Biotie Therapies enters into a Standby Equity Distribution Agreement with YA Global Master

Oct 23 2009

Biotie Therapies Corp. ("Biotie") has entered into a Standby Equity Distribution Agreement ("SEDA") with YA Global Master SPV Ltd. ("YA Global") a fund managed by Yorkville Advisors, LLC of Jersey City, New Jersey, USA ("Yorkville"). Under the terms of the agreement, Biotie has the option to take up YA Global's commitment to subscribe and pay for ordinary no-par Biotie shares up to a total value of 20 million euro over the period of the next 36 months. It remains at the sole and exclusive discretion of Biotie to exercise this option.

The purpose of the Standby Equity Distribution Agreement is to secure the financing of Biotie's working capital in the short and medium term. In consideration of the committed standby equity Biotie will pay to YA Global a one-time commitment fee of EUR 200.000, payable in Biotie shares, and has already paid a customary structuring fee and due diligence fee.

Timo Veromaa, CEO of Biotie commented: "We believe the agreement with YA Global gives Biotie the flexibility and access to capital that has become critical in today's marketplace. This vehicle is an additional resource that can help move our proprietary clinical programs forward to key inflection points. Yorkville has a proven track record in providing European companies with equity line commitments and we are glad to be working with the Yorkville team."

Dr. Michael J. Nowak, Head of the Healthcare Group and a Managing Director at Yorkville the investment manager to a family of Funds based in New Jersey, led the investment into Biotie Therapies Corp. Dr. Nowak, stated: "Yorkville provides flexible and innovative financing tools for public healthcare and technology companies. We are very pleased to be making our first SEDA investment in Northern Europe with Biotie Therapies Corp., especially given the large unmet medical need and market potential addressed by Biotie Therapies' multiple compounds in development, and the strength of their strategic partners and management team."

At any time during the 36 month commitment period, Biotie may request YA Global to purchase newly issued Biotie shares or shares Biotie has in its own possession by delivering an advance notice to YA Global designating requested portion of the commitment amount to be taken up. The maximum portion of the commitment amount to be used at a time is EUR 50.000 for the first tranche, EUR 100.000 for the second tranche and EUR 300.000 for the subsequent tranches. If a share lending arrangement is implemented, or other arrangements are made with the result of prompt delivery of shares to YA Global in connection with each tranche, the parties may decide to increase the maximum portion of the commitment amount to be used for all tranches subsequent to the second tranche to the lesser of (i) EUR 500.000 or (ii) the value of the shares available to be borrowed by YA Global. The number of shares issuable to YA Global shall, however, in no event cause the aggregate number of shares beneficially owned by YA Global and its affiliates at any time to exceed 4.99% of the then issued shares. Further, in no event shall the aggregate number of shares issued by Biotie pursuant to the Standby Equity Distribution Agreement or otherwise exceed 9.9% of all outstanding shares of Biotie during a rolling twelve month period unless Biotie ensures that all shares issued despite exceeding the threshold are or will be admitted for listing.

The pricing of the shares will be determined as 95% of the lowest daily volume-weighted average share price of the five trading days following the date on which Biotie shall have sent to YA Global the relevant advance notice ("Pricing Period"), and may in no event be less than 85% of the volume-weighted average price of Biotie shares on NASDAQ OMX Helsinki Ltd. on the last trading day prior to such date of advance notice ("Minimum Price"). Further, should the market price on certain of the five trading days following the date of advance notice fall below the Minimum Price, the pro rata subscription for such days will not be executed unless YA Global decides to execute such subscription at the Minimum Price.

YA Global can either sell the subscribed shares or accumulate them. YA Global is also contractually bound not to short sell Biotie shares unless a share lending arrangement is implemented or certain other arrangements made. Other than the afore-said, YA Global is not restricted in its right to sell Biotie shares without any limit of time, including during the Pricing Period, in compliance with applicable laws, rules and regulations. At the current share price the facility corresponds to tranches of around 530.000 shares and a maximum cumulated amount of approximately 36.000.000 shares. At the date of this release, the number of issued shares in Biotie is 144,320,560.

Biotie will, as a general rule, publish a separate stock exchange release every time the SEDA instrument is used once the pricing of the respective shares has been determined.