Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is both (i) not material and (ii) the type that the Registrant treats as private or confidential. Execution Version...
[***] Certain information in this document has been excluded pursuant to Regulation S-K, Item (601)(b)(10). Such excluded information is both (i) not material and (ii) the type that the Registrant treats as private or confidential. Execution Version US-DOCS\149870611.184871-1379-4480 v.21 REVENUE INTEREST PURCHASE AND SALE AGREEMENT Dated as of May 9, 2024 between VERONA PHARMA, INC., VERONA PHARMA PLC, THE PURCHASERS FROM TIME TO TIME PARTY HERETO, and OAKTREE FUND ADMINISTRATION, LLC, as the Administrative Agent U.S. $250,000,000
iv US-DOCS\149870611.184871-1379-4480 v.21 EXHIBITS SCHEDULE 1 PURCHASERS 1. Oaktree-TCDRS Strategic Credit, LLC 2. SC Investments UBTI Blocker, LLC 3. Oaktree-TSE 16 Strategic Credit, LLC 4. INPRS Strategic Credit Holdings, LLC 5. FSFC Holdings, Inc. 6. OSCF Blocker Holdings, Inc. 7. Oaktree AZ Strategic Lending Fund, L.P. 8. Oaktree LSL Fund Delaware Holdings EURRC, L.P. 9. Oaktree Direct Lending Fund Delaware Holdings Non-EURRC, L.P 10. Oaktree Direct Lending Fund Unlevered Delaware Holdings Non-EURRC, L.P. 11. Oaktree Direct Lending Fund VCOC Delaware Holdings Non-EURRC, L.P. 12. Oaktree Loan Acquisition Fund, L.P. 13. OCM Life Sciences Portfolio LP – Form of Security Agreement Error! Reference source not found. – Form of Debenture Error! Reference source not found. – Form of Funding Notice
1 US-DOCS\149870611.184871-1379-4480 v.21 REVENUE INTEREST PURCHASE AND SALE AGREEMENT This REVENUE INTEREST PURCHASE AND SALE AGREEMENT (as amended, supplemented or otherwise modified from time to time, this “Agreement”) is made and entered into as of May 9, 2024, by and between Verona Pharma, Inc., a Delaware corporation (the “Company”), Verona Pharma plc, a public limited company registered in England and Wales with company number 05375156 (“Holdings”), the entities listed in Schedule 1 hereto (the “Purchasers”), and Oaktree Fund Administration, LLC, as administrative agent for the Purchasers (in such capacity, the “Administrative Agent” and, together with the Company and the Purchasers, the “Parties”, and each a “Party”). WHEREAS, the Company wishes to obtain financing in respect of the Commercialization (as hereinafter defined) of the Product (as hereinafter defined); WHEREAS, the Company wishes to sell, assign, convey and transfer to the Purchasers the Assigned Interests (as hereinafter defined) in consideration for its payment of the Purchase Price (as hereinafter defined) to raise such financing; and WHEREAS, the Purchasers wish to purchase from the Company the Assigned Interests, upon and subject to the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the mutual covenants, agreements representations and warranties set forth herein, the parties hereto agree as follows: ARTICLE I DEFINITIONS Section 1.01 Definitions. The following terms, as used herein, shall have the following meanings: “Acquisition” shall mean any transaction, or any series of related transactions, by which any Person (for purposes of this definition, an “acquirer”) directly or indirectly, by means of amalgamation, consolidation, merger, purchase of assets, purchase of Equity Interests, exclusive licensing of Intellectual Property or otherwise, (i) acquires all or substantially all of the assets of any other Person, (ii) acquires (including via licensing and in-licensing) an entire business line, product, product line, unit or division of any other Person, (iii) with respect to any other Person that is managed or governed by a Board, acquires control of Equity Interests of such other Person representing more than fifty percent (50%) of the ordinary voting power (determined on a fully- diluted basis) for the election of directors of such Person’s Board, or (iv) acquires control of more than fifty percent (50%) of the Equity Interests in any other Person (determined on a fully-diluted basis) that is not managed by a Board. “Administrative Agent” shall have the meaning set forth in the preamble hereto. “Affiliate” shall mean with respect to a specified Person, any Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common
2 US-DOCS\149870611.184871-1379-4480 v.21 control with the Person specified; provided, that, with respect to OCM Life Sciences Portfolio LP, an Affiliate shall include any Person in respect of which OMERS Administration Corporation, as administrator of the OMERS primary pension plan and trustee of the pension funds thereunder, holds, directly or indirectly, more than fifty percent (50%) of the Equity Interests of such Person. For purposes of this definition, “control” shall mean, in respect of a particular Person, the possession by one or more other Persons, directly or indirectly, of the power to direct or cause the direction of the management or policies of such particular Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “controlled” have meanings correlative thereto. “Affiliated Parties” shall have the meaning set forth in Section 7.19. “Administrative Agent Fee Letter” shall mean that certain fee letter dated as of the date hereof by and between the Company and the Administrative Agent, as may be amended, amended and restated or modified from time to time. “Agreement” shall have the meaning set forth in the first paragraph hereof. “American Depositary Shares” shall mean American depositary shares listed on NASDAQ, each representing eight (8) Common Shares. “Anti-Terrorism Laws” shall mean any laws relating to terrorism or money laundering, including, without limitation, (i) the Money Laundering Control Act of 1986 (e.g., 18 U.S.C. §§ 1956 and 1957), (ii) the Bank Secrecy Act of 1970 (e.g., 31 U.S.C. §§ 5311 – 5330), as amended by the Patriot Act, (iii) the laws, regulations and Executive Orders administered by the United States Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), (iv) the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 and implementing regulations by the United States Department of the Treasury, (v) the laws, regulations and orders administered by the UK Office of Financial Sanctions Implementation, (vi) any law prohibiting or directed against terrorist activities or the financing of terrorist activities (e.g., 18 U.S.C. §§ 2339A and 2339B), or (vii) any similar laws enacted in the United States, the United Kingdom, European Union or any other jurisdictions in which the parties to this agreement operate, and all other present and future legal requirements of any Governmental Authority governing, addressing, relating to, or attempting to eliminate, terrorist acts and acts of war. “Applicable Funding Condition” shall mean, with respect to each tranche, the Tranche A Funding Condition or Tranche B Funding Condition, as applicable. “Applicable Funding Date” shall mean, with respect to each tranche, the Tranche A Funding Date or Tranche B Funding Date, as applicable. “Applicable Percentage” shall mean 6.50% for Net Sales during any Fiscal Year. “Applicable Tranche” shall mean Tranche A or Tranche B, as applicable. “Arm’s Length Transaction” shall mean, with respect to any transaction, the terms of such transaction shall not be less favorable to any Obligor or any of its Subsidiaries than commercially
3 US-DOCS\149870611.184871-1379-4480 v.21 reasonable terms that would be obtained in a transaction not while in financial distress with a Person that is an unrelated Third Party. “Assigned Interests” shall mean the Purchasers’ right to receive the Assigned Interest Payments up to the Hard Cap. “Assigned Interests Payments” shall have the meaning set forth in Section 2.02(a). “Audit Costs” shall mean, with respect to any audit of the books and records of the Company with respect to amounts payable or paid under this Agreement, the reasonable and documented out-of-pocket cost of such audit, including all fees, costs and expenses incurred in connection therewith. “Back-Up Security Interest” shall have the meaning set forth in Section 2.01(e). “Bankruptcy Event of Default” shall mean the occurrence of any of the following: (a) any Obligor or any of its Subsidiaries shall commence any case, proceeding or other action (i) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, administration, reorganization, moratorium, liquidation, receivership, examinership, dissolution, winding up or relief of debtors (including by way of voluntary arrangement, scheme of arrangement, restructuring plan or otherwise) or the like, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (ii) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any portion of its assets, or any Obligor or any of its Subsidiaries shall make a general assignment for the benefit of its creditors; (b) there shall be commenced against any Obligor or any of its Subsidiaries any case, proceeding or other action of a nature referred to in clause (a) above which remains undismissed, undischarged, unbonded and in effect for a period of forty-five (45) days; (c) there shall be commenced against any Obligor or any of its Subsidiaries any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against (i) all or a substantial portion of the assets of such Obligor or such Subsidiary, and/or (ii) the Product or a substantial portion of the Product Intellectual Property, which results in the entry of an order for any such relief which shall not have been vacated, discharged, stayed, satisfied or bonded pending appeal within forty-five (45) days from the entry thereof; or (d) an affirmative vote by the Board to commence any case, proceeding or other action described in clause (a) above. “Benefit Plan” shall mean any employee benefit plan as defined in Section 3(3) of ERISA (whether governed by the laws of the United States or otherwise) to which any Obligor or any Subsidiary thereof incurs or otherwise has any obligation or liability, contingent or otherwise.
4 US-DOCS\149870611.184871-1379-4480 v.21 “Board” shall mean, with respect to any Person, the board of directors (or similar governing body) of such Person. “Boxed Warning” shall mean a contraindication or serious warning required by the FDA to be presented in a box within the approved labeling of a drug product, as set forth in 21 C.F.R. Sections 201.57(a)(4) and 201.57(c)(1). “Business Day” shall mean a day (other than a Saturday or Sunday) on which commercial banks are not authorized or required to close in New York City, Toronto, Canada, or London, England. “Call Option” shall have the meaning set forth in Section 5.05(a). “Call Option Closing Date” shall have the meaning set forth in Section 5.05(a). “Call Price” shall mean, as of any date of determination, an amount sufficient, that, after giving effect to the payment of the Assigned Interests Payments made by the Company to the Purchasers pursuant to Section 2.02(a), (i) the MOIC equals 1.20x, if such date is on or before the one-year anniversary of the Tranche A Funding Date, (ii) the MOIC equals 1.40x, if such date is after the one-year anniversary of the Tranche A Funding Date and on or before the two-year anniversary of the Tranche A Funding Date, (iii) the MOIC equals 1.55x if such date is after the two-year anniversary of the Tranche A Funding Date and on or before the three-year anniversary of the Tranche A Funding Date, and (iv) the MOIC equals 1.75x if such date is after the three-year anniversary of the Tranche A Funding Date. “Capital Lease Obligations” shall mean, as to any Person, the obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) any property by such Person as lessee, which obligations are required to be classified and accounted for as a capital lease or finance lease on a balance sheet of such Person under GAAP, and for the purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP. “Capital Lease Obligations” shall not include any obligations under a straight-line or operating lease (including any lease that would not have been a capital lease under GAAP prior to giving effect to Accounting Standards Codification 842, Leases). “Change of Control” shall mean an event or series of events (i) as a result of which any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Act, but excluding any of such person or its Subsidiaries, and any Person acting in its capacity as trustee, agent or other fiduciary or administrator of any such Plan) becomes the “beneficial owner”, directly or indirectly, of thirty-five percent (35%) or more of the Equity Interests of Holdings entitled to vote for members of the Board of Holdings on a fully-diluted basis (and taking into account all such Equity Interests that such person or group has the right to acquire pursuant to any Option Right); (ii) as a result of which, during any period of twelve (12) consecutive months, a majority of the members of the Board of Holdings cease to be composed of individuals (x) who were members of such Board on the first day of such period, (y) whose election, appointment or nomination to such Board was approved by individuals referred to in clause (x) above constituting at the time of such election, appointment or nomination, at least a majority of such Board or
5 US-DOCS\149870611.184871-1379-4480 v.21 equivalent governing body or (z) whose election, appointment or nomination to such Board was approved by individuals referred to in clauses (x) and (y) above constituting at the time of such election, appointment or nomination, at least a majority of such Board; (ii) an event or series of events that results in the sale of all or substantially all of the assets or businesses of Holdings and its Subsidiaries, taken as a whole, or (iii) except to the extent permitted by this Agreement, an event or series of events that results in Holdings’ failure to own, directly or indirectly, beneficially and of record, one-hundred percent (100%) of all issued and outstanding Equity Interests of any Obligor (other than Holdings) (other than, in the case of this clause (iii), as a result of any Acquisition, liquidation, or dissolution and any Equity Interests in the nature of directors’ qualifying shares required pursuant to applicable Law). For purposes of this definition, “beneficial owner” is as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person or group shall be deemed to have “beneficial ownership” of all Equity Interests that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “Option Right”). “Code” shall mean the Internal Revenue Code of 1986, as amended. “Collateral” shall mean (i) “Collateral” as defined in the Security Agreement, (ii) “Charged Assets” as defined in the Debenture, and (iii) to the extent the transfer of the Assigned Interests contemplated hereby is held not to be a sale, the Assigned Interests and the Assigned Interest Payments, whether now owned or hereafter acquired, and any proceeds (as such term is defined in the UCC) thereof. “Combination” shall have the meaning set forth in the definition of “Net Sales.” “Commercialization” shall mean any and all activities with respect to the manufacture, distribution, marketing, detailing, promotion, selling and securing of reimbursement and any other exploitation or commercialization of the Product in the applicable jurisdiction after Marketing Authorization for the Product has been obtained in such jurisdiction, which shall include, as applicable, seeking and negotiating pricing and reimbursement approvals for the Product, post- marketing approval studies, post-launch marketing, promoting, detailing, marketing research, distributing, customer service, selling the Product, importing, exporting or transporting the Product for sale, and regulatory compliance with respect to the foregoing in the applicable jurisdiction. When used as a verb, “Commercialize” shall mean to engage in Commercialization. “Commercially Reasonable Efforts” shall mean, with respect to the efforts to be expended, or considerations to be undertaken, by the Company and its Affiliates with respect to any objective or activity to be undertaken hereunder, such efforts and resources normally used by a reasonably prudent company in the pharmaceutical or biotechnology industry of similar size and resources to the Company to accomplish a substantially similar objective or activity for a pharmaceutical product for which substantially the same regulatory structure is involved as for the Product and irrespective of whether such company has any other products that compete with such pharmaceutical product, which pharmaceutical product is owned or licensed in a similar manner as the Product, which pharmaceutical product is at a similar stage in its Development or product life cycle and is of similar market or profit potential as the Product, taking into account efficacy, safety, approved labeling, the competitiveness of alternative products in a given jurisdiction, pricing/reimbursement for the pharmaceutical product in a given jurisdiction, the Intellectual
6 US-DOCS\149870611.184871-1379-4480 v.21 Property and regulatory protection of the pharmaceutical product in a given jurisdiction, the regulatory structure in such jurisdiction and the profitability of the pharmaceutical product in a given jurisdiction, all as measured by the facts and circumstances in existence at the time such efforts are due. It is anticipated that the level of effort and resources that constitute “Commercially Reasonable Efforts” with respect to a particular indication will change over time, reflecting changes in the status of the Product, as applicable. “Commitment” shall mean, with respect to each Purchaser, the obligation of such Purchaser to fund its applicable Purchase Price set forth opposite such Purchaser’s name on Schedule 1 (as such Schedule may be amended from time to time) under the caption “Applicable Commitment” on each of the Tranche A Funding Date and Tranche B Funding Date, as applicable, in accordance with the terms and conditions of this Agreement. The aggregate amount of Commitments on the date of this Agreement equals $250,000,000. “Common Shares” shall mean the ordinary shares, nominal value £0.05 per share, of Holdings. “Company” shall have the meaning set forth in the first paragraph hereof. “Company Competitor” shall mean (i) any competitor of Holdings or any of its Subsidiaries primarily operating in the same line of business as Holdings or any of its Subsidiaries and (ii) any of such competitor’s Affiliates (other than any Person that is a bona fide debt fund primarily engaged in the making, purchasing, holding or other investing in commercial loans, notes, bonds or similar extensions of credit or securities in the Ordinary Course) that are either clearly identifiable as an Affiliate of any such competitor on the basis of such Person’s name or identified by name in writing by the Company to the Administrative Agent from time to time. Notwithstanding anything to the contrary contained in this Agreement, (a) the Administrative Agent shall not be responsible or have any liability for, or have any duty to ascertain, inquire into, monitor or enforce, compliance with the provisions hereof relating to Company Competitor, (b) the Obligors and the Purchasers acknowledge and agree that the Administrative Agent shall have no responsibility or obligation to determine whether any Purchaser or potential Purchaser is a Company Competitor and that the Administrative Agent shall have no liability with respect to any assignment or participation made to a Company Competitor and (c) in no event shall any Oaktree Purchaser or any OMERS Purchaser be deemed to be a Company Competitor. “Company Indemnified Party” shall have the meaning set forth in Section 7.05(b). “Confidential Information” shall mean, as it relates to the Company and its Affiliates and the Product, the non-public Intellectual Property, confidential business information, financial data and other like information (including ideas, research and development, know-how, formulas, schematics, compositions, technical data, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals), inventory, ideas, algorithms, processes, computer software programs or applications (in both source code and object code form), client lists and tangible or intangible proprietary information or material, or such other information that either party identifies to the other as confidential or the nature of which or the circumstances of the disclosure of which would reasonably indicate that such information is confidential.
7 US-DOCS\149870611.184871-1379-4480 v.21 “Contracts” shall mean any contract, license, lease, agreement, obligation, promise, undertaking, understanding, arrangement, document, commitment, entitlement or engagement under which a Person has, or will have, any liability or contingent liability (in each case, whether written or oral, express or implied, and whether in respect of monetary or payment obligations, performance obligations or otherwise). “Control” or “Controlled” shall mean, when used with respect to any item of Intellectual Property, the possession or control (whether by ownership, license, sublicense or other contractual right) by Company or any of its Affiliates, of the ability to assign or grant to any Third Party the license, sublicense or right to access, use or otherwise exploit such Intellectual Property as it relates to the manufacture, use, exploitation, Development and/or Commercialization of the Product, without paying any additional consideration to any other Third Party or violating the terms of any agreement or other arrangement with any other Third Party. Notwithstanding the foregoing, a Party and its controlled Affiliates will not be deemed to “Control” any Intellectual Property that, prior to the consummation of a Change of Control of such Party, is owned or in-licensed by a Third Party that becomes an Affiliate that controls such acquired Party (or that merges or consolidates with such Party) after the Effective Date as a result of such Change of Control unless prior to the consummation of such Change of Control, such acquired Party or any of its controlled Affiliates also Controlled such Intellectual Property. “Copyright” shall mean published and unpublished works of authorship whether or not copyrightable, including software, website and mobile content, data, databases, and other compilations of information, in each case, whether or not registered, and any and all copyrights in and to the foregoing, together with all common law rights and moral rights therein, and all copyrights, copyright registrations and applications for copyright registrations, including all renewals, extensions, restorations, derivative works and reversions thereof and all common law rights, moral rights and other rights whatsoever accruing thereunder or pertaining thereto throughout the world. “Debenture” shall mean the debenture, dated as of the date hereof, between Holdings and the Administrative Agent (in its capacity as administrative agent for the benefit of the Secured Parties under this Agreement), which debenture shall be substantially in the form of Error! Reference source not found., as may be amended, restated, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof. “Default” shall mean any Event of Default and any event that, upon the giving of notice, the lapse of time or both, would constitute an Event of Default. “Designated Jurisdiction” shall mean any country or territory to the extent that such country or territory is the subject of country- or territory-wide Sanctions. “Development” shall mean, with respect to the Product, any internal or external research or development activities (including preclinical and clinical trials), and any internal or external regulatory activities related to obtaining and maintaining Marketing Authorization for the Product, including development of data or information for the purpose of submission to a Governmental Authority to obtain authorization to conduct clinical trials and to obtain, support, or maintain Marketing Authorization of the Product and including activities directed toward the clinical
8 US-DOCS\149870611.184871-1379-4480 v.21 manufacture and manufacturing process development for the Product. “Develop,” “Developing,” and “Developed” will be construed accordingly. “Disqualified Equity Interests” shall mean, with respect to any Person, any Equity Interest of such Person that, by its terms (or by the terms of any security or other Equity Interest into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (i) matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable (in each case, other than solely for (a) Qualified Equity Interests and (b) customary cash in lieu of fractional shares), including pursuant to a sinking fund obligation or otherwise, (ii) is redeemable at the option of the holder thereof (other than solely for (a) Qualified Equity Interests and (b) cash in lieu of fractional shares), in whole or in part, (iii) provides for the scheduled payments of dividends or other distributions in cash (other than the payment of cash in lieu of fractional shares) or other securities that would constitute Disqualified Equity Interests, or (iv) is or becomes convertible into or exchangeable for (unless at the sole option of the issuer thereof) Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is ninety-one (91) days after the date this Agreement terminates in accordance with Section 6.01; provided, that, any Disqualified Equity Interests that would not constitute Disqualified Equity Interests but for provisions thereof giving holders of such Equity Interests (or the holders of any security into or for which such Equity Interests are convertible, exchangeable or exercisable) the right to require the issuer thereof to redeem or repurchase such Equity Interests upon the occurrence of a change in control (including for this purpose an asset sale that would require prepayment in full of the Obligations) occurring prior to the 91st day after the date this Agreement terminates in accordance with Section 6.01 shall not constitute Disqualified Equity Interests if such right to redemption or repurchase is subject, to the satisfaction of the Administrative Agent in its reasonable discretion, to the prior payment in full of all Obligations (other than contingent indemnification obligations for which no claim has been asserted) under the Transaction Documents; provided, further, that, if such Equity Interests are issued pursuant to a customary employee benefits or equity incentive plan for the benefit of employees of Holdings or any Subsidiary or by any such plan to such employees, such Equity Interests shall not constitute Disqualified Equity Interests solely because (x) such employee may deliver such Equity Interests to Holdings and its Subsidiaries (or Holdings or such Subsidiary withholds such Equity Interests) in satisfaction of any exercise price or tax withholding obligations with respect to such Equity Interests, or (y) they may be required to be repurchased by Holdings or its Subsidiaries as a result of any such employee’s termination, death or disability. “Distressed Debt Investor” shall mean a vulture fund, distressed debt fund or any fund or investor whose principal business or principal portfolio or investment strategy is to invest in loans or other debt securities purchased with a view to owning the equity or gaining ownership of the equity in the business (directly or indirectly). In no event shall any Oaktree Purchaser or OMERS Purchaser be deemed to be a Distressed Debt Investor. Notwithstanding anything to the contrary contained in this Agreement, Administrative Agent shall not have any duty or obligation to carry out due diligence in order to identify or determine whether a Person would be a Distressed Debt Investor, and the Administrative Agent shall have no liability with respect to any assignment or participation made to a Distressed Debt Investor. “Distributor” shall mean a Third Party that (a) purchases or has the option to purchase the Product in finished form from or at the direction of the Company or any of its Affiliates, (b) has
9 US-DOCS\149870611.184871-1379-4480 v.21 the right, option or obligation to distribute, market and sell the Product (with or without packaging rights) in one or more regions, and (c) does not otherwise make any royalty, milestone, profit share or other similar payment to the Company or its Affiliate based on such Third Party’s sale of the Product. The term “packaging rights” in this definition shall mean the right for the Distributor to package or have packaged Product supplied in unpackaged bulk form into individual ready-for- sale packs. “Dollars” and “$” shall mean lawful money of the United States of America. “Effective Date” shall mean the first date upon which the conditions set forth in Section 2.05(a), shall have occurred. The Effective Date occurred on May 9, 2024. “Eligible Transferee” shall mean and include (i) any commercial bank, (ii) any insurance company, (iii) any finance company, (iv) any financial institution, (v) any Person that is a bona fide debt fund primarily engaged in the making, purchasing, holding or other investing in commercial loans, notes, bonds or similar extensions of credit or securities in the Ordinary Course, (vi) with respect to any Purchaser, any of its Affiliates or such Purchaser’s or Affiliate’s managed funds or accounts, and (vii) any other “accredited investor” (as defined in Regulation D of the Securities Act) that is principally in the business of managing investments or holding assets for investment purposes; provided, that no Distressed Debt Investor or Company Competitor shall be an Eligible Transferee. “Ensifentrine” shall mean 9,10-dimethoxy-2(2,4,6-trimethylphenylimino)-3-(n- carbamoyl-2-aminoethyl)-3,4,6,7-tetrahydro-2H-pyrimido[6,1-a]isoquinolin-4-one, a dual inhibitor of the enzymes phosphodiesterase 3 and 4, including any prodrugs, metabolites, salts, congeners, bases, anhydrides, hydrates, crystal forms, non-crystal forms, polymorphs, solvates, stereoisomers, radioisomers, or ester forms thereof and any other improvements, variations, and modifications thereto. “Ensifentrine” shall include all dosages, dosage forms and formulations of the foregoing. “Ensifentrine Approval” shall mean the FDA has approved Company’s NDA for Ensifentrine (NDA #217389) with an Indication and Usage section of the label stating that Ensifentrine is indicated for the maintenance treatment of certain patients with chronic obstructive pulmonary disease, with no Boxed Warning. “Equity Interests” shall mean, with respect to any Person (for purposes of this defined term, an “issuer”), all shares of, interests or participations in, or other equivalents in respect of such issuer’s capital stock, including all membership interests, partnership interests or equivalent, whether now outstanding or issued after the Effective Date, and in each case, however designated and whether voting or non-voting. Notwithstanding the foregoing, in no event shall any Indebtedness convertible or exchangeable into Equity Interests constitute “Equity Interests” hereunder. “Equivalent Amount” shall mean, with respect to an amount denominated in one currency, the amount in another currency that could be purchased by the amount in the first currency determined by reference to the Exchange Rate at the time of determination. Where the permissibility of a transaction, accuracy of a representation or warranty or compliance with a
10 US-DOCS\149870611.184871-1379-4480 v.21 covenant hereunder is determined by reference to amounts stated in U.S. dollars (or the Equivalent Amount in other currencies), the time of determination shall, in each case, be the time at which any applicable transaction is entered into (e.g. the time at which Indebtedness is incurred or at which an Acquisition is made), financial covenant is tested, or representation or warranty is made, and the permissibility of actions taken under this Agreement shall not be affected by, and no Default or Event of Default shall arise as a result of, subsequent fluctuations in exchange rates. “ERISA” shall mean the United States Employee Retirement Income Security Act of 1974, as amended. “ERISA Affiliate” shall mean, collectively, any Obligor, any Subsidiary thereof, and any Person under common control, or treated as a single employer, with any Obligor or any Subsidiary thereof, within the meaning of Section 414(b), (c), (m) or (o) of the Code. “ERISA Event” shall mean (i) a reportable event as defined in Section 4043 of ERISA with respect to a Title IV Plan, excluding, however, such events as to which the PBGC by regulation has waived the requirement of Section 4043(a) of ERISA that it be notified within thirty (30) days of the occurrence of such event; (ii) the applicability of the requirements of Section 4043(b) of ERISA with respect to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, to any Title IV Plan where an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected to occur with respect to such plan within the following thirty (30) days; (iii) a withdrawal by the Company or any ERISA Affiliate thereof from a Title IV Plan or the termination of any Title IV Plan resulting in liability under Section 4063 or 4064 of ERISA; (iv) the withdrawal of the Company or any ERISA Affiliate thereof in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential liability therefore, or the receipt by the Company or any ERISA Affiliate thereof of written notice from any Multiemployer Plan that it is insolvent pursuant to Section 4245 of ERISA; (v) the filing of a notice of intent to terminate, the treatment of a plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Title IV Plan or Multiemployer Plan (but in the case of a multiple employer plan or a Multiemployer Plan, only once notice has been received from the plan administrator); (vi) the imposition of liability on the Company or any ERISA Affiliate thereof pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the failure by the Company or any ERISA Affiliate thereof to make any required contribution to a Plan, or the failure to meet the minimum funding standard of Section 412 of the Code with respect to any Title IV Plan (whether or not waived in accordance with Section 412(c) of the Code) or the failure to make by its due date a required installment under Section 430 of the Code with respect to any Title IV Plan or the failure to make any required contribution to a Multiemployer Plan; (viii) the determination that any Title IV Plan is considered an at-risk plan or a plan in endangered to critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA; (ix) an event or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan (but in the case of a multiple employer plan or a Multiemployer Plan, only once notice has been received from the plan administrator); (x) the imposition of any liability under Title I or Title IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Company or any ERISA Affiliate thereof; (xi) an application for a funding waiver under Section 303 of
11 US-DOCS\149870611.184871-1379-4480 v.21 ERISA or an extension of any amortization period pursuant to Section 412 of the Code with respect to any Title IV Plan; (xii) the occurrence of a non-exempt prohibited transaction under Section 406 or 407 of ERISA for which any Obligor or any Subsidiary thereof would reasonably be expected to be directly or indirectly liable; (xiii) a violation of the applicable requirements of Section 404 or 405 of ERISA or the exclusive benefit rule under Section 401(a) of the Code by any fiduciary or disqualified person for which the Company or any ERISA Affiliate thereof would reasonably be expected to be directly or indirectly liable; (xiv) the occurrence of an act or omission which would reasonably be expected to give rise to the imposition on the Company or any ERISA Affiliate thereof of fines, penalties, taxes or related charges under Chapter 43 of the Code or under Section 409, 502(c), (i) or (1) or 4071 of ERISA; (xv) the assertion of a material claim (other than routine claims for benefits) against any Plan or the assets thereof, or against any Obligor or any Subsidiary thereof in connection with any such plan; (xvi) receipt from the IRS of notice of the failure of any Qualified Plan to qualify under Section 401(a) of the Code, or the failure of any trust forming part of any Qualified Plan to fail to qualify for exemption from taxation under Section 501(a) of the Code; or (xvii) the imposition of any lien (or the fulfillment of the conditions for the imposition of any lien) on any of the rights, properties or assets of the Company or any ERISA Affiliate thereof, in either case pursuant to Title I or IV, including Section 302(f) or 303(k) of ERISA or to Section 401(a)(29) or 430(k) of the Code. “ERISA Funding Rules” shall mean the rules regarding minimum required contributions (including any installment payment thereof) to Title IV Plans, as set forth in Sections 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA. “Erroneous Payment” shall have the meaning set forth in Section 8.14(d). “Erroneous Payment Deficiency Assignment” shall have the meaning set forth in Section 8.14(d). “Erroneous Payment Impacted Assigned Interests” shall have the meaning set forth in Section 8.14(d). “Erroneous Payment Return Deficiency” shall have the meaning set forth in Section 8.14(d). “Erroneous Payment Subrogation Rights” shall have the meaning set forth in Section 8.14(d). “Event of Default” shall mean any one of the following events: (a) any Bankruptcy Event of Default; or (b) a Change of Control shall have occurred; or (c) a Tranche A Funding Event of Default; or (d) any sale, out-licensing of all or substantially all of the rights in and to the Product or other form of divestment of all or substantially all of the rights in and to the Product, in each case other than any Permitted Licensing Agreement; or
12 US-DOCS\149870611.184871-1379-4480 v.21 (e) the Company shall fail (i) to pay, when and as required to be paid herein, any amount of any Royalty Interest Payment, U.S. Licensing / Participation Payment or Ex-U.S. Licensing / Participation Payment when and as the same shall become due and payable, whether at the due date thereof, at a date fixed for prepayment thereof or otherwise, or (ii) to pay or reimburse the Purchasers for any other Obligations not described in the preceding clause (i), and, in each case, such failure shall continue for a period of ten (10) Business Days following the due date therefor (or, if there is no due date therefor, within ten (10) Business Days following the Purchasers’ demand for any such payment or reimbursement); or (f) the Company shall fail to comply with Section 2.02(d) with respect to amounts in excess of $500,000 in the aggregate, and such failure shall continue for a period of ten (10) Business Days following the due date thereof; or (g) Holdings or any Subsidiary shall breach any other material provision of this Agreement or of any of the other Transaction Documents (other than any provision embodied in or covered by any other clause of this definition), and, in the case of any such breach that is capable of cure, the same shall remain unremedied for thirty (30) days or more after an officer of Holdings or any Subsidiary first learns or acquires knowledge (after reasonable due inquiry) of such breach, including written notice from one or more of the Purchasers or the Administrative Agent. “Event of Default Fee” shall mean, with respect to any Event of Default occurring after the Tranche A Funding Date, as of any date of determination, an amount sufficient that, after giving effect to the payment of the Event of Default Fee and the Royalty Interest Payments, U.S. Licensing / Participation Payments and Ex-U.S. Licensing / Participation Payments made by the Company to the Purchasers pursuant to Section 2.02(a), (i) the MOIC equals 1.20x, if such date is before the one-year anniversary of the Tranche A Funding Date, (ii) the MOIC equals 1.40x, if such date is on or after the one-year anniversary of the Tranche A Funding Date and before the two-year anniversary of the Tranche A Funding Date, (iii) the MOIC equals 1.55x if such date is on or after the two-year anniversary of the Tranche A Funding Date and before the three-year anniversary of the Tranche A Funding Date, and (iv) the MOIC equals 1.75x if such date is on or after the three-year anniversary of the Tranche A Funding Date. “Exchange Rate” shall mean, as of any date, the rate at which any currency may be exchanged into another currency, as set forth on the relevant Reuters screen at or about 11:00 a.m. (Eastern time) on such date. In the event that such rate does not appear on the Reuters screen, the “Exchange Rate” shall be determined by reference to such other publicly available service for displaying exchange rates as may be reasonably designated by the Administrative Agent. “Excluded Liabilities and Obligations” shall have the meaning set forth in Section 2.06. “Excluded Taxes” shall mean any of the following Taxes imposed on or with respect to any Purchaser or required to be withheld or deducted from a payment to any Purchaser: (i) Taxes imposed on or measured by net income (however denominated), franchise Taxes and branch profits Taxes, in each case, (x) imposed as a result of such Purchaser being organized under the laws of, or having its principal office located in, the jurisdiction imposing such Tax (or any political subdivisions thereof) or (y) that are Other Connection Taxes, (ii) U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Purchaser pursuant to a law in effect on
13 US-DOCS\149870611.184871-1379-4480 v.21 the date on which (1) such Purchaser acquires the Assigned Interests or (2) such Purchaser changes its principal office, except in each case to the extent that, pursuant to Section 5.10, amounts with respect to such Taxes were payable to such Purchaser’s assignor immediately before such Purchaser acquired the Assigned Interests or to such Purchaser immediately before it changed its principal office, (iii) Taxes attributable to such Purchaser’s failure to comply with Section 5.10(b), and (iv) any withholding Taxes imposed under FATCA. “Ex-U.S. Licensing / Participation Proceeds” shall mean the portion of all license fees, commercial or sales-based milestone payments, up-front payments, or royalties received by the Company or any of its Affiliates from any Ex-US Licensing Agreements for the Product during the Payment Period. “Ex-U.S. Licensing / Participation Payment(s)” shall have the meaning set forth in Section 2.02(a). “Ex-U.S. Licensing / Participation Percentage” shall mean 5.00%. “Ex-U.S. Licensing Agreement” shall mean any license, commercialization, co-promotion, collaboration, distribution, marketing or partnering agreement or other arrangement entered into during the Term by the Company or any of its Affiliates under which a Third Party has a right and license under the Product Intellectual Property to Commercialize the Product outside of the United States. “FATCA” shall mean Sections 1471 through 1474 of the 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 Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code. “FD&C Act” shall mean the U.S. Food, Drug and Cosmetic Act, 21 U.S.C. §§ 301 et seq. (or any successor thereto), as amended from time to time, and the rules and regulations, issued or promulgated thereunder. “FDA” shall mean the United States Food and Drug Administration and any successor entity. “Federal Funds Effective Rate” shall mean, for any day, the rate calculated by the Federal Reserve Bank of New York based on such day’s federal funds transactions by depositary institutions (as determined in such manner as the Federal Reserve Bank of New York shall set forth on its public website from time to time) and published on the next succeeding Business Day by the Federal Reserve Bank of New York as the federal funds effective rate; provided, that (a) if such day is not a Business Day, the Federal Funds Effective Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Effective Rate for such day shall be the average rate charged to three (3) major banks on such day on such transactions as determined by the Administrative Agent; provided,
14 US-DOCS\149870611.184871-1379-4480 v.21 further, that if the Federal Funds Effective Rate as so determined would be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement. “Financial Statements” shall mean the audited consolidated balance sheets of Holdings and its Subsidiaries as of December 31, 2023, and the related audited consolidated statements of operations and cash flows for the Fiscal Year then ended. “Fiscal Quarter” shall mean each three (3) month period commencing January 1, April 1, July 1 or October 1; provided, however, that (a) the first Fiscal Quarter of the Term shall be the Fiscal Quarter in which the Tranche A Funding Date occurs and (b) the last Fiscal Quarter of the Term shall end upon the expiration or termination of this Agreement. “Fiscal Year” shall mean the calendar year. “Funded Amount” shall mean, as of any time of determination, the aggregate amount actually funded by the Purchasers under this Agreement in respect of Tranche A and Tranche B. “Funding Notice” shall have the meaning set forth in Section 2.05(b)(i). “GAAP” shall mean generally accepted accounting principles in (i) the United States of America, as in effect from time to time, set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants, in the statements and pronouncements of the Financial Accounting Standards Board and in such other statements by such other entity as may be in general use by significant segments of the accounting profession that are applicable to the circumstances as of the date of determination and (ii) in relation to a Guarantor incorporated in a jurisdiction other than the United States of America, generally accepted accounting principles consistently applied in the jurisdiction in which such Guarantor is incorporated and/or carries on business. All references to “GAAP” shall be to GAAP applied consistently with the principles used in the preparation of the financial statements delivered pursuant to Section 3.05. “Governmental Approval” shall mean any consent, authorization, approval, order, license, franchise, permit, certification, accreditation, registration, clearance or exemption that is issued or granted by or from (or pursuant to any act of) any Governmental Authority, including any application or submission related to any of the foregoing, including, for the avoidance of doubt, the Ensifentrine Approval. “Governmental Authority” shall mean any nation, government, branch of power (whether executive, legislative or judicial), state, province or municipality or other political subdivision thereof and any entity exercising executive, legislative, judicial, monetary, regulatory or administrative functions of or pertaining to government, including regulatory authorities, governmental departments, agencies, commissions, bureaus, officials, ministers, courts, bodies, boards, tribunals and dispute settlement panels, and other law-, rule- or regulation-making organizations or entities of any state, territory, county, city or other political subdivision of any country, in each case whether U.S. or non-U.S. “Gross Sales” shall have the meaning set forth in the definition of “Net Sales.”
15 US-DOCS\149870611.184871-1379-4480 v.21 “Guarantee” of or by any Person (the “Guarantor”) shall mean any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation (the “primary obligations”) of any other Person (the “Primary Obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such primary obligations or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such primary obligations of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the Primary Obligor so as to enable the Primary Obligor to pay such primary obligations or (d) as an account party in respect of any letter of credit or letter of guaranty (including any bank guarantee) issued to support such primary obligations; provided, that the term Guarantee shall not include endorsements for collection or deposit or guarantees of any straight- line or operating lease (including any lease that would not have been a capital lease under GAAP prior to giving effect to Accounting Standards Codification 842, Leases). “Guarantor” shall have the meaning set forth in the definition of “Guarantee.” “Hard Cap” shall mean an amount equal to the product of (i) the Funded Amount, multiplied by (ii) 1.75. “Healthcare Laws” shall mean, collectively, all Laws regulating the distribution, dispensing, importation, exportation, quality, manufacturing, labeling, promotion and provision of and payment for drugs, medical devices, medical or healthcare products, items and services, including, the Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”); 42 U.S.C. § 1320a-7b (Criminal Penalties Involving Medicare or State Health Care Programs), commonly referred to as the “Federal Anti-Kickback Statute”; 42 U.S.C. § 1320a-7h (the Physician Payment Sunshine Act); the FD&C Act;; and all rules and regulations promulgated under or pursuant to any of the foregoing, including any non-U.S. equivalents. “Hedging Agreement” shall mean any interest rate exchange agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement. Notwithstanding anything to the contrary in the foregoing, neither any Permitted Bond Hedge Transaction nor any Permitted Warrant Transaction shall be a Hedging Agreement. “Holdings” shall have the meaning set forth in the first paragraph hereof. “HIPAA” shall have the meaning set forth in the definition of “Healthcare Laws.” “IND” shall mean an investigational new drug application submitted to the FDA pursuant to 21 C.F.R. Part 312 for allowance to initiate human clinical trials in the United States, or any equivalent application submitted to a Governmental Authority outside of the United States, including all amendments that may be submitted with respect to the foregoing. “Indebtedness” of any Person shall mean, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or similar instruments, (iii) all obligations of such Person upon which
16 US-DOCS\149870611.184871-1379-4480 v.21 interest charges are customarily paid (excluding interest penalties for late payments under commercial contracts entered into in the Ordinary Course and, for the avoidance of doubt, which commercial contracts do not relate to obligations for borrowed money or purchase money indebtedness), (iv) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (v) all obligations of such Person in respect of the deferred purchase price of property or services (it being agreed that seller notes or earn-out obligations are addressed in clause (xii)), (vi) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (vii) all Guarantees by such Person of Indebtedness of others, (viii) all Capital Lease Obligations of such Person, (ix) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (x) obligations under any Hedging Agreement, currency swaps, forwards, futures or derivatives transactions, (xi) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (xii) all obligations under any earn-out and guaranteed minimum milestone and other payments of such Person under any license or other agreements appearing on such Person’s balance sheet in accordance with GAAP (but excluding any payments based on sales under any such license or other agreement), (xiii) any Disqualified Equity Interests of such Person, and (xiv) all other obligations required to be classified as indebtedness of such Person under GAAP; provided that, notwithstanding the foregoing, Indebtedness shall not include (A) accrued expenses, deferred rent, Taxes, deferred compensation or customary obligations under employment agreements (including obligations in respect of early retirement or termination obligations, deferred compensatory or employee or director equity plans, pension fund obligations or contributions or similar claims, obligations or contributions or social security or wage taxes), or (B) accounts payable incurred in the Ordinary Course, in each case, not overdue by more than sixty (60) days, unless contested in good faith by appropriate proceedings and reserved for in accordance with GAAP. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. “Indemnified Tax” shall mean (i) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of the Assigned Interests or any other Obligation and (ii) to the extent not otherwise described in clause (i), Other Taxes. “Indications and Usage” shall mean the section of the FDA-approved labeling for a drug product that states such drug is indicated for the treatment, prevention, mitigation, cure, or diagnosis of a recognized disease or condition, or of a manifestation of a recognized disease or condition, or for the relief of symptoms associated with a recognized disease or condition, as set forth in 21 C.F.R. Section 201.57(c)(2). “Intellectual Property” shall mean intellectual property or proprietary rights of any kind anywhere in the world, including any rights in or to Patents, Trademarks, Copyrights and Trade Secrets, and database rights, whether U.S. or non-U.S, together with all rights to claim priority from such rights and all similar or equivalent rights or forms of protection which subsist or will subsist now or in the future in any part of the world.
17 US-DOCS\149870611.184871-1379-4480 v.21 “Intercreditor Agreement” shall mean the Intercreditor Agreement between Oaktree Fund Administration, LLC, as the administrative agent under the Oaktree Term Loan Facility, and Oaktree Fund Administration, LLC, as Administrative Agent on behalf of the Purchasers, acknowledged by the Company, Holdings and each other Grantor as named therein, providing for the relative rights and priorities of the First Lien Claimholders (as defined therein) and the Purchaser Claimholders (as defined therein) with respect to the Collateral as may be amended, restated, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof. “Invention” shall mean any novel, inventive or useful art, apparatus, method, process, machine (including any article or device), manufacture or composition of matter, or any novel, inventive and useful improvement in any art, apparatus, method, process, machine (including article or device), manufacture or composition of matter. “Law” shall mean, collectively, all U.S. or non-U.S. federal, state, provincial, territorial, municipal or local statute, treaty, rule, guideline, regulation, ordinance, code or administrative or judicial precedent or authority, including any interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law. “Legal & IP Expenses” shall have the meaning set forth in Section 7.15. “Lien” shall mean (a) any mortgage, lien, license, pledge, hypothecation, charge, assignment, security interest, or other encumbrance of any kind or character whatsoever, whether or not filed, recorded or otherwise perfected under applicable Law, or any lease, title retention agreement, mortgage, restriction, easement, right-of-way, option or adverse claim (of ownership or possession) (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any other encumbrance on title to real property, any option or other agreement to sell, or give a security interest in, such asset and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes of any jurisdiction)) or any preferential arrangement that has the practical effect of creating a security interest and (b) in the case of Equity Interests, any purchase option, call or similar right of a third party with respect to such Equity Interests. “Licensing Agreement” shall mean any U.S. Licensing Agreement or Ex-U.S. Licensing Agreement, in each case, excluding contracts with Distributors. “Long Stop Date” shall mean September 30, 2025. “Losses” shall mean judgments, debts, liabilities, expenses, costs, damages or losses, contingent or otherwise, whether liquidated or unliquidated, matured or unmatured, disputed or undisputed, contractual, legal or equitable, including loss of value, professional fees, including fees and disbursements of legal counsel on a full indemnity basis, and all costs incurred in investigating or pursuing any claim or any proceeding relating to any claim.
18 US-DOCS\149870611.184871-1379-4480 v.21 “Majority Purchasers” shall mean, at any time, Purchasers having at such time in excess of fifty percent (50%) of the sum of (i) the Commitments then in effect and (ii) the outstanding Funded Amount. “Marketing Authorization” shall mean, with respect to the Product, the Governmental Approval required by applicable Law to Commercialize the Product including, to the extent required by applicable Law for the Commercialization of the Product, all pricing approvals and government reimbursement approvals. “Material Adverse Effect” shall mean a material adverse effect on (i) the business, operations, financial condition, assets or liabilities of Holdings and its Subsidiaries taken as a whole, (ii) the ability of the Obligors, taken as a whole, to perform their payment obligations under the Transaction Documents, as and when due, (iii) the legality, validity, binding effect or enforceability of the Transaction Documents, or (iv) the rights, remedies and benefits available to, or conferred upon, the Administrative Agent or the Purchasers under any of the Transaction Documents “Material Contract” shall mean any contract specifically related to the Product and the Commercialization and/or Development thereof required to be disclosed (including amendments thereto) under regulations promulgated under the Securities Act of 1933 or Securities Exchange Act of 1934, as may be amended. Notwithstanding the foregoing, employment and management contracts shall not be Material Contracts. “MOIC” shall mean, as of any date of determination, the aggregate amount of payments received by the Purchasers under this Agreement, divided by the Funded Amount as of such date. “Multiemployer Plan” shall mean any multiemployer plan, as defined in Section 400l(a)(3) of ERISA, to which any ERISA Affiliate incurs or otherwise has any obligation or liability, contingent or otherwise. “NDA” shall mean a new drug application, submitted to the FDA pursuant to 21 U.S.C. § 355 seeking approval to market a new drug in the United States, or any equivalent application submitted to a Governmental Authority outside of the United States, and all supplements or amendments thereto. “Net Sales” shall mean the gross amount billed, invoiced or otherwise recorded for sales of the Product anywhere in the world (“Gross Sales”) by (or on behalf of, including through a Distributor) the Company and any of its Affiliates (each of the foregoing persons and entities, for purposes of this definition, shall be considered a “Selling Party”), for sales or other dispositions of the Product across all marketed indications and delivery forms to a Third Party by a Selling Party, less the sum of the following (to the extent not reimbursed by any Third Party and without duplication): (a) reasonable and customary rebates, chargebacks, quantity, trade and similar discounts, credits and allowances and other price reductions reasonably and actually granted, allowed, incurred or paid;
19 US-DOCS\149870611.184871-1379-4480 v.21 (b) discounts (including cash discounts and quantity discounts), coupons, retroactive price reductions, charge back payments and rebates for sales paid for by managed care organizations or to Governmental Authorities (including, but not limited to, payments made under the “Medicare Part D Coverage Gap Discount Program” and the “Annual Fee for Branded Pharmaceutical Manufacturers” specific to the Product), in each case, as applied to sales of the Product and actually given to customers; (c) reasonable and customary credits and allowances taken upon rejection, return or recall of the Product; (d) reasonable and customary freight and insurance costs incurred with respect to the shipment of the Product to customers, in each case if charged separately and invoiced to customers; (e) customs duties, surcharges and other similar governmental charges incurred in connection with the exportation or importation of the Product to the extent included in the gross amount invoiced; (f) Value Added Tax, and that portion of annual fees due under Section 9008 of the United States Patient Protection and Affordable Care Act of 2010 (Pub. L. No. 111-148) and any other fee imposed by any equivalent applicable Law, in each of the foregoing cases, that is allocable to sales of the Product in accordance with the Selling Party’s standard policies and procedures consistently applied across its products, as adjusted for rebates and refunds, imposed in connection with the sales of the Product to any Third Party (excluding any taxes based on income); and (g) actual uncollectible debt amounts with respect to sales of the Product, provided that if the debt is thereafter paid, the corresponding amount shall be added to the Net Sales of the period during which it is paid. Such amounts shall be determined consistent with a Selling Party’s customary practices, and in accordance with GAAP. Sale or transfer of a Product between any of the Selling Parties shall not result in any Net Sales (unless the Selling Party purchaser or transferee is the ultimate end user of the Product), with Net Sales to be based only on any subsequent sales or dispositions to a non-Selling Party. For clarity, (i) Net Sales shall not include amounts or other consideration received by a Selling Party from a non-Selling Party in consideration of the grant of a (sub)license or co-promotion or distribution right to such non-Selling Party, provided that such consideration is not in lieu of all or a portion of the transfer price of the Product, (ii) sales to a Third Party distributor, wholesaler, group purchasing organization, pharmacy benefit manager, or retail chain customer shall be considered sales to a non-Selling Party to the extent that no additional consideration is received by a Selling Party for the subsequent use or re-sale by any such distributor, wholesaler, group purchasing organization, pharmacy benefit manager, or retail chain customer, as applicable, (iii) Net Sales by a Selling Party to a non-Selling Party consignee are not recognized as Net Sales by such Selling Party until the non-Selling Party consignee sells the Product, (iv) if a Selling Party receives in-kind consideration for the sale of the Product, then Net Sales shall be calculated as the fair market value of all consideration received by a Selling Party in respect of the Product, whether
20 US-DOCS\149870611.184871-1379-4480 v.21 such consideration is in cash, payment in kind, exchange or other form, as determined in good faith by the Selling Party and (v) Net Sales shall exclude transfers or dispositions for charitable, promotional, pre-clinical, clinical, or regulatory purposes, to the extent consideration is not received for such transfers or dispositions that is in excess of the fully burdened manufacturing cost of the applicable quantity of the Product so transferred or disposed. With respect to sales of the Product invoiced in U.S. dollars, Net Sales shall be determined in U.S. dollars. With respect to sales of the Product invoiced in a currency other than U.S. dollars, Net Sales shall be determined by converting the currencies at which the sales are made into US. Dollars, at rates of exchange determined in a manner consistent with the Selling Party’s method for calculating rates of exchange in the preparation of such person’s annual financial statements in accordance with GAAP consistently applied. No amount for which deduction is permitted pursuant to this definition shall be deducted more than once. If any Product is sold in a territory in combination with one or more other active pharmaceutical ingredients or therapeutic agents for a single invoice price (each a “Combination”), then the Net Sales for any such Product included in such Combination shall be calculated territory- by-territory by multiplying actual Net Sales of such Combination by the fraction A/(A+B) where “A” is the weighted average invoice price of the Product, when sold separately in such territory during the applicable accounting period in which the sales of the Combination were made, and “B” is the combined weighted average invoice prices of all of the active pharmaceutical ingredients or therapeutic agents other than the Product contained in such Combination, when sold separately in such territory during such same accounting period. If the Product or any of the other active pharmaceutical ingredients or therapeutic agents contained in such Combination is not sold separately in such territory during such accounting period, the Company and Majority Purchasers shall mutually determine the Net Sales for the Product included in such Combination based on the relative contribution of the Product and the other active pharmaceutical ingredients and therapeutic agents in the Combination in good faith and shall take into account in good faith any applicable allocations and calculations that may have been made for the same period in other countries. Notwithstanding anything to the contrary in the foregoing, with respect to any Combination Developed by the Company or any of its Affiliates, so long as the Combination involves any Product, the Net Sales for any such Product shall include all Net Sales of such Combination. If the Company or any of its Affiliates recover monetary damages, settlement amounts or other monetary recovery with respect to the Product from a Third Party in a claim brought for infringement, misappropriation or other violation of any Intellectual Property, (A) such damages will be allocated first to the reimbursement of any expenses incurred by the Company or such Affiliates, as applicable, for bringing such action (including reasonable attorney’s fees) not already reimbursed from other damages awarded under the same action, and (B) any remaining amount of such damages will be reduced, if and to the extent applicable, to allocate recovered damages to Third Party licensors of such Intellectual Property (other than damages for lost royalties), only as required under any then pre-existing license or other agreements, then any other remaining amount of such damages, settlement amounts or other monetary recovery after application of (A) and (B) will be included as Net Sales (provided, that none of the deductions from Net Sales in subsections (a) through (g) may be applied to such amounts).
21 US-DOCS\149870611.184871-1379-4480 v.21 “Oaktree Purchaser” shall mean any Purchaser that is an Affiliate or managed fund or account of Oaktree Capital Management, L.P. “Oaktree Term Loan Facility” shall mean the Credit Agreement and Guaranty, dated as of May 9, 2024, by and among Verona Pharma, Inc., as the borrower, Holdings, as the guarantor, the subsidiary guarantors from time to time party thereto, the lenders from time to time party thereto, and Oaktree Fund Administration, LLC, as the administrative agent (as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms of the Intercreditor Agreement). “Obligations” shall mean any and all obligations of the Obligors under the Transaction Documents. “Obligors” shall mean, collectively, Holdings, the Company and the other grantors under the Security Agreement or the Debenture and their respective successors and permitted assigns. “OFAC” shall have the meaning set forth in the definition of “Anti-Terrorism Laws.” “OMERS Purchasers” shall mean OCM Life Sciences Portfolio LP or any of its Affiliates. “Option Right” shall have the meaning set forth in the definition of “Change of Control.” “Ordinary Course” shall mean ordinary course of business or ordinary trade activities that are customary for similar businesses in the normal course of their ordinary operations and not while in financial distress. “Organic Document” shall mean, for any Person, such Person’s formation documents, including, as applicable, its certificate of incorporation, by-laws, certificate of name change, constitutional documents, certificate of partnership, partnership agreement, certificate of formation, limited liability agreement, operating agreement and all shareholder agreements, voting trusts and similar arrangements applicable to such Person’s Equity Interests, or any equivalent document of any of the foregoing. “Other Connection Taxes” shall mean, with respect to any Purchaser, Taxes imposed as a result of a present or former connection between such Purchaser and the jurisdiction imposing such Tax (other than connections arising from such Purchaser having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Transaction Document, or sold or assigned an interest in any Transaction Document). “Other Product” shall mean a product, other than the Product, that is owned or controlled by Obligor or any of its Subsidiaries and is Commercialized or otherwise subject to or has completed a Phase 3 or registrational clinical trial at the time of determination. “Other Taxes” shall mean all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security
22 US-DOCS\149870611.184871-1379-4480 v.21 interest under, or otherwise with respect to, this Agreement, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment. “Patents” shall mean (i) all domestic, national, regional and foreign patents, patent rights, patent applications, provisional applications, patent disclosures and Invention disclosures issued or filed, (ii) any patent applications filed from such patents, patent rights, patent applications, provisional applications, patent disclosures and Invention disclosures claiming priority to any of these, including renewals, divisionals, continuations, continuations-in-part, substitutions, provisionals, converted provisionals, and continued prosecution applications, (iii) any patents that have issued or in the future issue from the foregoing described in clauses (i) and (ii), including utility models, xxxxx patents and design patents and certificates of invention, and (iv) all extensions or restorations by existing or future extension or restoration mechanisms, including revalidations, reissues, re-examinations, revisions, and term extensions (including any supplementary protection certificates and the like) of the foregoing patents or patent applications described in clauses (i), (ii) and (iii), including the Inventions claimed in any of the foregoing and any priority rights arising therefrom. “Patriot Act” shall mean the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)). “Payment Period” shall mean the period from, and including, the first day of the first Fiscal Quarter through, and including the Fiscal Quarter in which this Agreement terminates pursuant to Section 6.01. “Payment Recipient” shall have the meaning set forth in Section 8.14(a). “PBGC” shall mean the United States Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions. “Permitted Bond Hedge Transaction” shall mean any call or capped call option (or substantively equivalent derivative transaction) relating to Holdings’ Common Shares or American Depositary Shares representing such Common Shares (or other securities or property following a merger event, reclassification or other change of the Common Shares) that is (A) purchased by Holdings in connection with the issuance of any Permitted Convertible Debt, (B) settled in Common Shares or American Depositary Shares (or such other securities or property), cash or a combination thereof (such amount of cash determined by reference to the price of the Common Shares or American Depositary Shares), and cash in lieu of fractional shares of Common Shares and (C) on terms and conditions customary for bond hedge transactions as reasonably determined by Holdings. “Permitted Cash Equivalent Investments” shall mean (i) marketable direct obligations issued or unconditionally guaranteed by the United States, United Kingdom or any member states of the European Union or any agency or any state thereof having maturities of not more than one (1) year from the date of acquisition, (ii) commercial paper maturing no more than two hundred seventy (270) days after the date of acquisition thereof and having the highest rating from either Standard & Poor’s Ratings Group or Xxxxx’x Investors Service, Inc., (iii) certificates of deposit maturing no more than one (1) year after issue that are issued by any bank organized under the
23 US-DOCS\149870611.184871-1379-4480 v.21 Laws of the United States, or any state thereof, the District of Columbia or any non-U.S. jurisdiction, or any U.S. branch of a foreign bank having, at the date of acquisition thereof, combined capital and surplus of not less than $500,000,000 (or the Equivalent Amount in other currencies), (iv) any money market or similar funds that exclusively hold any of the foregoing and (v) any other Investments permitted by the Obligors’ investment policy as in effect on the date hereof, and as amended from time to time with the prior written consent of the Administrative Agent. “Permitted Convertible Debt” shall mean unsecured Indebtedness of Holdings or any of its Subsidiaries pursuant to clause (B) below, that is either (i) convertible into a fixed number (subject to customary conversion and adjustment rights for broadly distributed 144A convertible bond transactions as of the date of issuance) of the Common Shares, or American Depositary Shares representing such Common Shares (or other securities or property following a merger event or other change of the Common Shares), cash or a combination thereof (such amount of cash determined by reference to the price of the Common Shares or American Depositary Shares or such other securities or property), or cash in lieu of fractional Common Shares or (ii) sold as units with call options, warrants or rights to purchase (or substantially equivalent equity derivative transactions) that are exercisable for the Common Shares, or American Depositary Shares representing such Common Shares (or other securities or property following a merger event or other change of the Common Shares), cash or a combination thereof (such amount of cash determined by reference to the price of the Common Shares or American Depositary Shares or such other securities or property), or cash in lieu of fractional shares of the Common Shares; provided that any such Indebtedness shall (A) not require any scheduled amortization or otherwise require, pursuant to its terms, payment of principal prior to, (other than in connection with (x) any offer to purchase such Indebtedness as a result of “change of control”, “fundamental change”, “free float event” or any comparable term under and as defined in any indenture or other documents governing any Permitted Convertible Debt, (y) any early conversion of such Indebtedness in accordance with the terms thereof and (z) any redemption of such Indebtedness upon satisfaction of a condition related to the stock price of the Common Shares or American Depositary Shares representing such Common Shares), at least 180 days after the date this Agreement terminates in accordance with Section 6.01; provided, further that any right to require the scheduled amortization, payment, redemption or repurchase of such Permitted Convertible Debt shall be subject, to the satisfaction of the Majority Purchasers in its sole discretion, to the prior payment in full of all Obligations (other than contingent indemnification obligations for which no claim has been asserted), (B) have recourse only to Holdings or be exchangeable notes issued by a Subsidiary of Holdings using a so-called “cash box” structure, under which each of the following conditions are met: (I) such Subsidiary is an Obligor; (II) the only assets of such Subsidiary are the cash proceeds of such exchangeable notes; (III) such exchangeable notes are only exchangeable into securities of Holdings; and (IV) the cash proceeds of such exchangeable notes are either held by such Subsidiary or are otherwise paid directly to Holdings, and (C) not have an all-in-yield greater than 500 basis points as determined in good faith by the Administrative Agent (with any original issue discount equated to interest based on the convertible debt maturity date and excluding any additional or special interest that may become payable from time to time). “Permitted First Lien Intercreditor Agreement” shall have the meaning set forth in Section 7.18.
24 US-DOCS\149870611.184871-1379-4480 v.21 “Permitted Hedging Agreement” shall mean a Hedging Agreement entered into by Holdings or any of its Subsidiaries in the Ordinary Course for the purpose of hedging currency risks or interest rate risks (and not for speculative purposes) and (x) with respect to hedging currency risks, in an aggregate notional amount for all such Hedging Agreements not in excess of $12,000,000 (or the Equivalent Amount in other currencies) and (y) with respect to hedging interest rate risks, in an aggregate notional amount for all such Hedging Agreements not more than 50%, of the aggregate principal amount of Loans outstanding at such time. “Permitted Indebtedness” shall mean: (a) any payment obligations hereunder to the extent constituting Indebtedness; (b) Indebtedness existing on the date hereof and set forth on Schedule 3.17(a) and Permitted Refinancings thereof; provided, that, if such Indebtedness is intercompany Indebtedness, any Permitted Refinancing of such Indebtedness shall also be intercompany Indebtedness among the same parties; (c) Indebtedness of an Obligor owing to any other Obligor; (d) Indebtedness consisting of guarantees resulting from the endorsement of negotiable instruments for collection in the Ordinary Course; (e) Permitted Priority Debt; (f) Indebtedness with respect to letters of credit that are at any time outstanding and issued on behalf of Holdings or any Subsidiary in an amount not to exceed $1,200,000 (or the Equivalent Amount in other currencies) in the aggregate at any time; (g) Guarantees by any Obligor of Permitted Indebtedness of any other Obligor; (h) Ordinary Course equipment and software financing and leasing (including Capital Lease Obligations and purchase money Indebtedness); provided that (i) if secured, the collateral therefor consists solely of the assets being financed, the products and proceeds thereof and books and records related thereto and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed $6,000,000 (or the Equivalent Amount in other currencies) in the aggregate at any time; (i) Indebtedness under (i) Permitted Hedging Agreements and (ii) Permitted Bond Hedge Transactions not exceeding, net of the proceeds of any Permitted Warrant Transactions entered in connection therewith, 20% of the net proceeds obtained in the related Permitted Convertible Debt issuance; (j) Indebtedness assumed pursuant to any Acquisition and Permitted Refinancings thereof; provided that (i) no such Indebtedness (individually) shall exceed 20% of the total purchase price paid in connection with such Acquisition, (ii) the aggregate outstanding principal amount of Indebtedness permitted pursuant to this clause (j) shall not exceed $12,000,000 (or the Equivalent Amount in other currencies) at any time outstanding and (iii) no such Indebtedness was created or incurred in connection with, or in contemplation of, such Acquisition;
25 US-DOCS\149870611.184871-1379-4480 v.21 (k) other unsecured Indebtedness in an aggregate outstanding principal amount not to exceed $6,000,000 (or the Equivalent Amount in other currencies); (l) Permitted Convertible Debt in an aggregate principal amount not to exceed $360,000,000 in principal amount at any time outstanding; (m) Indebtedness in respect of (i) letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created, or related to obligations or liabilities incurred, in the Ordinary Course, (ii) workers compensation claims, health, disability or other employee benefits, or performance of commercial contracts, (iii) leases, subleases or liability insurance or self-insurance, workshare arrangements, or (iv) other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; (n) Indebtedness arising in connection with the financing of insurance premiums in the Ordinary Course; (o) Indebtedness in respect of (i) customary performance bonds, bid bonds, appeal bonds, surety bonds, customs bonds, government bonds, performance and completion guarantees and similar obligations in each case arising in the Ordinary Course and (ii) customary indemnification obligations to purchasers in connection with asset sales; (p) Indebtedness in respect of (i) netting services, (ii) overdraft protections, (iii) business credit cards, (iv) purchasing cards, (v) payment processing, (vi) automatic clearinghouse arrangements, (vii) arrangements in respect of pooled deposit or sweep accounts, (viii) check endorsement guarantees, and (ix) otherwise in connection with deposit accounts or cash management services, in each case, in the Ordinary Course; provided that the aggregate amount outstanding under clause (iii) shall not exceed $3,600,000 at any one time outstanding; (q) customary purchase price adjustments, indemnity payments and other deferred purchase price obligations in connection with any permitted Acquisition; (r) Indebtedness arising under a Permitted Revenue Financing; and (s) Permitted Warrant Transactions that constitute Indebtedness. “Permitted Licensing Agreement” shall mean (i) licenses of off-the-shelf software that is commercially available to the public, (ii) intercompany licenses or grants of rights for development, manufacture, production, commercialization (including commercial sales to end users), marketing, promotion, co-promotion, sales or distribution, which may be exclusive if each party to such license or grant is an Obligor at the time such license or grant is entered into, (iii) each license agreement existing on the Closing Date and set forth on Schedule 2 and (iv) any out-bound license granted for the use of Intellectual Property of any Obligor for development, manufacture, production, commercialization (including commercial sales to end users), marketing, promotion, co-promotion, sales or distribution of any Product, in each case, entered into in the Ordinary Course, which license may be (A) non-exclusive or exclusive if the territorial scope of such license is outside the United States and (B) with respect to the United States as the licensed territory, may only be non-exclusive (and shall not be exclusive) and may only be granted to service providers, including contract research organizations, contract manufacturing organizations, clinical trial sites
26 US-DOCS\149870611.184871-1379-4480 v.21 and other contractors for the exploitation of the Product; provided, that, with respect to each such license or grant described in clause (ii) and this clause (iv), (a) no Default or Event of Default has occurred and is continuing at the time such license or grant, or the agreement governing such license or grant is entered into and (b) such license or grant constitutes an Arm’s Length Transaction, the terms of which do not provide for a sale or assignment, or control of Intellectual Property. “Permitted Liens” shall mean: (a) Liens created in favor of the Purchasers on or after the Effective Date pursuant to the Security Agreement and any other Transaction Document; (b) Liens securing Indebtedness permitted under clause (h) of the definition of Permitted Indebtedness; provided that such Liens are restricted solely to the collateral described in clause (h) of the definition of “Permitted Indebtedness.” (c) Liens imposed by operation of Law arising in the Ordinary Course related to carriers’, warehousemen’s, landlords’, and mechanics’ liens, liens relating to leasehold improvements and other similar Liens arising in the Ordinary Course and which (x) are not in respect of Indebtedness for borrowed money, (y) do not in the aggregate materially detract from the value of the property subject thereto or materially impair the use thereof in the operations of the business of such Person or (z) are being contested in good faith by appropriate proceedings, which proceedings diligently conducted have the effect of preventing the forfeiture or sale of the property subject to such Liens and for which adequate reserves have been made if required in accordance with GAAP; (d) pledges or deposits made in the Ordinary Course (i) in connection with bids, leases, appeal bonds, workers’ compensation, unemployment insurance or other similar social security legislation or (ii) securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees) insurance carriers providing property, casualty or liability insurance to Holdings or any Subsidiary; (e) Liens for Taxes, assessments and other governmental charges not delinquent or that are being contested in good faith by appropriate proceedings diligently conducted, for which adequate reserves with respect thereto are being maintained in accordance with GAAP; (f) any Liens set forth on Schedule 3.04(a) and renewals and extensions thereof in connection with Permitted Refinancings of the Indebtedness being secured by such Lien; provided that (i) no such Lien (including any renewal or extension thereof) shall extend to any other property or asset of any Obligor or any of its Subsidiaries (other than improvements and accession to such property or asset) and (ii) any such Lien shall secure only those obligations which it secures on the date hereof and renewals, extensions and replacements thereof in connection with Permitted Refinancings of the Indebtedness being secured by such Lien that do not increase the outstanding principal amount thereof (other than by an amount equal to unpaid interest and premiums thereon, required prepayment premiums, and any customary underwriting discounts, fees, commissions and expenses associated with such extension, renewal or replacement);
27 US-DOCS\149870611.184871-1379-4480 v.21 (g) servitudes, easements, rights of way, restrictions and other similar encumbrances on real property imposed by any Law and Liens consisting of zoning or building restrictions, easements, licenses, restrictions on the use of real property or minor imperfections in title thereto which, in the aggregate, are not material, and which do not in any case materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of any Obligor or its Subsidiaries; (h) with respect to any real property, (i) such defects or encroachments as might be revealed by an up-to-date survey of such real property, and such other defects in title that (A) do not interfere in any material respect with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes and (B) could not reasonably be expected to prevent or interfere with the ability of any Obligor or any of its Subsidiaries to conduct any Product Commercialization and Development Activities with respect to Ensifentrine in any material respect; (ii) the reservations, limitations, provisos and conditions expressed in the original grant, deed or patent of such property by the original owner of such real property pursuant to all applicable Laws; and (iii) rights of expropriation, access or user or any similar right conferred or reserved by or in any Law, which, in the aggregate for clauses (i), (ii) and (iii), are not material, and which do not in any case materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of any of any Obligor or its Subsidiaries; (i) (i) Liens that are contractual or common law rights of set-off relating to (A) the establishment of depository relations in the Ordinary Course with banks not given in connection with the issuance of Indebtedness or (B) pooled deposit or sweep accounts of Holdings and any Subsidiary to permit satisfaction of overdraft or similar obligations incurred in the Ordinary Course, (ii) other Liens securing cash management obligations with depositary institutions (that do not constitute Indebtedness) in the Ordinary Course and (iii) Liens encumbering customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the Ordinary Course; (j) Liens securing Indebtedness described in clause (j) of “Permitted Indebtedness”; provided that (i) such Lien is not created in contemplation of or in connection with such Acquisition pursuant to which such Indebtedness was assumed, (ii) such Lien shall not apply to any other property or assets of Holdings or any of its Subsidiaries and (iii) such Lien shall secure only those obligations that it secured immediately prior to the consummation of such Acquisition and any Permitted Refinancings thereof; (k) Liens securing Indebtedness described in clauses (f), (m), (n), (o) and (p) of the definition of “Permitted Indebtedness;” (l) any judgement Lien or Liens arising from decrees or attachments not constituting an Event of Default; (m) Liens arising from precautionary UCC financing statement filings regarding operating leases of personal property and consignment arrangements entered into in the Ordinary Course;
28 US-DOCS\149870611.184871-1379-4480 v.21 (n) other Liens which secure obligations in an aggregate amount not to exceed $3,000,000 (or the Equivalent Amount in other currencies) at any time outstanding; (o) Liens securing Indebtedness described in clause (e) and clause (r) of “Permitted Indebtedness” and subject to the Intercreditor Agreement or a Permitted First Lien Intercreditor Agreement and, if applicable, a Permitted Pari Passu Intercreditor Agreement; (p) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods and incurred in the Ordinary Course; (q) Liens on cash and Permitted Cash Equivalent Investments securing obligations under Permitted Hedging Agreements; (r) (i) Liens to secure payment of workers’ compensation, employment insurance, old age pensions, social security and other like social and welfare obligations incurred in the Ordinary Course (other than Liens imposed by ERISA) and (ii) deposits in respect of letters of credit, bank guarantees or similar instruments issued for the account of any Obligor or any Subsidiary in the Ordinary Course supporting obligations of the type set forth in clause (i) above; (s) (i) with respect to Product Intellectual Property, Permitted Licensing Agreements, (ii) solely with respect to assets owned by third parties and licensed or leased to such Obligor or any of its Subsidiaries, retained interests or title of licensors or lessors that do not conflict with such Obligor’s or any such Subsidiaries’ use thereof and (iii) leases, subleases, non-exclusive licenses or sublicenses of personal property (other than Intellectual Property) granted in the Ordinary Course of any Obligor or any Subsidiary thereof; (t) Liens solely on any xxxx xxxxxxx money deposits or customary cash escrow arrangements made by Holdings or any of the Subsidiaries in connection with any letter of intent or purchase agreement in respect of an Acquisition or other investment; (u) Liens arising out of any sale-leaseback transaction, so long as such Liens attach only to the property sold and being leased in such transaction and any accessions and additions thereto or proceeds and products thereof and related property; (v) Liens of sellers of goods to Holdings and any Subsidiaries arising under Article 2 of the UCC or otherwise in the Ordinary Course, covering only the goods sold and securing only the unpaid purchase price for such goods and related expenses; and (w) any Lien arising under conditional sale, title retention, consignment or similar arrangements for the sale of goods in the Ordinary Course; provided that such Lien attaches only to the goods subject to such sale, title retention, consignment or similar arrangement; provided that no Liens otherwise permitted under any of the foregoing shall apply to any Product Intellectual Property other than Liens incurred pursuant to clauses (a), (l), (o) and (s) of this “Permitted Liens” definition.
29 US-DOCS\149870611.184871-1379-4480 v.21 “Permitted Pari Passu Intercreditor Agreement” shall have the meaning set forth in Section 7.18. “Permitted Priority Debt” shall mean: (a) Indebtedness permitted under the Intercreditor Agreement in connection with a debtor- in-possession financing and (b) Indebtedness in an aggregate principal amount not to exceed $480,000,000 at any time, so long as (i) such debt consists of the Oaktree Term Loan Facility, any Permitted Refinancing thereof or any other Indebtedness that does not refinance Permitted Priority Debt (and such other Indebtedness is subject to clauses (b) – (e) of the definition of Permitted Refinancing) and (ii) with respect to such Permitted Refinancings or other Indebtedness that does not refinance Permitted Priority Debt (and such other Indebtedness is subject to clauses (b) – (e) of the definition of Permitted Refinancing), as of the date of incurrence of such Indebtedness: (1) the amounts drawn under all such Permitted Refinancings or other Indebtedness do not exceed the aggregate principal amount (i) that was drawn on the Oaktree Term Loan Facility plus (ii) an amount equal to 20% of the aggregate principal amount that was drawn under (A) the Oaktree Term Loan Facility or (B) if all commitments under the Oaktree Term Loan Facility have expired or been terminated and all obligations (other than contingent indemnification obligations not yet due) arising under the Oaktree Term Loan Facility have been paid in full in cash, any Permitted Refinancing of the Oaktree Term Loan Facility, plus (iii) any amounts that were undrawn but where the Company met: (w) with respect to Tranche B Term Loans (as defined in the Oaktree Term Loan Facility), the Applicable Funding Condition (as defined in the Oaktree Term Loan Facility), (x) with respect to Tranche C Term Loans (as defined in the Oaktree Term Loan Facility), Net Sales (as defined in the Oaktree Term Loan Facility and as of the end of a fiscal quarter on or prior to December 31, 2025) for the trailing six (6) consecutive month period exceeding $[***], (y) with respect to Tranche D Term Loans (as defined in the Oaktree Term Loan Facility), Net Sales (as defined in the Oaktree Term Loan Facility and as of the end of a fiscal quarter on or prior to June 30, 2026) for the trailing twelve (12) consecutive month period exceeding $[***] and (z) with respect to Tranche E Term Loans (as defined in the Oaktree Term Loan Facility), the consent of the applicable Lenders (as defined in the Oaktree Term Loan Facility); provided that such Tranche E Term Loans (as defined in the Oaktree Term Loan Facility) may only be included in this calculation if the conditions set forth above in clause (b)(1)(y) with respect to the funding of the Tranche D Term Loans (as defined in the Oaktree Term Loan Facility) has been met, and
30 US-DOCS\149870611.184871-1379-4480 v.21 (2) any future drawings under such Permitted Refinancings or other Indebtedness are subject to funding conditions that contain commercial milestone achievements related to Ensifentrine containing products (as agreed between the Company and the lender of such Permitted Refinancing or Indebtedness). “Permitted Refinancing” shall mean, with respect to any Indebtedness permitted to be refinanced, extended, renewed or replaced hereunder, any refinancings, extensions, renewals and replacements of such Indebtedness; provided that such refinancing, extension, renewal or replacement shall not (a) increase the outstanding principal amount of the Indebtedness being refinanced, extended, renewed or replaced, except by an amount equal to accrued interest, any required prepayment premium and customary fees and expenses reasonably incurred, in connection with such refinancing, extension, renewal or replacement and by an amount equal to any existing commitments unutilized thereunder to the extent permitted under Permitted Priority Debt, (b) contain terms relating to amortization (if any), maturity, collateral security (if any) or subordination (if any), or other material terms that, taken as a whole, are less favorable in any material respect to the Obligors and their respective Subsidiaries or the Purchasers than the terms of any agreement or instrument governing such existing Indebtedness (as determined in good faith by the Company, provided, that if such Indebtedness is a revolving facility, the terms of such Indebtedness may have applicable market terms as determined in good faith by the Company), (c) have an applicable interest rate which does not exceed the greater of (i) the rate of interest of the Indebtedness being replaced and (ii) the then applicable market interest rate, (d) contain any new requirement to grant any Lien or to give any Guarantee that was not an existing requirement of such Indebtedness, and (e) after giving effect to such refinancing, extension, renewal or replacement, no Default shall have occurred (or would reasonably be expected to occur) as a result thereof. “Permitted Revenue Financing” shall mean any additional revenue interest purchase and sale agreement or revenue interest financing agreement for the sale or pledge to a Person of no more than [***]% of Net Sales in the aggregate generated in the United States; provided, that such agreement shall be entered into no later than December 31, 2025, and such transaction is subject to a Permitted First Lien Intercreditor Agreement and a Permitted Pari Passu Intercreditor Agreement. “Permitted Warrant Transaction” shall mean any call option, warrant or right to purchase (or substantively equivalent derivative transaction) relating to the Common Shares or American Depositary Shares representing such Common Shares (or other securities or property following a merger event, reclassification or other change of the Common Stock) sold by Holdings, substantially concurrently with any purchase by Holdings of a Permitted Bond Hedge Transaction and settled in Common Shares or American Depositary Shares, cash or a combination thereof (such amount of cash determined by reference to the price of the Common Shares or American Depositary Shares or such other securities or property), and cash in lieu of fractional shares of the Common Shares. “Person” shall mean an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, but not including a government or political subdivision or any agency or instrumentality of such government or political subdivision.
32 US-DOCS\149870611.184871-1379-4480 v.21 “Product Patent” shall mean any Patent that constitutes Product Intellectual Property. “Prohibited Payment” shall mean any bribe, rebate, payoff, influence payment, kickback or other payment or gift of money or anything of value (including meals or entertainment) to any officer, employee or ceremonial office holder of any government or instrumentality thereof, political party or supra-national organization (such as the United Nations), any political candidate, any royal family member or any other person who is connected or associated personally with any of the foregoing that is prohibited under any Law for the purpose of influencing any act or decision of such payee in his official capacity, inducing such payee to do or omit to do any act in violation of his lawful duty, securing any improper advantage or inducing such payee to use his influence with a government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality. “Proportionate Share” shall mean, with respect to any Purchaser, the percentage obtained by dividing (i) the sum of the Commitments then in effect and the outstanding Funded Amount of such Purchaser by (ii) the sum of the Commitments then in effect and the outstanding Funded Amount of all Purchasers. “Purchase Price” shall mean, with respect to each tranche, the Tranche A Purchase Price and the Tranche B Purchase Price, as applicable. “Purchasers” shall have the meaning set forth in the first paragraph hereof, and shall also include any permitted successors or assigns thereof. “Purchasers Indemnified Party” shall have the meaning set forth in Section 7.05(a). “Qualified Equity Interest” shall mean, with respect to any Person, any Equity Interest of such Person that is not a Disqualified Equity Interest. “Qualified Plan” shall mean an employee benefit plan (as defined in Section 3(3) of ERISA) other than a Multiemployer Plan (i) that is or was at any time maintained or sponsored by the Company or any ERISA Affiliate thereof or to which the Company or any ERISA Affiliate thereof has ever made, or was ever obligated to make, contributions, and (ii) that is intended to be tax qualified under Section 401(a) of the Code. “Quarterly Report” shall mean, with respect to the relevant Fiscal Quarter of the Company, a report showing (i) the Royalty Interest Payment, U.S. Licensing / Participation Payment and Ex- U.S. Licensing / Participation Payment due to the Administrative Agent for such Fiscal Quarter, which report shall include a calculation of Royalty Interest Payments, U.S. Licensing / Participation Payment and Ex-U.S. Licensing / Participation Proceeds, in each case, reconciled, to the extent applicable, with the consolidated statements of operations of Holdings and its Subsidiaries, including the calculation and adjustment from which such Royalty Interest Payments, Sales, U.S. Licensing / Participation Payment or Ex-U.S. Licensing / Participation Proceeds are derived, (ii) Net Sales as a percentage of Gross Sales for such Fiscal Quarter, and (iii) the number of units of the Product sold in such Fiscal Quarter; provided that, with respect to U.S. Licensing / Participation Payment and Ex-U.S. Licensing / Participation Payments received from a licensee of the Company, if the Company receives the applicable reporting from such licensee necessary for the Company to determine such licensee’s U.S. Licensing / Participation Payment or Ex-U.S.
33 US-DOCS\149870611.184871-1379-4480 v.21 Licensing / Participation Payment fewer than ten (10) Business Days prior to the due date for a Quarterly Report (so long as the timing for receipt of such reporting is not set up in contemplation of this Agreement), the Company may, at its option, include such U.S. Licensing / Participation Payment or Ex-U.S. Licensing / Participation Payment, as applicable, on the Quarterly Report for the subsequent Fiscal Quarter and pay such U.S. Licensing / Participation Payment or Ex-U.S. Licensing / Participation Payment, as applicable, concurrently with delivery of such subsequent Quarterly Report in accordance with Section 2.02(c). “Registered Product IP” shall mean all Product Intellectual Property that is issued by, registered with, renewed by or the subject of a pending application before any Governmental Authority or domain name registrar. “Regulatory Agency” shall mean a Governmental Authority with responsibility for the approval of the manufacture, use, storage, import, export, transport, or Commercialization of the Product in the applicable jurisdiction. “Requested Audit” shall have the meaning set forth in Section 5.01(d). “RIPSA Account” shall mean that certain segregated deposit account for purposes of holding only the proceeds pursuant to Section 2.02(d)(i) and any minimum amounts required by the applicable depositary bank, which deposit account shall be at all times subject to an account control agreement pursuant to Section 5.18. “RIPSA Sweep Amount” shall have the meaning set forth in Section 2.02(d). “Royalty Interest Payment(s)” shall have the meaning set forth in Section 2.02(a). “Sanction” shall mean any international economic or financial sanction or trade embargo imposed, administered or enforced from time to time by the United States Government (including, without limitation, OFAC), the United Nations Security Council, the European Union or its Member States, the United Kingdom (including His Majesty’s Treasury) or other relevant sanctions authority where the Company is located or conducts business. “Sanctioned Person” shall mean, at any time, (i) any Person listed in any Sanctions-related list of designated Persons maintained by the United States Government (including OFAC), the United Nations Security Council, the European Union or its Member States, the government of the United Kingdom (including His Majesty’s Treasury), or other relevant sanctions authority, (ii) any Person organized or resident in a Designated Jurisdiction or (iii) any Person fifty percent (50%) or more owned or is controlled by any such Person or Persons described in the foregoing clause (i) or (ii). “SEC” shall mean the U.S. Securities and Exchange Commission and any successor agency thereto. “Secured Parties” shall mean the Purchasers, the Administrative Agent and any of their respective permitted transferees or assigns.
34 US-DOCS\149870611.184871-1379-4480 v.21 “Security Agreement” shall mean the Security Agreement among the Company, the other grantors thereto, and the Administrative Agent (in its capacity as administrative agent for the benefit of the Secured Parties under this Agreement), which Security Agreement shall be substantially in the form of SCHEDULE 1 PURCHASERS 14. Oaktree-TCDRS Strategic Credit, LLC 15. SC Investments UBTI Blocker, LLC 16. Oaktree-TSE 16 Strategic Credit, LLC 17. INPRS Strategic Credit Holdings, LLC 18. FSFC Holdings, Inc. 19. OSCF Blocker Holdings, Inc. 20. Oaktree AZ Strategic Lending Fund, L.P. 21. Oaktree LSL Fund Delaware Holdings EURRC, L.P. 22. Oaktree Direct Lending Fund Delaware Holdings Non-EURRC, L.P 23. Oaktree Direct Lending Fund Unlevered Delaware Holdings Non-EURRC, L.P. 24. Oaktree Direct Lending Fund VCOC Delaware Holdings Non-EURRC, L.P. 25. Oaktree Loan Acquisition Fund, L.P. 26. OCM Life Sciences Portfolio LP , as may be amended, restated, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof. “Subsidiary” shall mean, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than fifty percent (50%) of the equity or more than fifty percent (50%) of the ordinary voting power or, in the case of a partnership, more than fifty percent (50%) of the general partnership interests are, as of such date, owned, controlled or held, directly or indirectly. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of Holdings. “Tax” or “Taxes” shall mean any federal, state, local or foreign tax, levy, impost, duty, assessment, fee, deduction or withholding (including backup withholding) or other charge, including all excise, sales, use, value added, transfer, stamp, documentary, filing, recordation and other fees imposed by any taxing authority (and interest, fines, penalties and additions related thereto). “Tax Return” shall mean any report, return, form (including elections, declarations, statements, amendments, claims for refund, schedules, information returns or attachments thereto) or other information supplied or required to be supplied to a Governmental Authority with respect to Taxes. “Term” shall have the meaning set forth in Section 6.01.
35 US-DOCS\149870611.184871-1379-4480 v.21 “Term Sheet” shall mean the Letter of Intent between Holdings and Oaktree Capital Management, L.P., dated March 15, 2024. “Third Party” shall mean any Person other than the Purchasers or the Company and its Affiliates. “Title IV Plan” shall mean an employee benefit plan (as defined in Section 3(3) of ERISA) other than a Multiemployer Plan (i) that is or was at any time maintained or sponsored by the Company or any ERISA Affiliate thereof or to which the Company or any ERISA Affiliate thereof has ever made, or was obligated to make, contributions, and (ii) that is or was subject to Section 412 of the Code, Section 302 of ERISA or Title IV of ERISA. “Trade Secrets” shall mean all know-how, trade secrets and other proprietary or confidential information, any information of a scientific, technical, or business nature in any form or medium, Inventions and Invention disclosures, all documented research, developmental, demonstration or engineering work (including all novel manufacturing methods), and all other technical data, clinical data and information related thereto, including laboratory notebooks, chemical and biological materials (including any compounds, DNA, RNA, clones, vectors, cells and any expression product, progeny, derivatives or improvements thereto) and the results of experimentation and testing, including samples. “Trademarks” shall mean all trade names, trademarks and service marks, trade dress, corporate names, logos, Internet domain names, IP addresses, social media handles, uniform resource locators and other indicia of origin, trademark and service mark registrations, and applications for trademark and service mark registrations, whether or not registered, and any and all common law rights thereto, including (a) all renewals of trademark and service mark registrations and (b) all rights whatsoever accruing thereunder or pertaining thereto throughout the world, together, in each case, with the goodwill of the business connected with the use thereof and symbolized thereby. “Tranche A” shall mean a funding in the amount of the Tranche A Purchase Price. “Tranche A Funding Condition” shall mean the occurrence of each of (i) Ensifentrine Approval by September 30, 2024, (ii) the actual funding of the Tranche B Term Loans (as defined in the Oaktree Term Loan Facility) and (iii) no Default, Event of Default, or Material Adverse Effect shall have occurred or be continuing. For the avoidance of doubt, the Tranche A Funding Conditions shall solely apply to funding and activities in connection with Tranche A and shall not apply with respect to Tranche B or any other event hereunder. “Tranche A Funding Date” shall have the meaning set forth in Section 2.05(c). “Tranche A Funding Event of Default” shall have the meaning set forth in Section 2.05(b)(ii). “Tranche A Purchase Price” shall mean $100,000,000. “Tranche B” shall mean a funding in the amount of the Tranche B Purchase Price.
36 US-DOCS\149870611.184871-1379-4480 v.21 “Tranche B Funding Condition” shall mean the occurrence of (i) Tranche A Funding Date, (ii) Net Sales in the United States exceeding $[***] during any trailing six (6) month period, (iii) no Default or Event of Default shall have occurred or be continuing, and (iv) no Material Adverse Effect shall have occurred or be continuing. “Tranche B Funding Date” shall have the meaning set forth in Section 2.05(c). “Tranche B Purchase Price” shall mean an amount equal to $250,000,000 minus the Tranche A Purchase Price. “Transaction Documents” shall mean, collectively, this Agreement, the Security Agreement, the Debenture, the Intercreditor Agreement, each Permitted First Lien Intercreditor Agreement, each Permitted Pari Passu Intercreditor Agreement, the Administrative Agent Fee Letter and any related ancillary documents or agreements (provided, for the avoidance of doubt, that any documents related to the Oaktree Term Loan Facility and any other Permitted Priority Debt other than the Intercreditor Agreement and any applicable Permitted First Lien Intercreditor Agreement or Permitted Pari Passu Intercreditor Agreement shall not be Transaction Documents). “UCC” shall mean, with respect to any applicable jurisdictions, the Uniform Commercial Code as in effect in such jurisdiction, as may be modified from time to time. “UCC Financing Statements” shall mean the UCC-1 financing statements, in form and substance reasonably satisfactory to the Administrative Agent and the Purchasers, that shall be filed by the Administrative Agent at or promptly following the Effective Date, as well as any additional UCC-1 financing statements or amendments thereto as reasonably requested from time to time, to perfect the Purchasers’ security interest in the Collateral (as defined in the Security Agreement) and the Back-Up Security Interest. “United States” or “U.S.” shall mean the United States of America (including the District of Columbia, its territories and Puerto Rico). “U.S. Licensing / Participation Proceeds” shall mean the portion of all license fees, commercial or sales-based milestone payments, up-front payments, or royalties (other than sales- based royalties) received by the Company or any of its Affiliates pursuant to any U.S. Licensing Agreements for the Product during the Payment Period. “U.S. Licensing / Participation Payment(s)” shall have the meaning set forth in Section 2.02(a). “U.S. Licensing / Participation Percentage” shall mean 6.50%. “U.S. Licensing Agreement” shall mean any license, commercialization, co-promotion, collaboration, distribution, marketing or partnering agreement or other arrangement entered into during the Term by the Company or any of its Affiliates under which a Third Party has a right and license under the Product Intellectual Property to Commercialize the Product in the United States.
40 US-DOCS\149870611.184871-1379-4480 v.21 Section 2.03 Payment in Respect of Event of Default. (a) Payment in Respect of Pre-Funding Change of Control. With respect to a Pre- Funding Change of Control, the Company shall notify the Purchasers and the Administrative Agent in writing as soon as possible and in any event at least six (6) Business Days prior to the occurrence of such Pre-Funding Change of Control. The applicable Pre-Funding Event of Default Fee shall automatically be due and payable concurrently with the consummation of such Pre- Funding Change of Control. The payment of such Pre-Funding Event of Default Fee shall be made by wire transfer of immediately available funds to the Administrative Agent for the account of the Purchasers. The Purchasers may not fund Tranche A or Tranche B upon the Company’s entry into any agreement that would result in a Pre-Funding Change of Control. (b) Payment in Respect of Tranche A Funding Event of Default. With respect to a Tranche A Funding Event of Default, the applicable Pre-Funding Event of Default Fee shall automatically be due and payable immediately upon the occurrence of such Tranche A Funding Event of Default, the payment of which shall be made by wire transfer of immediately available funds to the Administrative Agent for the account of the Purchasers. (c) Payment in Respect of Bankruptcy Event of Default. With respect to a Bankruptcy Event of Default, the Company shall notify the Purchasers and the Administrative Agent in writing as soon as possible. Immediately upon the occurrence of such Bankruptcy Event of Default, the applicable Pre-Funding Event of Default Fee (in the event such Bankruptcy Event of Default occurs prior to the Tranche A Funding Date) or Event of Default Fee (in the event such Bankruptcy Event of Default occurs after the Tranche A Funding Date) shall automatically (without any action or notice by any of the Purchasers) be due and payable, the payment of which shall be made by wire transfer of immediately available funds to the Administrative Agent for the account of the Purchasers. (d) Payment in Respect of Other Event of Default. With respect to an Event of Default other than a Pre-Funding Change of Control, Tranche A Funding Event of Default or Bankruptcy Event of Default, the Company shall notify the Purchasers and the Administrative Agent in writing as soon as possible and in any event (i) within two (2) Business Days following the occurrence of any Event of Default during the Term (other than a Change of Control) or (ii) with respect to a Change of Control, at least six (6) Business Days prior to the occurrence (whereby occurrence shall mean closing) of such Change of Control, identifying the nature of such Event of Default. Upon the occurrence of such Event of Default, the Purchasers may demand, unanimously and in writing, the payment of a Pre-Funding Event of Default Fee (in the event such Event of Default occurs prior to the Tranche A Funding Date) or an Event of Default Fee (in the event such Event of Default occurs after the Tranche A Funding Date) and terminate the Agreement pursuant to Section 6.01. In the event the Purchasers unanimously make such demand in writing, (i) the Pre- Funding Event of Default Fee or Event of Default Fee (other than in respect of a Change of Control occurring after the Tranche A Funding Date), as applicable, shall be due and payable within five (5) Business Days after delivery of such demand in writing and (ii) the Event of Default Fee in respect of a Change of Control occurring after the Tranche A Funding Date shall be due and payable concurrently with the consummation of such Pre-Funding Change of Control. The payment of such Pre-Funding Event of Default Fee or Event of Default Fee shall be made by wire
43 US-DOCS\149870611.184871-1379-4480 v.21 The Purchasers shall have received satisfactory evidence that each Obligor has obtained all required consents and approvals of all Persons to the execution, delivery and performance of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereunder and thereunder. The Company shall have delivered to the Administrative Agent and the Purchasers an opinion of counsel to each Obligor reasonably acceptable to the Administrative Agent and the Purchasers, and their respective counsel as to matters relating to the Obligors and the Transaction Documents. The Administrative Agent shall have received the Financial Statements, or such information shall be publicly available on “XXXXX”. The Administrative Agent shall have received a certificate in form and substance reasonably satisfactory to the Purchasers, dated as of the Effective Date, duly executed and delivered by an officer of the Company, certifying that the conditions set forth in clause (iv) and (vi) of this Section 2.05(a) have been satisfied. The Administrative Agent shall be satisfied with Lien searches regarding the Obligors made as of a date reasonably close to the Effective Date. Tranche A Term Loans (as defined under the Oaktree Term Loan Facility) shall have been funded. (b) Purchase Procedures. The obligation of the Company to sell each Applicable Tranche, and of each Purchaser to pay the applicable Purchase Price is subject to (i) with respect to Tranche A, (x) satisfaction of the Tranche A Funding Condition and (y) a request by the Company for the Tranche A funding, made by the Company within three (3) Business Day after satisfaction of the Tranche A Funding Condition by delivering to the Administrative Agent and the Purchasers an irrevocable funding notice (“Funding Notice”) in the form of Error! Reference source not found. signed by a duly authorized representative of the Company (which notice, if received by the Purchasers on a day that is not a Business Day or after 10:00 A.M. (Eastern time) on a Business Day, shall be deemed to have been delivered on the next Business Day), and (ii) with respect to Tranche B, (x) satisfaction of the Tranche B Funding Condition and (y) a request by the Company for the Tranche B funding, made by the Company at least five (5) Business Days prior to the requested funding date by delivering to the Administrative Agent and the Purchasers an irrevocable Funding Notice in the form of Error! Reference source not found. signed by a duly authorized representative of the Company (which notice, if received by the Purchasers on a day that is not a Business Day or after 10:00 A.M. (Eastern time) on a Business Day, shall be deemed to have been delivered on the next Business Day). Each Funding Notice shall be for the full amount of the Applicable Tranche and no Funding Notice for less than such full amount shall be permitted. The funding of Tranche A shall not be optional and the Company shall be obligated to request the Tranche A funding within three (3) Business Days of the satisfaction of the Tranche A Funding Condition. It shall be a Tranche A Funding Event of Default if the Company fails to request the Tranche A funding within three (3) Business Days of satisfaction of
44 US-DOCS\149870611.184871-1379-4480 v.21 the Tranche A Funding Condition (a “Tranche A Funding Event of Default”). The funding of Tranche B shall be at the Company’s option, and the Company has no obligation to request or accept the Tranche B funding. (c) Payment of Purchase Price. Each Purchaser shall pay its Proportionate Share of the Tranche A Purchase Price or Tranche B Purchase Price, as applicable, solely by wire transfer in immediately available funds, by 2:00 p.m. New York City Time on the fifth (5th) day following such Purchaser’s receipt of a Funding Notice from the Company (respectively, the “Tranche A Funding Date” and “Tranche B Funding Date”) to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Purchasers. The requirement of the Purchasers to pay its Proportionate Share of the Applicable Tranche shall be subject to the representations and warranties being made by the Company in Article III hereof being true and correct in all material respects as of the Applicable Funding Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date (except that any representation or warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects). The Applicable Funding Condition may be waived by mutual agreement by the Purchasers and the Company each in their sole discretion. (d) Payment of the Purchase Price by the Purchasers shall have no contingencies other than as set forth in Section 2.05(b) above. (e) Notwithstanding anything to the contrary in this Agreement, in no event shall the Tranche B Funding Date occur after the Long Stop Date. Section 2.06 No Assumed Obligations. Notwithstanding any provision in this Agreement or any other writing to the contrary, the Purchasers are acquiring only the Assigned Interests and are not assuming any liability or obligation of the Company or any of its Affiliates of whatever nature, whether presently in existence or arising or asserted hereafter, whether under any Transaction Document or otherwise (the “Excluded Liabilities and Obligations”). The Purchasers expressly do not assume or agree to be responsible for any Excluded Liabilities and Obligations and all such liabilities and obligations shall be retained by and remain solely obligations and liabilities of the Company or its Affiliates. Section 2.07 No Financial Accommodation. The Company hereby acknowledges, covenants and agrees that: (i) this Agreement does not, and shall not, constitute a “financial accommodation agreement” pursuant to Section 365(c)(2) of the Bankruptcy Code, (ii) it shall not take a position to the contrary in any court of competent jurisdiction including any bankruptcy court, and (iii) it will not initiate, or assert in, any litigation or other legal proceeding that this Agreement does or may constitute a “financial accommodation agreement” under Section 365(c)(2) of the Bankruptcy Code.
49 US-DOCS\149870611.184871-1379-4480 v.21 and (3) neither any Obligor nor any of its Subsidiaries has initiated any claim with respect to any such Product Intellectual Property, in each case of (1), (2) and (3), that would reasonably be expected to result in a Material Adverse Effect; all current and former employees and contractors that have developed or contributed to the development of any material Product Intellectual Property for or on behalf of any Obligor or any of its Subsidiaries has executed a valid, written confidentiality and invention assignment Contracts with such Obligor or such Subsidiary, as applicable, that irrevocably and presently assign to such Obligor or such Subsidiary, as applicable, all rights of such employees and contractors to any such material Product Intellectual Property; and each Obligor and each of its Subsidiaries has taken reasonable precautions to protect the secrecy, confidentiality and value of its Product Intellectual Property consisting of Trade Secrets and no such Trade Secret constituting material Product Intellectual Property has been used or discovered by, or disclosed to, any Person except pursuant to written, valid and enforceable non-disclosure agreements protecting the confidentiality thereof, which agreements, to the knowledge of each Obligor and its Subsidiaries, have not been breached in any material respect. (b) Except as set forth in Schedule 3.12(b), and without limiting the representations and warranties in Section 3.12(a): each of the issued claims of each Product Patent owned or to the knowledge of the Obligors otherwise Controlled by Company or its Affiliates is valid and enforceable; subsequent to the issuance of each Product Patent owned or to the knowledge of the Obligors otherwise Controlled by Company or its Affiliates, neither any Obligor nor any of its Subsidiaries or predecessors-in-interest has filed any disclaimer or made or permitted any other voluntary reduction in the scope of the Inventions claimed in such Product Patents, or any such disclaimer or reduction in scope would reasonably be expected to result in a Material Adverse Effect; to the knowledge of any Obligor and its Subsidiaries, no allowable or allowed subject matter of any Product Patents is subject to any competing conception claims of allowable or allowed subject matter of any patent applications or patents of any third party and have not been the subject of any interference, and are not and have not been the subject of any re- examination, opposition or any other post-grant proceedings, nor is any Obligor or its Subsidiaries aware of any basis for any such interference, re-examination, opposition, inter partes review, post grant review, or any other post-grant proceedings; no Product Patents that are material to the Product Commercialization and Development Activities have ever been finally adjudicated to be invalid, unpatentable or unenforceable for any reason in any administrative, arbitration, judicial or other proceeding, and, with the exception of publicly available documents in the applicable patent office with respect to any such Patents, no Obligor nor any of their Subsidiaries has received any written notice asserting that such Patents are invalid, unpatentable or unenforceable; and
56 US-DOCS\149870611.184871-1379-4480 v.21 due hereunder, the amount of such overpayment shall be promptly refunded or fully creditable against amounts payable in subsequent payment periods, at the Company’s election. (f) Quarterly Reports. During the Term, the Company shall, promptly after the end of each Fiscal Quarter of the Company (but in no event later than forty-five (45) days following the end of each Fiscal Quarter), produce and deliver to the Administrative Agent (which shall, in turn, deliver to the Purchasers) a Quarterly Report for such quarter, together with a certificate of the Company, certifying that to the knowledge of the Company (i) such Quarterly Report is a true and complete copy and (ii) any statements and any data and information therein prepared by the Company are true, correct and accurate in all material respects. The Company shall use, and shall use Commercially Reasonable Efforts to ensure that each of its Affiliates shall use, Commercially Reasonable Efforts to include in each contract of the Obligors for the Development or Commercialization of the Product entered into on or after the Effective Date, obligations reasonably appropriate to ensure that the counterparty to such contract shall furnish to the Company all information necessary for the Company to comply with this Section 5.01(f) and Section 5.01(a), and calculate the Royalty Interest Payments, U.S. Licensing / Participation Payments or Ex-U.S. Licensing / Participation Proceeds as set forth in this Agreement. In addition the Majority Purchasers may request a quarterly verbal update on material updates related to the Product Commercialization and Development Activities, including clinical trials, manufacturing and marketing related activities, whereby all Purchasers will be invited to such updates by the Company. (g) Monthly Reports. During the Term, the Company shall, promptly after the end of each calendar month (but in no event later than fifteen (15) days following the end of each calendar month), produce and deliver to the Administrative Agent (which shall, in turn, deliver to the Purchasers) a flash report disclosing (i) the number of units of Products sold in the preceding calendar month and (ii) the Gross Sales for such calendar month, in each case of (i) and (ii) solely to enable the Purchasers to review the progress of the Commercialization of the Product and which shall be preliminary, unaudited, and subject to further verifications and modifications by the Company. (h) Periodic Reports. The Company shall deliver to the Administrative Agent (which shall, in turn, deliver to the Purchasers) the following financial statements, provided that documents required to be furnished pursuant to this Section 5.01(h) shall be deemed furnished on the date that such documents are publicly available on “XXXXX”: as soon as available and in any event within forty-five (45) days after the end of the first three (3) Fiscal Quarters of each fiscal year (commencing with the Fiscal Quarter ending June 30, 2024) (i) the consolidated balance sheets of Holdings and its Subsidiaries as of the end of such Fiscal Quarter and (ii) the related consolidated statements of income, shareholders’ equity and cash flows of Holdings and its Subsidiaries for such quarter and the portion of the fiscal year through the end of such fiscal quarter, in each case prepared in all material respects in accordance with GAAP consistently applied, all in reasonable detail and setting forth in comparative form the figures for the corresponding period in the preceding fiscal year, together with (iii) a certificate of the Company stating that (x) such financial statements fairly present in all material respects the financial condition of Holdings and its Subsidiaries as at such date and (y) the results of operations of Holdings and its Subsidiaries for the period ended on such date have been
59 US-DOCS\149870611.184871-1379-4480 v.21 Product IP, owned or Controlled by such Obligor, consistent with prudent business practice. Each Obligor shall use reasonable efforts consistent with sound business judgment to seek and to apply for patent term extensions (to the extent it has the right to do so), pediatric data package exclusivity extension, supplementary protection certificates, any functional equivalents of any of the foregoing, or similar means of extending market exclusivity or patent protection for any Product Intellectual Property which it owns or Controls, and the Product in each territory that such Obligor obtains Governmental Approval for Commercialization, and where such items are permissible, as the case may be. No Obligor shall fail to take any action to prosecute and maintain the Product Intellectual Property that it owns or Controls, which would reasonably be expected to result in a Material Adverse Effect or Product Material Adverse Effect in the event at the time of determination, the Company or any of its Affiliates is Developing or Commercializing one or more Other Products. (b) In the event that any Obligor or the Purchasers becomes aware of any actual or suspected infringement, misappropriation, violation or invalidity claims by a Third Party of or directed to, as applicable, any material Product Intellectual Property, including any Product Patents, then promptly following such Obligor or the Purchasers, respectively, becoming aware of such actual or suspected infringement, misappropriation, violation or invalidity claim, such Obligor or the Purchasers, respectively, shall inform the Purchasers of such actual or suspected infringement, misappropriation, violation or invalidity claim and shall, in addition to such notice, provide to the Purchasers any material information within such party’s possession pertaining thereto (which may be subject to agreement necessary to protect privilege, confidentiality and the like with respect to such information). Each Obligor shall use Commercially Reasonable Efforts to defend or assert Product Intellectual Property owned or Controlled by such Obligor, including the Product Patents, against infringement, misappropriation, violation or claims and any interference by any other Person, and against any claims of invalidity or unenforceability of any Product Intellectual Property, including any Product Patents (including, by bringing any legal action for infringement or defending any counterclaim of invalidity or action of a Third Party for declaratory judgment of non-infringement or non-interference), in each case to the extent that the failure to do so would not reasonably be expected to result in a Material Adverse Effect, or Product Material Adverse Effect in the event at the time of determination, the Company or any of its Affiliates is Developing or Commercializing one or more Other Products. The Company will keep the Purchasers reasonably informed with respect to the status of any such enforcement and/or defense of such Product Intellectual Property as the Purchasers may, from time to time, reasonably request. Each Obligor shall not, and shall use its Commercially Reasonable Efforts to cause any licensee not to, disclaim, abandon or otherwise dispose, or fail to take any action necessary to prevent the disclaimer, abandonment or disposal of, any Product Intellectual Property, including any of the Product Patents, except in accordance with reasonable and prudent business practice in a manner that would not reasonably be expected to result in a Material Adverse Effect, or Product Material Adverse Effect in the event at the time of determination, the Company or any of its Affiliates is Developing or Commercializing one or more Other Products. (c) In the event that any Obligor becomes aware that the Product (including any Product Commercialization and Development Activities) infringes, misappropriates or otherwise violates any Third Party Intellectual Property, such Obligor shall, in the exercise of its reasonable business discretion, use Commercially Reasonable Efforts to attempt to secure the right to use or otherwise exploit such Intellectual Property on behalf of itself and any affected licensee, as
63 US-DOCS\149870611.184871-1379-4480 v.21 make payments hereunder to the Administrative Agent (or any successor Administrative Agent) without withholding or deduction on account of United States federal taxes. The Administrative Agent and each Purchaser agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Company (and, with respect to any Purchaser, the Administrative Agent) in writing of its legal inability to do so. (c) Payments Free of Taxes. Any and all payments by or on account of any Obligation shall be made without deduction or withholding for any Taxes, except as required by any Law. If any Law (as determined in the good faith discretion of the Company or the Administrative Agent, as applicable) requires the deduction or withholding of any Tax from any such payment by the Company or the Administrative Agent, then the Company or the Administrative Agent, as applicable, shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable Laws and, if such Tax is an Indemnified Tax, then the sum payable by the Company shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 5.10) the Purchasers receive an amount equal to the sum they would have received had no such deduction or withholding been made. (d) Payment of Other Taxes by Company. The Company shall timely pay to the relevant Governmental Authority in accordance with applicable Law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes. (e) Indemnification by the Company. The Company shall reimburse and indemnify each Purchaser, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 5.10) payable or paid by such Purchaser or required to be withheld or deducted from a payment to such Purchaser and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Company by a Purchaser shall be conclusive absent manifest error. (f) Evidence of Payments. As soon as practicable after any payment of Taxes by the Company to a Governmental Authority pursuant to this Section 5.10, the Company shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent. (g) Treatment of Certain Tax Benefits. If any party to this Agreement determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 5.10 (including by the payment of additional amounts pursuant to this Section 5.10), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 5.10 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request
71 US-DOCS\149870611.184871-1379-4480 v.21 party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section 7.05 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. In any such proceeding, an indemnified party shall have the right to retain its own counsel, but the reasonable fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel, (ii) the indemnifying party has assumed the defense of such proceeding and has failed within a reasonable time to retain counsel reasonably satisfactory to such indemnified party or (iii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential conflicts of interests between them based on the advice of such counsel. It is agreed that the indemnifying party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate law firm in each relevant jurisdiction for all such indemnified parties. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (d) The indemnification afforded by this Section 7.05 shall be the sole and exclusive remedy for any and all Losses awarded against or incurred or suffered by the Purchasers Indemnified Parties against the Obligors in connection with the Obligors’ indemnification obligations hereunder and the Company Indemnified Parties against the Purchasers in connection with the Purchasers’ indemnification obligations hereunder, in each case other than any indemnification obligations resulting from (A) the gross negligence, the bad faith or willful misconduct or violation of applicable Law of the other Party or (B) acts or omissions based upon and in compliance with the written instructions from the other Party; provided that nothing in this Section 7.05 shall alter or affect the rights of the Purchasers to exercise remedies under the Transaction Documents in accordance with their terms or other rights of creditors under the UCC or any other applicable Law. (e) Notwithstanding anything in this Agreement to the contrary, no Obligor shall have any liability under this Section 7.05 on any day on which such indemnity claim under this Section 7.05 is paid by such Obligor, in excess of the Cap Amount for such day. “Cap Amount” means, for any day on which an indemnity claim under this Section 7.05 is paid by any Obligor, the excess of (x) the Hard Cap over (y) the sum of (A) the aggregate amount of Royalty Interest Payments, U.S. Licensing / Participation Payments and Ex-U.S. Licensing / Participation Payments received by the Purchasers on or prior to such day and (B) the aggregate amount of payments made under this Section 7.05 by any Obligor on or prior to such day. Notwithstanding
75 US-DOCS\149870611.184871-1379-4480 v.21 Section 7.16 Governing Law; Jurisdiction. (a) This Agreement shall be governed by, and construed, interpreted and enforced in accordance with, the laws of the state of New York, without giving effect to the principles of conflicts of law thereof. (b) Any legal action or proceeding with respect to this Agreement or any other Transaction Document may be brought in any state or federal court of competent jurisdiction in the State of New York, County of New York. By execution and delivery of this Agreement, each party hereto hereby irrevocably consents to and accepts, for itself and in respect of its property, generally and unconditionally the exclusive jurisdiction of such courts. Each party hereto hereby further irrevocably waives any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, which it may now or hereafter have to the bringing of any action or proceeding in such jurisdiction in respect of any Transaction Document. (c) Each party hereto hereby irrevocably consents to the service of process out of any of the courts referred to in subsection (b) of this Section 7.16 in any such suit, action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to it at its address set forth in this Agreement. Each party hereto hereby irrevocably waives any objection to such service of process and further irrevocably waives and agrees not to plead or claim in any suit, action or proceeding commenced hereunder or under any other Transaction Document that service of process was in any way invalid or ineffective. Nothing herein shall affect the right of a party to serve process on the other party in any other manner permitted by law. Section 7.17 Waiver of Jury Trial. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any action, proceeding, claim or counterclaim arising out of or relating to any Transaction Document or the transactions contemplated under any Transaction Document. This waiver shall apply to any subsequent amendments, renewals, supplements or modifications to any Transaction Document. Section 7.18 Release of Liens upon Certain Permitted Financings; Non- Disturbance; Permitted First Lien Intercreditor Agreement; Permitted Pari Passu Intercreditor Agreement. (a) In connection with the incurrence by any Obligor or any of its Subsidiaries of any Permitted Priority Debt (other than the Oaktree Term Loan Facility), the Administrative Agent and the Purchasers (upon request of the Company) shall enter into an intercreditor agreement with the lenders under such Permitted Priority Debt (or the agent to such lenders), which intercreditor agreement shall contain substantially similar terms as those in the Intercreditor Agreement, or such other terms as are reasonably acceptable to the Company, the Administrative Agent and the Purchasers (a “Permitted First Lien Intercreditor Agreement”). In connection with the incurrence or entry into by any Obligor or any of its Subsidiaries of any Permitted Revenue Financing, the Administrative Agent and the Purchasers (upon request of the Company) shall enter into a customary pari passu intercreditor agreement with the lenders or purchasers under such Permitted Revenue Financing (or the agent to such lenders or purchasers), in form and substance reasonably acceptable to the Company, the Administrative Agent and the Purchasers (any such intercreditor agreement, an “Permitted Pari Passu Intercreditor Agreement”).
84 US-DOCS\149870611.184871-1379-4480 v.21 in respect of each day from the date such Erroneous Payment (or portion thereof) was received by such Payment Recipient to the date such amount is repaid to the Administrative Agent in same day funds at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect. A notice of the Administrative Agent to any Payment Recipient under this clause (i) shall be conclusive, absent manifest error. (b) Without limiting immediately preceding clause (a), each Payment Recipient hereby further agrees that if it receives a payment, prepayment or repayment (whether received as a payment, prepayment or repayment of Royalty Interest Payments, U.S. Licensing / Participation Payments or Ex-U.S. Licensing / Participation Payments, fees, distribution or otherwise) from the Administrative Agent (or any of its Affiliates) (x) that is in a different amount than, or on a different date from, that specified in this Agreement or in a notice of payment, prepayment or repayment (a “Payment Notice”) sent by the Administrative Agent (or any of its Affiliates) with respect to such payment, prepayment or repayment, (y) that was not preceded or accompanied by a Payment Notice, or (z) that such Payment Recipient otherwise becomes aware was transmitted, or received, in error or by mistake (in whole or in part), then, in each such case: (i) such Payment Recipient acknowledges and agrees that (A) in the case of immediately preceding clauses (x) or (y), an error and mistake shall be presumed to have been made (absent written confirmation from the Administrative Agent to the contrary) or (B) an error and mistake has been made (in the case of immediately preceding clause (z)), in each case, with respect to such payment, prepayment or repayment; and (ii) such Payment Recipient shall promptly (and, in all events, within one (1) Business Day of its knowledge of the occurrence of any of the circumstances described in immediately preceding clauses (x), (y) or (z)) use commercially reasonable efforts to notify the Administrative Agent of its receipt of such payment, prepayment or repayment, the details thereof (in reasonable detail) and that it is so notifying the Administrative Agent pursuant to this Section 8.14(b)(ii). (c) Each Purchaser hereby authorizes the Administrative Agent to set off, net and apply any and all amounts at any time owing to such Purchaser under any Transaction Document, or otherwise payable or distributable by the Administrative Agent to such Purchaser from any source, against any amount that the Administrative Agent has demanded to be returned pursuant to immediately preceding clause (a). (d) In the event that an Erroneous Payment (or portion thereof) is not recovered by the Administrative Agent for any reason, after demand therefor by the Administrative Agent in accordance with immediately preceding clause (a), from any Purchaser that has received such Erroneous Payment (or portion thereof) (and/or from any Payment Recipient who received such Erroneous Payment (or portion thereof) on its respective behalf) (such unrecovered amount, an “Erroneous Payment Return Deficiency”), upon the Administrative Agent’s notice to such Purchaser at any time, then effective immediately (with the consideration therefor being acknowledged by the parties hereto), (i) such Purchaser shall be deemed to have assigned its Assigned Interests (but not its Commitments) with respect to which such Erroneous Payment was made (the “Erroneous Payment Impacted Assigned Interests”) in an amount equal to the Erroneous Payment Return Deficiency (or such lesser amount as the Administrative Agent may specify) (such assignment of the Assigned Interests (but not Commitments) of the Erroneous Payment Impacted Assigned Interests, the “Erroneous Payment Deficiency Assignment”) (on a cashless basis) (with
85 US-DOCS\149870611.184871-1379-4480 v.21 the assignment fee to be waived by the Administrative Agent in such instance), and is hereby (together with the Company) deemed to execute and deliver an assignment and assumption agreement with respect to such Erroneous Payment Deficiency Assignment, and such Purchaser shall deliver any notes or other instruments evidencing such Assigned Interests to the Company or the Administrative Agent (but the failure of such Person to deliver any such notes shall not affect the effectiveness of the foregoing assignment), (ii) the Administrative Agent as the assignee Purchaser shall be deemed to have acquired the Erroneous Payment Deficiency Assignment, (iii) upon such deemed acquisition, the Administrative Agent as the assignee Purchaser shall become a Purchaser, as applicable, hereunder with respect to such Erroneous Payment Deficiency Assignment and the assigning Purchaser shall cease to be a Purchaser, as applicable, hereunder with respect to such Erroneous Payment Deficiency Assignment, excluding, for the avoidance of doubt, its obligations under the indemnification provisions of this Agreement and its applicable Commitments which shall survive as to such assigning Purchaser, (iv) the Administrative Agent and the Company shall each be deemed to have waived any consents required under this Agreement to any such Erroneous Payment Deficiency Assignment, and (iv) the Administrative Agent may reflect in the Register its ownership interest in the Assigned Interests subject to the Erroneous Payment Deficiency Assignment. Subject to Section 7.04, the Administrative Agent may, in its discretion, sell any Assigned Interests acquired pursuant to an Erroneous Payment Deficiency Assignment and upon receipt of the proceeds of such sale, the Erroneous Payment Return Deficiency owing by the applicable Purchaser shall be reduced by the net proceeds of the sale of such Assigned Interests (or portion thereof), and the Administrative Agent shall retain all other rights, remedies and claims against such Purchaser (and/or against any recipient that receives funds on its respective behalf). For the avoidance of doubt, no Erroneous Payment Deficiency Assignment shall reduce the Commitments of any Purchaser and such Commitments shall remain available in accordance with the terms of this Agreement. In addition, each party hereto agrees that, except to the extent that the Administrative Agent has sold an Assigned Interests (or portion thereof) acquired pursuant to an Erroneous Payment Deficiency Assignment, and irrespective of whether the Administrative Agent may be equitably subrogated, the Administrative Agent shall be contractually subrogated to all the rights and interests of the applicable Purchaser under the Transaction Documents with respect to each Erroneous Payment Return Deficiency (the “Erroneous Payment Subrogation Rights”) (provided that the Obligors’ Obligations under the Transaction Documents in respect of the Erroneous Payment Subrogation Rights shall not be duplicative of such Obligations in respect of the Assigned Interests that have been assigned to the Administrative Agent under an Erroneous Payment Deficiency Assignment). (e) The parties hereto agree that an Erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by any Obligor, provided that this Section 8.14 shall not be interpreted to increase (or accelerate the due date for), or have the effect of increasing (or accelerating the due date for), the Obligations of the Company relative to the amount (and/or timing for payment) of the Obligations that would have been payable had such Erroneous Payment not been made by the Administrative Agent; provided, further, that for the avoidance of doubt, the last sentence of immediately preceding clause (d) and this clause (e) shall not apply to the extent such Erroneous Payment is, and solely with respect to the amount of such Erroneous Payment that is, comprised of funds received by the Administrative Agent from any Obligor for the purpose of making such Erroneous Payment.
86 US-DOCS\149870611.184871-1379-4480 v.21 (f) To the extent permitted by applicable law, no Payment Recipient shall assert any right or claim to an Erroneous Payment, and hereby waives, and is deemed to waive, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Administrative Agent for the return of any Erroneous Payment received, including without limitation waiver of any defense based on “discharge for value” or any similar doctrine. (g) Each party’s obligations, agreements and waivers under this Section 8.14 shall survive the resignation or replacement of the Administrative Agent, any transfer of rights or obligations by, or the replacement of, a Purchaser, the termination of the Commitments and/or the repayment, satisfaction or discharge of all Obligations (or any portion thereof) under any Transaction Document. [SIGNATURE PAGE FOLLOWS]
[Signature Page to Revenue Interest Purchase and Sale Agreement] US-DOCS\149870611.184871-1379-4480 v.21 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date first above written. COMPANY: VERONA PHARMA, INC. By: /s/ Xxxx X. Xxxx Name: Xxxx X. Xxxx Title: Treasurer, Secretary and Chief Financial Officer
[Signature Page to Revenue Interest Purchase and Sale Agreement] US-DOCS\149870611.184871-1379-4480 v.21 VERONA PHARMA PLC By: /s/ Xxxx X. Xxxx Name: Xxxx X. Xxxx Title: Chief Financial Officer
[Signature Page to Revenue Interest Purchase and Sale Agreement] US-DOCS\149870611.184871-1379-4480 v.21 ADMINISTRATIVE AGENT: OAKTREE FUND ADMINISTRATION, LLC By: Oaktree Capital Management, L.P. Its: Managing Member By: /s/ Xxxxxxx Xxxxxxx Name: Xxxxxxx Xxxxxxx Title: Managing Director By: /s/ Xxxx Xxxxxxxx Name: Xxxx Xxxxxxxx Title: Managing Director Address for Notices: Oaktree Fund Administration, LLC 000 X. Xxxxx Xxxxxx, 00xx Xx. Los Angeles, CA 90071 Attn: Oaktree Agency Email: Xxxxxxxxxxxxx@xxxxxxxxxx.xxx With a copy to: Oaktree Capital Management, L.P. 000 X. Xxxxx Xxxxxx, 00xx Xx. Los Angeles, CA 90071 Attn: [ ] Email: [ ] With a copy (which shall not constitute notice) to: Xxxxxxxx & Xxxxxxxx LLP 000 Xxxxx Xxxxxx Xxx Xxxx, XX 00000 Attn: [ ] Email: [ ]
[Signature Page to Revenue Interest Purchase and Sale Agreement] US-DOCS\149870611.184871-1379-4480 v.21 PURCHASER: OAKTREE-TCDRS STRATEGIC CREDIT, LLC By: Oaktree Capital Management, L.P. Its: Managing Member By: /s/ Xxxxxxx Xxxxxxx Name: Xxxxxxx Xxxxxxx Title: Managing Director By: /s/ Xxxx Xxxxxxxx Name: Xxxx Xxxxxxxx Title: Managing Director
[Signature Page to Revenue Interest Purchase and Sale Agreement] US-DOCS\149870611.184871-1379-4480 v.21 SC INVESTMENTS UBTI BLOCKER, LLC By: Oaktree Fund GP IIA, LLC Its: Manager By: Oaktree Fund XX XX, L.P. Its: Managing Member By: /s/ Xxxxxxx Xxxxxxx Name: Xxxxxxx Xxxxxxx Title: Managing Director By: /s/ Xxxx Xxxxxxxx Name: Xxxx Xxxxxxxx Title: Managing Director
[Signature Page to Revenue Interest Purchase and Sale Agreement] US-DOCS\149870611.184871-1379-4480 v.21 OAKTREE-TSE 16 STRATEGIC CREDIT, LLC By: Oaktree Capital Management, L.P. Its: Manager By: /s/ Xxxxxxx Xxxxxxx Name: Xxxxxxx Xxxxxxx Title: Managing Director By: /s/ Xxxx Xxxxxxxx Name: Xxxx Xxxxxxxx Title: Managing Director
[Signature Page to Revenue Interest Purchase and Sale Agreement] US-DOCS\149870611.184871-1379-4480 v.21 INPRS STRATEGIC CREDIT HOLDINGS, LLC By: Oaktree Capital Management, L.P. Its: Manager By: /s/ Xxxxxxx Xxxxxxx Name: Xxxxxxx Xxxxxxx Title: Managing Director By: /s/ Xxxx Xxxxxxxx Name: Xxxx Xxxxxxxx Title: Managing Director
[Signature Page to Revenue Interest Purchase and Sale Agreement] US-DOCS\149870611.184871-1379-4480 v.21 FSFC HOLDINGS, INC. By: /s/ Xxxxxxx Xxxxxxx Name: Xxxxxxx Xxxxxxx Title: Chief Operating Officer
[Signature Page to Revenue Interest Purchase and Sale Agreement] US-DOCS\149870611.184871-1379-4480 v.21 OSCF BLOCKER HOLDINGS, INC. By: Oaktree Strategic Credit Fund Its: Director By: Oaktree Fund Advisors, LLC Its: Investment Advisor By: /s/ Xxxxxxx Xxxxxxx Name: Xxxxxxx Xxxxxxx Title: Managing Director By: /s/ Xxxx Xxxxxxxx Name: Xxxx Xxxxxxxx Title: Managing Director
[Signature Page to Revenue Interest Purchase and Sale Agreement] US-DOCS\149870611.184871-1379-4480 v.21 OAKTREE AZ STRATEGIC LENDING FUND, L.P. By: Oaktree AZ Strategic Lending Fund GP, L.P. Its: General Partner By: Oaktree Fund GP IIA, LLC Its: General Partner By: Oaktree Fund XX XX, L.P. Its: Managing Member By: /s/ Xxxxxxx Xxxxxxx Name: Xxxxxxx Xxxxxxx Title: Managing Director By: /s/ Xxxx Xxxxxxxx Name: Xxxx Xxxxxxxx Title: Managing Director
[Signature Page to Revenue Interest Purchase and Sale Agreement] US-DOCS\149870611.184871-1379-4480 v.21 OAKTREE LSL FUND DELAWARE HOLDINGS EURRC, L.P. By: Oaktree Life Sciences Lending Fund GP, L.P. Its: General Partner By: Oaktree Life Sciences Lending Fund GP Ltd. Its: General Partner By: Oaktree Capital Management, L.P. Its: Director By: /s/ Xxxxxxx Xxxxxxx Name: Xxxxxxx Xxxxxxx Title: Managing Director By: /s/ Xxxx Xxxxxxxx Name: Xxxx Xxxxxxxx Title: Managing Director
[Signature Page to Revenue Interest Purchase and Sale Agreement] US-DOCS\149870611.184871-1379-4480 v.21 OAKTREE DIRECT LENDING FUND DELAWARE HOLDINGS NON-EURRC, L.P. By: Oaktree Direct Lending Fund GP, L.P. Its: General Partner By: Oaktree Direct Lending Fund GP Ltd. Its: General Partner By: Oaktree Capital Management, L.P. Its: Director By: /s/ Xxxxxxx Xxxxxxx Name: Xxxxxxx Xxxxxxx Title: Managing Director By: /s/ Xxxx Xxxxxxxx Name: Xxxx Xxxxxxxx Title: Managing Director
[Signature Page to Revenue Interest Purchase and Sale Agreement] US-DOCS\149870611.184871-1379-4480 v.21 OAKTREE DIRECT LENDING FUND UNLEVERED DELAWARE HOLDINGS NON- EURRC, L.P. By: Oaktree Direct Lending Fund GP, L.P. Its: General Partner By: Oaktree Direct Lending Fund GP Ltd. Its: General Partner By: Oaktree Capital Management, L.P. Its: Director By: Oaktree Capital Management, L.P. Its: Director By: /s/ Xxxxxxx Xxxxxxx Name: Xxxxxxx Xxxxxxx Title: Managing Director By: /s/ Xxxx Xxxxxxxx Name: Xxxx Xxxxxxxx Title: Managing Director
[Signature Page to Revenue Interest Purchase and Sale Agreement] US-DOCS\149870611.184871-1379-4480 v.21 OAKTREE DIRECT LENDING FUND VCOC DELAWARE HOLDINGS NON-EURRC, L.P. By: Oaktree Direct Lending Fund VCOC (Parallel), L.P. Its: General Partner By: Oaktree Direct Lending Fund GP, L.P. Its: General Partner By: Oaktree Direct Lending Fund GP Ltd. Its: General Partner By: Oaktree Capital Management, L.P. Its: Director By: /s/ Xxxxxxx Xxxxxxx Name: Xxxxxxx Xxxxxxx Title: Managing Director By: /s/ Xxxx Xxxxxxxx Name: Xxxx Xxxxxxxx Title: Managing Director
[Signature Page to Revenue Interest Purchase and Sale Agreement] US-DOCS\149870611.184871-1379-4480 v.00 XXXXXXX XXXX XXXXXXXXXXX XXXX, X.X. By: Oaktree Fund GP IIA, LLC Its: General Partner By: Oaktree Fund XX XX, L.P. Its: Managing Member By: /s/ Xxxxxxx Xxxxxxx Name: Xxxxxxx Xxxxxxx Title: Managing Director By: /s/ Xxxx Xxxxxxxx Name: Xxxx Xxxxxxxx Title: Managing Director Address for Notices: Oaktree Fund Administration, LLC 000 X. Xxxxx Xxxxxx, 00xx Xx. Los Angeles, CA 90071 Attn: Oaktree Agency Email: Xxxxxxxxxxxxx@xxxxxxxxxx.xxx With a copy to: Oaktree Capital Management, L.P. 000 X. Xxxxx Xxxxxx, 00xx Xx. Los Angeles, CA 90071 Attn: [ ] Email: [ ] With a copy (which shall not constitute notice) to: Xxxxxxxx & Xxxxxxxx LLP 000 Xxxxx Xxxxxx Xxx Xxxx, XX 00000 Attn: [ ] Email: [ ]
[Signature Page to Revenue Interest Purchase and Sale Agreement] US-DOCS\149870611.184871-1379-4480 v.21 PURCHASER: OCM Life Sciences Portfolio LP By: OCM Life Sciences Portfolio G.P. Inc. Its: General Partner By: Name: Xxx Xxxxxxx Title: President By: Name: Xxxxxxxx Xx Title: Vice President Address for Notices: OCM Life Sciences Portfolio LP c/o OCM Life Sciences Portfolio G.P. Inc. 000 Xxxxxxxx Xx. X, Xxxxx 000 Xxxxxxx, XX X0X 0X0 Xxxxxx Attn: [ ] Email: [ ] With a copy to: OMERS Capital Solutions LP 000 Xxxxxxxx Xx. X, Xxxxx 000 Xxxxxxx, XX X0X 0X0 Xxxxxx Attn: [ ] Email: [ ] With a copy (which shall not constitute notice) to: Sidley Austin LLP 0000 Xxxxxx Xxxx Xx., Xxxxx 000 Xxxxxxxxx, XX 00000 Attn: [ ] Email: [ ]
US-DOCS\149870611.184871-1379-4480 v.21 SCHEDULE 1 PURCHASERS 27. Oaktree-TCDRS Strategic Credit, LLC 28. SC Investments UBTI Blocker, LLC 29. Oaktree-TSE 16 Strategic Credit, LLC 30. INPRS Strategic Credit Holdings, LLC 31. FSFC Holdings, Inc. 32. OSCF Blocker Holdings, Inc. 33. Oaktree AZ Strategic Lending Fund, L.P. 34. Oaktree LSL Fund Delaware Holdings EURRC, L.P. 35. Oaktree Direct Lending Fund Delaware Holdings Non-EURRC, L.P 36. Oaktree Direct Lending Fund Unlevered Delaware Holdings Non-EURRC, L.P. 37. Oaktree Direct Lending Fund VCOC Delaware Holdings Non-EURRC, L.P. 38. Oaktree Loan Acquisition Fund, L.P. 39. OCM Life Sciences Portfolio LP