REVENUE INTEREST FINANCING AGREEMENT by and among LIQUIDIA TECHNOLOGIES, INC., as the Company, HEALTHCARE ROYALTY PARTNERS IV, L.P., as the Investor and HCR COLLATERAL MANAGEMENT, LLC, as the Investor Representative Dated January 9, 2023
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.
REVENUE INTEREST FINANCING AGREEMENT
by and among
LIQUIDIA TECHNOLOGIES, INC.,
as the Company,
HEALTHCARE ROYALTY PARTNERS IV, L.P.,
as the Investor
and
HCR COLLATERAL MANAGEMENT, LLC,
as the Investor Representative
Dated January 9, 2023
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SCHEDULES AND EXHIBITS
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REVENUE INTEREST FINANCING AGREEMENT
This REVENUE INTEREST FINANCING AGREEMENT (this “Agreement”) dated as of January 9, 2023 (the “Effective Date”), is by and among LIQUIDIA TECHNOLOGIES, INC., a Delaware corporation (the “Company”), HEALTHCARE ROYALTY PARTNERS IV, L.P., a Delaware limited partnership (the “Investor”), and HCR COLLATERAL MANAGEMENT, LLC, a Delaware limited liability company (the “Investor Representative”), solely in its capacity as agent for, and representative of, the Investor. Each of the Company and the Investor are referred to in this Agreement as a “Party” and, collectively, as the “Parties”.
W I T N E S S E T H:
WHEREAS, the Company is developing the Existing Yutrepia Product (defined in Section 1.1) for the purposes of sale in the United States; and
WHEREAS, the Company desires to secure financing from the Investor, and the Investor has indicated its willingness to provide financing, upon and subject to the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements, representations and warranties set forth herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, intending to be legally bound, the Parties hereto covenant and agree as follows:
“Acquisition” means any acquisition by any member of the Company Group, whether by purchase, merger, consolidation, contribution or otherwise, of (a) at least a majority of the assets or property and/or liabilities, or a business line, product line, unit or division of, any other Person, (b) Equity Interests of any other Person such that such other Person becomes a Subsidiary and (c) additional Equity Interests of any Subsidiary not then held by any member of the Company Group.
“Additional Amounts” has the meaning set forth in Section 3.1(i).
“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such Person. For purposes of this definition, “control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of securities entitled to elect the Board of Directors or management board, by Contract or otherwise, and the terms “controlled” and “controlling” have meanings correlative to the foregoing.
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“Agreement” has the meaning set forth in the preamble.
“Annual Net Revenues” means, with respect to any Calendar Year, the aggregate amount of worldwide Net Revenues for that Calendar Year.
“Anti-Corruption Laws” means all Laws of any jurisdiction applicable to the Company or any of its Affiliates from time to time concerning or relating to bribery or corruption, including without limitation the United States Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act 2010 and other similar legislation in any other jurisdictions.
“Anti-Terrorism Laws” means any Laws relating to terrorism or money laundering, including without limitation Executive Order No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the Laws comprising or implementing the Bank Secrecy Act, the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto.
“Applicable Law” means, with respect to any Person, all Laws, rules, regulations and orders of Governmental Authorities applicable to such Person or any of its properties or assets.
“Applicable Tiered Percentage” means, for any given Calendar Quarter, the percentage royalty rate for calculating the Included Product Payment Amount, as set forth in Table 1 on Schedule 1.1-1 and corresponding to (a) the row indicating the then-current Investment Amount as of the last day of such Calendar Quarter and (b) the column indicating the applicable portion of Annual Net Revenues; provided that, if Net Sales attributable to the Existing Yutrepia Product in the United States for the Calendar Year ending December 31, 2025, do not exceed [***], then the percentage royalty rate for calculating the Included Product Payment Amount shall be determined by reference to Table 2 on Schedule 1.1-1 (and not Table 1) for the Calendar Quarter beginning January 1, 2026 and thereafter.
“Asserted Patents” means U.S. Patent Nos. 9,593,066; 9,604,901; and 10,716,793.
“Audited Financial Statements” means the audited consolidated balance sheets of the Parent Company and its Subsidiaries for the fiscal year ended December 31, 2021, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for such fiscal year of the Parent Company and its Subsidiaries, including the notes thereto, audited by independent public accountants of recognized national standing and prepared in conformity with GAAP.
“Bankruptcy Event” means the occurrence of any of the following in respect of a Person:
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“Board of Directors” means (a) with respect to a company or corporation, the board of directors of the company or corporation or any committee thereof duly authorized to act on behalf of such board, (b) with respect to a partnership, the board of directors or similar governing body of the general partner of the partnership, (c) with respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof, and (d) with respect to any other Person, the board or committee of such Person serving a similar function.
“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by Applicable Law to remain closed.
“Calendar Quarter” means (a) for the first such Calendar Quarter, the period beginning on the Initial Closing Date and ending on the last day of the calendar quarter in which the Initial Closing Date falls, and (b) for each Calendar Quarter thereafter, each successive period of three consecutive calendar months ending on March 31, June 30, September 30 or December 31.
“Calendar Year” means (a) for the first such Calendar Year, the period beginning on the Initial Closing Date and ending on December 31 of the calendar year in which the Initial Closing Date occurs, (b) for each calendar year of the Payment Term thereafter, each successive period beginning on January 1 and ending twelve (12) consecutive calendar months later on December 31, and (c) for the last year of the Payment Term, the period beginning on January 1 of the year in which this Agreement expires or terminates and ending on the effective date of expiration or termination of this Agreement.
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“Cash Equivalents” means (a) United States dollars, (b) readily-marketable securities issued or directly, unconditionally and fully guaranteed or insured by the United States government or any agency or instrumentality thereof having maturities of less than one year from the date of acquisition, (c) certificates of deposit and Eurodollar time deposits with maturities of less than one year from the date of acquisition, bankers’ acceptances with maturities of less than one year and overnight bank deposits, in each case with any domestic commercial bank having capital and surplus in excess of $100,000,000, (d) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (b) and (c) entered into with any financial institution meeting the qualifications specified in clause (c) immediately above, (e) commercial paper having the highest rating obtainable from Xxxxx’x Investors Service, Inc., or S&P’s Ratings Services and in each case maturing within nine months after the date of acquisition and (f) interests in money market mutual funds which invest solely in assets and securities of the type described in clauses (a) through (e) immediately above.
“CDA” means that certain Confidentiality Agreement, dated as of [***], by and between HealthCare Royalty Management, LLC and the Company.
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“Change of Control Payment” means, as of any date of determination, the amount equal to the sum of (a) the Hard Cap less the aggregate of (i) all of the payments of the Company in respect of the Total Fixed Payments and the Total Included Product Payments (including any Under Performance Payment or Generic Product Payment) made to the Investor prior to such date and (ii) any amounts received by the Investor pursuant to the Insurance Policy, if any, plus (b) after taking into account the payments made under the foregoing clause (a), the IRR True-Up Payment Amount plus (c) any other Obligations (other than inchoate Obligations) payable by the Company Parties under this Agreement and the other Transaction Documents (if any).
“Closing” has the meaning set forth in Section 8.1.
“Closing Date” means the Initial Closing Date, the Second Closing Date, the Third Closing Date or the Fourth Closing Date, as applicable.
“Collateral” has the meaning set forth in the Security Agreement.
“Collateral Documents” means, collectively, the Security Agreement, Perfection Certificate, any collateral access agreement, each Deposit Account Control Agreement, each Securities Account Control Agreement, each Commodities Account Control Agreement and each other agreement or instrument pursuant to or in connection with which any Company Party or any other Person grants a security interest in any Collateral to Investor Representative.
“Commercialization” means, on a country by country basis, any and all activities with respect to the manufacture, distribution, marketing, detailing, promotion, selling and securing of reimbursement of Included Products in accordance with the Product Plans in a country after Marketing Authorization for an Included Product in that country has been obtained, which shall include, as applicable, post-marketing approval studies, post-launch marketing, promoting, detailing, marketing research, distributing, customer service, selling the Included Product, importing, exporting or transporting the Included Product for sale, and regulatory compliance with respect to the foregoing, in each case in accordance with the Product Plans. When used as a verb, “Commercialize” means to engage in Commercialization.
“Commercially Reasonable and Diligent Efforts” means, with respect to the efforts to be expended with respect to any Included Product in any country or regulatory jurisdiction, such efforts and resources normally used by a reasonably prudent company in the biotechnology industry of a size and product portfolio comparable, and with similar resources available, to the Company and its Affiliates with the marketing, sale and product development and research plans similar to the Product Plans in the biopharmaceutical industry, taken as a whole, in such applicable
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country or jurisdiction, with respect to a pharmaceutical product for which substantially the same Regulatory Approval is held as for such Included Product, which pharmaceutical product is owned or licensed in the same manner as such Included Product, which pharmaceutical product is at a similar stage in its product life and of similar market and profit potential as such Included Product, taking into account efficacy, safety, approved labeling, the competitiveness of alternative products in such country or jurisdiction, pricing/reimbursement for the pharmaceutical product in such country or jurisdiction relative to other countries and jurisdictions, the intellectual property and regulatory protection of the pharmaceutical product in such country or jurisdiction, the regulatory structure in such country or jurisdiction and the profitability of the pharmaceutical product in such country or jurisdiction, all as measured by the facts and circumstances in existence at the time such efforts are due.
“Commodities Account” means a “commodity account” (as defined in Article 9 of the UCC).
“Commodities Account Control Agreement” means the commodities account control agreement entered into by the commodities intermediary, the Investor Representative and any Company Party (and any Permitted Debt Creditors, if applicable), which shall be in form and substance reasonably acceptable to the Investor Representative and the Company.
“Company” has the meaning set forth in the preamble.
“Company Group” means the Parent Company and its Subsidiaries.
“Company Indemnification Cap” has the meaning set forth in Section 10.6(a).
“Company Indemnification Obligations” has the meaning set forth in Section 10.1.
“Company Indemnified Party” has the meaning set forth in Section 10.2.
“Company Party” means any of the Company and the Guarantors.
“Comparable Yield” has the meaning set forth in Section 6.22(a).
“Competitive Party” has the meaning set forth on Schedule 1.1-2.
“Compliance Certificate” means a certificate substantially in the form of Exhibit B.
“Confidential Information” means any and all technical and non-technical non-public information provided by either Party to the other (including, without limitation, the reports provided pursuant to Section 3.4 and any notices or other information provided pursuant to ARTICLE VI), either directly or indirectly, and including any materials prepared on the basis of such information, whether in graphic, written, electronic or oral form, including without limitation information relating to a Party’s technology, products and services, and any business, financial or customer information relating to a Party. The existence and terms of this Agreement shall be deemed the Confidential Information of both Parties. For clarity, this Agreement shall supersede the CDA and the CDA shall cease to be of any force and effect following the execution of this Agreement; provided, however, that all information falling within the definition of “Confidential
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Information” set forth in the CDA shall also be deemed Confidential Information disclosed pursuant to this Agreement, and the use and disclosure of such Confidential Information following the date of this Agreement shall be subject to the provisions of ARTICLE IX.
“Contract” means any contract, agreement, commitment, government bid, instrument, license, sublicense, subcontract, real or personal property lease or sublease, legally binding letters of intent, memorandum of understanding, offer letter, note, indenture, mortgage, bond, letter of credit, guarantee, purchase order, or other legally binding business arrangement, whether written or oral, together with any amendments, restatements, supplements or other modifications thereto.
“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any other Contract by which such Person is a party or by which it or any of its property is bound.
“Copyright License” means any Contract providing for the grant of any right to use any Work under any Copyright.
“Copyrights” means (a) all proprietary rights afforded Works pursuant to Title 17 of the United States Code, including, without limitation, all rights in mask works, copyrights and original designs, and all proprietary rights afforded such Works by other countries for the full term thereof (and including all rights accruing by virtue of bilateral or international treaties and conventions thereto), whether registered or unregistered, including, but not limited to, all applications for registration, renewals, extensions, reversions or restorations thereof now or hereafter provided for by Law and all rights to make applications for registrations and recordations, regardless of the medium of fixation or means of expression, which are owned by or licensed to any member of the Company Group or with respect to which any member of Company Group is authorized or granted rights under or to; and (b) all copyright rights under the copyright Laws of the United States and all other countries for the full term thereof (and including all rights accruing by virtue of bilateral or international copyright treaties and conventions), whether registered or unregistered, including, but not limited to, all applications for registration, renewals, extensions, reversions or restorations of copyrights now or hereafter provided for by Law and all rights to make applications for copyright registrations and recordations, regardless of the medium of fixation or means of expression, which are owned by or licensed to any member of the Company Group or with respect to which any member of the Company Group is authorized or granted rights under or to.
“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.
“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
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“Deposit Account” means a “deposit account” (as defined in Article 9 of the UCC), investment account or other account in which funds are held or invested to or for the credit or account of any Company Party.
“Deposit Account Control Agreement” means the deposit account control agreement entered into by the Depositary Bank, the Investor Representative and any Company Party (and any Permitted Debt Creditors, if applicable), which shall be in form and substance reasonably acceptable to the Investor Representative and the Company.
“Depositary Bank” means such bank or financial institution specified to Investor Representative in writing by the Company on or prior to the Initial Closing Date or such other bank or financial institution specified to Investor Representative in writing by the Company.
“Designated Jurisdiction” means any country, territory or region to the extent that such country, territory or region is the subject of any Sanction.
“Disposition”, “Dispose” and “Disposed” means the sale, transfer, out-license, lease or other disposition (including any sale and leaseback transaction, or any issuance by any Subsidiary of the Parent Company of its Equity Interests other than to a Company Party or any Division) of any property or any economic interest by any member of the Company Group, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith, but excluding the following (collectively, the “Permitted Transfers”):
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It is understood and agreed that, notwithstanding anything to the contrary set forth in this definition, in no event shall a “Permitted Transfer” include (a) any license of any Included Product or IP Rights associated therewith other than Permitted Licenses, (b) prior to the achievement of the Net Sales Threshold, (i) any Disposition of the Sandoz Agreement, or (ii) any Disposition of the Sandoz Device Agreement that would have a material adverse effect on the Commercialization of the Sandoz Product in the United States, or (c) any Disposition of any Yutrepia Device Agreement that would have a material adverse effect on the Commercialization of the Existing Yutrepia Product in the United States.
“Disputes” has the meaning set forth in Section 4.10(k).
“Disqualified Capital Stock” means any Equity Interests that (i) by its terms, (ii) by the terms of any security into which it is convertible or for which it is exchangeable, or (iii) by Contract or otherwise, is, or upon the happening of any event or passage of time would be, required to be redeemed, or is redeemable at the option of the holder thereof, in any such case on or prior to the date that is ninety-one (91) days after the Legal Maturity Date; provided that only the portion of Equity Interests (or portion of security into which it is convertible or for which it is exchangeable) which is, or upon the happening of any event or passage of time would be, required to be redeemed, or is redeemable at the option of the holder thereof, on or prior to such date will be deemed to be Disqualified Capital Stock; and provided further that if such Equity Interests are issued to any plan for the benefit of directors, managers, employees, officers or consultants of any member of the Company Group or by any such plan to such directors, managers, employees, officers or consultants, such Equity Interests shall not constitute Disqualified Capital Stock solely because it may be required to be repurchased by any member of the Company Group in order to satisfy applicable statutory or regulatory obligations. Notwithstanding the preceding sentence, any Equity Interests that would constitute Disqualified Capital Stock solely because the holders thereof have the right to require the redemption or repurchase of such Equity Interests upon the occurrence of a Change of Control, fundamental change or an asset sale will not constitute Disqualified Capital
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Stock if the “asset sale”, “fundamental change” or “Change of Control” provisions applicable to such Equity Interests provide that the issuer thereof will not redeem or repurchase any such Equity Interests pursuant to such provisions prior to all other Obligations (other than contingent indemnification obligations for which no claim has been asserted) having been irrevocably paid in full in cash.
“Division” means, in reference to any Person which is an entity, the division of such Person into two (2) or more separate Persons, with the dividing Person either continuing or terminating its existence as part of such division, including, without limitation, as contemplated under Section 18-217 of the Delaware Limited Liability Company Act for limited liability companies formed under Delaware law, Section 17-220 of the Delaware Revised Uniform Limited Partnership Act for limited partnerships formed under Delaware law, or any analogous action taken pursuant to any other Applicable Law with respect to any corporation, limited liability company, partnership or other entity.
“Dollar” or the sign “$” means United States dollars.
“Domain Names” means all domain names and URLs that are registered and/or owned by or licensed to any member of the Company Group or with respect to which any member of the Company Group is authorized or granted rights under or to.
“Domestic Subsidiary” means any Subsidiary that is organized under the Laws of the United States, any state of the United States or the District of Columbia.
“Drug Application” means an application for Regulatory Approval to market, sell and distribute a drug or product in a country or region, including (a) a New Drug Application, a Supplemental or an Abbreviated New Drug Application, as those terms are defined in the FDCA and the FDA regulations promulgated thereunder, for any Included Product, as appropriate, in each case of any member of the Company Group, (b) any corresponding foreign application in any country or jurisdiction in the world, and (c) all supplements, amendments, variations, extensions and renewals thereof that may be filed with respect to the foregoing.
“EEA” means the European Economic Area, namely the EEA Member Countries.
“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, the United Kingdom, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
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“Effective Date” has the meaning set forth in the preamble.
“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member, membership or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.
“ERISA” means the Employee Retirement Income Security Act of 1974 as amended.
“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Company within the meaning of Section 414(b) or (c) of the Internal Revenue Code (and Sections 414(m) and (o) of the Internal Revenue Code for purposes of provisions relating to Section 412 of the Internal Revenue Code).
“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan, (b) the withdrawal of the Parent Company or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA, (c) a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) by the Parent Company or any ERISA Affiliate from a Multiemployer Plan, (d) the filing by the plan administrator of a notice of intent to terminate a Pension Plan or the treatment of a Pension Plan amendment as a termination under Sections 4041 of ERISA, (e) the institution by the PBGC of proceedings under Section 4042 of ERISA to terminate a Pension Plan, (f) the determination that any Multiemployer Plan is considered an at-risk plan or a plan in endangered or critical status within the meaning of Section 432 of the Internal Revenue Code or Section 305 of ERISA or is insolvent, within the meaning of Section 4245 of ERISA, or has been terminated, within the meaning of Section 4041A of ERISA, (g) the determination that any Pension Plan is in at-risk status within the meaning of Section 303 of ERISA, or (h) the imposition of any liability pursuant to Sections 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA upon the Parent Company or any ERISA Affiliate.
“Event of Default” means any of the events set forth in Section 11.1.
“Event of Default Payment” means, as of any date of determination, the amount equal to the sum of (a) the Hard Cap less the aggregate of (i) all of the payments of the Company in respect of the Total Fixed Payments and the Total Included Product Payments (including any Under Performance Payment or Generic Product Payment) made to the Investor prior to such date, and (ii) any amounts received by the Investor pursuant to the Insurance Policy, if any, plus (b) after taking into account the payments made under clause (a), the IRR True-Up Payment Amount, plus
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(c) any other Obligations (other than inchoate Obligations) payable by the Company Parties under this Agreement and the other Transaction Documents (if any).
“Excluded Account” means, any Deposit Account, Commodities Account or Securities Account (a) that is used solely for payroll, payroll taxes and other employee wage and benefit payments, (b) that solely functions as a trust, fiduciary, escrow, withholding or tax payment account, (c) that is subject to a zero balance, (d) that is maintained solely for the benefit of third parties as cash collateral for obligations owing to such third parties or for cash of third parties, or (e) that do not at any time have cash, investment property, or other amounts, including Cash Equivalents, on deposit therein in excess of $[***], individually, or $[***] in the aggregate for all such accounts.
“Excluded Assets” means, with respect to a Company Party:
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provided, however, that (x) Excluded Assets shall not include any Proceeds of any item of General Intangibles, and (y) any item of General Intangibles or Equipment that at any time ceases to satisfy the criteria for Excluded Assets (whether as a result of the applicable Company Party obtaining any necessary consent, any change in any rule of law, statute or regulation, payment in full of the purchase money indebtedness or capitalized lease obligation to which such asset is subject, or otherwise, as applicable) shall no longer be an Excluded Asset, in each case, with the exclusion of the Litigation Finance Collateral, which shall always be deemed an Excluded Asset.
“Excluded Foreign Subsidiary” means any Foreign Subsidiary that: (i) does not hold any right, title or interest in any IP Rights, Drug Applications, Regulatory Approvals, other Governmental Licenses and all applications and requests for Governmental Licenses; and (ii) is not a party to any Material Contract.
“Excluded Liabilities and Obligations” has the meaning set forth in Section 2.2.
“Excluded Taxes” means (i) Taxes imposed on or measured by the Investor’s net income, however denominated, franchise (and similar) Taxes, and branch profits Taxes (or any similar Taxes), in each case, imposed by any jurisdiction as a result of the Investor being organized in or having its principal office in such jurisdiction, or as a result of any other present or former connection between the Investor and such jurisdiction other than any connections arising from executing, delivering, being a party to, engaging in any transactions contemplated by, performing its obligations under, receiving payments under, or enforcing any Transaction Document, (ii) Taxes attributable to the failure of the Investor to deliver any documentation reasonably requested by the Company that the Investor is legally eligible to deliver, (iii) any U.S. federal withholding Taxes imposed on any payment by or on account of any Obligation of any Company Party under any Transaction Document to an Investor pursuant to a Law in force at the time such Investor becomes a party hereto (or designates a new funding office), except to the extent that such Investor (or its assignor, if any) was entitled, immediately prior to the designation of a new funding office (or assignment), to receive additional amounts with respect to such withholding Tax pursuant to Section 6.22(c), and (iv) any withholding Taxes imposed under FATCA.
“Existing Yutrepia Product” means Yutrepia (treprostinil inhalation powder) Oral Inhalation, which is the subject of New Drug Application No. 213005 filed with the FDA.
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“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to current Section 1471(b)(1) of the Internal Revenue Code (or any amended or successor version described above) and any fiscal or regulatory legislation, rules or official administrative guidance adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and that implement such Sections of the Internal Revenue Code.
“Favorable Determination” means the earlier to occur of (a) with respect to each claim in U.S. Patent No. 10,716,793 asserted against the Company, a final Non-Appealable Decision of either (i) a U.S. District Court decision that such claim is invalid and/or not infringed by the Existing Yutrepia Product, or (ii) inter partes review of such claim before the Patent Trial and Appeal Board of the United States Patent and Trademark Office that such claim is invalid (with respect to clause (a), so long as there has not been a court decision that the Existing Yutrepia Product infringes at least one valid claim of an Asserted Patent other than U.S. Patent No. 10,716,793), and (b) Regulatory Approval of the Existing Yutrepia Product in the United States. For clarity, Regulatory Approval of the Existing Yutrepia Product in the United States shall not be deemed to have been granted until final approval of New Drug Application No. 213005 has been granted by FDA.
“FCPA” has the meaning set forth in Section 4.23(b).
“FDA” means the U.S. Food and Drug Administration or any successor agency or authority thereto.
“Financial Statements” means the Audited Financial Statements and the Interim Financial Statements.
“First Commercial Sale” means the first bona fide, arm’s length sale or transfer of the Existing Yutrepia Product to a Third Party in the United States following receipt of Regulatory Approval for the Existing Yutrepia Product. For clarity, Regulatory Approval for the Existing Yutrepia Product in the United States shall not be deemed to have been granted until final approval of New Drug Application No. 213005 has been granted by FDA.
“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.
“Fourth Closing” has the meaning set forth in Section 8.1(d).
“Fourth Closing Date” has the meaning set forth in Section 8.1(d).
“Fourth Investment Amount” has the meaning set forth in Section 2.1(d).
“Fundamental Representations” means those representations and warranties of the Company and of any other Company Party set forth in the first sentence of Section 4.1 (Organization), Section 4.2 (No Conflicts), Section 4.3 (Authorization), Section 4.4 (Ownership), Section 4.10 (Intellectual Property Matters) Section 4.12 (Material Contracts) to the extent relating to (a) prior to the achievement of the Net Sales Threshold, the Sandoz Agreement and the Sandoz
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Device Agreement, or (b) any Yutrepia Device Agreement that is material to the development, manufacturing, commercialization or supply of a device that is necessary to administer Yutrepia in the United States, Section 4.13 (Bankruptcy), Section 4.17 (No Default; No Special Termination Event), Section 4.21 (Perfection of Security Interests), Section 4.23 (Sanctions Concerns; Anti-Corruption Laws; PATRIOT Act) and Section 4.28 (Tax) and, in each case, in any other Transaction Document to the extent any of the foregoing are incorporated therein.
“GAAP” means generally accepted accounting principles in effect as the standard financial accounting guidelines in the United States from time to time (consistently applied and on a basis consistent with the accounting policies, practices, procedures, valuation methods and principles used in preparing the Financial Statements), and any successor thereto; provided that if any change in such generally accepted accounting principles or the application thereof would substantively change the recognition of revenue with respect to Net Revenues (defined as of the Effective Date) and its calculation as set forth in this Agreement, then the Parties shall mutually agree to amendments to this Agreement in order to cause the Included Product Payment Amount as determined after giving effect to such change in generally accepted accounting principles to be substantially the same as the amount as determined under generally accepted accounting principles in effect as the standard financial accounting guidelines in the United States as of the Effective Date and, pending any such amendment, Net Revenues shall be calculated in a manner consistent with generally accepted accounting principles prior to giving effect to such change.
“Generic Product Payment” has the meaning set forth in Section 3.1(b)(ii).
“Generic Product Payment Event” has the meaning set forth on Schedule 1.1-11.
“Governmental Authority” means the government of the United States, any other nation or any political subdivision thereof, whether state, local or otherwise, and any agency, authority (including supranational authority), commission, instrumentality, regulatory body, court, central bank or other Person exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government, including each Patent Office, the FDA and any other government authority in any jurisdiction.
“Governmental Licenses” means all authorizations issuing from a Governmental Authority, including the FDA, based upon or as a result of applications to and requests for approval from a Governmental Authority for the right to manufacture, import, store, market, promote, advertise, offer for sale, sell, use and/or otherwise distribute a Included Product, which are owned by or licensed to any member of the Company Group, acquired by any member of the Company Group via assignment, purchase or otherwise or that any member of the Company Group is authorized or granted rights under or to.
“Grantors” means the Company and the Guarantors.
“Guarantors” means (i) the Parent Company, (ii) Liquidia PAH, (iii) any Subsidiary providing a Guaranty in favor of the Investor Representative, and (iv) any other Subsidiary of the Company that executes and delivers a Joinder Agreement pursuant to Section 6.1; provided, that, no Excluded Foreign Subsidiary shall be or be required to be a Guarantor for so long as such Subsidiary remains an Excluded Foreign Subsidiary.
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“Guaranty” means the guaranty to be executed in favor of the Investor Representative, for the benefit of the Investor, by the Company and each of the Guarantors.
“Hard Cap” means, as of any time of determination, the amount equal to one hundred seventy-five percent (175%) of the Investment Amount.
“Included Product” means Yutrepia, the Sandoz Product and any other product or service developed, imported, manufactured, marketed, offered for sale, promoted, sold, tested or otherwise distributed by any member of the Company Group. For clarity, references in this Agreement to “an” Included Product or to “the” Included Product(s) refer to any Included Product(s).
“Included Product Payment Amount” means, for each Calendar Quarter, (i) if the Third Investment Amount has not been funded, an amount equal to the Applicable Tiered Percentage multiplied by the Quarterly Net Revenues for such Calendar Quarter and (ii) if the Third Investment Amount has been funded, then (x) for any Calendar Quarter ending prior to January 1, 2026, an amount equal to the Applicable Tiered Percentage multiplied by the Quarterly Net Revenues for such Calendar Quarter, or (y) for any Calendar Quarter commencing on or after January 1, 2026, an amount equal to the greater of (A) the Applicable Tiered Percentage multiplied by the Quarterly Net Revenues for such Calendar Quarter and (B) Five Million Dollars ($5,000,000), until such time as the Investor Representative has received Included Product Payment Amounts for the relevant Calendar Year for which determination is being made equal to Twenty Million Dollars ($20,000,000), in which case the amount set forth in clause (ii)(y)(A) shall apply for the balance of such Calendar Year. For clarity, the Applicable Tiered Percentage used to calculate the Included Product Payment Amount for a given Calendar Quarter will be based on the aggregate Net Revenues billed or invoiced in such Calendar Quarter and all prior Calendar Quarters in the applicable Calendar Year. The Included Product Payment Amount for each Quarterly Payment Date shall be determined in a manner consistent with the example of such calculation set forth in Exhibit C.
“Indebtedness” of any Person means (a) any obligation of such Person for borrowed money, (b) any obligation of such Person evidenced by a bond, debenture, note or other similar instrument, (c) any obligation of such Person to pay the deferred purchase price of property or services (except (i) trade accounts payable that arise in the ordinary course of business, (ii) payroll liabilities and deferred compensation, and (iii) any purchase price adjustment, royalty, earnout, milestone payments, contingent payment or deferred payment of a similar nature incurred in connection with any license, lease, contract research and clinic trial arrangements or acquisition to the extent an amount due thereunder has not been determined and is not due and payable), (d) any obligation of such Person as lessee under a capital lease (under GAAP as in effect on the date hereof), (e) any obligation of such Person to purchase securities or other property that arises out of or in connection with the sale of the same or substantially similar securities or property (other than any such obligation permitted by clause (d) of the definition of Cash Equivalents), (f) any non-contingent obligation of such Person to reimburse any other Person in respect of amounts paid under a letter of credit or other guaranty issued by such other Person, (g) any Indebtedness of others secured by a Lien on any asset of such Person, and (h) any Indebtedness of others guaranteed by such Person; provided that intercompany loans among the Company and its Affiliates shall not constitute Indebtedness.
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“Indemnified Taxes” means all Taxes imposed on or with respect to any payment made by or on account of any Obligation of any Company Party under any Transaction Document, other than Excluded Taxes.
“Initial Closing” has the meaning set forth in Section 8.1(a).
“Initial Closing Date” has the meaning set forth in Section 8.1(a).
“Initial Investment Amount” has the meaning set forth in Section 2.1(a).
“Interim Financial Statements” means the unaudited, condensed and consolidated balance sheets of the Parent Company and its Subsidiaries for the nine (9)-month period ended September 30, 2022, and the related condensed and consolidated statements of operation and comprehensive loss, stockholders’ equity and cash flows for such period of the Parent Company and its Subsidiaries, including the notes thereto.
“Internal Revenue Code” means the United States Internal Revenue Code of 1986, as amended.
“Investment” means any beneficial ownership interest in any Person (including stock, partnership, membership or other ownership interest or other equity securities), and any loan, advance or capital contribution to any Person.
“Investment Amount” means, as of any time of determination, the aggregate of the Initial Investment Amount and, if funded pursuant to Section 2.1(b), the Second Investment Amount and, if funded pursuant to Section 2.1(c), the Third Investment Amount and, if funded pursuant to pursuant to Section 2.1(d), the Fourth Investment Amount. For clarity, the Investment Amount reflects the total amount funded by Investor under this Agreement as of any time of determination without regard to whether any such amount has been prepaid or repaid (including any amounts received by the Investor pursuant to the Insurance Policy).
“Investor” has the meaning set forth in the preamble.
“Investor Account” means such account as designated by the Investor Representative to the Company in writing from time to time.
“Investor Indemnification Obligations” has the meaning set forth in Section 10.2.
“Investor Indemnified Party” has the meaning set forth in Section 10.1.
“Investor Representative” has the meaning set forth in the preamble.
“Involuntary Disposition” means any loss of, damage to or destruction of, or any condemnation or other taking for public use of, any property of any Company Party or any of its Subsidiaries.
“IP Rights” means, collectively, all Copyrights, all Copyright Licenses, all Domain Names, all Patent Licenses, all Patent Rights (including, for the avoidance of doubt, the Yutrepia
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Patent Rights), all Proprietary Databases, all Proprietary Software, all Trademarks, all Trademark Licenses, all Trade Secrets and all Confidential Information of any member of the Company Group, including (but not limited to) the items listed on Schedule 4.10(a) and Schedule 4.10(r).
“IRR True-Up Payment Amount” means, as of any time of determination, the amount that the Investor would need to receive to yield an internal rate of return on the Investment Amount equal to eighteen percent (18%), calculated using the “XIRR function” in Microsoft® Excel® and determined after taking into account the Total Fixed Payments, the Total Included Product Payments, the Under Performance Payments, the Generic Product Payment and any payments under the Insurance Policy received by the Investor Representative and/or the Investor, if any. For reference, information on the XIRR function in Microsoft® Excel® is available at xxxxx://xxxxxxx.xxxxxxxxx.xxx/xx-xx/xxxxxx/xxxx-xxxxxxxx-xx0000xx-0000-000x-x00x-x000xx0xxx0x. An illustrative example of the calculation of the IRR True-Up Payment Amount is attached as Exhibit E hereto.
“IRS” means the United States Internal Revenue Service.
“Joinder Agreement” means a joinder agreement substantially in the form of Exhibit D executed and delivered by each Subsidiary of the Parent Company in accordance with the provisions of Section 6.1.
“Know-How” means all non-public information, results and data of any type whatsoever, in any tangible or intangible form (and whether or not patentable), including databases, practices, methods, techniques, specifications, formulations, formulae, knowledge, skill, experience, data and results (including pharmacological, medicinal chemistry, biological, chemical, biochemical, toxicological and clinical study data and results), analytical and quality control data, stability data, studies and procedures, and manufacturing process and development information, results and data.
“Knowledge” means, with respect to any Company Party, (a) for purposes of ARTICLE IV, the knowledge, after due inquiry, as of the Effective Date and as of each Closing Date, of the officers of all Company Parties identified on Schedule 1.1-3, and (b) for all other purposes of this Agreement, the knowledge, after due inquiry, as of a specified time, of any of the officers of all Company Parties identified on Schedule 1.1-3 or, in each case, any successor to any such officer holding the same or substantially similar officer position at such time.
“Laws” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders directed duties, and Permits with any Governmental Authority, in each case, having the force of law.
“Legal Maturity Date” means the date that is the twelve (12) year anniversary of the Initial Closing Date.
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“License Agreement” means (i) each Contract identified on Schedule 1.1-4 as of the Effective Date and (ii) any New License Agreements entered into after the Effective Date, which will be added to Schedule 1.1-4 pursuant to Section 6.10(a)(iii).
“Licensee” means, with respect to any Included Product, a Third Party to whom the Parent Company or any Affiliate of the Parent Company has granted a license or sublicense (or any Third Party to whom such Third Party has granted a license or sublicense) to develop, have developed, make, have made, seek Regulatory Approvals for, distribute, use, have used, import, sell, offer to sell, have sold or otherwise Commercialize such Included Product under the applicable License Agreement.
“Lien” means any security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge against or interest in property or other priority or preferential arrangement of any kind or nature whatsoever, in each case to secure payment of a debt or performance of an obligation, including any conditional sale or any sale with recourse.
“Litigation Financing Agreements” means (i) that certain Financing Agreement dated as of June 4, 2020, by and between Liquidia PAH and Xxxxxxxxx SPV, LLC and (ii) that certain Litigation Funding and Indemnification Agreement by and between PBM RG Holdings, LLC and Liquidia PAH, in each case (x) related solely to the case captioned Sandoz Inc. and RareGen, LLC v. United Therapeutics Corporation and Smiths Medical ASD, Inc., Case No. 3:19 cv 10170 and (y) as in effect as of the Effective Date or as amended, supplemented, modified or restated from time to time after the Effective Date in a manner that will not result in increased costs under the Litigation Financing Agreements to any member of the Company Group or any change to the Litigation Financing Collateral.
“Litigation Financing Collateral” means the term “Collateral” as defined under each of the Litigation Financing Agreements, as in effect as of the Effective Date.
“Liquidia PAH” means Liquidia PAH, LLC, a Delaware limited liability company.
“Loss” means any loss, assessment, award, cause of action, claim, charge, Tax (other than any Tax for which additional amounts are paid by the Company to the Investor under Section 6.22(c)), cost, expense (including reasonable expenses of investigation and reasonable and documented out-of-pocket attorneys’ fees), fine, judgment, liability, obligation or penalty; provided, however that Loss shall not include any lost profits or revenue or consequential, punitive, special or incidental damages except (a) any Included Product Payment Amounts that are not received by Investor Representative (on behalf of the Investor) due to failure by any Third Party to make payment thereof (other than resulting from any matter described in Section 10.1, Section 10.2, Section 10.3 or Section 10.4) and (b) any lost profits or revenue or consequential, punitive, special or incidental damages awarded or payable by an Investor to a Third Party in connection with a claim or action for which the Company is required to indemnify the Investor pursuant to Section 10.1.
“Marketing Authorization” means, with respect to an Included Product, the Regulatory Approval required by Applicable Law to sell such Included Product in a country or
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region, including, to the extent required by Applicable Law for the sale of such Included Product, all pricing approvals and government reimbursement approvals.
“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the business, assets, properties, liabilities or condition (financial or otherwise) of the Company Group taken as a whole, (b) a material impairment of the rights and remedies of the Investor under any Transaction Document to which it is a party or a material impairment in the perfection or priority of the Investor’s security interests in the Collateral, (c) an impairment of the ability of the Company Parties (taken as a whole) to perform their respective obligations under the Transaction Documents that could reasonably be expected to have a material adverse effect on the business, assets, properties, liabilities or condition (financial or otherwise) of the Company Group taken as a whole, (d) a material adverse effect upon the legality, validity, binding effect or enforceability against any Company Party of any Transaction Document, when taken as a whole, to which it is a party, or (e) an adverse effect (other than a de minimis effect) on the timing, amount or duration of payments due in respect of Net Revenues in accordance with the Transaction Documents to which it is a party or the right of the Investor to receive payments due in respect of Net Revenues; provided, however, that “Material Adverse Effect” shall not include (x) any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to the failure to achieve a Favorable Determination or the occurrence of an Other Determination or (y) the failure, in and of itself, of any Company Party to achieve any previously forecasted or any previously achieved level of sales or Net Revenue.
“Material Contract Counterparty” means a counterparty to any Material Contract.
“Material Contracts” means each Contract to which any member of the Company Group is a party, and that is material to the marketing, sale, distribution, supply or production (including manufacturing, packaging or labeling) of any Included Product (including, without limitation, all waivers, amendments, supplements and other modifications thereto). The Material Contracts as of the Effective Date are set forth on Schedule 4.12(a). For clarity, each of the following is a Material Contract: (a) prior to the achievement of the Net Sales Threshold, the Sandoz Agreement and the Sandoz Device Agreement; and (b) any Yutrepia Device Agreement that is material to the development, manufacturing, commercialization or supply of a device that is necessary to administer Yutrepia in the United States.
“Minimum Cash Account” has the meaning set forth in Section 7.8.
“Minimum Multiple” means the multiples of the then-current Investment Amount as set forth in Column A of the chart in Section 3.1(b).
“Multiemployer Plan” means any “employee benefit plan” (as defined in Section 3(3) of ERISA) that is a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding 5 plan years, has made or been obligated to make contributions.
“Net Revenues” means, without duplication, the Net Sales, Other Royalty Payments, payments received under the Sandoz Agreement that any member of the Company Group recognizes as revenue in accordance with GAAP, and any other payments made in lieu of
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the sale of any Included Product (to the extent such payments are not included in the Net Sales or Other Royalty Payments) recognized as revenue by any member of the Company Group in accordance with GAAP.
“Net Sales” means, with respect to each Included Product and without duplication, for any period of determination, the sum of: (i) “net revenue” with respect to the sale by any member of the Company Group of Included Products, as reported in the Parent Company’s (or any successor’s) periodic reports filed with the SEC on Form 10-Q and Form 10-K (as applicable); and (ii) for any sales of any Included Product by any member of the Company Group that are not reported in the Parent Company’s (or any successor’s) periodic reports filed with the SEC on Form 10-Q and Form 10-K (as applicable) under the preceding clause (i) as “net revenue”, then “net sales” of each Included Product shall be calculated in such case as the difference between (notwithstanding anything to the contrary and for the avoidance of doubt, no “net sales” calculated in the preceding clause (i) shall be included in the “net sales” calculation pursuant to clause (ii)):
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“Net Sales Threshold” means has the meaning set forth on Schedule 1.1-8.
“New Drug Application” means a New Drug Application, as defined in the FDCA and the FDA regulations promulgated thereunder.
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“New License Agreement” means any partnership agreement, license agreement or similar agreement entered into by the Company or its Affiliate, pursuant to which the Company or an Affiliate of the Company has granted a license or sublicense to any Third Party to develop, have developed, make, have made, seek Regulatory Approvals for, distribute, use, have used, import, sell, offer to sell, have sold or otherwise Commercialize an Included Product.
“Non-Appealable Decision” means a decision which cannot be appealed (other than to the United States Supreme Court) because either (a) all appeals have been taken (except for a petition for certiorari to the United States Supreme Court) or (b) the deadline for filing an appeal has lapsed (except for a petition for certiorari to the United States Supreme Court).
“Obligations” means all liabilities, indebtedness, obligations, covenants and duties of any nature (monetary (including post-petition interest, costs, fees, expenses and other amounts, whether allowed or not) or otherwise) of each of the Company Parties arising under this Agreement or any other Transaction Document, any Collateral Document, in each case howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due.
“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.
“One-Time Fixed Payment” has the meaning set forth in Section 3.1(a)(i).
“Orange Book” means the FDA publication “Approved Drug Products with Therapeutic Equivalence Evaluations”, as may be amended from time to time.
“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any jurisdiction outside the United States), (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement, and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.
“Other Determination” means Regulatory Approval of the Existing Yutrepia Product in the United States remains delayed until the expiration of the Asserted Patents due to a Non-Appealable Decision that the Existing Yutrepia Product infringes at least one valid claim of the Asserted Patents. For clarity, Regulatory Approval of the Existing Yutrepia Product in the United States shall not be deemed to have been granted until final approval of New Drug Application No. 213005 has been granted by FDA. The foregoing notwithstanding, for purposes of this definition only, it will be deemed that there has not been a Non-Appealable Decision with respect to U.S. Patent No. 10,716,793 until there has been a Non-Appealable Decision with respect to both (i) the lawsuit involving such Asserted Patent before the U.S. District Court for the District of Delaware (Case No. 1:20-cv-00755-RGA), and (ii) the inter partes review of such Patent before
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the Patent Trial and Appeal Board of the United States Patent and Trademark Office (IPR2021-00406).
“Other Royalty Payments” means, without duplication, any net revenue recognized by any member of the Company Group in their financial statements prepared in accordance with GAAP from partnership distributions, royalty payments, upfront payments, milestone payments or similar payments or any other amounts payable by the Licensees to any member of the Company Group or its Affiliates under or in respect of the applicable License Agreement or any other amounts or proceeds arising from the applicable License Agreement other than: (a) payments by Licensees for payment or reimbursement of expenses, including patent prosecution, defense, enforcement or maintenance expenses in respect of any IP Rights; (b) the fair market value of payments received by Company Group from a Licensee for any debt and/or equity securities or instruments issued by Company Group, or payments for an acquisition of all or substantially all of its assets that include the assignment of this Agreement; (c) funds received from a Licensee as a reimbursement of expenses for bona fide research and development of Included Products (including payments for full-time employees, clinical development and manufacturing expenses); and (d) currently unrecognized revenue from any cash payments received on or before the Initial Closing Date under license agreements in effect as of the Initial Closing Date. For the avoidance of doubt, Other Royalty Payments does not include any payments received by any member of the Company Group under the Sandoz Agreement for so long as such payments constitute Net Revenues.
“Other Taxes” means all stamp, court, documentary, intangible, excise, recording, filing or similar Taxes that arise from any payment made pursuant to any Transaction Document or from the execution, delivery, registration or enforcement of, or otherwise with respect to, any Transaction Document.
“Owned Patent Rights” means Patent Rights which are owned by any Company Party, including any Yutrepia Patent Rights which are owned by any Company Party.
“Parent Company” means Liquidia Corporation, a Delaware corporation.
“Party” and “Parties” have the meanings set forth in the preamble.
“Patent License” means any Contract providing for the grant of any right under any Patent Rights by any member of the Company Group or with respect to which any member of the Company Group is authorized or granted rights under or to.
“Patent Office” means the applicable patent office, including the United States Patent and Trademark Office and any comparable foreign patent office, for any Patent Rights.
“Patent Rights” means all letters patent and patent applications in the United States and all other countries (and all letters patent that issue therefrom or from an application claiming priority therefrom) and all patent term extensions, supplementary protection certificates, reissues, reexaminations, extensions, renewals, divisions and continuations (including continuations-in-part and continuing prosecution applications) thereof, for the full term thereof, together with the right to claim the priority thereto and the right to sue for past infringement of any of the foregoing (“Patents”), in each case which are owned by or licensed to any member of the Company Group
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or with respect to which any member of the Company Group is authorized or granted rights under or to.
“Payment Term” means the time period commencing on the Initial Closing Date and expiring on the date upon which the Investor Representative has received in full (a) cash payments in respect of the Total Fixed Payments and Total Included Product Payments totaling, in the aggregate, the Hard Cap less any amounts received by the Investor pursuant to the Insurance Policy, if any, plus (b) after taking into account the payments made under clause (a) above, the IRR True-Up Payment Amount plus (c) any other Obligations (other than inchoate Obligations) payable by the Company Parties under this Agreement and the other Transaction Documents.
“Payoff” means the repayment in full of all outstanding loans and other amounts due under that certain Amended and Restated Loan and Security Agreement, dated as of January 7, 2022, by and among Silicon Valley Bank, SVB Innovation Credit Fund VIII, L.P., the Parent Company, the Company and Liquidia PAH, as such agreement may be further amended, supplemented, modified or restated from time to time.
“Pension Plan” means any “employee pension benefit plan” (as defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is maintained or is contributed to by the Company and any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to minimum funding standards under Section 412 of the Internal Revenue Code.
“Perfection Certificate” means the Perfection Certificate, dated as of the Effective Date, delivered by each Company Party in connection with this Agreement.
“Permits” means licenses, Governmental Licenses, certificates, accreditations, Regulatory Approvals, other authorizations, registrations, permits, consents, clearances and approvals required in connection with the conduct of any member of the Company Group’s business or to comply with any Applicable Laws, and those issued by state governments for the conduct of any member of the Company Group’s business.
“Permitted Acquisition” means any Acquisition by any member of the Company Group if:
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“Permitted Convertible Notes” means unsecured Indebtedness of the Parent Company to be issued in the form of convertible notes that provide for the issuance of common stock upon conversion thereof or cash in lieu of such common stock at the option of the Parent Company and which include customary change of control or fundamental change out provisions and that have the benefit of covenants and events of default customary for comparable convertible securities; provided that: (i) such convertible notes shall not be guaranteed by any Subsidiary of the Parent Company, (ii) the aggregate of the principal amounts of such convertible notes shall not exceed [***]% of the market capitalization of the Parent Company (determined at the time of signing of the definitive agreement for the issuance of such convertible notes, after taking into account the issuance purchase or sale of such convertible notes) and (iii) such convertible notes shall not have a fixed maturity date earlier than the seven (7) year anniversary of the Initial Closing Date.
“Permitted Convertible Notes Creditors” means the lenders or holders of Permitted Convertible Notes.
“Permitted Debt” means any of the following Indebtedness of any member of the Company Group (which, for purposes of determining whether such Indebtedness exceeds any maximum amount provided in the applicable clause below, shall be calculated on a consolidated basis with respect to the Company Group as a whole):
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“Permitted Licensee” means a Third Party counterparty to a Permitted License.
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“Personal Information” has the meaning set forth in Section 4.24(b).
“Plan” means any “employee benefit plan” within the meaning of Section 3(3) of ERISA (including a Pension Plan) that is maintained for employees of the Company or, in the case of any Pension Plan, any ERISA Affiliate or to which the Company or, in the case of any Pension Plan, any ERISA Affiliate is required to contribute on behalf of any of its employees.
“Product Plan” means the key manufacturing, marketing, sale and product development and research plans with respect to the Sandoz Product and the Existing Yutrepia Product in the United States set forth on Schedule 1.1-7.
“Product Rights” means, collectively, all IP Rights, all Drug Applications, all Regulatory Approvals, all other Governmental Licenses, all applications and requests for Governmental Licenses, all Websites, and all Website Agreements, in each case, which are owned by, issued or licensed to, licensed by, or hereafter acquired or licensed by, any member of the Company Group.
“Proprietary Databases” means any material non-public proprietary database or information repository which is owned by or exclusively licensed to any member of the Company Group or with respect to which any member of the Company Group is authorized or granted rights under or to.
“Proprietary Software” means any proprietary software (other than any software that is generally commercially available, off-the-shelf and/or open source) including, without limitation, the object code and source code forms of such software and all associated documentation, which is owned by or exclusively licensed to any member of the Company Group or with respect to which any member of the Company Group is authorized or granted rights under or to.
“Purpose” has the meaning set forth in Section 9.1.
“Quarterly Fixed Payments” means, with respect to any Calendar Quarter for which a payment is due under Section 3.1(a)(i), the amount equal to (a) Five Hundred Thousand Dollars ($500,000), plus (b) with respect to each Quarterly Payment Date following any Closing Date (other than the Initial Closing Date), an additional amount to reflect the increased Investment Amount on a ratable basis determined in a manner consistent with the example of such calculation set forth in Exhibit C, and plus (c) if the First Commercial Sale has not occurred by June 30, 2025, Three Million Dollars ($3,000,000) as set forth in Section 3.1(a)(i). For clarity, the Quarterly Fixed Payments do not include the One-Time Fixed Payment.
“Quarterly Net Revenues” means, with respect to any Calendar Quarter, the aggregate amount of Net Revenues for that Calendar Quarter.
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“Quarterly Payment Date” means, with respect to a Calendar Quarter, the date that is forty-five (45) days after the end of each Calendar Quarter after the Initial Closing Date (provided if any such date is not a Business Day, the Quarterly Payment Date shall be the next succeeding Business Day, and provided, further, that for such Calendar Quarter ending December 31, the Quarterly Payment Date shall mean the date that is seventy-five (75) days following the end of each such Calendar Quarter).
“Recipient” has the meaning set forth in Section 9.1.
“Reference Date” means the reference dates set forth in the Column B of the chart in Section 3.1(b).
“Refinancing Convertible Notes” has the meaning set forth in Section 7.7.
“Regulatory Agency” means a Governmental Authority with responsibility for the approval of the marketing and sale of pharmaceuticals or other regulation of pharmaceuticals in any jurisdiction.
“Regulatory Approvals” means, collectively, all regulatory approvals, registrations, certificates, authorizations, permits and supplements thereto, as well as associated materials (including the product dossier) pursuant to which the Included Product may be marketed, sold and distributed in a jurisdiction, issued by the appropriate Regulatory Agency.
“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the thirty-day notice period has been waived.
“Responsible Officer” means the officers of the Company identified on Schedule 1.1-3 or any successor to any such officer holding the same or substantially similar officer position at the applicable time and, solely for purposes of the delivery of certificates pursuant to this Agreement, the secretary or any assistant secretary of a Company Party. Any document delivered hereunder that is signed by a Responsible Officer of a Company Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Company Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Company Party.
“Restricted Payment” means
(a) any dividend or other distribution, direct or indirect, on account of any shares (or equivalent) of any class of Equity Interests of any member of the Company Group, now or hereafter outstanding;
(b) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of (i) any shares (or equivalent) of any class of Equity Interests of any member of the Company Group, now or hereafter outstanding or (ii) any call option on any shares (or equivalent) of any class of Equity Interests of any member of the Company Group (irrespective of whether such call option can be cash, net share or physically settled);
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(c) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of Equity Interests of any member of the Company Group, now or hereafter outstanding; and
(d) any payment made in cash to the holders of Permitted Debt under the Permitted Debt Facility Documents in excess of the original principal (or notional) amount thereof, interest thereon and any fees due thereunder.
“Revenue Interests” means all right, title and interest in and to, free and clear of any and all Liens, that portion of Annual Net Revenues of each member of the Company Group in an amount equal to the Included Product Payment Amount for each Calendar Quarter until such time as the Investor Representative has received payments equal to the Hard Cap.
“Royalty Company” means any Person (inclusive of such Person’s Affiliates) engaged primarily in the business of royalty financing or royalty monetization transactions in the life sciences industry, including the purchase or sale of, or financing in exchange for the receipt of, royalties (whether existing or synthetic), net sales, net revenues or other contingent payments (including milestone payments) with respect to pharmaceutical, biological and/or medical device products, or other similar financing transactions for life sciences companies.
“Safety Notices” means any recalls, field notifications, market withdrawals, warnings, “dear doctor” letters, investigator notices, safety alerts or other notices of action issued or instigated by any member of the Company Group or any Governmental Authority relating to an alleged lack of safety or regulatory compliance of the Included Products.
“Sanction(s)” means any sanction administered or enforced by the United States government (including, without limitation, OFAC), the United Nations Security Council, the European Union, His Majesty’s Treasury (“HMT”) or other relevant sanctions authority.
“Sandoz Agreement” means that certain Promotion Agreement, dated as of August 1, 2018, by and between Sandoz Inc. and Liquidia PAH (formerly known as RareGen, LLC), as amended by the First Amendment, dated as of May 8, 2020, and the Second Amendment, dated as of September 4, 2020, and Third Amendment, dated as of November 18, 2022, and any other Contract granting the Company or any of its Affiliates any rights in or to the Sandoz Product.
“Sandoz Device Agreement” means at any given time, either (a) that certain Device Development and Supply Agreement, dated December 1, 2022, by and among Mainbridge Health Partners, LLC, Liquidia PAH and Sandoz Inc. (the “Mainbridge Agreement”), or (b) any other comparable agreement between any Company Party and/or Sandoz and/or any Third Party entered into in accordance with Section 6.8(c) relating to the development, manufacturing, commercialization or supply of a device that is necessary to administer the Sandoz Product in the United States (a “New Sandoz Device Agreement”).
“Sandoz Inc.” means Sandoz Inc., a corporation organized and existing under the laws of Colorado and counterparty to the Sandoz Agreement, and all of its successors and permitted assigns.
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“Sandoz Product” means any and all of the Company’s rights in and to (a) treprostinil injection (therapeutic equivalent to Remodulin®) as approved by the FDA for sale in the United States under Abbreviated New Drug Application No. 203649 owned by Sandoz Inc., and (b) any other “Product”, as such term is defined under the Sandoz Agreement.
“SEC” means the Securities and Exchange Commission or any successor agency or authority thereto.
“Second Closing” has the meaning set forth in Section 8.1(b).
“Second Closing Date” has the meaning set forth in Section 8.1(b).
“Second Closing Notice” has the meaning set forth in Section 8.3.
“Second Investment Amount” has the meaning set forth in Section 2.1(b).
“Securities Account” means a “securities account” (as defined in Article 8 of the UCC) or other account to or for the credit or account of any Company Party to which a financial asset is or may be credited in accordance with an agreement under which the Person maintaining the account undertakes to treat the Person for whom the account is maintained as entitled to exercise the rights that comprise the financial asset.
“Securities Account Control Agreement” means any securities account control agreement entered into by any “securities intermediary”, the Investor Representative and any Company Party with respect to any Securities accounts, which shall be in form and substance reasonably acceptable to the Investor Representative.
“Security Agreement” means the security agreement dated as of the Initial Closing Date executed in favor of the Investor Representative, for the benefit of the Investor, by the Company and each of the Guarantors.
“Set-off” means any set-off, off-set, reduction or similar deduction.
“Special Maturity Payment Amount” means, as of the Legal Maturity Date, the sum of (a) the Hard Cap less the aggregate of (i) all of the payments of the Company in respect of the Total Fixed Payments and the Total Included Product Payments (including any Under Performance Payment or Generic Product Payment) made to the Investor prior to such date and (ii) any amounts received by the Investor pursuant to the Insurance Policy, if any, plus (b) after taking into account the payments made under clause (a), the IRR True-Up Payment Amount, plus (c) any other Obligations (other than inchoate Obligations) payable by the Company Parties under this Agreement and the other Transaction Documents (if any).
“Special Termination Amount” has the meaning set forth in Schedule 1.1-9.
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“Subordinated Debt” means Indebtedness of any member of the Company Group (which, for purposes of determining whether such Indebtedness exceeds any maximum amount provided in the applicable clause below, shall be calculated on a consolidated basis with respect to the Company Group as a whole) that satisfies each of the criteria set forth below:
“Subsidiary” means with respect to any Person (a) any entity as to which such Person directly or indirectly owns outstanding voting securities with power to vote more than fifty percent (50%) of the outstanding Voting Stock of such entity or (b) any entity as to which more than fifty percent (50%) of its outstanding Voting Stock are directly or indirectly owned, controlled or held by such Person with power to vote such securities. As of the Effective Date, the Subsidiaries of the Company are set forth on Schedule 4.20.
“Tax” or “Taxes” means all present or future U.S. federal, state, local or non-U.S. tax, levy, impost, duty, assessment or withholding or other similar fee, deduction or charge, including all income, excise, withholding, estimated, sales, use, value added, transfer, stamp,
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documentary, filing, recordation and other fees imposed by any taxing authority (and interest, fines, penalties and additions related thereto).
“Third Closing” has the meaning set forth in Section 8.1(c).
“Third Closing Date” has the meaning set forth in Section 8.1(c).
“Third Closing Notice” has the meaning set forth in Section 8.4.
“Third Investment Amount” has the meaning set forth in Section 2.1(c).
“Third Party” means any Person other than (a) the Company, (b) the Investor or (c) an Affiliate of either the Company or any of the Investor (as applicable).
“Third Party Claim” means any claim, action, suit or proceeding by a Third Party, excluding any lender, officer, directors, employee or agent or other representative of a Party, including any investigation by any Governmental Authority.
“Third Party Information” has the meaning set forth on Schedule 3.4.
“Third Party Reports” has the meaning set forth on Schedule 3.4.
“Total Fixed Payments” means, as of any time of determination, the aggregate amount of payments made by Company pursuant to Section 3.1(a)(i).
“Total Included Product Payments” means, as of any time of determination, the aggregate amount of payments made by Company pursuant to Section 3.1(a)(ii).
“Trade Secrets” means all rights in data or information that is not commonly known by or available to the public, and which (a) derives economic value, actual or potential, from not being generally known to and not being readily ascertainable by proper means by other Persons who can obtain economic value from its disclosure or use, and (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy, in each case which are owned by or licensed to any member of the Company Group or with respect to which any member of the Company Group is authorized or granted rights under or to.
“Trademark License” means any Contract providing for the grant of any right to use any Trademark by any member of the Company Group or with respect to which any member of the Company Group is authorized or granted rights under or to.
“Trademarks” means all statutory and common-law trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers, and the goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications to register in connection therewith, under the Laws of the United States, any state thereof or any other country or any political subdivision thereof, or otherwise, for the full term and all renewals thereof, which are owned by or licensed to any member of the Company Group or
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with respect to which any member of the Company Group is authorized or granted rights under or to.
“Transaction Documents” means this Agreement, the Collateral Documents, the Guaranty and any Joinder Agreement and all other documents, instruments and Contracts executed and delivered by any Company Party or any other Person to or for the benefit of Investor Representative and/or the Investor in connection with this Agreement or any other Transaction Document.
“Treasury Management Arrangement” means any agreement or other arrangement governing the provision of treasury or cash management services, including Deposit Accounts, netting services, overdraft, credit or debit card, funds transfer, automated clearinghouse, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting, direct debit, cash concentration, trade finance services and other cash management services.
“U.S.” or “United States” means the United States of America, its 50 states, each territory and possession thereof and the District of Columbia.
“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided, that, if, with respect to any financing statement or by reason of any provisions of Applicable Law, the perfection or the effect of perfection or non-perfection of any security interest or any portion thereof granted pursuant to any Collateral Document is governed by the Uniform Commercial Code as in effect in a jurisdiction of the United States other than the State of New York, then “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of this Agreement and any financing statement relating to such perfection or effect of perfection or non-perfection.
“Under Performance Payments” has the meaning set forth in Section 3.1(b).
“Unused Amounts” has the meaning set forth in Section 7.7(k).
“Voting Stock” means, with respect to any Person, Equity Interests issued by such Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the Board of Directors of such Person, even though the right so to vote has been suspended by the happening of such a contingency.
“Website Agreements” means all agreements between a Company Party and any other Person pursuant to which such Person provides any services relating to the hosting, design, operation, management or maintenance of any Website, including without limitation, all agreements with any Person providing website hosting, database management or maintenance or disaster recovery services to any member of the Company Group and all agreements with any domain name registrar.
“Websites” means all websites that any member of the Company Group shall operate, manage or control through a Domain Name, whether on an exclusive basis or a nonexclusive basis, including, without limitation, all content, elements, data, information, materials, hypertext markup language (HTML), software and code, works of authorship, textual
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works, visual works, aural works, audiovisual works and functionality embodied in, published or available through each such website and all IP Rights in each of the foregoing. “Work” means any work or subject matter that is subject to protection pursuant to Title 17 of the United States Code.
“Yutrepia” means the Existing Yutrepia Product, and, except for the Sandoz Product, any other pharmaceutical or biological composition containing treprostinil, including any modifications or improvements thereto.
“Yutrepia Device Agreement” means any agreement entered into after the Effective Date between any Company Party and a Third Party relating to the development, manufacturing, commercialization or supply of a device that is necessary to administer Yutrepia in the United States.
“Yutrepia Patent Rights” means any Patent Rights relating to Yutrepia.
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A. Minimum Multiple | B. Reference Date |
0.60x | December 31, 2026 |
1.00x | December 31, 2028 |
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Minimum Multiple |
1.00x |
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Except as set forth in the disclosure schedules attached hereto (the “Disclosure Schedule”), the Company hereby represents and warrants to the Investor Representative as of the Effective Date and as of the date of each Closing as follows:
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Each Investor hereby represents and warrants separately (and not jointly) to the Company as of the Effective Date and the date of each Closing as follows:
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The Parties hereto covenant and agree as follows:
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Subject to any confidentiality obligations to any Third Party, each notice pursuant to clauses (a) through (k) of this Section 6.3 shall be accompanied by a statement of a Responsible Officer of the Company setting forth details of the occurrence referred to therein and stating what action the applicable Company Party has taken and proposes to take with respect thereto. Each notice pursuant to Section 6.3(g), Section 6.3(i) or Section 6.3(h) shall describe with particularity any and all provisions of this Agreement and any other Transaction Document that have been breached.
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During the Payment Term, no Company Party shall, nor shall it permit any Subsidiary to, directly or indirectly:
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Notwithstanding the foregoing, and for the avoidance of doubt, conversion by holders of (including any cash payment upon conversion), or required payment of any principal or premium on, or required payment of any interest with respect to, any Permitted Convertible Notes, in each case, in accordance with the terms of the indenture governing such Permitted Convertible Notes, shall not constitute a Restricted Payment.
Notwithstanding the foregoing, the Company may repurchase, exchange or induce the conversion of Permitted Convertible Notes by delivery of shares of the Company’s common stock and/or a different series of Permitted Convertible Note (any such series of Permitted Convertible Notes, “Refinancing Convertible Notes”) and/or by payment of cash in an amount that does not exceed the proceeds received by the Company from the substantially concurrent issuance of shares of the Company’s common stock and/or Refinancing Convertible Notes.
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provided that (A) such Third Party or Person or entity in clause (b) agrees to confidentiality and non-use obligations with respect thereto at least as stringent as those specified for in this ARTICLE IX; and (B) in the case of clauses (a)(i) through (iv) and clause (c), to the extent permitted by Applicable Law, the Recipient shall provide prior written notice thereof to the disclosing Party and provide the opportunity for the disclosing Party to review and comment on such required disclosure and request confidential treatment thereof or a protective order therefor; and provided, further that the Recipient will use reasonable efforts to secure confidential treatment of such information and the Confidential Information disclosed shall be limited to that information which is legally required to be disclosed.
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Notwithstanding anything set forth in this Agreement, prior to any foreclosure on the Collateral, the Investor and the Investor Representative shall not file any patent application based upon or using the Confidential Information of the Company provided hereunder.
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Notwithstanding the foregoing, the Company Indemnification Cap shall not apply to any Loss suffered by any Investor Indemnified Party in connection with a Third Party Claim.
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if to the Company, to:
Liquidia Technologies, Inc.
000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxx Xxxxxxxx
Attention: General Counsel
Email: xxxxx@xxxxxxxx.xxx
with a copy to (which shall not constitute notice):
DLA Piper LLP (US)
00 Xxxx X. Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxx Xxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq. and Xxxxxx Xxxxxx, Esq.
Email: xxxxxx.xxxxxxx@xx.xxxxxxxx.xxx and xxxxxx.xxxxxx@xx.xxxxxxxx.xxx
if to the Investor, to:
HealthCare Royalty Management, LLC
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxxxxx, Managing Director
Email: Xxxxxxx.Xxxxxxxxxxxx@xxxx.xxx
with a copy (which shall not constitute notice) to:
HealthCare Royalty Management, LLC
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxx Xxxxxx, General Counsel
Email: Xxx.Xxxxxx@xxxx.xxx
with a copy (which shall not constitute notice) to:
Xxxxxx Xxxxxx LLP
0000 Xxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxx, Xxxxxxx Xxxxxxxx and Xxxxxx Xxxxxxx
E-mail: xxxxxx@xxxxxx.xxx, xxxxxxxxx@xxxxxx.xxx and xxxxxx.xxxxxxx@xxxxxx.xxx
Each Party hereto may, by notice given in accordance herewith to the other Party hereto, designate any further or different address to which subsequent notices, consents, waivers and other communications shall be sent.
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[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the Effective Date.
LIQUIDIA TECHNOLOGIES, INC.
By:
Name:
Title:
[Signature Page to Revenue Interest Financing Agreement]
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HEALTHCARE ROYALTY PARTNERS IV, L.P.
By: | HealthCare Royalty XX XX, LLC, |
By:
Name:
Title:
INVESTOR REPRESENTATIVE:
HCR COLLATERAL MANAGEMENT, LLC
By:
Name:
Title:
[Signature Page to Revenue Interest Financing Agreement]
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DISCLOSURE SCHEDULES
of
LIQUIDIA TECHNOLOGIES, INC.
pursuant to that certain
REVENUE INTEREST FINANCING AGREEMENT
dated as of January 9, 2023
by and among
LIQUIDIA TECHNOLOGIES, INC.,
HEALTHCARE ROYALTY PARTNERS IV, L.P.,
and
HCR COLLATERAL MANAGEMENT, LLC
The following schedules are delivered pursuant to that certain Revenue Interest Financing Agreement (the “Agreement”), dated as of January 9, 2023, by and among LIQUIDIA TECHNOLOGIES, INC., a Delaware corporation (the “Company”), HEALTHCARE ROYALTY PARTNERS IV, L.P., a Delaware limited partnership (the “Investor”), and HCR COLLATERAL MANAGEMENT, LLC, a Delaware limited liability company (the “Investor Representative”), solely in its capacity as agent for, and representative of, the Investor. Nothing contained in these schedules is intended to broaden the scope of any representation or warranty contained in the Agreement or to create any covenant unless clearly and explicitly specified in the contrary herein. The information set forth in these schedules shall be deemed to be disclosed for purposes of all Sections or subsections of the Agreement.
Notwithstanding any materiality qualifications in any representations or warranties in the Agreement, for administrative ease, certain items have been included herein which are not considered by the Company to be material to its business, assets (including intangible assets), financial condition, prospects or results of operations. No reference to or disclosure of any item or other matter in these schedules shall be construed as an admission or indication that such item or other matter is material (nor shall it establish a standard of materiality for any purpose whatsoever) or that such item or other matter is required to be referred to or disclosed herein.
The information set forth in these schedules is disclosed solely for the purposes of the Agreement, and nothing in these schedules constitute an admission by any party hereto of any liability or obligation of the Company to any third party of any matter whatsoever, or an admission against the Company interests. The inclusion of any matters not required by the Agreement to be reflected in these schedules is set forth for informational purposes and does not necessarily include
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other matters of a similar informational nature. In disclosing the information in these schedules, the Company expressly does not waive any attorney-client privilege associated with such information or any protection afforded by the work-product doctrine with respect to any of the matters disclosed or discussed herein.
The information contained in these schedules is in all respects subject to ARTICLE IX of the Agreement. These schedules and the information, descriptions and disclosures included herein are intended to qualify and limit the representations, warranties, and covenants of the Company contained in the Agreement. The headings used in these schedules are inserted for convenience only and shall not create a different standard for disclosure than the language set forth in the Agreement. Capitalized terms used herein but not otherwise defined herein shall have the meanings ascribed thereto in the Agreement.
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COMPETITIVE PARTY
“Competitive Party” means any Person that is engaged in developing, marketing, manufacturing, and/or commercializing any clinical therapeutic product candidates and/or products that are or could reasonably be expected to be competitive with business of a member of the Company Group and listed below, as the same may be updated, by written notice to the Investor Representative from time to time, which notice shall not apply retroactively. For clarity, no Royalty Company may be included as a Competitive Party.
[***]
SCH. 1.1-2
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KNOWLEDGE PERSONS AND RESPONSIBLE OFFICERS
Chief Executive Officer
Chief Financial Officer
General Counsel
Chief Medical Officer (solely with respect to Section 4.25)
PERMITTED INVESTMENTS
| 1. | Ownership of Equity Interests in the Company by Parent Company. |
| 2. | Ownership of Equity Interests in Liquidia PAH, LLC by the Company. |
SCH. 1.1-5
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PERMITTED LICENSES
| 1. | Inhaled Collaboration and Option Agreement, dated as of June 15, 2012, by and between Liquidia Technologies, Inc., and Glaxo Group Limited, as amended by Amendment 1 to the Inhaled Collaboration and Option Agreement, dated as of May 13, 2015, Second Amendment to the Inhaled Collaboration and Option Agreement, dated as of November 19, 2015, and Amendment No. 3 to the Inhaled Collaboration and Option Agreement, dated as of June 24, 2019 (the “GSK ICO Agreement”). |
| 2. | License Agreement, dated as of November 8, 2013, by and between Liquidia Technologies, Inc., and Envisia Therapeutics, Inc., as amended by Amendment to License Agreement, dated as of March 6, 2014, 2nd Amendment to License Agreement, dated September 15, 2014, 3rd Amendment to License Agreement, dated as of May 6, 2015, 4th Amendment to License Agreement, dated as of July 20, 2015, 5th Amendment to License Agreement, dated as of March 29, 2017, 6th Amendment to License Agreement, dated as of March 29, 2017, and 7th Amendment to License Agreement, dated as of October 4, 2017 (the “Envisia License Agreement”). |
SCH. 1.1-6
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SCHEDULE 1.1-7
PRODUCT PLAN
[***]
SCH. 1.1-7
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NET SALES THRESHOLD
The Net Sales Threshold is achieved if aggregate Net Sales of the Existing Yutrepia Product in any period of four consecutive Calendar Quarters exceed $[***].
SCH. 1.1-8
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SCHEDULE 1.1-9
SPECIAL TERMINATION AMOUNT / SPECIAL TERMINATION EVENT
SCH. 1.1-9
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SCH. 1.1-9
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PERMITTED LIENS
Debtor | Secured Party | UCC File No. | Filing Jurisdiction |
|---|---|---|---|
Liquidia Technologies, Inc. | Corporation Service Company, as Representative | 20182080022 | DE |
Liquidia Technologies, Inc. | Corporation Service Company, as Representative | 20183016710 | DE |
Liquidia Technologies, Inc. | Corporation Service Company, as Representative | 20183016728 | DE |
Liquidia Technologies, Inc. | Corporation Service Company, as Representative | 20183018971 | DE |
Liquidia Technologies, Inc. | Corporation Service Company, as Representative | 20183654619 | DE |
Liquidia Technologies, Inc. | Corporation Service Company, as Representative | 20186960039 | DE |
Liquidia Technologies, Inc. | U.S. Bank Equipment Finance, a Division of U.S. Bank National Association | 20190662606 | DE |
Liquidia Technologies, Inc. | Corporation Service Company, as Representative | 20192774292 | DE |
Liquidia Technologies, Inc. | Corporation Service | 20193213944 | DE |
SCH. 1.1-10
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Debtor | Secured Party | UCC File No. | Filing Jurisdiction |
|---|---|---|---|
| Company, as Representative | ||
Liquidia Technologies, Inc. | Corporation Service Company, as Representative | 20195818872 | DE |
Liquidia Technologies, Inc. | Corporation Service Company, as Representative | 20196331016 | DE |
Liquidia Technologies, Inc. | Corporation Service Company, as Representative | 20196374776 | DE |
Liquidia Technologies, Inc. | Corporation Service Company, as Representative | 20197181709 | DE |
Liquidia Technologies, Inc. | Corporation Service Company, as Representative | 20197181691 | DE |
Liquidia Technologies, Inc. | Thermo Xxxxxx Financial Services, Inc. | 20197414423 | DE |
Liquidia Technologies, Inc. | Corporation Service Company, as Representative | 20197940005 | DE |
Liquidia Technologies, Inc. | Corporation Service Company, as Representative | 20222018174 | DE |
Liquidia Technologies, Inc. | Corporation Service Company, as Representative | 20223808664 | DE |
Liquidia Technologies, Inc. | Corporation Service Company, as Representative | 20223808698 | DE |
SCH. 1.1-10
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Debtor | Secured Party | UCC File No. | Filing Jurisdiction |
|---|---|---|---|
Liquidia Technologies, Inc. | Corporation Service Company, as Representative | 20223808706 | DE |
SCH. 1.1-10
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SCHEDULE 1.1-11
GENERIC PRODUCT PAYMENT EVENT
SCH. 1.1-11
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SCHEDULE 3.4
THIRD PARTY REPORTS AND INFORMATION
“Third Party Reports” means the reports under Sections 4.2.3(b), 4.2.3(c) and 6.6 of the Sandoz Agreement, or any similar report under the Sandoz Agreement, in each case that has been received by any Company Party from Sandoz Inc. under the Sandoz Agreement relating to any payments to any Company Party thereunder.
“Third Party Information” means any “Confidential Information” (as defined in the Sandoz Agreement) of Sandoz Inc. that is provided by Sandoz Inc. to any Company Party under the Sandoz Agreement that is responsive to any disclosure or reporting obligations of the Company Group under the Transaction Documents.
SCH. 3.4
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SCHEDULE 4.2(b)
NO CONFLICTS
Parent Company, the Company and Liquidia PAH have granted Liens in the “Collateral” (as defined in the SVB Loan Agreement), pursuant to that certain Amended and Restated Loan and Security Agreement dated as of January 7, 2022, by and among Silicon Valley Bank, as lender, administrative agent, and collateral agent, SVB Innovation Credit Fund VIII, L.P., the Company, the Parent Company, and Liquidia PAH (the “SVB Loan Agreement”). Each member of the Company Group’s Indebtedness under the SVB Loan Agreement will be satisfied in full and retired as of the Initial Closing Date, and all Liens securing such Indebtedness will be released.
SCH. 4.2(b)
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SCHEDULE 4.4
OWNERSHIP
The disclosure under Schedule 4.2(b) of this Disclosure Schedule is incorporated herein by reference.
SCH. 4.4
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SCHEDULE 4.6
LITIGATION
The following disclosures are made under subsection (i) of Section 4.6:
| 1. | Liquidia Technologies, Inc. is party to the following proceedings related to the Asserted Patents that, if adversely determined, could have an adverse effect on the Company Group: |
| x. | Xxxxx-Xxxxxx lawsuit before U.S. District Court for the District of Delaware (Case No. 1:20-cv-00755-RGA) (the “Xxxxx-Xxxxxx Litigation”) |
| b. | Inter partes review before the Patent Trial and Appeal Board of the United States Patent and Trademark Office (IPR2021-00406) (the “IPR”) |
| 2. | United Therapeutics Corporation has filed a lawsuit against Liquidia Technologies, Inc. in the North Carolina Business Court (Case No. 2021CVS4094), alleging that Liquidia Technologies, Inc. and a former employee misappropriated certain trade secrets of United Therapeutics Corporation (the “Trade Secret Case”). |
SCH. 4.6
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SCHEDULE 4.10(i)
PATENT RIGHTS COVERING INCLUDED PRODUCTS
[***]
SCH. 4.10(i)
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COPYRIGHTS, TRADEMARKS AND DOMAIN NAMES
Owned Copyrights
None that are owned or exclusively licensed to any Company Party and material to any member of the Company Group’s Commercialization of any Included Product.
Owned Trademarks
1.RareGen, LLC owns (or has an ownership interest in) the following issued United States trademark:
RAREGEN (Registration No. 5836188)
| 2. | Liquidia Technologies, Inc. owns (or has an ownership interest in) the following issued United States trademarks: |
PRINT (Registration No. 5541277)
LIQUIDIA TECHNOLOGIES (Registration No. 5443598)
PRINT (Registration No. 3694178)
PRINT (Registration No. 3346353)
LIQUIDIA TECHNOLOGIES (Registration No. 3321419)
FLUOROCUR (Registration No. 6646535)
| 3. | Liquidia Technologies, Inc. owns (or has an ownership interest in) the following issued United States trademarks and United States trademark applications: |
LIQUIDIA (Application No. 90218085)
YUTREPIA (Application No. 88749075)
YUTREPIA (Application No. 88899379)
ZENLIFIA (Application No. 88403824)
LIQUIDIA (Application No. 88403819)
PAHVIMY (Application No. 88403738)
TREPLIFI (Application No. 88403720)
LIQUIDIA (Application No. 88403710)
Owned Domain Names
All of the following domain names are held by Liquidia Technologies, Inc. and are registered through GoDaddy:
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SCH. 4.10(r)
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SCH. 4.10(r)
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Licensed Copyrights, Trademarks, and Domain Names
1. | Sandoz possesses certain Trademarks, Trade Secrets and Domain Names that are material to the Commercialization of the Sandoz Product. Pursuant to the Sandoz Agreement, Liquidia PAH, LLC has a non-exclusive license to use the “Sandoz Trademarks and Copyrights” as such term is defined in the Sandoz Agreement. |
SCH. 4.10(r)
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SCHEDULE 4.10
DISCLOSURES
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SCH. 4.10
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MATERIAL CONTRACTS
| (a) | List of Material Contracts |
| 1. | Sandoz Agreement. |
| 2. | Joint Development Agreement, dated as of May 6, 2019, by and between RareGen, LLC, and Carelife USA Inc. |
| 3. | Mainbridge Agreement. |
| 4. | Amended and Restated License Agreement, dated as of December 15, 2008, by and between Liquidia Technologies, Inc., and The University of North Carolina at Chapel Hill, as amended by First Amendment to Amended and Restated License Agreement, dated as of June 8, 2009, Second Amendment to Amended and Restated License Agreement, dated as of June 1, 2012, Third Amendment to Amended and Restated Licensed Agreement, dated as of October 7, 2014, 4th Amendment to Amended and Restated License Agreement, dated as of July 22, 2015, 5th Amendment to Amended and Restated License Agreement, dated as of November 12, 2015, 6th Amendment to Amended and Restated License Agreement, dated as of June 10, 2016, and 7th Amendment to Amended and Restated License Agreement, dated as of March 23, 2018. |
| 5. | Manufacturing Development and Scale-Up Agreement, dated as of March 19, 2012, by and between Liquidia Technologies, Inc., and Chasm Technologies, Inc., as amended by 1st Amendment to Manufacturing Development and Scale-Up Agreement, dated as of May 25, 2017. |
| 6. | Lease Agreement, dated June 29, 2007, by and between Liquidia Technologies, Inc. and GRE Keystone Technologies One LLC, as amended by Lease Modification Agreement No. 1, dated January 12, 2009, Lease Modification Agreement No. 2, dated December 17, 2010, Third Amendment to Lease Agreement, dated June 25, 2014, Fourth Amendment to Lease Agreement, dated November 17, 2015, Fifth Amendment to Lease Agreement, dated January 23, 2017, Sixth Amendment to Lease Agreement, dated June 9, 2017, and Seventh Amendment to Lease Agreement, dated November 1, 2018. |
| 7. | The Litigation Financing Agreements. |
| 8. | LIQ861 API Supply Agreement, dated as of January 10, 2020, by and among Liquidia Technologies, Inc., LGM Pharma LLC and Yonsung Fine Chemicals Co., Ltd., as modified by LIQ861 Liquidia-LGM Pricing Agreement, dated as of January 10, 2020, by and between Liquidia Technologies, Inc., and LGM Pharma LLC. |
SCH. 4.12(a)
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| 9. | Commercial Manufacturing Services and Supply Agreement, dated as of November 12, 2020, by and between Liquidia Technologies, Inc., and Xcelience, LLC |
| 10. | The GSK ICO Agreement. |
| 11. | The Envisia License Agreement. |
SCH. 4.12(a)
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SCHEDULE 4.14(b)
ADDITIONAL NAMES
| 1. | Liquidia PAH was formerly known as RareGen, LLC. Its name was changed on February 24, 2021. |
| 2. | In connection with the acquisition of Liquidia PAH by Parent Company, Gemini Merger Sub I, Inc. and Gemini Merger Sub II, LLC were formed as wholly owned subsidiaries of the Parent Company. Gemini Merger Sub I, Inc. was merged with and into the Company. Gemini Merger Sub II, LLC was merged with and into Liquidia PAH. |
PERMITTED DEBT
| 1. | Indebtedness secured by the Liens described in Schedule 1.1-10. |
| 2. | Royalty obligations under the agreements identified in Items 4 and 5 in part (a) of Schedule 4.12. |
| 3. | Payment obligations with respect to the development of a new pump pursuant to the agreement identified in Item 3 in part (a) of Schedule 4.12. |
| 4. | Obligations to reimburse patent costs pursuant to the agreement identified in Item 4 in part (a) of Schedule 4.12. |
| 5. | Any Indebtedness underlying the Litigation Finance Agreements |
| 6. | The Indebtedness of each member of the Company Group with respect to the SVB Loan Agreement referenced in Schedule 4.2(b), which will be satisfied in full and retired as of the Initial Closing Date, and all Liens securing such Indebtedness will be released. |
SCHEDULE 4.16(d)
MATERIAL ADVERSE EFFECT
[***]
SCH. 4.16(d)
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SUBSIDIARIES
Subsidiary | Jurisdiction of Organization | Percentage of Equity Interests |
Liquidia Technologies, Inc | Delaware | 100% |
Liquidia PAH, LLC | Delaware | 100% |
SCHEDULE 4.21
PERFECTION OF SECURITY INTERESTS IN THE COLLATERAL
Schedule 4.2(b) of this Disclosure Schedule is incorporated herein by reference. Each member of the Company Group’s Indebtedness with respect to the SVB Loan Agreement referenced in Schedule 4.2(b) will be satisfied in full and retired as of the Initial Closing Date, and all Liens securing such Indebtedness will be released.
SCH. 4.21
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SCHEDULE 4.25(b)
LIMITATIONS ON REGULATORY APPROVAL
[***]
SCH. 4.25(b)
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FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date: __________, 20___ (the “Financial Statement Date”)
To:HCR Collateral Management, LLC, as Investor Representative
Re: | Revenue Interest Financing Agreement dated as of January 9, 2023 (as amended, restated, amended and restated, supplemented or otherwise modified or extended from time to time, the “Revenue Interest Financing Agreement”) among Liquidia Technologies, Inc., a Delaware corporation (the “Company”), the entities listed on the signature pages thereto and HCR Collateral Management, LLC, a Delaware limited liability company, solely in its capacity as agent for, and representative of, the Investor. Capitalized terms used but not otherwise defined herein have the meanings provided in the Revenue Interest Financing Agreement. |
Ladies and Gentlemen:
The undersigned [chief executive officer / chief financial officer / treasurer / controller] hereby certifies as of the date hereof that [he/she] is the _______________ of the Company, and that, in [his/her] capacity as such, [he/she] is authorized to execute and deliver this Compliance Certificate to the Investor Representative on the behalf of the Company, and that:
[Use following paragraph 1 for fiscal year-end financial statements that are not previously filed with the SEC:]
[1.Attached hereto as Schedule 1 are the year-end audited financial statements required by Section 6.9(a) of the Revenue Interest Financing Agreement for the fiscal year of the Parent Company ended as of the Financial Statement Date, together with the report and opinion of an independent certified public accountant required by such Section.]
[Use following paragraph 1 for fiscal quarter-end financial statements:]
[1.[Attached hereto as Schedule 1 are the unaudited financial statements required by Section 6.9(b) of the Revenue Interest Financing Agreement for the fiscal quarter of the Parent Company ended as of the Financial Statement Date. Such financial statements] 1 [The financial statements for the fiscal quarter of the Parent Company filed with the SEC]2 fairly present in all material respects the financial condition, results of operations, stockholders’ equity and cash flows of the Parent Company and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes.]
2.The undersigned has reviewed and is familiar with the terms of the Revenue Interest Financing Agreement and has made, or has caused to be made, a reasonably detailed review of the
1 To be included if the fiscal quarter-end financial statements have not previously been filed with the SEC.
2 To be included if the financial statements have been filed with the SEC.
EX. B
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transactions and condition (financial or otherwise) of the Company Group during the past fiscal quarter.
3.A review of the activities of the Company Group during such fiscal period has been made under the supervision of the undersigned with a view to determining whether during such fiscal period the Company Group performed and observed all of its Obligations, and
[select one:]
[to the knowledge of the undersigned during such fiscal period, the Company Group performed and observed each covenant and condition of the Transaction Documents applicable to it, and no Change of Control, Special Termination Event, Default or Event of Default has occurred and is continuing.]
[or:]
[the following covenants or conditions have not been performed or observed and the following is a list of each such Special Termination Event, Change of Control, Default and/or Event of Default and its nature and status:]
[4.][Attached hereto as Schedule [1] [2] are copies of any Sales and Inventory Report (as defined in the Sandoz Agreement) or similar report received by any Company Party from Sandoz under the Sandoz Agreement relating to any payments to any Company Party thereunder for the applicable Calendar Quarter, including reports under Section 6.6 of the Sandoz Agreement.]3
[5.][Attached hereto as Schedule [2][3] are calculations showing the amount of gross sales of the Included Product in each country, (ii) the amount of Other Royalty Payments in each country, (iii) the amount of the Net Revenues and a calculation thereof, and (iv) a calculation of the Included Product Payment Amount for each Quarterly Payment Date, showing the Applicable Tiered Percentage applied thereto and a calculation of Under Performance Payments or the Generic Product Payment (if applicable), in each case, for each fiscal quarter period covered by such Compliance Certificate.4
[5.][6.]. Attached are updates required by Section 6.3(l) and Section 6.10(a)(iii).
[Signature Page Follows]
3 To be included only upon the receipt of Xxxxxx’x consent.
4 To be included following the First Commercial Sale.
EX. B
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IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as of __________, 20__.
Liquidia Technologies, Inc.,
a Delaware corporation
By:
Name:
Title:
EX. B
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EXAMPLE OF CALCULATION OF INCLUDED PRODUCT PAYMENT AMOUNT
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Investment Amount | | | | | |
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EXAMPLE OF CALCULATION OF QUARTERLY FIXED PAYMENTS
[To be provided by Investor]
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (this “Agreement”) dated as of [●] [●], 20[●] is by and between [NAME OF NEW GUARANTOR] (the “New Subsidiary”) and [HEALTHCARE ROYALTY PARTNERS IV, L.P.], each as secured party (in such capacities, collectively, the “Secured Party”). Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Revenue Interest Financing Agreement, dated as of January 9, 2023 (the “Revenue Interest Financing Agreement”), by and among LIQUIDIA TECHNOLOGIES, INC. (the “Company”), the Secured Party, as Investor, and HCR COLLATERAL MANAGEMENT, LLC, a Delaware limited liability company, solely in its capacity as agent for, and representative of, the Investor.
The New Subsidiary is required by Section 6.1(a) of the Revenue Interest Financing Agreement to become a “Grantor” under the Security Agreement and a “Guarantor” under the Guaranty. Accordingly, and as of the date hereof, the New Subsidiary hereby agrees as follows with the Secured Party:
1.The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the New Subsidiary will be deemed to be a party to the Security Agreement and a “Grantor” for all purposes of the Security Agreement, and shall have all the obligations of a Grantor thereunder as if it had executed the Security Agreement. The New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Security Agreement (subject to the information set forth on the schedules to this Agreement). Without limiting the generality of the foregoing terms of this Section 1, the New Subsidiary hereby grants to the Secured Party, a continuing security interest in any and all right, title and interest of the New Subsidiary in and to the Collateral of the New Subsidiary to secure the prompt payment and performance in full when due, whether by lapse of time, acceleration, mandatory prepayment or otherwise, of the Secured Obligations (as defined in the Security Agreement).
2.The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the New Subsidiary will be deemed to be a party to the Guaranty and a “Guarantor” for all purposes of the Guaranty, and shall have all of the obligations of a Guarantor thereunder as if it had executed the Guaranty. The New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions applicable to the Guarantors contained in the Guaranty. Without limiting the generality of the foregoing terms of this Section 1, the New Subsidiary hereby jointly and severally, irrevocably, and unconditionally, together with the other Guarantors, guarantees to the Secured Party as primary obligor and not as surety, the prompt payment and performance of the Guaranteed Obligations (as defined in the Guaranty) in full when due (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code of the United States of America) strictly in accordance with the terms thereof.
3.The New Subsidiary hereby represents and warrants to the Secured Party that:
(a)The New Subsidiary’s exact legal name and state of organization are as set forth on the signature pages hereto.
(b)The New Subsidiary’s taxpayer identification number and organizational identification number are set forth on Schedule 1 hereto.
(c)Other than as set forth on Schedule 2 hereto, the New Subsidiary has not changed its legal name, changed its state of organization, or been party to a merger, consolidation or other change in structure in the five years preceding the date hereof.
(d)Schedule 3 hereto sets forth a complete and accurate list of the Collateral of the New Subsidiary as of the date hereof, in form and substance substantially similar to the original scheduling requirements of the Collateral by the Company under the Revenue Interest Financing Agreement
(e)Schedule 4 hereto is a complete and accurate list as of the date hereof of each Subsidiary of the New Subsidiary, together with (i) jurisdiction of organization, (ii) number of shares of each class of Equity Interests outstanding, (iii) number and percentage of outstanding shares of each class owned (directly or indirectly) by the New Subsidiary and (iv) number and effect, if exercised, of all outstanding options, warrants, rights of conversion or purchase and all other similar rights with respect thereto.
(f) Without limiting the generality of the terms of Section 1, to the extent applicable to it, the New Subsidiary represents and warrants that the representations and warranties in the ARTICLE IV of the Revenue Interest Financing Agreement applicable to the New Subsidiary are true and correct in all material respects as of the date hereof (or, if made as of a specific date, as of such date) subject to any additions that the Company may make to the Disclosure Schedule; (which additions must be acceptable to the Investor Representative it being acknowledged that any addition that would not be reasonably expected to have a Material Adverse Effect shall be conclusively deemed acceptable); provided, that to the extent that any such representation or warranty is qualified by the term “material” or “Material Adverse Effect” such representation or warranty (as so written, including the term “material” or “Material Adverse Effect”) shall have been true and correct in all respects as of the date hereof and shall be true and correct in all respects as of the Closing Date or such other date, as applicable.
4.The address of the New Subsidiary for purposes of all notices and other communications is the address designated for the Company Parties or such other address as the New Subsidiary may from time to time notify the Secured Party in writing.
5.The New Subsidiary waives acceptance and notice of acceptance by the Secured Party of the guaranty by the New Subsidiary upon the execution of this Agreement by the New Subsidiary.
7.THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
[Signature Page Follows]
IN WITNESS WHEREOF, the New Subsidiary has caused this Joinder Agreement to be duly executed by their authorized officers, and the Secured Party has caused the same to be accepted by its authorized officer, as of the day and year first above written.
[NAME OF NEW SUBSIDIARY]
By:
Name:
Title:
Acknowledged and accepted:
HEALTHCARE ROYALTY PARTNERS IV, L.P.
By: | HealthCare Royalty XX XX, LLC, |
By:
Name:
Title:
