Item 1.02 Termination of a Material Definitive Agreement.
Lightbridge Corporation (the "Company") is a party to that certain R&D Services
Agreement, dated November 14, 2017, by and among Framatome SAS ("Framatome,"
formerly known as AREVA NP S.A.S), Enfission, LLC ("Enfission") and the Company
(as amended by Amendment Number One, dated January 25, 2018, and Amendment
Number Two, dated June 20, 2018, the "RDSA"). The RDSA, among other things,
defines the terms and conditions for joint research and development activities
among Framatome, Enfission, and the Company.
Section 13.3 of the RDSA provides that any party may terminate the RDSA, by
written notice of termination to the other parties to the RDSA, if another party
materially breaches a material term or condition of the RDSA and fails to cure
such breach within thirty days, or any other mutually agreed upon cure period,
of such party's receipt of written notice specifying the breach. Section 5.1(b)
of the RDSA, among other things, sets forth a process for the establishment by
the Company and Framatome of a yearly budget and provides that if no agreement
on the budget is ultimately reached within the specified timelines, the
resolution of the budget shall be escalated to the CEO of each party. Section
13.4 of the RDSA provides that any party may terminate the RDSA following a
failure of the escalation process under Section 5.1(b) of the RDSA upon ten
days' written notice to the other party.
On October 2, 2019, pursuant to the terms of Section 13.3 of the RDSA, the
Company delivered written notice to Framatome, notifying Framatome of its
material breach of certain material terms of the RDSA, relating to its invoicing
obligations under the RDSA, which breach was not cured within the thirty-day
cure period. On October 7, 2019, the Company delivered written notice to
Framatome formally initiating the escalation process under Section 5.1(b) of the
RDSA. The Company and Framatome continued negotiations as the Company sought to
resolve issues related to Framatome's compliance with the RDSA and agree on
budget commitments. On October 22, 2019, the Company and Framatome held a
CEO-to-CEO meeting as part of the escalation process under Section 5.1(b) of the
RDSA, subsequent to which the escalation process failed. As a result, the Board
of Directors and the management of the Company determined that it is advisable
and in the best interest of the Company and its shareholders to terminate the
RDSA in accordance with the termination rights set forth therein and on November
18, 2019, the Company delivered a notice of termination of the RDSA to
Framatome, thereby terminating the RDSA (effective immediately). The Company
intends to fully avail itself of its rights under the RDSA with respect to the
issues that were pending between the Company and Framatome prior to the
termination, as well as any issues that arise as a result of the termination of
the RDSA. Pursuant to the terms of the RDSA, the Company does not expect to
incur any material early termination penalties in connection with the
termination of the RDSA. Following the termination of the RDSA, the Company
intends to continue to pursue the development of the Lightbridge-designed
metallic fuel technology.
The foregoing summary of the RDSA is not complete and is subject to, qualified
in its entirety by, and should be read in conjunction with the full text of the
RDSA, which was filed as Exhibit 10.2 to the Company's Current Report on Form
8-K filed on November 15, 2017, as amended on March 5, 2018, and the amendments
thereto, filed as Exhibits 10.1 and 10.2 to the Quarterly Report on Form 10-Q
for the quarter ended September 30, 2018.
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