EXHIBIT 4.1

 

 

 

 

 

 

 

 

 

 

 

ROYALTY PURCHASE AGREEMENT

 

dated as of January 6, 2018

 

between ANTIGENICS LLC, as Seller

 

and

 

HEALTHCARE ROYALTY PARTNERS III, L.P., AND CERTAIN AFFILIATED FUNDS IDENTIFIED HEREIN,

collectively as Purchaser

 

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TABLE OF CONTENTS

 

Page

 

ARTICLE I DEFINITIONS1

Section 1.01 Definitions1

ARTICLE II

PURCHASE AND SALE OF THE PURCHASED ROYALTY INTEREST9

Section 2.01 Purchase and Sale.9

Section 2.03 Purchase Price.12

Section 2.04 No Assumed Obligations.12

Section 2.05 Excluded Assets.12

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER12

Section 3.01 Organization; Operations of Seller.12

Section 3.02 Corporate Authorization.13

Section 3.03 Governmental Authorization.13

Section 3.04 Ownership.13

Section 3.05 Solvency.14

Section 3.06 Litigation.14

Section 3.07 Compliance with Laws.14

Section 3.08 Conflicts.15

Section 3.09 No Withholding15

Section 3.10 Applicable Agreements15

Section 3.11 Products; Royalties.15

Section 3.12 No Other Representations or Warranties.17

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER17

Section 4.01 Organization.17

Section 4.02 Authorization.17

Section 4.03 Broker’s Fees.18

Section 4.04 Conflicts.18

Section 4.05 Access to Information.18

ARTICLE V

COVENANTS19

Section 5.01 Books and Records.19

 

 

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Section 5.02 Confidentiality; Public Announcement.19

Section 5.03 Commercially Reasonable Efforts; Further Assurance.21

Section 5.04 Remittance to Joint Escrow Account.21

Section 5.05 Applicable Agreements.22

Section 5.06 Audits.23

Section 5.07 Notice.24

Section 5.08 Seller Operations.24

Section 5.09 Special Purpose Vehicle Covenants24

ARTICLE VI

THE CLOSING; CONDITIONS TO CLOSING26

Section 6.01 Closing.26

Section 6.02 Conditions Applicable to Purchaser in Closing.26

Section 6.03 Conditions Applicable to Seller in Closing.27

ARTICLE VII

EXPIRATION.28

Section 7.01 Expiration Date.28

Section 7.02 Effect of Expiration.28

ARTICLE VIII

MISCELLANEOUS28

Section 8.01 Survival.28

Section 8.02 Specific Performance.29

Section 8.03 Notices.29

Section 8.04 Successors and Assigns.30

Section 8.05 Indemnification.30

Section 8.06 Independent Nature of Relationship.33

Section 8.07 Tax.33

Section 8.08 Entire Agreement.34

Section 8.09 Governing Law.34

Section 8.10 Severability.34

Section 8.11 Counterparts; Effectiveness.34

Section 8.12 Amendments; No Waivers.34

 

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ROYALTY PURCHASE AGREEMENT

 

ROYALTY PURCHASE AGREEMENT (as amended, supplemented or otherwise modified from time to time, this “Agreement”) is made and entered into as of January 6, 2018, by and between ANTIGENICS LLC, a Delaware limited liability company (the “Seller”) and the entities set forth on Schedule 1 in the proportions set forth thereon (collectively, the “Purchaser”).

 

WHEREAS, Seller wishes to sell, assign, convey and transfer to Purchaser, and Purchaser wishes to purchase from Seller, the Purchased Royalty Interests, upon and subject to the terms and conditions hereinafter set forth; and

 

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 1.01Definitions.

 

The following terms, as used herein, shall have the following meanings:

 

“Affiliate” shall mean any Person that controls, is controlled by, or is under common control with another Person. For purposes of this definition, “control” shall mean (i) in the case of corporate entities, direct or indirect ownership of at least fifty percent (50%) of the stock or shares having the right to vote for the election of directors, and (ii) in the case of non-corporate entities, direct or indirect ownership of at least fifty percent (50%) of the equity interests with the power, or the power by contract or otherwise, to direct the management and policies of such non- corporate entities.

 

“Agreement” shall have the meaning set forth in the first paragraph hereof.

 

“Applicable Agreements” shall mean, collectively, the License Agreement, Manufacturing Agreement and Negotiation Agreement.

 

“Bankruptcy Event” shall mean the occurrence of any of the following:

 

(i)Seller shall commence any case, proceeding or other action (a) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, relief of debtors or the like, seeking to have an order for relief entered with respect to such party, 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 respective debts, or (b) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any portion of its assets, or Seller shall make a general assignment for the benefit of its creditors; or

 

 

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(ii)there shall be commenced against Seller any case, proceeding or other action of a nature referred to in clause (i) above which remains undismissed, undischarged or unbonded for a period of ninety (90) calendar days; or

 

(iii)there shall be commenced against Seller any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against (a) all or any substantial portion of its assets and/or (b) the

Royalties, 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) calendar days from the entry thereof; or

 

(iv)Seller shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii) or (iii) above; or

 

(v)Seller shall become unable, admit in writing its inability, or fail generally, to pay its debts as they become due; or

 

(vi)Seller shall be in a financial condition such that the sum of its debts, as they become due and mature, is greater than the fair value of its property on a going concern basis.

 

“Bill of Sale” shall mean the Bill of Sale pursuant to which Seller shall assign to Purchaser all of its right, title and interest in and to the Purchased Royalty Interests purchased hereunder, which Bill of Sale shall be substantially in the form of Exhibit A.

 

“Business Day” shall mean any day other than a Saturday, a Sunday, any day which is a legal holiday under the laws of New York, or any day on which banking institutions located in New York or in the state in which the Depositary Bank is located are authorized or required by law or other governmental action to close.

 

“Closing” shall have the meaning set forth in Section 6.01.

 

“Closing Date” shall have the meaning set forth in Section 6.01.

 

“Combination Vaccine” has the meaning set forth in the License Agreement.

 

“Confidential Information” shall mean, as it relates to Seller Parent, Seller and their respective Affiliates, the Applicable Agreements, the Royalty Rights, the Products, the Patent Rights, know-how, trade secrets, confidential business information, financial data and other like information (including but not limited to ideas, research and development, know-how, formulas, schematics, compositions, technical data and results, techniques, inventions (whether patentable or not), practices, methods, 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, tangible or intangible proprietary information or material, and any other technical or scientific information, in each case, regardless of whether such information is specifically designated as confidential and regardless of whether such information is in written,

 

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oral, electronic, or other form.  For the avoidance of doubt, any notices or reports delivered by Seller pursuant to this Agreement shall be deemed to be Confidential Information.

 

“Depositary Bank” shall mean Bank of New York Mellon or such other bank or financial institution designated by Purchaser.

 

“EMA” shall mean the European Medicines Agency.

 

“Excluded Collateral” shall mean (i) any rights or property owned or controlled by AgenTus Therapeutics, Inc. and any securities of AgenTus Therapeutics, Inc. owned directly or indirectly by Seller Parent, (ii) any other rights or property, including intellectual priority, Fixtures (as defined in the UCC), Equipment (as defined in the UCC), securities of Subsidiaries, governmental permit or franchise, in all cases whether owned directly or acquired under a lease, contract, property rights agreement or license, that is owned or controlled by the Seller Parent or any of its Affiliates other than the Seller and is necessary or used or identified at any time for use in the conduct of the cell therapy business of AgenTus Therapeutics, Inc., including T Cell Receptor (TCR) and Chimeric Antigen Receptor (CAR) technologies, (iii) any security or other equity interest representing more than 65% of the outstanding equity of any Subsidiary of the Seller Parent or any of its Affiliates other than the Seller organized under any jurisdiction outside of the United States and (iv) any assets of any Subsidiary organized under any jurisdiction outside of the United States that is a controlled foreign corporation for U.S. federal income tax purposes.

 

“Excluded Liabilities and Obligations” shall have the meaning set forth in Section 2.04.

 

“Exploitation” shall mean, with respect to a Product, the manufacture, use, sale, offer for sale (including marketing and promotion), importation, distribution or other commercialization.

 

“FDA” shall mean the United States Food and Drug Administration and any successor agency thereto.

 

“First Commercial Sale” has the meaning set forth in the Manufacturing Agreement.

 

“Governmental Authority” shall mean any government, court, regulatory or administrative agency or commission, or other governmental authority, agency or instrumentality, whether foreign, federal, state or local (domestic or foreign), including each Patent Office, the FDA, the EMA, or any other government authority in any country.

 

“Gross Sales” has the meaning set forth in the Applicable Agreements.

 

“GSK” shall mean GlaxoSmithKline Biologicals SA, a Belgian company, its Affiliates and any successors-in-interest and assigns under the Applicable Agreements.

 

“GSK Direction Letter” shall have the meaning set forth in Section 5.04(c).

 

“Joint Escrow Account” shall mean the deposit account established and maintained at the Depositary Bank into which payments of the Royalties are to be remitted in accordance with Section 2.02(a) (and the terms of an escrow agreement to be agreed upon by the parties) and the

 

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account from which the Depositary Bank transfers funds into the Purchaser Account and Seller Account.

 

“Knowledge” shall mean, with respect to Seller, the knowledge of (i) Garo Armen, Chief Executive Officer of the Seller Parent, (ii) Christine Klaskin, VP of Finance of the Seller Parent,

(iii) Karen Valentine, Chief Legal Officer/General Counsel of the Seller Parent and (iv) Michael Plater, Chief Business Officer of the Seller Parent, or their respective successors in such positions, or, in each case, to the extent any such person or position does not exist at any time, the knowledge of another person with similar responsibility, regardless of title; provided,

however, that any such Person shall be deemed to have knowledge of a particular matter if, in the prudent exercise of his or her duties and responsibilities in the ordinary course of business, such person should have known of such matter.

 

“Law” shall mean any law, rule, ordinance or regulation, or any judgment, order, writ, decree, permit or license of any Governmental Authority.

 

“License Agreement” shall mean that certain License Agreement, effective as of July 6, 2006, by and between the Seller and GSK, as amended by the Negotiation Agreement and as such agreement may be further amended.

 

“License Party Audit” shall have the meaning set forth in Section 5.06.

 

“Lien” shall mean lien, hypothecation, charge, instrument, preference, priority, security agreement, security interest, interest, mortgage, option, privilege, pledge, liability, covenant, order, tax, right of recovery, trust or deemed trust (whether contractual, statutory or otherwise arising) or any encumbrance, right or claim of any other person of any kind whatsoever whether choate or inchoate, filed or unfiled, noticed or unnoticed, recorded or unrecorded, contingent or non-contingent, material or non-material, known or unknown.

 

“Losses” shall mean collectively, any and all damages, losses, assessments, awards, cause of actions, claims, charges, costs and expense (including reasonable expenses of investigation

and reasonable attorneys’ fees and expenses), fines, judgments, liabilities, obligations or penalties; provided, however that Losses shall not include any lost profits or revenue or consequential, punitive, special or incidental damages except (a) in the case of the Purchaser’s Losses, the amount of the Purchaser’s anticipated return on investment, at the assumed rate of return and over the assumed time period for realization of such return, on the basis of which the Purchaser determined the Purchase Price it was willing to pay for the Purchased Royalty Interests, as certified by the Purchaser to the Seller and (b) any lost profits or revenue or consequential, punitive, special or incidental damages awarded or payable by a Purchaser Indemnified Party to a Third Party in connection with a claim or action for which the Seller is required to indemnify the Purchaser pursuant to Section 8.05.

 

“Major Market Country” shall have the meaning set forth in the Manufacturing Agreement.

 

“Malaria Products” means (a) the vaccine, currently designated as Mosquirix (RTS,S), that is currently being developed by GSK for malaria, including such vaccine as it may be modified or improved and any Combination Vaccine that includes such vaccine (including as it

 

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may be modified or improved) and (b) any other QS-21 Vaccine for malaria, including as any such other QS-21 Vaccine may be modified or improved and any Combination Vaccine that includes such other QS-21 Vaccine (including as such other QS-21 Vaccine may be modified or improved).

 

“Manufacturing Agreement” shall mean that certain Amended and Restated Manufacturing Technology Transfer and Supply Agreement, effective as of January 16, 2009, by and between the Seller and GSK, as amended by the Negotiation Agreement and as such agreement may be further amended.

 

“Material Adverse Effect” shall mean (i) a material adverse effect on the validity or enforceability of any of the Transaction Documents or the Applicable Agreements, (ii) a material adverse effect on the ability of Seller to perform any of its material obligations under any of the Transaction Documents or the Applicable Agreements, (iii) a material adverse effect on the

rights or remedies of Purchaser under any of the Transaction Documents or the Applicable Agreements, (iv)  an adverse effect (other than any de minimis effect) on the timing, amount or duration of the Royalties or the right of the Purchaser to receive payments in respect of the Royalties in accordance with the Transaction Documents and Applicable Agreements.

 

“Negotiation Agreement” shall mean that certain First Right to Negotiate and Amendment Agreement, effective as of March 2, 2012, by and among Seller Parent, Seller and GSK, as such agreement may be further amended.

 

“Net Sales” shall mean “Net Sales” as such term is defined in the License Agreement and the Manufacturing Agreement, as applicable.

 

“Patent Rights” shall mean “Licensed Patent Rights” as such term is defined in the License Agreement, but only to the extent such Licensed Patent Rights are exclusively owned or controlled by Seller or its Affiliates.

 

“Payoff Letter” shall have the meaning set forth in Section 6.02(m).

 

“Permitted Liens” shall mean any: (a) Liens in favor of Purchaser or its Affiliates;

(b) Liens created, permitted or required by the Transaction Documents in favor of Purchaser Representative, (c) Liens incurred by Purchaser after the Closing Date; and (d) Liens permitted under the Seller Parent Security Agreement or under the Seller Security Agreement.

 

“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.

 

“Product” shall mean any Shingles Product, Malaria Product, or other QS-21 Vaccine, whether now or hereafter in development and whenever marketed, individually, and “Products” means the Shingles Products, the Malaria Products and such other QS-21 Vaccines, collectively.

 

“Purchase Price” shall be the amount set forth in Section 2.03 which shall be payable in United States Dollars.

 

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“Purchased Royalty Interests” shall mean an undivided one hundred percent (100%) interest in the Royalties, including without limitation, all “accounts” (as such term is defined in the UCC) of Seller with respect to the Royalties.

 

“Purchaser” shall have the meaning set forth in the first paragraph hereof.

 

“Purchaser Account” shall mean a segregated account established for the benefit of Purchaser and maintained at the Depositary Bank.

 

“Purchaser Indemnified Party” shall have the meaning set forth in Section 8.05(a).

 

“Purchaser Representative” shall mean HealthCare Royalty Partners III, L.P., as collateral agent for the Purchaser.

 

“Purchaser-Requested Audit” shall have the meaning set forth in Section 5.06.

 

“QS-21” shall have the meaning set forth in the Manufacturing Agreement.

 

“QS-21 Vaccine” shall have the meaning set forth in the Manufacturing Agreement.

 

“Representatives” shall have the meaning set forth in Section 5.02(b).

 

“Royalty” or “Royalties” shall mean without duplication, one hundred percent (100%) of

(a)all royalties paid, owed, accrued or otherwise payable by GSK under Section 3.2 of the License Agreement with respect to Net Sales of any Product, (b) all royalties paid, owed, accrued or otherwise payable by GSK under Section 5.3 of the Manufacturing Agreement with respect to Net Sales of any Product, (c) all amounts paid, owed, accrued or otherwise payable by GSK under Section 4.3 of the License Agreement with respect to the royalties referenced in clause (a) above, (d) all amounts paid, owed, accrued or otherwise payable by GSK under Section 6.3 of

the Manufacturing Agreement with respect to the royalties referenced in clause (b) above, (e) all amounts paid, owed, accrued or otherwise payable by GSK under Section 4.5 of the License Agreement with respect to the royalties referenced in clause (a) above, (f) all amounts paid, owed, accrued or otherwise payable by GSK under Section 6.5 of the Manufacturing Agreement with respect to the royalties referenced in clause (b) above, (g) all amounts equal to the royalty that would otherwise be payable pursuant to Section 3.2 of the License Agreement on all proceeds (including any damages, monetary awards or other amounts recovered, whether by judgment or settlement and treating such proceeds as Net Sales of a Product (provided, that, with respect to any Combination Vaccine, the portion of such proceeds treated as Net Sales shall be calculated on the same basis as Net Sales for such Combination Vaccine would be calculated under the License Agreement) for purposes of calculating such royalty) paid, owed, accrued or otherwise payable to the Seller of any suit, proceeding or other legal action taken pursuant to Section 11.3 of the License Agreement in accordance with Section 11.5 of the License Agreement and arising from or related to infringement that results in reduced sales of any Product (other than amounts awarded to or recovered by the Seller in connection with any judgment or settlement for reimbursement of the costs and expenses (including attorneys’ fees) of bringing such suit or proceeding or taking such other legal action or for other reimbursement of the costs and expenses (including attorneys’ fees), if any, of the Seller related to the prosecution of any such suit, proceeding or other legal action), (h) all royalties paid, owed,

 

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accrued or otherwise payable by GSK under the last sentence of Section 8.4(c) of the Manufacturing Agreement with respect to Net Sales of any Product, (i) all interest paid, owed, accrued or otherwise payable by GSK under Section 4.6 of the License Agreement with respect to any of the foregoing amounts, (j) all interest paid, owed, accrued or otherwise payable by GSK under Section 6.6 of the Manufacturing Agreement with respect to any of the foregoing amounts  and (k) all proceeds (including any damages, monetary awards or other amounts recovered, whether by judgment or settlement) paid, owed, accrued or otherwise payable with respect to any of the foregoing of any suit, proceeding or other legal action taken to enforce the right to receive any of the foregoing (other than amounts awarded or recovered in connection with any judgment or settlement for reimbursement of the costs and expenses (including attorneys’ fees) of the party bringing such suit or proceeding or taking such other legal action).

 

“Royalty Rights” shall mean, collectively, any and all rights of Seller under or in respect of the Applicable Agreements arising out of, in connection with, or with respect to the Royalties, including without limitation, (a) any right to receive royalty or audit reports, summaries or other information from GSK; (b) any right to audit, inspect or otherwise review any of the records of GSK or the right to receive any related audit reports; (c) any right to enforce the Patent Rights against a breaching licensee; (d) the right to enforce the Applicable Agreements in the event of a default by any party thereunder; and (e) any right to disapprove or consent to an assignment or transfer (by operation of law or otherwise) pursuant to the Applicable Agreements.

 

“Sales Milestone Payments” shall have the meaning set forth in Section 2.02(b).

 

“Sales Rebate Amount” shall mean $25,855,035.75.

 

“Sales Rebate Date” shall mean the date thirty (30) Business Days after the date of delivery of a report as contemplated under Section 5.05(b) specifying the worldwide Net Sales of the Products for the year ending December 31, 2020.

 

“Sales Rebate Payment” shall have the meaning set forth in Section 2.02(a).

 

“Secured Lender” shall have the meaning set forth in Section 6.02(m).

 

“Seller” has the meaning set forth in the preamble.

 

“Seller Account” shall mean a segregated account established for the benefit of Seller.

 

“Seller Disclosure Schedules” means the schedules attached hereto as Exhibit J.

 

“Seller Indemnified Party” has the meaning set forth in Section 8.05(b).

 

“Seller Organizational Documents” means the certificate of formation of Seller dated as of September 2, 2015 and the limited liability company agreement of Seller dated as of September 2, 2015.

 

“Seller Parent” means Agenus, Inc., a Delaware corporation.

 

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“Seller Parent Guaranty” means the Guaranty pursuant to which Seller Parent shall guaranty to Purchaser payment of the Sales Rebate Payment hereunder and in which Seller Parent will make substantially the same representations and warranties as Seller, which Guaranty shall be substantially in the form of Exhibit B.

 

“Seller Parent Security Agreement” means the security agreement pursuant to which Seller Parent shall grant Purchaser Representative a first priority perfected security interest in all of Seller Parent’s assets other than the Excluded Collateral as security for its obligations under the Seller Parent Guaranty, which Security Agreement shall be substantially in the form of Exhibit C.

 

“Seller Security Agreement” means the security agreement pursuant to which Seller shall grant Purchaser Representative a first priority perfected security interest in all of Seller’s assets, substantially in the form of Exhibit D.

 

“Shingles Products” shall mean (a) the vaccine, currently designated as Shingrix (HZ/su), that is currently being developed or commercialized by GSK for shingles (herpes zoster), including such vaccine as it may be modified or improved and any Combination Vaccine that includes such vaccine (including as it may be modified or improved) and (b) any other QS-21 Vaccine for shingles (herpes zoster), including as any such other QS-21 Vaccine may be modified or improved and any Combination Vaccine that includes such other QS-21 Vaccine (including as such other QS-21 Vaccine may be modified or improved).

 

“Specified Persons” shall mean (i) Garo Armen, Chief Executive Officer of the Seller Parent, (ii) Christine Klaskin, VP of Finance of the Seller Parent, (iii) Karen Valentine, Chief Legal Officer/General Counsel of the Seller Parent and (iv) Michael Plater, Chief Business Officer of the Seller Parent, or their respective successors in such positions, or, in each case, to the extent any such person or position does not exist at any time, another person with similar responsibility, regardless of title.

 

“Subsidiary” or “Subsidiaries” shall mean with respect to any Person (i) any corporation of which the outstanding capital stock having at least a majority of votes entitled to be cast in the election of directors under the ordinary circumstances shall at the time be owned, directly or indirectly, by such Person or (ii) any other Person of which at least a majority voting interest under ordinary circumstances is at the time owned, directly or indirectly, by such Person.

 

“Third Party” shall mean any Person other than Seller or Purchaser or their respective Affiliates.

 

“Third Party Patents” shall mean, with respect to any Third Party, any and all issued patents and pending patent applications as of the date of this Agreement, including all provisional applications, substitutions, continuations, continuations-in-part, divisions, and renewals, all letters patent granted thereon, and all patents-of-addition, reissues, reexaminations and extensions or restorations by existing or future extension or restoration mechanisms (including regulatory extensions), and all supplementary protection certificates, together with any foreign counterparts thereof anywhere in the world, of such Third Party.

 

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“Transaction Documents” shall mean, collectively, this Agreement, the Bill of Sale, the Seller Parent Guaranty, the Seller Parent Security Agreement and the Seller Security Agreement.

 

“Transaction Expense Amount” shall mean an amount equal to any actual, documented, out-of-pocket fees and expenses of Purchaser (including, without limitation, external legal fees and expenses and out-of-pocket expenses incurred in connection with Purchaser’s due diligence investigation) incurred in connection with the consummation of the transactions contemplated by this Agreement, which amount shall not exceed $100,000.

 

“UCC” shall mean the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in any applicable jurisdiction.

 

“Valid Claim” shall mean a claim of an issued and unexpired patent, or a claim of a pending patent application, which claim has not been held invalid, unpatentable or unenforceable in an unappealed or unappealable decision by a court of competent jurisdiction, and has not been admitted to be invalid, unpatentable or unenforceable through disclaimer or otherwise, which claim, but for a right to use such claim, would be infringed by the Product and/or its

Exploitation; provided, however that if a claim of a pending patent application shall not have issued as a claim of an issued patent within five (5) years after the earliest filing date from which such claim claims priority, then such claim shall not be a “Valid Claim” for purposes of this Agreement unless and until such claim issues as a claim of an issued patent.

 

ARTICLE II

PURCHASE AND SALE OF THE PURCHASED ROYALTY INTEREST

 

Section 2.01Purchase and Sale.

 

 

 

 

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Interests and (ii) perfect the security interest in the Purchased Royalty Interests granted by Seller to Purchaser Representative pursuant to Section 2.01(d).

 

 

Section 2.02Transfers and Payments in Respect of the Purchased Royalty Interests.

 

 

i.Effective upon the Closing, and subject to Section 2.02(b), Purchaser shall be entitled to receive any and all Royalties.  Any and all such Royalties shall be paid by GSK or other payor into the Joint Escrow Account by wire transfer of immediately available funds in accordance with the GSK Direction Letter or other instruction letter provided to such other payor in compliance with Section 5.04(c), and distributed from the Joint Escrow Account to the Purchaser Account. In the event Seller or its Affiliates receives any payment on account of any Royalties directly from the payor of such Royalties, Seller or any of its Affiliates, as the case may be, shall hold such amounts in trust for the benefit of Purchaser and, within five (5) Business Days after receipt thereof, transfer all such funds into the Joint Escrow Account by wire transfer of immediately available funds.

 

ii.On the Sales Rebate Date, Purchaser shall be entitled to receive from Seller, and Seller shall pay to Purchaser, a cash amount equal to the Sales Rebate Amount (any such payment, a “Sales Rebate Payment”); provided that no such Sales Rebate Payment shall be due if either:

 

 

 

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ending December 31, 2020, in which case no Sales Rebate Payment shall be due if ninety percent (90%) of the worldwide Gross Sales of Products for the fiscal year ending December 31, 2020 exceed $1,750,000,000.

 

iii.Notwithstanding any claim or set-off which Seller may have against Purchaser or which GSK may have against Seller, Seller shall use its reasonable best efforts to ensure that GSK remits all payments GSK is required to pay under the Applicable Agreements with respect to the Purchased Royalty Interests directly to the Joint Escrow Account, pursuant to the GSK Direction Letter.

 

iv.For the avoidance of doubt, the parties understand and agree that if GSK fails to pay any Royalties when Seller or Purchaser reasonably believes they are due under the Applicable Agreements (each such unpaid amount, a “Discrepancy”) because of a disagreement with GSK as to when, whether or the amount of any Royalties that are owed, then Seller shall not be obligated to pay to Purchaser or otherwise compensate or make Purchaser whole with respect to any such Discrepancy, but instead the parties shall attempt to recover such Discrepancy from GSK; provided, however, that nothing in this

Section 2.02(a) shall limit or affect in any respect the rights of any Purchaser Indemnified Party under Section 8.05.

 

v.For the avoidance of doubt, the parties understand and agree that if GSK fails to pay any Royalties when Seller or Purchaser reasonably believes they are due under the Applicable Agreements because of any set-off under any of the agreements effectuated by GSK, then Seller shall pay to Purchaser the amount required to make Purchaser whole with respect to any such deficiency, by depositing the amount thereof in the Purchaser Account; provided, however, that the $2,500,000 that GSK is entitled to credit against the Purchased Royalty Interests pursuant to Section 4 of the Negotiation Agreement shall not be deemed a set-off by GSK for purposes of this Agreement.

 

 

i.if Net Sales of Products equal or exceed an aggregate of $2,000,000,000 during any period of twelve consecutive months prior to January 1, 2024, Seller shall be entitled to receive a Sales Milestone Payment in an amount equal to $15,100,000; and

 

ii.if Net Sales of Products equal or exceed an aggregate of $2,750,000,000 during any period of twelve consecutive months prior to January 1, 2026, Seller shall be entitled to receive a Sales Milestone Payment in an amount equal to $25,250,000.

 

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For the avoidance of doubt, the sales milestones set forth above can be achieved during concurrent time periods (e.g., if Net Sales of the Products for any twelve consecutive months ending prior to January 1, 2024 exceed $2,750,000,000, then Purchaser shall owe Seller Sales Milestone Payments in an amount equal to $40,350,000).

 

Section 2.03Purchase Price.

 

In consideration for the sale of the Purchased Royalty Interests, and subject to the terms and conditions set forth herein, Purchaser shall pay to Seller, or its designee, on the Closing Date, the sum of $190,000,000 less the Transaction Expense Amount (such net amount, the “Purchase Price”) by wire transfer to account(s) designated in writing by Seller prior to the Closing.

 

Section 2.04No Assumed Obligations.

 

Notwithstanding any provision in this Agreement or any other writing to the contrary, Purchaser is acquiring only the Purchased Royalty Interests and is not assuming any liability or obligation of Seller or any of its Affiliates of whatever nature, whether presently in existence or arising or asserted hereafter, whether under the Applicable Agreements or any Transaction Document or otherwise. All such liabilities and obligations shall be retained by and remain obligations and liabilities of Seller or its Affiliates (the “Excluded Liabilities and Obligations”).

 

Section 2.05Excluded Assets.

 

Purchaser does not, by purchase of the rights granted hereunder or otherwise pursuant to any of the Transaction Documents, acquire any assets or contract rights of Seller or any of its Affiliates under the Applicable Agreements, the Patent Rights or any other assets of Seller, other than the Purchased Royalty Interests; provided that the foregoing is without prejudice to Purchaser’s and Purchaser Representative’s rights under the Seller Parent Security Agreement and the Seller Security Agreement.

 

ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller hereby represents and warrants to Purchaser as of the date first written above the following:

 

Section 3.01Organization; Operations of Seller.

 

 

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Section 3.02Corporate Authorization.

 

Seller has all necessary limited liability company power and authority to enter into, execute and deliver the Transaction Documents to which it is a party and to perform all of the obligations to be performed by it hereunder and thereunder and to consummate the transactions contemplated hereunder and thereunder.  The Transaction Documents to which it is a party have been duly authorized, executed and delivered by Seller and each Transaction Document to which it is a party constitutes the valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, subject, as to enforcement of remedies, to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally or general equitable principles.

 

Section 3.03Governmental Authorization.

 

Except for filings with the Securities and Exchange Commission, its successor or foreign equivalent, the execution and delivery by Seller of the Transaction Documents to which it is a party, and the performance by Seller of its obligations hereunder and thereunder and under the Applicable Agreements, do not require any notice to, action or consent by, or in respect of, or filing with, any Governmental Authority.

 

Section 3.04Ownership.

 

Immediately prior to the Closing, Seller will be the exclusive owner of the entire right, title (legal and equitable) and interest in, to and under the Purchased Royalty Interests and have good and valid title thereto, free and clear of all Liens (other than Permitted Liens). Except as

set forth in Section 3.04 of the Seller Disclosure Schedules, the Purchased Royalty Interests sold, assigned, transferred, conveyed and granted to Purchaser on the Closing Date have not been

 

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pledged, sold, contributed, assigned, transferred, conveyed or granted by Seller to any Person, other than the Secured Lender, nor has Seller consented to any such action. Immediately prior to the Closing, Seller will have full right to sell, contribute, assign, transfer, convey and grant the Purchased Royalty Interests to Purchaser. Upon the sale, assignment, transfer, conveyance and granting by Seller of the Purchased Royalty Interests to Purchaser, Purchaser shall acquire good and valid title to the Purchased Royalty Interests free and clear of all Liens, other than Permitted Liens, and shall be the exclusive owner of the Purchased Royalty Interests.

 

Section 3.05Solvency.

 

Assuming consummation of the transactions contemplated by the Transaction Documents to which Seller is a party (i) the present fair saleable value of Seller’s assets is greater than the amount required to pay its debts as they become due, (ii) Seller does not have unreasonably small capital with which to engage in its business, (iii) Seller will be able to realize upon its assets and pay its debts and other obligations as they mature, and (iv) Seller has not incurred,

will not incur, nor does it have present plans or intentions to incur, debts or liabilities beyond its ability to pay such debts or liabilities as they become absolute and matured.

 

Section 3.06Litigation.

 

 

(ii)above, which, if adversely determined, could reasonably be expected to result, individually or in the aggregate, in a Material Adverse Effect.

 

Section 3.07Compliance with Laws.

 

None of Seller or any of its Affiliates (A) (i) are in violation of, or have violated, or (ii) to the Knowledge of Seller, are under investigation with respect to, or have been threatened to be charged with or been given notice of any violation of, in any material respect, any law, rule, ordinance or regulation of, or any judgment, order, writ decree, permit or license granted, issued or entered by, any Governmental Authority or (B) are subject to any judgment, order, writ

decree, permit or license granted, issued or entered by, any Governmental Authority, which in the case of (A) or (B), could reasonably be expected to result in a Material Adverse Effect.

 

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Section 3.08Conflicts.

 

any of its Affiliates or any of their respective assets or properties are subject or bound.

 

 

Section 3.09No Withholding

 

No deduction or withholding for or on account of any tax has been made or, to the Knowledge of Seller, was required to be made under applicable Law from any payment to Seller under any Applicable Agreement.  As of the Closing Date, to the Knowledge of Seller, no deduction or withholding for or on account of any tax is required to be made under applicable Law from any payment by Seller to Purchaser under this Agreement.

 

Section 3.10Applicable Agreements.

 

The License Agreement attached hereto as Exhibit G, the Manufacturing Agreement attached hereto as Exhibit H and the Negotiation Agreement attached hereto as Exhibit I are true, correct and complete copies of each such agreement, as in effect on the date hereof, and there have been no amendments or modifications to such Applicable Agreements which are not reflected in such exhibits.

 

Section 3.11Products; Royalties.

 

 

 

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the Products under the License Agreement. The Seller has not provided any notice at any time in accordance with Section 12.12 of the License Agreement to GSK under Section 5.3 of the License Agreement relating to any of the Products.

 

 

 

 

 

 

 

5.3 of the Manufacturing Agreement are payable by GSK for ten years after the First Commercial Sale of the first QS-21 Vaccine that achieves First Commercial Sale in a Major Market Country regardless of any termination or expiration of the License Agreement or Manufacturing Agreement or any Patent Rights prior to the end of such ten-year period.

 

 

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(herpes zoster) or malaria other than the Products or (ii) any other product candidates or products that would qualify as Combination Vaccines.

 

 

 

Section 3.12No Other Representations or Warranties.

 

Except for the representations and warranties contained in this Article III and as set forth in the Seller Parent Guaranty, neither Seller nor any other Person has made or makes any other express or implied representation or warranty, either written or oral, on behalf of Seller, including any representation or warranty as to the accuracy or completeness of any information regarding the Purchased Royalty Interests, the Products or the Royalties furnished or made available to Purchaser or its Representatives (including any information, documents,

management presentations or material delivered to Purchaser, or in any other form in expectation of the transactions contemplated hereby) or as to the future revenue, profitability or success of the Products, or any representation or warranty arising from statute or otherwise in Law.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

Purchaser represents and warrants to Seller as of the date first written above, the following:

 

Section 4.01Organization.

 

Each entity constituting the collective Purchaser is a limited partnership duly formed, validly existing and in good standing under the laws of Delaware, and such entity has all limited partnership powers and all licenses, authorizations, consents and approvals required to carry on its business as now conducted.

 

Section 4.02Authorization.

 

Purchaser has all necessary power and authority to enter into, execute and deliver the Transaction Documents and to perform all of the obligations to be performed by it hereunder and

 

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thereunder and to consummate the transactions contemplated hereunder and thereunder.  The Transaction Documents have been duly authorized, executed and delivered by Purchaser and each Transaction Document constitutes the valid and binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms, subject, as to enforcement of remedies, to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and general equitable principles.

 

Section 4.03Broker’s Fees.

 

Purchaser has not taken any action that would entitle any Person to any commission or broker’s fee in connection with the transactions contemplated by the Transaction Documents.

 

Section 4.04Conflicts.

 

Neither the execution and delivery of this Agreement or any other Transaction Document nor the performance or consummation of the transactions contemplated hereby or thereby will:

(i)contravene, conflict with, result in a breach or violation of, constitute a default under, or accelerate the performance provided by, in any material respects, any provisions of (A) any law, rule or regulation of any Governmental Authority, or any judgment, order, writ, decree, permit or license of any Governmental Authority, to which Purchaser or any of its assets or properties may be subject or bound; or (B) any contract, agreement, commitment or instrument to which Purchaser is a party or by which Purchaser or any of its assets or properties is bound or committed; (ii) contravene, conflict with, result in a breach or violation of, constitute a default under, or accelerate the performance provided by, any provisions of any organizational or constitutional documents of Purchaser; or (iii) require any notification to, filing with, or consent of, any Person or Governmental Authority.

 

Section 4.05Access to Information.

 

Purchaser acknowledges that it has (i) reviewed the Applicable Agreements and such other documents and information relating to the Products and (ii) has had the opportunity to ask such questions of, and to receive answers from, representatives of Seller concerning the Applicable Agreements and the Products, in each case as it deemed necessary to make an informed decision to purchase the Purchased Royalty Interests in accordance with the terms of this Agreement.  Purchaser has such knowledge, sophistication and experience in financial and business matters that it is capable of evaluating the risks and merits of purchasing the Purchased Royalty Interests in accordance with the terms of this Agreement.

 

Section 4.06Financing.

 

Purchaser has sufficient funds available to consummate all of the transactions contemplated by any of the Transaction Documents and to pay the Purchase Price and all other cash amounts required to be paid in connection with the transactions contemplated by the Transaction Documents, and, when so required to pay or otherwise perform, as applicable, Purchaser will be able to pay or otherwise perform the obligations of Purchaser or any of its Affiliates under the Transaction Documents (including the Purchase Price payment at Closing and all other cash amounts required to be paid at or in connection with the Closing). Purchaser

 

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acknowledges and agrees that its obligations under this Agreement are not contingent on obtaining financing.

 

ARTICLE V COVENANTS

 

The parties covenant and agree as follows:

 

Section 5.01Books and Records.

 

 

 

 

 

Section 5.02Confidentiality; Public Announcement.

 

 

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confidential the Confidential Information of Seller; and (iii) it will not furnish or disclose to any Person any Confidential Information of Seller.

 

 

 

will not oppose action by Seller to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Confidential Information in the event that confidential treat cannot be obtained by Purchaser.

 

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Section 5.03Commercially Reasonable Efforts; Further Assurance.

 

implement expeditiously the transactions contemplated by any Transaction Document and to vest in Purchaser good, valid and marketable rights and interests in and to the Purchased Royalty Interests free and clear of all Liens, other than Permitted Liens.

 

(b)Seller and Purchaser shall cooperate and provide assistance as reasonably requested by the other party in connection with any litigation, arbitration or other proceeding (whether threatened, existing, initiated, or contemplated prior to, on or after the date hereof) to which the other party hereto or any of its officers, directors, shareholders, members, managers, agents or employees is or may become a party or is or may become otherwise directly or indirectly affected or as to which any such persons have a direct or indirect interest, in each case, relating to the Royalty Rights, the Purchased Royalty Interests or the transactions contemplated hereunder or under the Transaction Documents, but in all cases excluding any litigation brought by Seller against Purchaser or brought by Purchaser against Seller.

 

Section 5.04Remittance to Joint Escrow Account.

 

 

 

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Direction Letter”), with instructions to pay all amounts payable under the Applicable Agreements to the Joint Escrow Account.  Without in any way limiting the foregoing, commencing on the Closing Date and at any time thereafter, any and all Royalties received by Seller or any of its Affiliates shall be held in trust for the benefit of Purchaser and transferred to the Joint Escrow Account within five (5) Business Days of Seller’s or its Affiliate’s receipt thereof.

 

Section 5.05Applicable Agreements.

 

the Applicable Agreements, (iv) create, incur, assume or suffer to exist any Lien, upon or with respect to the Royalties or the Royalty Rights, or agree to do or suffer to exist any of the foregoing, except for any Permitted Liens or (v) sell, lease, license, transfer or assign (or attempt to do any of the foregoing) all or any portion of the Patent Rights.

 

 

(i)terminating any of the Applicable Agreements, (ii) alleging any breach of or default under any of the Applicable Agreements by Seller, or (iii) asserting the existence of any facts, circumstances or events which alone or together with other facts, circumstances or events could reasonably be expected (with or without the giving of notice or passage of time or both) to give rise to a breach of or default under any of the Applicable Agreements by Seller or the right to terminate any of the Applicable Agreements by GSK or (B) Seller obtains Knowledge of any fact, circumstance or event which alone or together with other facts, circumstances or events could reasonably be expected (with or without the giving of notice or passage of time or both) to give rise to a breach of or default under any of the Applicable Agreements by Seller or the right to terminate any of the Applicable Agreements by GSK, in each case, Seller shall promptly give a written notice to Purchaser describing in reasonable detail the relevant breach or default, including a copy of any written notice received from GSK and, in the case of any breach or default or alleged breach or default by Seller, describing in reasonable detail any action Seller proposes to take to dispute or correct such alleged breach or default and (i) dispute such breach or default, or (ii) cure as promptly as practicable such breach or default in accordance with applicable Law and in a manner consistent in all material respects with the standard with which Seller would dispute or cure a breach in the administration of its own business (assuming, for

 

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these purposes, that the Applicable Agreements were the only business of Seller); provided, however, that, if Purchaser, in its good faith judgment, determines that Seller has not used efforts to dispute or cure such breach or default consistent with the foregoing standard, Purchaser shall be entitled (but not obligated) to, to the extent permitted by applicable Law, take any and all actions on behalf of Seller that Purchaser deems reasonably necessary or advisable to dispute or cure such breach or default promptly (including by directly performing any obligation of Seller on behalf of Seller or providing funds to Seller so that Seller may perform its obligations under the Applicable Agreements), and Seller shall act in accordance with any reasonable instructions provided by Purchaser with respect to such breach or default, provide all reasonable cooperation requested by Purchaser in connection therewith and promptly reimburse Purchaser for all costs and expenses incurred in connection therewith.

 

 

 

Section 5.06Audits.

 

To the extent Seller has the right to perform or cause to be performed inspections or audits under any Applicable Agreement regarding payments payable and/or paid thereunder (each, a “License Party Audit”), Seller shall, at the reasonable request of Purchaser (such request not to be made more frequently than once every calendar year), cause a License Party Audit to be performed as promptly as practicable following Purchaser’s request in accordance with the terms of such Applicable Agreement (a “Purchaser-Requested Audit”). In conducting a Purchaser- Requested Audit, Seller shall, to the extent permitted by the Applicable Agreements, select such public accounting firm to conduct the Purchaser-Requested Audit as Purchaser shall recommend for such purpose.  Seller shall not, without the prior written consent of Purchaser, request or cause an inspection or audit of GSK’s books and records to be conducted pursuant to, and in accordance with Section 4.5 of the License Agreement or Section 6.5 of the Manufacturing Agreement, as applicable; provided, however, that if Purchaser has not requested an inspection

or audit pursuant to this Section 5.06 prior to June 30 of any applicable calendar year, Seller may request an audit or inspection pursuant to Section 4.5 of the License Agreement or Section 6.5 of the Manufacturing Agreement, as applicable, during such calendar year without the consent of Purchaser.  As promptly as practicable after completion of any License Party Audit (whether or not requested by Purchaser), Seller shall deliver to Purchaser an audit report summarizing the results of such License Party Audit.  In the event that an inspection or audit constitutes a Purchaser-Requested Audit, all of the expenses of any such Purchaser-Requested Audit (including, without limitation, the fees and expenses of the independent public accounting firm) that would otherwise be borne by Seller pursuant to the Applicable Agreements, shall instead be borne (as such expenses are incurred, upon the provision to Purchaser of written documentation evidencing such expenses) by Purchaser, provided that any reimbursement by GSK of the expenses of the Purchaser-Requested Audit shall belong to Purchaser. Any deficiency in

 

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payments made by GSK demonstrated in a License Party Audit shall be paid promptly, in accordance with the Applicable Agreements, to Purchaser or Seller, as the case may be, by deposit in the Joint Escrow Account for further distribution to Purchaser or (in respect of Sales Milestone Payments) to Seller.

 

Section 5.07Notice.

 

Seller shall provide Purchaser with written notice as promptly as practicable (and in any event within five (5) Business Days) after becoming aware of any of the following:

 

i.any Bankruptcy Event;

 

ii.any material breach or default by Seller of any covenant, agreement or other provision of this Agreement, the Applicable Agreements or any other Transaction Document to which Seller is a party; or

 

iii.any representation or warranty made by Seller in any of the Transaction Documents or in any certificate delivered to Purchaser pursuant hereto shall prove to be untrue, inaccurate or incomplete in any material respect on the date as of which made.

 

with, in the case of clause (i) above, a copy to the Depositary Bank.  In the event Purchaser has actual notice of any Bankruptcy Event, it shall be entitled to give written notice thereof to the Depositary Bank, provided it concurrently delivers a copy thereof to Seller.

 

Section 5.08Seller Operations.

 

Except as permitted under Section 8.04, all of the equity interests in Seller are, and shall always be, owned, directly or indirectly, by Seller Parent. Following the Closing and except as set forth on Section 5.08 of the Seller Disclosure Schedule, Seller will not acquire or otherwise possess any assets or incur any liabilities, Liens (other than Permitted Liens) or other obligations (contractual or otherwise) except in connection with the performance of its obligations under the Transaction Documents or resulting out of the ownership of assets that are not the Purchased Royalty Interests.  Except as set forth on Section 5.08 of the Seller Disclosure Schedule, Seller will not undertake any actions other than to enter into and perform its obligations under the Applicable Agreements, the Transaction Documents and all documents, instruments, or agreements directly related thereto. Neither Seller nor Seller Parent or any manager of Seller shall amend or alter the Seller Organizational Documents, agree to dissolve Seller or otherwise windup its affairs or allow or take any action for Seller to become subject to any Bankruptcy Event.

 

Section 5.09Special Purpose Vehicle Covenants.

 

 

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(i)fail to hold itself out to the public and all other Persons as a legal entity separate from the owners of its capital stock and from any other Person;

 

(ii)commingle its assets with assets of any other Person except in connection with, and for the limited purposes of, operation of the Joint Escrow Account;

 

(iii)fail to conduct its business only in its own name, nor fail to comply with all organizational formalities necessary to maintain its separate existence;

 

(iv)fail to maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person nor have its assets listed on any financial statement of any other Person; provided, however, that Seller’s assets may be included in a consolidated financial statement of its Affiliates in conformity with

applicable provisions of GAAP (provided that such assets shall also be listed on Seller’s own separate balance sheet);

 

(v)fail to pay its own liabilities and expenses only out of its own funds, except in respect of short term advances to be repaid;

 

(vi)enter into any transaction with an Affiliate except transactions that are at prices and on terms and conditions that could be obtained on an arm’s-length basis from unrelated Third Parties;

 

(vii)fail to correct any known misunderstanding regarding its separate identity and not identify itself as a department or division of any other Person;

 

(viii)fail to maintain adequate capital in light of its contemplated business purpose, transactions and liabilities; provided, however, that the foregoing shall not require the holders of its capital stock to make additional capital contributions to Seller;

 

(ix)fail to cause the representatives of Seller to act at all times with respect to Seller consistently and in furtherance of the foregoing and in the best interests of Seller;

 

(x)make any payment or distribution of assets with respect to any obligation of any other person other than as required under trade or commercial agreements entered into in the ordinary course of business; or

 

(xi)engage in any business activity other than as contemplated hereunder or under the other Transaction Documents or the Applicable Agreements and any activities ancillary or related thereto.

 

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ARTICLE VI

THE CLOSING; CONDITIONS TO CLOSING

 

Section 6.01Closing.

 

Subject to the closing conditions set forth in Sections 6.02 and 6.03, the closing of the transactions contemplated under this Agreement (the “Closing”) shall take place on a mutually agreed date no later than January 19, 2018 or such later date as may be agreed upon by Purchaser and Seller(such date, the “Closing Date”).

 

Section 6.02Conditions Applicable to Purchaser in Closing.

 

The obligations of Purchaser to effect the Closing, including the requirement to pay the Purchase Price pursuant to Section 2.03, shall be subject to the satisfaction of each of the following conditions, as of the Closing Date, any of which may be waived by Purchaser in its sole discretion:

 

 

 

 

 

 

Exhibit B, shall have been duly executed and delivered by Seller Parent to Purchaser.

 

 

 

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(ii)attaching copies, certified by such officer as true and complete, of resolutions of the board of directors or Sole Manager, as applicable, of Seller or Seller Parent (as applicable) authorizing and approving the execution, delivery and performance by Seller or Seller Parent (as applicable) of the Transaction Documents and the transactions contemplated herein and therein; (iii) setting forth the incumbency of the officer or officers of Seller or Seller Parent (as applicable) who have executed and delivered the Transaction Documents including therein a signature specimen of each officer or officers; and (iv) attaching copies, certified by such officer as true and complete, of a certificate of the appropriate Governmental Authority of Seller’s or Seller Parent’s (as applicable) jurisdiction of incorporation, stating that such party is in good standing under the laws of such jurisdiction.

 

 

party.

 

 

of the amount set forth therein (the “Payoff Letter”).

 

Section 6.03Conditions Applicable to Seller in Closing.

 

The obligations of Seller to effect the Closing shall be subject to the satisfaction of each of the following conditions, any of which may be waived by Seller in its sole discretion:

 

 

 

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of the transactions contemplated by this Agreement, or seeking to obtain damages in connection with the transactions contemplated by this Agreement, or (ii) seeking to restrain or prohibit Purchaser’s acquisition of the Purchased Royalty Interests.

 

 

 

 

 

ARTICLE VII EXPIRATION

 

Section 7.01Expiration Date.

 

This Agreement shall terminate on the later of six (6) months following receipt by Purchaser of all Royalties to which it is entitled hereunder and any other payment due from Seller hereunder.

 

Section 7.02Effect of Expiration.

 

In the event of the expiration of this Agreement pursuant to Section 7.01, this Agreement shall forthwith become void and have no effect without any liability on the part of any party hereto or its Affiliates, directors, officers, stockholders, managers or members other than the provisions of this Section 7.02 and Sections 5.02, 8.01 and 8.05 hereof, which shall survive any termination as set forth in Section 8.01.  Nothing contained in this Section 7.02 shall relieve any party from liability for any breach of this Agreement.

 

ARTICLE VIII MISCELLANEOUS

 

Section 8.01Survival.

 

All representations and warranties made herein and in any other Transaction Document or any closing certificates delivered pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing and shall continue to survive until the receipt by Purchaser of the last payment due pursuant to the terms of the Applicable Agreements.

Notwithstanding anything in this Agreement or implied by law to the contrary, all of the agreements contained in Sections 5.02, 8.01 and 8.05 shall survive indefinitely following the execution and delivery of this Agreement and the Closing and the expiration of this Agreement.

 

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Section 8.02Specific Performance.

 

Each of the parties hereto acknowledges that the other parties will have no adequate remedy at law if it fails to perform any of its obligations under any of the Transaction Documents.  In such event, each of the parties agrees that the other parties shall have the right, in addition to any other rights they may have (whether at law or in equity), to specific performance of this Agreement.

 

Section 8.03Notices.

 

All notices, consents, waivers and communications hereunder given by any party to the other shall be in writing and delivered personally, by hand, by a recognized overnight courier, or by dispatching the same by certified or registered mail, return receipt requested, with postage prepaid, or by email (provided any notice given by email shall also be given by another method of delivery permitted by this Section 8.03), in each case addressed:

 

If to Purchaser to:

 

Healthcare Royalty Partners III, L.P. 300 Atlantic Street, Suite 600

Stamford, CT  06901 Attention:  John A. Urquhart

Email: john.urquhart@hcroyalty.com

with a copy (which shall not constitute notice) to: Healthcare Royalty Partners III, L.P.

300 Atlantic Street, 6th Floor Stamford, CT 06901

Attention:  Chief Legal Officer Email: royalty-legal@hcroyalty.com

 

and

 

Cadwalader, Wickersham & Taft LLP One World Financial Center

New York, New York 10281 Attention: Ira J. Schacter Email:ira.schacter@cwt.com

 

If to Seller:

 

Antigenics LLC 3 Forbes Road

Lexington, MA 02421 Attention: Legal Department

Email: karen.valentine@agenusbio.com

 

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with a copy (which shall not constitute notice) to:

 

Goodwin Procter LLP 100 Northern Ave

Boston, MA 02210

Attention: Arthur R. McGivern, Esq.

Email: AMcGivern@goodwinlaw.com

 

or to such other address or addresses as Purchaser or Seller may from time to time designate by notice as provided herein, except that notices of changes of address shall be effective only upon receipt.  All such notices, consents, waivers and communications shall: (a) when posted by certified or registered mail, postage prepaid, return receipt requested, be effective three (3) Business Days after dispatch, unless such communication is sent trans-Atlantic, in which case they shall be deemed effective five (5) Business Days after dispatch, (b) when delivered by a recognized overnight courier or in person, be effective upon receipt when hand delivered or (c) on the date sent by e-mail of a PDF document if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient, and followed by a transmission pursuant to another method of delivery permitted by this Section 8.03.

 

Section 8.04Successors and Assigns.

 

The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Seller shall not be entitled to assign any of their obligations and rights under the Transaction Documents to which Seller is a party without the prior written consent of Purchaser.  Purchaser may assign any of its obligations and rights under the Transaction Documents, without restriction and without the consent of Seller; provided that, notwithstanding any assignment pursuant to this Section 8.04, Purchaser shall remain obligated with respect to the payment of the Purchase Price in connection with the Closing.

 

Section 8.05Indemnification.

 

 

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Purchaser’s interest therein; provided that the foregoing shall exclude any indemnification to any Purchaser Indemnified Party (i) that results from the gross negligence or willful misconduct of such Purchaser Indemnified Party, or (ii) to the extent resulting from acts or omissions of Seller or any of its Affiliates based upon the written instructions from any Purchaser Indemnified Party.

 

Seller Indemnified Party arising out of any breach of any representation, warranty or certification made by Purchaser in any of the Transaction Documents or certificates given by Purchaser in writing pursuant hereto or thereto or any breach of or default under any covenant or agreement

by Purchaser pursuant to any Transaction Document, to the extent any such Losses are not subject to indemnification by Seller hereunder; provided, however, that the foregoing shall exclude any indemnification to any Seller Indemnified Party (i) that results from the gross negligence or willful misconduct of such Seller Indemnified Party, or (ii) to the extent resulting from acts or omissions of Purchaser or any of its Affiliates based upon the written instructions from any Seller Indemnified Party.

 

results in the forfeiture of, or have a material adverse effect on the exercise or prosecution of, substantive rights or defenses by the indemnifying party.  In case any such action is brought against an indemnified party and it notifies the indemnifying party of the commencement

thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish and provided that the indemnifying party acknowledges in writing to the indemnified party that it would have an indemnity obligation pursuant to this Section 8.05 with respect to such action, to assume and control the defense thereof, with counsel reasonably satisfactory to such indemnified 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 8.05 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; provided that the indemnifying party shall be responsible for the indemnified party’s reasonable fees and expenses of such counsel if (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

 

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counsel would be inappropriate due to actual or potential conflicts of interests between them based on the advice of counsel to the indemnified party.  It is agreed that the indemnifying party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate law firm (in addition to local counsel where necessary) for all such indemnified parties.  The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any indemnifiable Loss under this Agreement by reason of such settlement or judgment.  No indemnifying party shall, without the

prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement

(i) includes an unconditional written release of such indemnified party, in form and substance reasonably satisfactory to the indemnified party, from all liability on claims that are the subject matter of such claim or proceeding, (ii) does not include any statement as to an admission of fault, culpability or failure to act by or on behalf of any indemnified party and (iii) does not impose any continuing material obligation or restrictions on any indemnified party.

 

 

this Agreement or any other Transaction Document as a result of any breach by the other party hereof or thereof, but instead shall have the right to seek indemnification under this Section 8.05 and such specific performance.

 

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Section 8.06Independent Nature of Relationship.

 

 

 

 

Section 8.07Tax.

 

 

 

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successor forms prior to the payment and that as a result withholding is not required by applicable law.  If any withholding or deduction is required at source from a payment made pursuant to the Applicable Agreements or this Agreement, Seller and Purchaser shall take commercially reasonable measures and cooperate with GSK to obtain any available reduction or exemption from such tax.

 

Section 8.08Entire Agreement.

 

This Agreement, together with the Exhibits and Schedule hereto (which are incorporated herein by reference), and the other Transaction Documents, constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior agreements, understandings and negotiations, both written and oral, between the parties with respect to the subject matter of this Agreement.  No representation, inducement, promise, understanding, condition or warranty not set forth herein (or in the Exhibits, Schedule or other Transaction Documents) has been made or relied upon by either party hereto. None of this Agreement, nor any provision hereof, is intended to confer upon any Person other than the parties hereto any rights or remedies hereunder.

 

Section 8.09Governing Law.

 

This Agreement shall be construed in accordance with and governed by the laws of the State of New York without giving effect to the principles of conflicts of law thereof.

 

Section 8.10Severability.

 

If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

 

Section 8.11Counterparts; Effectiveness.

 

This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto. Any counterpart may be executed by electronic signature and such electronic signature shall be deemed an original.

 

Section 8.12Amendments; No Waivers.

 

 

 

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privilege.  The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

 

 

[Signature page follows]

 

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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.

 

 

 

 

 

ANTIGENICS LLC

 

 

By: /s/ Garo H. Armen

Name: Garo H. Armen

Title: President

 

 

HEALTHCARE ROYALTY PARTNERS III,

L.P.

By: HealthCare Royalty GP III, LLC, its general partner

 

 

By: /s/ Clarke B. Futch

Name: Clarke B. Futch

Title: Managing Partner

 

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HCRP OVERFLOW FUND, L.P.

 

By: HCRP Overflow Fund GP, LLC, its general partner

 

By: /s/ Clarke B. Futch

Name: Clarke B. Futch

Title: Managing Partner

 

 

 

HCR MOLAG FUND, L.P.

 

By:  HCR MOLAG Fund GP, LLC,

its general partner

 

 

By: /s/ Clarke B. Futch

Name: Clarke B. Futch

Title: Managing Partner

 

 

 

 

HCR STAFFORD FUND, L.P.

 

By: HCR Stafford Fund GP, LLC, its general partner

 

By: /s/ Clarke B. Futch

Name: Clarke B. Futch

Title: Managing Partner

 

 

 

 

 

 

[Signature Page to Royalty Purchase Agreement]