Exhibit 10.3

 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED
WITH “[***]”. SUCH IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT
BECAUSE IT IS (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO
THE COMPANY IF DISCLOSED.

 

AMENDMENT TO ROYALTY INTEREST ACQUISITION AGREEMENT

 

AMENDMENT, dated as of June 8, 2020 (this “Amendment”), to the Royalty Interest
Acquisition Agreement, dated as of December 28, 2017 (the “Acquisition
Agreement”), by and among Elobix AB, a limited liability company organized under
the laws of Sweden, (“Seller”), HealthCare Royalty Partners III, L.P., a limited
partnership organized under the laws of the State of Delaware (“Buyer”) and,
solely for the purposes of Section 5.08, Section 5.09 and Article VIII, Albireo
Pharma, Inc. a Delaware corporation (“Seller Parent”). Capitalized terms used
but not otherwise defined herein shall have the meanings ascribed thereto in the
Acquisition Agreement.

 

WHEREAS, Buyer, Seller and Seller Parent desire to amend certain of the
provisions of the Acquisition Agreement in accordance with Section 8.07(a) of
the Acquisition Agreement to address certain revisions and additional agreements
among the Parties and an additional investment by Buyer;

 

NOW THEREFORE, in consideration of the mutual covenants, agreements
representations and warranties set forth herein, the Parties agree as follows:

 

1.Amendments. Effective upon the Additional Investment Closing,

 

(a)the Acquisition Agreement shall be amended as follows:

 

(i)Section 1.01 of the Acquisition Agreement shall be amended by removing and
deleting in their entirety the following terms: “Cap Amount”, “Cap Date”, “Cap
Payment”, “Sales Milestone Event”, “Sales Milestone” and “Sales Milestone
Payment”.

 

(ii)The following definitions in Section 1.01 of the Acquisition Agreement shall
be amended and restated in their entirety as set forth below:

 

“Amendment Payment” shall mean $15,000,000.

 

“Applicable Percentage” shall mean 100%.

 

“Investment Amount” shall mean the sum of the Approval Payment and the Amendment
Payment paid by Buyer to Seller under this Agreement.

 

“Knowledge of the Seller” shall mean the actual knowledge of Ron Cooper, Jan
Mattsson, Simon Harford and Jason Duncan.

 

 

 

“Material Territory Patent Rights” means any issued Territory Patent Right that
claims the composition of matter of Elobixibat or a method using Elobixibat for
an indication (a) that is approved for marketing by a Regulatory Authority in
Japan or (b) for which a marketing approval application for Elobixibat has been
filed by Licensee in Japan.

 

“Royalty Interest” shall mean an undivided interest in respect of all present
and future rights of Seller to receive the Applicable Percentage of the Included
Product Payments.

 

(iii)Section 2.01(c)(ii) of the Acquisition Agreement shall be deleted in it is
entirety.

 

(iv)Section 2.02(d) of the Acquisition Agreement shall be amended and restated
in its entirety as follows:

 

“(d) In the event Buyer receives any payment pursuant to the License Agreement
or this Agreement (directly, via sweep of funds from the Deposit Account or
otherwise) that is not part of the Royalty Interest (“Excess Payments”), Buyer
shall remit to Seller each such Excess Payment within 10 Business Days after
receipt thereof by wire transfer of immediately available funds as directed by
Seller.”

 

(v)Section 2.02(e) of the Acquisition Agreement shall be amended and restated in
its entirety as follows:

 

“(e) For clarity, any Withholding Tax (excluding the excess of (a) any
Subsequent Withholding Tax in respect of the applicable payments, subject to
Section 5.13, over (b) the amount of any tax benefit, offset or credit to Buyer
as a result of such Subsequent Withholding Tax) deducted or withheld from any
payment due to Buyer pursuant to the License Agreement or this Agreement shall,
for purposes of this Agreement, be considered a Royalty Interest Payment
received by Buyer. For clarity and with the intent of avoiding “double
counting,” any payments made by Seller or any of its Affiliates to Buyer in
respect of any Indemnified Withholding Tax pursuant to Section 8.05(d) shall,
for purposes of this Agreement, not be considered “Royalty Interest Payments.”
As an illustration of the foregoing, if a Royalty Interest Payment equal to $100
is payable to Buyer and there is an Indemnified Withholding Tax in an amount
equal to $20, Buyer shall be deemed to have received a Royalty Interest Payment
in an amount equal to $100, and the $20 payment by Seller or any of its
Affiliates to Buyer in respect of such Indemnified Withholding Tax shall not be
deemed a Royalty Interest Payment.”

 

(vi)Section 2.04(a) of the Acquisition Agreement shall be amended by deleting
“whether the Sales Milestone Event has occurred,” as the beginning of such
section.

 

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(vii)Section 2.04(b) of the Acquisition Agreement shall be amended by deleting
“the Cap Amount,” at the beginning of such section.

 

(viii)Section 2.05 of the Acquisition Agreement shall be deleted in its
entirety.

 

(ix)Section 6.01(c) of the Acquisition Agreement shall be deleted in its
entirety.

 

(x)Section 7.01(c) of the Acquisition Agreement shall be amended and restated in
its entirety as follows:

 

“(c) This Agreement shall terminate on the earlier to occur of (x) the date on
which this Agreement is terminated by either Party pursuant to and in accordance
with Sections 7.01(a) and, in the case of termination by Buyer, Section 7.01(b)
and (y) the License Expiration.”

 

(b)The following definition in the Protective Rights Agreement shall be amended
and restated in its entirety as follows:

 

(i)“Collateral Patent Rights” means the following Japanese patents: No. 3665055,
No. 4870552, No. 5421326, No. 5889321, No. 6097695, No. 6456921 and No.
2017-519487.

 

2.Representations and Warranties.

 

(a)Each of Seller and Seller Parent represents and warrants to Buyer that:

 

(i)Each of Seller and Seller Parent has all necessary legal power and authority
to enter into, execute and deliver this Amendment and to perform all of the
obligations to be performed by it hereunder and to consummate the transactions
contemplated hereunder. None of the execution and delivery by each of Seller and
Seller Parent of this Amendment, the performance by each of Seller and Seller
Parent of any of the obligations to be performed by it hereunder, or the
consummation by each of Seller and Seller Parent of any of the transactions
contemplated hereby, 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.

 

(ii)Once signed by each of Seller and Seller Parent, this Amendment will have
been duly authorized, executed and delivered by each of Seller and Seller Parent
and, assuming it is duly executed by Buyer, this Amendment will then constitute
the valid and binding obligation of Seller and Seller Parent, enforceable
against Seller and Seller Parent 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.

 

3

 

 

(iii)As of the date of this Amenement, to the Knowledge of Seller, no event has
occurred and is continuing which could reasonably be expected to have a Material
Adverse Effect on the Royalty Interest.

 

(b)Buyer represents and warrants to Seller and Seller Parent that

 

(i)Buyer has all necessary legal power and authority to enter into, execute and
deliver this Amendment and to perform all of the obligations to be performed by
it hereunder and to consummate the transactions contemplated hereunder. None of
the execution and delivery by Buyer of this Amendment, the performance by Buyer
of any of the obligations to be performed by it hereunder, or the consummation
by Buyer of any of the transactions contemplated hereby, 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.

 

(ii)Once signed by Buyer, this Amendment will have been duly authorized,
executed and delivered by Buyer and, assuming it is duly executed by Seller and
Seller Parent, this Amendment will then constitute the valid and binding
obligation of Buyer, enforceable against Buyer 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.

 

3.Additional Agreements and Investment.

 

(a)Additional Investment. Within 15 Business Days of the date of this Amendment,
subject to satisfaction of the conditions set forth in Section 3(b) of this
Amendment, Buyer shall pay to Seller or its designee an amount equal to the
Amendment Payment less the amount of Buyer Amendment Expenses, by wire transfer
of immediately available funds as directed by Seller (the “Additional
Investment”). The date of the closing of the Additional Investment (the
“Additional Investment Closing”) shall be referred to herein as the “Additional
Investment Closing Date”.

 

For purposes hereof, the term “Buyer Amendment Expenses” shall mean the amount
of Buyer’s actual, documented, out-of-pocket fees and expenses incurred in
connection with Buyer’s confirmatory due diligence and legal documentation
associated with the negotiation and execution of this Amendment, provided that
in no event shall Buyer Amendment Expenses exceed [***]. Buyer acknowledges that
[***] of the Buyer Amendment Expenses has been paid by Seller prior to the date
hereof, which amount shall be credited toward the total amount of Buyer
Amendment Expenses to be deducted from the Amendment Payment pursuant to this
Section 3(a).

 

(b)Additional Investment Conditions. The obligations of Buyer to effect the
Additional Investment Closing and to make the Amendment Payment in accordance
with Section 3(a) of this Amendment shall be subject to the following
conditions, as of the date of the Additional Investment Closing, any of which
may be waived by Buyer in its sole discretion:

 

4

 

 

(i)Each of Seller and Seller Parent shall have performed and complied in all
material respects with all covenants required by the Transaction Documents to be
performed or complied with by it on or prior to the Additional Investment
Closing Date.

 

(ii)At the Additional Investment Closing, (A) the Subsequent Closing
Representations (other than Section 3.08(b)) and the representations and
warranties of the Seller and Seller Parent in Section 2 of this Amendment shall
be true, correct and complete in all respects on and as of the Additional
Investment Closing Date as though made on and as of the Additional Investment
Closing Date, and (B) the Subsequent Closing Representations in Section 3.08(b),
shall be true, correct and complete on and as of the Additional Investment
Closing Date as though made on and as of the Additional Investment Closing Date
except where the failure to be true, correct or complete would not reasonably be
expected to have a Material Adverse Effect; and

 

(iii)Seller shall have delivered to Buyer a certificate dated as of the date of
the Additional Investment Closing executed by an officer of Seller expressly
confirming and certifying that the conditions set forth in Section 3(b)(i) and
3(b)(ii) of this Amendment have been met.

 

(c)The Parties acknowledge that the provisions of this Section 3 of this
Amendment shall be deemed to be incorporated into and part of the terms of the
Acquisition Agreement.

 

(d)Each of the Parties shall use their commercially reasonable efforts as
promptly as practicable following the Additional Investment Closing to seek an
additional consent from Licensee that would, among other things, allow Buyer the
right to directly enforce the obligations of Licensee and the rights of Seller,
in each case, with respect to the Royalty Interest and the Collateral Patent
Rights under the License Agreement and to assign such Seller rights to Buyer. In
the event that such consent of the Licensee is granted, Seller and Buyer shall
use their commercially reasonable efforts to negotiate in good faith amendments
to the Purchase Agreement to reflect the assignment of such rights to Buyer and
related changes, including to the covenants in Article V, to reflect such
assignment. Notwithstanding the foregoing, Seller shall not, in the exercise of
commercially reasonable efforts, be required to pay any amount to Licensee to
obtain the consent or amendment referred to in this Section 3(d) unless Buyer
agrees to reimburse Seller for any such amounts.

 

(e)In furtherance of its obligations under Sections 6 and 8 of the Protective
Rights Agreement, within thirty (30) days of the Additional Investment Closing,
Seller Parent shall execute and deliver to Buyer (i) one original of a Pledge
Agreement and Power of Attorney in the form of Exhibit A to the Protective
Rights Agreement and (ii) one original of a Special Power of Attorney in the
form of Exhibit B to the Protective Rights Agreement, in each case, for
execution of a collateral assignment of the Collateral Patent Rights to Buyer,
or the implementation of the sale or other disposition of the Collateral Patent
Rights pursuant to Buyer’s good faith exercise of the rights and remedies
granted pursuant to the Protective Rights Agreement.

 

5

 

 

4.No Other Changes. Except as expressly provided herein, the Acquisition
Agreement is not amended, modified or otherwise affected by this Amendment, and
the Acquisition Agreement and the rights and obligations of the parties
thereunder are hereby ratified and confirmed in all respects. From and after the
date hereof, all references to the Acquisition Agreement shall refer to the
Acquisition Agreement as amended by this Amendment (including for the avoidance
of doubt, references to the Acquisition Agreement in that certain Assignment
Agreement, dated as of December 28, 2017 by and between Seller and Buyer).

 

5.Miscellaneous Provisions.

 

(a)Headings and Captions. The headings and captions in this Amendment are for
convenience and reference purposes only and shall not be considered a part of or
affect the construction or interpretation of any provision of this Agreement.

 

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

 

(c)Severability. If any provision of this Amendment is held to be invalid or
unenforceable, the remaining provisions shall nevertheless be given full force
and effect. Any provision of this Amendment 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.

 

(d)Expenses. Except to the extent reflected in payments made pursuant to Section
3(a) of this Amendment, each of Buyer, Seller and Seller Parent will pay its own
fees and expenses in connection with entering into and consummating the
transactions contemplated by this Amendment.

 

6

 

 

(e)Governing Law; Jurisdiction. This Amendment shall be governed by, and
construed, interpreted and enforced in accordance with, the laws of the State of
New York without giving effect to the principles of conflicts of law thereof
that would apply any other law. Each Party unconditionally and irrevocably
consents to the exclusive jurisdiction of the courts of the State of New York
located in New York City (Borough of Manhattan) and the federal district court
for the Southern District of New York located in New York City (Borough of
Manhattan) with respect to any suit, action or proceeding arising out of or
relating to this Amendment or the transactions contemplated hereby. Each Party
hereby further irrevocably waives any objection, including any objection to the
laying of venue or based on the grounds of forum non conveniens, which it may
now or hereafter have to the bringing of any action or proceeding in such
jurisdiction in respect of any Transaction Document. Each Party hereby
irrevocably consents to the service of process out of any of the courts referred
to in this Section (5(e) in any such suit, action or proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid, to it at its
address set forth in the Acquisition Agreement. Each Party hereby irrevocably
waives any objection to such service of process and further irrevocably waives
and agrees not to plead or claim in any suit, action or proceeding commenced
hereunder or under any other Transaction Document that service of process was in
any way invalid or ineffective. Nothing herein shall affect the right of a Party
to serve process on the other Party in any other manner permitted by law.

 

(f)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 THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED UNDER
ANY TRANSACTION DOCUMENT OR THIS AMENDMENT. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO ANY TRANSACTION
DOCUMENT (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). 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 5(F).

 

[Remainder of Page Intentionally Left Blank]

 

7

 

 

IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by the
undersigned as of the date first written above.

 

SELLER: ELOBIX AB           By: /s/ Ronald Cooper   Name: Ronald Cooper   Title:
Director     SELLER PARENT: ALBIREO PHARMA, INC.           By: /s/ Ronald Cooper
  Name: Ronald Cooper   Title: Chief Executive Officer     BUYER: HealthCare
Royalty Partners III, L.P.       By:HealthCare Royalty GP III, LLC, its general
partner           By: /s/ Clarke B. Futch   Name: Clarke B. Futch   Title:
Managing Partner

 

[SIGNATURE PAGE – RIAA AMENDMENT]