Exhibit 10.3

 

SUPPORT AGREEMENT

 

THIS AGREEMENT made as of the 26th day of February, 2015.

 

AMONG:

 

BIONIK LABORATORIES CORP.
a corporation existing under the laws of the State of Delaware
(hereinafter referred to as “Bionik US”)

 

- and -

 

BIONIK ACQUISITION INC.,
a company existing under the laws of Canada
(hereinafter referred to as “Acquireco”)

 

- and -

 

BIONIK LABORATORIES INC.,
a corporation existing under the laws of Canada
(hereinafter referred to as the “Corporation”)

 

RECITALS:

 

AIn connection with (i) a private placement offering of a minimum of 7,500,000
units and a maximum of 16,000,000 units of Bionik US (each unit consisting of
one (1) share of common stock of Bionik US and one (1) warrant to purchase one
(1) share of common stock of Bionik US) and a “reverse takeover” (or similar
transaction) of Bionik US by the shareholders of the Corporation (the “Unit
Offering”) and (ii) the articles of amendment of the Corporation dated
February 26, 2015 (“Articles of Amendment”), Exchangeable Shares are to be
issued to the holders of common shares of the Corporation pursuant to the
Articles of Amendment and will be issuable to holders of rights to acquire
Common Shares upon the due exercise of such rights and further Exchangeable
Shares may be issued by the Corporation from time to time in the future for such
purposes as the Corporation may require.

 

BBionik US, Acquireco and the Corporation have agreed to enter into this
agreement in connection with the Unit Offering and the issuance of Exchangeable
Shares to make appropriate provision and to establish a procedure whereby each
of Bionik US and Acquireco will take certain actions and make certain payments
and deliveries necessary to ensure that Acquireco and the Corporation will be
able to make certain payments and to deliver or cause to be delivered Bionik US
Shares in satisfaction of the obligations of the Corporation and Acquireco,
respectively, with respect to the payment and satisfaction of the Dividend
Amount, Liquidation Amount, Redemption Price and Retraction Price all in
accordance with the Share Provisions.

 

 

 

 

In consideration of the foregoing and the mutual agreements contained herein and
other good and valuable consideration (the receipt and sufficiency of which are
acknowledged), the parties agree as follows:

 

Article 1
DEFINITIONS AND INTERPRETATION

 

1.1Defined Terms

 

Each initially capitalized term used and not otherwise defined herein shall have
the meaning ascribed thereto in the rights, privileges, restrictions and
conditions (collectively, the “Share Provisions”) attaching to the Exchangeable
Shares as set out in the Articles of Amendment. In this agreement, “including”
means including without limitation and “includes” means includes without
limitation.

 

1.2Interpretation Not Affected by Headings

 

The division of this agreement into Articles, Sections and other portions and
the insertion of headings are for convenience of reference only and do not
affect the construction or interpretation of this agreement. Unless otherwise
specified, references to an “Article” or “Section” refer to the specified
Article or Section of this agreement.

 

1.3Number, Gender

 

Words importing the singular number only shall include the plural and vice
versa. Words importing any gender shall include all genders.

 

1.4Date for any Action

 

If any date on which any action is required to be taken under this agreement is
not a business day, such action shall be required to be taken on the next
succeeding business day. For the purposes of this agreement, a “business day”
means any day other than a Saturday, Sunday, a public holiday or a day on which
commercial banks are not open for business in Toronto, Ontario or New York, New
York under applicable law.

 

Article 2
COVENANTS OF BIONIK US AND THE CORPORATION

 

2.1Covenants Regarding Exchangeable Shares

 

So long as any Exchangeable Shares not owned by Bionik US or its subsidiaries
are outstanding, Bionik US shall:

 

(a)not declare or pay any dividend or make any other distribution on the
Bionik US Shares unless:

 

- 2 -

 

 

 

(i)the Corporation shall (A) on the same day declare or pay, as the case may be,
an equivalent dividend or other distribution (as provided for in the Share
Provisions) on the Exchangeable Shares (an “Equivalent Dividend”), and (B) have
sufficient money or other assets or authorized but unissued securities available
to enable the due declaration and the due and punctual payment, in accordance
with applicable law, of any such Equivalent Dividend, or

 

(ii)the Corporation shall, in the case of a dividend that is a stock dividend on
the Bionik US Shares (A) issue such number of Exchangeable Shares to holders of
Exchangeable Shares for each Exchangeable Share as is equal to the number of
Bionik US Shares to be paid on each Bionik US Share or (B) subdivide the
Exchangeable Shares in lieu of a stock dividend thereon (as provided for in the
Share Provisions) in a similar proportion to that in respect of the Bionik US
Shares (an “Equivalent Stock Subdivision”), and (C) have sufficient authorized
but unissued securities available to enable such issuance of Exchangeable Shares
or the Equivalent Stock Subdivision;

 

(b)advise the Corporation sufficiently in advance of the declaration by
Bionik US of any dividend or other distribution on the Bionik US Shares and take
all such other actions as are necessary or desirable, in co-operation with the
Corporation, to ensure that:

 

(i)the respective declaration date, record date and payment date for an
Equivalent Dividend on the Exchangeable Shares shall be the same as the
declaration date, record date and payment date for the corresponding dividend or
other distribution on the Bionik US Shares, or

 

(ii)the record date and effective date for an Equivalent Stock Subdivision shall
be the same as the record date and payment date for the corresponding stock
dividend on the Bionik US Shares;

 

(c)ensure that the record date for any dividend or other distribution declared
on the Bionik US Shares is not less than seven (7) days after the declaration
date of such dividend or other distribution;

 

(d)take all such actions and do all such things as are necessary to enable and
permit the Corporation, in accordance with applicable law, to pay and otherwise
perform its obligations with respect to the satisfaction of the Liquidation
Amount, the Retraction Price or the Redemption Price in respect of each issued
and outstanding Exchangeable Share (other than Exchangeable Shares owned by
Bionik US or its subsidiaries) upon the liquidation, dissolution or winding-up
of the Corporation or any other distribution of the assets of the Corporation
among its shareholders for the purpose of winding up its affairs, the delivery
of a Retraction Request by a holder of Exchangeable Shares or a redemption of
Exchangeable Shares by the Corporation, as the case may be, including all such
actions and all such things as are necessary or desirable to enable and permit
the Corporation to cause to be delivered Bionik US Shares to the holders of
Exchangeable Shares in accordance with the provisions of Sections 5, 6 or 7, as
the case may be, of the Share Provisions;

 

- 3 -

 

 

(e)take all such actions and do all such things as are necessary or desirable to
enable and permit Acquireco, in accordance with applicable law, to perform its
obligations arising upon the exercise by it of the Liquidation Call Right, the
Retraction Call Right, the Change of Law Call Right or the Redemption Call
Right, including all such actions and all such things as are necessary or
desirable to enable and permit Acquireco to cause to be delivered Bionik US
Shares to the holders of Exchangeable Shares in accordance with the provisions
of the Liquidation Call Right, the Retraction Call Right, the Change of Law Call
Right or the Redemption Call Right, as the case may be;

 

(f)except in connection with any event, circumstance or action which causes or
could cause the occurrence of a Redemption Date, not exercise its vote as a
shareholder to initiate the voluntary liquidation, dissolution or winding up of
the Corporation or any other distribution of the assets of the Corporation among
its shareholders for the purpose of winding up its affairs, nor take any action
or omit to take any action that is designed to result in the liquidation,
dissolution or winding up of the Corporation or any other distribution of the
assets of the Corporation among its shareholders for the purpose of winding up
its affairs; and

 

(g)use all reasonable efforts to cause the Corporation, Acquireco and the
Transfer Agent to take all such actions and do all such things as are reasonably
necessary or desirable to enable and permit the exchange of their Exchangeable
Shares subject to and in accordance with the Share Provisions and the Voting and
Exchange Trust Agreement.

 

2.2Segregation of Funds

 

Bionik US shall deposit or cause the Corporation to deposit a sufficient amount
of funds in a separate account of the Corporation and segregate a sufficient
amount of such other assets and property as is necessary to enable the
Corporation to pay dividends when due and to pay or otherwise satisfy its
respective obligations under Sections 3, 5, 6, 7 and 9 of the Share Provisions,
as applicable.

 

2.3Reservation of Bionik US Shares

 

Bionik US hereby represents, warrants and covenants in favour of the Corporation
and Acquireco that Bionik US has reserved for issuance and shall, at all times
while any Exchangeable Shares (other than Exchangeable Shares held by Bionik US
or its subsidiaries) are outstanding, keep available, free from pre-emptive and
other rights, out of its authorized and unissued capital stock such number of
Bionik US Shares (or other shares or securities into which Bionik US Shares may
be reclassified or changed as contemplated by Section 2.7):

 

(a)as is equal to the sum of (i) the number of Exchangeable Shares issued and
outstanding from time to time and (ii) the number of Exchangeable Shares
issuable upon the exercise of all rights to acquire Exchangeable Shares
outstanding from time to time; and

 

- 4 -

 

 

(b)as are now and may hereafter be required to enable and permit Bionik US to
meet its obligations under the Voting and Exchange Trust Agreement and under any
other security or commitment pursuant to which Bionik US may now or hereafter be
required to issue Bionik US Shares, to enable and permit Acquireco or Bionik US,
as the case may be, to meet its obligations under each of the Liquidation Call
Right, the Retraction Call Right, the Change of Law Call Right and the
Redemption Call Right and to enable and permit the Corporation to meet its
obligations hereunder and under the Share Provisions.

 

2.4Notification of Certain Events

 

In order to assist Bionik US to comply with its obligations hereunder and to
permit Acquireco or Bionik US to exercise, as the case may be, the Liquidation
Call Right, the Retraction Call Right, the Change of Law Call Right and the
Redemption Call Right, the Corporation shall notify Bionik US and Acquireco of
each of the following events at the time set forth below:

 

(a)in the event of any determination by the Board of Directors to institute
voluntary liquidation, dissolution or winding-up proceedings with respect to the
Corporation or to effect any other distribution of the assets of the Corporation
among its shareholders for the purpose of winding up its affairs, at least sixty
(60) days prior to the proposed effective date of such liquidation, dissolution,
winding-up or other distribution;

 

(b)promptly, upon the earlier of receipt by the Corporation of notice of and the
Corporation otherwise becoming aware of any threatened or instituted claim,
suit, petition or other proceedings with respect to the involuntary liquidation,
dissolution or winding-up of the Corporation or to effect any other distribution
of the assets of the Corporation among its shareholders for the purpose of
winding up its affairs;

 

(c)promptly, upon receipt by the Corporation of a Retraction Request;

 

(d)on the same date on which notice of redemption is given to holders of
Exchangeable Shares, upon the determination of a Redemption Date in accordance
with the Share Provisions;

 

(e)as soon as practicable upon the issuance by the Corporation of any
Exchangeable Shares or rights to acquire Exchangeable Shares (other than the
issuance of Exchangeable Shares and rights to acquire Exchangeable Shares
pursuant to the Arrangement); and

 

(f)promptly, upon receiving notice of a Change of Law.

 

- 5 -

 

 

2.5Delivery of Bionik US Shares to the Corporation and Acquireco

 

In furtherance of its obligations, upon notice from the Corporation or Acquireco
of any event that requires the Corporation or Acquireco to cause to be delivered
Bionik US Shares to any holder of Exchangeable Shares, Bionik US shall forthwith
allot, issue and deliver or cause to be delivered to the relevant holder of
Exchangeable Shares as directed by the Corporation or Acquireco the requisite
number of Bionik US Shares to be allotted to, received by, and issued to or to
the order of, the former holder of the surrendered Exchangeable Shares (but, for
the avoidance of doubt, not to the Corporation or Acquireco). All such Bionik US
Shares assuming the delivery of the applicable Exchangeable Shares by the
relevant holder thereof in accordance with the Share Provisions, shall be duly
authorized and validly issued as fully paid and shall be free and clear of any
Lien. In consideration of the issuance and delivery of each such Bionik US
Share, the Corporation or Acquireco, as the case may be, shall ascribe a cash
amount or pay a purchase price (whether in cash, securities or other property)
equal to the fair market value of such Bionik US Shares.

 

2.6Qualification of Bionik US Shares and Novation of Registration Rights
Agreement

 

Bionik US shall use its commercially reasonable efforts (which, for greater
certainty, shall not require Bionik US to consent to a term or condition of an
approval or consent which Bionik US reasonably determines could have a
materially adverse effect on Bionik US or its subsidiaries) to cause all
Bionik US Shares (or such other shares or securities) to be delivered hereunder
to be listed, quoted or posted for trading on all stock exchanges and quotation
systems on which outstanding Bionik US Shares (or such other shares or
securities) have been listed by Bionik US and remain listed and are quoted or
posted for trading at such time.

 

Concurrently with the execution of this Agreement, Bionik US shall execute a
novation agreement, substantially in the form attached to Schedule “A” hereto.

 

2.7Economic Equivalence

 

So long as any Exchangeable Shares not owned by Bionik US or its subsidiaries
are outstanding:

 

(a)Bionik US shall not without prior approval of the Corporation and the prior
approval of the holders of the Exchangeable Shares given in accordance with
Section 12(2) of the Share Provisions:

 

(i)issue or distribute Bionik US Shares (or securities exchangeable for or
convertible into or carrying rights to acquire Bionik US Shares) to the holders
of all or substantially all of the then outstanding Bionik US Shares by way of
stock dividend or other distribution, other than an issue of Bionik US Shares
(or securities exchangeable for or convertible into or carrying rights to
acquire Bionik US Shares) to holders of Bionik US Shares (A) who exercise an
option to receive dividends in Bionik US Shares (or securities exchangeable for
or convertible into or carrying rights to acquire Bionik US Shares) in lieu of
receiving cash dividends, or (B) pursuant to any dividend reinvestment plan or
similar arrangement; or

 

- 6 -

 

 

(ii)issue or distribute rights, options or warrants to the holders of all or
substantially all of the then outstanding Bionik US Shares entitling them to
subscribe for or to purchase Bionik US Shares (or securities exchangeable for or
convertible into or carrying rights to acquire Bionik US Shares); or

 

(iii)issue or distribute to the holders of all or substantially all of the then
outstanding Bionik US Shares (A) shares or securities (including evidence of
indebtedness) of Bionik US of any class (other than Bionik US Shares or
securities convertible into or exchangeable for or carrying rights to acquire
Bionik US Shares), or (B) rights, options, warrants or other assets other than
those referred to in Subsection 2.7(a)(ii) or (C) assets of Bionik US or any
direct or indirect subsidiary of Bionik US,

 

unless in each case the economic equivalent on a per share basis of such rights,
options, securities, shares, evidences of indebtedness or other assets is issued
or distributed simultaneously to holders of the Exchangeable Shares and at least
ten (10) days prior written notice thereof is given to the holders of
Exchangeable Shares; provided that, for greater certainty, the above
restrictions shall not apply to any securities issued or distributed or that may
be issued or distributed by Bionik US in order to give effect to and to
consummate, is in furtherance of or is otherwise in connection with the
transactions contemplated by, and in accordance with, the Unit Offering and the
securities issued thereunder.

 

(b)Bionik US shall not without the prior approval of the Corporation and the
prior approval of the holders of the Exchangeable Shares given in accordance
with Section 12(2) of the Share Provisions:

 

(i)subdivide, redivide or change the then outstanding Bionik US Shares into a
greater number of Bionik US Shares; or

 

(ii)reduce, combine, consolidate or change the then outstanding Bionik US Shares
into a lesser number of Bionik US Shares; or

 

(iii)reclassify or otherwise change Bionik US Shares or effect a sale of all or
substantially all of the assets of Bionik US (on a consolidated basis) or effect
an amalgamation, merger, arrangement, reorganization or other transaction
affecting Bionik US Shares;

 

unless the same or an economically equivalent change shall (subject to the
receipt of all required approvals) simultaneously be made to, or in the rights
of the holders of, the Exchangeable Shares and at least ten (10) days prior
written notice is given to the holders of Exchangeable Shares; provided that,
for greater certainty, the above restrictions shall not apply to any securities
issued or distributed or that may be issued or distributed by Bionik US in order
to give effect to and to consummate, is in furtherance of or is otherwise in
connection with the transactions contemplated by, and in accordance with, the
Unit Offering and the securities issued thereunder.

 

- 7 -

 

 

(c)Bionik US shall ensure that the record date for any event referred to in
Subsection 2.7(a) or Subsection 2.7(b), or (if no record date is applicable for
such event) the effective date for any such event, is not less than five
business days after the date on which such event is declared or announced by
Bionik US (with contemporaneous notification thereof by Bionik US to the
Corporation).

 

(d)The Board of Directors of the Corporation shall determine, acting in good
faith and in its sole discretion, economic equivalence for the purposes of any
event referred to in Subsection 2.7(a) or Subsection 2.7(b) and each such
determination shall be conclusive and binding on Bionik US. In making each such
determination, the following factors shall, without excluding other factors
determined by the Board of Directors of the Corporation to be relevant, be
considered by the Board of Directors of the Corporation:

 

(i)in the case of any stock dividend or other distribution payable in Bionik US
Shares, the number of such shares issued in proportion to the number of
Bionik US Shares previously outstanding;

 

(ii)in the case of the issuance or distribution of any rights, options or
warrants to subscribe for or purchase Bionik US Shares (or securities
exchangeable for or convertible into or carrying rights to acquire Bionik US
Shares), the relationship between the exercise price of each such right, option
or warrant and the Current Market Price of a Bionik US Share;

 

(iii)in the case of the issuance or distribution of any other form of property
(including any shares or securities of Bionik US of any class other than
Bionik US Shares, any rights, options or warrants other than those referred to
in Subsection 2.7(d)(ii), any evidences of indebtedness of Bionik US or any
assets of Bionik US), the relationship between the fair market value (as
determined by the Board of Directors of the Corporation in the manner above
contemplated) of such property to be issued or distributed with respect to each
outstanding Bionik US Share and the Current Market Price of a Bionik US Share;

 

(iv)in the case of any subdivision, redivision or change of the then outstanding
Bionik US Shares into a greater number of Bionik US Shares or the reduction,
combination, consolidation or change of the then outstanding Bionik US Shares
into a lesser number of Bionik US Shares or any amalgamation, merger,
arrangement, reorganization or other transaction affecting Bionik US Shares, the
effect thereof upon the then outstanding Bionik US Shares; and

 

(v)in all such cases, the general Canadian taxation consequences of the relevant
event to Canadian resident holders of Exchangeable Shares to the extent that
such consequences may differ from the taxation consequences to holders of
Bionik US Shares as a result of differences between taxation laws of Canada and
the United States (except for any differing consequences arising as a result of
differing withholding taxes and marginal taxation rates and without regard to
the individual circumstances of holders of Exchangeable Shares).

 

- 8 -

 

 

(e)The Corporation agrees that, to the extent required, upon due notice from
Bionik US, the Corporation shall use its best efforts to take or cause to be
taken such steps as may be necessary for the purposes of ensuring that
appropriate dividends are paid or other distributions are made by the
Corporation, or subdivisions, redivisions or changes are made to the
Exchangeable Shares, in order to implement the required economic equivalence
with respect to the Bionik US Shares and Exchangeable Shares as provided for in
this Section 2.7.

 

2.8Tender Offers

 

In the event that a tender offer, share exchange offer, issuer bid, take-over
bid or similar transaction with respect to Bionik US Shares (a “Tender Offer”)
is proposed by Bionik US or is proposed to Bionik US or its shareholders and is
recommended by the board of directors of Bionik US, or is otherwise effected or
to be effected with the consent or approval of the board of directors of
Bionik US, and the Exchangeable Shares are not redeemed by the Corporation or
purchased by Acquireco pursuant to the Redemption Call Right, Bionik US shall
expeditiously and in good faith take all such actions and do all such things as
are necessary or desirable to enable and permit holders of Exchangeable Shares
(other than Bionik US and its subsidiaries) to participate in such Tender Offer
to the same extent and on an economically equivalent basis as the holders of
Bionik US Shares, without discrimination. Without limiting the generality of the
foregoing, Bionik US shall expeditiously and in good faith take all such actions
and do all such things as are necessary or desirable to ensure that holders of
Exchangeable Shares may participate in each such Tender Offer without being
required to retract Exchangeable Shares as against the Corporation (or, if so
required, to ensure that any such retraction, shall be effective only upon, and
shall be conditional upon, the closing of such Tender Offer and only to the
extent necessary to tender or deposit to the Tender Offer). Nothing herein shall
affect the rights of the Corporation to redeem (or Acquireco or Bionik US to
purchase pursuant to the Redemption Call Right) Exchangeable Shares, as
applicable, in the event of a Bionik US Control Transaction.

 

2.9Ownership of Outstanding Shares

 

Without the prior approval of the Corporation and the prior approval of the
holders of the Exchangeable Shares given in accordance with Section 12(2) of the
Share Provisions, Bionik US covenants and agrees in favour of the Corporation
that, as long as any outstanding Exchangeable Shares are owned by any person
other than Bionik US or any of its subsidiaries, Bionik US shall be and remain
the direct or indirect beneficial owner of all issued and outstanding voting
shares in the capital of the Corporation and Acquireco and shall ensure that the
Corporation and Acquireco do not dispose of any material assets. Notwithstanding
the foregoing, but subject to Article 3, Bionik US shall not be in violation of
this Section 2.9 if any person or group of persons acting jointly or in concert
acquire all or substantially all of the assets of Bionik US or the Bionik US
Shares pursuant to any merger of Bionik US pursuant to which Bionik US was not
the surviving corporation.

 

- 9 -

 

 

2.10Bionik US and Subsidiaries Not to Vote Exchangeable Shares

 

Bionik US covenants and agrees that it shall appoint and cause to be appointed
proxyholders with respect to all Exchangeable Shares held by it and its
subsidiaries for the sole purpose of attending each meeting of holders of
Exchangeable Shares in order to be counted as part of the quorum for each such
meeting. Bionik US further covenants and agrees that it shall not, and shall
cause its subsidiaries not to, exercise any voting rights which may be
exercisable by holders of Exchangeable Shares from time to time pursuant to the
Share Provisions or pursuant to the provisions of the Canada Business
Corporations Act (or any successor or other corporate statute by which the
Corporation may in the future be governed) with respect to any Exchangeable
Shares held by it or by its subsidiaries in respect of any matter considered at
any meeting of holders of Exchangeable Shares. Bionik US covenants and agrees to
cause, as a direct or indirect shareholder of each of Acquireco and the
Corporation to the extent applicable and legally permitted, each of Acquireco
and the Corporation to perform their obligations under this Agreement and shall
be jointly and severally liable, as primary obligor and not merely as surety, in
the event that Acquireco or the Corporation fail to perform their obligations
hereunder.

 

2.11Ordinary Market Purchases

 

For certainty, nothing contained in this agreement, including the obligations of
Bionik US contained in Section 2.8, shall limit the ability of Bionik US (or any
of its subsidiaries including, without limitation, Acquireco or the Corporation)
to make ordinary market purchases of Bionik US Shares in accordance with
applicable laws and regulatory or stock exchange requirements.

 

2.12Stock Quotation

 

Bionik US covenants and agrees in favour of the Corporation that for a period of
3 years from the date hereof and, as long as any outstanding Exchangeable Shares
are owned by any person other than Bionik US or any of its subsidiaries,
Bionik US shall use commercially reasonable best efforts to maintain a
quotation, listing or posting for trading of such Exchangeable Shares on OTCBB
or a National Securities Exchange.

 

Article 3
BIONIK US SUCCESSORS

 

3.1Certain Requirements in Respect of Combination, etc.

 

So long as any Exchangeable Shares not owned by Bionik US or its subsidiaries
are outstanding, Bionik US shall not consummate any transaction (whether by way
of reconstruction, reorganization, consolidation, arrangement, amalgamation,
merger, transfer, sale, lease or otherwise) whereby all or substantially all of
its undertaking, property and assets (on a consolidated basis) would become the
property of any other person or, in the case of a merger, amalgamation,
arrangement or similar transaction, of the continuing corporation or other legal
entity resulting therefrom, provided that it may do so if:

 

- 10 -

 

 

(i)such other person or continuing corporation or other legal entity or, in the
event of any merger, amalgamation, arrangement or similar transaction pursuant
to which holders of Bionik US Shares are entitled to receive shares in the
capital of any corporation or other legal entity other than such person or
continuing corporation or other legal entity (in each case the “Bionik US
Successor”) by operation of law, becomes, without more, bound by the terms and
provisions of this agreement or, if not so bound, executes, prior to or
contemporaneously with the consummation of such transaction, an agreement
supplemental hereto and such other instruments (if any) as are necessary or
advisable to evidence the assumption by the Bionik US Successor of liability for
all moneys payable and property deliverable hereunder and the covenant of such
Bionik US Successor to pay and deliver or cause to be delivered the same and its
agreement to observe and perform all the covenants and obligations of Bionik US
under this agreement; and

 

(ii)such transaction shall be upon such terms and conditions as to preserve and
not to impair in any material respect any of the rights, duties, powers and
authorities of the other parties hereunder or the holders of the Exchangeable
Shares.

 

3.2Vesting of Powers in Successor

 

Whenever the conditions of Section 3.1 have been duly observed and performed,
the parties, if required by Section 3.1, shall execute and deliver the
supplemental agreement provided for in Subsection 3.1(i) and thereupon the
Bionik US Successor and such other person that may then be the issuer of the
Bionik US Shares shall possess and from time to time may exercise each and every
right and power of Bionik US under this agreement in the name of Bionik US or
otherwise and any act or proceeding by any provision of this agreement required
to be done or performed by the board of directors of Bionik US or any officers
of Bionik US may be done and performed with like force and effect by the
directors or officers of such Bionik US Successor.

 

3.3Wholly-Owned Subsidiaries

 

Nothing herein shall be construed as preventing (i) the amalgamation or merger
of any wholly-owned direct or indirect subsidiary of Bionik US with or into
Bionik US, (ii) the winding-up, liquidation or dissolution of any wholly-owned
direct or indirect subsidiary of Bionik US, provided that all of the assets of
such subsidiary are transferred to Bionik US or another wholly-owned direct or
indirect subsidiary of Bionik US, or (iii) any other distribution of the assets
of any wholly-owned direct or indirect subsidiary of Bionik US among the
shareholders of such subsidiary for the purpose of winding up its affairs, and
any such transactions are expressly permitted by this Article 3.

 

3.4Successorship Transaction

 

Notwithstanding the foregoing provisions of Article 3, in the event of an
Bionik US Control Transaction:

 

- 11 -

 

 

(i)in which Bionik US merges or amalgamates with, or in which all or
substantially all of the then outstanding Bionik US Shares are acquired by, one
or more other corporations to which Bionik US is, immediately before such
merger, amalgamation or acquisition, “related” within the meaning of the ITA
(otherwise than by virtue of a right referred to in paragraph 251(5)(b)
thereof);

 

(ii)which does not result in an acceleration of the Redemption Date in
accordance with paragraph (b) of that definition; and

 

(iii)in which all or substantially all of the then outstanding Bionik US Shares
are converted into or exchanged for shares or rights to receive such shares (the
“Other Shares”) or another corporation (the “Other Corporation”) that,
immediately after such Bionik US Control Transaction, owns or controls, directly
or indirectly, Bionik US;

 

then all references herein to “Bionik US” shall thereafter be and be deemed to
be references to “Other Corporation” and all references herein to “Bionik US
Shares” shall thereafter be and be deemed to be references to “Other Shares”
(with appropriate adjustments if any, as are required to result in a holder of
Exchangeable Shares on the exchange, redemption or retraction of such shares
pursuant to the Exchangeable Share Provisions or exchange of such shares
pursuant to the Voting and Exchange Trust Agreement immediately subsequent to
the Bionik US Control Transaction being entitled to receive that number of Other
Shares equal to the number of Other Shares such holder of Exchangeable Shares
would have received if the exchange, redemption or retraction of such shares
pursuant to the Exchangeable Share Provisions, or exchange of such shares
pursuant to the Voting and Exchange Trust Agreement had occurred immediately
prior to the Bionik US Control Transaction and the Bionik US Control Transaction
was completed) without any need to amend the terms and conditions of the
Exchangeable Shares and without any further action required.

 

Article 4
GENERAL

 

4.1Term

 

This agreement shall come into force and be effective as of the date hereof and
shall terminate and be of no further force and effect at such time as no
Exchangeable Shares (or securities or rights convertible into or exchangeable
for or carrying rights to acquire Exchangeable Shares) are held by any person
other than Bionik US and any of its subsidiaries.

 

4.2Changes in Capital of Bionik US and the Corporation

 

At all times after the occurrence of any event contemplated pursuant to Section
2.7 and Section 2.8 or otherwise, as a result of which either Bionik US Shares
or the Exchangeable Shares or both are in any way changed, this agreement shall
forthwith be amended and modified as necessary in order that it shall apply with
full force and effect, mutatis mutandis, to all new securities into which
Bionik US Shares or the Exchangeable Shares or both are so changed and the
parties hereto shall execute and deliver an agreement in writing giving effect
to and evidencing such necessary amendments and modifications.

 

- 12 -

 

 

4.3Severability

 

If any term or other provision of this agreement is invalid, illegal or
incapable of being enforced by any rule or law, or public policy, all other
conditions and provisions of this agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.

 

4.4Amendments, Modifications

 

(a)Subject to Section 4.2, Section 4.3 and Section 4.5, this agreement may not
be amended or modified except by an agreement in writing executed by the
Corporation, Acquireco and Bionik US and approved by the holders of the
Exchangeable Shares in accordance with Section 12(2) of the Share Provisions.

 

(b)No amendment or modification or waiver of any of the provisions of this
agreement otherwise permitted hereunder shall be effective unless made in
writing and signed by all of the parties hereto.

 

4.5Ministerial Amendments

 

Notwithstanding the provisions of Section 4.4, the parties to this agreement may
in writing at any time and from time to time, without the approval of the
holders of the Exchangeable Shares, amend or modify this agreement for the
purposes of:

 

(a)adding to the covenants of any or all parties provided that the board of
directors of each of the Corporation, Acquireco and Bionik US shall be of the
good faith opinion that such additions will not be prejudicial to the rights or
interests of the holders of the Exchangeable Shares;

 

(b)making such amendments or modifications not inconsistent with this agreement
as may be necessary or desirable with respect to matters or questions which, in
the good faith opinion of the board of directors of each of the Corporation,
Acquireco and Bionik US, it may be expedient to make, provided that each such
board of directors shall be of the good faith opinion that such amendments or
modifications will not be prejudicial to the rights or interests of the holders
of the Exchangeable Shares; or

 

- 13 -

 

 

(c)making such changes or corrections which, on the advice of counsel to the
Corporation, Acquireco and Bionik US, are required for the purpose of curing or
correcting any ambiguity or defect or inconsistent provision or clerical
omission or mistake or manifest error, provided that the boards of directors of
each of the Corporation, Acquireco and Bionik US shall be of the good faith
opinion that such changes or corrections will not be prejudicial to the rights
or interests of the holders of the Exchangeable Shares.

 

4.6Meeting to Consider Amendments

 

The Corporation shall call , and Bionik US may require that the Corporation,
call, a meeting or meetings of the holders of the Exchangeable Shares for the
purpose of considering any proposed amendment or modification requiring approval
pursuant to Section 4.4. Any such meeting or meetings shall be called and held
in accordance with the bylaws of the Corporation, the Share Provisions and all
applicable laws.

 

4.7Enurement

 

This agreement shall be binding upon and enure to the benefit of the parties
hereto and their respective successors and permitted assigns. No party may
assign this Agreement without the consent of the other parties and the approval
by a majority of the holders of Exchangeable Shares at a meeting of holders of
Exchangeable Shares called and held in accordance with the bylaws of the
Corporation, the Share Provisions and all applicable laws.

 

4.8Notices to Parties

 

Any notice and other communications required or permitted to be given pursuant
to this agreement shall be sufficiently given if delivered in person or if sent,
as applicable, by email or fax transmission (provided such transmission is
recorded as being transmitted successfully) to the parties at the following
addresses:

 

(i)In the case of Bionik US, the Corporation or Acquireco to the following
address:

 

Bionik Laboratories Inc.

483 Bay Street

Office N105

Toronto, ON M5G 2C9

 

Attn:                Peter Bloch

Email:               pb@bioniklabs.com

 

With a copy to (which shall not constitute notice):

 

Fasken Martineau DuMoulin LLP
333 Bay Street, Suite 2400
Bay Adelaide Centre, Box 20
Toronto, Ontario, Canada M5H 2T6

 

- 14 -

 

 

Attn:                 Scott Conover

Facsimile:         416 364 7813

Email:                sconover@fasken.com

 

- and -

 

Ruskin Moscou Faltischek P.C.
East Tower, 15th Floor
RXR Plaza
Uniondale, New York 11556

Attn:                Stephen E. Fox, Esq.
Facsimile:        516 663 6780
Email:              sfox@rmfpc.com

 

or at such other address as the party to which such notice or other
communication is to be given has last notified the party given the same in the
manner provided in this section, and if not given the same shall be deemed to
have been received on the date of such delivery or sending.

 

4.9Specific Performance

 

Except as otherwise provided herein, any and all remedies herein expressly
conferred upon a party will be deemed cumulative with and not exclusive of any
other remedy conferred hereby, or by law or equity upon such party, and the
exercise by a party of any one remedy will not preclude the exercise of any
other remedy.

 

The parties hereto hereby agree that irreparable damage would occur in the event
that any provision of this agreement were not performed in accordance with its
specific terms or were otherwise breached, and that money damages or other legal
remedies would not be an adequate remedy for any such damages. Accordingly, the
parties hereto acknowledge and hereby agree that in the event of any breach or
threatened breach by a party of any of its covenants or obligations set forth in
this agreement (the “Breaching Party”), any other party (the “Other Party”)
shall be entitled to an injunction or injunctions to prevent or restrain
breaches or threatened breaches of this agreement by the Breaching Party, and to
specifically enforce the terms and provisions of this agreement to prevent
breaches or threatened breaches of, or to enforce compliance with, the covenants
and obligations of the other under this agreement. Each of the parties hereto
hereby agrees not to raise any objections to the availability of the equitable
remedy of specific performance to prevent or restrain breaches or threatened
breaches of this agreement by it, and to specifically enforce the terms and
provisions of this agreement to prevent breaches or threatened breaches of, or
to enforce compliance with, the covenants and obligations of a Party under this
Agreement. The parties hereto further agree that by seeking the remedies
provided for in this Section 4.9, a party shall not in any respect waive its
right to seek any other form of relief that may be available to a party under
this agreement

 

4.10Counterparts

 

This agreement may be executed in counterparts, each of which shall be deemed an
original, and all of which taken together shall constitute one and the same
instrument.

 

- 15 -

 

 

 

4.11Third Party Beneficiaries

 

It is acknowledged and agreed that each holder of Exchangeable Shares (other
than Bionik US and its subsidiaries) is, and shall at all relevant times be, a
third party beneficiary of the covenants of each of Bionik US and Acquireco
given to the Corporation in this agreement and shall have all rights and
remedies in connection therewith and the full benefits thereof (including to
pursue claims for damages and other relief (including equitable relief) against
Bionik US and Acquireco for any breach of this Agreement by Bionik US or
Acquireco, which right is hereby expressly acknowledged and agreed to by each of
the parties hereto) and any covenant of Bionik US and Acquireco given herein
shall be enforceable by each holder of Exchangeable Shares against Bionik US and
Acquireco.

 

4.12Jurisdiction

 

This agreement shall be construed and enforced in accordance with the laws of
the Province of Ontario and the laws of Canada applicable therein. Each party
hereto irrevocably attorns and submits to the exclusive jurisdiction of the
courts of the Province of Ontario with respect to any matter arising hereunder
or related hereto.

 

4.13Attornment

 

Each of Bionik US, Acquireco and the Corporation agrees that any action or
proceeding arising out of or relating to this agreement may be instituted in the
courts of Ontario, waives any objection which it may have now or hereafter to
the venue of any such action or proceeding, irrevocably attorns and submits to
the non-exclusive jurisdiction of the said courts in any such action or
proceeding, agrees to be bound by any judgement of the said courts and not to
seek, and hereby waives, any review of the merits of any such judgement by the
courts of any other jurisdiction, and Bionik US hereby appoints the Corporation
at its registered office in the Province of Ontario as attorney for service of
process.

 

Bionik US hereby irrevocably designates the Corporation (in such capacity, the
“Process Agent”), with an office at its address specified in Section 4.8, as its
designee, appointee and agent to receive, for and on its behalf service of
process in such jurisdiction in any legal action or proceedings with respect to
this agreement or the transactions contemplated hereby, and such service shall
be deemed complete upon delivery thereof to the Process Agent; provided that in
the case of any such service upon the Process Agent, the party effecting such
service shall also deliver a copy thereof to Bionik US in the manner provided in
Section 4.8. Bionik US shall take all such action as may be necessary to
continue said appointment in full force and effect or to appoint another agent
(provided all parties receive notice of such appointment and all relevant
information) so that Bionik US will at all times have an agent for service of
process for the above purposes in the City of Toronto in the Province of Ontario
in Canada.

 

Nothing herein shall affect the right of any Party to serve process in any
manner permitted by applicable law. Bionik US expressly acknowledges that the
foregoing waiver is intended to be irrevocable under all applicable laws.

 

[signature page to follow]

 

- 16 -

 

 

IN WITNESS WHEREOF, the parties hereto have caused this agreement to be duly
executed as of the date first above written.

 

 

  BIONIK LABORATORIES CORP.         By: /s/ Austin Kibler     Name: Austin
Kibler     Title: Chief Executive Officer         BIONIK ACQUISITION INC.      
  By: /s/ Peter Bloch     Name: Peter Bloch     Title: CEO         BIONIK
LABORATORIES INC.         By: /s/ Peter Bloch     Name: Peter Bloch     Title:
CEO

 

- 17 -

 

 

SCHEDULE “A”

 

NOVATION AGREEMENT

 

- 18 -