 1.01. Entry into a Material Definitive Agreement.
As previously disclosed by Universal Biosensors, Inc. (the “Company”), the Company’s wholly-owned operating subsidiary, Universal Biosensors Pty Ltd (“UBS”) (the Company and UBS collectively referred to as “UBI”), and Siemens Healthcare Diagnostics Inc. (“Siemens”) (UBI and Siemens collectively referred to as the “Parties”) are parties to:
| | • | | a Collaboration Agreement dated September 9, 2011, as amended on September 20, 2012 (the “Collaboration Agreement”) (a copy of which was incorporated by reference to our Quarterly Report onForm 10-Q filed on November 3, 2011 as Exhibit 10.20), pursuant to which the parties are collaborating in the development of coagulation-related test strip products (the “Original Products”), and associated readers for the Original Products (the “Readers”) for commercialization by Siemens in thehospital point-of-care and ambulatory care coagulation markets; |
| | • | | a Supply Agreement dated September 20, 2012, pursuant to which UBS will manufacture and supply the Original Products to Siemens (the “Supply Agreement”) (a copy of which is incorporated by reference to our Quarterly Report onForm 10-Q/A filed on February 4, 2013 as Exhibit 10.2); |
| | • | | a letter agreement titled “Supplemental Agreement – Reader Product Support Obligations and Responsibilities” dated September 20, 2012 (the “Reader Letter”) (a copy of which was incorporated by reference to our Quarterly Report onForm 10-Q/A filed on February 4, 2013 as Exhibit 10.3); |
| | • | | a letter agreement dated December 12, 2014 (the “December 2014 Letter”); and |
| | • | | a letter agreement titled “Conditional Prepayment of Milestones and other amendments” dated March 9, 2016 (the “Prepayment Letter”) (a copy of which was incorporated by reference to our Quarterly Report onForm 10-Q filed on April 21, 2016 as Exhibit 10.2). |
In addition, on February 8, 2019, the Parties entered into a term sheet agreement (the “Term Sheet Agreement”), which expires on September 30, 2019 unless mutually extended by the Parties, with respect to the following matters:
The Term Sheet Agreement provides that the Parties have agreed to negotiate in good faith for a specified period (subject to extension if mutually agreed) (the “Negotiation Period”) possible modifications to their commercial relationship, including the Collaboration and the Supply Agreements.
Under the Term Sheet Agreement, and to facilitate their negotiations, UBI has agreed not to make any dividend payments or similar distributions, or engage in M&A transactions (subject to an exception which would allow the Company or UBS to enter into M&A transactions where the directors of the Company determine, in good faith, that not proceeding with such a transaction would be inconsistent with their fiduciary duties).
Under the Term Sheet Agreement, and to facilitate their negotiations, UBI’s obligations to apply commercially reasonable efforts and to apply reasonably necessary resources to certain research and development activities under the Collaboration Agreement are suspended during the Negotiation Period.
On September 9, 2019, the Parties entered into executed binding term sheets modifying their commercial relationship relating to coagulation products (the “Term Sheets”) with respect to the following matters:
The Term Sheets restore the Parties’ commercial relationship and provide for cooperation between the Parties to retain and grow the incumbent user base on anon-exclusive basis. Siemens will support this with a minimum strip purchase guarantee over 42 months on favorable payment terms, and manufacturing assistance which will enable a reduction in manufacturing costs.
The Term Sheet further enables UBI to pursue partnership and distribution opportunities beyond Siemens, with access to global markets and market segments, including the hospitalpoint-of-care segment which was previously exclusive to Siemens.
