Exhibit 10.2

 

SECURITY AGREEMENT

by and between

ATHENEX, INC.,

a Delaware corporation

and

SAGARD HEALTHCARE ROYALTY PARTNERS, LP,

a Cayman Islands exempted limited partnership

 

Dated as of August 4, 2020

 

 

 

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TABLE OF CONTENTS

Page

Section 1

 

Definitions; Interpretation

3

Section 2

 

Security Interest

4

Section 3

 

Perfection and Priority

5

Section 4

 

Representations and Warranties

6

Section 5

 

Covenants

7

Section 6

 

Authorization; Appointment of Attorney-in-Fact

10

Section 7

 

Secured Party Performance of Grantor Obligations

11

Section 8

 

Secured Party’s Duties

11

Section 9

 

Remedies

12

Section 10

 

Certain Waivers

14

Section 11

 

Notices

15

Section 12

 

No Waiver; Cumulative Remedies

15

Section 13

 

Binding Effect

16

Section 14

 

Governing Law; Jurisdiction; Waiver of Jury Trial

16

Section 15

 

Entire Agreement; Amendment

16

Section 16

 

Severability

16

Section 17

 

Counterparts; Effectiveness

16

Section 18

 

Incorporation of Provisions of the RIFA

16

Section 19

 

No Inconsistent Requirements

16

Section 20

 

Termination

16

Section 21

 

Right of Set-Off

17

Section 22

 

Intercreditor Agreement

17

 

 

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SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this “Agreement”), dated as of August 4, 2020, is made
by and between Athenex, Inc., a Delaware corporation (the “Grantor”) and Sagard
Healthcare Royalty Partners, LP, a Cayman Islands exempted limited partnership
(“Purchaser”).

WHEREAS, the Grantor and Purchaser are parties to that certain Revenue Interest
Financing Agreement, dated as of August 4, 2020 (as amended, restated,
supplemented or otherwise modified from time to time, the “RIFA”);

WHEREAS, the RIFA provides that Grantor has agreed to assign to Purchaser, and
Purchaser has agreed to acquire from Grantor, the Assigned Interests (as defined
in the RIFA); and

WHEREAS, Grantor has agreed pursuant to the terms of the RIFA to enter into this
Agreement, under which the Grantor grants to Purchaser a valid continuing,
perfected lien on, and security interest in, the Collateral (as defined below)
as security for the due performance and payment of all of Grantor’s obligations
to Purchaser under the RIFA;

NOW, THEREFORE, the parties hereto agree as follows:

Section 1Definitions; Interpretation.

(a)Terms Defined in RIFA. All capitalized terms used in this Agreement
(including in the recitals hereof) and not otherwise defined herein shall have
the meanings assigned to them in the RIFA.

(b)Certain Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:

“Books” means all books, records and other written, electronic or other
documentation in whatever form maintained now or hereafter by or for Grantor, in
each case solely to the extent such material evidences or contains information
relating to the Collateral.

“Collateral” has the meaning set forth in Section 2.

“Existing Intercreditor Agreement” means that certain Intercreditor Agreement,
dated as of the date hereof, between the Purchaser and Oaktree and acknowledged
by the Grantor.

“Intellectual Property Security Agreement” means each Copyright Security
Agreement in substantially the form of Exhibit A, each Trademark Security
Agreement in substantially the form of Exhibit B, each Patent Security Agreement
in substantially the form of Exhibit C or any amendment thereto and prepared for
purposes of recordation with the U.S. Copyright Office or the U.S. Patent and
Trademark Office, as applicable.

“Intercreditor Agreement” means the Existing Intercreditor Agreement and any
other intercreditor agreement entered into by the Purchaser pursuant to Section
22.

“NY UCC” means the UCC as from time to time in effect in the State of New York.

 

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“Oaktree” means Oaktree Fund Administration, LLC in its capacity as
administrative agent under the Oaktree Term Loan Facility.

“Product Intellectual Property Collateral” means all Intellectual Property that
is claiming or covering (i) the Product itself or (ii) any method of using,
making or manufacturing the Product; provided, however that the Product
Intellectual Property Collateral shall not include any Platform Intellectual
Property, except to the extent that such Platform Intellectual Property is
directed solely to the Product or the use or manufacture thereof and does not
have applications or uses covering products that are not the Product.
Notwithstanding the foregoing, Product Intellectual Property Collateral excludes
any intent-to-use trademark application solely to the extent that and solely
during the period in which the grant of such security interest would impair the
validity or enforceability, or result in the cancellation, of such intent-to-use
trademark application under federal law.

 

“Purchaser Priority Collateral” means, at any date of determination, the portion
of Rights to Payment equal to the Applicable Percentage.

“Rights to Payment” means any and all of Grantor’s Accounts that constitute
Collateral and any and all of Grantor’s rights and claims to the payment or
receipt of money or other forms of consideration of any kind in, to and under or
with respect to such Accounts.

“Secured Obligations” means all Obligations (as defined in the RIFA) other than
inchoate indemnification and expense reimbursement obligations for which no
claim has been made.

(c)Terms Defined in the NY UCC. Where applicable and except as otherwise defined
herein or in the RIFA, terms used in this Agreement shall have the meanings
assigned to them in the NY UCC; provided that to the extent that the NY UCC is
used to define any term herein and such term is defined differently in different
Articles of the NY UCC, the definition of such term contained in (and ascribed
thereto in) Article 9 shall govern.

(d)Interpretation. The rules of interpretation set forth in Section 7.11 of the
RIFA shall be applicable to this Agreement and are incorporated herein by this
reference.

Section 2Security Interest.

(a)Grant of Security Interest. As security for the payment or performance, as
the case may be, in full in cash of the Secured Obligations, Grantor hereby
grants to Purchaser a security interest (the “Security Interest”) in and lien on
all of Grantor’s right, title and interest in, to and under the following
property (collectively, the “Collateral”): (i) any and all Accounts arising from
Net Sales of the Product and (ii) all Product Intellectual Property
Collateral.  

(b)Grantor Remains Liable. The Security Interest is granted as security only and
shall not subject Purchaser to, or in any way alter or modify, any obligation or
liability of Grantor with respect to or arising out of the Collateral. Anything
herein to the contrary notwithstanding, (i) Grantor shall remain liable under
any contracts included in the Collateral, to the extent set forth therein, to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (ii) the exercise by Purchaser of any of
the rights

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granted to Purchaser hereunder shall not release Grantor from any of its duties
or obligations under any such contracts included in the Collateral, and
(iii) Purchaser shall not have any obligation or liability under any such
contracts included in the Collateral by reason of this Agreement, nor shall
Purchaser be obligated to perform any of the obligations or duties of Grantor
thereunder or to take any action to collect or enforce any such Contract
included in the Collateral.

(c)Continuing Security Interest. Grantor agrees that this Agreement shall create
a continuing security interest in the Collateral in favor of Purchaser which
shall remain in effect until terminated in accordance with Section 20.

Section 3Perfection and Priority.

(a)Financing Statements, Etc. Grantor hereby authorizes Purchaser to file at any
time and from time to time in any relevant jurisdiction in the United States
(including any jurisdiction within or of the United States) any financing
statements with respect to the Collateral or any part thereof and amendments
thereto that contain the information required by Article 9 of the UCC of each
applicable jurisdiction for the filing of any financing statement or amendment,
including whether Grantor is an organization, the type of organization and any
organizational identification number issued to Grantor. Grantor agrees to
provide such information to Purchaser promptly (and in any case within five (5)
Business Days) upon its reasonable request. Purchaser is further authorized to
file with the United States Patent and Trademark Office or United States
Copyright Office (or any successor office) such documents as may be necessary or
advisable for the purpose of perfecting, confirming, continuing, enforcing or
protecting the Security Interest granted by Grantor, without the signature of
Grantor, and naming Grantor as debtor and Purchaser as secured party. Grantor
shall execute and deliver to Purchaser, and Grantor hereby authorizes Purchaser
to file, at any time and from time to time, all amendments to financing
statements, continuation financing statements, termination statements,
Intellectual Property Security Agreements, assignments, affidavits, reports,
notices and all other documents and instruments, in form reasonably satisfactory
to Purchaser, as Purchaser may reasonably request, to perfect and continue
perfected, maintain the priority of or provide notice of Purchaser’s security
interest in the Collateral and to accomplish the purposes of this Agreement.
Without limiting the generality of the foregoing, Grantor shall from time to
time take the actions specified in subsections Error! Reference source not
found. through (e) below.

(b)Product Intellectual Property Collateral. (i) Grantor shall execute and
deliver to Purchaser, concurrently with the execution of this Agreement, such
Intellectual Property Security Agreements as Purchaser may reasonably request,
and record such Intellectual Property Security Agreements with the U.S.
Copyright Office or the U.S. Patent and Trademark Office, as applicable, and
take such other action as may be necessary, or as Purchaser may reasonably
request, to perfect Purchaser’s security interest in the Product Intellectual
Property Collateral. Notwithstanding anything herein or in the RIFA to the
contrary, for the avoidance of doubt, no Grantor shall be required to take any
action to perfect Purchaser’s security interest in Product Intellectual Property
Collateral in any jurisdiction except the U.S.

(ii)Following the creation or other acquisition of any Product Intellectual
Property Collateral by Grantor after the date hereof which is registered or
becomes registered or the subject of an application for registration with the
U.S. Copyright Office or the

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U.S. Patent and Trademark Office, as applicable, Grantor shall include details
of such newly created or acquired Product Intellectual Property Collateral on
the next Quarterly Report provided under Section 5.01(f) of the RIFA, and take
actions as Purchaser may reasonably request to ensure perfection of Purchaser’s
security interest in such U.S. Product Intellectual Property Collateral.

(c)Rights to Payment. At the request of the Purchaser, Grantor shall deliver to
Purchaser, or an agent designated by it, appropriately endorsed or accompanied
by appropriate instruments of transfer or assignment, all Rights to Payment
representing amounts in excess of $1,000,000 at any time evidenced by promissory
notes, trade acceptances or other instruments, not already delivered hereunder
pursuant to this Section 3.

(d)Further Assurances. Grantor agrees that, at its own expense, it will promptly
execute, acknowledge, deliver and cause to be filed all further instruments and
documents and take all other actions as Purchaser may from time to time
reasonably request in order to assure, obtain, perfect, preserve and protect any
security interest granted or purported to be granted under this Agreement or
enable Purchaser to exercise and enforce its rights and remedies hereunder with
respect to any Collateral, including the payment of any fees and Taxes required
in connection with the execution and delivery of this Agreement, the granting of
the Security Interest and the filing of any financing or continuation statements
or other documents in connection herewith or therewith.

(e)Taxes. At its option, Purchaser may discharge past due Taxes, assessments,
charges, fees, Liens, security interests or other encumbrances at any time
levied or placed on the Collateral and not expressly permitted pursuant to the
RIFA, and may pay for the maintenance and preservation of the Collateral to the
extent Grantor fails to do so to the extent required by the RIFA or this
Agreement, and Grantor jointly and severally agrees to reimburse Purchaser on
demand for any reasonable payment made or any reasonable expense incurred by
Purchaser pursuant to the foregoing authorization; provided, however, that
nothing in this paragraph shall be interpreted as excusing Grantor from the
performance of, or imposing any obligation on Purchaser to cure or perform, any
covenants or other promises of Grantor with respect to Taxes, assessments,
charges, fees, Liens, security interests or other encumbrances and maintenance
as set forth herein or in the other Transaction Documents.

Section 4Representations and Warranties. Grantor represents and warrants to
Purchaser as of the date of this Agreement that:

(a)Location of Chief Executive Office and Collateral. Grantor’s chief executive
office and principal place of business (as of the date of this Agreement) is
located at the address set forth in Error! Reference source not found., and all
other locations (as of the date of this Agreement) where Grantor conducts
business or Collateral is kept are set forth in Error! Reference source not
found..

(b)Locations of Books.  All Books are kept at Grantor’s chief executive office,
principal place of business or other place where Grantor conducts business.

(c)Jurisdiction of Organization and Names. Grantor’s jurisdiction of
organization is set forth in Error! Reference source not found.; and Grantor’s
exact legal name is

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as set forth in the signature pages of this Agreement. All trade names and trade
styles under which Grantor presently conducts its business operations are set
forth in Error! Reference source not found., and, except as set forth in Error!
Reference source not found., Grantor has not, at any time in the past: (i) been
known as or used any other corporate, trade or fictitious name or (ii) changed
its name; (iii) been the surviving or resulting corporation in a merger or
consolidation; or (iv) acquired through asset purchase or otherwise any business
of any Person.

(d)Collateral. Grantor has rights in or the power to transfer the Collateral,
and Grantor has legal title to the Collateral (or, in the case of after-acquired
Collateral, at the time Grantor acquires rights in such Collateral, will have
good and valid title therein), free from any Lien other than Permitted Liens.

(e)Enforceability; Priority of Security Interest. (i) This Agreement creates a
valid security interest in the Collateral which is enforceable against the
Collateral in which Grantor now has rights and will create a valid security
interest which is enforceable against the Collateral in which Grantor hereafter
acquires rights at the time Grantor acquires any such rights; and (ii) upon the
completion of the filing of the UCC Financing Statements, the Purchaser will
have a perfected security interest in the Collateral in which Grantor now has
rights, and will have a perfected security interest in the Collateral in which
Grantor hereafter acquires rights at the time Grantor acquires any such rights,
in each case, subject to Permitted Liens and securing the payment and
performance of the Secured Obligations.

(f)Other Financing Statements. Other than (i) financing statements disclosed to
Purchaser, (ii) financing statements in favor of Purchaser or (iii) financing
statements in respect of Permitted Liens, no effective financing statement
naming Grantor as debtor, assignor, grantor, mortgagor, pledgor or the like and
covering all or any part of the Collateral is on file in any filing or recording
office in any jurisdiction.

(g)Rights to Payment. Except for Permitted Liens, Grantor has not assigned any
of its rights under any of its Rights to Payment except to Oaktree in accordance
with the Intercreditor Agreement, as provided in this Agreement or as set forth
in the other Transaction Documents.

(h)Control Agreements. No deposit account control agreements or securities
account control agreements exist with respect to any Collateral held or received
by Grantor from time to time other than any control agreements in favor of
Oaktree.

Section 5Covenants. So long as any of the Secured Obligations remain
unsatisfied, Grantor agrees that:

(a)Defense of Collateral. Grantor will appear in and defend any action, suit or
proceeding which may to a material extent affect its title to, or right or
interest in, or Purchaser’s right or interest in, the Collateral, including any
action, suit or proceeding with respect to any Liens on the Collateral (other
than any Lien not prohibited by the Transaction Documents).

(b)Preservation of Collateral. Grantor will do and perform all commercially
reasonable acts that may be necessary and appropriate to maintain, preserve and
protect the Collateral.

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(c)Compliance with Laws, Etc. Grantor will comply, in all material respects,
with all applicable laws, and all policies of insurance, relating to the
possession, operation, maintenance and control of the Collateral.

(d)Location of Books and Chief Executive Office. Grantor will: (i) keep all
Books at Grantor’s chief executive office, principal place of business or other
place where Grantor conducts business that is set forth in Schedule 1 (or
specified in writing by the Grantor to the Purchaser after the date of this
Agreement) and (ii) promptly notify Purchaser of any changes in the location of
Grantor’s chief executive office or principal place of business.

(e)Change in Name, Identity or Structure. Grantor will give five (5) Business
Days prior written notice to Purchaser of (i) any change in name, (ii) any
change in its jurisdiction of organization, (iii) any change in its registration
as an organization (or any new registration); and (iv) any changes in its
identity or structure in any manner which might make any financing statement
filed hereunder incorrect or misleading; provided that such changes are
otherwise permitted by the Transaction Documents and that Grantor shall not
change its jurisdiction of organization to a jurisdiction outside of the United
States.

(f)Maintenance of Records. Grantor will keep, at its own cost and expense,
separate, accurate and complete Books as is consistent with its practices as of
the date hereof in all material respects with respect to the Collateral held by
Grantor.

(g)Disposition of Collateral. Grantor will not surrender or lose possession of,
sell, lease, rent, or otherwise dispose of or transfer any of the Collateral
held by Grantor or any right or interest therein, except in connection with
Permitted Liens or otherwise in compliance with the RIFA and the Intercreditor
Agreement.

(h)Rights to Payment. Grantor will:

(i)until the Purchaser exercises its rights hereunder to collect any Rights to
Payment, endeavor in the first instance diligently to collect all amounts due or
to become due on or with respect to the Rights to Payment;

(ii)with such frequency as Purchaser may reasonably require or as may be
required under the RIFA, furnish to Purchaser full and complete reports, in form
and substance reasonably satisfactory to Purchaser, with respect to Accounts of
Grantor constituting Collateral;

(iii)if any Accounts of Grantor constituting Collateral in an aggregate amount
in excess of $1,000,000 per fiscal year arise from contracts with the United
States or any department, agency or instrumentality thereof, promptly notify
Purchaser thereof and execute any documents and instruments and take any other
steps reasonably requested by Purchaser in order that all monies due and to
become due thereunder shall be assigned to Purchaser upon the occurrence and
continuance of a Put Option Event;

(iv)upon the occurrence and during the continuation of a Put Option Event and
upon the request of the Purchaser (A) notify all or any designated portion of
the account debtors and other obligors on the Rights to Payment of the security
interest hereunder, (B) notify the account debtors and other obligors on the
Rights to Payment or any designated portion thereof

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that payment shall be made directly to the Purchaser or to such other Person or
location as the Purchaser shall specify, and (C) hold all remittances received
by Grantor in connection with the Rights to Payment in trust for the Purchaser
and, in accordance with the Purchaser’s instructions, remit such amounts to the
Purchaser or deposit them to an account with the Purchaser in the form received
(with any necessary endorsements or instruments of assignment or transfer); and

(v)upon the occurrence and during the continuation of a Put Option Event,
establish such lockbox or similar arrangements for the payment of the Rights to
Payment as the Purchaser shall require.

(i)Product Intellectual Property Collateral. Grantor will:

(i)not allow or suffer any Product Intellectual Property Collateral held by
Grantor to become abandoned, nor any registration thereof to be abandoned,
terminated, forfeited, expired or dedicated to the public, except as shall be
reasonable and appropriate in accordance with prudent business practice;

(ii)notify Purchaser promptly if it knows or has reason to know (A) that any
Product Intellectual Property Collateral may become abandoned, terminated,
forfeited, expired or dedicated to the public, except to the extent permitted by
the RIFA or (B) of any materially adverse determination or development
(including the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, United States
Copyright Office or any court or similar office of any other jurisdiction)
regarding Grantor’s ownership or control of any Product Intellectual Property
Collateral, its right to register the same, or its right to keep and maintain
the same.

(iii)use commercially reasonable efforts to prosecute all applications for
patents, copyrights and trademarks, and file and prosecute any and all
continuations, continuations-in-part, divisionals, applications for reissue,
applications for certificate of correction, re-examinations, re-issues, other
post-grant review procedures and like matters as shall be reasonable and
appropriate in accordance with prudent business practice, and promptly and
timely pay any and all maintenance, license, registration and other fees, taxes
and expenses incurred in connection with any Product Intellectual Property
Collateral, except as shall be reasonable and appropriate in accordance with
prudent business practice; and

(iv)in the event that Grantor knows or has reason to believe that any Product
Intellectual Property Collateral has been or will imminently be infringed,
misappropriated or otherwise violated by a third person in any manner that would
reasonably be expected to result in a Material Adverse Effect, Grantor shall
promptly (and in any case within five Business Days after obtaining knowledge
thereof) notify Purchaser and shall, if consistent with good business judgment,
promptly take such commercially reasonable measures with respect to such
infringement, misappropriation or other violation and, if appropriate, to
recover damages therefor.

(j)Notices, Reports and Information. Grantor will, upon the reasonable request
of Purchaser, make such demands and requests for information and reports as
Grantor is entitled to make in respect of the Collateral.

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Section 6Authorization; Appointment of Attorney-in-Fact. In addition to (and not
in limitation of) any other right or remedy provided to Purchaser hereunder,
Purchaser shall have the right to, in the name of Grantor, or in the name of
Purchaser or otherwise, without notice to or assent by Grantor, and Grantor
hereby constitutes and appoints Purchaser (and any of Purchaser’s officers or
employees or agents designated by Purchaser) as Grantor’s true and lawful
attorney-in-fact, with full power and authority to:

(a)file any of the financing statements which must be filed to perfect or
continue perfected, maintain the priority of, or provide notice of, Purchaser’s
Lien in the Collateral;

(b)take possession of and endorse any notes, acceptances, checks, drafts, money
orders or other forms of payment or security and collect any Proceeds, in each
case solely to the extent constituting Collateral;

(c)sign and endorse any invoice or other document relating to any of the
Collateral;

(d)notify the U.S. Postal Service and other postal authorities to change the
address for delivery of mail addressed to Grantor to such address as the
Purchaser may designate; and, without limiting the generality of the foregoing,
establish with any Person lockbox or similar arrangements for the payment of the
Rights to Payment;

(e)receive, open and dispose of all mail addressed to Grantor relating to the
Collateral;

(f)send requests for verification of Rights to Payment to the applicable
customers or other obligors of Grantor;

(g)contact, or direct Grantor to contact, all account debtors and other obligors
on the Rights to Payment and instruct such account debtors and other obligors to
make all payments directly to the Purchaser;

(h)assert, adjust, sue for, compromise or release any claims under any policies
of insurance in respect of the Collateral;

(i)notify each Person maintaining lockbox or similar arrangements for the
payment of the Rights to Payment of Grantor to remit all amounts representing
collections on such Rights to Payment directly to the Purchaser;

(j)ask, demand, collect, receive and give acquittances and receipts for any and
all Rights to Payment, enforce payment or any other rights in respect of
Collateral, grant consents, agree to any amendments, modifications or waivers of
the agreements and documents governing such Collateral, and otherwise file any
claims, take any action or institute, defend, settle or adjust any actions,
suits or proceedings with respect to the Collateral, as Purchaser may deem
necessary or desirable to maintain, preserve and protect the Collateral, to
collect the Collateral or to enforce the rights of Purchaser with respect to the
Collateral;

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(k)execute any and all applications, documents, papers and instruments necessary
for Purchaser to use the Product Intellectual Property Collateral and grant or
issue any exclusive or non-exclusive license with respect to any Product
Intellectual Property Collateral;

(l)execute any and all endorsements, assignments or other documents and
instruments necessary to sell, lease, assign, convey or otherwise transfer title
in or dispose of the Collateral;

(m)commence and prosecute any and all suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect or otherwise realize on
all or any of the Collateral or to enforce any rights in respect of any
Collateral;

(n)settle, compromise, compound, adjust or defend any actions, suits or
proceedings relating to all or any of the Collateral; and

(o)use, sell, assign, transfer, pledge, make any agreement with respect to or
otherwise deal with all or any of the Collateral, and execute any and all such
other documents and instruments, and do any and all acts and things for and on
behalf of Grantor, which Purchaser may deem necessary or advisable to maintain,
protect, realize upon and preserve the Collateral and Purchaser’s security
interest therein and to accomplish the purposes of this Agreement.

Purchaser agrees that, except upon the occurrence and during the continuation of
a Put Option Event, it shall not exercise the power of attorney, or any rights
granted to Purchaser, pursuant to clauses (b) through (o). The foregoing power
of attorney is coupled with an interest and irrevocable so long as the Secured
Obligations have not been paid and performed in full. Grantor hereby ratifies,
to the extent permitted by applicable law, all that Purchaser shall lawfully and
in good faith do or cause to be done by virtue of and in compliance with this
Section 6.

Section 7Secured Party Performance of Grantor Obligations. Upon the occurrence
and continuation of a Put Option Event, Purchaser shall have the right (but not
any obligation) to perform or pay any obligation which Grantor has agreed to
perform or pay under or in connection with this Agreement, and Grantor shall
reimburse Purchaser on demand for all documented out of pocket costs and
expenses by Purchaser pursuant to this Section 7.

Section 8Secured Party’s Duties. Notwithstanding any provision contained in this
Agreement, Purchaser shall have no duty to exercise any of the rights,
privileges or powers afforded to it and shall not be responsible to Grantor or
any other Person for any failure to do so or delay in doing so. Without limiting
the generality of the foregoing, nothing herein contained shall be construed as
requiring or obligating Purchaser to make any commitment or to make any inquiry
as to the nature of sufficiency of any payment received by Purchaser, or to
present or file any claim or notice, or to take any action with respect to the
Collateral or any part thereof or the moneys due or to become due in respect
thereof or any property covered thereby. With the exception of the exercise of
reasonable care to assure the safe custody of Collateral in Purchaser’s
possession and the accounting for moneys actually received by Purchaser
hereunder, Purchaser and its officers, directors, employees, agents or
sub-agents shall have no duty or liability to exercise or preserve any rights,
privileges or powers pertaining to the Collateral.

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Section 9Remedies.

(a)Remedies. Solely upon the occurrence and during the continuation of a Put
Option Event, Grantor agrees to deliver each item of Collateral to Purchaser on
demand, and Purchaser shall have, in addition to all other rights and remedies
granted to it in this Agreement, the RIFA, or any other Transaction Document,
all rights and remedies of a secured party under the NY UCC and other applicable
law. Without limiting the generality of the foregoing, Grantor agrees that:

(i)Purchaser may peaceably, with or without legal process and with or without
notice, without liability for trespass enter any premises of Grantor, take
possession of any Collateral, remove or dispose of all or part of the Collateral
on any premises of Grantor or elsewhere, and otherwise collect, receive,
appropriate and realize upon all or any part of the Collateral, and demand, give
receipt for, settle, renew, extend, exchange, compromise, adjust, or sue for all
or any part of the Collateral, as Purchaser may determine, and, generally,
exercise any and all rights afforded to a secured party under the UCC or other
applicable law.

(ii)Purchaser may require Grantor to assemble all or any part of the Collateral
and make it available to Purchaser, at any place and time designated by
Purchaser.

(iii)Purchaser may use or transfer any of Grantor’s rights and interests in any
Product Intellectual Property Collateral, by license, by sublicense (solely to
the extent permitted by such applicable license) or otherwise, on such
conditions and in such manner as Purchaser may determine.

(iv)Purchaser may secure the appointment of a receiver of the Collateral or any
part thereof (to the extent and in the manner provided by applicable law).

(v)Purchaser may sell, resell, lease, use, assign, transfer or otherwise dispose
of any or all of the Collateral in its then condition or following any
commercially reasonable preparation or processing (utilizing in connection
therewith any of Grantor’s assets, without charge or liability to Purchaser
therefor) at public or private sale or at any broker’s board or any securities
exchange, by one or more contracts, in one or more parcels, at the same or
different times, for cash or credit or for future delivery without assumption of
any credit risk, all as Purchaser deems advisable; provided that Grantor shall
be credited with the net proceeds of a sale only when such proceeds are finally
collected by Purchaser. Purchaser shall have the right upon any such public
sale, and, to the extent permitted by applicable law, upon any such private
sale, to purchase the whole or any part of the Collateral so sold, free of any
right or equity of redemption, which right or equity of redemption Grantor
hereby releases, to the extent permitted by applicable law. Purchaser shall give
Grantor such notice of any public or private sale as may be required by the NY
UCC or other applicable law.

Purchaser shall give each applicable Grantor not less than 10 days’ written
notice (which Grantor agrees is reasonable notice within the meaning of Section
9-611 of the NY UCC or its equivalent in other jurisdictions) of its intention
to make any sale of Collateral. Such notice, in the case of a public sale, shall
state the time and place for such sale and, in the case of a sale at a broker’s
board or on a securities exchange, shall state the board or exchange at which
such sale is to be made and

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the day on which the Collateral, or portion thereof, will first be offered for
sale at such board or exchange. Any such public sale shall be held at such time
or times within ordinary business hours and at such place or places as Purchaser
may fix and state in the notice (if any) of such sale. At any such sale, the
Collateral, or portion thereof, to be sold may be sold in one lot as an entirety
or in separate parcels, and by Purchaser in its own right or by one or more
agents or contractors, upon any premises owned, leased or occupied by Grantor,
Purchaser or any such agent or contractor, and any such sale may include any
other property, in each case, as Purchaser may (in its sole and absolute
discretion) determine. Purchaser shall not be obligated to make any sale of any
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of such Collateral shall have been given. Purchaser may, without
notice or publication, adjourn any public or private sale or cause the same to
be adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. In case any sale of all or any part of the
Collateral is made on credit or for future delivery, the Collateral so sold may
be retained by Purchaser until the sale price is paid by the purchaser or
purchasers thereof, but Purchaser shall not incur any liability in case any such
purchaser or purchasers shall fail to take up and pay for the Collateral so sold
and, in case of any such failure, such Collateral may be sold again upon like
notice. At any public (or, to the extent permitted by law, private) sale made
pursuant to this Agreement, the Purchaser may bid for or purchase, free (to the
extent permitted by applicable law) from any right of redemption, stay,
valuation or appraisal on the part of Grantor (all said rights being also hereby
waived and released to the extent permitted by applicable law), the Collateral
or any part thereof offered for sale and may make payment on account thereof by
using any claim then due and payable to Purchaser from Grantor as a credit
against the purchase price, and Purchaser may, upon compliance with the terms of
sale, hold, retain and dispose of such property without further accountability
to Grantor therefor. For purposes hereof, a written agreement to purchase the
Collateral or any portion thereof shall be treated as a sale thereof; Purchaser
shall be free to carry out such sale pursuant to such agreement and Grantor
shall not be entitled to the return of the Collateral or any portion thereof
subject thereto, notwithstanding the fact that after Purchaser shall have
entered into such an agreement all Events of Default shall have been remedied
and the Obligations shall have been indefeasibly paid in full in cash. As an
alternative to exercising the power of sale herein conferred upon it, Purchaser
may proceed by a suit or suits at law or in equity to foreclose this Agreement
and to sell the Collateral or any portion thereof pursuant to a judgment or
decree of a court or courts having competent jurisdiction or pursuant to a
proceeding by a court-appointed receiver. Any sale pursuant to the provisions of
this Section 9(a) shall be deemed to conform to the commercially reasonable
standards as provided in Section 9-610(b) of the NY UCC or its equivalent in
other jurisdictions. Purchaser shall not be required to marshal any present or
future Collateral or to resort to such Collateral in any particular order.

 

(vi)Purchaser shall not have any obligation to clean up or otherwise prepare the
Collateral for sale. Purchaser has no obligation to attempt to satisfy the
Secured Obligations by collecting them from any other Person liable for them and
Purchaser may release, modify or waive any Collateral provided by any other
Person to secure any of the Secured Obligations, all without affecting
Purchaser’s rights against Grantor. Grantor waives any right it may have to
require Purchaser to pursue any third Person for any of the Secured Obligations.
Purchaser may comply with any applicable state or federal law requirements in
connection with a disposition of the Collateral and compliance will not be
considered to adversely affect the

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commercial reasonableness of any sale of the Collateral. Purchaser may sell the
Collateral without giving any warranties as to the Collateral. Purchaser may
specifically disclaim any warranties of title or the like. This procedure will
not be considered to adversely affect the commercial reasonableness of any sale
of the Collateral. If Purchaser sells any of the Collateral upon credit, Grantor
will be credited only with payments actually made by the purchaser, received by
Purchaser and applied to the indebtedness of the purchaser. In the event the
purchaser fails to pay for the Collateral, Purchaser may resell the Collateral
and the Grantor shall be credited with the proceeds of the sale.

(b)License. For the purpose of enabling Purchaser to exercise its rights and
remedies under this Section 9 or otherwise in connection with this Agreement,
and solely during the continuance of a Put Option Event, Grantor hereby grants
to Purchaser: (a) an irrevocable, non-exclusive license (exercisable without
payment or royalty or other compensation to Grantor) to use, license or
sublicense any Product Intellectual Property Collateral and (b) a non-exclusive
license (exercisable without payment or royalty or other compensation to
Grantor) to use, license or sublicense the Platform Intellectual Property to
extent reasonably necessary to permit the use, manufacture, sell, offer for
sale, import, and other exploitation of the Product or the exploitation of the
Product Intellectual Property Collateral, including, in each case of (a)-(b),
all access to all media in which any of the licensed items may be recorded or
stored and to all computer software and programs used for the compilation or
printout thereof for the purpose of practicing the foregoing licenses; provided,
however, that nothing in this Section 9(b) shall require Grantor to grant any
license that (i) violates the express terms of any agreement between Grantor and
a third party governing Grantor’s use of such Product Intellectual Property
Collateral or Platform Intellectual Property, or gives such third party any
right of acceleration, modification or cancellation therein, or (ii) is
prohibited by any applicable law; provided, further, that such licenses to be
granted hereunder with respect to Trademarks shall be subject to maintenance of
quality standards with respect to the goods and services on which such
Trademarks are used sufficient to preserve the validity of such Trademarks.

(c)Application of Proceeds. Except as expressly provided elsewhere in this
Agreement, all cash proceeds actually received from the sale or other
disposition or collection of Collateral, and any other amounts received in
respect of Collateral the application of which is not otherwise provided for
herein, shall be applied in good faith to satisfy (to the extent of the net
proceeds received by Purchaser) such item or part of the Secured Obligations as
Purchaser may designate. Any surplus thereof which exists after payment and
performance in full of the Secured Obligations shall be promptly paid over to
Grantor or otherwise disposed of in accordance with the NY UCC or other
applicable law. Grantor shall remain liable to Purchaser for any deficiency
which exists after any sale or other disposition or collection of Collateral.

Section 10Certain Waivers. Grantor waives, to the fullest extent permitted by
applicable law, (i) any right of redemption with respect to the Collateral,
whether before or after sale hereunder, and all rights, if any, of marshalling
of the Collateral or other collateral or security for the Secured Obligations;
(ii) any right to require Purchaser (w) to proceed against any Person, (x) to
exhaust any other collateral or security for any of the Secured Obligations,
(y) to pursue any remedy in Purchaser’s power, or (z) to make or give any
presentments, demands for performance, notices of nonperformance, protests,
notices of protests or notices of dishonor in connection with

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any of the Collateral; and (iii) all claims, damages, and demands against
Purchaser arising out of the repossession, retention, sale or application of the
proceeds of any sale of the Collateral.

Section 11Notices. All notices, requests, instructions, directions and other
communications provided for herein (including any modifications of, or waivers,
requests or consents under, this Agreement) shall be given or made in writing
(including by telecopy or email) delivered, if to any of the parties hereto, as
specified in the RIFA. Except as otherwise provided in this Agreement or
therein, all such communications shall be deemed to have been duly given upon
receipt of a legible copy thereof, in each case given or addressed as aforesaid.
All such communications provided for herein by telecopy shall be confirmed in
writing promptly after the delivery of such communication (it being understood
that non-receipt of written confirmation of such communication shall not
invalidate such communication).

Section 12No Waiver; Cumulative Remedies.

(a)No failure on the part of Purchaser to exercise and no delay in exercising,
and no course of dealing with respect to, any right, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under this Agreement preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. Any waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice or demand on Grantor in
any case shall entitle Grantor to any other or further notice or demand in
similar or other circumstances. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.

(b)Grantor waives any and all other defenses, set-offs or counterclaims (other
than a defense of payment or performance in full hereunder) which may at any
time be available to or be asserted by it or any other Person against Purchaser,
including, without limitation, failure of consideration, breach of warranty,
statute of frauds, statute of limitations, accord and satisfaction and usury.

(c)Grantor waives diligence, presentment, protest, marshaling, demand for
payment, notice of dishonor, notice of default and notice of nonpayment to or
upon Grantor with respect to the Secured Obligations. Except for notices
provided for herein, Grantor hereby waives notice (to the extent permitted by
applicable law) of any kind in connection with this Agreement or any collateral
securing the Secured Obligations, including, without limitation, the Collateral.
When making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against Grantor, Purchaser may, but shall be under no obligation to,
make a similar demand on or otherwise pursue such rights and remedies as it may
have against any other Person or against any collateral security or guarantee
for the Secured Obligations or any right of offset with respect thereto, and any
failure by Purchaser to make any such demand, to pursue such other rights or
remedies or to collect any payments from the Grantor or any other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of Grantor or any other Person or any such
collateral security, guarantee or right of offset, shall not relieve Grantor of
any obligation or liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of
Purchaser against any Grantor. For the purposes hereof “demand” shall include
the commencement and continuance of any legal proceedings.

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Section 13Binding Effect. This Agreement shall be binding upon, inure to the
benefit of and be enforceable by Grantor, Purchaser and their respective
successors and assigns. Grantor shall not assign or delegate this Agreement, any
of its rights or obligations hereunder or any interest herein or in the
Collateral (in each case, except as expressly contemplated by this Agreement or
the RIFA) without the prior written consent of Purchaser, and any attempted
assignment without such consent shall be null and void.

Section 14Governing Law; Jurisdiction; Waiver of Jury Trial. Sections 7.16 and
7.17 of the RIFA are incorporated herein by reference, mutandis mutandis.

Section 15 Entire Agreement; Amendment. This Agreement and the other Transaction
Documents constitute the entire agreement between the parties with respect to
the subject matter hereof and supersede all prior agreements (including the Term
Sheet), understandings and negotiations, both written and oral, between the
parties with respect to the subject matter of this Agreement. No representation,
inducement, promise, understanding, condition or warranty not set forth herein
(or in 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 16Severability. If any provision of this Agreement is held to be invalid
or unenforceable, the remaining provisions shall nevertheless be given full
force and effect.

Section 17Counterparts; Effectiveness. This Agreement may be executed in two or
more counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument. This Agreement shall become
effective when each party hereto shall have received a counterpart hereof signed
by the other parties hereto. Any counterpart may be executed by facsimile or pdf
signature and such facsimile or pdf signature shall be deemed an original.

Section 18Incorporation of Provisions of the RIFA. To the extent the RIFA
contains provisions of general applicability to the Transaction Documents, such
provisions are incorporated herein by this reference.

Section 19No Inconsistent Requirements. Grantor acknowledges that this Agreement
and the other Transaction Documents may contain covenants and other terms and
provisions variously stated regarding the same or similar matters, and agrees
that all such covenants, terms and provisions are cumulative and all shall be
performed and satisfied in accordance with their respective terms.

Section 20Termination. Upon the termination of the RIFA and payment and
performance in full of all Secured Obligations, the security interests created
by this Agreement shall automatically terminate and Purchaser shall promptly
execute and deliver to Grantor such documents and instruments reasonably
requested by Grantor as shall be necessary to evidence the termination of all
security interests given by Grantor to Purchaser hereunder.  Any execution and
delivery of such documents pursuant to this Section 20 shall be without recourse
to or representation or warranty by Purchaser. The Grantor shall reimburse
Purchaser upon demand for all reasonable and documented costs and out of pocket
expenses, including the reasonable fees,

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charges and expenses of counsel, incurred by it in connection with any action
contemplated by this Section 20.

Upon any sale, lease, transfer or other disposition by Grantor of any Collateral
that is permitted under the RIFA, the security interest in such Collateral shall
be automatically released.

In addition, in connection with the entry into any license by the Grantor
concerning any Collateral, Purchaser shall, at the request of Grantor, negotiate
and enter into a non-disturbance agreement and other similar agreements in form
and substance reasonably satisfactory to Purchaser and the Grantor.

Section 21Right of Set-Off. If a Put Option Event shall have occurred and is
continuing, Purchaser is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any and all Collateral
(including any deposits (general or special, time or demand, provisional or
final)) at any time held and other obligations at any time owing by Purchaser to
or for the credit or the account of Grantor against any and all of the
obligations of Grantor now or hereafter existing under this Agreement and the
other Transaction Documents, irrespective of whether or not Purchaser shall have
made any demand under this Agreement or any other Transaction Document and
although such obligations may be unmatured. The rights of Purchaser under this
Section 21 are in additional to any other rights and remedies (including other
rights of setoff) which Purchaser may have.

Section 22Intercreditor Agreement.

(a)Concurrently herewith, the Purchaser shall enter into the Existing
Intercreditor Agreement. In connection with any Permitted Refinancing of the
Oaktree Term Loan Facility or other incurrence of any Permitted Indebtedness,
the Purchaser shall enter into an Intercreditor Agreement on terms and
conditions consistent with the Existing Intercreditor Agreement or otherwise
reasonably satisfactory to the Purchaser providing for the subordination of the
Liens of the Purchaser on the Collateral (other than Purchaser Priority
Collateral) to the Liens of the lender(s) (or agent(s) for such lender(s)) of
such Permitted Indebtedness.

(b)Notwithstanding anything herein to the contrary, the priority of the lien and
security interest granted to the Purchaser pursuant to this Agreement and the
exercise of any right or remedy by the Purchaser hereunder are subject to the
provisions of the Intercreditor Agreement. In the event of any conflict between
the terms of the Intercreditor Agreement and this Agreement with respect to the
priority of any liens or the exercise of any rights or remedies, the terms of
the Intercreditor Agreement shall govern. The requirement under this Agreement
to deliver Collateral to the Purchaser (or any representation or warranty having
the effect of requiring the same) shall be deemed satisfied (or any such
representation or warranty shall be deemed true) by delivery of such Collateral
to Oaktree (or other senior creditor under the Intercreditor Agreement from time
to time) as bailee of, and behalf of, the Purchaser pursuant to the
Intercreditor Agreement).

(c)Notwithstanding anything herein to the contrary, to the extent the Grantor is
required hereunder to deliver Collateral to, or the possession or control by,
the Purchaser for purposes of possession and/or “control” (as such term is used
herein) and is unable to do so as a result of having previously delivered such
Collateral to Oaktree (or other authorized representative

17

 

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in accordance with the terms of any then applicable Intercreditor Agreement),
such Grantor’s obligations hereunder with respect to such delivery shall be
deemed complied with and satisfied by the delivery to such representative, as
gratuitous bailee and/or gratuitous agent for the benefit of the Purchaser.

(d)Any reference in this Agreement to a “first priority security interest” or
words of similar effect in describing the security interests created hereunder
shall be understood to refer to such priority subject to the terms of the
Intercreditor Agreement.

[Remainder of page intentionally left blank; signature pages follow]

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first above written.

 

GRANTOR:

ATHENEX, INC.

 

 

 

 

By:

 

/s/ Johnson Y.N. Lau

 

 

Name:

Johnson Y.N. Lau

 

 

Title:

Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Security Agreement]

 

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SAGARD HEALTHCARE ROYALTY

PARTNERS, LP, by its general partner,

SAGARD HEALTHCARE ROYALTY

PARTNERS GP LLC

 

 

 

 

 

 

 

 

By:

 

/s/ Adam Vigna

 

 

Name:

Adam Vigna

 

 

Title:

Chief Investment Officer

 

 

 

 

 

 

 

 

 

By:

 

/s/ Andrew Dean

 

 

Name:

Andrew Dean

 

 

Title:

Manager

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Security Agreement]

 

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Schedule 1*

Grantor Information

* Schedule 1 has been omitted pursuant to Item 601(a)(5) of Regulation S-K.  The
registrant will provide a copy of any omitted exhibit or schedule to the
Securities and Exchange Commission or its staff upon request.

 

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Exhibit A

TO THE SECURITY AGREEMENT

FORM OF COPYRIGHT SECURITY AGREEMENT

This COPYRIGHT SECURITY AGREEMENT, dated as of [__________], 20[__] (“Copyright
Security Agreement”), made by Athenex, Inc. (the “Grantor”), is in favor of
Sagard Healthcare Royalty Partners, LP (“Purchaser”).

W I T N E S S E T H:

WHEREAS, the Grantor is party to a Security Agreement dated as of [●], 2020 (the
“Security Agreement”) in favor of Purchaser, pursuant to which the Grantor is
required to execute and deliver this Copyright Security Agreement (capitalized
terms used but not otherwise defined herein shall have the meanings given to
them in the Security Agreement);

WHEREAS, pursuant to the terms of the Security Agreement, the Grantor has
created in favor of Purchaser a security interest in, and Purchaser has become a
secured creditor with respect to, the Copyright Collateral (as defined below);

NOW, THEREFORE, in consideration of the premises and to induce Purchaser to
enter into the RIFA and extend credit to Grantor thereunder, Grantor hereby
grants to Purchaser a security interest in all of the following property now
owned or at any time hereafter acquired by Grantor or in which Grantor now has
or at any time in the future may acquire any right, title or interest
(collectively, the “Copyright Collateral”), as collateral security for the
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of all Secured Obligations:

(a)all Copyrights of such Grantor listed on Schedule 1 attached hereto;

(b)to the extent not covered by clause (a), all Proceeds of any of the
foregoing; and

(c)to the extent not covered by clause (a), all causes of action arising prior
to or after the date hereof for infringement of any of the Copyrights included
in the Copyright Collateral.

The security interest granted pursuant to this Copyright Security Agreement is
granted in conjunction with the security interest granted to Purchaser pursuant
to the Security Agreement, and the Grantor hereby acknowledges and affirms that
the rights and remedies of Purchaser with respect to the security interest in
the Copyright Collateral made and granted hereby are more fully set forth in the
Security Agreement. In the event that any provision of this Copyright Security
Agreement is deemed to conflict with the Security Agreement, the provisions of
the Security Agreement shall govern.

Grantor hereby authorizes and requests that the Register of Copyrights record
this Copyright Security Agreement.

 

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THIS COPYRIGHT SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS COPYRIGHT SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

This Copyright Security Agreement may be executed by one or more of the parties
to this Copyright Security Agreement on any number of separate counterparts, and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument. Delivery of an executed signature page of this Copyright
Security Agreement by facsimile transmission or electronic transmission (in PDF
format) shall be effective as delivery of a manually executed counterpart
hereof.

[Remainder of This Page Intentionally Left Blank.]

 

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IN WITNESS WHEREOF, the Grantor has caused this COPYRIGHT SECURITY AGREEMENT to
be executed and delivered by its duly authorized officer as of the date first
above written.

 

ATHENEX, INC.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accepted and Agreed:
SAGARD HEALTHCARE ROYALTY PARTNERS, LP

 

By

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

Address:

 

 

 

 

 

--------------------------------------------------------------------------------

 

Schedule 1

COPYRIGHTS

Copyright Registrations

Title of Work

Reg. No.

Reg. Date

Owner

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit B

TO THE SECURITY AGREEMENT

FORM OF TRADEMARK SECURITY AGREEMENT

This TRADEMARK SECURITY AGREEMENT, dated as of [_________], 20[__] (“Trademark
Security Agreement”), made by Athenex, Inc. (the “Grantor”), is in favor of
Sagard Healthcare Royalty Partners, LP (“Purchaser”).

W I T N E S S E T H:

WHEREAS, the Grantor is party to a Security Agreement, dated as [●], 2020 (the
“Security Agreement”) in favor of Purchaser, pursuant to which the Grantor is
required to execute and deliver this Trademark Security Agreement (capitalized
terms used but not otherwise defined herein shall have the meanings given to
them in the Security Agreement);

WHEREAS, pursuant to the terms of the Security Agreement, the Grantor has
created in favor of Purchaser a security interest in, and Purchaser has become a
secured creditor with respect to, the Trademark Collateral (as defined below);

NOW, THEREFORE, in consideration of the premises and to induce Purchaser to
enter into the RIFA and extend credit to the Grantor thereunder, Grantor hereby
grants to Purchaser a security interest in all of the following property now
owned or at any time hereafter acquired by Grantor or in which Grantor now has
or at any time in the future may acquire any right, title or interest
(collectively, the “Trademark Collateral”), as collateral security for the
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of all Secured Obligations:

(a)all registered and applied-for Trademarks of Grantor listed on Schedule 1
attached hereto;

(b)to the extent not covered by clause (a), all Proceeds of any of the
foregoing;

(c)to the extent not covered by clause (a), the goodwill of the businesses with
which the Trademarks included in the Trademark Collateral are associated; and

(d)to the extent not covered by clause (a), all causes of action arising prior
to or after the date hereof for infringement of any of the Trademarks included
in the Trademark Collateral or unfair competition regarding the same.

The security interest granted pursuant to this Trademark Security Agreement is
granted in conjunction with the security interest granted to Purchaser pursuant
to the Security Agreement, and the Grantor hereby acknowledges and affirms that
the rights and remedies of Purchaser with respect to the security interest in
the Trademarks made and granted hereby are more fully set forth in the Security
Agreement. In the event that any provision of this Trademark Security Agreement
is deemed to conflict with the Security Agreement, the provisions of the
Security Agreement shall govern.

 

--------------------------------------------------------------------------------

 

Grantor hereby authorizes and requests that the Commissioner of Trademarks
record this Trademark Security Agreement.

THIS TRADEMARK SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS TRADEMARK SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

This Trademark Security Agreement may be executed by one or more of the parties
to this Trademark Security Agreement on any number of separate counterparts, and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument. Delivery of an executed signature page of this Trademark
Security Agreement by facsimile transmission or electronic transmission (in PDF
format) shall be effective as delivery of a manually executed counterpart
hereof.

[Remainder of This Page Intentionally Left Blank.]

 

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IN WITNESS WHEREOF, the Grantor has caused this TRADEMARK SECURITY AGREEMENT to
be executed and delivered by its duly authorized officer as of the date first
above written.

 

ATHENEX, INC.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accepted and Agreed:
SAGARD HEALTHCARE ROYALTY PARTNERS, LP

 

By

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

Address:

 

 

 

 

 

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Schedule 1

TRADEMARKS

Trademark Registrations and Applications

Trademark

Reg. No.

(App. No.)

Reg. Date

(App. Date)

Owner

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit C

TO THE SECURITY AGREEMENT

FORM OF PATENT SECURITY AGREEMENT

This PATENT SECURITY AGREEMENT, dated as of [__________], 20[ ] (“Patent
Security Agreement”), made by Athenex, Inc. (the “Grantor”), is in favor of
Sagard Healthcare Royalty Partners, LP (“Purchaser”).

W I T N E S S E T H:

WHEREAS, the Grantor is party to a Security Agreement dated as of [●], 2020 (the
“Security Agreement”) in favor of Purchaser, pursuant to which the Grantor is
required to execute and deliver this Patent Security Agreement (capitalized
terms used but not otherwise defined herein shall have the meanings given to
them in the Security Agreement);

WHEREAS, pursuant to the terms of the Security Agreement, the Grantor has
created in favor of Purchaser a security interest in, and Purchaser has become a
secured creditor with respect to, the Patent Collateral (as defined below);

NOW, THEREFORE, in consideration of the premises and to induce Purchaser to
enter into the RIFA and extend credit to the Grantor thereunder, the Grantor
hereby grants to Purchaser a security interest in all of the following property
now owned or at any time hereafter acquired by Grantor or in which Grantor now
has or at any time in the future may acquire any right, title or interest
(collectively, the “Patent Collateral”), as collateral security for the complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of all Secured Obligations:

(a)all registered and applied-for Patents of Grantor listed on Schedule 1
attached hereto;

(b)to the extent not covered by clause (a), all Proceeds of any of the
foregoing; and

(c)to the extent not covered by clause (a), all causes of action arising prior
to or after the date hereof for infringement of any of the Patents included in
the Patent Collateral.

The security interest granted pursuant to this Patent Security Agreement is
granted in conjunction with the security interest granted to Purchaser pursuant
to the Security Agreement, and the Grantor hereby acknowledges and affirms that
the rights and remedies of Purchaser with respect to the security interest in
the Patents made and granted hereby are more fully set forth in the Security
Agreement. In the event that any provision of this Patent Security Agreement is
deemed to conflict with the Security Agreement, the provisions of the Security
Agreement shall govern.

The Grantor hereby authorizes and requests that the Commissioner of Patents
record this Patent Security Agreement.

 

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THIS PATENT SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS PATENT SECURITY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

This Patent Security Agreement may be executed by one or more of the parties to
this Patent Security Agreement on any number of separate counterparts, and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument. Delivery of an executed signature page of this Patent Security
Agreement by facsimile transmission or electronic transmission (in PDF format)
shall be effective as delivery of a manually executed counterpart hereof.

[Remainder of This Page Intentionally Left Blank.]

 

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IN WITNESS WHEREOF, the Grantor has caused this PATENT SECURITY AGREEMENT to be
executed and delivered by its duly authorized officer as of the date first above
written.

 

ATHENEX, INC.

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accepted and Agreed:
SAGARD HEALTHCARE ROYALTY PARTNERS, LP

 

By

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

Address:

 

 

 

 

 

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Schedule 1

PATENTS

Patents and Patent Applications

Patent

Reg. No.

(App. No.)

Reg. Date

(App. Date)

Owner