Exhibit 10.6

 

June 30, 2016

 

Sorrento Therapeutics, Inc.

9380 Judicial Drive

San Diego, California 92121

 

Ladies and Gentlemen:

This letter agreement (this “Agreement”) sets forth the terms and conditions of
a binding agreement among Sorrento Therapeutics, Inc., a Delaware corporation
(“Sorrento”), the Chan Soon-Shiong Family Foundation, a Delaware exempt
corporation (“CSSFF”), and Cambridge Equities, LP, a Delaware limited
partnership (“Cambridge”), with reference to the following facts:

A. CSSFF owns, in the aggregate, 7,878,098 shares of common stock, par value
$0.0001 per share of Sorrento (the “Sorrento Shares”).

B. Cambridge owns a Common Stock Purchase Warrant, dated December 22, 2014, to
purchase 1,724,138 shares of Sorrento Common Stock at an exercise price of $5.80
per share (the “Sorrento Warrant”).

C. Sorrento owns, in the aggregate, 5,618,326 shares of common stock, par value
$0.0001 per share of NantKwest, Inc. (“NantKwest Shares”).

1. Purchase and Sale of Sorrento Shares; Sorrento Warrant.  Subject to the terms
and conditions of this Agreement, at the Closing, CSSFF will sell to Sorrento,
and Sorrento will purchase from CSSFF, the Sorrento Shares.  Subject to the
terms and conditions of this Agreement, at the Closing, Cambridge will surrender
and forfeit its rights to acquire up to 500,000 shares of common stock, par
value $0.0001 per share, of Sorrento (the “Sorrento Common Stock”) under the
Sorrento Warrant (such that immediately following the Closing, the Sorrento
Warrant will be exercisable by Cambridge for up to an aggregate of 1,224,138
shares of Sorrento Common Stock at an exercise price of $5.80 per share) (the
“Warrant Amendment”).

2. Purchase and Sale of NantKwest Shares.  Subject to the terms and conditions
of this Agreement, at the Closing, Sorrento will sell to CSSFF, and CSSFF will
purchase from Sorrento, the NantKwest Shares.

3. Consideration.  In consideration of the purchase and sale of the Sorrento
Shares and the NantKwest Shares and the Warrant Amendment, each as contemplated
by Sections 1 and 2 above: (a) CSSFF will convey, assign and transfer to
Sorrento the Sorrento Shares; and (b) Sorrento will convey, assign and transfer
to CSSFF the NantKwest Shares and wire transfer to CSSFF an aggregate of
$15,639,071.95 pursuant to wire instructions delivered by CSSFF to Sorrento,
which wire instructions will be delivered to Sorrento by July 1, 2016.

 

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4. CSSFF Representations.  CSSFF represents and warrants to Sorrento that
(a) CSSFF has full power and authority to execute and deliver, and to perform
all of its obligations under, this Agreement; (b) the execution, delivery and
performance by CSSFF of this Agreement have been approved by all requisite
action on the part of CSSFF; (c) the execution, delivery and performance of this
Agreement does not and will not: (i) violate or conflict with any law, rule,
regulation, order, writ, judgment, injunction, decree, determination, award,
contract, agreement or understanding presently in effect applicable to CSSFF
(including the charter and governing documents of CSSFF) or (ii) require any
authorization, consent, approval, license, exemption by or from, or filing or
registration with, any court, executive or legislative body, governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign; (d) this Agreement constitutes a legal, valid and binding obligation of
CSSFF enforceable against it in accordance with its terms; (e) CSSFF has good
title to and is the sole owner of the Sorrento Shares, free and clear of all
liens, charges and any encumbrances of any kind whatsoever (and at the Closing
Sorrento will receive good title to the Sorrento Shares, free and clear of all
liens, charges and any encumbrances of any kind whatsoever); (f) CSSFF is not a
party to any voting, trust, proxy or other agreement or understanding with
respect to the voting of such Sorrento Shares or any other capital stock of
Sorrento; (g) CSSFF did not offer or sell such Sorrento Shares by any form of
general solicitation or general advertising; (h) CSSFF is an “accredited
investor” as that term is defined in Rule 501(a) of Regulation D under the
Securities Act of 1933, as amended; (i) CSSFF (i) is a sophisticated person with
respect to the sale of such Sorrento Shares; (ii) has adequate information
concerning the business and financial condition of Sorrento to make an informed
decision regarding the sale of such Sorrento Shares; (iii) has independently and
without reliance upon Sorrento or any of its officers or directors, and based on
such information as CSSFF has deemed appropriate, made its own analysis and
decision to enter into this Agreement; and (iv) acknowledges that arm’s-length
negotiations between Sorrento and CSSFF resulted in CSSFF agreeing to the
sufficiency of the consideration hereunder.  CSSFF acknowledges that Sorrento
(and none of its officers, directors or representatives) has not given CSSFF any
investment advice, credit information or opinion on whether the sale of the
Sorrento Shares is prudent; and (j) Charles Kenworthy has authority to execute
this Agreement on behalf of CSSFF.

5. Cambridge Representations.  Cambridge represents and warrants to Sorrento
that (a) Cambridge has full power and authority to execute and deliver, and to
perform all of its obligations under, this Agreement; (b) the execution,
delivery and performance by Cambridge of this Agreement have been approved by
all requisite action on the part of Cambridge; (c) the execution, delivery and
performance of this Agreement does not and will not: (i) violate or conflict
with any law, rule, regulation, order, writ, judgment, injunction, decree,
determination, award, contract, agreement or understanding presently in effect
applicable to Cambridge (including the charter and governing documents of
Cambridge) or (ii) require any authorization, consent, approval, license,
exemption by or from, or filing or registration with, any court, executive or
legislative body, governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign; (d) this Agreement constitutes a legal,
valid and binding obligation of Cambridge enforceable against it in accordance
with its terms; (e) Cambridge has good title to and is the sole owner of the
Sorrento Warrant, free and clear of all liens, charges and any encumbrances of
any kind whatsoever; (f) Cambridge is an “accredited investor” as that term is
defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as
amended; (g) CSSFF (i) is a sophisticated person with respect to the Warrant
Amendment; (ii) has adequate information concerning the business and financial
condition of Sorrento to make an informed decision regarding the Warrant
Amendment; (iii) has independently and without reliance upon Sorrento or any of
its officers or directors, and based on such information as Cambridge has deemed
appropriate, made its own analysis and decision to enter into this Agreement;
and (iv) acknowledges that arm’s-length negotiations between Sorrento and
Cambridge resulted in Cambridge agreeing to the sufficiency of the consideration
hereunder.  Cambridge acknowledges that Sorrento (and none of its officers,
directors or representatives) has not given Cambridge any investment advice,
credit information or opinion on whether the Warrant Amendment is prudent; and
(h) Charles Kenworthy has authority to execute this Agreement on behalf of
Cambridge.

 

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6. Sorrento Representations.  Sorrento represents and warrants to CSSFF that
(a) Sorrento has full power and authority to execute and deliver, and to perform
all of its obligations under, this Agreement; (b) the execution, delivery and
performance by Sorrento of this Agreement have been approved by all requisite
action on the part of Sorrento; (c) the execution, delivery and performance of
this Agreement does not and will not: (i) violate or conflict with any law,
rule, regulation, order, writ, judgment, injunction, decree, determination,
award, contract, agreement or understanding presently in effect applicable to
Sorrento (including the charter and governing documents of Sorrento) or
(ii) require any authorization, consent, approval, license, exemption by or
from, or filing or registration with, any court, executive or legislative body,
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign; (d) this Agreement constitutes a legal, valid and binding
obligation of Sorrento enforceable against it in accordance with its terms; (e)
Sorrento has good title to and is the sole owner of the NantKwest Shares, free
and clear of all liens, charges and any encumbrances of any kind whatsoever (and
at the Closing CSSFF will receive good title to such NantKwest Shares, free and
clear of all liens, charges and any encumbrances of any kind whatsoever);
(f) Sorrento is not a party to any voting, trust, proxy or other agreement or
understanding with respect to the voting of such NantKwest Shares or any other
capital stock of NantKwest; (g) Sorrento did not offer or sell such NantKwest
Shares by any form of general solicitation or general advertising; (h) Sorrento
is an “accredited investor” as that term is defined in Rule 501(a) of Regulation
D under the Securities Act of 1933, as amended; (i) Sorrento (i) is a
sophisticated person with respect to the sale of such NantKwest Shares; (ii) has
adequate information concerning the business and financial condition of
NantKwest to make an informed decision regarding the sale of such NantKwest
Shares; (iii) has independently and without reliance upon CSSFF or NantKwest or
any of its officers or directors, and based on such information as Sorrento has
deemed appropriate, made its own analysis and decision to enter into this
Agreement; and (iv) acknowledges that arm’s-length negotiations between Sorrento
and CSSFF resulted in Sorrento agreeing to the sufficiency of the consideration
hereunder.  Sorrento acknowledges that none of CSSFF or NantKwest (and none of
its officers, directors or representatives) has given Sorrento any investment
advice, credit information or opinion on whether the sale of the NantKwest
Shares is prudent; and (j) Henry Ji has authority to execute this Agreement on
behalf of Sorrento.

7. Closing.  The closing of the sale and purchase of the Sorrento Shares and the
NantKwest Shares (the “Closing”) shall occur on or before July 8, 2016 (such
date to be mutually agreed between the parties).  At the Closing: (a) CSSFF will
convey, assign and transfer to Sorrento the Sorrento Shares; (b) Sorrento will
convey, assign and transfer to CSSFF the NantKwest Shares; (c) Sorrento will
wire transfer to CSSFF in immediately available funds the aggregate amount of
$15,639,071.95 to the account designated by CSSFF by written notice delivered to
Sorrento by July 1, 2016; and (d) Cambridge will surrender the original Sorrento
Warrant to Sorrento for cancellation and Sorrento will issue to Cambridge a new
warrant of like tenor representing the right to purchase up to an aggregate of
1,224,138 shares of Sorrento Common Stock at an exercise price of $5.80 per
share.

8. CSSFF Acknowledgments. CSSFF acknowledges and understands: (a) Sorrento and
its officers and directors may possess material nonpublic information not known
to CSSFF that may impact the value of the Sorrento Shares, including without
limitation, information concerning Sorrento’s business and financial results for
the six months ended June 30, 2016; (b) the disadvantage to which CSSFF is
subject due to the disparity of information between Sorrento and CSSFF;
(c) notwithstanding such disparity of information, CSSFF has deemed it
appropriate to sell the Sorrento Shares to Sorrento as contemplated hereunder
(and if CSSFF were in possession of some or all of any such material nonpublic
information, CSSFF might not sell the Sorrento Shares to Sorrento); (d) CSSFF
has made its own decision to consummate the transaction contemplated hereunder
based on its own independent review and consultations with such investment,
legal, tax, accounting and other advisers as it deemed necessary, and without
reliance on any representation or warranty of, or advice from, Sorrento; and
(e) CSSFF hereby waives any right to rescind or invalidate the sale of the
Sorrento Shares to Sorrento or to seek any damages or other remuneration from
Sorrento or its officers or directors based on the possession of any such
material nonpublic information by Sorrento or the lack of possession of any such
material nonpublic information by CSSFF.  Without limiting the generality of the
foregoing, CSSFF agrees that Sorrento and its officers, directors, stockholders,
employees and agents shall have no liability to CSSFF or its beneficiaries
whatsoever due to or in connection with Sorrento’s use or non-disclosure of any
material nonpublic information or otherwise as a result of the transaction
contemplated hereby, and CSSFF hereby irrevocably waives any claim that it might
have based on the failure of Sorrento to disclose any material nonpublic
information.

 

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9. Cambridge Acknowledgments. Cambridge acknowledges and understands:
(a) Sorrento and its officers and directors may possess material nonpublic
information not known to Cambridge that may impact the value of the Sorrento
Warrant, including without limitation, information concerning Sorrento’s
business and financial results for the six months ended June 30, 2016; (b) the
disadvantage to which Cambridge is subject due to the disparity of information
between Sorrento and Cambridge; (c) notwithstanding such disparity of
information, Cambridge has deemed it appropriate to agree to the Warrant
Amendment as contemplated hereunder (and if Cambridge were in possession of some
or all of any such material nonpublic information, Cambridge might not agree to
the Warrant Amendment); (d) Cambridge has made its own decision to consummate
the transaction contemplated hereunder based on its own independent review and
consultations with such investment, legal, tax, accounting and other advisers as
it deemed necessary, and without reliance on any representation or warranty of,
or advice from, Sorrento; and (e) Cambridge hereby waives any right to rescind
or invalidate the Warrant Amendment or to seek any damages or other remuneration
from Sorrento or its officers or directors based on the possession of any such
material nonpublic information by Sorrento or the lack of possession of any such
material nonpublic information by Cambridge.  Without limiting the generality of
the foregoing, Cambridge agrees that Sorrento and its officers, directors,
stockholders, employees and agents shall have no liability to Cambridge or its
beneficiaries whatsoever due to or in connection with Sorrento’s use or
non-disclosure of any material nonpublic information or otherwise as a result of
the transaction contemplated hereby, and Cambridge hereby irrevocably waives any
claim that it might have based on the failure of Sorrento to disclose any
material nonpublic information.

10. Sorrento Acknowledgments.  Sorrento acknowledges and understands: (a) CSSFF
and its officers and directors may possess material nonpublic information not
known to Sorrento that may impact the value of the NantKwest Shares, including
without limitation, information concerning NantKwest’s business and financial
results for the six months ended June 30, 2016; (b) the disadvantage to which
Sorrento is subject due to the disparity of information between Sorrento and
CSSFF; (c) notwithstanding such disparity of information, Sorrento has deemed it
appropriate to sell the NantKwest Shares to CSSFF as contemplated hereunder (and
if Sorrento were in possession of some or all of any such material nonpublic
information, Sorrento might not sell the NantKwest Shares to CSSFF);
(d) Sorrento has made its own decision to consummate the transaction
contemplated hereunder based on its own independent review and consultations
with such investment, legal, tax, accounting and other advisers as it deemed
necessary, and without reliance on any representation or warranty of, or advice
from, CSSFF or NantKwest; and (e) Sorrento hereby waives any right to rescind or
invalidate the sale of the NantKwest Shares to CSSFF or to seek any damages or
other remuneration from CSSFF or NantKwest or its officers or directors based on
the possession of any such material nonpublic information by CSSFF or the lack
of possession of any such material nonpublic information by Sorrento.  Without
limiting the generality of the foregoing, Sorrento agrees that CSSFF and
NantKwest and its officers, directors, stockholders, employees and agents shall
have no liability to Sorrento or its beneficiaries whatsoever due to or in
connection with CSSFF’s use or non-disclosure of any material nonpublic
information or otherwise as a result of the transaction contemplated hereby, and
Sorrento hereby irrevocably waives any claim that it might have based on the
failure of CSSFF to disclose any material nonpublic information.

11. Further Assurances.  Each party shall do and perform, or cause to be done
and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, including
stock powers, as the other party may reasonably request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.

12. Arbitration.  Any and all disputes arising out of or related to this
Agreement shall be resolved pursuant to binding arbitration held in the County
of Los Angeles in the State of California and administered by the Judicial
Arbitration and Mediation Services, Inc. pursuant to its Streamlined Arbitration
Rules & Procedures then in effect. Each party shall bear its own attorneys’ fees
and expenses in such arbitration.  The parties agree to abide by all decisions
and awards rendered in such proceedings.  Such decisions and awards rendered by
the arbitrator shall be final and conclusive.

13. Governing Law.  This Agreement and any matter or dispute relating hereto
shall be governed by and construed in accordance with the laws of the State of
California, without regard to principles of conflicts of law.

 

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14. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.  Any party may execute this Agreement by
facsimile or .pdf signature and the other party shall be entitled to rely on
such facsimile or .pdf signature as evidence that this Agreement has been duly
executed by such party.

15. Voluntary Execution of Agreement.  This Agreement is executed voluntarily,
without any duress or undue influence on the part of any party or on behalf of
any party.  Each party acknowledges that (a) it has read and understands the
terms and consequences of this Agreement; (b) it has been represented in the
preparation, negotiation and execution of this Agreement by legal counsel of its
own choice or that it has voluntarily declined to seek such counsel; and (c) it
is fully aware of the legal and binding effect of this Agreement.

[Signature Page Follows]

 

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Please kindly countersign this Agreement to confirm your agreement with the
terms and conditions set forth herein.

 

Sincerely,

 

Chan Soon-Shiong Family Foundation

 

Cambridge Equities, LP

 

 

 

 

 

 

 

 

By:  MP13 Ventures, LLC, its general partner

 

 

 

 

 

By:

/s/ Charles Kentworthy

 

By:

/s/ Charles Kentworthy

Name: 

Charles Kenworthy

 

Name: 

Charles Kenworthy

Title:

Executive Vice President

 

Title:

Manager

 

ACKNOWLEDGED AND AGREED:

 

Sorrento Therapeutics, Inc.

 

By:

 

/s/ Henry Ji, Ph.D.

Name:

 

Henry Ji, Ph.D.

Title:

 

President & Chief Executive Officer