Exhibit 10.1

 

EXECUTION

 

 

 

 

 

 

 

 

 

LOAN AGREEMENT

 

Dated as of November 4, 2016

 

Between

 

HEALTHCARE ROYALTY PARTNERS III, L.P.,

 

as Lender,

 

and

 

MNTX ROYALTIES SUB LLC,

 

as Borrower

 

 
 

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TABLE OF CONTENTS

 

ARTICLE I.

CERTAIN DEFINITIONS

     

SECTION 1.01

DEFINITIONS

1

     

SECTION 1.02

INTERPRETATION; HEADINGS

19

     

ARTICLE II.   

THE LOAN; DISBURSEMENT; CERTAIN FEES

 

SECTION 2.01

INITIAL TRANCHE LOAN; SUBSEQUENT TRANCHE LOAN

20

     

SECTION 2.02

NOTICE OF BORROWING

20

     

SECTION 2.03

DISBURSEMENT AND BORROWING

21

     

SECTION 2.04

LOAN NOT REVOLVING

21

     

ARTICLE III.

REPAYMENT

   

 

SECTION 3.01

AMORTIZATION; MATURITY DATE

21

     

SECTION 3.02

VOLUNTARY PREPAYMENT; MANDATORY PREPAYMENT

22

     

SECTION 3.03

INCREASED COST

25

   

ARTICLE IV.

INTEREST; EXPENSES; MAKING OF PAYMENTS

   

 

SECTION 4.01

INTEREST RATE

25

     

SECTION 4.02

BLOCKED ACCOUNT

26

     

SECTION 4.03

INTEREST ON LATE PAYMENTS

28

     

SECTION 4.04

INITIAL EXPENSES

28

     

SECTION 4.05

ADMINISTRATION AND ENFORCEMENT EXPENSES

28

     

SECTION 4.06

MAKING OF PAYMENTS

28

     

SECTION 4.07

SETOFF OR COUNTERCLAIM

28

 

 
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ARTICLE V.

TAXES  

 

SECTION 5.01

TAXES

28

     

SECTION 5.02

RECEIPT OF PAYMENT

30

     

SECTION 5.03

OTHER TAXES

30

     

SECTION 5.04

INDEMNIFICATION

30

     

SECTION 5.05

REGISTERED OBLIGATION

30

     

SECTION 5.06

TAX TREATMENT

31

     

SECTION 5.07

AHYDO CATCHUP PAYMENT

32

 

ARTICLE VI.

CLOSING CONDITIONS  

   

 

SECTION 6.01

CONDITIONS PRECEDENT TO THE INITIAL TRANCHE LOAN

32

     

SECTION 6.02

CONDITIONS PRECEDENT TO THE SUBSEQUENT TRANCHE LOAN

34

 

ARTICLE VII.

REPRESENTATIONS AND WARRANTIES  

   

 

SECTION 7.01

REPRESENTATIONS AND WARRANTIES OF BORROWER

35

     

SECTION 7.02

REPRESENTATIONS AND WARRANTIES AS TO COMPANY, ETC.

40

     

SECTION 7.03

SURVIVAL OF REPRESENTATIONS AND WARRANTIES

50

     

ARTICLE VIII.

AFFIRMATIVE COVENANTS   

   

 

SECTION 8.01

MAINTENANCE OF EXISTENCE

50

     

SECTION 8.02

USE OF PROCEEDS

50

     

SECTION 8.03

FINANCIAL STATEMENTS AND INFORMATION

51

     

SECTION 8.04

BOOKS AND RECORDS

53

     

SECTION 8.05

MAINTENANCE OF INSURANCE

53

 

 
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SECTION 8.06

GOVERNMENTAL AUTHORIZATIONS

53

     

SECTION 8.07

COMPLIANCE WITH LAWS AND CONTRACTS

53

     

SECTION 8.08

PLAN ASSETS

53

     

SECTION 8.09

NOTICES

53

     

SECTION 8.10

PAYMENT OF TAXES

54

     

SECTION 8.11

WAIVER OF STAY, EXTENSION OR USURY LAWS

54

     

SECTION 8.12

INTELLECTUAL PROPERTY

55

     

SECTION 8.13

SECURITY DOCUMENTS; FURTHER ASSURANCES

56

     

SECTION 8.14

INFORMATION REGARDING COLLATERAL

57

     

SECTION 8.15

ADDITIONAL COLLATERAL; NEW LICENSE ARRANGEMENT

57

     

ARTICLE IX.

NEGATIVE COVENANTS  

   

 

SECTION 9.01

ACTIVITIES OF BORROWER

58

     

SECTION 9.02

MERGER; SALE OF ASSETS

59

     

SECTION 9.03

LIENS

60

     

SECTION 9.04

INVESTMENT COMPANY ACT

60

     

SECTION 9.05

LIMITATION ON ADDITIONAL INDEBTEDNESS

60

     

SECTION 9.06

LIMITATION ON TRANSACTIONS WITH CONTROLLED AFFILIATES

60

     

SECTION 9.07

ERISA

60

     

SECTION 9.08

DIVIDENDS AND DISTRIBUTIONS

61

     

ARTICLE X.

EVENTS OF DEFAULT  

   

 

SECTION 10.01

EVENTS OF DEFAULT

61

     

SECTION 10.02

DEFAULT REMEDIES

61

 

 
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SECTION 10.03

RIGHT OF SET-OFF; SHARING OF SET-OFF

61

     

SECTION 10.04

RIGHTS NOT EXCLUSIVE

62

ARTICLE XI.

INDEMNIFICATION  

   

 

SECTION 11.01

FUNDING LOSSES

62

     

SECTION 11.02

OTHER LOSSES

62

     

SECTION 11.03

ASSUMPTION OF DEFENSE; SETTLEMENTS

64

     

ARTICLE XII.

MISCELLANEOUS   

   

 

SECTION 12.01

ASSIGNMENTS

64

     

SECTION 12.02

SUCCESSORS AND ASSIGNS

65

     

SECTION 12.03

NOTICES

65

     

SECTION 12.04

ENTIRE AGREEMENT

66

     

SECTION 12.05

MODIFICATION

67

     

SECTION 12.06

NO DELAY; WAIVERS; ETC.

67

     

SECTION 12.07

SEVERABILITY

67

     

SECTION 12.08

DETERMINATIONS

67

     

SECTION 12.09

REPLACEMENT OF NOTE

67

     

SECTION 12.10

GOVERNING LAW

67

     

SECTION 12.11

JURISDICTION

67

     

SECTION 12.12

WAIVER OF JURY TRIAL

68

     

SECTION 12.13

WAIVER OF IMMUNITY

68

     

SECTION 12.14

COUNTERPARTS

68

     

SECTION 12.15

LIMITATION ON RIGHTS OF OTHERS

68

     

SECTION 12.16

SURVIVAL

68

 

 
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SECTION 12.17

CONFIDENTIALITY

68

     

SECTION 12.18

PATRIOT ACT NOTIFICATION

70

 

 
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Exhibits

 

Exhibit A

Notice of Prepayment

Exhibit B

Form of Security Agreement

Exhibit C-1

Form of Initial Tranche Note

Exhibit C-2

Form of Subsequent Tranche Note

Exhibit D-1

Form of Notice of Initial Tranche Borrowing

Exhibit D-2

Form of Notice of Subsequent Tranche Borrowing

Exhibit E

Borrower Corporate Counsel Opinion

Exhibit F

Orange-Book Listed Patents

Exhibit G

Form of Contribution Agreement

Exhibit H

Form of Stock Pledge Agreement

Exhibit I

Form of Progenics Limited Recourse Guaranty

Exhibit J

Form of Assignment and Acceptance

Exhibit K

[RESERVED]

Exhibit L

License Agreement

Exhibit M

Form of Blocked Account Control Agreement (“Lending Control”)

Exhibit N

Form of Officer’s Certificate

           

 

Schedules

 

 
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This LOAN AGREEMENT, dated as of November 4, 2016, is entered into by and
between HEALTHCARE ROYALTY PARTNERS III, L.P., a Delaware limited partnership,
as lender (“Lender”), and MNTX ROYALTIES SUB LLC, a Delaware limited liability
company, as borrower (“Borrower”) (the “Agreement”).

 

Capitalized terms not otherwise defined herein shall have the meanings set forth
in, or by reference in, Article I below.

 

RECITALS

 

WHEREAS, Borrower has requested that Lender make the Initial Tranche Loan to
Borrower on the Initial Funding Date and the Lender is willing to make the
Initial Tranche Loan on the Initial Funding Date, on the terms and subject to
the conditions set forth herein;

 

WHEREAS, the Borrower and the Lender wish to set forth the terms for the
Subsequent Tranche Loan, in the event that the Borrower and the Lender were to
exercise their respective options to effect the Subsequent Tranche Loan on the
terms and subject to the conditions set forth herein;

 

NOW, THEREFORE, in consideration of the mutual promises of the Parties, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, it is mutually agreed by the Parties as follows:

 

Article I.     
CERTAIN DEFINITIONS

 

Section 1.01     Definitions. As used herein:

 

“Account Bank” means JPMorgan Chase Bank, N.A. or such other bank or financial
institution approved by each of the Lender and Borrower.

 

“Accreted Principal” has the meaning set forth in Section 4.01(c).

 

“Affiliate” means any Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with
another Person. For purposes of this definition, “control” shall mean (a) in the
case of corporate entities, direct or indirect ownership of at least ten percent
(10%) of the stock or shares having the right to vote for the election of
directors, and (b) in the case of non-corporate entities, direct or indirect
ownership of at least ten percent (10%) of the equity interest with the power to
direct the management and policies of such non-corporate entities. Unless
otherwise stated, any usage of “Affiliate” herein means an Affiliate of Borrower
or as the context may require, the Company.

 

“Agreement” means this Agreement (as defined in the preamble hereto).

 

“AHYDO Catchup Payment” has the meaning set forth in Section 5.07.

 

“Amortization Payments” means the principal payments of the Loan due under
Section 3.01(a) hereof.

 

 

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“Approved Licensee” means any Person that is a manufacturer or marketer of
pharmaceutical products that had total sales of all its products marketed in the
U.S. in the immediately preceding calendar year of at least $500,000,000, as
reported in such Person’s public filings with the SEC or, if such Person is not
subject to reporting obligations under the Exchange Act, as reported in the IMS
Report prepared with respect to such Person by Media Analytics, LLC.

 

“Assignee” means any other Person to which a Lender has assigned or is assigning
its rights and obligations hereunder, whether or in whole or in part.

 

“Assignment and Acceptance” means a written instrument of assignment in the form
set forth in Exhibit J, executed by and between the parties to an assignment
under Section 12.01 hereof.

 

“Bankruptcy Law” means Title 11 of the United States Code entitled “Bankruptcy”
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief laws of the United States or other
applicable jurisdictions (domestic or foreign) from time to time in effect and
affecting the rights of creditors generally.

 

“Bill of Sale” means the Bill of Sale, dated the date hereof, delivered by the
Contributor to the Borrower under the Contribution Agreement with respect to the
Transferred Assets (as defined in the Contribution Agreement).

 

“Borrower” means the Borrower (as defined in the preamble hereto).

 

“Borrower Party Documents” means the Borrower’s Organizational Documents.

 

“Blocked Account” means, collectively, any segregated deposit account
established and maintained at the Account Bank pursuant to a Blocked Account
Control Agreement, the Security Agreement and this Agreement.

 

“Blocked Account Control Agreement” means any agreement entered into by the
Account Bank, Borrower and the Lender substantially in the form attached hereto
as Exhibit M, pursuant to which, among other things, the Blocked Account shall
be established and maintained.

 

“Business Day” means any day, except a Saturday, Sunday or other day on which
commercial banks in New York are required or authorized by law to close.

 

“Capital Stock” of any Person means any and all shares, interests, memberships,
ownership interest units, rights to purchase, warrants, options, participations
or other equivalents of or interests in (however designated) equity of such
Person, including any preferred stock, and including, if such Person is a
partnership, partnership interests (whether general or limited) and any other
interest or participation that confers on a Person the right to receive a share
of the profits and losses of, or distributions of property of, such partnership,
and including, if such Person is a limited liability company, membership
interests and any other interest or participation that confers on a Person the
right receive an interest in the profits and losses of, or distributions of
property of, such limited liability company, in each case whether outstanding on
the date hereof or issued after the date hereof, but excluding any Indebtedness
convertible into or exchangeable for such equity.

 

 
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“Change of Control” means:

 

(i)     the acquisition by any Person or group (within the meaning of Sections
13(d)(3) or 14(d)(2) of the Exchange Act) (other than any trustee or other
fiduciary holding securities under an employee benefit plan of Borrower or any
entity controlled, directly or indirectly, by Borrower) of direct or indirect
beneficial ownership of any Capital Stock of Borrower, if after such
acquisition, such Person or group would be the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of
securities of Borrower representing more than fifty percent (50%) of the
combined voting power of Borrower’s then outstanding securities entitled to vote
generally in the election of directors; or

 

(ii)     during any one year period, individuals who at the beginning of such
period constitute the Board of Directors of Borrower or the Company (together
with any new directors (other than a director designated by a Person who has
entered into an agreement with Borrower to effect a transaction described in
clause (i) of this definition of “Change of Control”), whose election by such
Board of Directors or nomination for election by Borrower’s shareholders, as
applicable, was approved by a vote of a majority of the directors then still in
office who either were directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute at least a majority of the Board of Directors of Borrower
or the Company then in office.

 

“Closing Date” means November 4, 2016.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Collateral” means the Royalty Interest, the License Agreement insofar as
concerns the Royalty Interest, the right to receive the Quarterly Activity
Report, the Sublicense Revenue Report and other reports described in Section
6.6(b) of the License Agreement, the right to audit the records of the Licensee
as described in Section 6.6(f) of the License Agreement, the right to make
indemnification claims against the Licensee pursuant to Section 11.1 of the
License Agreement, the Progenics Sublicense, the Contribution Agreement, the
Bill of Sale, the Pledged Account, all books and records of the Borrower that at
any time evidence or contain information relating to any of the foregoing or are
otherwise necessary or helpful in the collection or realization thereof, and all
other property and assets of the Borrower described as collateral for the
Obligations hereunder or in the Security Agreement, whether nor or hereafter in
existence, and all proceeds and products of the foregoing.

 

“Company” means Progenics Pharmaceuticals, Inc., a Delaware corporation, which
is the direct sole parent of the Borrower.

 

 
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“Confidential Information” means any and all information, whether communicated
orally or in any physical form, including without limitation, financial and all
other information which Disclosing Party or its authorized Representatives
provide to the Recipient, together with such portions of analyses, compilations,
studies, or other documents, prepared by or for the Recipient and its
Representatives, which contain or are derived from information provided by
Disclosing Party. Without limiting the foregoing, information shall be deemed to
be provided by Disclosing Party to the extent it is learned or derived by
Recipient or Recipient’s Representatives (a) from any inspection, examination or
other review of books, records, contracts, other documentation or operations of
Disclosing Party, (b) from communications with authorized Representatives of
Disclosing Party or (c) created, developed, gathered, prepared or otherwise
derived by Recipient while in discussions with Disclosing Party. However,
Confidential Information does not include any information which Recipient can
demonstrate (i) is or becomes part of the public domain through no fault of
Recipient or its Representatives, (ii) was known by Recipient on a
non-confidential basis prior to disclosure, or (iii) was independently developed
by Persons who were not given access to the Confidential Information disclosed
to Recipient by Disclosing Party.

 

“Confidentiality Agreement” means that certain Confidentiality Agreement by and
between Progenics Pharmaceuticals, Inc. and HealthCare Royalty Management, LLC,
dated as of August 25, 2016.

 

“Contract” means any agreement, contract, lease, commitment, license and other
arrangement which is legally binding.

 

“Contract Party” means any party to a Material Contract.

 

“Contribution Agreement” means the Contribution and Servicing Agreement, dated
as of the Closing Date, between the Company and Borrower, in the form of Exhibit
G hereto.

 

“Contributor” means the Company.

 

“Contributor Event of Default” has the meaning set forth in the Contribution
Agreement.

 

“Controlled Affiliate” with respect to any Person means any Person directly or
indirectly controlling, controlled by or under common control with, such Person.
For the purposes of this Agreement, “control” (including, with correlative
meaning, the terms “controlling” and “controlled”) means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.

 

“Default” means any condition or event which constitutes an Event of Default or
which, with the giving of notice or the lapse of time or both (in each case to
the extent described in the relevant subclauses of the definition of “Event of
Default”) would, unless cured or waived, become an Event of Default.

 

“Default Rate” means, for any period for which an amount is overdue, a rate per
annum equal for each day in such period to the lesser of (i) 2% plus the rate of
interest otherwise applicable to the Loan as provided in Section 4.01 and the
definition of “Fixed Interest” and (ii) the maximum rate of interest permitted
under applicable Law.

 

 
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“Disclosing Party” means, with respect to any Confidential Information, the
Party disclosing the Confidential Information to the other Party.

  

“Dispute” means, with respect a particular agreement, matter or Person, any
opposition, interference proceeding, reexamination proceeding, cancellation
proceeding, re-issue proceeding, invalidation proceeding, inter parties review
proceeding, injunction, claim, lawsuit, proceeding, hearing, investigation,
complaint, arbitration, mediation, demand, investigation, decree, or any other
dispute, disagreement, or claim with respect to such agreement, matter or
Person.

 

“Disqualified Capital Stock” of any Person means any class of Capital Stock of
such Person that, by its terms, or by the terms of any related agreement or of
any security into which it is convertible, puttable or exchangeable, is, or upon
the happening of any event or the passage of time would be, required to be
redeemed by such Person, whether or not at the option of the holder thereof, or
matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, in whole or in part, on or prior to the date which is 91 days after
the date specified in clause (a) of the definition of “Maturity Date” herein;
provided, however, that any class of Capital Stock of such Person that, by its
terms, authorizes such Person to satisfy in full its obligations with respect to
the payment of dividends or upon maturity, redemption (pursuant to a sinking
fund or otherwise) or repurchase thereof or otherwise by the delivery of Capital
Stock that is not Disqualified Capital Stock, and that is not convertible,
puttable or exchangeable for Disqualified Capital Stock or Indebtedness, will
not be deemed to be Disqualified Capital Stock so long as such Person satisfies
its obligations with respect thereto solely by the delivery of Capital Stock
that is not Disqualified Capital Stock.

 

“Dollars” or “$” means lawful money of the United States of America.

 

“Equity Cure Limitation” means no more than one (1) capital contribution in each
of any two (2) successive calendar quarters and no more than three (3) capital
contributions in the aggregate while any Obligations are outstanding.

 

“Enforcement Action” shall mean any claim, action, suit or proceeding brought,
or assertion made, by the Company or any of its Affiliates (whether as plaintiff
or by means of counterclaim) against any Third Party relating to or arising out
of any infringement, misuse or misappropriation by such Third Party of any
Intellectual Property.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations promulgated thereunder.

 

“ERISA Affiliate” at any time means each trade or business (whether or not
incorporated) that, together with Borrower or the Company, as applicable, is
treated as a single employer under the applicable provisions of Section 414 of
the Code.

 

“Event of Default” means the occurrence of one or more of the following:

 

(a)     Borrower fails to pay any principal of the Loan within three Business
Days after the same becomes due and payable, whether on the Maturity Date or
otherwise (excluding any prepayment of principal of the Loan pursuant to Section
3.02(b)).

 

 
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(b)     Except as permitted by Section 4.01, Borrower fails to pay any interest
on the Loans (including, without limitation, Fixed Interest) or make payment of
any other amounts payable under this Agreement within three Business Days after
the same becomes due and payable.

 

(c)     Any representation or warranty of Borrower in any Transaction Document
to which it is party or in any certificate, financial statement or other
document delivered by Borrower in connection with the Transaction Documents
proves to have not been true and correct in all material respects at the time it
was made or deemed made (except that any representation or warranty that is
qualified as to “materiality” or “Material Adverse Effect”, or by reference to
an objective standard (e.g., a specified Dollar amount), shall be true and
correct in all respects); provided, that if the consequences of the failure of
such representation or warranty to be true and correct can be cured, such
failure continues for a period of 30 days without such cure after the earlier of
the date Borrower becomes aware of such failure or the date the Lender provides
Notice of such failure to Borrower.

 

(d)     Borrower fails to perform or observe any covenant or agreement contained
in Article IX (other than Section 9.03, which is covered under clause (e)
below).

 

(e)     Borrower fails to perform or observe any other covenant or agreement
contained in the Transaction Documents to which it is a party (other than those
referred to in the preceding clauses of this definition) if such failure is not
remedied on or before the 30th day after Notice thereof from the Lender.

 

(f)     A Contributor Event of Default occurs and is continuing.

 

(g)     Borrower (i) fails to pay when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) any Indebtedness (other
than the Obligations hereunder) of $15,000 or more or (ii) fails to perform or
observe any covenant or agreement to be performed or observed by it contained in
any agreement or in any instrument evidencing any of its Indebtedness (other
than the Obligations hereunder) of $15,000 or more and, as a result of such
failure, any other party to that agreement or instrument is entitled to exercise
the right to accelerate the maturity of any Indebtedness thereunder.

 

(h)     Any uninsured judgment, decree or order in an amount in excess of
$25,000 shall be rendered against Borrower and either (i) enforcement
proceedings shall have been commenced upon such judgment, decree or order or
(ii) such judgment, decree or order shall not have been stayed or bonded pending
appeal, vacated or discharged, within thirty days from entry.

 

(i)     An Insolvency Event shall occur.

 

 
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(j)     (i) Any of the Transaction Documents shall cease to be in full force and
effect, or (ii) its validity or enforceability is disaffirmed or challenged in
writing by (x) the Borrower, the Company or any of their respective Affiliates
or (y) any Person (other than the Lender) asserting an interest in any of the
Collateral and such written disaffirmation or challenge is not withdrawn or
disavowed by such Person within 10 days after its communication or the Borrower
has not brought appropriate proceedings for declaratory or other relief negating
such disaffirmation or challenge within 20 days after such communication and has
not obtained an order granting such relief within 60 days after commencement of
such proceedings, or (iii) this Agreement, the Security Agreement or the Pledge
Agreement shall cease to give the Lender the rights purported to be created
hereby or thereby (including a first priority perfected Lien on the assets of
Borrower that constitute Collateral) other than as a direct result of any action
by the Lender or failure of the Lender to perform an obligation of the Lender
hereunder.

 

(k)     Borrower fails to perform or observe any covenant or agreement contained
in any Material Contract to which it is a party or any Borrower Party Document,
as applicable, and such failure is not cured or waived within any applicable
grace period, and in the case of any provision in Borrower Party Documents, if
not cured, is not waived by the Lender, or any Material Contract shall cease to
be in full force and effect.

 

(l)     The License Agreement is terminated or cancelled by the Licensee and is
not replaced in accordance with Section 8.15(b) hereof within 270 days after
such termination or cancellation.

 

(m)     Any security interest purported to be created by this Agreement or the
Security Agreement shall cease to be in full force and effect, or shall cease to
give the rights, powers and privileges purported to be created and granted
hereunder or thereunder (including a perfected first priority security interest
in and Lien on substantially all of the Collateral (except as otherwise
expressly provided herein and therein)) in favor of the Lender pursuant hereto
or thereto, or shall be asserted by Borrower not to be a valid, perfected, first
priority (except as otherwise expressly provided in this Agreement or such
Security Agreement) security interest in the Collateral, and/or Borrower takes
any action which could reasonably be expected to impair Lender’s security
interest in any of the Collateral.

 

“Exchange Act” means the Securities Exchange Act of 1934 and the regulations
promulgated thereunder.

 

“Excluded Taxes” means (i) any Taxes imposed on (or measured by) net income
(including branch profits Taxes) of the Lender, or any franchise or similar
Taxes imposed in lieu thereof, by any Governmental Authority or taxing authority
by the jurisdiction under the laws of which the Lender is organized or any
jurisdiction in which the Lender is a resident, has an office, conducts business
or has another connection (other than any connection arising from any
transaction contemplated by any Transaction Document), (ii) any U.S. federal
withholding tax that is imposed on amounts payable to a Lender under law in
effect at the time (x) such Lender becomes a party to this Agreement, or (y)
changes its Office, except in each case to the extent that such Lender (or its
assignor, if any) was entitled, immediately prior to an assignment or change of
Office, to receive additional amounts from Borrower with respect to such U.S.
federal withholding tax pursuant to Section 5.01 or 5.04, (iii) any U.S. federal
withholding tax that is attributable to such Lender’s failure to comply with
Section 5.01(b), (c) or (d) and (iv) any tax withheld pursuant to FATCA.

 

 
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“Exploit” means, with respect to the Product, the manufacture, use, sale, offer
for sale (including marketing and promotion), importation, distribution or other
commercialization; and “Exploitation” shall have the correlative meaning.

 

“FATCA’ means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), and any current or future
Treasury regulations or official interpretations thereof, any agreements entered
into pursuant to Section 1471(b)(1) of the Code as of the date of this Agreement
(or any amended or successor version described above), any intergovernmental
agreements (and any related treaty, non-U.S. law, regulation or other official
guidance) implementing any of the foregoing.

 

“FCPA” means the Foreign Corrupt Practices Act.

 

“FDA” means the United States Food and Drug Administration.

 

“Financial Statements” means, the consolidated balance sheets of the Company,
audited at December 31, 2015, December 31, 2014 and December 31, 2013 and the
related consolidated statements of operations and comprehensive loss, cash flows
and changes in stockholders’ equity of the Company audited for the years ended
December 31, 2015, December 31, 2014 and December 31, 2013, and the accompanying
footnotes thereto, as filed with the SEC, including the Management’s Discussion
and Analysis of Financial Condition and Results of Operations contained therein.

 

“Fixed Interest” means interest with respect to the Loan, accruing with respect
to the outstanding principal balance thereof at a rate per annum equal to 9.50%.

 

“Foreign Lender” means any Lender which is not a “United States person” within
the meaning of Section 7701(a)(30) of the Code.

 

“GAAP” means the generally accepted accounting principles in the United States
of America in effect from time to time; provided, that in the event such
principles change after the Closing Date in a manner which affects compliance
with this Agreement by Borrower (including without limitation in the
determination of payments in respect of the Royalty Interest), such change shall
be ignored for the purpose of determining such compliance.

 

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or pertaining to,
government.

 

“Guarantee” or “Guaranty” means, as to any Person: (a) any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation payable or
performable by another Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or
indirect (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation, (ii) to purchase or lease
property, securities or services for the purpose of assuring the obligee in
respect of such Indebtedness or other obligation of the payment or performance
of such Indebtedness or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity or level
of income or cash flow of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation, or (iv) entered into for
the purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part); or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person.

 

 
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“Indebtedness” with respect to any Person means any amount (absolute or
contingent) payable by such Person as debtor, borrower, issuer, guarantor or
otherwise (i) pursuant to an agreement or instrument involving or evidencing
money borrowed, the advance of credit, a conditional sale or a transfer with
recourse or with an obligation to repurchase, (ii) pursuant to a lease with
substantially the same economic effect as any such agreement or instrument,
(iii) pursuant to any equity interest with a mandatory obligation to repurchase,
or any obligations with respect to Disqualified Capital Stock, (iv) pursuant to
indebtedness of a third party secured by (or for which the holder of such
indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on assets owned or acquired by such Person, whether or not the
indebtedness secured thereby has been assumed, (v) pursuant to an interest rate
protection agreement, foreign currency exchange agreement or other hedging
arrangement, (vi) pursuant to a letter of credit issued for the account of such
Person, or (vii) all Guarantees with respect to Indebtedness of the types
specified in clauses (i) through (vi) above of another Person. For the avoidance
of doubt, the Indebtedness of any Person shall include the Indebtedness of any
other entity to the extent such Person is directly liable therefor as a result
of such Person’s ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor.

 

“Indemnified Liabilities” means, collectively, any and all liabilities,
obligations, losses, damages, penalties, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including the reasonable fees
and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any fees or expenses actually incurred by
Indemnitees in enforcing the indemnity provided herein), whether direct,
indirect or consequential and whether based on any federal, state or foreign
laws, statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations), on common law or equitable cause or on contract
or otherwise, imposed on, incurred by, or asserted against any such Indemnitee,
in any manner relating to or arising out of this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby (including any
enforcement, performance or administration of any of the Loan Documents
(including any sale of, collection from, or other realization upon any of the
Collateral)).

 

“Indemnified Taxes” means (i) Taxes other than Excluded Taxes imposed on or with
respect to any payment made by or on account of any obligation of the Borrower
under any Loan Documents and (ii) Other Taxes.

 

“Indemnitee” means each Lender and its Affiliates and their respective officers,
partners, directors, trustees, employees, agents and controlling Persons.

 

 
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“Initial Funding Date” means the date upon which the conditions precedent under
Section 6.01 have been satisfied to the satisfaction of the Lender.

 

“Initial Tranche Disbursement Amount” means an amount equal to 1% of the
original principal amount of the Initial Tranche Loan.

 

“Initial Tranche Loan” means, prior to its disbursement, the loan to be made by
the Lender to the Borrower in accordance with Section 2.01(a), and from and
after its disbursement, at any time the aggregate principal amount loaned to the
Borrower on the Initial Funding Date pursuant to Section 2.01(a), plus any
Accreted Principal thereunder outstanding at such time.

 

“Initial Tranche Loan Commitment” means the amount of $50,000,000.

 

“Initial Tranche Note” means the note, in the form attached hereto as Exhibit
C-1, issued by Borrower to the Lender evidencing the Initial Tranche Loan made
on the Initial Funding Date to Borrower and any replacement(s) thereof issued in
accordance with Section 13.09.

 

“Insolvency Event” means the occurrence of any of the following with respect to
the Borrower or the Contributor:

 

(i)     (A) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (x) relief
in respect of the Borrower or the Contributor, or of a substantial part of the
property of the Borrower or the Contributor, under any Bankruptcy Law now or
hereafter in effect, (y) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or the
Contributor for a substantial part of the property of the Borrower or the
Contributor or (z) the winding-up or liquidation of the Borrower or the
Contributor, which proceeding or petition shall continue undismissed for
60 calendar days or (B) an order of a court of competent jurisdiction approving
or ordering any of the foregoing shall be entered;

 

(ii)     the Borrower or the Contributor shall (A) voluntarily commence any
proceeding or file any petition seeking relief under any Bankruptcy Law now or
hereafter in effect, (B) apply for the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official itself or for a
substantial part of its property, (C) fail to contest in a timely and
appropriate manner any proceeding or the filing of any petition described in
clause (i) of this definition, (D) file an answer admitting the material
allegations of a petition filed against it in any proceeding described in clause
(i) of this definition, (E) make a general assignment for the benefit of
creditors or (F) wind up or liquidate (except as permitted under this
Agreement);

 

(iii)     the Borrower or the Contributor shall take any action in furtherance
of or for the purpose of effecting, or indicating its consent to, approval of,
or acquiescence in, any of the acts set forth in clause (i) or (ii) of this
definition;

 

(iv)     the Borrower or the Contributor shall become unable, admit in writing
its inability, or fail generally, to pay its debts as they become due;

 

 
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(v)     the Borrower or the Contributor 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; or

 

(vi)     the entry of an order of attachment, execution, distraint or similar
process against any Product or any Intellectual Property that is included under
the Progenics Sublicense, in an action commenced against the Borrower or the
Contributor, which such order shall not have been vacated, discharged, stayed,
satisfied or bonded pending appeal within 60 calendar days from the entry
thereof.

 

“Insurance Providers” means the insurance companies set forth in Schedule
7.01(vv) or insurance companies rated at least as high as the ratings given, as
of the Closing Date (according to A.M. Best Company, Inc.), the insurance
companies set forth on Schedule 7.01(vv).

 

“Intellectual Property” means the Licensed Technology that is licensed or
sublicensed by the Company or its Affiliates to the Licensee under the License
Agreement.

 

“Interest Payment Date” means each December 31, March 31, June 30 and September
30, or if any such day is not a Business Day, on the next succeeding Business
Day, beginning on December 31, 2016.

 

“Know-How” means all non-public information, results and data of any type
whatsoever, in any tangible or intangible form (and whether or not patentable),
including databases, practices, methods, techniques, specifications,
formulations, formulae, knowledge, skill, experience, data and results
(including pharmacological, medicinal chemistry, biological, chemical,
biochemical, toxicological and clinical study data and results), analytical and
quality control data, stability data, studies and procedures, and manufacturing
process and development information, results and data.

 

“Knowledge” means, with respect to Borrower or the Company, as the case may be,
the knowledge of an officer, director, manager or internal counsel or other
person with similar responsibility, regardless of title, of Borrower or the
Company, respectively, relating to a particular matter; provided, however, that
a person charged with responsibility for the aspect of the business relevant or
related to the matter at issue 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” means any federal, state, local or foreign law, including common law, and
any regulation, rule, requirement, policy, judgment, order, writ, decree,
ruling, award, approval, authorization, consent, license, waiver, variance,
guideline or permit of, or any agreement with, any Governmental Authority.

 

“Lender” means Lender (as defined in the preamble hereto) and any assignee under
Section 13.01(b).

 

 
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“Lender Concentration Account” means a segregated account established for the
benefit of the Lender and maintained at the Account Bank or such other banking
institution as the Lender may specify in its discretion from time to time. The
Lender Concentration Account shall be the account into which the funds held in
the Blocked Account which are payable to the Lender pursuant to this Agreement
are swept in accordance with the terms of this Agreement and the Blocked Account
Control Agreement.

 

“Lender Expense Amount” means $500,000.

 

“Liabilities” means the liabilities of Borrower or Company, as the case may be.

 

“Licensee” means Salix Pharmaceuticals, Inc., a California corporation, or any
successor thereto.

 

“License Agreement” means the License Agreement, dated as of February 3, 2011,
by and among Salix Pharmaceuticals, Inc., Progenics Pharmaceuticals, Inc.,
Progenics Pharmaceuticals Nevada, Inc. and Excelsior Life Sciences Ireland
Limited, together with such amendments, supplements or other modifications
attached thereto, in the form attached to this Agreement as Exhibit L, as
assigned, transferred and contributed to Borrower pursuant to the Contribution
Agreement.

 

“Licensed Know-How” has the meaning given to such term in the License Agreement.

 

“Licensed Patents” the assets giving rise to the “Licensed Patent Rights” as
such term is defined in the License Agreement. For the avoidance of doubt,
Licensed Patents include the Orange-Book Listed Patents.

 

“Licensed Technology” has the meaning given to such term in the License
Agreement.

 

“Lien” means any mortgage or deed of trust, pledge, hypothecation, lien, charge,
attachment, set-off, encumbrance or other security interest in the nature
thereof (including any conditional sale agreement, equipment trust agreement or
other title retention agreement, a lease with substantially the same economic
effect as any such agreement or a transfer or other restriction) or other
encumbrance, right or claim of any nature whatsoever.

 

“Loan” means, prior to their respective disbursement, the loan or loans to be
made by the Lender and borrowed by the Borrower in accordance with and subject
to Section 2.01 and Section 2.02, and after their respective disbursement to the
Borrower, at any time the sum of the Initial Tranche Loan and the Subsequent
Tranche Loan (if any).

 

“Loan Documents” means this Agreement, the Initial Tranche Note, the Subsequent
Tranche Note (if any), the Security Agreement, the Progenics Limited Recourse
Guaranty, the Stock Pledge Agreement, the Contribution Agreement, the Bill of
Sale, the Progenics Sublicense, the Blocked Account Control Agreement, and all
other documents delivered in connection therewith.

 

 
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“Material Adverse Effect” means (a) an Insolvency Event, (b) a material adverse
change in the business, operations, prospects, properties, liabilities, results
of operations or condition (financial or other) of Borrower, taken as a whole;
(c) an adverse effect on the validity or enforceability of the Loan Documents or
any material provision hereof or thereof; (d) a material adverse effect on the
ability of Borrower or the Contributor to consummate the transactions
contemplated by the Loan Documents, or on the ability of Borrower or the
Contributor to perform its obligations under the Loan Documents to which it is a
party; (e) a material adverse effect on the rights or remedies of the Lender
under any of Loan Documents; (f) a material adverse effect on the right of the
Lender to receive any payment due hereunder or under the other Loan Documents;
(g) a material adverse effect on any material portion of the Collateral (except
to the extent such effect results directly from a deterioration in Net Sales of
Product unrelated to a breach of the License Agreement) or (h) any adverse
effect on the right of the Borrower to receive the Royalty Interest on the terms
set forth in the License Agreement relating to the amount, timing or duration of
the Royalty Interest, the payment of the Royalty Interest, royalty reports and
other information or the exercise of audit rights.

 

“Material Contract” means any Contract to which Borrower, the Company, or an
Affiliate of the Company, as the case may be in the context in which used, is a
party or any of the respective assets or properties of Borrower, the Company or
such Affiliate are bound or committed (other than the Transaction Documents) and
for which any breach, violation, nonperformance or early cancellation could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

 

“Maturity Date” means the earlier of (i) the Scheduled Maturity Date and (ii)
the date of any prepayment in full of the Loans.

 

“Maximum Lawful Rate” means the highest rate of interest permissible under
applicable Law.

 

“Net Sales” means “Net Sales” as defined in the License Agreement, and except as
otherwise defined herein, defined terms set forth in the License Agreement and
used in the definition of “Net Sales” shall have the meanings set forth in or by
reference in the License Agreement, without taking into account any amendment or
modification thereto after the Closing Date without the consent of the Lender.

 

“New Arrangement” has the meaning set forth in Section 8.15(b).

 

“Note” means either or both of the Initial Tranche Note and the Subsequent
Tranche Note.

 

“Notice of Borrowing” means either or both of the Notice of Initial Tranche
Borrowing or the Notice of Subsequent Tranche Borrowing.

 

“Notice of Initial Tranche Borrowing” means an irrevocable notice, substantially
in the form set forth in Exhibit D-1 to be given by Borrower to the Lender in
accordance with Section 2.02(a).

 

“Notice of Subsequent Tranche Borrowing” means an irrevocable notice,
substantially in the form set forth in Exhibit D-2 to be given by Borrower to
the Lender in accordance with Section 2.02(b).

 

 
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“Notices” means, collectively, notices, consents, approvals, reports,
designations, requests, waivers, elections and other communications.

 

“Obligations” means, without duplication, the Loan, Fixed Interest and all
present and future Indebtedness, taxes, liabilities, obligations, covenants,
duties, and debts, owing by Borrower to the Lender, arising under or pursuant to
the Loan Documents, including all principal, interest, premium, charges,
expenses, fees and any other sums chargeable to Borrower hereunder and under the
other Loan Documents (and including any interest, fees and other charges that
would accrue but for the filing of a bankruptcy action with respect to Borrower,
whether or not such claim is allowed in such bankruptcy action).

 

“Office” means, with respect to the Lender, its Stamford, Connecticut office,
and with respect to any other Lender, the office of such Lender designated as
its “Office” in an Assignment and Acceptance, or such other office as may be
otherwise designated in writing from time to time by such Lender to Borrower.

 

“Orange-Book Listed Patents” means the Licensed Patents set forth on Exhibit F
hereto.

 

“Organizational Document” shall mean, with respect to any Person, (i) in the
case of any corporation, the certificate of incorporation and by-laws (or
similar documents) of such Person, (ii) in the case of any limited liability
company, the certificate of formation and operating agreement (or similar
documents) of such Person, (iii) in the case of any limited partnership, the
certificate of formation and limited partnership agreement (or similar
documents) of such Person, (iv) in the case of any general partnership, the
partnership agreement (or similar document) of such Person, and (v) in any other
case, the functional equivalent of the foregoing.

 

“Other Taxes” has the meaning set forth in Section 5.03.

 

“Owned Patents” means Patents owned by a Person.

 

“Party” and “Parties” means the Lender and Borrower, individually and
collectively.

 

“Patent Office” means the respective patent office (foreign or domestic) for any
patent.

 

“Patent Rights” means, collectively, with respect to a Person, all patents
issued or assigned to, and all patent applications and registrations made by,
such Person (whether established or registered or recorded in the United States
or any other country or any political subdivision thereof), together with any
and all (i) rights and privileges arising under applicable Law with respect to
such Person’s use of any patents, (ii) inventions and improvements described and
claimed therein, (iii) reissues, divisions, continuations, renewals, extensions
and continuations-in-part thereof and amendments thereto, (iv) income, fees,
royalties, damages, claims and payments now or hereafter due and/or payable
thereunder and with respect thereto including damages and payments for past,
present or future infringements thereof, (v) rights corresponding thereto
throughout the world and (vi) rights to sue for past, present or future
infringements thereof.

 

 
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“Patents” means the Licensed Patents.

 

“Patriot Act” means the USA Patriot Act, Public Law No. 107-56 (the “Patriot
Act”).

 

“Payments” means due and owing payments of Amortization Payments (under Section
3.01(a) hereof) and Fixed Interest (under Section 4.01 hereof), including, in
each case any default, additional interest or prepayment premium charged
hereunder.

 

“Permitted Liens” means the following:

 

(a)     Liens created pursuant to any Loan Document;

 

(b)     Liens in favor of a banking or other financial institution arising as a
matter of law or under customary contractual provisions encumbering deposits or
other funds maintained with such banking or other financial institution
(including the right of set off and grants of security interests in deposits
and/or securities held by such banking or other financial institution) and that
are within the general parameters customary in the banking industry;

 

(c)     Liens securing taxes, assessments, fees or other governmental charges or
levies, Liens securing the claims of materialmen, mechanics, carriers,
landlords, warehousemen and similar Persons, and attachment, judgment and other
similar Liens arising in connection with court proceedings so long as the
enforcement of such Liens is effectively stayed and the judgment claims secured
thereby do not otherwise constitute an Event of Default under clause (i) of the
definition of “Event of Default”; and

 

(d)     any right, title or interest under a license or sublicense to which the
Borrower is a party as licensee or sublicensee, and any restrictions under a
license to which the Borrower is a party as licensor or sublicensor.

 

“Person” means an individual, corporation, association, limited liability
company, limited liability partnership, partnership, estate, trust,
unincorporated organization or a government or any agency or political
subdivision thereof.

 

“Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA)
subject to Title IV or Section 302 of ERISA or Section 412 of the Code.

 

“Plan Assets” means assets of any (i) employee benefit plan (as defined in
Section 3(3) of ERISA) subject to the fiduciary responsibility provisions of
Title I of ERISA, (ii) plan (as defined in Section 4975(e)(1) of the Code)
subject to Section 4975 of the Code or (iii) entity whose underlying assets
include assets of any such employee benefit plan or plan by reason of the
investment by an employee benefit plan or plan in such entity.

 

“Pledged Account” has the meaning set forth under the Security Agreement, and
includes the Blocked Account.

 

“Prepayment Event Date” means the date of occurrence of a Prepayment Trigger or
the date fixed for a voluntary prepayment of the Loans pursuant to Section
3.02(a).

 

 
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“Prepayment Trigger” means the occurrence of any of the following: (i) the
occurrence of any Event of Default and (unless prohibited by operation of Law)
the acceleration of the maturity of the Loans, or (ii) the occurrence of any
Change of Control, or (iii) the occurrence of any event or the existence of any
circumstance that could reasonably be expected to have a Material Adverse Effect
(including any event or circumstance that would be a Material Adverse Effect
under clause (g) thereof but for the exception in the parenthetical phrase
within such clause) that is not cured within twenty (20) Business Days after the
occurrence thereof; provided, however, that no cure period shall be available
unless at the time of such occurrence such event or circumstance could
reasonably be expected to be cured on or before the end of such twenty (20)
Business Day period.

 

“Proceeding” means an action or proceeding brought against a Party as a
defendant, for purposes of all legal proceedings arising out of or relating to
this Agreement or the transactions contemplated hereby.

 

“Product” or “Products” means the pharmaceutical product that is or is to be
Exploited under the name RELISTOR® (or any alternate or substitute tradename or
trademark) pursuant to the License Agreement.

 

“Progenics Limited Recourse Guaranty” means the limited recourse Guaranty
executed by the Company in favor of the Lender, in the form of Exhibit I hereto,
limited in recourse to the Capital Stock of Borrower and secured by the Stock
Pledge.

 

“Progenics Sublicense” means one or more fully paid licenses, sublicenses or
instruments to similar effect entered into by the Company, and any Affiliates as
necessary, with the Borrower, licensing, sublicensing or otherwise making
available to the Borrower for a period not less than the full term of the
License Agreement (and assignable to the Lender as part of the Collateral), all
Intellectual Property, and any other property or assets, that is necessary for
performance of the obligations undertaken by the Borrower under the License
Agreement pursuant to the assignment and transfer of the License Agreement to
the Borrower pursuant to the Contribution Agreement.

 

“Quarterly Report” means, with respect to the relevant calendar quarter of
Borrower: (a) the “Quarterly Activity Report” and the “Sublicense Revenue
Report” provided for under Section 6.6(b) of the License Agreement for the
period thereunder corresponding to such quarter, together with relevant
supporting documentation and (b) such additional information, in such form or
format, as the Lender may reasonably request.

 

“Recipient” means, with respect to any Confidential Information disclosed by a
Party hereto, the other Party which is receiving such Confidential Information.

 

“Register” means a record of ownership in which Borrower registers by book entry
the interests (including any rights to receive payment hereunder) of each Lender
in the Loans and any assignment of any such interest, obligation or right.

 

 
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“Regulatory Agency” means a Governmental Authority with responsibility for the
regulation of the research, development, marketing or sale of drugs or
pharmaceuticals in any jurisdiction, including the FDA, the U.S. National
Institutes of Health and the EMEA.

 

“Regulatory Approval” means, with respect to a product or device in any country
or regulatory jurisdiction, all actions, approvals (including, where applicable,
pricing and reimbursement approval and schedule classifications), licenses,
registrations or authorizations of a Regulatory Agency necessary for the making,
manufacture, sale, offer for sale, distribution, import, export, promotion,
marketing or other use of such product or device in such country or
jurisdiction.

 

“Regulatory Change” shall mean (i) the adoption after the date hereof of any
applicable law, rule or regulation or any change therein after the date hereof,
or (ii) any change after the date hereof in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, either generally or as
effected through compliance with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency.

 

“Representative” means, with respect to any Person, directors, officers,
employees, agents, co-investors, advisors, potential investors, underwriters,
rating agencies, permitted assignees, sources of financing and trustees of such
Person (other than competitors of Lender and its Affiliates).

 

“Royalty Interest” means the royalties (together with the right to receive such
royalties) payable to the Borrower under Section 6.5 of the License Agreement
and the portion of Sublicense Revenues (together with the right to receive such
portion of the Sublicense Revenues) payable to the Borrower under Section 6.4 of
the License Agreement (including in each case payments constituting royalties,
settlement payments, judgments, securities, consideration or any other
remuneration of any kind payable or received in respect of, or in substitution
or compensation for, or otherwise in lieu of, such royalties or such Sublicense
Revenue under the License Agreement and all “accounts” (as such term is defined
in the New York Uniform Commercial Code) in respect of the Royalty Interest
evidencing or giving rise to any of the foregoing) relating to Exploitation of
the Product, and any collections, recoveries, payments or other compensation
made in lieu thereof and any amounts paid or payable to the Borrower and/or any
of its Subsidiaries in respect of such royalties or Sublicense Revenue pursuant
to Section 365(n) of the United States Bankruptcy Code, in each case, derived
from Net Sales or Sublicense Revenues, as the case may be, since July 1, 2016.

 

“Scheduled Maturity Date” means June 30, 2025.

 

“SEC” means the United States Securities and Exchange Commission.

 

“Security Agreement” means the Security Agreement, substantially in the form of
Exhibit B hereto, between the Lender and the Borrower, securing the Obligations
of Borrower hereunder and the other Loan Documents, as supplemented by any
amendments or supplements thereto.

 

 
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“Senior Officer” means (i) in the case of the Borrower, the Chief Executive
Officer or Treasurer and (ii) in the case of the Company, the Chief Executive
Officer or Chief Financial Officer.

 

“Set-off” means any right of set off, rescission, counterclaim, reduction,
deduction or defense.

 

“Stock Pledge Agreement” means the Pledge and Security Agreement, dated as of
the Closing Date, between the Company and the Lender, in the form of Exhibit H
hereto, pursuant to which the Capital Stock of the Borrower is pledged to the
Lender as collateral for the Progenics Limited Recourse Guaranty.

 

“Sublicense Revenue” has the meaning set forth in the License Agreement.

 

“Subsequent Funding Date” means the date upon which the conditions precedent
under Section 6.02 have been satisfied to the satisfaction of the Lender, which
(subject to such satisfaction) shall be the date that is within fifteen Business
Days following receipt by the Lender of the Notice of Subsequent Tranche
Borrowing but which shall not be a date later than the Subsequent Tranche
Commitment Termination Date without the consent of the Lender in its sole
discretion.

 

“Subsequent Tranche Disbursement Amount” means an amount equal to 1% of the
original principal amount of the Subsequent Tranche Loan.

 

“Subsequent Tranche Loan” means, prior to its disbursement, the loan that may be
made by the Lender to the Borrower in accordance with Section 2.01(b), and from
and after its disbursement, at any time the aggregate principal amount loaned to
the Borrower on the Subsequent Funding Date pursuant to Section 2.01(b), plus
any Accreted Principal thereunder outstanding at such time.

 

“Subsequent Tranche Loan Availability Termination Date” means the twelfth
monthly anniversary of the Closing Date, provided that if such date is not a
Business Day, the “Subsequent Tranche Loan Availability Termination Date” will
be the preceding Business Day.

 

“Subsequent Tranche Loan Principal” means an amount of up to $50,000,000, to be
determined by mutual agreement of the Borrower and the Lender in accordance with
the terms and conditions set forth herein.

 

“Subsequent Tranche Note” means the note, in the form attached hereto as Exhibit
C-2, issued by Borrower to the Lender evidencing the Subsequent Tranche Loan, if
made, on the Subsequent Funding Date to Borrower and any replacement(s) thereof
issued in accordance with Section 13.09.

 

“Subsidiary” means, with respect to any Person, at any time, any entity of which
more than thirty-five percent (35%) of the outstanding Voting Stock or other
equity interest entitled ordinarily to vote in the election of the directors or
other governing body (however designated) is at the time beneficially owned or
controlled directly or indirectly by such Person, by one or more such entities
or by such Person and one or more such entities.

 

 
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“Surviving Person” means, with respect to any Person involved in or that makes
any disposition, the Person formed by or surviving such disposition or the
Person to which such disposition is made.

 

“Taxes” means taxes, levies, duties, imposts, deductions, charges, fees or
withholdings, and all interest, penalties and other liabilities with respect
thereto.

 

“Third Party” means any Person other than Borrower or its Affiliates.

 

“Transaction Documents” means the Loan Documents and the Borrower Party
Documents.

 

“U.S.” means the United States of America.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York; provided, however, that, at any time, if by reason of
mandatory provisions of law, any or all of the perfection or priority of the
Lender’s security interest in any item or portion of the Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other than the
State of New York, the term “UCC” shall mean the Uniform Commercial Code as in
effect, at such time, in such other jurisdiction for purposes of the provisions
hereof relating to such perfection or priority and for purposes of definitions
relating to such provisions.

 

“Valid Claim” shall mean a claim of an issued and unexpired patent, or a claim
of a pending patent application, within the Patents, which claim has not been
held invalid, unpatentable or unenforceable by a court of competent jurisdiction
from which no further appeal can be further taken, and has not been held
admitted to be invalid, unpatentable or unenforceable, 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 seven (7) 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.

 

“Voting Stock” means Capital Stock issued by a company, or equivalent interests
in any other Person, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even if the right so to vote has
been suspended by the happening of such contingency.

 

Section 1.02     Interpretation; Headings. Each term used in any Exhibit to this
Agreement and defined in this Agreement but not defined therein shall have the
meaning set forth in this Agreement. Unless the context otherwise requires,
(a) “including” means “including, without limitation” and (b) words in the
singular include the plural and words in the plural include the singular. A
reference to any party to this Agreement, any other Transaction Document or any
other agreement or document shall include such party’s successors and permitted
assigns. A reference to any agreement or order shall include any amendment of
such agreement or order from time to time in accordance with the terms herewith
and therewith. A reference to any legislation, to any provision of any
legislation or to any regulation issued thereunder shall include any amendment
thereto, any modification or re-enactment thereof, any legislative provision or
regulation substituted therefore and all regulations and statutory instruments
issued thereunder or pursuant thereto in existence as of the effective date of
any reference made herein to such legislation. The headings contained in this
Agreement are for convenience and reference only and do not form a part of this
Agreement. Section, Article and Exhibit references in this Agreement refer to
sections or articles of, or exhibits to, this Agreement unless otherwise
specified. Borrower acknowledges and agrees that it was represented by counsel
in connection with the execution and delivery of the Loan Documents to which it
is a party, that it and its counsel reviewed and participated in the preparation
and negotiation hereof and thereof and that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be employed in the interpretation hereof or thereof.

 

 
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Article II.     
THE LOAN; DISBURSEMENT; CERTAIN FEES

 

Section 2.01     Initial Tranche Loan; Subsequent Tranche Loan.

 

(a)     On the terms and subject to the conditions set forth herein, including
the conditions set forth in Section 6.01 hereof, on the Initial Funding Date,
the Lender shall make a loan hereunder to Borrower, and Borrower shall accept
and borrow such loan from the Lender, in a principal amount equal to the Initial
Tranche Loan Commitment.

 

(b)     On the terms and subject to the conditions set forth herein, including
the conditions set forth in Section 6.02 hereof, in the event that the Borrower,
in its sole discretion, determines to borrow the Subsequent Tranche Loan from
the Lender and the Lender, in its sole discretion, determines to make the
Subsequent Tranche Loan to the Borrower, as elected in each case prior to the
Subsequent Tranche Loan Availability Termination Date, then on the Subsequent
Funding Date, the Lender shall make a loan hereunder to Borrower, and Borrower
shall accept and borrow such loan from the Lender, in a principal amount
specified in the Notice of Subsequent Tranche Borrowing as the Subsequent
Tranche Loan Principal and agreed by the Lender in its sole discretion.

 

Section 2.02     Notice of Borrowing.

 

(a)     Subject to Section 2.01(a), Borrower shall, simultaneously with the
execution and delivery of this Agreement by the Parties, deliver to the Lender a
Notice of Initial Tranche Borrowing, setting forth that Borrower will borrow a
principal amount equal to the Initial Tranche Loan Commitment on the Initial
Funding Date. The Initial Tranche Loan Commitment shall automatically terminate
upon disbursement of the Initial Tranche Loan on the Initial Funding Date.

 

(b)     Subject to Section 2.01(b), Borrower shall, not later than 5:00PM (New
York time) on or before the sixtieth (60th) day preceding the Subsequent Tranche
Loan Availability Termination Date but not more than ninety (90) days prior to
the proposed Subsequent Tranche Funding Date, deliver to the Lender a Notice of
Subsequent Tranche Borrowing, setting forth that Borrower requests to borrow a
proposed Subsequent Tranche Loan Principal on the Subsequent Funding Date. Only
one Notice of Subsequent Tranche Borrowing may be given by the Borrower. No
later than the thirtieth (30th) day following its receipt of the Notice of
Subsequent Tranche Borrowing, the Lender shall notify the Borrower in writing
whether or not it will, subject to the satisfaction of the conditions set forth
in Section 6.02 hereof, make the Subsequent Tranche Loan to Borrower. The
availability of the Subsequent Tranche Loan shall automatically terminate upon
the earlier of (i) funding of the Subsequent Tranche Loan on the Subsequent
Funding Date, (ii) delivery of notice by the Lender that it will not make the
Subsequent Tranche Loan and (iii) the Subsequent Tranche Loan Availability
Termination Date.

 

 
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Section 2.03     Disbursement and Borrowing. On the terms and subject to the
conditions set forth herein:

 

(a)     on the Initial Funding Date, (i) the Lender shall wire transfer an
amount equal to (A) the Initial Tranche Loan Commitment less (B) the Lender
Expense Amount and less (C) the Initial Tranche Disbursement Amount, to the
account of Borrower which Borrower shall have designated for such purpose in the
related Notice of Borrowing or a separate payment instruction, or to Borrower’s
order, and (ii) Borrower shall accept and borrow such amount (i.e., the Initial
Tranche Loan will be funded on a net basis); and

 

(b)     on the Subsequent Funding Date, if any, (i) the Lender shall credit, in
same day funds, an amount equal to (A) the Subsequent Tranche Loan original
principal amount specified in the Notice of Subsequent Tranche Borrowing and
agreed to by Lender in its sole discretion less (B) the Subsequent Tranche
Disbursement Amount, to the account of Borrower which Borrower shall have
designated for such purpose in the related Notice of Borrowing, and
(ii) Borrower shall accept and borrow such amount (i.e., the Subsequent Tranche
Loan will be funded on a net basis).

 

(c)     The use and disposition of the Lender Expense Amount, Initial Tranche
Disbursement Amount and Subsequent Tranche Disbursement Amount shall be at the
sole discretion of the Lender.

 

Section 2.04     Loan Not Revolving. The Loan is not revolving in nature, and
any amount of the Loan repaid or prepaid may not be reborrowed.

 

Article III.     
REPAYMENT

 

Section 3.01     Amortization; Maturity Date.

 

(a)     (i) On each Interest Payment Date beginning with the Interest Payment
Date of March 31, 2018 (except as otherwise expressly provided herein), through
but not including the Interest Payment Date of September 30, 2021, the Borrower
shall repay principal on the Loan at par in an amount which is equal to fifty
percent (50%) of the amount, if any, by which payments received in respect of
the Royalty Interest since the immediately preceding payment date in respect of
the Royalty Interest under the License Agreement, exceed Fixed Interest accrued
and payable on such Interest Payment Date.

 

 
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(ii) On each Interest Payment Date beginning with the Interest Payment Date of
September 30, 2021 (except as otherwise expressly provided herein), the Borrower
shall repay principal on the Loan at par in an amount which is equal to 100% of
the amount, if any, by which payments received in respect of the Royalty
Interest since the immediately preceding payment date in respect of the Royalty
Interest under the License Agreement, exceed Fixed Interest accrued and payable
on such Interest Payment Date, until the outstanding principal amount of the
Loan and all other Obligations hereunder are fully repaid.

 

(b)     Notwithstanding Section 3.01(a), at any time and for any reason, at
Lender’s option, which it may exercise in its sole discretion, at any time
commencing in 2018 by written notice to Borrower within 30 Business Days prior
to the Interest Payment Date on and after which such election is to be
effective, the percentage for repayment of principal on the Loan pursuant to
Section 3.01(a)(i) shall be 100% rather than 50%.

 

(c)     If not earlier repaid in full, the unpaid balance of the outstanding
principal amount of the Loan, together with any accrued and unpaid interest, and
all other Obligations then outstanding, shall be due and payable in cash on the
Maturity Date.

 

(d)     The outstanding principal balance of the Loan and any interest or
premium due with respect thereto shall be repayable solely from payments in
respect of the Royalty Interest except (i) in connection with voluntary
prepayment of the Loan pursuant to Section 3.02(a) or Section 3.02(f) or (ii)
following a Prepayment Trigger, to the extent of any capital contributions made
by the Company in its sole discretion that cure the basis of such Prepayment
Trigger, subject to the Equity Cure Limitation.

 

Section 3.02     Voluntary Prepayment; Mandatory Prepayment.

 

(a)     Borrower may voluntarily prepay the Loan in whole but not in part, in
cash, at any time, together with accrued and unpaid Fixed Interest on the amount
prepaid, together with any additional amounts due in respect thereof pursuant to
clause (c) below, and all other Obligations then outstanding together with all
other amounts in respect thereof.

 

(b)     If any Prepayment Trigger occurs, then the outstanding principal amount
of the Loan plus any accrued and unpaid interest thereon shall be immediately
due and payable hereunder, to the extent permitted by law, together, if
applicable, with any additional amounts due in respect thereof pursuant to
clause (c) or clause (d) below, as the case may be, and all other Obligations
then outstanding together with all other amounts in respect thereof, and the
provisions of this Section 3.02 shall apply.

 

(c)     In the case of (i) a voluntary prepayment of the Loan pursuant to
Section 3.02(a) occurring not later than ninety (90) days following the
Prepayment Event Date with respect to a Prepayment Trigger or (ii) a voluntary
prepayment of the Loan pursuant to Section 3.02(a) that occurs at any time that
no uncured Prepayment Trigger exists, such prepayment shall be in the amount
indicated in the second column of the table below (determined as of the
Prepayment Event Date:

 

 
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With respect to a voluntary prepayment under Section 3.02(a) as described in
Section 3.02(c)(i) or 3.02(c)(ii) during the period below

Prepayment Amount

During the 30 month period commencing on the Closing Date

100% of the outstanding principal balance of the Loan at the date of occurrence
of the Prepayment Trigger or the date fixed for such voluntary prepayment (such
date, as the case may be, the “Prepayment Event Date”), plus an amount equal to
all interest that would have accrued on such principal balance (assuming no
further amortization thereof) during the period from such Prepayment Event Date
through the end of such 30 month period 

After the 30 month period, and prior to the end of the 42 month period,
following the Closing Date

103.0% of the outstanding principal balance of the Loan as at the Prepayment
Event Date

After the 42 month period, and prior to the end of the 54 month period,
following the Closing Date

101.5% of the outstanding principal balance of the Loan as at the Prepayment
Event Date

After the 54 month period following the Closing Date and thereafter

100% of the outstanding principal balance of the Loan as at the Prepayment Event
Date

 

 
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(d)     In the case of a prepayment due to a Prepayment Trigger other than a
Prepayment Trigger covered by Section 3.02 (c)(i), such prepayment shall be in
the amount indicated in the second column of the table below (determined as of
the Prepayment Event Date):

 

With respect to a Prepayment Trigger covered under Section 3.02(d) occurring
during the period below

Prepayment Amount

During the first 12-month period commencing on the Closing Date

110.0% of the outstanding principal balance of the Loan as at the Prepayment
Event Date

During the second 12-month period following the Closing Date

107.5% of the outstanding principal balance of the Loan as at the Prepayment
Event Date

During the third 12-month period following the Closing Date

105.0% of the outstanding principal balance of the Loan as at the Prepayment
Event Date

During the fourth 12-month period following the Closing Date

101.5% of the outstanding principal balance of the Loan as at the Prepayment
Event Date

During the fifth 12-month period following the Closing Date and thereafter

100% of the outstanding principal balance of the Loan as at the Prepayment Event
Date

 

 

(e)     In the event that, on a date more than ninety (90) days following the
Prepayment Event Date with respect to a Prepayment Trigger that remains uncured,
the Borrower elects to voluntarily prepay the Loan in whole but not in part
pursuant to Section 3.02(a), the Borrower shall pay, in addition to the
outstanding principal amount of the Loan plus any accrued and unpaid interest
thereon, the greater of the prepayment amount determined pursuant to clause (c)
above and the prepayment amount determined pursuant to clause (d) above, in
either case, with respect to such Prepayment Event Date.

 

(f)     In the event that Lender exercises its option in Section 3.01(b),
Borrower shall have the right to prepay the Loan in whole, but not in part, at
any time during the one hundred twenty (120) day period following its receipt of
notice of Lender’s election pursuant to Section 3.01(b). Such prepayment of the
Loan shall be made together with accrued and unpaid Fixed Interest on the amount
prepaid and all other Obligations then outstanding together with all other
amounts in respect thereof, but shall not require the payment of any prepayment
amount described in clause (c) or clause (d) above.

 

(g)     In addition to the amounts in clause (c), (d), (e) or (f) above, in
connection with the prepayment in full of the Loan, any unpaid amounts in
respect of such prepaid Loan not consisting of principal or Fixed Interest
(i.e., any unpaid amounts for indemnification, tax gross-up, default interest,
expense reimbursement and other amounts not consisting of principal or interest)
shall be immediately due and payable.

 

 
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(h)     If the Borrower wishes to make a prepayment pursuant to clause (a), (e)
or (f) above, it shall give the Lender irrevocable notice in the form set forth
in Exhibit A (a “Notice of Prepayment”) to that effect not later than the 30th
day before the date of the prepayment (the “Prepayment Date”), specifying the
Prepayment Date (which shall be a Business Day) and showing the calculation of
the amount to be prepaid and all other amounts payable in connection therewith
under this Section 3.02. Such Notice of Prepayment shall constitute Borrower’s
irrevocable commitment to prepay the Loan and all such other amounts on that
Prepayment Date.

 

Section 3.03     Increased Cost.     (a)     If (i) any Regulatory Change or
(ii) compliance by the Lender with any Regulatory Change occurs that has or
would have the effect of reducing the rate of return on the capital of the
Lender as a consequence of its obligations hereunder or arising in connection
herewith to a level below that which the Lender could have achieved but for such
introduction, change or compliance (taking into consideration the policies of
the Lender with respect to capital adequacy) by an amount deemed by the Lender
to be material, then from time to time, on the first Interest Payment Date
occurring at least 30 days after demand by the Lender (which demand shall be
accompanied by a statement setting forth the basis for such demand and a
description of the computation of such demand), the Borrower shall pay directly
to the Lender such additional amount or amounts as will compensate the Lender
for such reduction. The Lender will take such actions reasonably requested by
the Borrower, at the expense of the Borrower, if such actions will avoid the
need for, or reduce the amount of, such compensation and will not, in the
judgment of the Lender, be otherwise disadvantageous to it or inconsistent with
its internal policies and procedures. In no event will the Lender be expected or
required to monitor the occurrence of any of the events or contingencies
described in this Section 3.03(a).

 

(b)     In determining any amount provided for in this Section 3.03, the Lender
shall use commercially reasonable averaging and attribution methods. If the
Lender makes a claim under this Section, it shall submit to the Borrower a
certificate setting forth the basis for such demand and a description of the
computation of such demand as to such additional or increased cost or reduction,
which certificate shall be conclusive absent manifest error.

 

(c)     If the Lender submits a demand to the Borrower to pay any additional
amounts pursuant to this Section 3.03, the Borrower may elect, in its sole
discretion, to prepay the Loan in full. Borrower shall notify the Lender in
writing of such election no later than 30 days following its receipt of such
demand and shall specify in such notice the date upon which such prepayment
shall be made which shall not be later than 60 days following the date of the
Lender’s demand. Prepayment pursuant to this Section 3.03 shall be made together
with interest accrued and unpaid on the Loans to date of prepayment and all
other amounts then payable to the Lender hereunder, but shall not be subject to
any prepayment amount pursuant to Section 3.02.

 

Article IV.     
INTEREST; EXPENSES; MAKING OF PAYMENTS

 

Section 4.01     Interest Rate.

 

(a)      The Loans shall bear interest consisting of Fixed Interest, which shall
be paid in cash as provided in this Section 4.01.

 

 
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(b)     All interest hereunder in respect of Fixed Interest shall be computed on
the basis of a 360-day year of twelve 30-day months.

 

(c)     Except as otherwise expressly provided in Section 4.03, accrued Fixed
Interest shall be paid in cash to the Lender by payment at the Lender
Concentration Account; provided that if the payments in respect of the Royalty
Interest for the applicable Interest Period are insufficient to pay all amounts
of Fixed Interest due on the Loan for such Interest Period (any such deficiency,
the “Deficiency Amount”), then any such Deficiency Amount shall increase the
outstanding principal amount of the Loan by an amount equal to the Deficiency
Amount for the applicable Interest Period (rounded up to the nearest whole
dollar) and the Lender shall be deemed to have made an additional term loan in a
principal amount equal to the aggregate amount of the Deficiency Amount (such
additional term loan, “Accreted Principal”). Accreted Principal shall be deemed
to be part of the Loan made to Borrowers for all purposes under this Agreement,
and the Loan shall bear interest on such increased principal amount from and
after the applicable Interest Payment Date in accordance with this Section 4.01.
Accrued Fixed Interest on the Loan shall be payable by Borrower to the Lender in
arrears on each Interest Payment Date for the Loan commencing with the first
Interest Payment Date occurring after the funding of the Loan; provided that in
the event of any repayment or prepayment of the Loan (including, without
limitation, principal payments due under Section 3.01), accrued Fixed Interest
on the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment.

 

(d)     Prior to an Event of Default and acceleration of the Loan, Fixed
Interest on the Loan (other than in connection with voluntary prepayment of the
Loan and excluding any prepayment premium pursuant to Section 3.02) shall be
payable solely from payments in respect of the Royalty Interest.

 

Section 4.02     Blocked Account. On or before the Initial Funding Date or such
later date as the Parties may agree, the Parties shall enter into a Blocked
Account Control Agreement with the Account Bank, which Blocked Account Control
Agreement will provide for, among other things, the establishment and
maintenance of a Blocked Account in accordance with the terms herein and
therein.

 

(a)     The Lender Concentration Account shall be established and maintained
solely for the benefit of the Lender, subject to the terms and conditions of
this Agreement. The Lender shall have immediate and full access to any funds
held in the Lender Concentration Account and such funds shall not be subject to
any conditions or restrictions whatsoever.

 

(b)     Sweeps from the Blocked Account shall be made to the Lender
Concentration Account on each Interest Payment Date, and shall be applied (in
accordance with Article III and this Article IV) to interest accrued and, as
appropriate, principal outstanding, on the Loan on the same Business Day as such
funds are credited to the Lender Concentration Account, all pursuant to a
calculation of such amounts provided to the Account Bank and the Borrower by the
Lender. Funds in the Blocked Account identified by the Lender as funds not to be
swept to the Lender Concentration Account, shall be transferred by the Account
Bank to such account as the Borrower shall designate, provided that funds
deposited by Borrower pursuant to Section 4.02(c) shall be available for
withdrawal by the Account Bank.

 

 
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(c)     Borrower shall pay for all fees, expenses and charges of the Account
Bank by depositing sufficient funds into the Blocked Account when such fees,
expenses and charges are due.

 

(d)     Borrower shall, not later than the date of execution of the Blocked
Account Control Agreement (i) instruct the Licensee in writing (with detailed
wire instructions) to remit to the Blocked Account when due all payments that
are due and payable to Borrower in respect of or derived from the License
Agreement and (ii) promptly provide to the Lender a copy of such notification.

 

(e)     Borrower shall have no right to terminate the Blocked Account without
the Lender’s prior written consent. Any such consent, which the Lender may grant
or withhold in its sole discretion, shall be subject to the satisfaction of each
of the following conditions to the satisfaction of the Lender:

 

(i)     the successor Account Bank shall be acceptable to the Lender;

 

(ii)     the Lender, the Borrower and the successor Account Bank shall have
entered into a deposit account control agreement substantially in the form of
the Blocked Account Control Agreement initially entered into;

 

(iii)     all funds and items in the accounts subject to the Blocked Account
Control Agreement to be terminated shall be transferred to the new accounts held
at the successor Account Bank prior to the termination of the then existing
Blocked Account; and

 

(iv)     Borrower and the Lender shall have received evidence that the Licensee
has been instructed to remit all future payments to the new account held at the
successor Account Bank.

 

(f)     Borrower shall make prepayments made in accordance with Section 3.02 by
wire transfer or by an Automated Clearing House transfer to the Lender
Concentration Account.

 

(g)     In the event at any time following the execution of the Blocked Account
Control Agreement by all parties thereto, the Licensee remits any payments
directly to Borrower or otherwise except to the Blocked Account, Borrower shall
immediately (i) remit any such payments to the Blocked Account (or, if for some
reason such account is no longer in effect or payment cannot be made into such
account, Borrower shall remit such payments by wire transfer or by an Automated
Clearing House transfer of immediately available funds directly to the Lender
Concentration Account), (ii) immediately instruct the Licensee in writing to
remit any future payments to the Blocked Account and (iii) promptly provide to
Lender a copy of such notice.

 

(h)     Any payments, other than from funds paid to the Lender from the Lender
Concentration Account, to be made by the Borrower to the Lender hereunder or
under any other Transaction Document shall be made by wire transfer or by an
Automated Clearing House transfer of immediately available funds to the Lender
Concentration Account.

 

 
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Section 4.03     Interest on Late Payments. If any amount payable by Borrower to
the Lender hereunder is not paid when due (whether at stated maturity, by
acceleration or otherwise), interest shall accrue on any such unpaid amounts,
both before and after judgment during the period from and including the
applicable due date, to but excluding the day the overdue amount is paid in
full, at a rate per annum equal to the Default Rate. Interest accruing under
this Section 4.03 shall be payable on demand of the Lender. For the avoidance of
doubt, Fixed Interest that is not paid in cash on the date due but that is added
to the principal amount of the Loan as Accreted Principal in accordance with
Section 4.01(c) shall accrue Fixed Interest from the date at which it is
incorporated as Accreted Principal and shall thereafter accrue interest at the
Default Rate in the event that the principal amount of the Loan generally bears
interest at the Default Rate.

 

Section 4.04     Initial Expenses. Borrower shall pay to the Lender, on the
Initial Funding Date as provided in Section 2.03, the Lender Expense Amount,
which shall serve as payment for confirmatory due diligence and legal
documentation expenses of the Lender associated with the execution and delivery
of this Agreement as of the Closing Date.

 

Section 4.05     Administration and Enforcement Expenses. Borrower shall
promptly reimburse the Lender on demand for all reasonable costs and expenses
incurred by the Lender (including the reasonable fees and expenses of one
outside counsel to the Lender) as a consequence of or in connection with any
Default, Event of Default, Prepayment Trigger or voluntary or mandatory
prepayment of the Loan.

 

Section 4.06     Making of Payments. Notwithstanding anything to the contrary
contained herein, any Payment stated to be due hereunder or under any Note on a
given day in a specified month shall be made or shall end (as the case may be),
(i) if there is no such given day or corresponding day, on the last Business Day
of such month or (ii) if such given day or corresponding day is not a Business
Day, on the next succeeding Business Day.

 

Section 4.07     Setoff or Counterclaim. Each payment by Borrower under this
Agreement or under any Note shall be made without setoff or counterclaim. The
Lender shall have the right to set off any and all amounts owed by Borrower
and/or any of its Subsidiaries under this Agreement as provided in Section
10.03.

 

Article V.     
TAXES

 

Section 5.01     Taxes.

 

(a)     Except as otherwise required by Law, any and all payments by Borrower
under this Agreement or any other Loan Document (including payments with respect
to the Loan) shall be made free and clear of and without deduction for any and
all present and future Taxes. If Borrower or any other applicable withholding
agent shall be required by applicable Law to deduct any Indemnified Taxes from
or in respect of any sum payable to a Lender under this Agreement or any other
Loan Document, (i) the sum payable by Borrower shall be increased as necessary
so that after all required deductions have been made by the applicable
withholding agent (including deductions applicable to additional sums payable
under this Section 5.01(a)), the Lender receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the applicable
withholding agent shall make such deductions and (iii) the applicable
withholding agent shall timely pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable Law.

 

 
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(b)     Any Lender that is entitled to an exemption from or reduction of
withholding Tax with respect to payments made under any Loan Document shall
deliver to the Borrower, at the time or times reasonably requested by the
Borrower, such properly completed and executed documentation reasonably
requested by the Borrower as will permit such payments to be made without
withholding or at a reduced rate of withholding. In addition, any Lender, if
reasonably requested by the Borrower, shall deliver such other documentation
prescribed by applicable Law or reasonably requested by the Borrower as will
enable the Borrower to determine whether or not such Lender is subject to backup
withholding or information reporting requirements.

 

(c)     Without limiting the generality of the foregoing, if a Lender is a
Foreign Lender, then such Lender shall provide to Borrower (i) in the case of a
Foreign Lender claiming exemption from U.S. federal withholding tax under
Section 871(h) or 881(c) of the Code with respect to payments of “portfolio
interest,” (x) two accurate and complete original signed copies of IRS Form
W-8BEN-E or W-8BEN (or a successor form) properly completed and duly executed by
such Foreign Lender and (y) a certificate to the effect that such Foreign Lender
is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B)
a “10 percent shareholder” of Borrower within the meaning of Section
881(c)(3)(B) of the Code or (C) a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code, (ii) if the payments receivable by the Foreign
Lender are effectively connected with the conduct of a trade or business in the
United States, two accurate and complete original signed copies of IRS
applicable Form W-8 (or a successor form), (iii) in the case of a Foreign Lender
that is entitled to benefits under an income tax treaty to which the United
States is a party that reduces the rate of withholding tax on payments of
interest, two accurate and complete original signed copies of IRS Form W-8BEN-E
or W-8BEN (or a successor form) indicating that such Foreign Lender is entitled
to receive payments under this Agreement and the Notes with reduced or no
deduction of any United States federal income withholding tax or (iv) in the
case of a Foreign Lender acting as an intermediary, two accurate and complete
original signed copies of IRS Form W-8IMY (or a successor form), accompanied by
original signed copies of IRS Form W-8BEN-E or W-8BEN and/or other statement or
certification documents from each beneficial owner, as applicable. Such forms
shall be delivered by such Foreign Lender on or prior to the date that it
becomes a Lender under this Agreement, at any time thereafter when a change in
the Foreign Lender’s circumstances renders an existing form obsolete or invalid
or requires a new form to be provided, and within fifteen Business Days after a
reasonable written request of Borrower from time to time thereafter.
Notwithstanding any other provision of this Section 5.01(c), no Foreign Lender
shall be required to deliver any form pursuant to this Section 5.01(c) that such
Foreign Lender is not legally eligible to deliver.

 

 
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(d)     Each Lender that is not a Foreign Lender shall provide two properly
completed and duly executed copies of Form W-9 (or successor form) at the times
specified for delivery of forms under Section 5.01(c).

 

(e)     Each Lender having assigned its rights and obligations hereunder in
whole or in part shall collect from such assignee the documents described in
Sections 5.01(c) and (d) as applicable.

 

Section 5.02     Receipt of Payment. Within thirty days after the date of any
payment of Taxes withheld by Borrower in respect of any payment to the Lender,
Borrower shall furnish to the Lender the original or a certified copy of a
receipt evidencing payment thereof or other evidence reasonably satisfactory to
the Lender.

 

Section 5.03     Other Taxes. Borrower shall promptly pay any registration or
transfer taxes, stamp duties or similar levies, and any penalties or interest
that may be due with respect thereto, that may be imposed in connection with the
execution, delivery, registration or enforcement of this Agreement, the Note
issued hereunder or any other Transaction Document or the filing, registration,
recording or perfecting of any security interest contemplated by this Agreement,
except any such Taxes with respect to an assignment by a Lender that are imposed
as a result of a present or former connection between such Lender and the
jurisdiction imposing such Tax (other than any connection arising solely from
such Lender having executed, delivered, enforced, become a party to, performed
its obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to, and/or enforced,
any Loan Documents) (“Other Taxes”).

 

Section 5.04     Indemnification. If the Lender pays any Taxes that Borrower is
required to pay pursuant to this Article V, Borrower shall indemnify the Lender
on demand in full in the currency in which such Taxes are paid (including any
Taxes imposed by any jurisdiction on amounts payable under this Section 5.04),
whether or not such Taxes were correctly or legally asserted, together with
interest thereon from and including the date of payment to, but excluding, the
date of reimbursement at the Default Rate and reasonable expense arising
therefrom. A certificate of an affected Lender claiming any compensation under
this Section 5.04, setting forth the amounts to be paid thereunder and delivered
to Borrower, shall be conclusive, binding and final for all purposes, absent
manifest error.

 

Section 5.05     Registered Obligation.

 

(a)     Borrower shall establish and maintain, at its address referred to in
Section 12.03, (i) a Register in which Borrower agrees to register by book entry
the interests (including any rights to receive payment hereunder) of the Lender
in the Loans, each of its obligations under this Agreement to participate in the
Loans, and any assignment of any such interest, obligation or right, and
(ii) accounts in the Register in accordance with its usual practice in which it
shall record (1) the names and addresses of the Lender(s) (and each change
thereto pursuant to Sections 12.01 and 12.02), (2) the amount of the Loans
described in clause (i) above, (3) the amount of any principal or interest due
and payable or paid, and (4) any other payment received and its application to
the Loan.

 

 
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(b)     Notwithstanding anything to the contrary contained in this Agreement or
elsewhere, the Loans (including any Note evidencing such Loan) are registered
obligations, the right, title and interest of the Lender and its assignees in
and to such Loans shall be transferable only upon notation of such transfer in
the Register and no assignment thereof shall be effective until recorded
therein. This Section 5.05 and Sections 12.01 and 12.02 shall be construed so
that the Loans are at all times maintained in “registered form” within the
meaning of Section 5f.103-1(c) of the U.S. Treasury Regulations, Sections
163(f), 871(h)(2) and 881(c)(2) of the Code and any related regulations (and any
successor provisions). The Lender shall cooperate with Borrower in all respects,
notwithstanding anything else whether in the Loan Documents or otherwise and
including, but not limited to, providing appropriate information, so that the
Loan shall be maintained in such registered form.

 

Section 5.06     Tax Treatment.

 

(a)     For U.S. federal income and applicable state and local income tax
purposes, the Parties shall treat the Loan Documents and the Notes as debt that
is subject to the “contingent payment debt instrument” rules of Treasury
Regulation Section 1.1275-4. Each Party agrees not to take any position that is
inconsistent with the provisions of this Section 5.06(a) on any tax return or in
any audit or other administrative or judicial proceeding unless (i) each other
Party has consented to such actions; or (ii) as a result of a material change in
applicable Law following the date of this Agreement, counsel for such Party has
advised it in writing that it is more likely than not (x) that there is no
“reasonable basis” (within the meaning of Treasury Regulation Section
1.6662-3(b)(3)) for the position specified in this Section 5.06(a) or (y) that
taking such a position would, notwithstanding compliance with all applicable
reporting requirements and disclosure obligations, otherwise subject such Party
to penalties under the Code.

  

(b)     The Initial Tranche Disbursement Amount and Subsequent Tranche
Disbursement Amount, if any, shall be treated as original issue discount with
respect to the Initial Tranche Loan and Subsequent Tranche Loan, respectively,
for U.S. federal income and applicable state and local income tax purposes.

 

(c)     This Agreement is not intended to create a deemed partnership,
association or joint venture between or among Lender and/or Borrower or any
Subsidiary. Each Party agrees not to refer to the other as a “partner” or the
relationship as a “partnership” or “joint venture”.

 

 
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Section 5.07     AHYDO Catchup Payment Notwithstanding anything to the contrary
herein, commencing with the first “accrual period” (defined for purposes of the
Code) following the fifth (5th) anniversary of the Closing Date and continuing
with each subsequent accrual period thereafter, the Borrower shall pay in cash,
on or before the end of such accrual period, an amount equal to the sum of any
accrued and unpaid interest and the accrued and unpaid original issue discount,
with respect to the Loan, if, but only to the extent that, the sum of the amount
of the interest and the original issue discount, in each case that has accrued
and not been paid in cash from the Closing Date, exceeds the product of (i) the
“issue price” (as defined in Section 1273(b) and 1274(a) of the Code) of the
Loan and (ii) the “yield to maturity” (interpreted in accordance with Section
163(i) of the Code) of the Loan (such payment, the “AHYDO Catch-Up Payment”).
The amount of such payment shall be treated as an amount of interest to be paid
(within the meaning of Section 163(i)(2)(B)(i) of the Code) under this
Agreement. This provision is intended to prevent the obligations created
pursuant to this Agreement from being classified as “applicable high yield
discount obligations,” as defined in Section 163(i) of the Code, and shall be
interpreted consistently therewith.

 

Article VI.     
CLOSING CONDITIONS

 

Section 6.01     Conditions Precedent to the Initial Tranche Loan. The
obligation of the Lender to advance the Initial Tranche Loan on the Initial
Funding Date shall be subject to the fulfillment, to the sole satisfaction of
the Lender, of all of the following conditions precedent in addition to the
conditions specified in Section 2.01 and Section 2.02:

 

(a)     Borrower shall have executed and delivered to the Lender the Initial
Tranche Note, dated the Initial Funding Date.

 

(b)     Lender shall have received on or before the Initial Funding Date an
executed copy of:

 

(i)     a certificate of each of the Borrower and the Company, executed
respectively by a Senior Officer thereof, dated the Initial Funding Date,
substantially in the form of Exhibit N hereto; and

 

(ii)     an opinion of Dechert LLP, counsel to Borrower and the Company, dated
the Closing Date, substantially in the form of Exhibit E and otherwise in form
and substance satisfactory to the Lender.

 

(c)     The Borrower and the Contributor shall each have delivered to the Lender
a certificate, dated the Closing Date, of a respective Senior Officer (the
statements in which shall be true and correct on and as of the Initial Funding
Date): (i) attaching copies, certified by such officer as true and complete, of
such party’s certificate of incorporation or other organizational documents
(together with any and all amendments thereto) certified by the appropriate
Governmental Authority as being true, correct and complete copies;
(ii) attaching copies, certified by such officer as true and complete, of
resolutions of the Board of Directors (or similar governing body) of such party
authorizing and approving the execution, delivery and performance by such party
of the Loan Documents to which it is a party and the transactions contemplated
herein and therein; (iii) setting forth the incumbency of the officer of such
party who executed and delivered such Loan Documents, including therein a
signature specimen of each such officer; and (iv) attaching copies, certified by
such officer as true and complete, of certificates of the appropriate
Governmental Authority of the jurisdiction of formation, stating that such party
was in good standing under the laws of such jurisdiction as of the Initial
Funding Date (or a date immediately prior thereto acceptable to the Lender).

 

 
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(d)     This Agreement and the other Loan Documents shall have been executed and
delivered to the Lender by each party thereto (other than the Lender), and the
Borrower shall have delivered, or caused to be delivered, such other documents
as the Lender reasonably requested, in each case, in form and substance
satisfactory to the Lender.

 

(e)     The Transaction Documents shall be in full force and effect.

 

(f)     [RESERVED]

 

(g)     No event shall have occurred and be continuing that (i) constitutes a
Default or an Event of Default or a Prepayment Trigger or (ii) could reasonably
be expected to constitute a Material Adverse Effect (without giving effect to
the cure period applicable to a Prepayment Trigger based thereon), in each case
both at the time of, and immediately after giving effect to, the making of the
Initial Tranche Loan on the Initial Funding Date.

 

(h)     The representations and warranties made by the Borrower in Article VII
hereof and in the other Transaction Documents shall be true and correct in all
material respects as of the Initial Funding Date, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct in all material respects as of such earlier
date, before and after giving effect to the Initial Tranche Loan (except that
any representation or warranty that is qualified as to “materiality” or
“Material Adverse Effect” shall be true and correct in all respects).

 

(i)     All necessary governmental and third-party approvals, consents and
filings, including in connection with the Loan, the Security Agreement and the
other Loan Documents shall have been obtained or made and shall remain in full
force and effect.

 

(j)     Borrower shall have delivered to the Lender certified copies of UCC,
United States Patent and Trademark Office and United States Copyright Office,
tax and judgment lien searches, or equivalent reports or searches, each of a
recent date listing all effective financing statements, lien notices or
comparable documents that name the Borrower as debtor and that are filed in
those state and county jurisdictions in which the Borrower is organized or
maintains its principal place of business and such other searches that the
Lender deems necessary or appropriate, none of which encumber the Collateral
covered or intended to be covered by the Loan Documents (other than any
Permitted Liens and other Liens acceptable to the Lender).

 

(k)     The Lender shall have received all UCC financing statements in
appropriate form for filing under the UCC, and all other certificates,
agreements, instruments, filings, recordings and other actions that are
necessary or reasonably requested by the Lender in order to establish, protect,
preserve and perfect the security interest in the assets of Borrower
constituting Collateral as provided in the Security Agreement as a valid and
perfected first priority security interest with respect to such assets shall
have been duly effected (or arrangements therefor satisfactory to the Lender
shall have been made).

 

 
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(l)     The Lender shall have received such other approvals, opinions, documents
or materials as the Lender may reasonably request.

 

(m)     The Lender shall have received a copy of, or a certificate as to
coverage under, the insurance policies required by Section 8.05, each of which
shall be endorsed or otherwise amended to include a “standard” or “New York”
lender’s loss payable endorsement and shall name the Lender, as an additional
insured, in form and substance reasonably satisfactory to the Lender.

 

(n)     The Lender shall have completed its due diligence investigation, the
results of which shall be satisfactory to the Lender in its sole discretion. The
Lender shall have received all documentation and other information required by
bank regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including without limitation, the Patriot Act,
including and the information described in Section 12.18.

 

Section 6.02     Conditions Precedent to the Subsequent Tranche Loan. The
obligation of the Lender to advance the Subsequent Tranche Loan on the
Subsequent Funding Date shall be subject to the fulfillment, to the sole
satisfaction of the Lender, of all of the following conditions precedent in
addition to the conditions specified in Section 2.01 and Section 2.02:

 

(a)     The Borrower shall have executed and delivered to the Lender the
Subsequent Tranche Note evidencing the Subsequent Tranche Loan, dated the
Subsequent Funding Date.

 

(b)     No event shall have occurred and be continuing that constitutes a
Default, an Event of Default or a Prepayment Trigger under this Agreement and no
such event shall occur or shall have occurred by reason of the making of the
Subsequent Tranche Loan.

 

(c)     The representations and warranties made by the Borrower in Article VII
hereof and in the other Transaction Documents shall be true and correct in all
material respects as of the Subsequent Funding Date, except to the extent that
such representations and warranties specifically refer to an earlier date, in
which case they shall be true and correct in all material respects as of such
earlier date, before and after giving effect to the Subsequent Tranche Loan
(except that any representation or warranty that is qualified as to
“materiality” or “Material Adverse Effect” shall be true and correct in all
respects).

 

(d)     The License Agreement shall be in full force and effect, no default in
the payment of any amount in respect of the Royalty Interest or other amounts
payable thereunder shall have occurred, no amendment, supplement or modification
thereof shall have been made since the Initial Funding Date and no notice shall
have been given or received with respect to effecting a termination or
cancellation thereof.

 

 
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(e)     The Borrower shall provide a certificate signed by a Senior Officer of
the Borrower certifying that the conditions in clauses (a), (b), (c) and (d)
above have been satisfied.

 

 

 

Article VII.     
REPRESENTATIONS AND WARRANTIES

 

Section 7.01     Representations and Warranties of Borrower(a)     . The
Borrower hereby represents and warrants to the Lender as of the date of this
Agreement, as of the Initial Funding Date and as of the Subsequent Funding Date
(except for any representations and warranties which speak as to a specific
date, which representations and warranties shall be made as of the date
specified) as follows:

 

(a)     Borrower (i) is a limited liability company duly formed, validly
existing and in good standing under the Laws of its jurisdiction of formation;
(ii) has all necessary powers, licenses, authorizations, consents and approvals
required to carry on its business as now conducted and to own, lease, license
and dispose of its assets and properties; and (iii) is duly qualified to do
business as a foreign limited liability company, and is in good standing, in
every jurisdiction except where the failure to be so qualified or in good
standing has not had, and could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.

 

(b)     Schedule 7.01(b) contains a complete and accurate list of each
jurisdiction in which Borrower is authorized to do business.

 

(c)     Borrower has all necessary power and authority to enter into, execute
and deliver this Agreement and the other Transaction Documents to which it is a
party or by which it is bound and to perform all of the obligations to be
performed by it hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby.

 

(d)     The execution, delivery, and performance of this Agreement and the other
Transaction Documents to which it is a party have been duly authorized by the
Borrower by all necessary limited liability company action; the Borrower has and
will have the power and authority to acquire and will have acquired whatever
right title and interest in the Transferred Assets as was conveyed to it by the
Contributor pursuant to the Contribution Agreement. This Agreement and each
other Loan Document to which Borrower is a party has been duly authorized,
executed and delivered by Borrower and constitutes, and each of the other
Transaction Documents, when executed and delivered by Borrower, will constitute,
the valid and binding obligation of Borrower, enforceable against Borrower 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 (regardless of
whether enforcement is sought in equity or at law).

 

 
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(e)     (i)     The consummation of the transactions contemplated by and the
fulfillment by the Borrower of the terms of this Agreement and the other
Transaction Documents to which it is a party will not conflict with, result in
any breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time or both) a default under, the Borrower Party Documents,
or any material term of any agreement or other instrument to which the Borrower
is a party or by which it is bound, or result in the creation or imposition of
any Lien upon any of its properties pursuant to the terms of any such agreement
or other instrument, other than Permitted Liens, or violate any law or any
order, rule, or regulation applicable to the Borrower of any court or of any
federal or state regulatory body, administrative agency, or other Governmental
Authority having jurisdiction over the Borrower.

 

(ii)     None of the execution and delivery by Borrower of the Transaction
Documents, the performance by Borrower of any of the obligations to be performed
by it hereunder or thereunder, or the consummation by Borrower of any of the
transactions contemplated hereby or thereby, will require any notice to, action,
approval or consent by, or in respect of, or filing or registration with, any
Governmental Authority or other Person, except (i) filings necessary to perfect
Liens created by the Transaction Documents and (ii) any filings required to be
made by the Company with the SEC.

 

(f)     No consent or approval of, or notice to, any Person is required by the
terms of any Material Contract to which the Borrower is a party for the
execution or delivery of, or the performance of the obligations of the Borrower
under, this Agreement and the other Loan Documents or the consummation of the
transactions contemplated hereby or thereby other than those that have been
obtained and are in full force and effect as of the date this representation is
made, and such execution, delivery, performance and consummation will not result
in any breach or violation of, or constitute a default under the Borrower Party
Documents, any Material Contract to which the Borrower is a Party or any Law
applicable to Borrower, or any of its assets, subject in each case to the
application of Sections 9-406, 9-407 and 9-408 of the Uniform Commercial Code as
then in effect in any relevant jurisdiction.

 

(g)     Upon giving effect to the contribution under the Contribution Agreement
and the Progenics Sublicense, Borrower is, and at all times from and after the
Closing Date has been, the exclusive owner of the entire right, title (legal and
equitable) and interest (subject to Permitted Liens) in and to all property
(including the Borrower’s interest as a party to agreements or instruments)
described hereunder as Collateral. Borrower has not granted to any Person any
sublicense or other interest (other than the license to the Licensee under the
License Agreement and the security interest under the Security Agreement to the
Lender) under the Progenics Sublicense.

 

(h)     (i) Except as set forth on Schedule 7.01(h), all of the Collateral owned
by Borrower is solely (and not jointly) owned by Borrower and is free and clear
of any and all Liens, except Liens constituting Permitted Liens (other than
Liens described in subclauses (b) or (c) of the definition of Permitted Liens).
The Royalty Interest and all of the rights of Borrower under the License
Agreement described hereunder as Collateral are free and clear of any and all
Liens, except those Liens created in favor of Lender pursuant to the Loan
Documents.

 

 
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(ii)     The Borrower owns, and is entitled to be the sole recipient of, all
payments in respect of the Royalty Interest. The Borrower owns, and is the sole
holder of, and/or has and holds a valid, enforceable and subsisting license to,
all Intellectual Property required (and no other assets are required by
Borrower) to receive any payments in respect of the Royalty Interest from the
Licensee pursuant to, and subject to the terms of, the License Agreement. The
Borrower has not transferred, sold, or otherwise disposed of, or agreed to
transfer, sell, or otherwise dispose of any portion of its respective rights to
receive payments in respect of the Royalty Interest or other payments payable to
the Borrower under the License Agreement other than the grant of the security
interest therein to the Lender pursuant to the Loan Documents.

 

(i)     There are no actions, proceedings or claims pending or, to the Knowledge
of Borrower, threatened which could reasonably be expected to have a Material
Adverse Effect or which challenge the validity of any Transaction Document.

 

(j)     No Default, Event of Default or Prepayment Trigger has occurred and is
continuing, and no such event will occur upon the making of the Loan.

 

(k)     (i)     The Borrower is not a party to any Material Contract (other
than, after giving effect to the contribution thereof under the Contribution
Agreement, the License Agreement).

 

(ii)     The License Agreement is in full force and effect and has not been
waived, altered or modified in any respect, whether by consent or otherwise. The
Licensee has not been released, in whole or in part, from any of its obligations
under the License Agreement. The License Agreement has not been satisfied in
full, discharged, canceled, terminated, subordinated or rescinded, in whole or
in part. The License Agreement is the entire agreement among the parties thereto
relating to the subject matter thereof.

 

(iii)     Neither the Borrower nor the Company has received (A) any notice or
other written or, to the Knowledge of Borrower, oral communication of the
Licensee’s intention to terminate the License Agreement in whole or in part, or
(B) any notice or other written or, the Knowledge of the Borrower, oral
communication requesting any amendment, supplement, alteration or modification
to the License Agreement.

 

(iv)     To the Knowledge of the Borrower, nothing has occurred and no condition
exists that would adversely impact the right of the Borrower to receive any
payments payable to Borrower under the License Agreement. Neither the Borrower
nor, to the Knowledge of the Borrower, the Licensee, has taken any action or
omitted to take any action that would adversely impact the right of the Lender
to take a security interest in the License Agreement, the Royalty Interest or
the Progenics License.

 

 
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(v)     To the Knowledge of the Borrowers, all payments required to be made
under the License Agreement have been made. To the Knowledge of the Borrower, no
payment required to be made under the terms of the License Agreement has been
subject to any claim pursuant to any right of rescission, set-off, counterclaim,
reduction or defense.

 

(vi)     The execution, delivery and performance of the License Agreement was
and is within the corporate powers or other organizational power of the Company
and its Affiliates and, to the Knowledge of the Borrower, the Licensee. The
License Agreement was duly authorized by all necessary action on the part of,
and validly executed and delivered by, the Company and its Affiliates and, to
the Knowledge of the Borrower, the Licensee. There is no breach or default, or
event which upon notice or the passage of time, or both, could give rise to any
breach or default, in the performance of the License Agreement by the Borrower,
the Company or its Affiliate or, to the Knowledge of the Borrower, the Licensee,
that could reasonably be expected to have a Material Adverse Effect.

 

(vii)     Except as otherwise expressly provided under the License Agreement,
the Licensee has no right of set-off, rescission, counterclaim, reduction,
deduction or defense against the Royalty Interest or any other amounts payable
to the Borrower thereunder.

 

(l)     All written information heretofore or herein supplied by or on behalf of
Borrower or the Company to the Lender is accurate and complete in all material
respects. All written information heretofore or herein produced by any Third
Party and supplied by or on behalf of Borrower to the Lender is, to the
Knowledge of the Borrower, true, accurate and complete in all material respects.
There is no fact or circumstance known to Borrower that could reasonably be
expected to have a Material Adverse Effect that has not been expressly disclosed
in this Agreement. All representations and warranties made by the Borrower in
any of the other Loan Documents to which it is party are true and correct in all
material respects.

 

(m)     (i)     The Borrower is not insolvent under the Bankruptcy Law and will
not be rendered insolvent under the Bankruptcy Law by the transactions
contemplated by this Agreement or the other Transaction Documents; the Borrower
is paying its debts as they become due; and, after giving effect to the
transactions contemplated hereby, will have adequate capital to conduct its
business.

 

(ii)     After giving effect to the making of the Initial Tranche Loan or the
Subsequent Tranche Loan, as the case may be:

 

 

(a)

The aggregate value of the assets of Borrower, at fair value and present fair
salable value, exceeds (i) its Liabilities and (ii) the amount required to pay
such Liabilities as they become absolute and matured in the normal course of
business;

 

 
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(b)

Borrower has the ability to pay its debts and Liabilities as they become
absolute and matured in the normal course of business; and

 

 

(c)

Borrower does not have an unreasonably small amount of capital with which to
conduct its business.

 

(n)     Borrower has no Subsidiaries.

 

(o)     Borrower’s principal place of business and chief executive office is set
forth on Schedule 7.01(o).

 

(p)     (i) Borrower is in compliance with all applicable Laws except where the
failure to be in compliance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. To the Borrower’s
Knowledge, no prospective change in any applicable laws, rules, ordinances or
regulations has been proposed or adopted which, when made effective, could
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

(ii)     Borrower or the Company has all required permits and licenses for
Borrower’s performance of the obligations undertaken by Borrower under the
License Agreement.

 

(iii)     To the Knowledge of Borrower, there has been no indication that the
FDA or any other Regulatory Agency has any material concerns with the Product or
may withdraw approval of the Product, nor, to the Knowledge of Borrower, has any
clinical trial produced any results raising safety concerns with respect to the
Product.

 

(q)     The Borrower is not an “investment company”, or a company “controlled”
by an “investment company”, within the meaning of the Investment Company Act of
1940.

 

(r)     Borrower has timely filed all tax returns required to be filed by it and
has paid all taxes due reported on such returns or pursuant to any assessment
received by Borrower (which may be by inclusion in a tax return of the Company).

 

(s)     Neither Borrower nor its ERISA Affiliates has outstanding or expects to
incur any material unsatisfied liability under Title IV or Section 302 of ERISA
or Section 412 of the Code. Neither Borrower nor any ERISA Affiliate sponsors,
maintains, contributes to or has any obligation to contribute to, nor within the
past six years has sponsored, maintained, contributed to or had any obligation
to contribute to, any Plan. Assuming that no assets of Lender are or are deemed
to be Plan Assets, the consummation of the transactions contemplated by this
Agreement will not constitute or result in any non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code. The Borrower has no
employees and does not sponsor, maintain or contribute to any employee benefit
plan (as defined in Section 3(3) of ERISA) whether or not subject to ERISA.
Neither Borrower nor any of its ERISA Affiliates has any liability with respect
to any employee benefit plan that could, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

 
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(t)     The Security Agreement is effective to create in favor of the Lender,
legal, valid and enforceable (subject to bankruptcy, insolvency, reorganization,
moratorium or similar Laws affecting creditors’ rights generally or general
equitable principles, regardless of whether enforcement is sought in equity or
at law) Liens on, and security interests in, the Collateral and, when
(x) financing statements and other filings in appropriate form are filed in the
offices specified on Schedule 7.01(v) and (y) upon the taking of possession or
control by the Lender of the Collateral with respect to which a security
interest may be perfected only by possession or control (which possession or
control shall be given to the Lender to the extent possession or control by the
Lender is required by the Security Agreement), the Liens created by the Security
Agreement shall constitute fully perfected Liens on, and security interests in,
all right, title and interest of the Borrower in the Collateral, to the extent a
security interest in the Collateral can be perfected by the making of such
filings or the taking of possession or control, in each case subject to no Liens
other than Permitted Liens.

 

(u)     [RESERVED].

 

(v)     [RESERVED].

 

(w)     The claims and rights of the Lender created by this Agreement and any
other Transaction Document in and to the Collateral will be senior to any
Indebtedness or other obligation of the Borrower, with respect to such
Collateral.

 

(x)     No Capital Stock has been issued by the Borrower other than the Capital
Stock issued to the Company that is subject to the pledge to the Lender under
the Stock Pledge Agreement.

 

(y)     Borrower is covered as an additional insured under the insurance
policies with the coverages and limits set forth on Schedule 7.02(yy), carried
with the insurance companies also set forth therein, and such policies cover the
interest of the Lender as required under this Agreement.

 

Section 7.02     Representations and Warranties as to Company, Etc.. The
Borrower hereby represents and warrants to the Lender as of the date of this
Agreement, as of the Initial Funding Date and as of the Subsequent Funding Date
(except for any representations and warranties which speak as to a specific
date, which representations and warranties shall be made as of the date
specified), with respect to the Company, its Affiliates, and other matters, as
follows:

 

(a)     The Company (i) is a corporation duly incorporated, validly existing and
in good standing under the Laws of its jurisdiction of incorporation; (ii) has
all necessary powers, licenses, authorizations, consents and approvals required
to carry on its business as now conducted and to own, lease, license and dispose
of its assets and properties; and (iii) is duly qualified to do business as a
foreign corporation, and is in good standing, in every jurisdiction except where
the failure to be so qualified or in good standing has not had, and could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

 

 
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(b)     Schedule 7.02(b) contains a complete and accurate list of each
jurisdiction in which the Company is authorized to do business.

 

(c)     The Company has all necessary power and authority to enter into, execute
and deliver the Transaction Documents to which it is a party or by which it is
bound and to perform all of the obligations to be performed by it thereunder and
to consummate the transactions contemplated thereby.

 

(d)     Each Transaction Document to which the Company is a party has been duly
authorized, executed and delivered by the Company and constitutes, or when
executed and delivered by the Company will constitute, the valid and binding
obligation of the Company, enforceable against the Company 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 (regardless of whether enforcement is sought in
equity or at law).

 

(e)     None of the execution and delivery by the Company of the Transaction
Documents to which it is a party, the performance by the Borrower of any of the
obligations to be performed by it thereunder, or the consummation by the Company
of any of the transactions contemplated thereby, will require any notice to,
action, approval or consent by, or in respect of, or filing or registration
with, any Governmental Authority or other Person, except (i) filings necessary
to perfect Liens created by the Transaction Documents and (ii) any filings
required to be made by the Company with the SEC.

 

(f)     No consent or approval of, or notice to, any Person is required for the
execution or delivery of, or the performance of the obligations of the Company
under the Transaction Documents to which it is a party or the consummation of
the transactions contemplated hereby or thereby other than those that have been
obtained and are in full force and effect as of the date this representation is
made, and such execution, delivery, performance and consummation will not result
in any breach or violation of, or constitute a default under the any Contract to
which it is a party or any Law applicable to the Company, or any of its assets,
subject in each case to the application of Sections 9-406, 9-407 and 9-408 of
the Uniform Commercial Code as then in effect in any relevant jurisdiction.

 

(g)     The Company or its Affiliates have been the exclusive owners of the
entire right, title (legal and equitable) and interest (subject to the rights of
licensors and/or licensees) in and to the License Agreement, any Intellectual
Property owned by the Company or its Affiliates and covered by the Progenics
Sublicense, or the Capital Stock of Borrower, except for the interest of the
Licensee pursuant to the License Agreement (in the case of Intellectual
Property) and as pledged or assigned to the Lender pursuant to the Transaction
Documents to which the Company is a party.

 

(h)     (i) Except as set forth on Schedule 7.02(h), all of the assets referred
to in Section 7.02(g) are owned by the Company or its Affiliates solely (and not
jointly) and are free and clear of any and all Liens, except those (x) Liens
created in favor of Lender pursuant to the Transaction Documents to which the
Company is a party and (y) Liens consisting of rights of any Third Party
licensee of Intellectual Property or other assets covered under the Progenics
Sublicense. The Royalty Interest and all of the rights being contributed to
Borrower under the Contribution Agreement are free and clear of any and all
Liens, except those Liens created in favor of Lender pursuant to the Loan
Documents and the Liens referred to in subclause (y) of the preceding sentence.

 

 
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(ii)     Before giving effect to the contribution of the License Agreement to
the Borrower, the Company owns, and is entitled to be the sole recipient of, all
payments in respect of the Royalty Interest. The Company or its Affiliates own,
and are the sole holders of, and/or have and hold a valid, enforceable and
subsisting license to, all Intellectual Property that is required to receive any
payments in respect of the Royalty Interest from the Licensee pursuant to, and
subject to the terms of the License Agreement. Before giving effect to the
contribution of the License Agreement to the Borrower pursuant to the terms of
the Contribution Agreement, the Company has not transferred, sold, or otherwise
disposed of, or agreed to transfer, sell, or otherwise dispose of any portion of
its respective rights to receive payments in respect of the Royalty Interest or
other payments under the License Agreement .

 

(i)     There are no actions, proceedings or claims pending or against the
Company or any of its Affiliates, or to the Knowledge of the Company, threatened
which could reasonably be expected to have a Material Adverse Effect or which
challenge the validity of any Transaction Document.

 

(j)     No Default, Event of Default or Prepayment Trigger has occurred and is
continuing, and no such event will occur upon the making of the Loan.

 

(k)     (i)     With respect to each Material Contract (a) each such Contract is
a valid and binding agreement and each such Contract is in full force and
effect, and (b) the Company is in compliance with each such Material Contract
and has no Knowledge of any default by the Company under any such Material
Contract which could give rise to any termination right of the applicable
Contract Party which default has not been cured or waived. Schedule 7.02(k) is a
list of all Material Contracts to which the Company or its Affiliates are party.

 

(ii)     The License Agreement is in full force and effect and has not been
waived, altered or modified in any respect, whether by consent or otherwise. The
Licensee has not been released, in whole or in part, from any of its obligations
under the License Agreement. The License Agreement has not been satisfied in
full, discharged, canceled, terminated, subordinated or rescinded, in whole or
in part. The License Agreement is the entire agreement among the parties thereto
relating to the subject matter thereof.

 

(iii)     The Company has not received (A) any notice or other written or, to
the Knowledge of the Company, oral communication of the Licensee’s intention to
terminate the License Agreement in whole or in part, or (B) any notice or other
written or, the Knowledge of the Company, oral communication requesting any
amendment, supplement, alteration or modification to the License Agreement.

 

 
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(iv)     To the Knowledge of the Company, nothing has occurred and no condition
exists that would adversely impact the right of the Company to receive any
payments payable under the License Agreement. Neither the Company nor, to the
Knowledge of the Company, the Licensee, has taken any action or omitted to take
any action that would adversely impact the right of the Lender to take a
security interest in the License Agreement, the Royalty Interest or the
Progenics Sublicense or of the Borrower to receive payment of the Royalty
Interest as and when due under the License Agreement .

 

(v)     To the Knowledge of the Company, no payment required to be made under
the terms of the License Agreement has been subject to any claim pursuant to any
right of rescission, set-off, counterclaim, reduction or defense.

 

(vi)     The execution, delivery and performance of the License Agreement was
and is within the corporate powers or other organizational power of the Company
and its Affiliates and, to the Knowledge of the Company, the Licensee. The
License Agreement was duly authorized by all necessary action on the part of,
and validly executed and delivered by, the Company and its Affiliates and, to
the Knowledge of the Company, the Licensee. There is no breach or default, or
event which upon notice or the passage of time, or both, could give rise to any
breach or default, in the performance of the License Agreement by the Company or
its Affiliate or, to the Knowledge of the Company, the Licensee, that could
reasonably be expected to have a Material Adverse Effect.

 

(vii)     Except as otherwise expressly provided under the License Agreement,
the Licensee has no right of set-off, rescission, counterclaim, reduction,
deduction or defense against the Royalty Interest or any other amounts payable
to the Company thereunder and no event or circumstance that would under the
License Agreement entitle the Licensee to effect any such set-off, rescission,
counterclaim, reduction, deduction or defense has occurred.

 

(l)     All written information heretofore or herein supplied by or on behalf of
the Company to the Lender is accurate and complete in all material respects. All
written information heretofore or herein produced by any Third Party and
supplied by or on behalf of the Company to the Lender is, to the Knowledge of
the Company true, accurate and complete in all material respects. There is no
fact or circumstance known to the Company that could reasonably be expected to
have a Material Adverse Effect that has not been expressly disclosed in this
Agreement or in such written information provided to the Lender. All
representations and warranties made by the Company in any of the other Loan
Documents to which it is party are true and correct in all material respects.

 

 
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(m)     The Financial Statements of the Company (reported on and accompanied by
an unqualified report from the Company’s independent auditor) are complete and
accurate in all material respects, were prepared in conformity with GAAP applied
on a consistent basis during the periods involved (except as may be indicated in
the notes thereto) and present fairly in all material respects, in accordance
with applicable requirements of GAAP, the consolidated financial position and
the consolidated financial results of the operations of the Company and its
Subsidiaries as of the dates and for the periods covered thereby and the
consolidated statements of cash flows of the Company and its Subsidiaries for
the periods presented therein. Since June 30, 2016, there has been no Material
Adverse Effect. The Company and its Subsidiaries have no Indebtedness (or other
Liabilities) other than (i) identified in the Financial Statements or (ii)
incurred by the Company or its Subsidiaries in the ordinary course of business
since June 30, 2016 or (c) otherwise listed and described on Schedule 7.02(m).

 

(n)     After giving effect to the contribution of assets to the Borrower under
the Contribution Agreement on or before the Closing Date:

 

(i)     The aggregate value of the assets of the Company, at fair value and
present fair salable value, exceeds (i) its Liabilities and (ii) the amount
required to pay such Liabilities as they become absolute and matured in the
normal course of business;

 

(ii)     The Company has the ability to pay its debts and Liabilities as they
become absolute and matured in the normal course of business; and

 

(iii)     The Company does not have an unreasonably small amount of capital with
which to conduct its business.

 

(o)     The Company’s Affiliates are identified on Schedule 7.02(o).

 

(p)     The Company’s principal place of business and chief executive office is
set forth on Schedule 7.01(p).

 

(q)     (i) The Company is in compliance with all applicable Laws except where
the failure to be in compliance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. No prospective change
in any applicable laws, rules, ordinances or regulations has been proposed or
adopted which, when made effective, could individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

(ii)     The Company possess all material certificates, authorizations and
permits issued or required by the appropriate federal, state, local or foreign
regulatory authorities, necessary to perform the Company’s obligations under the
License Agreement (and the Borrower’s obligations thereunder on its behalf after
giving effect to the contribution under the Contribution Agreement) and to
conduct its business as presently conducted, including all such certificates,
authorizations and permits required by the FDA or any other federal, state,
local or foreign agencies or bodies engaged in the regulation of pharmaceuticals
or biohazardous substances or materials except where the failure to possess such
certificates, authorizations and permits, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect. The
Company has not received any notice of proceedings relating to, and to the
Knowledge of the Company there are no facts or circumstances that could
reasonably be expected to lead to, the revocation, suspension, termination or
modification of any such certificate, authorization or permit.

 

 
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(iii)     To the Knowledge of the Company, there has been no indication that the
FDA or any other Regulatory Agency has any material concerns with the Product or
may not approve or may withdraw approval of the Product, nor has the Product, to
the Knowledge of the Company, suffered any material adverse events in any
clinical trial.

 

(r)     The Company is not an “investment company”, or a company “controlled” by
an “investment company”, within the meaning of the Investment Company Act of
1940.

 

(s)     The Company has timely filed all tax returns required to be filed by it
and has paid all taxes due reported on such returns or pursuant to any
assessment received by the Company, except for failures to file tax returns or
pay taxes that, individually, and in the aggregate, are not reasonably expected
to result in a Material Adverse Effect. Any charges, accruals or reserves on the
books of the Company in respect of taxes are adequate except for inadequacies
that, individually, and in the aggregate, are not reasonably expected to result
in a Material Adverse Effect. The Company has had no material liability for any
taxes imposed on or with respect to its net income (except for state or local
income or franchise taxes). The Company has fulfilled all its obligations with
respect to withholding taxes except for failures that, individually, and in the
aggregate, are not reasonably expected to result in a Material Adverse Effect.

 

(t)     Neither the Company nor any ERISA Affiliate has outstanding or expects
to incur any material unsatisfied liability under Title IV or Section 302 of
ERISA or Section 412 of the Code. Neither the Company nor any ERISA Affiliate
sponsors, maintains, contributes to or has any obligation to contribute to, nor
within the past six years has sponsored, maintained, contributed to or had any
obligations to contribute to, any Plan. Assuming that no assets of Lender are or
are deemed to be Plan Assets, the consummation of the transactions contemplated
by this Agreement will not constitute or result in any non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code. Neither the
Company nor any of its Affiliates has any employee benefit plan (as defined in
Section 3(3) of ERISA) whether or not subject to ERISA that could, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(u)     Neither the Company nor to the Knowledge of the Company any of its
directors, officers, employees, Affiliates or agents, has taken any action,
directly or indirectly, that would result in a violation by such Persons of the
FCPA, including making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political
office, in contravention of the FCPA. The Company, and, to the Knowledge of the
Company, its Affiliates have conducted their respective businesses in compliance
with the FCPA and have instituted and maintain policies and procedures designed
to ensure, and which are reasonably expected to continue to ensure, continued
compliance therewith.

 

 
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(v)     The Company maintains a system of accounting controls that is sufficient
to provide reasonable assurances that (i) transactions are executed in
accordance with management’s general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.

 

(w)     The Stock Pledge Agreement is effective to create in favor of the
Lender, legal, valid and enforceable (subject to bankruptcy, insolvency,
reorganization, moratorium or similar Laws affecting creditors’ rights generally
or general equitable principles (regardless of whether enforcement is sought in
equity or at law)) Liens on, and security interests in, the Capital Stock of
Borrower, and, when (x) financing statements and other filings in appropriate
form are filed in the offices specified on Schedule 7.02(w) and (y) upon the
taking of possession or control by the Lender of the Capital Stock certificates
(if certificated) with duly executed instruments of transfer in blank, the Liens
created by the Stock Pledge Agreement shall constitute fully perfected Liens on,
and security interests in, all right, title and interest of the Company in the
Capital Stock of the Borrower, subject to no Liens other than Permitted Liens.

 

(x)     The Company owns, and is the sole holder of, and/or has and holds a
subsisting license (which license is to the Company’s Knowledge valid and
enforceable) to, all assets that are required to produce or receive any payments
from any contract party or payor under and pursuant to, and subject to the terms
of any Material Contract. The Company has not transferred, sold, or otherwise
disposed of, or agreed to transfer, sell, or otherwise dispose of any portion of
its respective rights to receive payments in respect of the Royalty Interest or
any other amount owing or to become owing to it under the License Agreement,
other than to Borrower. To the Knowledge of the Company, no Person other than
the Company has any right to receive the payments payable under the License
Agreement, other than, pursuant to and in accordance with the Loan Documents,
the Borrower and the Lender.

 

(y)     The claims and rights of the Lender created by the Stock Pledge
Agreement in and to the Capital Stock of Borrower and by the Security Agreement
in the Collateral, will be senior to any Indebtedness or other obligation of the
Company, with respect to such Collateral.

 

(z)     The Company has good title to, or valid leasehold interests in, all its
tangible personal property material to its business, free and clear of all Liens
(other than Permitted Liens). The tangible personal property of the Company
(i) is in good operating order, condition and repair (ordinary wear and tear and
casualty and condemnation excepted) and (ii) constitutes, together with the
Intellectual Property covered by the Progenics Sublicense, all the property
which is required for the business and operations of the Company in respect of
the License Agreement as presently conducted.

 

 
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(aa)     Schedule 7.02(aa) contains a true and complete list of each interest in
real property (i) owned by the Company and its Affiliates (describing the type
of interest therein held by the Company and its Affiliates); and (ii) leased,
subleased or otherwise occupied or utilized by the Company and its Affiliates,
as lessee, sublessee, franchisee or licensee (describing the type of interest
therein held by the Company and its Affiliates) and, in each of the cases
described in clauses (i) and (ii) of this clause (aa), whether any lease
requires the consent of the landlord or tenant thereunder, or other party
thereto, to the transactions contemplated by the Loan Documents.

 

(bb)     Schedule 7.02(bb) sets forth a complete and accurate list of the
Patents. For each Patent set forth on Schedule 7.02(bb) there is indicated: (i)
the application number; (ii) the patent or registration number, if any; (iii)
the country or other jurisdiction where the Patent was issued, registered, or
filed; (iv) the scheduled expiration date of any issued Patent, including a
notation if such scheduled expiration date includes a term extension or
supplementary protection certificate; and (v) the registered owner thereof.

 

(cc)     Except as otherwise indicated on Schedule 7.02(bb), the Company or the
indicated Affiliate is the sole and exclusive owner of the entire right, title
and interest in each of the Patents listed on Schedule 7.02(bb) as being owned
by the Company, and such Patents are not subject to any encumbrance, lien (other
than any license thereof to the Licensee and Liens consisting of rights of any
Third Party licensee of Intellectual Property or other assets covered under the
Progenics Sublicense) or claim of ownership by any Third Party (other than
co-ownership by the Third Parties indicated on Schedule 7.02(bb)), and to the
Knowledge of the Company there are no facts that would preclude the Company or
such Affiliate from having, subject to the rights of the co-owners indicated on
Schedule 7.02(bb), unencumbered title to such Patents. Neither the Company nor
such Affiliate has received any notice of any claim by any Third Party
challenging the ownership of the rights to such Patents listed on Schedule
7.02(bb) as being owned by the Company.

 

(dd)     The Company or an Affiliate has a license to use each of the Patents
listed on Schedule 7.02(bb) as being owned by a Third Party, which license is to
the Knowledge of the Company valid. Except as indicated on Schedule 7.02(dd)
there have not been, nor are there any pending or to the Knowledge of the
Company threatened, disputes relating to the Company’s or such Affiliate’s right
to use such Patents listed on Schedule 7.02(bb) as being owned by a Third Party.
All Contracts relating to the Company’s or such Affiliate’s rights in such
Patents have been provided to the Lender prior to the Closing Date.

 

(ee)     [RESERVED]

 

 
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(ff)     To the Knowledge of the Company, each Person who has or has had any
rights in or to the Patents, including each inventor named on the Patents, has
executed a Contract assigning their entire right, title and interest in and to
such Patents and the inventions embodied, described and/or claimed therein, to
the owner thereof, and each such Contract has been duly recorded at the United
States Patent and Trademark Office and each such Contract has been duly recorded
at the United States Patent and Trademark Office.

 

(gg)     To the Knowledge of the Company, except as otherwise indicated on
Schedule 7.02(bb), no issued Patent listed on Schedule 7.02(bb) has lapsed,
expired or otherwise been terminated and no Patent applications listed on
Schedule 7.02(bb) have lapsed, expired, been abandoned or otherwise been
terminated, other than by operation of law, except for such issued Patents and
Patent applications that are not relevant, in any material respect, to the
Royalty Interest.

 

(hh)     To the Knowledge of the Company, there are no unpaid maintenance fees,
annuities or other like payments with respect to the Patents, except for Patents
that are not relevant, in any material respect, to the Royalty Interest.

 

(ii)     To the Knowledge of the Company, each of the Patents correctly
identifies each and every inventor of the claims thereof as determined in
accordance with the laws of the jurisdiction in which such Patent was issued or
is pending. To the Knowledge of the Company, there is not any Person who is or
claims to be an inventor of any of the Patents who is not a named inventor
thereof. Except as disclosed in the License Agreement, the Company has not
received any notice from any Person who is or claims to be an inventor of any of
the Patents who is not a named inventor thereof.

 

(jj)     To the Knowledge of the Company each of the Patents is valid,
enforceable and subsisting. The Company has not received, and to the Company’s
Knowledge the Licensee has not received, any opinion of counsel that any of the
Patents is invalid or unenforceable. Except as set forth on Schedule 7.02(jj),
the Company has not received any written (including, without limitation, by
electronic means) notice of any claim by any Third Party challenging the
validity or enforceability of any of the Patents.

 

(kk)     To the Knowledge of the Company, each individual associated with the
filing and prosecution of the Patents has complied in all material respects with
all applicable duties of candor and good faith in dealing with any Patent
Office, including any duty to disclose to any Patent Office all information
known by such individual to be material to patentability of each such Patent, in
those jurisdictions where such duties exist.

 

(ll)     To the Knowledge of the Company there are no facts that would
reasonably be expected result in a determination by a Governmental Authority
that the Orange-Book Listed Patents have been improperly listed for the Products
in the FDA’s so-called “Orange Book”, and there is at least one Valid Claim in
each such Orange-Book Listed Patent.

 

(mm)     Except for information disclosed to the applicable Patent Office during
prosecution of the Patents, to the Knowledge of the Company there are no
patents, published patent applications, articles, abstracts or other prior art
deemed material to patentability of any of the inventions claimed in such
Patents, or that would otherwise reasonably be expected to materially adversely
affect the validity or enforceability of any of the claims of such Patents.

 

 
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(nn)     Except as disclosed on Schedule 7.02 (nn), there are no pending or to
the Knowledge of the Company threatened proceedings before a Governmental
Authority that could (i) impact the validity and/or enforceability of any of the
claims of the Patents owned by the Company or any of its Affiliates or, to the
Knowledge of the Company, any other Patents, or (ii) otherwise materially
adversely impact whether any claim within the Patents owned by the Company or
any of its Affiliates or, to the Knowledge of the Company, any other Patents, is
a Valid Claim.

 

(oo)     Except as disclosed on Schedule 7.02(oo), to the Knowledge of the
Company there is no pending, decided or settled Dispute, including without
limitation any International Trade Commission investigations, and, to the
Knowledge of the Company, no such Dispute been threatened, in each case
challenging the legality, validity, enforceability, scope or ownership of any
Patent, or adjudicating whether any Patent is or would be infringed by the
Exploitation of the Product by a Third Party or which would give rise to a
credit or right of set off against the Royalty Interest (or the right to receive
the same).

 

(pp)     [RESERVED]

 

(qq)     To the Knowledge of the Company, none of the conception, development
and reduction to practice of the inventions claimed in the Patents has
constituted or involved the misappropriation of trade secrets or other rights or
property of any Third Party.

 

(rr)     Neither the Company nor any Affiliate, and to the Company’s Knowledge
no other Person, has filed any disclaimer, other than a terminal disclaimer, or
made or permitted any other voluntary reduction in the scope of any Patent after
the issuance thereof.

 

(ss)     To the Knowledge of the Company, neither the Company nor any of its
Affiliates has undertaken or omitted to undertake any acts, and no circumstances
or grounds exist, that would void, invalidate, reduce or eliminate, in whole or
in part, the enforceability or scope of any of the Patents in any material
respect.

 

(tt)     To the Knowledge of the Company no Third Party Patent Right has been,
or is, or will be, infringed by the Licensee’s Exploitation of the Product.
Neither the Company nor any Affiliate has received, and to the Company’s
Knowledge the Licensee has not received, any notice of any claim by any Third
Party asserting that the Licensee’s Exploitation of the Product infringes such
Third Party’s Patents Rights. Neither the Company nor any Affiliate has
received, and to the Company’s Knowledge the Licensee has not received, any
opinion of counsel regarding infringement or non-infringement of any Third Party
Patent Rights by the Licensee’s Exploitation of the Product.

 

(uu)     To the Company’s Knowledge, there are no pending, published patent
applications owned by any Third Party, which the Licensee does not have the
right to use, which if issued, would limit or prohibit in any material respect
the Licensee’s Exploitation of the Product.

 

 
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(vv)     Except as set forth on Schedule 7.02(vv), to the Knowledge of the
Company, there are no Disputes between the Licensee and a Third Party relating
to the Licensee’s Exploitation of the Product. Neither the Company nor any
Affiliate has received or given written (including, without limitation, by
electronic means) notice of any such Dispute, and to the Company’s Knowledge,
there exists no circumstances or grounds upon which any such claims could be
asserted. To the Knowledge of the Company, the Patents are not subject to any
outstanding injunction, judgment or other decree, ruling, charge settlement or
other disposition of any Dispute.

 

(ww)     Except as set forth on Schedule 7.02(ww), to the Knowledge of the
Company, no Third Party is infringing any of the issued Patents. Neither the
Company nor any Affiliate has put any Third Party on notice of any of the issued
Patents.

 

(xx)     [RESERVED]

 

(yy)     The Company has the insurance policies with the coverages and limits
set forth on Schedule 7.02(yy), carried with the insurance companies also set
forth therein, the Borrower is covered under such policies, and the Lender’s
interest and status as an additional insured is covered thereby.

 

Section 7.03     Survival of Representations and Warranties. All representations
and warranties by the Borrower, whether with respect to the Borrower, the
Company, any respective Affiliate or any asset or property, contained in this
Agreement shall survive the execution, delivery and acceptance thereof by the
Parties and the closing of the transactions described in this Agreement.

 

Article VIII.     
AFFIRMATIVE COVENANTS

 

Section 8.01     Maintenance of Existence. Borrower shall at all times
(a) preserve, renew and maintain in full force and effect its legal existence
(except as otherwise permitted pursuant to Section 9.02(a) hereof) and good
standing as a limited liability company under the Laws of the jurisdiction of
its organization; (b) not change its name or its chief executive office as set
forth herein without having given Lender the notice thereof required under
Section 8.15 ; and (c) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect.

 

Section 8.02     Use of Proceeds.

 

(a)     Borrower shall use the net proceeds of the Loan received by it to
acquire assets from the Contributor pursuant to the Contribution Agreement and
for general corporate purposes.

 

 
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Section 8.03     Financial Statements and Information.

 

(a)     In the event that any such information need not to be filed with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act, Borrower shall furnish to
the Lender, on or before the forty-fifth day after the close of each quarter of
each fiscal year, the unaudited consolidated balance sheet of the Company as at
the close of such quarter and unaudited consolidated statement of operations and
comprehensive loss and cash flows of the Company for such quarter, duly
certified by the chief financial officer of the Company as having been prepared
in accordance with GAAP. Concurrently with the delivery or filing of the
documents described in the preceding sentence, Borrower shall furnish to the
Lender a certificate of the chief financial officer of the Company, which
certificate shall include a statement that such officer has no knowledge, except
as specifically stated, of any condition, event or act which constitutes a
Default, Event of Default or Prepayment Trigger.

 

(b)     Borrower shall furnish to the Lender, on or before the 135th day after
the close of each fiscal year, the Company’s audited financial statements as at
the close of such fiscal year, including the consolidated balance sheet as at
the end of such fiscal year and consolidated statement of operations and cash
flows of the Company for such fiscal year, in each case accompanied by the
report thereon of independent registered public accountant of nationally
recognized standing reasonably satisfactory to the Lender. Concurrently with the
delivery or filing of the documents described in the preceding sentence,
Borrower shall furnish to the Lender a certificate of the chief financial
officer of the Company, which certificate shall include a statement that such
officer has no knowledge, except as specifically stated, of any condition, event
or act which constitutes a Default, Event of Default or Prepayment Trigger.

 

(c)     Borrower shall, promptly upon receipt thereof, forward or cause to be
forwarded to the Lender copies of all Notices, reports, updates and other data
or information (i) pertaining to the Royalty Interest and other Collateral, (ii)
received from the Licensee or any Third Party which relate to events or
circumstances that could reasonably be expected to have a Material Adverse
Effect or (iii) received from any Person that relate to the Licensed Technology
and that could reasonably be expected to have a Material Adverse Effect, or that
the Lender reasonably requests.

 

(d)     Borrower shall furnish or cause to be furnished to the Lender from time
to time such other information regarding the financial position, assets or
business of Borrower or the Company or its compliance with any Loan Document to
which it is a party or the business of Borrower or the Company as the Lender may
from time to time reasonably request.

 

 
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(e)     For each quarter ending after the Closing Date, Borrower shall, promptly
following receipt thereof under Section 6.6(b) of the License Agreement, deliver
or cause to be delivered to the Lender a true copy of the “Quarterly Activity
Report” and the “Sublicense Revenue Report” (each as defined in Section 6.6(b)
of the License Agreement) for such quarter, together with a certificate of a
Senior Officer of Borrower, certifying that to the Knowledge of Borrower such
Quarterly Activity Report is a true, correct and accurate copy of the Quarterly
Activity Report as provided to the Borrower by the Licensee, and such additional
information as is requested by the Lender, constituting in the aggregate the
Quarterly Report hereunder. Following receipt of any such Quarterly Report, the
Lender shall have the right to require a meeting in person or by phone with
management of the Borrower and the Company to discuss matters related to the
License Agreement. The Lender and the Borrower each shall be entitled to
exercise the audit rights under Section 6.6(f) of the License Agreement (subject
to all restrictions and limitations thereon contained in the License Agreement).
The party exercising such rights shall pay the costs of the respective audit and
shall be entitled to any reimbursement of the costs thereof by the Licensee as
provided under Section 6(f)(ii) of the License Agreement. Any additional
payments of the Royalty Interest due from the Licensee, together with interest
thereon as provided under the License Agreement, shall be paid by the Licensee
to the Blocked Account, and any refund due to the Licensee from any overpayment
in respect of the Royalty Interest determined in any such audit shall be paid by
the Borrower in accordance with the License Agreement. The Borrower and the
Lender will each provide reasonable prior written notice of its intent to
exercise such audit rights and will reasonably cooperate in the exercise of such
audit rights in order to avoid unnecessary limitations on the timing, scope and
conduct of such audits within the parameters specified in the License Agreement.

 

(f)     The Lender and its Representatives shall have the right, from time to
time, not more than once per calendar year, during normal business hours and
upon at least ten (10) Business Days’ prior written notice to Borrower (provided
that, after the occurrence and during the continuance of a Default or Event of
Default, Lender shall have the right, as often, at such times and with such
prior notice, as Lender determines in its reasonable discretion), to visit the
offices and properties of Borrower and the Company where books and records
relating or pertaining to the Royalty Interest and the Collateral are kept and
maintained, to inspect and make extracts from and copies of such books and
records, to discuss, with officers of Borrower and the Company, the business,
operations, properties and financial and other condition of Borrower and the
Company, to discuss the License Agreement and to verify compliance with the
provisions of the Loan Documents regarding receipt and application of the
Royalty Interest.

 

(g)     [RESERVED]

 

(h)     [RESERVED]

 

(i)     All written information supplied by or on behalf of Borrower to the
Lender pursuant to this Section 8.03 shall be accurate and complete in all
material respects as of its date or the date so supplied, and, in the case of
written information supplied pursuant to Sections 8.03(a) and 8.03(b), none of
such information shall contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements therein not
materially misleading in light of the circumstances under which made, as of its
date or the date filed by or on behalf of the Company with the SEC or if not so
filed so delivered to the Lender. For the avoidance of doubt, the Borrower makes
no representations or warranties regarding the accuracy or completeness of any
information it receives from a Third Party that it is required to furnish to the
Lender pursuant to this Section 8.03, unless to the actual Knowledge of the
Borrower or the Company such information is inaccurate or incomplete, in which
case the Borrower or the Company shall specify such inaccuracy or
incompleteness.

 

 
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Section 8.04     Books and Records. Borrower shall keep proper books, records
and accounts in which entries in conformity with sound business practices and
all requirements of Law applicable to it shall be made of all dealings and
transactions in relation to its business, assets and activities and as shall
permit the preparation of the consolidated financial statements of Borrower in
accordance with GAAP.

 

Section 8.05     Maintenance of Insurance. Borrower shall maintain, or exercise
its rights under the Contribution Agreement to cause the Company to maintain
coverage under, insurance policies with the same or better coverages and limits
as those set forth on Schedule 7.01(yy) with an Insurance Provider, and such
insurance shall name the Lender as additional insured (in the case of liability
insurance). Borrower shall furnish to the Lender from time to time upon written
request full information as to the insurance carried.

 

Section 8.06     Governmental Authorizations. Borrower shall obtain, make and
keep in full force and effect all authorizations from and registrations with
Governmental Authorities that may be required for the validity or enforceability
against Borrower of this Agreement and the other Transaction Documents to which
it is a party.

 

Section 8.07     Compliance with Laws and Contracts.

 

(a)     Borrower shall comply with all applicable Laws and perform its
obligations under all Material Contracts, if any, entered into after the Closing
Date relative to the conduct of its business, except where the failure to comply
could not reasonably be expected to result in a Material Adverse Effect.
Borrower shall use commercially reasonable efforts to take all actions necessary
to enforce its rights under each Material Contract, and perform all of its
material obligations under each Material Contract.

 

(b)     Borrower shall at all times comply with the margin requirements set
forth in Section 7 of the Exchange Act and any regulations issued pursuant
thereto, including, without limitation, Regulations T, U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R., Chapter II.

 

Section 8.08     Plan Assets. Borrower shall not take any action that causes its
assets to be deemed to be Plan Assets at any time.

 

Section 8.09     Notices.

 

(a)     Borrower shall promptly give written Notice to the Lender of each
Default, Event of Default or Prepayment Trigger and each other event that has or
could reasonably be expected to have a Material Adverse Effect; provided that in
any of the foregoing situations where Borrower knows a press release or other
public disclosure is to be made, Borrower shall use all commercially reasonable
efforts to provide such information to the Lender as early as possible but in no
event later than simultaneously with such release or other public disclosure.

 

 
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(b)     Borrower shall promptly give written Notice to the Lender upon receiving
notice, or otherwise becoming aware, of any default or event of default under
any Material Contracts.

 

(c)     Borrower shall, promptly after becoming aware thereof, give written
Notice to the Lender of any litigation or proceedings to which Borrower is a
party or which could reasonably be expected to have a Material Adverse Effect.

 

(d)     Borrower shall, promptly after becoming aware thereof, give written
Notice to the Lender of any litigation or proceedings challenging the validity
of the License Agreement, the Intellectual Property sublicensed under the
Progenics Sublicense or otherwise required under the License Agreement, the
Transaction Documents or any of the transactions contemplated therein.

 

(e)     Borrower shall, promptly after becoming aware thereof, give written
Notice to the Lender of any representation or warranty made or deemed made by
Borrower in any of the Transaction Documents or in any certificate delivered to
the Lender pursuant hereto shall prove to be untrue, inaccurate or incomplete in
any material respect on the date as of which made or deemed made.

 

(f)     Borrower shall promptly give written Notice to the Lender of the
occurrence of any Material Adverse Effect.

 

(g)     Borrower shall, promptly after becoming aware thereof, give written
Notice to the Lender of the occurrence of (i) a manufacturing disruption which
has had, or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the level of Net Sales of the Product or
(ii) any other Material Adverse Effect on the Exploitation of the Product.

 

Section 8.10     Payment of Taxes. Borrower shall pay, directly or through its
parent company, all material taxes of any kind imposed on or in respect of its
income or assets before any penalty or interest accrues on the amount payable
and before any Lien on any of its assets exists as a result of nonpayment except
as provided in Section 9.03 hereof and except for taxes contested in good faith
by appropriate proceedings and for which adequate reserves are maintained in
accordance with GAAP.

 

Section 8.11     Waiver of Stay, Extension or Usury Laws. Notwithstanding any
other provision of this Agreement or the other Transaction Documents, if at any
time the rate of interest payable by any Person under the Transaction Documents
exceeds the Maximum Lawful Rate, then, so long as the Maximum Lawful Rate would
be exceeded, such rate of interest shall be equal to the Maximum Lawful Rate. If
at any time thereafter the rate of interest so payable is less than the Maximum
Lawful Rate, such Person shall continue to pay interest at the Maximum Lawful
Rate until such time as the total interest received from such Person is equal to
the total interest that would have been received had applicable law not limited
the interest rate so payable. In no event shall the total interest received by
the Lender under this Agreement and the other Transaction Documents exceed the
amount which such Lender could lawfully have received, had the interest due been
calculated from the Closing Date at the Maximum Lawful Rate. Without limiting
the foregoing, Borrower will not at any time, to the extent that it may lawfully
not do so, insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or other law that would
prohibit or forgive Borrower from paying all or any portion of the principal of
or premium, if any, or interest on the Loan as contemplated herein, wherever
enacted, now or at any time hereafter in force, or that may affect the covenants
or the performance of this Agreement; and, to the extent that it may lawfully do
so, Borrower hereby expressly waives all benefit or advantage of any such law
and expressly agrees that it will not hinder, delay or impede the execution of
any power herein granted to the Lender, but will suffer and permit the execution
of every such power as though no such law had been enacted.

 

 
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Section 8.12     Intellectual Property.

 

(a)     Borrower shall, at its sole expense, exercise its rights under the
Contribution Agreement to cause the Company to prepare, execute, deliver and
file any and all agreements, documents or instruments which are necessary to (i)
prosecute and maintain the material Intellectual Property (including Patents
therein) in accordance with the terms of the License Agreement to the extent
that the Company has the right to prosecute and maintain such material
Intellectual Property; and (ii) defend or assert such material Intellectual
Property against commercially significant infringement or interference by any
other Persons, and against any claims of invalidity or unenforceability, in any
jurisdiction, in each case, in accordance with the terms of the License
Agreement (including by bringing any legal action for infringement or defending
any counterclaim of invalidity or action of a Third Party for declaratory
judgment of non-infringement or non-interference) to the extent that the Company
has the right to do so. Borrower shall keep the Lender informed of all of such
actions and the Lender shall have the opportunity to participate and
meaningfully consult with Borrower and the Company with respect to the direction
thereof and Borrower and the Company shall consider all of the Lender’s comments
in good faith. For clarity, this subsection (a) shall apply only to the extent
of Borrower’s or any Affiliate’s rights (including rights to review and comment)
to prosecute, maintain and/or enforce the Intellectual Property.

 

(b)     The Borrower shall not, and shall not permit or suffer the Company or
any of its Affiliates to, consent to any judgment or settlement in any action,
suit or proceeding referred to in Section 7.3(b) of the License Agreement,
without the prior written consent of the Lender, which consent shall not be
withheld, delayed or conditioned by Lender if doing so would result in Borrower
breaching its obligation to not unreasonably withhold, delay or condition its
consent under Section 7.3(b) of the License Agreement.

 

(c)     Borrower shall cause the Company to use commercially reasonable efforts
to prosecute all pending Patent applications within the Intellectual Property
for which the Company or its Affiliates has rights to prosecute such Patents
consistent with standards in the pharmaceutical industry (as applicable) for
similarly situated entities.

 

 
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(d)     Borrower and the Company and its Affiliates shall:

 

 

(i)

take reasonable measures to protect the proprietary nature of material
Intellectual Property and to maintain in confidence all trade secrets and
confidential information compromising a part thereof;

 

 

(ii)

not disclose and use commercially reasonable efforts to prevent any distribution
or disclosure by others (including their employees and contractors) of any item
that contains or embodies material, non-public Intellectual Property; and

 

 

(iii)

take reasonable physical and electronic security measures to prevent disclosure
of any item that contains or embodies material, non-public Intellectual
Property.

 

(e)     Borrower shall cause the Company to use commercially reasonable efforts
to cause each individual associated with the filing and prosecution of the
Patents material to the conduct of the business of Borrower to comply in all
material respects with all applicable duties of candor and good faith in dealing
with any Patent Office, including any duty to disclose to any Patent Office all
information known by such individual to be material to patentability of each
such Patent, in those jurisdictions where such duties exist, in each case to the
extent that Borrower and/or the Company has the right to file and prosecute such
Patents.

 

(f)     Borrower shall furnish the Lender from time to time upon Lender’s
reasonable written request therefor reasonably detailed statements and schedules
further identifying and describing the Intellectual Property and such other
materials evidencing or reports pertaining to any Intellectual Property as the
Lender may reasonably request.

 

Section 8.13     Security Documents; Further Assurances. The Borrower shall
promptly, upon the reasonable request of the Lender, at the Borrower’s expense,
(a) execute, acknowledge and deliver, or cause the execution, acknowledgment and
delivery of, and thereafter register, file or record, or cause to be registered,
filed or recorded, in an appropriate governmental office, any document or
instrument supplemental to or confirmatory of the Loan Documents or otherwise
deemed by the Lender reasonably necessary or desirable for the continued
validity, perfection and priority of the Liens on the Collateral covered thereby
subject to no other Liens except as permitted by the applicable Loan Document,
or obtain any consents or waivers as may be necessary or appropriate in
connection therewith; (b) deliver or cause to be delivered to the Lender from
time to time such other documentation, consents, authorizations, approvals and
orders in form and substance reasonably satisfactory to the Lender and the
Lender shall reasonably deem necessary to perfect or maintain the Liens on the
Collateral pursuant to the Loan Documents; and (c) upon the exercise by the
Lender of any power, right, privilege or remedy pursuant to any Loan Document
which requires any consent, approval, registration, qualification or
authorization of any Governmental Authority execute and deliver all
applications, certifications, instruments and other documents and papers that
the Lender may require. In addition, Borrower shall promptly, at its sole cost
and expense, execute and deliver to the Lender such further instruments and
documents, and take such further action, as the Lender may, at any time and from
time to time, reasonably request in order to carry out the intent and purpose of
this Agreement and the other Transaction Documents to which it is a party and to
establish and protect the rights, interests and remedies created, or intended to
be created, in favor of the Lender hereby and thereby.

 

 
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Section 8.14     Information Regarding Collateral.

 

Borrower shall not effect any change (i) in its legal name, (ii) in the location
of its chief executive office, (iii) in its identity or organizational
structure, (iv) in its Federal Taxpayer Identification Number or organizational
identification number, if any, or (v) in its jurisdiction of organization (in
each case, including by merging with or into any other entity, reorganizing,
dissolving, liquidating, reorganizing or organizing in any other jurisdiction),
until (A) it shall have given the Lender not less than 10 days’ prior written
notice (in the form of an certificate of a duly authorized officer of Borrower),
or such lesser notice period agreed to by the Lender, of its intention so to do,
clearly describing such change and providing such other information in
connection therewith as the Lender may reasonably request and (B) it shall have
taken all action reasonably satisfactory to the Lender to maintain the
perfection and priority of the security interest of the Lender in the
Collateral, if applicable. Borrower agrees to provide promptly the Lender with
certified Borrower Party Documents reflecting any of the changes described in
the preceding sentence. Borrower also agrees to notify promptly the Lender of
any change in the location of any office in which it maintains books or records
relating to Collateral owned by it or any office or facility at which any
portion of Collateral is located (including the establishment of any such new
office or facility), other than (a) changes in location to a mortgaged property,
(b) Collateral which is in-transit or in the possession of employees, and (c)
Collateral which is out for repair or processing.

 

Section 8.15     Additional Collateral; New License Arrangement(a)     .

 

(a)     With respect to any property acquired after the Closing Date by Borrower
that is not already subject to the Lien created by any of the Loan Documents or
specifically excluded from the requirement to be subject to such Lien in the
Loan Documents, Borrower shall promptly (and in any event within 30 days after
the acquisition thereof) (i) execute and deliver to the Lender such amendments
or supplements to the relevant Loan Documents or such other documents as the
Lender shall deem necessary or advisable to grant for its benefit, a Lien on
such property subject to no Liens other than Permitted Liens, and (ii) take all
actions necessary to cause such Lien to be duly perfected in accordance with all
applicable requirements of Law, including the filing of financing statements in
such jurisdictions as may be reasonably requested by the Lender. Borrower shall
otherwise take such actions and execute and/or deliver to the Lender such
documents as the Lender shall reasonably require to confirm the validity,
perfection and priority of the Lien of the Security Agreement on such
after-acquired properties. Notwithstanding any other provision in any Loan
Document, Borrower shall not be required to take any actions outside of the
United States to perfect any Lien or security interest in any assets which are
located outside of the United States of America.

 

 
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(b)     Without limiting any other rights or remedies Lender may have under this
Agreement, the Security Agreement or the Stock Pledge Agreement, if (i) Licensee
terminates or provides written notice of termination of the License Agreement or
the License Agreement terminates as to Licensee by operation of law or (ii)
Borrower terminates theLicense Agreement in violation of its covenants herein or
the License Agreement terminates as to Borrower by operation of law, then
Borrower, in consultation with Lender, or Lender (in the case of a termination
under preceding subclause (ii) or in the event that Borrower fails to so consult
with Lender), in each case at Lender’s option and at all times in consultation
with Lender and subject to the further requirements of this Section 8.15(b),
shall identify and use commercially reasonable efforts (as if Borrower owned all
Intellectual Property covered by the Progenics Sublicense) to consummate a
licensing opportunity with a Third Party that has rights (from, by or through
Licensee or any successor or assignee thereof) to develop, produce or sell the
Product, covering the Intellectual Property that had been licensed to Licensee,
for such Third Party’s use of the Intellectual Property in the development,
production and sale of Product. Borrower shall cooperate with Lender, at
Borrower’s cost and expense, including Borrower’s attorneys’ fees, if any, in
connection therewith, in such efforts to identify and consummate such licensing
opportunity, which license shall (i) become effective not earlier than the
effective date of such termination, (ii) expire not earlier than the Maturity
Date and (iii) include terms, conditions and limitations that are not materially
less favorable to Borrower or Lender (other than economic terms, which shall be
no less favorable to Borrower or Lender), than those contained in the License
Agreement, including with respect to obligations and costs imposed on Borrower,
disclaimers of Borrower’s liability, intellectual property ownership and control
and indemnification of Borrower (any such license, a “New Arrangement”). If
Borrower (in consultation with Lender) is the party pursuing such New
Arrangement, Borrower and Lender shall mutually agree on the Third Party with
which to enter into such New Arrangement; provided, however, that Lender will be
deemed to have agreed to Borrower’s selection of any Approved Licensee as the
licensee under any such New Arrangement. Should such New Arrangement be
identified and meet the preceding requirements, and represent a commercially
reasonable course of action in the good faith judgment of Borrower, Borrower
agrees to duly execute and deliver a new license agreement effecting such New
Arrangement that satisfies the foregoing requirements promptly upon the written
request of Lender and such New Arrangement shall be substituted hereunder for
the License Agreement to the satisfaction of Lender.

 

Article IX.     
NEGATIVE COVENANTS

 

Section 9.01     Activities of Borrower. (a)     Borrower shall not amend,
modify, waive or terminate (other than expiration in accordance with its terms)
any provision of, or permit or agree to the amendment, modification, waiver or
termination (other than expiration in accordance with its terms) of any
provision of, any of the Transaction Documents or any Material Contract without
the prior written consent of the Lender, such consent not to be unreasonably
withheld or delayed. Borrower shall not establish or acquire any Subsidiaries.

 

(b)     Borrower shall not:

 

(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 Blocked
Account;

 

 
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(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 Borrower’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 Borrower’s own separate balance sheet);

 

(v)     fail to pay its own liabilities and expenses only out of its own funds;

 

(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)     issue any securities of any kind except as contemplated by this
Agreement and the other Transaction Documents;

 

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

 

(ix)     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 Borrower;

 

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

 

(xi)     make any payment or distribution of assets with respect to any
obligation of any other person;

 

(xii)     engage in any business activity other than the License Agreement, any
New Arrangement that is implemented hereunder and the borrowing, payment and
repayment of amounts provided for hereunder and under the other Loan Documents;
or

 

(xiii)     fail to file any tax returns and pay any taxes as may be required
under Law (except for taxes contested in good faith by appropriate proceedings
and for which adequate reserves are maintained in accordance with GAAP).

 

Section 9.02     Merger; Sale of Assets.

 

(a)     Borrower shall not merge or consolidate with or into (whether or not
Borrower is the Surviving Person) any other Person and Borrower will not sell,
convey, assign, transfer, lease, sublease, license, sublicense or otherwise
dispose of all or substantially all of Borrower’s assets to any Person in a
single transaction or series of related transactions; provided that nothing in
this Section 9.02(a) shall prohibit a Change of Control so long as Borrower
complies with Section 3.02 in connection therewith.

 

 
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(b)     Borrower shall not sell, assign, convey, transfer, lease, sublease,
license, sublicense or otherwise dispose of (including by way of merger or
consolidation) any right, title or interest in or to, the License Agreement or
the Royalty Interest, other than to Lender pursuant to the Loan Documents, or
pursuant to a Change of Control so long as Borrower complies with Section 3.02
in connection therewith.

 

Section 9.03     Liens. Borrower shall not create or suffer to exist any Lien on
or with respect to Collateral, except for Permitted Liens.

 

Section 9.04     Investment Company Act. Neither Borrower nor any of its
Subsidiaries shall be or become an investment company subject to registration
under the Investment Company Act of 1940.

 

Section 9.05     Limitation on Additional Indebtedness. Borrower shall not,
directly or indirectly, incur or suffer to exist any Indebtedness; provided that
Borrower may incur:

 

(a)     Indebtedness under this Agreement;

 

(b)     Indebtedness representing obligations for the payment of money (and not
contingent obligations) incurred in the ordinary course of business for goods or
services rendered, unsecured, not overdue and not exceeding $5,000 in the
aggregate at any time; or

(c)     Indebtedness secured by Liens of any of the types described under
clauses (b) or (c) of the definition of Permitted Liens, but only to the extent
of the Indebtedness related thereto.

 

Section 9.06     Limitation on Transactions with Controlled Affiliates. Borrower
shall not, directly or indirectly, enter into any transaction or series of
related transactions or participate in any arrangement (including any purchase,
sale, lease or exchange of assets or the rendering of any service) with any
Controlled Affiliate other than the Transaction Documents or in the ordinary
course of business of Borrower upon fair and reasonable terms no less favorable
to Borrower than it would obtain in a comparable arm’s-length transaction with a
non-Controlled Affiliate.

 

Section 9.07     ERISA.

 

(a)     The Borrower shall not sponsor, maintain or contribute to, or agree to
sponsor, maintain or contribute to, any employee benefit plan (as defined in
Section 3(3) of ERISA) whether or not subject to ERISA, that could, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(b)     The Borrower shall not engage in a non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code or in any transaction
that, assuming that no assets of Lender are or are deemed to be Plan Assets,
would cause any obligation or action taken or to be taken hereunder (or the
exercise by the Lender of any of its rights under the Notes, this Agreement or
the other Loan Documents) to be a non-exempt prohibited transaction under such
provisions.

 

 
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(c)     Borrower shall not incur any liability with respect to any obligation to
provide medical benefits with respect to any person beyond their retirement or
other termination of service, other than coverage mandated by law, that could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

Section 9.08     Dividends and Distributions. Borrower will not, directly or
indirectly, make any dividends or other distributions to holders of Capital
Stock (i) except as permitted under the Borrower Party Documents and the Stock
Pledge Agreement or (ii) while an Event of Default or Prepayment Trigger has
occurred and is continuing.

 

Article X.     
EVENTS OF DEFAULT

 

Section 10.01     Events of Default. If one or more of Events of Default occurs
and is continuing, the Lender shall be entitled to the remedies set forth in
Section 11.02.

 

Section 10.02     Default Remedies. If any Event of Default shall occur and be
continuing, the Lender may, by Notice to Borrower, (a) exercise all rights and
remedies available to the Lender hereunder and under the Security Agreement and
applicable law, including enforcement of the security interests created thereby,
(b) declare the Loan, all interest thereon and all other Obligations to be
immediately due and payable, whereupon all such amounts shall become immediately
due and payable, all without diligence, presentment, demand of payment, protest
or further notice of any kind, which are expressly waived by Borrower and (c)
declare the obligations of the Lender hereunder to be terminated, whereupon such
obligations shall terminate; provided, however, that if any event of any kind
referred to in clause (i) of the definition of “Event of Default” herein occurs,
the obligations of the Lender hereunder shall immediately terminate, all amounts
payable hereunder by Borrower shall become immediately due and payable and the
Lender shall be entitled to exercise rights and remedies under the Security
Agreement and applicable law without diligence, presentment, demand of payment,
protest or notice of any kind, all of which are hereby expressly waived by
Borrower. Each Notice delivered pursuant to this Section 10.02 shall be
effective when sent. In addition, the Lender shall have all rights available to
it under the Stock Pledge Agreement which it may exercise as it determines in
its sole discretion and any such exercise shall not constitute an election of
remedies.

 

Section 10.03     Right of Set-off; Sharing of Set-off.

 

(a)     If any amount payable hereunder is not paid as and when due, Borrower
irrevocably authorizes the Lender (i) to proceed, to the fullest extent
permitted by applicable Law, without prior notice, by right of set-off, bankers’
lien, counterclaim or otherwise, against any assets of Borrower in any currency
that may at any time be in the possession of the Lender or any Affiliate of
Lender, to the full extent of all amounts payable to the Lender hereunder or
(ii) to charge to Borrower’s account with Lender or any Affiliate of the Lender
the full extent of all amounts payable by Borrower to the Lender hereunder;
provided, however, that the Lender shall notify Borrower of the exercise of such
right promptly following such exercise.

 

 
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(b)     If any Lender shall, by exercising any right of setoff or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on the
Loan or other obligations owed to such Lender resulting in such Lender’s
receiving payment of a proportion of the aggregate amount of the Loan and
accrued interest thereon or other obligations owed to such Lender greater than
its pro rata share thereof as provided herein, then the Lender receiving such
greater proportion shall (a) notify the other Lenders of such fact, and
(b) purchase (for cash at face value) participations in the Loans and such other
obligations of the other Lenders, or make such other adjustments as shall be
equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and other amounts owing them;
provided that the provisions of this Section 11.03(b) shall (x) not be construed
to apply to (A) any payment made by Borrower pursuant to and in accordance with
the express terms of this Agreement or (B) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in the Loan to
any assignee and (y) only be applicable if there is more than one Lender.

 

Section 10.04     Rights Not Exclusive. The rights provided for herein are
cumulative and are not exclusive of any other rights, powers, privileges or
remedies provided by Law.

 

Article XI.     
INDEMNIFICATION

 

Section 11.01     Funding Losses. If Borrower fails to borrow the Initial
Tranche Loan on the Initial Funding Date or the Subsequent Tranche Loan on the
Subsequent Funding Date, as the case may be, after the applicable Notice of
Borrowing has been given to the Lender in accordance herewith and the conditions
set forth in Section 6.01 or 6.02, as the case may be, have been satisfied or
waived, Borrower shall reimburse the Lender within three Business Days after
demand for any resulting loss or expense incurred by the Lender including any
loss incurred in obtaining, liquidating or redeploying deposits or other funding
from third parties; provided that the Lender shall have delivered to Borrower a
certificate as to the amount of such loss or expense.

 

Section 11.02     Other Losses.

 

(a)     Borrower agrees to defend (subject to Indemnitees’ selection of
counsel), indemnify, pay and hold harmless, each Indemnitee from and against any
and all Indemnified Liabilities, in all cases, arising, in whole or in part, out
of or relating to any claim, notice, suit or proceeding commenced or threatened
in writing (including, without limitation, by electronic means) by any Person
(including any Governmental Authority) other than Borrower or any of Lender’s
Affiliates; provided Borrower shall not have any obligation to any Indemnitee
hereunder with respect to any Indemnified Liabilities to the extent such
Indemnified Liabilities arise from the gross negligence or willful misconduct of
such Indemnitee. To the extent that the undertakings to defend, indemnify, pay
and hold harmless set forth in this Section 11.02 may be unenforceable in whole
or in part because they are violative of any law or public policy, Borrower
shall contribute the maximum portion that it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by Indemnitees or any of them. This Section 11.02 shall not
apply with respect to Taxes other than any Taxes that represent losses, claims,
damages, etc. arising from any non-Tax claim.

 

 
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(b)     To the extent permitted by applicable law, no Party shall assert, and
each Party hereby waives, any claim against each other Party and such Party’s
Affiliates, directors, employees, attorneys or agents, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) (whether or not the claim therefor is based on
contract, tort or duty imposed by any applicable legal requirement) arising out
of, in connection with, as a result of, or in any way related to, this Agreement
or any Loan Document or any agreement or instrument contemplated hereby or
thereby or referred to herein or therein, the transactions contemplated hereby
or thereby, the Loan or the use of the proceeds thereof or any act or omission
or event occurring in connection therewith, and each Party hereby waives,
releases and agrees not to sue upon any such claim or any such damages, whether
or not accrued and whether or not known or suspected to exist in its favor.

 

 
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Section 11.03     Assumption of Defense; Settlements. If the Lender is entitled
to indemnification under this Article XI with respect to any action or
proceeding brought by a third party that is also brought against Borrower,
Borrower shall be entitled to assume the defense of any such action or
proceeding with counsel reasonably satisfactory to the Lender. Upon assumption
by Borrower of the defense of any such action or proceeding, Lender shall have
the right to participate in such action or proceeding and to retain its own
counsel but Borrower shall not be liable for any legal expenses of other counsel
subsequently incurred by the Lender in connection with the defense thereof
unless (i) Borrower has otherwise agreed to pay such fees and expenses,
(ii) Borrower shall have failed to employ counsel reasonably satisfactory to the
Lender in a timely manner or (iii) the Lender shall have been advised by counsel
that there are actual or potential conflicting interests between Borrower and
the Lender, including situations in which there are one or more legal defenses
available to the Lender that are different from or additional to those available
to Borrower; provided, however, that Borrower shall not, in connection with any
one such action or proceeding or separate but substantially similar actions or
proceedings arising out of the same general allegations, be liable for the fees
and expenses of more than one separate firm of attorneys at any time for the
Lender, except to the extent that local counsel, in addition to its regular
counsel, is required in order to effectively defend against such action or
proceeding. Borrower shall not consent to the terms of any compromise or
settlement of any action defended by Borrower in accordance with the foregoing
without the prior written consent of the Lender unless such compromise or
settlement (x) includes an unconditional release of the Lender from all
liability arising out of such action and (y) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
the Lender. Borrower shall not be required to indemnify the Lender for any
amount paid or payable by the Lender in the settlement of any action, proceeding
or investigation without the written consent of Borrower, which consent shall
not be unreasonably withheld, conditioned or delayed.

 

Article XII.     
MISCELLANEOUS

 

Section 12.01     Assignments.

 

(a)     Borrower shall not be permitted to assign this Agreement without the
prior written consent of the Lender (in the event such assignment is to be to an
Affiliate of the Borrower, such consent not to be unreasonably withheld) and any
purported assignment in violation of this Section 13.01 shall be null and void.

 

(b)     Lender may at any time assign its rights and obligations hereunder, in
whole or in part, to an Assignee and Lender may at any time pledge its rights
and obligations hereunder to an Assignee.

 

(c)     The parties to each assignment shall execute and deliver to Borrower an
Assignment and Acceptance. Upon the effectiveness of a permitted assignment
hereunder, (i) each reference in this Agreement to “Lender” shall be deemed to
be a reference to the assignor and the assignee to the extent of their
respective interests, (ii) such assignee shall be a Lender party to this
Agreement and shall have all the rights and obligations of a Lender and (iii)
the assignor shall be released from its obligations hereunder to a corresponding
extent of the assignment, and no further consent or action by any party shall be
required.

 

 
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(d)     In the event there are multiple Lenders, all payments of principal,
interest, fees and any other amounts payable pursuant to the Loan Documents
shall be allocated on a pro rata basis among the Lenders according to their
proportionate interests in the Loan.

 

(e)     Borrower and the Lender shall, from time to time at the request of the
other party hereto, execute and deliver any documents that are necessary to give
full force and effect to an assignment permitted hereunder, including a new Note
in exchange for the Note held by the Lender.

 

Section 12.02     Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective successors and
permitted assigns.

 

Section 12.03     Notices. All Notices authorized or required to be given
pursuant to this Agreement shall be given in writing and either personally
delivered to the Party to whom it is given or delivered by an established
delivery service by which receipts are given or mailed by registered or
certified mail, postage prepaid, or sent by electronic mail with a copy sent on
the following Business Day by one of the other methods of giving notice
described herein, addressed to the Party at its address listed below:

 

(a)           If to Borrower:

 

MNTX Royalties Sub LLC
One World Trade Center
47th floor Suite J
New York, New York 10007
Attention: Patrick Fabbio
E-mail: pfabbio@progenics.com

 

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

Progenics Pharmaceuticals, Inc.
One World Trade Center
47th floor Suite J
New York, New York 10007
Attention: Patrick Fabbio
E-mail: pfabbio@progenics.com

 

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

Dechert LLP
1095 Avenue of the Americas
New York, New York 10036
Attention: Kristopher Brown
E-mail: kristopher.brown@dechert.com

 

(b)           If to the Lender:

 

HealthCare Royalty Partners III, L.P.
300 Atlantic Street, Suite 600
Stamford, CT 06901
Attention: Clarke B. Futch
                   Founding Managing Partner
Email: Clarke.Futch@hcroyalty.com

 

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

HealthCare Royalty Partners III, L.P.
300 Atlantic Street, Suite 600
Stamford, CT 06901
Attention: Chief Legal Officer
Email: royalty-legal@hcroyalty.com

 

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

Cadwalader, Wickersham & Taft LLP
One World Financial Center
New York, New York 10281
Attn: Ira J. Schacter
E-mail: ira.schacter@cwt.com

 

Any Party may change its address for the receipt of Notices at any time by
giving Notice thereof to the other Party. Except as otherwise provided herein,
any Notice authorized or required to be given by this Agreement shall be
effective when received.

 

 

 

Section 12.04     Entire Agreement. This Agreement, together with the Exhibits
and Schedules 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
(including the Confidentiality Agreement), understandings and negotiations, both
written and oral, between the Parties with respect to the subject matter of this
Agreement.

 

 
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Section 12.05     Modification. No Transaction Document or provision thereof may
be waived, amended or modified except, in the case of this Agreement, by an
agreement or agreements in writing executed by Borrower and the Lender or, in
the case of any other Transaction Document, by an agreement or agreements in
writing entered into by the parties thereto with the prior written consent of
the Lender.

 

Section 12.06     No Delay; Waivers; etc. No delay on the part of the Lender in
exercising any power or right hereunder shall operate as a waiver thereof nor
shall any single or partial exercise of any power or right hereunder preclude
other or further exercise thereof or the exercise of any other power or right.
The Lender shall not be deemed to have waived any rights hereunder unless such
waiver shall be in writing and signed by the Lender.

 

Section 12.07     Severability. If any provision of this Agreement is held to be
invalid or unenforceable, the remaining provisions shall nevertheless be given
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree by a court of competent jurisdiction shall
remain in full force and effect to the extent not held invalid or unenforceable.

 

Section 12.08     Determinations. Each determination or calculation by the
Lender hereunder shall, in the absence of manifest error, be conclusive and
binding on the Parties.

 

Section 12.09     Replacement of Note. Upon the loss, theft, destruction, or
mutilation of any Note and (a) in the case of loss, theft or destruction, upon
receipt by Borrower of indemnity or security reasonably satisfactory to it
(except that if the holder of such Note is the Lender or any other financial
institution of recognized responsibility, the holder’s own agreement of
indemnity shall be deemed to be satisfactory) or (b) in the case of mutilation,
upon surrender to Borrower of any mutilated Note, Borrower shall execute and
deliver in lieu thereof a new Note, dated the Closing Date, in the same
principal amount.

 

Section 12.10     Governing Law. THIS AGREEMENT AND EACH NOTE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING
GENERAL OBLIGATIONS LAW SECTIONS 5-1401 AND 5-1402 BUT OTHERWISE WITHOUT GIVING
EFFECT TO LAWS CONCERNING CONFLICT OF LAWS OR CHOICE OF FORUM THAT WOULD REQUIRE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

 

Section 12.11     Jurisdiction. Each of Borrower and the Lender irrevocably
submits to the jurisdiction of the courts of the State of New York and of the
United States sitting in the State of New York, and of the courts of its own
corporate domicile with respect to any and all Proceedings. Each of Borrower and
the Lender irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of venue of any
Proceeding and any claim that any Proceeding has been brought in an inconvenient
forum. Any process or summons for purposes of any Proceeding may be served on
Borrower by mailing a copy thereof by registered mail, or a form of mail
substantially equivalent thereto, addressed to it at its address as provided for
Notices hereunder.

 

 
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Section 12.12     Waiver of Jury Trial. Each Party hereby irrevocably waives, to
the fullest extent permitted by applicable law, any and all right to trial by
jury in any action, proceeding, claim or counterclaim arising out of or relating
to any Transaction Document or the transactions contemplated under any
Transaction Document (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO ANY TRANSACTION DOCUMENT. EACH PARTY HERETO (A) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE OTHER PARTY HERETO WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.12.

 

Section 12.13     Waiver of Immunity. To the extent that Borrower has or
hereafter may be entitled to claim or may acquire, for itself or any of its
assets, any immunity from suit, jurisdiction of any court or from any legal
process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, or otherwise) with respect to itself or any of
its property, Borrower hereby irrevocably waives such immunity in respect of its
obligations hereunder and under the Notes to the fullest extent permitted by
law.

 

Section 12.14     Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

 

Section 12.15     Limitation on Rights of Others. Except for the Indemnitees
referred to in Section 11.02, no Person other than a Party shall have any legal
or equitable right, remedy or claim under or in respect of this Agreement.

 

Section 12.16     Survival. The obligations of Borrower contained in Sections
4.05, 4.06, 4.07, Article V, Article XI and this Section 12.16 shall survive the
repayment of the Loans and the cancellation of the Note and the termination of
the other obligations of Borrower hereunder.

 

Section 12.17     Confidentiality.

 

(a)     Except as expressly authorized in this Agreement or the other Loan
Documents or except with the prior written consent of the Disclosing Party, the
Receiving Party hereby agrees that (i) it will use the Confidential Information
of the Disclosing Party solely for the purpose of the transactions contemplated
by this Agreement and the other Loan Documents and exercising its rights and
remedies and performing its obligations hereunder and thereunder; (ii) it will
keep confidential the Confidential Information of the Disclosing Party; and
(iii) it will not furnish or disclose to any Person any Confidential Information
of the Disclosing Party.

 

 
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(b)     Notwithstanding anything to the contrary set forth in this Agreement or
any other Loan Document, the Receiving Party may, without the consent of the
Disclosing Party, but with prior written notice when permissible to the
Disclosing Party, furnish or disclose Confidential Information of the Disclosing
Party to (i) the Receiving Party’s Affiliates and their respective
Representatives, actual or potential financing sources, actual or potential
investors or actual or potential co-investors and actual or potential permitted
assignees, actual or potential purchasers, actual or potential transferees or
actual or potential successors-in-interest under Section 12.01, in each such
case, who need to know such information in order to provide or evaluate the
provision of financing to the Receiving Party or any of its Affiliates or to
assist the Receiving Party in evaluating the transactions contemplated by this
Agreement and the other Loan Documents or in exercising its rights and remedies
and performing its obligations hereunder and thereunder and who are, prior to
such furnishing or disclosure, informed of the confidentiality and non-use
obligations contained in this Section 12.17 and who are bound by written or
professional confidentiality and non-use obligations no less stringent than
those contained in this Section 12.17; and (ii) permitted assignees, purchasers,
transferees or successors-in-interest under Section 12.01, in each such case,
who need to know such information in connection with such actual or potential
assignment, sale or transfer, including, following any such assignment, sale or
transfer, in order to exercise their rights and remedies and perform their
obligations under this Agreement and the other Loan Documents and who are, prior
to such furnishing or disclosure, informed of the confidentiality and non-use
obligations contained in this Section 12.17 and who are bound by written or
professional confidentiality and non-use obligations no less stringent than
those contained in this Section 12.17.

 

(c)     In the event that the Receiving Party, its Affiliates or any of their
respective Representatives is required by applicable Law, applicable stock
exchange requirements or legal or judicial process (including by deposition,
interrogatory, request for documents, subpoena, civil investigative demand or
similar process) to furnish or disclose any portion of the Confidential
Information of the Disclosing Party, the Receiving Party shall, to the extent
legally permitted, provide the Disclosing Party, as promptly as practicable,
with written notice of the existence of, and terms and circumstances relating
to, such requirement, so that the Disclosing Party may seek, at its expense, a
protective order or other appropriate remedy (and, if the Disclosing Party seeks
such an order, the Receiving Party, such Affiliates or such Representatives, as
the case may be, shall provide, at their expense, such cooperation as such
Disclosing Party shall reasonably require). Subject to the foregoing, the
Receiving Party, such Affiliates or such Representatives, as the case may be,
may disclose that portion (and only that portion) of the Confidential
Information of the Disclosing Party that is legally required to be disclosed;
provided, however, that the Receiving Party, such Affiliates or such
Representatives, as the case may be, shall exercise reasonable efforts (at their
expense) to preserve the confidentiality of the Confidential Information of the
Disclosing Party, including by obtaining reliable assurance that confidential
treatment will be accorded any such Confidential Information disclosed.
Notwithstanding anything to the contrary contained in this Agreement or any of
the other Loan Documents, in the event that the Receiving Party or any of its
Affiliates receives a request from an authorized representative of a U.S. or
foreign tax authority for a copy of this Agreement or any of the other Loan
Documents, the Receiving Party or such Affiliate, as the case may be, may
provide a copy hereof or thereof to such tax authority representative without
advance notice to, or the consent of, the Disclosing Party; provided, however,
that the Receiving Party shall, to the extent legally permitted, provide the
Disclosing Party with written notice of such disclosure as soon as practicable.

 

 
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(d)     Notwithstanding anything to the contrary contained in this Agreement or
any of the other Loan Documents, the Receiving Party may disclose the
Confidential Information of the Disclosing Party, including this Agreement, the
other Loan Documents and the terms and conditions hereof and thereof, to the
extent necessary in connection with the enforcement of its rights and remedies
hereunder or thereunder or as required to perfect the Receiving Party’s rights
hereunder or thereunder.

 

(e)     Neither Party shall, and each Party shall cause its Affiliates not to,
without the prior written consent of the other Party (which consent shall not be
unreasonably withheld or delayed), issue any press release or make any other
public disclosure with respect to the transactions contemplated by this
Agreement or any other Transaction Document, except if and to the extent that
any such release or disclosure is required by applicable Law, by the rules and
regulations of any applicable stock exchange or by any Governmental Authority of
competent jurisdiction, in which case, the Party proposing (or whose Affiliate
proposes) to issue such press release or make such public disclosure shall use
commercially reasonable efforts to consult in good faith with the other Party
regarding the form and content thereof before issuing such press release or
making such public announcement.

 

Except with respect to the Lender’s internal communications or private
communications with its Representatives, the Lender shall not, and shall cause
its Representatives, its Affiliates and its Affiliates’ Representatives not to
make use of the name, nickname, trademark, logo, service mark, trade dress or
other name, term, mark or symbol identifying or associated with Borrower without
Borrower’s prior written consent to the specific use in question, provided that
the consent of Borrower shall not be required with respect to publication of
Borrower’s name and logos in the Lender’s promotional materials, including
without limitation the websites for the Lender and its Affiliates consistent
with its use of other similarly situated Third Parties’ names and logos.

 

(f)     Each of Borrower and Lender hereby (i) agree that, notwithstanding the
terms thereof, the Confidentiality Agreement is hereby terminated and (ii)
acknowledge that this Agreement shall supersede such Confidentiality Agreement
with respect to the treatment of Confidential Information by the Parties
(including, without limitation, with regard to Confidential Information
previously provided pursuant to such Confidentiality Agreement).

 

Section 12.18     Patriot Act Notification. Lender hereby notifies Borrower
that, consistent with the Patriot Act, regulations promulgated thereunder and
under other applicable Law, the Lender’s procedures and customer due diligence
standards require it to obtain, verify and record information that identifies
Borrower, including among other things name, address, information regarding
Persons with authority or control over Borrower, and other information regarding
Borrower, its operations and transactions with the Lender. Borrower agrees to
provide such information and take such actions as are reasonably requested by
the Lender in order to assist the Lender in maintaining compliance with its
procedures, the Patriot Act and any other applicable Laws.

 

 
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IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the day
and year first above written.

 

 

HEALTHCARE ROYALTY PARTNERS III, L.P.,

 

  as Lender  

 

 

 

 

 

By:

HealthCare Royalty GP III, LLC,

 

 

 

its general partner

 

 

 

 

 

 

 

 

By:

/s/ Clarke B. Futch     

 

 

 

Name:   Clark B. Futch     

 

 

 

Title: Founding Managing Director

 

 

 

MNTX ROYALTIES SUB LLC,
    as Borrower

 

 

 

 

 

 

 

 

 

 

By:

Mark R. Baker

 

 

 

Name:   Mark R. Baker

 

 

 

Title:     President

 

  

 

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EXHIBIT A

 

Form of

 

NOTICE OF PREPAYMENT

 

 

 

Date: [●], 20[●]

 

HealthCare Royalty Partners III, L.P.

300 Atlantic Street, Suite 600

Stamford, CT 06901

Attention: Clarke B. Futch

                   Founding Managing Partner

Email: Clarke.Futch@hcroyalty.com

 

 

Dear Sirs:

 

MNTX Royalties Sub LLC, a Delaware limited liability company (the “Borrower”),
pursuant to Section 3.02(h) of the Loan Agreement, dated as of November 4, 2016,
between the Borrower and HealthCare Royalty Partners III, L.P. (the “Lender”)
does hereby give the Lender notice that on [●], 20[●] (the “Prepayment Date”),
the Borrower shall prepay all amounts outstanding with respect to the Loans
under the Loan Agreement, in cash, including all accrued but unpaid interest and
any premium payable under the Loan Agreement, pursuant to [Section 3.02(a)]
[Section 3.02(e)] [Section 3.02(f)] of the Loan Agreement. The amount to be
prepaid, and all other amounts payable in connection therewith under Section
3.02 of the Loan Agreement, is calculated and determined as set forth in detail
on Exhibit A hereto.

 

Pursuant to Section 4.02(f) of the Loan Agreement, the Borrower shall make the
prepayment notified above by [wire transfer] [Automated Clearing House transfer]
to the Lender Concentration Account.

 

This Notice of Prepayment is irrevocable.

 

MNTX ROYALTIES SUB LLC

 

 

 

By:___________________________

Name:

Title:

 

 
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CC:

HealthCare Royalty Partners III, L.P.
300 Atlantic Street, Suite 600
Stamford, CT 06901
Attention: Chief Legal Officer
Email: royalty-legal@hcroyalty.com

 

Cadwalader, Wickersham & Taft LLP
One World Financial Center
New York, New York 10281
Attn: Ira J. Schacter
E-mail: ira.schacter@cwt.com

 

 
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EXHIBIT A
TO
NOTICE OF PREPAYMENT

 

 
-4-

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EXHIBIT B

 

FORM OF SECURITY AGREEMENT

 

 
-5-

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EXHIBIT C-1

 

FORM OF INITIAL TRANCHE NOTE

 

 
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EXHIBIT C-2

 

 

FORM OF SUBSEQUENT TRANCHE NOTE

 

 
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EXHIBIT D-1

 

FORM OF

 

NOTICE OF INITIAL TRANCHE BORROWING

 

 

 

Date: November 4, 2016

 

HealthCare Royalty Partners III, L.P.

300 Atlantic Street, Suite 600

Stamford, CT 06901

Attention: Clarke B. Futch

                   Founding Managing Partner

Email: Clarke.Futch@hcroyalty.com

 

 

Dear Sirs:

 

MNTX Royalties Sub LLC, a Delaware limited liability company (the “Borrower”),
pursuant to Section 2.02(a) of the Loan Agreement, dated as of November 4, 2016,
between the Borrower and HealthCare Royalty Partners III, L.P. (the “Lender”)
does hereby give the Lender notice that on November 4, 2016 the Borrower will
borrow the amount of $50,000,000.00 under and pursuant to the Loan Agreement and
the other Loan Documents.

 

 

 

MNTX ROYALTIES SUB LLC

 

 

 

By:___________________________

Name:

Title:

 

CC:

HealthCare Royalty Partners III, L.P.
300 Atlantic Street, Suite 600
Stamford, CT 06901
Attention: Chief Legal Officer
Email: royalty-legal@hcroyalty.com

 

Cadwalader, Wickersham & Taft LLP
One World Financial Center
New York, New York 10281
Attn: Ira J. Schacter
E-mail: ira.schacter@cwt.com

 

 
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EXHIBIT D-2

 

FORM OF

 

NOTICE OF SUBSEQUENT TRANCHE BORROWING

 

 

 

Date: [●], 201[●]

 

HealthCare Royalty Partners III, L.P.

300 Atlantic Street, Suite 600

Stamford, CT 06901

Attention: Clarke B. Futch

                   Founding Managing Partner

Email: Clarke.Futch@hcroyalty.com

 

 

Dear Sirs:

 

MNTX Royalties Sub LLC, a Delaware limited liability company (the “Borrower”),
pursuant to Section 2.02(b) of the Loan Agreement, dated as of October [●],
2016, between the Borrower and HealthCare Royalty Partners III, L.P. (the
“Lender”) does hereby give the Lender notice that the Borrower requests to
borrow the amount of $[●] on [●], 201[●] under and pursuant to the Loan
Agreement and the other Loan Documents.

 

 

 

MNTX ROYALTIES SUB LLC

 

 

 

By:___________________________

Name:

Title:

 

CC:

HealthCare Royalty Partners III, L.P.
300 Atlantic Street, Suite 600
Stamford, CT 06901
Attention: Chief Legal Officer
Email: royalty-legal@hcroyalty.com

 

 

 
-9-

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EXHIBIT E

 

 

BORROWER CORPORATE COUNSEL LEGAL OPINION

 

 
-10-

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EXHIBIT F

 

 

ORANGE-BOOK LISTED PATENTS

 

 
-11-

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EXHIBIT G

 

 

FORM OF

 

CONTRIBUTION AGREEMENT

 

 

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EXHIBIT H

 

 

FORM OF

 

 

STOCK PLEDGE AGREEMENT

 

 
-12-

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EXHIBIT I

 

 

FORM OF

 

 

PROGENICS LIMITED RECOURSE GUARANTY

 

 
-13-

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EXHIBIT J

 

 

FORM OF

 

ASSIGNMENT AND ACCEPTANCE

 

 

 

Reference is made to that certain Loan Agreement, dated as of November 4, 2016
(as amended, supplemented or otherwise modified from time to time, the "Loan
Agreement") between HealthCare Royalty Partners III, L.P., a Delaware limited
partnership (“Lender”) and MNTX Royalties Sub LLC, a Delaware limited liability
company (“Borrower”), and the Notes and other Loan Documents related thereto.
Terms defined in the Loan Agreement and not otherwise defined herein are used
herein with the same meaning.

 

The Assignor and the Assignee referred to on Schedule 1 attached hereto agree as
follows:

 

1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases from the Assignor, [all] [a [●] percent] interest in the
Assignor's rights and obligations under the Loan Agreement and the other Loan
Documents, and Assignee hereby accepts such assignment and assumes [all] [such
proportion] of the Assignor's obligations thereunder, in each case, to the
extent first arising on or after the date hereof. After giving effect to such
sale and assignment, the amount of the Loans owing to the Assignee will be as
set forth on Schedule 1 attached hereto.

 

2. The Assignor (i) represents and warrants that it is the sole legal and
beneficial owner of the entire Loan that is the subject of the assignment
hereunder; (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Documents, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to
be created under or in connection with the Loan Documents or any other
instrument or document furnished pursuant thereto; (iii) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of Borrower or the performance or observance by Borrower of any of its
obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; and (iv) requests that the Borrower record in the
Register the assignment of such Note or Notes in an amount equal to the
principal amount of the Loan assigned to the Assignee pursuant hereto, as
specified on Schedule 1 attached hereto, and if requested by the Assignor, the
Borrower shall issue to the Assignee a new Note or Notes representing the
principal amount of the Loan assigned to the Assignee and return a new Note or
Notes representing the principal amount of the Loan retained by the Assignor, if
any, upon which issuances the Note or Notes attached hereto shall be cancelled.

 

 
-14-

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3. The Assignee (i) confirms that it has received a copy of the Loan Agreement,
the Note or Notes and the other Loan Documents, together with such documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon Lender or the Assignor based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Agreement or the Note or Notes and the other Loan Documents; and (iii) agrees
that it will perform in accordance with their terms all of the obligations first
arising on or after the date hereof that by the terms of the Loan Agreement and
the other Loan Documents are required to be performed by it as an assignee of an
interest therein, to the extent of the interest assigned to it by Assignor.

 

4. The effective date for this Assignment and Acceptance (the "Effective Date")
shall be the date set forth on Schedule 1 attached hereto.

 

5. As of the Effective Date, (i) the Assignee shall be a party to (or the holder
of) the Loan Agreement, the Note or Notes and the other Loan Documents (or the
portion thereof assigned to the Assignee) and have the rights and, to the extent
provided in this Assignment and Acceptance, obligations of an assignee thereof,
to the extent of the portion thereof assigned to Assignee by Assignor, and (ii)
the Assignor shall relinquish its rights and, to the extent provided in the Loan
Agreement and this Assignment and Acceptance, be released from its obligations
under the Loan Agreement and the Note (or the portion thereof assigned by
Assignor to Assignee).

 

6. From and after the Effective Date, the Borrower shall continue to make or
cause to be made all payments under the Loan Agreement, the Note or Notes and
all other Loan Documents in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest and any other fees or
expenses due from time to time thereunder with respect thereto) in accordance
with Articles 3, 4 and 5 of the Agreement. The Assignor and Assignee shall make
all appropriate adjustments in payments under the Loan Agreement, the Note or
Notes and the other Loan Documents for all periods from and after the Effective
Date directly between themselves.

 

7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York, including but not limited to
General Obligations Law Section 5-1401 but otherwise without regard to any laws
of such jurisdiction concerning conflicts or choice of law.

 

8. This Assignment and Acceptance may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
this Assignment and Acceptance and of Schedule 1 hereto by telecopier shall be
effective as delivery of a manually executed counterpart of this Assignment and
Acceptance.

 

* * *

 

 
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IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Assignment
and Acceptance and Schedule 1 to this Assignment and Acceptance to be executed
by their officers thereunto duly authorized as of the date specified on Schedule
1.

 

 

 

 

 

ASSIGNOR:

 

 

 

 

 

 

 

 

 

ASSIGNEE:

 

 
-16-

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SCHEDULE 1

 

 

 

As to the Loan which is being assigned.:

 

Aggregate outstanding principal amount of the Loan assigned:

 

Principal amount of Loan payable to Assignee:

 

Effective Date: [●], 20[●]

 

 

 

 

 

 

 

ASSIGNOR:

 

 

 

 

 

 

 

 

 

ASSIGNEE:

 

 
-17-

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EXHIBIT K

 

 

[RESERVED]

 

 
-18-

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EXHIBIT L

 

 

LICENSE AGREEMENT

  

 
-19-

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EXHIBIT M

 

 

FORM OF

 

 

BLOCKED ACCOUNT CONTROL AGREEMENT

(“LENDING CONTROL”)

 

 
-20-

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EXHIBIT N

 

 

FORM OF

 

 

OFFICER’S CERTIFICATE

 

-21-