Exhibit 10.1

SETTLEMENT AND TERMINATION AGREEMENT

This SETTLEMENT AND TERMINATION AGREEMENT (this “Agreement”), dated November 25,
2019, is by and between Brickell Subsidiary, Inc., a Delaware corporation
(formerly known as Brickell Biotech, Inc.) (“Brickell”), Brickell Biotech, Inc.
a Delaware corporation (formerly known as Vical Incorporated) (“Parent”) and
NovaQuest Co-Investment Fund X, L.P., a Delaware limited partnership
(“NovaQuest”). Brickell, Parent and NovaQuest are together referred to as the
“Parties” or individually as a “Party” in this Agreement. All capitalized terms
not defined herein shall have the meanings ascribed to them in the Funding
Agreement, as hereinafter defined.
WHEREAS, Brickell and NovaQuest are parties to that certain Funding Agreement,
dated as of June 2, 2019, and as amended and otherwise modified from time to
time prior to the date hereof (the “Funding Agreement”);
WHEREAS, in connection with the Funding Agreement, (i) Brickell and NovaQuest
entered into that certain U.S. Security Agreement, dated August 31, 2019 (the
“Security Agreement”), (ii) Brickell and NovaQuest entered into that certain
Patent Security Agreement, dated August 31, 2019 (the “Patent Security
Agreement”), that certain Trademark Security Agreement, dated August 31, 2019
(the “Trademark Security Agreement”) and that certain Copyright Security
Agreement, dated August 31, 2019 (the “Copyright Security Agreement”, and
together with the Security Agreement, Patent Security Agreement and the
Trademark Security Agreement, the “Security Documents”), (iii) NovaQuest and
Parent entered into that certain Registration Rights Agreement, dated August 31,
2019 (the “Registration Rights Agreement” and, together with the Security
Documents, the “Related Agreements”), and (iv) Parent delivered to NovaQuest
that certain Common Stock Purchase Warrant, dated August 31, 2019 (the
“Warrant”);
WHEREAS, pursuant to the Funding Agreement, on September 5, 2019 (the “Initial
Funding Date”) NovaQuest paid to Brickell $5,600,000.00 in accordance with the
Investment Schedule (the “Initial Funded Amount”);
WHEREAS, on October 23, 2019, Bodor Laboratories, Inc. (“Bodor”) notified
Brickell of its purported termination of the license agreement entered into
between Bodor and Brickell, dated December 15, 2012, as amended (the “Bodor
License Agreement”), alleging that Brickell materially breached the Bodor
License Agreement (the “Bodor Allegations”);
WHEREAS, on October 23, 2019, Bodor and Nicholas S. Bodor (collectively, the
“Bodor Plaintiffs”) filed a complaint (the “Bodor Complaint”) against Brickell
in the United States District Court for the Southern District of Florida seeking
recovery for damages allegedly incurred by the Bodor Plaintiffs in connection
with the alleged material breach by Brickell of the Bodor License Agreement;
WHEREAS, on October 30, 2019, Brickell filed a Motion to Dismiss the Bodor
Complaint in the United States District Court for the Southern District of
Florida denying the Bodor Allegations and concurrently initiated an arbitration
demand against the Bodor Plaintiffs that also contained

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claims for material breach of the Bodor License Agreement and a claim for
tortious interference with Brickell’s business relationships by the Bodor
Plaintiffs, which includes but is not limited to their interference with the
Funding Agreement;
WHEREAS, on the basis of the Bodor Allegations and matters alleged in the Bodor
Complaint, which Brickell refutes, NovaQuest has suggested that it is entitled
to terminate the Funding Agreement in accordance with its terms;
WHEREAS, Brickell disagrees with NovaQuest’s position that NovaQuest has the
right to terminate the Funding Agreement; and
WHEREAS, as a result of the Bodor Allegations and matters alleged in the Bodor
Complaint, and in order to avoid the possibility of a protracted dispute between
NovaQuest and Brickell in connection with a potential unilateral termination of
the Funding Agreement on the part of NovaQuest, and the potential consequences
for Brickell and Parent should NovaQuest prevail in such a dispute, Brickell,
Parent and NovaQuest are willing to agree to terminate the Funding Agreement and
the Related Agreements and to cancel and surrender the Warrant, on the terms set
forth herein.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
1.Payments to NovaQuest.
1.1    In consideration of the agreements set forth herein, no later than 11:59
PM, EST, November 25, 2019, Brickell shall pay to NovaQuest an amount equal to
the Initial Funded Amount plus simple interest accruing thereon at a rate of
nine percent (9%) per annum from the Initial Funding Date until the date that
such payment is actually made (the “Termination Payment Amount”).
1.2    The payment contemplated in Section 1.1 shall be made in one installment
and in good and immediately available U.S. funds in accordance with the
following wire transfer instructions from NovaQuest:
Bank: Silicon Valley Bank, SIL VLY BK SJ
Bank Address: 3003 Tasman Drive, Santa Clara, CA 95054
Phone: 1-888-313-4029
ABA #: 121140399
SWIFT #: SVBKUS6S (for international wire use only)
Account #: 3302722622
Receiving Company: NovaQuest Co-Investment Fund X, L.P.

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2.    Termination.
2.1    Termination of Agreements.
2.1.1    Effective immediately upon payment of the Termination Payment Amount by
or on behalf of Brickell, the following agreements (collectively, the
“Terminated Agreements”) shall automatically terminate without further action or
obligation by the Parties:
(a)    the Funding Agreement;
(b)    the Security Documents; and
(c)    the Registration Rights Agreement.
2.1.2    Notwithstanding anything to the contrary set forth in any Terminated
Agreement or otherwise, such termination pursuant to Section 2.1.1 shall be in
respect of each and every right and obligation under the Terminated Agreements
except for those rights and obligations set forth in the Surviving Provisions
(as defined below). For the sake of clarity, the Parties agree that the effect
of this Agreement shall be, upon effectiveness of the termination contemplated
in Section 2.1.1, to render null and void each and every provision of the
Terminated Agreements, other than the Surviving Provisions as provided below,
notwithstanding any survival clause or other provision of any of the Terminated
Agreements that would provide otherwise (including, without limitation, Section
9.5 of the Funding Agreement). Without limiting the generality of the foregoing
the Parties agree that Article IV, Section 5.2, Article VII, Section 9.3,
Section 9.5 and Article X of the Funding Agreement shall be null and void and of
no further force or effect upon the effectiveness of the termination of the
Terminated Agreements in accordance with Section 2.1.1. The following provisions
(to the extent set forth below, the “Surviving Provisions”) shall survive the
termination of the applicable Terminated Agreement in which such provision is
set forth, subject to and in accordance with the respective terms of such
Surviving Provisions:
(a)    the provisions of Article VI of the Funding Agreement;
(b)    the provisions of Article XI of the Funding Agreement, solely to the
extent relevant to Article VI of the Funding Agreement;
(c)    Section 7.18 of the Security Agreement;
(d)    Section 2(a) of the Patent Security Agreement
(e)    Section 2(a) of the Trademark Security Agreement; and
(f)    Section 2(a) of the Copyright Security Agreement.

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2.2    Cancellation of Warrant. Effective immediately upon payment of the
Termination Payment Amount by or on behalf of Brickell, the Warrant shall
automatically be terminated, cancelled and of no further force or effect and
NovaQuest shall promptly deliver the Warrant to Brickell for cancellation.
2.3    Release of Security Interests. Effective immediately upon payment of the
Termination Payment Amount by or on behalf of Brickell, all security interests
and liens granted to NovaQuest pursuant to the Security Documents shall be
automatically released and terminated and each of the Security Documents shall
be of no further force and effect. Upon such termination, NovaQuest agrees to
execute any applicable lien releases, discharges of security interests,
intellectual property release documents or other documents necessary to
terminate the liens and security interests of NovaQuest pursuant to the Security
Documents. In addition, NovaQuest hereby authorizes (i) the filing of the UCC-3
termination statements attached as Exhibit A hereto by Brickell or any agent of
Brickell, including Mayer Brown LLP, and (ii) the filing of any additional
terminations, as applicable, at the United States Patent and Trademark Office,
or United States Copyright Office by Brickell or any agent of Brickell,
including Mayer Brown LLP. NovaQuest further authorizes Brickell or any agent of
Brickell, including Mayer Brown LLP, to deliver a copy of this Agreement to any
insurance company, insurance broker, bank, landlord, tenant, warehouseman or
other person in connection with the termination of the security interests
granted to NovaQuest pursuant to the Security Documents, provided that such
parties agree to be bound by Section 5 below.
3.    Mutual Release. Effective upon each Party’s receipt of a duly executed
copy of this Agreement from the other Parties, and NovaQuest’s receipt of the
payment contemplated in Section 1.1 hereof, each Party, for itself and on behalf
of its Affiliates, predecessors, successors, insurers, parent, subsidiary and
sibling corporations and entities, and assigns hereby completely and generally
releases, remises, acquits and forever discharges the other Parties, their
subsidiaries and Affiliates, and their respective present and past officers,
directors, shareholders, partners, limited partners, employees, representatives,
agents, attorneys, heirs, predecessors, successors, insurers and assigns of and
from any and all past and present claims, demands, obligations, actions, causes
of action, rights, damages, expenses and requests for compensation or payment of
any nature whatsoever, whether based on tort, contract, or any other legal
theory of recovery, and whether for compensatory, consequential or punitive
damages or other relief or damage, whether known or unknown, whether suspected
or unsuspected, whether liquidated or unliquidated, that have arisen from the
beginning of time until the effective date of termination of the Terminated
Agreements in accordance with Section 2.1 which in any way arose out of or was
related to the Terminated Agreements or the Warrant.
4.    Indemnity. Notwithstanding any language in Section 3, each Party agrees
for itself and on behalf of its Affiliates, predecessors, successors, and
parent, subsidiary and sibling corporations and entities that: (a) if such Party
has committed a breach of any representation, warranty or obligation under the
Funding Agreement, or has committed any other negligent act or omission, or
intentional misconduct, related to the Funding Agreement (collectively “Breach”)
prior to the date of this Agreement that forms the basis of a Third Party’s
claim against the other Party, but for which such claim could not otherwise be
asserted, then the Party committing the

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Breach will defend, indemnify and hold harmless the other Party, its Affiliates,
predecessors, successors, and parent, subsidiary and sibling corporations and
entities, from each such claim and (b) if a claim is brought against a Party,
its Affiliates, predecessors, successors, or parent, subsidiary or sibling
corporations or entities by any of the other Party’s present or former
shareholders or other equity owners, partners, officers or directors, arising in
any way out of such other Party’s decision to enter into this Agreement, then
such other Party will defend, indemnify and hold harmless the Party, its
Affiliates, predecessors, successors, and parent, subsidiary and sibling
corporations and entities against whom any such claim is brought, from each such
claim. Each of the Parties represents that as of the date of this Agreement, it
is not aware of any claim asserted by any Third Party that would trigger an
indemnification obligation under this Section 4, nor is it aware of any facts
that could reasonably be expected to support or trigger such a claim.
5.    Confidentiality. The Parties agree that this Agreement and the terms
contained herein constitute Confidential Information (as defined in the Funding
Agreement). Each Party agrees that any public announcements, public disclosures
or public filings made by it with respect to this Agreement shall be subject to
the terms of Article VI of the Funding Agreement.
6.    Representation and Warranty. Each Party represents and warrants to the
other Party that (a) the execution and delivery by such Party of this Agreement
and the performance of its obligations hereunder and the consummation of the
transactions contemplated hereby are within its power and have been duly
authorized by all necessary action on the part of such Party and (b) this
Agreement has been duly executed and delivered by a duly authorized
representative of such Party and is the legal, valid and binding obligation
thereof, enforceable against such Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting creditors’ rights generally.
7.    No Waiver. Nothing contained herein shall be deemed to constitute a waiver
of any claims that Brickell or Parent has or may have against the Bodor
Plaintiffs, all of which claims Brickell and Parent expressly reserve.
8.    Incorporation By Reference. Sections 11.1, 11.2, 11.3, 11.6, 11.7, 11.8,
11.9, 11.13, 11.16 of the Funding Agreement are hereby incorporated by reference
herein, mutatis mutandis, as though expressly set forth herein.
[Signature page follows]

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IN WITNESS WHEREOF, the undersigned have caused this Settlement and Termination
Agreement to be executed as of the date first above written.
BRICKELL SUBSIDIARY, INC.

By:
/s/ Robert B. Brown
 
Name: Robert B. Brown
Title: CEO

BRICKELL BIOTECH, INC.

By:
/s/ Robert B. Brown
 
Name: Robert B. Brown
Title: CEO

NOVAQUEST CO-INVESTMENT FUND X, L.P.

By:
NQ POF V GP, LTD, its general partner
 
 
 
 
 
 
 
By:
/s/ John L. Bradley, Jr.
 
Name: John L. Bradley, Jr.
Title: Director

[Signature Page to Settlement and Termination Agreement]

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EXHIBIT A

UCC-3 Termination Statements

(See attached)

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