Execution US-DOCS\85889051.6 AMENDED AND RESTATED INTEREST PURCHASE AGREEMENT dated as of May 31, 2017, between CORMATRIX CARDIOVASCULAR, INC. and LIGAND PHARMACEUTICALS INCORPORATED
Execution
US-DOCS\85889051.6
AMENDED AND RESTATED
INTEREST PURCHASE AGREEMENT
dated as of
May 31, 2017,
between
CORMATRIX CARDIOVASCULAR, INC.
and
LIGAND PHARMACEUTICALS INCORPORATED
US-DOCS\85889051.6
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Defined Terms .................................................................................................. 1
ARTICLE II
Purchase of Assigned Interests
SECTION 2.01. Purchase ............................................................................................................ 9
SECTION 2.02. Payments by the Company................................................................................ 9
SECTION 2.03. Closing; Payment of Purchase Price; Deliveries .............................................. 10
SECTION 2.04. No Assumed Obligations; Acquisition of Assigned Interests Alone ................ 10
ARTICLE III
Representations and Warranties of the Company
SECTION 3.01. Organization ...................................................................................................... 11
SECTION 3.02. Authorization .................................................................................................... 11
SECTION 3.03. Governmental Authorization ............................................................................ 11
SECTION 3.04. Ownership ......................................................................................................... 11
SECTION 3.05. Litigation ........................................................................................................... 12
SECTION 3.06. Compliance with Laws ..................................................................................... 12
SECTION 3.07. Conflicts ............................................................................................................ 12
SECTION 3.08. Current Indebtedness ........................................................................................ 13
SECTION 3.09. Solvency ............................................................................................................ 13
SECTION 3.10. Financial Statements ......................................................................................... 13
SECTION 3.11. Products............................................................................................................. 13
ARTICLE IV
Representations and Warranties of Purchaser
SECTION 4.01. Organization ...................................................................................................... 13
SECTION 4.02. Authorization .................................................................................................... 13
SECTION 4.03. Conflicts ............................................................................................................ 14
ARTICLE V
Covenants
SECTION 5.01. Access; Information .......................................................................................... 14
SECTION 5.02. Confidentiality; Press Release .......................................................................... 15
ii
US-DOCS\85889051.6
SECTION 5.03. Efforts; Further Assurance ................................................................................ 16
SECTION 5.04. Licenses............................................................................................................. 16
SECTION 5.05. Remedies Event ................................................................................................ 16
SECTION 5.06. Diligence ........................................................................................................... 16
SECTION 5.07. Indebtedness; Sale of Revenue Interests ........................................................... 16
ARTICLE VI
Termination
SECTION 6.01. Termination ....................................................................................................... 17
SECTION 6.02. Effect of Termination ........................................................................................ 17
ARTICLE VII
Miscellaneous
SECTION 7.01. Survival ............................................................................................................. 17
SECTION 7.02. Notices .............................................................................................................. 17
SECTION 7.03. Successors and Assigns..................................................................................... 18
SECTION 7.04. Indemnification ................................................................................................. 19
SECTION 7.05. No Implied Representations and Warranties .................................................... 20
SECTION 7.06. Independent Nature of Relationship ................................................................. 20
SECTION 7.07. Entire Agreement .............................................................................................. 21
SECTION 7.08. Amendments; No Waivers ................................................................................ 21
SECTION 7.09. Interpretation ..................................................................................................... 21
SECTION 7.10. Headings and Captions ..................................................................................... 21
SECTION 7.11. Counterparts; Effectiveness .............................................................................. 22
SECTION 7.12. Severability ....................................................................................................... 22
SECTION 7.13. Expenses ........................................................................................................... 22
SECTION 7.14. Governing Law; Jurisdiction............................................................................. 22
ARTICLE VIII
Intercreditor Matters
SECTION 8.01. Purchase and Sale Treatment; Recharacterization ............................................ 22
SECTION 8.02. Other Purchaser Security .................................................................................. 23
SECTION 8.03. Priority .............................................................................................................. 24
SECTION 8.04. Control Agreements ............................................................................................ 24
SECTION 8.05. Termination or Release ...................................................................................... 24
ARTICLE IX
Remedies
SECTION 9.01. Remedies ........................................................................................................... 25
US-DOCS\85889051.6
This AMENDED AND RESTATED INTEREST PURCHASE AGREEMENT (as
amended, supplemented or otherwise modified from time to time, this “Agreement”) is
made and entered into as of May 31, 2017 (the “Effective Date”), by and between
CORMATRIX CARDIOVASCULAR, INC., a Georgia corporation (the “Company”), and
LIGAND PHARMACEUTICALS INCORPORATED, a Delaware corporation
(“Purchaser”).
RECITALS
WHEREAS, the Company and the Purchaser previously entered into that
certain Interest Purchase Agreement dated as of May 3, 2016 (the “Prior Agreement”);
WHEREAS, on the date hereof, the Company is entering into an asset
purchase agreement with Aziyo Biologics, Inc., a Delaware corporate (“Parent”) and
Aziyo Med, LLC, a Delaware limited liability company and wholly-owned subsidiary of
Parent (“Aziyo”) pursuant to which the Company is selling certain assets related to the
Base Products and the CanGaroo Products (as such terms are defined in the Prior
Agreement) (the “Asset Purchase Agreement”);
WHEREAS, in connection with the Asset Purchase Agreement, Aziyo and
the Purchaser are entering into that certain royalty agreement, dated as of the date hereof,
with respect to the Base Products and CanGaroo Products (the “Aziyo Royalty
Agreement”);
WHEREAS, Aziyo will repay in full the Company’s outstanding debt with
MidCap Financial SBIC LP, a Delaware limited partnership, at the closing of the sale of
such assets; and
WHEREAS, the Company and the Purchaser desire to amend and restate
the Prior Agreement, as set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants,
agreements and representations and warranties set forth herein, the parties hereto agree as
follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in the Agreement, the following
terms shall have the meanings specified below:
“Acquiror” shall mean, with respect any of the Products, any Person (other
than any Affiliate of the Company) who acquires control of the commercialization of any
such Product as a result of any Product Change of Control.
“Affiliate” shall mean any Person that controls, is controlled by, or is under
common control with another Person. For purposes of this definition, “control” shall mean
2
US-DOCS\85889051.6
(i) in the case of corporate entities, direct or indirect ownership of at least fifty percent
(50%) of the stock or shares having the right to vote for the election of directors, and (ii) in
the case of non-corporate entities, direct or indirect ownership of at least fifty percent
(50%) of the equity interest with the power to direct the management and policies of such
non-corporate entities.
“Assigned Interest Period” shall mean, with respect to each Product, the
period from and including the Effective Date through and including the date that is the
tenth anniversary of the date of the first commercial sale of such Product.
“Assigned Interest Related Collateral” means any accounts (as defined in
Article 9 of the UCC) giving rise to the Assigned Interests and the proceeds of such
accounts.
“Assigned Interests” shall mean the Pipeline Product Interests and the
Valves Product Interests.
“Audit Costs” shall mean, with respect to any audit of the books and records
of the Company or its Subsidiaries with respect to amounts payable or paid under this
Agreement, the reasonable out-of-pocket cost of such audit, including all fees, costs and
expenses incurred in connection therewith.
“Bankruptcy Event” shall mean the occurrence of any proceeding being
instituted by or against the Company seeking to adjudicate it bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it or any substantial part of its
property, or the Company taking any action to authorize any of the actions set forth above.
Notwithstanding the foregoing, if such proceeding is instituted against the Company, no
Bankruptcy Event shall have occurred unless such proceeding remains undismissed,
undischarged or unbonded for a period of sixty (60) days.
“Books” shall mean all of the books and records of a Person, including
ledgers, federal and state tax returns, records regarding the Person’s assets or liabilities, the
Assigned Interest Related Collateral, business operations or financial condition, and all
computer programs or storage or any equipment containing such information.
“Business Day” shall mean any day other than a Saturday, a Sunday, any
day which is a legal holiday under the laws of the State of New York, or any day on which
banking institutions located in the State of New York are required by law or other
governmental action to close.
“Closing” shall have the meaning set forth in Section 2.03(a).
“Closing Date” shall mean May 3, 2016.
“Company” shall have the meaning set forth in the preamble.
3
US-DOCS\85889051.6
“Company Change of Control” shall mean, with respect to the Company:
(a) the acquisition by any Person or group (within the meaning of
Sections 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) of
beneficial ownership of any capital stock of the Company, if after such acquisition, such
Person or group would be the “beneficial owner” (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended, but assuming that any convertible securities
owned by such Person or group or any controlled affiliates thereof are immediately
exercisable), directly or indirectly, of securities of the Company representing more than
fifty percent (50%) of the combined voting power of the Company’s then outstanding
securities entitled to vote generally in the election of directors;
(b) a merger or consolidation of the Company, with any other Person,
other than a merger or consolidation which would result in the Company’s voting securities
outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity) more than
fifty percent (50%) of the combined voting power of the Company’s voting securities or
such surviving entity’s voting securities outstanding immediately after such merger or
consolidation; or
(c) the bona fide sale, lease, transfer, exclusive license or other
disposition, in a single transaction or series of related transactions, by the Company or any
of its Subsidiaries of all or substantially all the assets of the Company and its Subsidiaries,
taken as a whole.
“Confidential Information” shall mean, as it relates to the Company and its
Affiliates and any of the Products, the Intellectual Property related to any of the Products,
confidential business information, financial data and other like information (including
ideas, research and development, know-how, formulas, schematics, compositions,
technical data, specifications, customer and supplier lists, pricing and cost information, and
business and marketing plans and proposals), inventory, ideas, algorithms, processes,
computer software programs or applications (in both source code and object code form),
client lists and tangible or intangible proprietary information or material, or such other
information that either party identifies to the other as confidential or the nature of which or
the circumstances of the disclosure of which would reasonably indicate that such
information is confidential. Notwithstanding the foregoing definition, Confidential
Information shall not include information that (a) is already in the public domain at the
time the information is disclosed, (b) thereafter becomes lawfully obtainable from other
sources who, to the knowledge of the recipient, have no obligation of confidentiality, (c)
can be shown to have been independently developed by the recipient or its representatives
without reference to any Confidential Information of the other party or (d) is required to be
disclosed under laws, rules and regulations of any Governmental Authority applicable to
the Company or its Affiliates or Purchaser or its Affiliates, as the case may be, or pursuant
to the rules and regulations of any securities exchange or trading system or pursuant to any
other laws, rules or regulations of any Governmental Authority having jurisdiction over the
Company and its Affiliates or Purchaser and its Affiliates.
4
US-DOCS\85889051.6
“Excluded Costs” shall mean the following items to the extent permitted
by generally accepted accounting principles: (i) value added or any other similar
transaction taxes accrued on sales invoices, (ii) sales discounts and all kinds of rebates, (iii)
any orders or parts thereof which are subsequently returned to the Company (or an
Affiliate, agent or sublicensee thereof, as applicable) and refunded to the customer or
wholesaler, (iv) charges for late payment collected from customers, registration charges
and other service charges and (v) applicable shipping charges.
“Excluded Liabilities and Obligations” shall have the meaning set forth in
Section 2.04(a).
“Final Order” shall mean an order of the United States Bankruptcy Court
or any other court of competent jurisdiction as to which the time to appeal, petition for
certiorari, or move for reargument or rehearing has expired and a to which non appeal,
petition for certiorari, or other proceedings for reargument or rehearing shall then be
pending, or, in the event that an appeal, writ of certiorari, or reargument or rehearing
thereof has been filed or sought, such order of the Bankruptcy Court or other court of
competent jurisdiction shall have been affirmed by the highest court to which such order
was appealed, or from which certiorari, reargument or rehearing was sought, and the time
to take any further appeal, petition for certiorari or move for reargument or rehearing shall
have expired; provided that the possibility that a motion under Rule 59 or Rule 60 of the
Federal Rules of Civil Procedure or any analogous rule under the Federal Rules of
Bankruptcy Procedure or applicable state court rules of civil procedure, may be filed with
respect to such order shall not cause such order not to be a Final Order.
“Fiscal Quarter” shall mean each three (3) month period commencing
January 1, April 1, July 1 or October 1, provided however that (a) the first Fiscal Quarter of
the Term shall extend from the Closing Date to the end of the first full Fiscal Quarter
thereafter and (b) the last Fiscal Quarter of the Term shall end upon the expiration or
termination of this Agreement.
“Fiscal Year” shall mean the calendar year.
“Governmental Authority” shall mean any government, court, regulatory
or administrative agency or commission, or other governmental authority, agency or
instrumentality, whether foreign, federal, state or local (domestic or foreign).
“Intellectual Property” shall mean all proprietary information; technical
data; laboratory notebooks; clinical data; priority rights; trade secrets; know-how;
confidential information; inventions (whether patentable or unpatentable and whether or
not reduced to practice or claimed in a pending patent application); Patents; registered or
unregistered trademarks, trade names, service marks, including all goodwill associated
therewith; registered and unregistered copyrights and all applications thereof; in each case
that are owned, controlled by, generated by, issued to, licensed to, licensed by or hereafter
acquired by or licensed by the Company or its Subsidiaries.
5
US-DOCS\85889051.6
“Knowledge of the Company” shall mean the current and actual
knowledge, information or belief held by Xxxxx X. Xxxx, Xxxxxx X. Xxxxxxx, Xxxx X.
Xxxxxx, Xx. and/or Xxxxxx X. Xxxxx after reasonable inquiry by such person into the
relevant subject matter.
“Losses” shall mean collectively, any and all claims, damages, losses,
judgments, awards, penalties, liabilities, costs and expenses (including reasonable
expenses and reasonable attorneys’ fees) incurred in connection with defending any action,
suit or proceeding.
“Material Adverse Change” shall mean, with respect to the Company and
its Subsidiaries, any event, change, circumstance, occurrence, effect or state of facts that
has caused or is reasonably likely to cause a material adverse change in the business,
operations, assets or financial condition of the Company and its Subsidiaries, taken as a
whole.
“Material Adverse Effect” shall mean (a) the effect of a Material Adverse
Change, (b) a material adverse effect on the validity or enforceability of this Agreement,
(c) the inability or failure of the Company to make payments in respect of the Assigned
Interests in violation of this Agreement, (d) a material adverse effect on the ability of the
Company to perform any of its other material obligations under this Agreement or (e) any
material adverse effect on the Products or the ability of the Company and its Subsidiaries to
distribute, market and/or sell the Products.
“MidCap Payoff Letter” shall mean the letter from MidCap evidencing
payment in full of the MidCap Credit Facility, dated as of the date hereof.
“MidCap Credit Facility” shall mean that certain Credit and Security
Agreement, dated as of June 10, 2014 (as amended, amended and restated, supplemented
or otherwise modified as of the date hereof), among CorMatrix Cardiovascular, Inc.,
CorMatrix RE LLC, CorMatrix 1 LLC and CorMatrix 2 LLC, as Borrowers (as defined
therein), MidCap Financial Trust, a Delaware statutory trust, as administrative agent, and
the Lenders (as defined therein) party thereto.
“Monthly Report” shall mean, with respect to the relevant Payment Month
of the Company, a report showing (a) the gross revenues of the Pipeline Products and
Valves Products for such Payment Month, (b) the Pipeline Product Net Sales and the
Valves Product Net Sales for such Payment Month, (c) the Excluded Costs for such
Payment Month and (d) a reasonable calculation of the amount to which Purchaser is
entitled for such Payment Month pursuant to Section 2.02(a) of this Agreement.
“Obligations” shall mean any and all payment obligations of the Company
under the Agreement.
“Parties” shall mean Purchaser, the Company and any other Person from
time to time made party to this Agreement, each a “Party.”
6
US-DOCS\85889051.6
“Patent” shall mean all patents, patent rights, patent applications, patent
disclosures and invention disclosures issued or filed, together with all reissues, divisions,
continuations, revisions, term extensions, substitutes, supplementary protection
certificates, reexaminations, inter-partes reviews, post-grant oppositions or similar
post-grant review proceedings, including the inventions claimed in any of the foregoing
and any priority rights arising therefrom, that are issued or filed as of the date hereof or
during the Term, which are owned by the Company, its Subsidiaries or any of its Affiliates.
“Payment Month” shall mean each month-long period commencing on the
first day of such month, provided however that (a) the first Payment Month of the Term
shall extend from the Closing Date to the end of the first full Payment Month thereafter and
(b) the last Payment Month of the Term shall end upon the expiration or termination of this
Agreement.
“Permitted Transaction” shall mean any transaction during the Term
whereby the Company incurs, creates, assumes or permits to exist any indebtedness for
borrowed money or sells, assigns, transfers or conveys any Revenue Interests to any Third
Party; provided that such transaction (a) does not, except to the extent expressly
contemplated by Section 8.04, result in any security interest granted hereunder ceasing to
be a valid and perfected security interest or adversely affecting the priority of such interest
and (b) could not reasonably be expected to impair the ability of the Company to comply
with the requirements to make the payments set forth in Section 2.02.
“Person” shall mean an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, but not including a
government or political subdivision or any agency or instrumentality of such government
or political subdivision.
“Pipeline Product Applicable Percentage” shall mean 5% with respect to
any Pipeline Product Net Sales during the Assigned Interest Period.
“Pipeline Product Interests” shall mean the right to receive on a monthly
basis cash in an amount equal to the product of the Pipeline Product Applicable Percentage
multiplied by the Pipeline Product Net Sales during the Assigned Interest Period, pursuant
to the terms and conditions of this Agreement. For the avoidance of doubt, Pipeline
Product Interests shall not constitute any accounts or payment intangibles (as each term is
defined in the UCC) giving rise to such cash amounts.
“Pipeline Product Net Sales” shall mean the aggregate amount of sales
proceeds received by the Company (or an Affiliate, agent or sublicensee thereof, as
applicable) for the Pipeline Products sold on or after the Closing Date, less Excluded Costs.
“Pipeline Products” shall mean the following extracellular matrix
technology products, in each case, sold by the Company: (i) the Micronized ECM product,
(ii) the Epicardial Infarction Repair product, (iii) the Vascular Graft product, (iv) any other
products that were in development as of the Closing Date, and (v) any product substantially
7
US-DOCS\85889051.6
similar in design and application to any product described in the foregoing clauses
commercialized by the Company during the Assigned Interest Period.
“Prior Agreement” shall have the meaning set forth in the recitals.
“Product Change of Control” shall mean, with respect to any Product, or
any product enumerated in the definition of any Product (or in any Schedule referenced in
any such definition), any sale or other transfer by the Company of substantially all of the
assets primarily used to commercialize such Product or such enumerated product or of the
exclusive right to commercialize such Product or such enumerated product.
“Products” shall mean the Pipeline Products and the Valves Products.
“Purchase Price” shall mean $17,500,000.
“Purchaser” shall have the meaning set forth in the preamble.
“Purchaser Account” shall mean the following account (or such other
account as Purchaser may designate in writing (such designation to be made at least two (2)
Business Days prior to any payment owing to Purchaser under this Agreement)):
Ligand Pharmaceuticals, Inc.
Bank of America Xxxxxxx Xxxxx
Account No. 1453127240
Routing No. 000000000
“Recharacterization” shall mean a characterization by a Final Order of the
United Stated Bankruptcy Court or any other court of competent jurisdiction of the
purchase of the Assigned Interests as a loan or other financing instrument or that the
Purchaser does not have an ownership interest in the Assigned Interests.
“Regulatory Agency” shall mean a Governmental Authority with
responsibility for the approval of the marketing and sale of surgical implants or other
regulation of surgical implants.
“Regulatory Approvals” shall mean all approvals (including, without
limitation, where applicable, pricing and reimbursement approval and schedule
classifications), product and/or establishment licenses, registrations or authorizations of
any Governmental Authority necessary for the manufacture, use, storage, import, export,
transport, offer for sale, or sale of any of the Products.
“Remedies Event” shall mean (a) a Bankruptcy Event or (b) a failure by the
Company to make a payment pursuant to Section 2.02, provided that no such failure shall
constitute a Remedies Event unless such failure shall remain uncured for thirty (30) days.
“Revenue Interests” shall mean all of the interest of the Company and its
Subsidiaries in the proceeds of the total sales realized by the Company (or an Affiliate,
8
US-DOCS\85889051.6
agent or sublicensee thereof, as applicable) of the Products sold on or after the Effective
Date.
“SEC” shall mean the U.S. Securities and Exchange Commission.
“Special Account” shall have the meaning set forth in Section 8.03(b).
“Subsidiary” shall mean, with respect to any Person, a corporation,
partnership, joint venture, limited liability company or other business entity of which (i) a
majority of the shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or interests having such
power only by reason of the happening of a contingency) are at the time beneficially
owned, (ii) more than half of the issued share capital is at the time beneficially owned or
(iii) the management of which is otherwise controlled, directly or indirectly, through one or
more intermediaries, or both, by such Person.
“Term” shall have the meaning set forth in Section 6.01.
“Third Party” shall mean any Person other than Purchaser and any Affiliate
of Purchaser or the Company and any Subsidiary of the Company.
“Transfer” shall have the meaning set forth in Section 8.05.
“UCC” shall mean the Uniform Commercial Code as in effect in the State
of New York from time to time.
“Valves Product Applicable Percentage” shall mean 5% with respect to
any Valves Product Net Sales during the Assigned Interest Period.
“Valves Product Interests” shall mean the right to receive on a monthly
basis cash in an amount equal to the product of the Valves Product Applicable Percentage
multiplied by the Valves Product Net Sales during the Assigned Interest Period, pursuant
to the terms and conditions of this Agreement. For the avoidance of doubt, Valves Product
Interests shall not constitute any accounts or payment intangibles (as each term is defined
in the UCC) giving rise to such cash amounts.
“Valves Product Net Sales” shall mean the aggregate amount of sales
proceeds received by the Company (or an Affiliate, agent or sublicensee thereof, as
applicable) for the Valves Products sold on or after the Closing Date, less Excluded Costs.
“Valves Products” shall mean the extracellular matrix technology products
sold by the Company for the remodeling, repair or replacement of the tricuspid,
pulmonary, mitral or aortic valves and any product substantially similar in design and
application to any such product commercialized by the Company during the Assigned
Interest Period.
9
US-DOCS\85889051.6
ARTICLE II
Purchase of Assigned Interests
SECTION 2.01. Purchase. Upon the terms and subject to the conditions
set forth in this Agreement, the Company previously sold, assigned, transferred and
conveyed to Purchaser, and Purchaser purchased from the Company, free and clear of all
liens (except any liens for taxes or other governmental charges arising by operation of law
in the ordinary course of business for sums which are not yet due and payable), all of the
Company’s rights and interests in and to the Assigned Interests on the Closing Date.
Purchaser’s ownership interest in the Assigned Interests so acquired shall have vested
immediately upon the Company’s receipt of payment of the Purchase Price for such
Assigned Interests pursuant to Section 2.03(b), subject to the termination provisions of
Section 6.01.
SECTION 2.02. Payments by the Company.
(a) Monthly Payments in Respect of the Assigned Interests. In
connection with the assignment of the Assigned Interests, Purchaser shall be entitled to
receive, in respect of each Payment Month during the Assigned Interest Period:
(i) the Pipeline Product Applicable Percentage of Pipeline Product Net
Sales (if any) received during such Payment Month; and
(ii) the Valves Product Applicable Percentage of Valves Product Net
Sales (if any) received during such Payment Month.
(b) Payments to Purchaser. Within thirty (30) days following the end of
each Payment Month during the Assigned Interest Period, the Company shall disburse to
the Purchaser Account an amount equal to the amount to which Purchaser is entitled
pursuant to Section 2.02(a) of this Agreement (if any) for such Payment Month.
SECTION 2.03. Closing; Payment of Purchase Price; Deliveries.
(a) Closing. The closing of the purchase of the Assigned Interests
pursuant to this Agreement (the “Closing”) occurred as of the Closing Date.
(b) Payment of Purchase Price. At the Closing, Purchaser paid to the
Company the Purchase Price by wire transfer of immediately available funds to such
account as designated by the Company prior to the Closing Date.
(c) Closing Deliveries. At the Closing, as a condition precedent to the
effectiveness of the Prior Agreement:
(i) the Company delivered to Purchaser a duly executed counterpart to
this Agreement; and
10
US-DOCS\85889051.6
(ii) Purchaser delivered to the Company (1) payment of the Purchase
Price consistent with Section 2.03(b) and (2) a duly executed counterpart to this
Agreement.
(d) Effectiveness Date Deliveries. As of the Effective Date, as a
condition precedent to the effectiveness of this Agreement:
(i) the Company delivered to Purchaser (1) a duly executed counterpart
to this Agreement and (2) the MidCap Payoff Letter duly executed by the Company
and MidCap;
(ii) Purchaser delivered to the Company a duly executed counterpart to
this Agreement;
(iii) Purchaser and Aziyo shall have entered into the Aziyo Royalty
Agreement; and
(iv) the transactions contemplated by the Asset Purchase Agreement
shall have been closed.
SECTION 2.04. No Assumed Obligations; Acquisition of Assigned
Interests Alone. (a) Notwithstanding any provision in this Agreement or any other writing
to the contrary, Purchaser acquired only the Assigned Interests and has not assumed any
liability or obligation of the Company or any of its Affiliates of whatever nature, whether
presently in existence or arising or asserted hereafter, whether under this Agreement or
otherwise. All such liabilities and obligations shall be retained by and remain obligations
and liabilities of the Company or its Affiliates (the “Excluded Liabilities and
Obligations”).
(b) Purchaser has acquired no rights other than those expressly assigned
herein. Notwithstanding any provision in this Agreement or any other writing to the
contrary, Purchaser has not acquired any rights whatsoever under any Intellectual Property
of the Company.
ARTICLE III
Representations and Warranties of the Company
SECTION 3.01. Organization. As of the Effective Date, each of the
Company and its Subsidiaries is a corporation duly incorporated, validly existing and in
good standing under the laws of its respective jurisdiction of formation and has all
corporate powers and all licenses, authorizations, consents and approvals required to carry
on its respective business as now conducted and as proposed to be conducted in connection
with this Agreement.
SECTION 3.02. Authorization. The Company has all necessary power
and authority to enter into, execute and deliver this Agreement and to perform all of the
obligations to be performed by it hereunder and to consummate the transactions
11
US-DOCS\85889051.6
contemplated hereunder. The Agreement has been duly authorized, executed and delivered
by the Company and constitutes the valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’
rights generally or general equitable principles.
SECTION 3.03. Governmental Authorization. The execution and
delivery by the Company of the Agreement, and the performance by the Company of its
obligations hereunder, does not require any notice to, action or consent by, or in respect of,
or filing with, any Governmental Authority.
SECTION 3.04. Ownership. (a) As of the Effective Date, the Company
owns or holds a valid license under all of the Intellectual Property and the Regulatory
Approvals which it currently purports to own related to any of the Products free and clear
of all liens (except any liens for taxes or other governmental charges arising by operation of
law in the ordinary course of business for sums which are not yet due and payable). As of
the Effective Date, neither the Company nor any of its Subsidiaries has granted, nor does
there exist, any lien on the Assigned Interests (except any liens for taxes or other
governmental charges arising by operation of law in the ordinary course of business for
sums which are not yet due and payable).
(b) The Company and its Subsidiaries, immediately prior to the
purchase by Purchaser of the Assigned Interests, owned, and were the sole holders of, all
the Revenue Interests and owned, and were the sole holders of, and/or have and held a
valid, enforceable and subsisting license to, all of those other assets that are required to
produce any of the Products free and clear of any and all liens (other than any liens for
taxes or other governmental charges arising by operation of law in the ordinary course of
business for sums which are not yet due and payable). The Company and its Subsidiaries
have not transferred, sold, or otherwise disposed of, or agreed to transfer, sell, or otherwise
dispose of any portion of the Revenue Interests other than as contemplated by this
Agreement. By the delivery to Purchaser of the executed Prior Agreement, the Company
transferred, conveyed and assigned to Purchaser all of the Company’s rights and interests
in and to the Assigned Interests being sold, transferred, conveyed and assigned to
Purchaser pursuant to this Agreement, free and clear of any liens (other than any liens for
taxes or other governmental charges arising by operation of law in the ordinary course of
business for sums which are not yet due and payable).
(c) There is no filed and served or, to the Knowledge of the Company,
threatened action, suit, proceeding, investigation or claim by any Person to which the
Company is a party that claims that the Intellectual Property or the manufacture, use,
marketing, sale, offer for sale, importation or distribution of any Product infringes on any
intellectual property of any other Person or constitutes misappropriation of any other
Person’s trade secrets or other intellectual property. The Company has not received any
written communication containing an offer to license to the Company, or a request that the
Company consider whether it wishes to obtain a license, under any intellectual property
owned by a third party, in each case, to make, use or sell a Product. To the Knowledge of
the Company, there are no pending unlicensed patent applications owned by any other
12
US-DOCS\85889051.6
Person that, if a patent were to issue thereon without modification or amendment, would
limit or prohibit, in any material respect, the manufacture, use or sale of any Product.
SECTION 3.05. Litigation. As of the date hereof, there is no (a) action,
suit, arbitration proceeding, claim, investigation or other proceeding pending or, to the
Knowledge of the Company, threatened against the Company or its Subsidiaries or (b) any
governmental inquiry pending or, to the Knowledge of the Company, threatened against
the Company or its Subsidiaries, in each case with respect to clauses (a) and (b) above,
which, if adversely determined, would question the validity of, or could reasonably be
expected to have a material adverse effect on the transactions contemplated by this
Agreement or could reasonably be expected to have a Material Adverse Effect. As of the
date hereof, there is no action, suit, arbitration proceeding, claim, investigation or other
proceeding pending or, to the Knowledge of the Company, threatened against the
Company, its Subsidiaries or any other Person relating to any of the Products, the
Intellectual Property related to any of the Products, the Regulatory Approvals, the Revenue
Interests or the Assigned Interests.
SECTION 3.06. Compliance with Laws. To the Knowledge of the
Company, neither the Company nor any of its Subsidiaries (a) is in violation of, has
violated or is under investigation with respect to, and (b) has been threatened to be charged
with or been given notice of any violation of, any law, rule, ordinance or regulation of, or
any judgment, order, writ, decree, permit or license entered by any Governmental
Authority applicable to the Company, the Assigned Interests or the Revenue Interests
which would reasonably be expected to have a Material Adverse Effect.
SECTION 3.07. Conflicts. Neither the execution and delivery of this
Agreement nor the performance or consummation of the transactions contemplated hereby
will: (a) contravene, conflict with, result in a breach or violation of, constitute a default
under, or accelerate the performance provided by, in any material respects any provision of
(i) any law, rule, ordinance or regulation of any Governmental Authority, or any judgment,
order, writ, decree, permit or license of any Governmental Authority, to which the
Company or its Subsidiaries or any of their respective assets or properties are subject or
bound or (ii) any contract, agreement, commitment or instrument to which the Company or
its Subsidiaries is a party or by which the Company or its Subsidiaries or any of their
respective assets or properties is bound or committed; (b) contravene, conflict with, result
in a breach or violation of, constitute a default under, or accelerate the performance
provided by, any provisions of the articles or certificate of incorporation or bylaws (or
other organizational or constitutional documents) of the Company; (c) require any
notification to, filing with, or consent of, any Person or Governmental Authority, except
such consents that are obtained at or prior to Closing; or (d) give rise to any right of
termination, cancellation or acceleration of any right or obligation of the Company, its
Subsidiaries or any other Person or to a loss of any right to receive the Revenue Interests or
the Assigned Interests, except, in the case of the foregoing clauses (a), (c) or (d), for any
such breaches, defaults or other occurrences that would not, individually or in the
aggregate, have a Material Adverse Effect.
13
US-DOCS\85889051.6
SECTION 3.08. Current Indebtedness. Other than as set forth on
Schedule 3.08, there is no indebtedness (other than trade indebtedness in the ordinary
course of business) for borrowed money of the Company.
SECTION 3.09. Solvency. As of the Effective Date, the fair salable value
of the Company’s assets (including goodwill minus disposition costs) exceeds the fair
value of its liabilities. After giving effect to the transactions described in this Agreement,
the Company (a) is not left with unreasonably small capital in relation to its business as
presently conducted and (b) is able to pay its debts (including trade debts) as they mature.
SECTION 3.10. Financial Statements. All financial statements for the
Company delivered to Purchaser fairly present, in conformity with generally accepted
accounting principles, in all material respects, the consolidated financial condition and
consolidated results of operations of the Company.
SECTION 3.11. Products. As of the Effective Date, the only products that
are in development by the Company or any of its Affiliates are Pipeline Products and Valve
Products.
ARTICLE IV
Representations and Warranties of Purchaser
SECTION 4.01. Organization. Purchaser is a corporation duly
incorporated and validly existing under the laws of the State of Delaware.
SECTION 4.02. Authorization. Purchaser has all necessary power and
authority to enter into, execute and deliver this Agreement and to perform all of the
obligations to be performed by it hereunder and to consummate the transactions
contemplated hereunder. This Agreement has been duly authorized, executed and delivered
by Purchaser and constitutes the valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its respective terms, subject, as to enforcement of
remedies, to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally or general equitable principles.
SECTION 4.03. Conflicts. Neither the execution and delivery of this
Agreement nor the performance or consummation of the transactions contemplated hereby
by Purchaser will: (a) contravene, conflict with, result in a breach or violation of, constitute
a default under, or accelerate the performance provided by, in any material respects any
provision of (i) any law, rule or regulation of any Governmental Authority, or any
judgment, order, writ, decree, permit or license of any Governmental Authority, to which
Purchaser or any of its assets or properties may be subject or bound or (ii) any contract,
agreement, commitment or instrument to which Purchaser is a party or by which Purchaser
or any of its assets or properties is bound or committed; (b) contravene, conflict with, result
in a breach or violation of, constitute a default under, or accelerate the performance
provided by, any provisions of the organizational or constitutional documents of Purchaser;
or (c) require any notification to, filing with, or consent of, any Person or Governmental
14
US-DOCS\85889051.6
Authority, except, in the case of the foregoing clauses (a) or (c), for any such breaches,
defaults or other occurrences that would not, individually or in the aggregate, have a
material adverse effect on the ability of Purchaser to perform any of its obligations under
this Agreement.
ARTICLE V
Covenants
SECTION 5.01. Access; Information.
(a) Maintenance of Books and Records. During the Term, the
Company shall keep and maintain, or cause to be kept and maintained, at all times books of
account and record consistent with good business practices and customary industry
standards adequate to correctly reflect all payments paid and/or payable with respect to the
Assigned Interests.
(b) Inspection Rights. Purchaser shall have the right, once a year, to
designate a Third Party independent public accounting firm (the “Purchaser
Representative”) to visit the Company and its Subsidiaries’ offices and properties where
the Company and its Subsidiaries keep and maintain their books and records relating or
pertaining to the Revenue Interests and the Assigned Interests for purposes of conducting
an audit of such books and records, and to inspect and audit such books and records, during
normal business hours, and, upon five (5) Business Days’ written notice given by
Purchaser to the Company, the Company will provide such Purchaser Representative
reasonable access to such books and records.
(c) Audit Costs. In the event any audit of the books and records of the
Company and its Subsidiaries relating to the Revenue Interests and the Assigned Interests
by Purchaser and/or any of Purchaser’s representatives reveals that the amounts paid to
Purchaser hereunder for the period of such audit have been understated by more than ten
percent (10%) of the amounts determined to be due for the period subject to such audit,
then the Audit Costs in respect of such audit shall be borne by the Company; and in all
other cases, such Audit Costs shall be borne by Purchaser.
(d) Monthly Reports. Commencing with the Payment Month during
which the first commercial sale of any of the Products shall occur and continuing during
the Term, the Company shall, promptly after the end of each Payment Month of the
Company (but in no event later than thirty (30) days following the end of such Payment
Month), produce and deliver to Purchaser a Monthly Report for such Payment Month.
(e) Periodic Reports. Commencing with the Fiscal Quarter or Fiscal
Year, as applicable, during which the first commercial sale of any of the Products shall
occur and continuing during the Term, the Company shall deliver to Purchaser the
following financial statements:
15
US-DOCS\85889051.6
(i) Within forty-five (45) days after the end of each Fiscal Quarter,
copies of the unaudited consolidated financial statements of the Company and its
Subsidiaries for such Fiscal Quarter; and
(ii) Within ninety (90) days after the end of each Fiscal Year, copies of
the audited consolidated financial statements of the Company and its Subsidiaries
for such Fiscal Year.
SECTION 5.02. Confidentiality; Press Release. (a) All Confidential
Information furnished by the Company to Purchaser or by Purchaser to the Company in
connection with this Agreement and the transactions contemplated hereby, as well as the
terms, conditions and provisions of this Agreement, shall be kept confidential by Purchaser
and the Company. Notwithstanding the foregoing, (i) the Company and Purchaser may
disclose such Confidential Information to their partners, directors, employees, managers,
officers, investors, bankers, advisors, trustees and representatives, (ii) the Company may
disclose the terms, conditions and provisions of this Agreement to any Third Party in
connection with (and only in connection with) a transaction with such Third Party that
could reasonably be expected to result in (X) a Company Change of Control, (Y) a Product
Change of Control or (Z) a sale by the Company of a Subsidiary, division, product line, or
other significant portion of its business and (iii) the Company and Purchaser may disclose
such Confidential Information as may otherwise be required by applicable law, including
filing this Agreement with the SEC; provided, in the case of the foregoing clauses (i) and
(ii), that such Persons and such Third Parties shall be informed of the confidential nature of
such information and shall be obligated to keep such information confidential pursuant to
the terms of this Section 5.02(a); provided, further, that in the case of the foregoing clause
(iii), Purchaser shall provide five (5) Business Days’ notice to the Company of any filing
with the SEC and consider in good faith a request for confidential treatment of any portion
of this Agreement prior to filing with the SEC.
(b) Notwithstanding the foregoing clause (a), Purchaser may make a
press release or other announcement or public disclosure concerning this Agreement,
provided that such press release shall be (x) subject to prior review by the Company and (y)
in form and substance reasonably satisfactory to the Company taking into account any
commercial sensitivities of the Company.
SECTION 5.03. Efforts; Further Assurance. Subject to the terms and
conditions of this Agreement, each of Purchaser and the Company will use its
commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause
to be done, all things necessary under applicable laws and regulations to consummate the
transactions contemplated by this Agreement. Purchaser and the Company agree to
execute and deliver such other documents, certificates, agreements and other writings and
to take such other actions as may be reasonably necessary in order to consummate or
implement expeditiously the transactions contemplated by this Agreement and to vest in
Purchaser good, valid and marketable rights and interests in and to the Assigned Interests.
Company further agrees to use its commercially reasonable efforts to develop, launch and
commercialize the Products.
16
US-DOCS\85889051.6
SECTION 5.04. Licenses. During the Term, the Company shall maintain
each of the licenses made or entered into with respect to the Products that is required in
order to be able to market and sell any of the Products in good standing and shall not take
any action, or omit to fail to take any action (including making necessary payments), which
would result in a breach or early termination of any license agreements or any rights
thereunder, except in each case to the extent the same would not affect Purchaser’s rights or
license hereunder, and provided that, the Company’s obligations with respect to making
necessary payments under such licenses shall be contingent upon Purchaser making
corresponding payments to the Company pursuant to this Agreement. The Company
covenants that it shall not amend, modify or supplement the terms of, or waive any rights
under, any such license (except as those that may be entered into between the Company and
Purchaser) without the prior written consent of Purchaser where and to the extent that any
amendment or waiver would adversely affect the rights and licenses granted to Purchaser
pursuant to this Agreement. The Company shall promptly notify Purchaser upon receipt by
the Company of any notice from any in-bound licensor of any actual or alleged breach
under any license that could result in the termination of such agreement or a material
reduction or other material limitation in the Company’s rights thereunder to the extent the
same would adversely affect Purchaser’s rights or license hereunder, and the Company
shall promptly cure any such breach within the allotted cure period and if it is unwilling or
unable to do so, the Company shall timely notify Purchaser and Purchaser shall have the
right to cure such breach on the Company’s behalf.
SECTION 5.05. Remedies Event. During the Term, if a Remedies Event
shall have occurred, the Company shall not, without the consent of Purchaser, distribute
any dividend, retire any indebtedness for borrowed money or engage in any transaction
that would result in a Company Change of Control.
SECTION 5.06. Diligence. During the Assigned Interest Period with
respect to the Products, the Company shall use reasonable commercial efforts to develop
the Products and obtain Regulatory Approval for at least one (1) Product and, after
receiving the applicable Regulatory Approval, to commercialize at least one (1) Product in
the United States and in Europe.
SECTION 5.07. Indebtedness; Sale of Revenue Interests. Except set
forth in Schedule 5.07, during the Term, unless Purchaser shall otherwise consent in
writing, the Company shall not, other than in connection with any Permitted Transaction,
(x) incur, create, assume or permit to exist any indebtedness for borrowed money of the
Company other than indebtedness of the Company as of the Closing Date or (y) sell,
assign, transfer, encumber, hypothecate, grant a security interest in or convey the Assigned
Interests and any proceeds and products thereof, the Assigned Interest Related Collateral
and any Revenue Interests other than by the terms of this Agreement.
17
US-DOCS\85889051.6
ARTICLE VI
Termination
SECTION 6.01. Termination. Except as provided in this Section 6.01 and
in Section 6.02, this Agreement shall terminate upon expiration of the Assigned Interest
Period with respect to all Products (the “Term”). If any payments are accrued hereunder on
or prior to that date and are required to be made by one of the Parties hereunder, this
Agreement shall remain in full force and effect until any and all such payments have been
made in full. Upon expiration or termination of this Agreement in accordance with its
terms, all right, title, and interest in and to the Assigned Interests shall automatically revert
to Company, and Purchaser will have no further rights in or with respect to the Assigned
Interests.
SECTION 6.02. Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 6.01, this Agreement shall forthwith become void,
impose no liability on the part of any Party hereto or its Affiliates, directors, officers,
stockholders, partners, managers or members and have no effect other than the provisions
of this Section 6.02, Section 5.02 and Article VII hereof, which shall survive any such
termination.
ARTICLE VII
Miscellaneous
SECTION 7.01. Survival. All representations and warranties made herein
or in any other writing delivered pursuant hereto shall survive the execution and delivery of
this Agreement and shall continue to survive until the expiration or termination of this
Agreement in accordance with Article VI.
SECTION 7.02. Notices. All notices, consents, waivers and
communications hereunder given by any party to the other shall be in writing (including
facsimile transmission) and delivered personally, by telegraph, telecopy, telex or facsimile,
by a recognized overnight courier, or by dispatching the same by certified or registered
mail, return receipt requested, with postage prepaid, in each case addressed (with a copy by
email):
If to Purchaser to:
Ligand Pharmaceuticals Incorporated
0000 Xxxxxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxx
Email: xxxxxxxxxx@xxxxxx.xxx
With a copy to:
Xxxxxx & Xxxxxxx LLP
18
US-DOCS\85889051.6
00000 Xxxx Xxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Email: xxxxx.xxxxx@xx.xxx
If to the Company to:
CorMatrix Cardiovascular, Inc.
0000 Xxx Xxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Xx.
Email: xxxxxxx@xxxxxxxxx.xxx
With a copy to:
Xxxxxxxxx Xxxxxxxxx Glass LLP
0000 Xxxxxxxxx Xxxxxx XX, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Email: xxxxxxxxxx@xxxxxx.xxx
or to such other address or addresses as Purchaser or the Company may
from time to time designate by notice as provided herein, except that notices of changes of
address shall be effective only upon receipt. All such notices, consents, waivers and
communications shall: (a) when posted by certified or registered mail, postage prepaid,
return receipt requested, be effective three (3) Business Days after dispatch, (b) when
telegraphed, telecopied, telexed or facsimiled, be effective upon receipt by the transmitting
party of confirmation of complete transmission, or (c) when delivered by a recognized
overnight courier or in person, be effective upon receipt when hand delivered.
SECTION 7.03. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
(b) Upon the consent of Purchaser (which consent may not be
unreasonably withheld, delayed or conditioned for any proposed assignment to any
reasonably creditworthy potential Acquiror or other proposed assignee), the Company may
assign all or any applicable part of its rights and obligations under this Agreement to any
Acquiror in respect of any Product Change of Control, subject to the assumption by such
Acquiror of the obligations set forth in Section 2.02 or to any other proposed assignee. For
purposes of this Section 7.03(b), any Person the creditworthiness of whom clearly exceeds
the creditworthiness of the Company shall be deemed to be reasonably creditworthy.
(c) Solely upon the consent of the Company (which consent may not be
unreasonably withheld, delayed or conditioned, other than in respect of any proposed
assignment to any direct competitor of the Company, in respect of which such consent may
be granted or withheld by the Company in its sole discretion), Purchaser may assign any of
its obligations or rights under the Agreement without restriction; provided that,
19
US-DOCS\85889051.6
notwithstanding the foregoing, Purchaser may assign its rights and/or delegate its
obligations under this Agreement to an Affiliate, to any Person in a transaction in which
Purchaser also assigns all of its right, title and interest in all or substantially all of its assets
to the same party contemporaneous with the assignment of this Agreement, or to a
successor, whether by way of merger, sale of stock or otherwise, without the Company’s
prior written consent. In advance of any proposed assignment by Purchaser to any
proposed assignee, Purchaser shall provide to the Company any information concerning
such proposed assignment and such proposed assignee as may be reasonably requested by
the Company.
SECTION 7.04. Indemnification. (a) The Company hereby indemnifies
and holds Purchaser and its Affiliates and any of their respective partners, directors,
managers, members, officers, employees and agents (each, a “Purchaser Indemnified
Party”) harmless from and against any and all Losses incurred or suffered by any Purchaser
Indemnified Party arising out of any breach of any representation or warranty made by the
Company in this Agreement.
(b) Purchaser hereby indemnifies and holds the Company, its Affiliates
and any of their respective partners, directors, managers, officers, employees and agents
(each, a “Company Indemnified Party”) harmless from and against any and all Losses
incurred or suffered by a Company Indemnified Party arising out of any breach of any
representation or warranty made by Purchaser in this Agreement.
(c) If any claim, demand, action or proceeding (including any
investigation by any Governmental Authority) shall be brought or alleged against an
indemnified party in respect of which indemnity is to be sought against an indemnifying
party pursuant to the preceding paragraphs, the indemnified party shall, promptly after
receipt of notice of the commencement of any such claim, demand, action or proceeding,
notify the indemnifying party in writing of the commencement of such claim, demand,
action or proceeding, enclosing a copy of all papers served, if any; provided, that the
omission to so notify such indemnifying party will not relieve the indemnifying party from
any liability that it may have to any indemnified party under the foregoing provisions of
this Section 7.04 unless, and only to the extent that, such omission results in the forfeiture
of, or has a material adverse effect on the exercise or prosecution of, substantive rights or
defenses by the indemnifying party. In case any such action is brought against an
indemnified party and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party (who shall not, except with
the consent of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such indemnified party
under this Section 7.04 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable costs of
investigation. In any such proceeding, an indemnified party shall have the right to retain its
own counsel, but the reasonable fees and expenses of such counsel shall be at the expense
of such indemnified party unless the indemnifying party and the indemnified party shall
20
US-DOCS\85889051.6
have mutually agreed to the retention of such counsel. It is agreed that the indemnifying
party shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one separate law
firm (in addition to local counsel where necessary) for all such indemnified parties. The
indemnifying party shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be a final judgment
for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from
and against any loss or liability by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the subject matter of
such proceeding.
(d) Purchaser’s sole remedy shall be to recover any monetary damages
associated with a breach of a representation or warranty made by the Company in this
Agreement, subject to the other terms and provisions contained in this Agreement.
SECTION 7.05. No Implied Representations and Warranties. Each Party
acknowledges and agrees that, other than the representations and warranties specifically
contained in this Agreement, there are no representations or warranties of either Party or
any other Person either expressed or implied with respect to the Assigned Interests or the
transactions contemplated hereby. Without limiting the foregoing, Purchaser
acknowledges and agrees that (a) Purchaser and its Affiliates, together with its and its
Affiliates’ representatives, have made their own investigation of the Products, the
Intellectual Property related to the Products and the Regulatory Approvals and are not
relying on any implied warranties or upon any representation or warranty whatsoever as to
the future amount or potential amount of the Assigned Interests or as to the
creditworthiness of Company and (b) except as expressly set forth in any representation or
warranty in the Agreement, Purchaser shall have no claim or right to indemnification
pursuant to Section 7.04 (or otherwise) with respect to any information, documents or
materials furnished to Purchaser, any of its Affiliates, or any of its or its Affiliates’
representatives, including any information, documents or material made available to
Purchaser, its Affiliates or any of its and its Affiliates’ representatives in any data room,
presentation, management presentation, interview or any other form relating to the
transactions contemplated hereby.
SECTION 7.06. Independent Nature of Relationship. (a) The
relationship between the Company and Purchaser is solely that of seller and purchaser, and
neither Purchaser nor the Company has any fiduciary or other special relationship with the
other or any of their respective Affiliates. Nothing contained herein shall be deemed to
constitute the Company and Purchaser as a partnership, an association, a joint venture or
other kind of entity or legal form for any purposes, including any tax purposes.
(b) No officer or employee or agent of Purchaser will be located at the
premises of the Company or any of its Affiliates, except in connection with an audit
21
US-DOCS\85889051.6
performed pursuant to Section 5.01. No officer, manager or employee of Purchaser shall
engage in any commercial activity with the Company or any of its Affiliates other than as
contemplated herein or as otherwise separately agreed in writing.
(c) Purchaser and/or any of its Affiliates shall not at any time obligate
the Company, or impose on the Company any obligation, in any manner or respect to any
Person not a party hereto. The Company and/or any of its Affiliates shall not at any time
obligate Purchaser, or impose on Purchaser any obligation, in any manner or respect to any
Person not a party hereto.
SECTION 7.07. Entire Agreement. This Agreement, together with the
Exhibits and Schedules hereto (which are incorporated herein by reference), constitute the
entire agreement between the parties with respect to the subject matter hereof and
supersede all prior agreements (including any term sheet), understandings and
negotiations, both written and oral, between the Parties with respect to the subject matter of
this Agreement. No representation, inducement, promise, understanding, condition or
warranty not set forth herein has been made or relied upon by either Party hereto. None of
this Agreement, nor any provision hereof, is intended to confer upon any Person other than
the parties hereto any rights or remedies hereunder or in respect hereof.
SECTION 7.08. Amendments; No Waivers. (a) Neither this Agreement
nor any term or provision hereof may be amended, changed or modified except with the
written consent of all parties hereto. No waiver of any right hereunder shall be effective
unless such waiver is signed in writing by the party against whom such waiver is sought to
be enforced.
(b) No failure or delay by either party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any other right,
power or privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 7.09. Interpretation. When a reference is made in this
Agreement to Articles, Sections, Schedules or Exhibits, such reference shall be to an
Article, Section, Schedule or Exhibit to this Agreement unless otherwise indicated. The
words “include”, “includes” and “including” when used herein shall be deemed in each
case to be followed by the words “without limitation”. Neither party hereto shall be or be
deemed to be the drafter of this Agreement for the purposes of construing this Agreement
against one party or the other.
SECTION 7.10. Headings and Captions. The headings and captions in
this Agreement are for convenience and reference purposes only and shall not be
considered a part of or affect the construction or interpretation of any provision of this
Agreement.
SECTION 7.11. Counterparts; Effectiveness. This Agreement may be
executed in two or more counterparts, each of which shall be an original, but all of which
22
US-DOCS\85889051.6
together shall constitute one and the same instrument. This Agreement shall become
effective when each party hereto shall have received a counterpart hereof signed by the
other parties hereto. Any counterpart may be executed by facsimile or pdf signature and
such facsimile or pdf signature shall be deemed an original.
SECTION 7.12. Severability. If any provision of this Agreement is held to
be invalid or unenforceable, the remaining provisions shall nevertheless be given full force
and effect.
SECTION 7.13. Expenses. Each of Purchaser and the Company will pay
all of its own fees and expenses in connection with entering into and consummating the
transactions contemplated by this Agreement.
SECTION 7.14. Governing Law; Jurisdiction. (a) This Agreement shall
be governed by, and construed, interpreted and enforced in accordance with, the laws of the
state of New York, without giving effect to the principles of conflicts of law thereof.
(b) Any legal action or proceeding with respect to this Agreement may
be brought in any state or federal court of competent jurisdiction in the State of New York,
County of New York. By execution and delivery of this Agreement, each party hereto
hereby irrevocably consents to and accepts, for itself and in respect of its property,
generally and unconditionally the exclusive jurisdiction of such courts. Each party hereto
hereby further irrevocably waives any objection, including any objection to the laying of
venue or based on the grounds of forum non conveniens, which it may now or hereafter
have to the bringing of any action or proceeding in such jurisdiction in respect of this
Agreement.
(c) Each party hereto hereby irrevocably consents to the service of
process out of any of the courts referred to in clause (b) of this Section 7.14 in any such
suit, action or proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to it at its address set forth in this Agreement. Each party hereto hereby
irrevocably waives any objection to such service of process and further irrevocably waives
and agrees not to plead or claim in any suit, action or proceeding commenced hereunder
that service of process was in any way invalid or ineffective. Nothing herein shall affect
the right of a party to serve process on the other party in any other manner permitted by
law.
ARTICLE VIII
Intercreditor Matters
SECTION 8.01. Purchase and Sale Treatment; Recharacterization. (a)
It is the intention of the Parties to this Agreement that the conveyance by the Company to
Purchaser of the Assigned Interests pursuant to this Agreement shall constitute a purchase
and sale, and such purchase and sale of the Assigned Interests hereunder shall be treated as
a sale for all purposes, other than federal and state income tax purposes. The provisions of
this Agreement shall be construed to further these intentions of the Parties.
23
US-DOCS\85889051.6
(b) The Assigned Interests and any amounts received by the Company
in respect of the Assigned Interests (subject to any adjustments for Excluded Costs) are not,
and are not intended to be, the property of the Company (or, in the event of a Bankruptcy
Event, any estate created thereby by operation of applicable law or otherwise) but is
possessed by the Company in trust solely on behalf of Purchaser pending disbursement to
Purchaser or as otherwise provided for in Section 5.09(b), in each case, as contemplated
hereby.
(c) If, notwithstanding clause (b), the conveyance of the Assigned
Interests is subject to a Recharacterization, the Parties intend that the Company shall be
deemed hereunder to have granted, and the Company does hereby grant, to Purchaser a
first priority security interest in favor of Purchaser, to secure the obligations to make the
payments under Section 2.02 in the Assigned Interests and all proceeds and products
thereof.
(d) If, notwithstanding clause (b), the conveyance of the Assigned
Interests is subject to a Recharacterization, the Parties intend that the Company shall be
deemed hereunder to have granted, and the Company does hereby grant a first priority
security interest in favor of Purchaser, to secure the obligations to make payments under
Section 2.02 in the Assigned Interest Related Collateral.
SECTION 8.02. Priority. The security interest granted in Section 8.01(c)
shall be for all purposes senior in right to any other lien.
SECTION 8.03. Control Agreements. (a) The Purchaser agrees to
terminate on or before ten (10) Business Days after the Effective Date (i) that certain
Agreement Regarding Pledged Collateral, dated June 8, 2016, among the Purchaser, the
Company and State Bank and Trust and (ii) if requested by the Company, any other control
or similar agreements identified by the Company that Purchaser and the Company may
have entered into with any bank or financial institution in order to cause such bank or
financial institution to comply at any time with instructions from Purchaser to such bank or
financial institution directing the disposition of funds in any deposit account of the
Company held with such bank or financial institution.
(b) At least ten (10) Business Days prior to the first commercial sale of
any Product, the Company shall notify Purchaser of such first commercial sale and shall
(i) establish a separate bank account (the “Special Account”), (ii) grant Purchaser a first
priority security lien in the Special Account, (iii) enter into a depositary account control
agreement naming Purchaser as a lien holder, and (iv) transfer the Assigned Interests to the
Special Account on a weekly basis.
SECTION 8.04. Termination or Release. (a) Upon termination of this
Agreement in accordance with its terms and payment in full of all Obligations (other than
any contingent indemnification obligations with respect to which no claim has been made)
owing by the Company to Purchaser, all right, title, and interest in and to the Assigned
Interest Related Collateral shall automatically revert to Company and Purchaser will have
24
US-DOCS\85889051.6
no further rights in or with respect to the Assigned Interest Related Collateral and all
security interests granted pursuant to this Article VIII shall terminate and be released.
(b) At the Company’s request, Purchaser shall subordinate its liens with
respect to any of the Assigned Interest Related Collateral or terminate and release its liens
with respect to any of the Assigned Interest Related Collateral subject to any Permitted
Transaction.
(c) In connection with any termination or release pursuant to this
Section 8.04, Purchaser shall execute and deliver to the Company all documents that the
Company shall reasonably request to evidence such termination or release.
SECTION 8.05. Financing Statements. The Company hereby irrevocably
authorizes the Purchaser at any time and from time to time to file in any filing office and/or
recording or registration office in any relevant jurisdiction any financing statements and
amendments thereto that contain the information required by Article 9 of the UCC of each
applicable jurisdiction for the filing of any financing statement or amendment relating to
the collateral in which the Purchaser was granted a security interest pursuant to the terms of
this Agreement. Purchaser shall provide reasonable notice to the Company of all such
financing statement filings made by Purchaser on or about the date hereof, and any
subsequent filings or amendments, supplements or terminations of existing filings, made
by the Company from time to time thereafter.
ARTICLE IX
Remedies
SECTION 9.01. Remedies. If any Remedies Event shall occur and be
continuing, Purchaser may exercise all rights and remedies of a secured party under the
UCC or under any other applicable law and in equity.
[Remainder of this page intentionally left blank]
