Exhibit 10.2

 

[ * ] = CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN EXCLUDED PURSUANT TO
REGULATION S-K, iTEM 601(B)(10).  sUCH EXCLUDED INFORMATION IS NOT MATERIAL AND
WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.

Funding Agreement

By and Between

Cytokinetics, Incorporated

and

Dolya Holdco 19 Designated Activity Company

Dated as of July 14, 2020

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TABLE OF CONTENTS

 

 

 

Page

 

 

ARTICLE 1 PURCHASE, SALE AND ASSIGNMENT OF THE ACQUIRED INTANGIBLES

1

 

 

Section 1.1

Purchase, Sale and Assignment

1

 

 

Section 1.2

No Assumed Obligations, Etc.

1

 

 

ARTICLE 2 CLOSING

1

 

 

Section 2.1

Closing

1

 

 

Section 2.2

Payment of Purchase Price

1

 

 

Section 2.3

Additional Tranche Purchase Price

2

 

 

ARTICLE 3 REPRESENTATIONS AND WARRANTIES

2

 

 

Section 3.1

Seller’s Representations and Warranties

2

 

 

Section 3.2

Buyer’s Representations and Warranties

5

 

 

Section 3.3

No Implied Representations and Warranties; Reservation of Rights

6

 

 

ARTICLE 4 CONDITIONS TO CLOSING; CONDITIONS TO FIRST AND SECOND TRANCHES

6

 

 

Section 4.1

Conditions to the Buyer’s Obligations

6

 

 

Section 4.2

Conditions to the Seller’s Obligations

7

 

 

Section 4.3

Conditions to the First Tranche

8

 

 

Section 4.4

Conditions to the Second Tranche

8

 

 

Section 4.5

Termination of Second Tranche Obligation

8

 

 

ARTICLE 5 COVENANTS

9

 

 

Section 5.1

Reporting

9

 

 

Section 5.2

Royalties; Royalty Reports

9

 

 

Section 5.3

Disclosures; Public Announcement

10

 

 

Section 5.4

Inspections and Audits of the Seller

11

 

 

Section 5.5

Intellectual Property Matters

11

 

 

Section 5.6

Efforts to Complete Clinical Trials and Commercialize the Product

12

 

 

Section 5.7

Further Assurances

12

 

 

Section 5.8

Out-Licenses

12

 

 

Section 5.9

Use of Proceeds

13

 

 

Section 5.10

Negative Pledge; Preservation of Assets

13

 

 

ARTICLE 6 INDEMNIFICATION

13

 

 

Section 6.1

General Indemnity

13

 

 

Section 6.2

Notice of Claims

13

 

 

Section 6.3

Limitations on Liability

14

 

 

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Section 6.4

Third Party Claims

14

 

 

Section 6.5

Exclusive Remedy

15

 

 

ARTICLE 7 TERMINATION

15

 

 

Section 7.1

Mutual Termination

15

 

 

Section 7.2

Automatic Termination

15

 

 

Section 7.3

[*]

15

 

 

Section 7.4

Termination Upon Funding Failure

15

 

 

Section 7.5

Survival

15

 

 

ARTICLE 8 CONFIDENTIALITY

16

 

 

Section 8.1

Confidentiality

16

 

 

Section 8.2

Authorized Disclosure

16

 

 

ARTICLE 9 MISCELLANEOUS

17

 

 

Section 9.1

Definitions

17

 

 

Section 9.2

Certain Interpretations

27

 

 

Section 9.3

Headings

27

 

 

Section 9.4

Notices

27

 

 

Section 9.5

Expenses

29

 

 

Section 9.6

Assignment

29

 

 

Section 9.7

Amendment and Waiver

29

 

 

Section 9.8

Entire Agreement

29

 

 

Section 9.9

No Third Party Beneficiaries

29

 

 

Section 9.10

Governing Law

30

 

 

Section 9.11

JURISDICTION; VENUE

30

 

 

Section 9.12

Severability

30

 

 

Section 9.13

Specific Performance

30

 

 

Section 9.14

Relationship of Parties

31

 

 

Section 9.15

Counterparts

31

 

 

Section 9.16

Withholding

31

 

 

Section 9.17

Tax Treatment

32

 

 

Section 9.18

[*]

32

 

Index of Exhibits

 

Exhibit A:

Form of Funding Request

Exhibit B:

Form of Seller Security Agreement

 

 

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FUNDING AGREEMENT

This Funding Agreement, dated as of July 14, 2020, (this “Agreement”), is made
and entered into by and between Dolya Holdco 19 Designated Activity Company, a
designated activity company incorporated under the laws of Ireland under company
under 669527 (the “Buyer”), and Cytokinetics, Incorporated, a Delaware
corporation (the “Seller”).

W I T N E S E T H:

Whereas, the Buyer desires to acquire the Acquired Intangibles from the Seller
in exchange for payment of the Purchase Price, and the Seller desires to sell
the Acquired Intangibles to the Buyer in exchange for the Buyer’s payment of the
Purchase Price, in each case on the terms and conditions set forth in this
Agreement;

Now Therefore, in consideration of the representations, warranties, covenants
and agreements set forth herein and for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Seller and the Buyer
hereby agree as follows:

Article 1

PURCHASE, SALE AND ASSIGNMENT OF THE ACQUIRED INTANGIBLES

Section 1.1Purchase, Sale and Assignment.  At the First Tranche Funding Date
upon the payment of the First Tranche Purchase Price, and upon the terms and
subject to the conditions of this Agreement, the Seller shall sell, transfer,
assign and convey to the Buyer, and the Buyer shall purchase, acquire and accept
from the Seller, the Acquired Intangibles free and clear of all Liens (other
than Liens created by Buyer and Permitted Liens). For the avoidance of doubt,
the Acquired Intangibles do not represent any right, title or interest in the
Intellectual Property Rights.

Section 1.2No Assumed Obligations, Etc.  Notwithstanding any provision in this
Agreement to the contrary or any other agreement between the parties or their
Affiliates, the Buyer is only agreeing, on the terms and conditions set forth in
this Agreement, to purchase, acquire and accept the Acquired Intangibles and is
not assuming any liability or obligation of the Seller of whatever nature,
whether presently in existence or arising or asserted hereafter.

Article 2

CLOSING

Section 2.1Closing.  The closing and each Funding Date shall take place on the
date hereof subject to the conditions set forth in Article 4 have been
satisfied, or at such other place, time and date as the parties hereto may
mutually agree.  

Section 2.2Payment of Purchase Price.  

(a)Payment of First Tranche Purchase Price.  Upon the Seller’s election, in its
sole discretion, to require the funding of the First Tranche, subject to the
conditions precedent set forth in Section 4.3, on the First Tranche Funding
Date, the Buyer shall pay to the Seller the First Tranche Purchase Price by wire
transfer of immediately available funds to the account designated by the Seller.

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(b)Payment of Second Tranche Purchase Price.  Upon the Seller’s election, in its
sole discretion, to require the funding of the Second Tranche, subject to the
conditions precedent set forth in Section 4.4, on the Second Tranche Funding
Date, the Buyer shall pay to the Seller the Second Tranche Purchase Price by
wire transfer of immediately available funds to the account designated by the
Seller.

Section 2.3Additional Tranche Purchase Price.  In the event that the Seller
intends to develop the Product in any Other Indication, at the election of the
Seller, in its sole discretion, the Seller and the Buyer shall negotiate in good
faith any additional funding commitments by the Buyer (the payment of which
shall be the “Additional Tranche Purchase Price”) with respect to the
development of the Product in such Other Indication and amend this Agreement to
provide any additional amounts payable to the Buyer in consideration for such
additional funding commitments and enter into additional documentation as the
Seller and the Buyer may negotiate in good faith, which shall include an
agreement with respect to the Additional Tranche Purchase Price on substantially
the same terms as the document attached as Schedule 2.3.

Article 3

REPRESENTATIONS AND WARRANTIES

Section 3.1Seller’s Representations and Warranties.  The Seller represents and
warrants to the Buyer that as of the date hereof:

(a)Existence; Good Standing.  The Seller is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of
Delaware.  The Seller is duly licensed or qualified to do business and is in
corporate good standing in each jurisdiction in which the nature of the business
conducted by it or the character or location of the properties and assets owned,
leased or operated by it makes such licensing or qualification necessary, except
where the failure to be so licensed or qualified and in corporate good standing
has not and would not reasonably be expected to have, either individually or in
the aggregate, a material adverse effect on (i) the ability of the Seller to
enter into and to perform its obligations under this Agreement, (ii) the
Seller’s rights in or to the Product or the existing Patent Rights or (iii)
after the Initial Closing Date, the Buyer’s rights with respect to, or the
timing, amount or duration of, the Acquired Intangibles.

(b)Authorization.  The Seller has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement.  The
execution, delivery and performance of this Agreement, and the consummation of
the transactions contemplated hereby, have been duly authorized by all necessary
corporate action on the part of the Seller.

(c)Enforceability.  This Agreement has been duly executed and delivered by an
authorized officer of the Seller and constitutes the valid and binding
obligation of the Seller, enforceable against the Seller in accordance with its
terms, except as may be limited by applicable Bankruptcy Laws or by general
principles of equity (whether considered in a proceeding in equity or at law).

(d)No Conflicts.  The execution, delivery and performance by the Seller of this
Agreement and the consummation of the transactions contemplated hereby do not
and will not (i) contravene or conflict with the certificate of incorporation or
bylaws of the Seller, (ii) contravene or conflict with or constitute a default
under any law or Judgment binding upon or applicable to the Seller except for
such contraventions, conflicts, breaches or defaults that, individually or in
the aggregate, would not reasonably be expected to have a material adverse
effect on (A) the ability of the Seller to enter into and to perform its
material obligations under this Agreement, (B) the Seller’s rights in or to the
Product or the existing Patent Rights or (C) after the Initial Closing Date, the
Buyer’s rights with respect to, or the timing,

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amount or duration of, the Acquired Intangibles, or (iii) contravene or conflict
with or constitute a material default under any material agreement binding upon
or applicable to the Seller.

(e)Consents.  Except for the consents that have been obtained on or prior to the
Initial Closing Date or filings required by the federal securities laws or stock
exchange rules, no consent, approval, license, order, authorization,
registration, declaration or filing with or of any Governmental Entity or other
Person is required to be done or obtained by the Seller in connection with (i)
the execution and delivery by the Seller of this Agreement, (ii) the performance
by the Seller of its obligations under this Agreement or (iii) the consummation
by the Seller of any of the transactions contemplated by this Agreement.

(f)No Litigation.  There is no action, suit, investigation or proceeding
pending, or, to the Knowledge of the Seller, threatened (in writing) before any
Governmental Entity to which the Seller is a party that, individually or in the
aggregate would, if determined adversely to the Seller, reasonably be expected
to prevent or materially and adversely affect (i) the ability of the Seller to
enter into and to perform its obligations under this Agreement, (ii) the
Seller’s rights in or to the Product or its existing Patent Rights or (iii)
after the Initial Closing Date, the Buyer’s rights with respect to, or the
timing, amount or duration of, the Acquired Intangibles.

(g)Compliance.

(i)All applications, submissions, information and data related to the Product
submitted or utilized as the basis for any request to any Regulatory Authority
by or on behalf of the Seller were true and correct in all material respects as
of the date of such submission or request, and any material updates, changes,
corrections or modification to such applications, submissions, information or
data required under applicable laws or regulations have been submitted to the
necessary Regulatory Authorities.

(ii)The Seller has not committed any act, made any statement or failed to make
any statement in respect of the Product that would reasonably be expected to
provide a basis for the FDA to invoke its policy with respect to “Fraud, Untrue
Statements of Material Facts, Bribery, and Illegal Gratuities”, or any other
Regulatory Authority to invoke similar policies, set forth in any applicable
laws or regulations.

(h)Licenses.

(i)In-Licenses.  There are no In-Licenses.

(ii)Out-Licenses.  There are no Out-Licenses (other than the Collaboration
Agreement).

(i)No Liens; Title to Acquired Intangibles.  As of the date hereof, none of the
property or assets, in each case, that specifically relate to the Product, nor
any of the Intellectual Property Rights, of the Seller is subject to any Lien,
except for Permitted Liens.  Upon the First Tranche Funding Date and the payment
of the First Tranche Purchase Price by the Buyer, the Buyer will have acquired,
subject to the terms and conditions set forth in this Agreement, good and
marketable title to the Acquired Intangibles, free and clear of all Liens (other
than Liens created by the Buyer).

(j)Intellectual Property.

(i)Schedule 3.1(j)(i) of the Disclosure Schedule lists all of the currently
existing Patents included within the Patent Rights. Except as set forth on
Schedule 3.1(j)(i) of the Disclosure Schedule, the Seller is the sole and
exclusive owner of all of the existing Patent Rights.  Schedule 3.1(j)(i)

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

 

of the Disclosure Schedule specifies as to each listed patent or patent
application the jurisdictions by or in which each such patent has issued as a
patent or such patent application has been filed, including the respective
patent or application numbers.  Schedule 3.1(j)(i) of the Disclosure Schedule
specifies any Person other than the Seller owning or having an interest in such
Patent Right, including the nature of such interest.   

(ii)As of the date hereof, there are no issued Patents within the Patent Rights.

(iii)The Seller has not received any written notice from any Third Party
challenging the inventorship or ownership of the rights of the Seller in and to,
or the patentability, validity or enforceability of, any of the existing Patent
Rights, or asserting or alleging that the development, manufacture or
importation of the Product prior to the date hereof infringed or misappropriated
the intellectual property rights of such Third Party or that the development,
manufacture, importation, sale, offer for sale or use of the Product will
infringe, misappropriate or otherwise violate the intellectual property rights
of such Third Party. To the Knowledge of the Seller, the discovery, development,
manufacture, importation, sale, offer for sale or use of the Product, including
following the issuance of a Marketing Approval, has not and will not, infringe,
misappropriate or otherwise violate any Patents or other intellectual property
rights owned by any Third Party.

(iv)The Seller has not received any written notice that there is any, and, to
the Knowledge of the Seller, there is no, Person who is or claims to be an
inventor under any of the existing Patent Rights who is not a named inventor
thereof.

(v)To the Knowledge of the Seller, no Person has infringed, misappropriated or
otherwise violated, or is infringing, misappropriating or otherwise violating,
any of the existing Patent Rights.

(vi)There is no pending or, to the Knowledge of the Seller, threatened (in
writing), adverse actions, claims, suits or proceedings against the Seller or
any of its Affiliates involving the Intellectual Property Rights or the Product.
The Seller is not a party to any pending and, to the Knowledge of the Seller,
there is no threatened in writing, litigation, interference, reexamination,
opposition or like procedure involving any of the existing Patent Rights.

(k)UCC Representation and Warranties.  The Seller’s exact legal name is, and for
the immediately preceding ten years has been, “Cytokinetics, Incorporated”.  The
Seller is, and for the prior ten years has been, incorporated in the State of
Delaware.

(l)Brokers’ Fees.  There is no investment banker, broker, finder, financial
advisor or other intermediary who has been retained by or is authorized to act
on behalf of the Seller who might be entitled to any fee or commission in
connection with the transactions contemplated by this Agreement.

(m)Public Company Reporting Obligations.  The Seller has filed or furnished (as
applicable) with or to the SEC all registration statements, forms, reports,
certifications and other documents required to be filed or furnished by the
Seller with or to the SEC (all such registration statements, forms, reports,
certifications and other documents (including those that the Seller may file or
furnish after the date hereof until the Initial Funding Date) are referred to
herein as the “Seller SEC Documents”).  The Seller’s financial statements
included within the Seller SEC Documents have been prepared in accordance with
accounting principles generally accepted in the United States and such financial
statements fairly present in all material respects the financial condition and
operating results of the Seller as of the dates, and for the periods, indicated
therein, subject in the case of the unaudited financial statements to normal
year-end audit adjustments and the absence of footnotes.

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(n)Provision of Information. All written information made available by or on
behalf of the Seller, as redacted to remove highly confidential information such
as chemical, manufacturing and patient details, to the Buyer or its Affiliates
in connection with this Agreement was (when provided) and is (as of the Initial
Closing Date), to the Seller’s Knowledge, true and accurate in all material
respects; and the Seller has not knowingly or negligently failed to disclose to
the Buyer any information related to the Product or the Intellectual Property
Rights in its or its Affiliates’ control or possession, or of which the Seller
is aware, that would be reasonably necessary to make any information related to
the Product or the Intellectual Property Rights, as applicable, that has been
disclosed to the Buyer prior to the Initial Closing Date not misleading in any
material respect.

Section 3.2Buyer’s Representations and Warranties.  The Buyer represents and
warrants to the Seller that as of the date hereof:

(a)Existence; Good Standing.  The Buyer is a designated activity company duly
incorporated, validly existing and in good standing under the laws of
Ireland.  [*]. The Buyer is duly licensed or qualified to do business and is in
good standing in each jurisdiction in which the nature of the business conducted
by it or the character or location of the properties and assets owned, leased or
operated by it makes such licensing or qualification necessary, except where the
failure to be so licensed or qualified and in good standing has not and would
not reasonably be expected to have, either individually or in the aggregate, a
material adverse effect on the business of the Buyer or the ability of the Buyer
to enter into and to perform its obligations under this Agreement.

(b)Authorization.  The Buyer has the requisite right, power and authority to
execute, deliver and perform its obligations under this Agreement.  The
execution, delivery and performance of this Agreement, and the consummation of
the transactions contemplated hereby, have been duly authorized by all necessary
action on the part of the Buyer.

(c)Enforceability.  This Agreement has been duly executed and delivered by an
authorized person of the Buyer and constitutes the valid and binding obligation
of the Buyer, enforceable against the Buyer in accordance with its terms, except
as may be limited by applicable Bankruptcy Laws or by general principles of
equity (whether considered in a proceeding in equity or at law).

(d)No Conflicts.  The execution, delivery and performance by the Buyer of this
Agreement do not and will not (i) contravene or conflict with the organizational
documents of the Buyer, (ii) contravene or conflict with or constitute a default
under or violation of any law or Judgment binding upon or applicable to the
Buyer except for such contraventions, conflicts, defaults or violations that,
individually or in the aggregate, would not reasonably be expected to result in
a material adverse effect on the business of the Buyer or the ability of the
Buyer to enter into and to perform its obligations under this Agreement or (iii)
contravene or conflict with, constitute a breach of, or constitute a default
under any material agreement binding upon or applicable to the Buyer.

(e)Consents.  No consent, approval, license, order, authorization, registration,
declaration or filing with or of any Governmental Entity or other Person is
required to be done or obtained by the Buyer in connection with (i) the
execution and delivery by the Buyer of this Agreement, (ii) the performance by
the Buyer of its obligations under this Agreement or (iii) the consummation by
the Buyer of any of the transactions contemplated by this Agreement.

(f)No Litigation.  There is no action, suit, investigation or proceeding pending
or, to the knowledge of the Buyer, threatened (in writing) before any
Governmental Entity to which the Buyer is a party that would, if determined
adversely to the Buyer, reasonably be expected to prevent or materially and
adversely affect the ability of the Buyer to perform its obligations under this
Agreement.

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(g)Financing.  The Buyer has or will have sufficient cash on hand or binding and
enforceable commitments to provide it with funds sufficient to pay the entire
Purchase Price. The Buyer has no reason to believe, and has not been provided
with any notice (whether written or otherwise), that any of the Persons
providing the commitments referred to above are unable or are not required or do
not intend, for any reason, to satisfy their obligations under such commitments.
The Buyer acknowledges that its obligations under this Agreement are not
contingent on obtaining financing.

(h)Brokers’ Fees.  There is no investment banker, broker, finder, financial
advisor or other intermediary who has been retained by or is authorized to act
on behalf of the Buyer who might be entitled to any fee or commission in
connection with the transactions contemplated by this Agreement.

(i)Access to Information.  The Buyer acknowledges that it has (a) reviewed
Seller’s documents and information relating to the Product (including any
relevant Seller SEC Documents) and (b) had the opportunity to ask such questions
of, and to receive answers from, representatives of the Seller concerning the
Product, in each case, as it deemed necessary to make an informed decision to
enter into this Agreement.  The Buyer has such knowledge, sophistication and
experience in financial and business matters that it is capable of evaluating
the risks and merits of entering into the transaction contemplated by this
Agreement.

Section 3.3No Implied Representations and Warranties; Reservation of
Rights.  The Buyer acknowledges and agrees that, other than the express
representations and warranties of the Seller specifically contained in THIS
ARTICLE 3, (a) there are no representations or warranties of the Seller either
expressed or implied with respect to the Patent Rights, the Royalties or
otherwise and that the Buyer does not rely on, and shall have no remedies in
respect of, any representation or warranty not specifically set forth in THIS
ARTICLE 3, and all other representations and warranties are hereby expressly
disclaimed, and (b) nothing contained herein guarantees that the Seller or any
of its Affiliates will receive Marketing Approval and/or any other approvals
necessary for the sale or Commercialization of any Product, that the Seller will
achieve any sales of the Product or that sales of the Product or the aggregate
Royalties due to the Buyer will achieve any specific amount.  Except for the
Acquired Intangibles and Buyer’s rights under Section 5.5, the Buyer further
acknowledges and agrees that no licenses, assignments, or other rights under any
assets (including the Patent Rights or any other intellectual property RIGHTS)
of the Seller and its Affiliates or rights related thereto are granted pursuant
to this Agreement, including by implication, estoppel, exhaustion or otherwise.

Article 4

CONDITIONS TO CLOSING; CONDITIONS TO FirST and Second Tranches

Section 4.1Conditions to the Buyer’s Obligations.  The obligations of the Buyer
to consummate the transactions contemplated hereunder on the date hereof (the
“Initial Closing Date”) are subject to the satisfaction or waiver, at or prior
to the Initial Closing Date, of each of the following conditions precedent:

(a)The Seller shall have performed and complied in all material respects with
all agreements, covenants, obligations and conditions required to be performed
and complied with by it under

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this Agreement at or prior to the Initial Closing Date, and the Buyer shall have
received a certificate executed by a duly authorized officer of the Seller on
the Initial Closing Date certifying on behalf of the Seller to the effect of the
foregoing.

(b)The Seller shall have delivered to the Buyer the duly executed Transaction
Agreements (other than the Seller Security Agreement).

(c)The Buyer shall have received a certificate of the Secretary or an Assistant
Secretary of the Seller, dated the Initial Closing Date, certifying as to
(i) the incumbency of each officer of each such Seller executing this Agreement
and (ii) the attached thereto copies of (A) the Seller’s certificate of
incorporation, (B) bylaws and (C) resolutions adopted by the Seller’s Board of
Directors authorizing the execution and delivery and performance by the Seller
of this Agreement and the consummation by the Seller of the transactions
contemplated hereby.

(d)There shall not have been issued and be in effect any Judgment of any
Governmental Entity enjoining, preventing or restricting the consummation of the
transactions contemplated by this Agreement.

(e)There shall not have been instituted or be pending any action or proceeding
by any Governmental Entity or any other Person (i) challenging or seeking to
make illegal, to delay materially or otherwise directly or indirectly to
restrain or prohibit the consummation of the transactions contemplated hereby,
(ii) seeking to obtain material damages in connection with the transactions
contemplated hereby or (iii) seeking to restrain or prohibit the Buyer’s
purchase, or the Seller’s sale, of the Acquired Intangibles.

Section 4.2Conditions to the Seller’s Obligations.  The obligations of the
Seller to consummate the transactions contemplated hereunder on the Initial
Closing Date are subject to the satisfaction or waiver, at or prior to the
Initial Closing Date, of each of the following conditions precedent:

(a)The Buyer shall have performed and complied in all material respects with all
agreements, covenants, obligations and conditions required to be performed and
complied with by it under this Agreement at or prior to the Initial Closing
Date, and the Seller shall have received a certificate executed by a duly
authorized representative of the Buyer on the Initial Closing Date certifying on
behalf of the Buyer to the effect of the foregoing.

(b)The Seller shall have received, as applicable, either (i) a valid, properly
executed Internal Revenue Service Form W-9 certifying that the Buyer is exempt
from U.S. “backup” withholding Tax or (ii) a valid, properly executed Internal
Revenue Service Form W-8BEN-E (or other applicable W-8, with any necessary
accompanying attachments) certifying that the Buyer is exempt from U.S. federal
withholding Tax under a United States income Tax treaty with respect to
royalties and other income.

(c)The Seller shall have received a certificate of an authorized person of the
Buyer, dated the Initial Closing Date, certifying as to the incumbency of the
officers executing this Agreement on behalf of the Buyer.

(d)The Buyer shall have delivered to the Seller the duly executed Transaction
Agreements (other than the Seller Security Agreement).

(e)There shall not have been issued and be in effect any Judgment of any
Governmental Entity enjoining, preventing or restricting the consummation of the
transactions contemplated by this Agreement.

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(f)There shall not have been instituted or be pending any action or proceeding
by any Governmental Entity or any other Person (i) challenging or seeking to
make illegal, to delay materially or otherwise directly or indirectly to
restrain or prohibit the consummation of the transactions contemplated hereby,
(ii) seeking to obtain material damages in connection with the transactions
contemplated hereby or (iii) seeking to restrain or prohibit the Buyer’s
purchase, or the Seller’s sale, of the Acquired Intangibles.

Section 4.3Conditions to the First Tranche.  The obligations of the Buyer to pay
the First Tranche Purchase Price on the First Tranche Funding Date are subject
to the satisfaction or waiver, at or prior to the First Tranche Funding Date, of
each of the following conditions precedent:

(a)Either (i) the oHCM Trial Condition shall have occurred by the applicable
Sunset Date or (ii) the nHCM Trial Condition shall have occurred by the
applicable Sunset Date.

(b)The Seller shall have delivered a Funding Request with regards to the First
Tranche.

(c)The Seller shall have executed and delivered to the Buyer the Seller Security
Agreement.

(d)The Seller shall have delivered to the Buyer evidence reasonably satisfactory
to Buyer that any Liens on the Product Assets (other than Permitted Liens) or on
the Acquired Intangibles shall have been, or concurrently with payment of the
First Tranche Purchase Price will be, released and terminated, or, in the case
of Liens securing Permitted Secured Indebtedness, subject to an Acceptable
Intercreditor Agreement (as defined in the Seller Security Agreement).

(e)After giving effect to the purchase of the Acquired Intangibles by the Buyer
and the payment of First Tranche Purchase Price pursuant to Section 2.2(a) and
the use of proceeds thereof, the Seller shall be in compliance with Section
5.10.

For the avoidance of doubt, nothing herein shall obligate the Seller to deliver
a Funding Request with respect to the First Tranche.

Section 4.4Conditions to the Second Tranche.  The obligations of the Buyer to
pay the Second Tranche Purchase Price on the Second Tranche Funding Date are
subject to the satisfaction or waiver, at or prior to the Second Tranche Funding
Date, of each of the following conditions precedent:

(a)The Initial Funding Date shall have occurred.

(b)Each of the oHCM Trial Condition and the nHCM Trial Condition shall have
occurred prior to the applicable Sunset Date.

(c)The Seller shall have delivered a Funding Request with regards to the Second
Tranche.

For the avoidance of doubt, nothing herein shall obligate the Seller to deliver
a Funding Request with respect to the Second Tranche.

Section 4.5Termination of Second Tranche Obligation.  If (a) the First Tranche
Purchase Price has previously been paid and (b) (i) the oHCM Trial Condition has
not occurred prior to the applicable Sunset Date (in the case where the First
Tranche was funded upon the occurrence of the nHCM Trial Condition ) or (ii) the
nHCM Trial Condition has not occurred prior to the applicable Sunset Date (in
the

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case where the First Tranche was funded upon the occurrence of the oHCM Trial
Condition), then the obligations of the Buyer under Section 2.2(b) and Section
4.4 shall terminate.

Article 5

COVENANTS

Section 5.1Reporting.  

(a)At all times after the Initial Funding Date, the Seller shall, subject to
this Section 5.1, provide the Buyer, promptly following the end of each calendar
quarter, but in any event no later than [*] calendar days after the end of such
calendar quarter, a reasonably detailed report (the “Update Report”) setting
forth, with respect to such calendar quarter, the Intellectual Property Updates,
Regulatory Updates, Clinical Updates and Commercial Updates. The Seller shall
also provide the Buyer with such additional information regarding the updates
included in each Update Report as the Buyer may reasonably request from time to
time. The Seller shall prepare and maintain, shall cause its Affiliates (if
applicable) to prepare and maintain, and use Diligent Efforts to include in any
Out-License a provision requiring any counterparty to any Out-License of the
Seller or the Seller’s Affiliates to prepare and maintain, reasonably complete
and accurate records of the information to be disclosed in each Update Report
and to disclose such information to Seller to enable the disclosures of such
information in each Update Report, as contemplated herein. The parties
understand and agree that if the Seller is unable to obtain any of the foregoing
information from any counterparty to any Out-License, the Seller will not be
obligated to provide such information unless and until Seller is in possession
and control of such information; provided that the Seller shall use Diligent
Efforts to obtain in a timely manner from each such counterparty any information
to be disclosed in each Update Report, consistent with the terms of the
applicable Out-License(s). All Update Reports, and the Confidential Information
contained therein, shall be the Confidential Information of Seller and subject
to the obligations of confidentiality set forth in Article 8.   

(b)The Seller may redact or otherwise exclude from any Update Report (i) any
information, the redaction or exclusion of which is reasonably required to
comply with applicable laws (including those related to patient information and
privacy laws) and (ii) any information that does not relate to the Acquired
Intangibles, the Patent Rights or the Product; provided that the Seller shall
provide to the Buyer a reasonable summary of any information that is redacted,
to the extent permitted by applicable law and, solely in the case of information
falling under clause (ii) above, to the extent permitted by any obligations of
confidentiality to any Third Party.

(c)Thirty (30) calendar days prior to the Initial Funding Date, and thereafter,
promptly following the end of each calendar year, the Seller shall provide the
Buyer with a schedule of the then-existing Patent Rights, including setting
forth any new patents issued or patent applications filed covering the Product.

Section 5.2Royalties; Royalty Reports.

(a)

(i)From and after the Royalty Commencement Date and for the duration of the
Term, the Seller shall pay to the Buyer the Royalty, for such calendar quarter
promptly, but in any event no later than (i) forty-five (45) calendar days after
the end of each of the first three calendar quarters in each

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calendar year and (ii) sixty (60) calendar days after the end of the last
calendar quarter in each calendar year.

(ii)[*].

(b)If any amounts payable by the Seller shall be overdue for five (5) Business
Days (other than any such unpaid amounts arising as a result of late or improper
reporting or late payment by a Permitted Licensee or are otherwise subject to a
good faith dispute), the Seller obligated to make such payment shall
additionally pay to the party to whom such payment is owed simple interest on
the sum outstanding at the rate per annum equal to the lesser of (i)  the sum of
[*]% and the prime rate for the date that payment was due, as published by The
Wall Street Journal, Eastern U.S. edition and (ii) the highest rate permitted by
law shall apply.  The payment of such interest shall not prevent the Buyer from
exercising any other rights it may have as a consequence of the lateness of any
payment.

(c)

(i)Concurrently with the payment of each Royalty, the Seller shall deliver a
written report setting forth in reasonable detail, (i) the calculation of the
Royalty payable to the Buyer for the prior calendar quarter identifying, on a
country-by-country basis of those countries in the Royalty Purchase Territory,
the number of units of the Product sold by the Seller and its Affiliates and, to
the extent available, each counterparty to any Out-License, gross sales
generated by or on behalf of the Seller and any of its Subsidiaries and each
counterparty to any Out-License, foreign currency exchange rates used (which
shall be rates of exchange determined in a manner consistent with the Seller’s
method for calculating rates of exchange in the preparation of the Seller’s
annual financial statements in accordance with accounting principles generally
accepted in the United States), and a detailed break-down of all permitted
deductions from gross sales used to determine Net Sales and the Royalty due to
the Buyer and (ii) the cumulative year-to-date aggregate Net Sales for the
Product through the end of the prior calendar quarter (the “Royalty Report”);
[*]. The Royalty Report shall be in a form agreed by the parties and reasonable
acceptable to the Buyer and the Seller and, to the extent permitted under any
applicable confidentiality or disclosure obligations, shall also have attached
copies of any royalty reports received by the Seller from Permitted Licensees
pursuant to any Out-Licenses.

(ii)The Seller shall use Diligent Efforts to include in each Out-License a
provision requiring the counterparty to such Out-License to prepare and maintain
reasonably complete and accurate records of the information to be disclosed in
each Royalty Report, and to disclose such information to the Seller to enable
the disclosures of such information in each Royalty Report, as contemplated
herein.  The Seller shall use Diligent Efforts to obtain in a timely manner from
each such counterparty any information to be disclosed in each Royalty Report,
consistent with the terms of the applicable Out-License(s).

(d)The Seller shall be permitted to make prepayments of the Royalties hereunder
which shall be credited to future Royalty payments in such order as directed by
the Seller in connection with any such prepayment.

Section 5.3Disclosures; Public Announcement.  The parties shall agree upon the
Press Release to be issued announcing this Agreement and the other Transaction
Agreements.  Except for the Press Release, the Seller’s Current Report on Form
8-K describing the material terms of this Agreement, the other Transaction
Agreements and the transactions contemplated by this Agreement and the other
Transaction Agreements or any other public announcement using substantially the
same disclosure as such Press Release or Form 8-K, neither the Buyer nor the
Seller shall, and each party hereto shall cause its respective Representatives,
Affiliates and Affiliates’ Representatives not to, issue a press release or
other

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public announcement or otherwise make any public disclosure with respect to this
Agreement or the subject matter hereof without the prior written consent of the
other party hereto (which consent shall not be unreasonably withheld or
delayed), except as may be required by applicable law, regulation or stock
exchange rule (in which case the party hereto required to make the press release
or other public announcement or disclosure shall allow the other party hereto
reasonable time to comment on such press release or other public announcement or
disclosure in advance of such issuance); provided that (a) no review or consent
shall be required with respect to disclosures by either party hereto otherwise
previously approved pursuant to this Section 5.3 and (b) notwithstanding
anything herein to the contrary, each party hereto may, without the review or
consent of the other party hereto, disclose (and nothing herein shall be
construed to restrict either party hereto from disclosing) the Purchase Price
and the amount and nature of the Acquired Intangibles (and related accounting
disclosures of the transactions contemplated hereby) in such party’s periodic
reports and financial statements.

Section 5.4Inspections and Audits of the Seller.  From and after the Royalty
Commencement Date and for the duration of the Term, upon at least [*] Business
Days written notice and during normal business hours, no more frequently than
[*] per calendar year, the Buyer may cause an inspection and/or audit by an
independent public accounting firm reasonably acceptable to the Seller to be
made of the Seller’s books of account for the purpose of determining the
correctness of Royalties made under this Agreement.  Upon the Buyer’s reasonable
request not more than [*] in any calendar year while any Out-License remains in
effect, the Seller shall exercise any rights it may have under any Out-License
relating to the Product to cause an inspection and/or audit by an independent
public accounting firm to be made of the books of account of any counterparty
thereto for the purpose of determining the correctness of Royalties paid under
this Agreement.  All of the expenses of any inspection or audit requested by the
Buyer hereunder (including the fees and expenses of such independent public
accounting firm designated for such purpose) shall be borne by the Buyer, unless
the independent public accounting firm determines that Royalties previously paid
were incorrect by an amount greater than five percent (5%) of the Royalties
actually paid, in which case such expenses shall be borne by the Seller.  The
terms on which any such independent public accounting firm is engaged shall
provide that such independent public accounting firm may not disclose the
confidential information of the Seller or any such counterparty to any
Out-License relating to the Product to the Buyer, except to the extent such
disclosure is either necessary to determine the correctness of Royalties or such
confidential information otherwise would be included in a Royalty Report.  All
information obtained by the Buyer as a result of any such inspection or audit
shall be Confidential Information of the Seller subject to Article 8 and the
independent public accounting firm shall be considered a Representative of Buyer
for purposes of Article 8.  Any payment owed by one party to another as a result
of the audit shall be made within [*] Business Days of receipt of the audit
report. No royalty period will be subject to an audit more than once.  

Section 5.5Intellectual Property Matters.  At all times after the Initial
Funding Date and prior to the Royalty Termination Date with respect to any
country in the Royalty Purchase Territory, if the Seller recovers monetary
damages from a Third Party in an action brought for such Third Party’s
infringement of any Patent Rights in connection with the exploitation of any
product, therapy or service intended for use, or actually used, in the
Applicable Indications, and that actually or prospectively competes with the
Product, where such damages (whether in the form of judgment or settlement) are
awarded for such infringement of such Patent Rights relating to the Product, (i)
such damages will be allocated first to the reimbursement of any expenses
incurred by the Seller in bringing such action (including reasonable attorney’s
fees) not already reimbursed from other damages awarded under the same action,
then (ii) any remaining amount of such damages will be reduced, if applicable,
to comply with allocation of recovered damages with licensors of such Patent
Rights required under any In-Licenses or Permitted Licensees of such Patent
Rights under any Out-Licenses, if any, and (iii) any residual amount of such
damages after application of (i) and (ii) will be treated as Net Sales of the
Product for purposes of Royalties under this Agreement.

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Section 5.6Efforts to Complete Clinical Trials and Commercialize the
Product.  After the Initial Funding Date, the Seller shall (directly or
indirectly through an Affiliate or Permitted Licensee) use Diligent Efforts to
seek Marketing Approval in the Royalty Purchase Territory for the Product in (a)
prior to the Second Tranche Funding Date, the Applicable Indication that was the
subject of the First Tranche or (b) following the Second Tranche Funding Date,
each of the Applicable Indications.  Following the issuance of any Marketing
Approval of the Product in any country in the Royalty Purchase Territory, the
Seller (or its Affiliates or Permitted Licensees) shall use Diligent Efforts to
Commercialize the Product in the indication(s) for which the Product has
received Marketing Approval in each such country where it has received such
Marketing Approval.  Unless otherwise agreed pursuant to Section 2.3, the Seller
shall have no obligation to research, develop or commercialize the Product for
any Other Indications.

Section 5.7Further Assurances.  After the Initial Closing Date, the Seller and
the Buyer agree to execute and deliver such other documents, certificates,
agreements and other writings and to take such other actions as may be
reasonably necessary in order to give effect to the transactions contemplated by
this Agreement.  Notwithstanding the foregoing, nothing herein shall obligate
the Seller to send a Funding Request with respect to either the First Tranche or
the Second Tranche.  

Section 5.8Out-Licenses.

(a)Subject to compliance with this Section 5.8, the Seller may grant, at its
sole discretion, licenses, covenants not to sue, or other similar rights to any
Affiliate or Third Party (each, a “Permitted Licensee”) with respect to all or a
portion of the Intellectual Property Rights including to develop, manufacture,
promote, market, use, sell, offer for sale or import any Product in all or any
portion of the world [*] (any agreement granting any of the foregoing rights, a
“Permitted License”).

(b)The Seller will cause to be included in all Out-Licenses provisions (i)
permitting the Seller to audit such counterparty on terms and conditions
consistent in all material respects with the Buyer’s rights to audit the Seller
set forth in Section 5.4 and (ii) requiring the counterparty to any Out-License
to keep books and records in accordance in all material respects with the
requirements of the Seller and its Affiliates set forth in Section 5.4. The
Seller shall use Diligent Efforts to include in all Out-Licenses provisions (i)
requiring the counterparty to any Out-License to provide the Seller with notice
of any infringement of the Patent Rights and (ii) requiring the counterparty to
any Out-License to provide the requisite information regarding its Net Sales of
any Product to allow the calculation of such Net Sales in accordance with the
definition of Net Sales contained in this Agreement.

(c)The Seller shall provide the Buyer prompt written notice within [*] Business
Days of any counterparty’s material breach of its obligations under any
Out-License of which any of the individuals named in the definition of
“Knowledge of the Seller” becomes aware, to the extent such material breach is
directly related to the Buyer’s rights or Seller’s obligations to Buyer under
this Agreement.

(d)The Seller shall provide the Buyer with written notice following the
termination of any Out-License.

(e)[*] calendar days prior to the Initial Funding Date, and thereafter, promptly
(and in any event within [*] calendar days), the Seller shall provide the Buyer
with (i) true, correct and complete copies of each Out-License executed after
the Initial Closing Date, and (ii) true, correct and complete copies of each
material amendment, supplement, modification to, or written waiver under, an
Out-License. In addition, [*] calendar days prior to the Initial Funding Date,
and thereafter, promptly (and in any event within [*] Business Days), the Seller
shall provide the Buyer true, correct and complete copies of any material
reports provided by the Seller to the Permitted Licensee to any Out-License or
provided to the Seller by the Permitted Licensee to any Out-License, to the
extent that such reports relate to the Acquired

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Intangibles, the Product or the Patent Rights. All materials delivered by the
Seller to the Buyer pursuant to this Section 5.8(e) shall be the Confidential
Information of Seller and subject to the obligations of confidentiality set
forth in Article 8. The Seller may redact or otherwise exclude from any of the
foregoing any information, the redaction or exclusion of which is reasonably
required to comply with applicable laws (including those related to patient
information and privacy laws) or in the case of any information that does not
relate to the Acquired Intangibles, the Patent Rights or the Product, to the
extent required by any obligations of confidentiality to any Third Party;
provided that the Seller shall provide to the Buyer a reasonable summary of any
information that is redacted to the extent permitted by applicable law or such
obligation.

Section 5.9Use of Proceeds.  [*].  

Section 5.10Negative Pledge; Preservation of Assets.  Effective from and after
the Initial Funding Date and prior to the date that the Total Net Payments paid
to the Buyer equals or exceeds [*]% of the amounts funded by the Buyer pursuant
to Section 2.2, the Seller shall not, and shall not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien on the
Acquired Intangibles or any of the Product Assets, except for (i) the security
interest created by Buyer or granted to the Buyer under this Agreement and (ii)
Permitted Liens.  For the avoidance of doubt, nothing herein shall restrict the
Seller or any of its Subsidiaries from incurring unsecured Indebtedness or
Indebtedness secured by assets that are not Product Assets or Acquired
Intangibles.

Article 6

INDEMNIFICATION

Section 6.1General Indemnity.  Subject to Section 6.3, from and after the
Initial Closing Date:

(a)The Seller hereby agrees to indemnify, defend and hold harmless the Buyer and
its Affiliates and its and their directors, partners, managers, trustees,
officers, agents and employees (the “Buyer Indemnified Parties”) from, against
and in respect of all Loss suffered or incurred by the Buyer Indemnified Parties
to the extent arising out of or resulting from (i) any breach of any of the
representations or warranties (in each case, when made) of the Seller provided
in this Agreement or (ii) any breach of any of the covenants or agreements of
the Seller in this Agreement.

(b)The Buyer hereby agrees to indemnify, defend and hold harmless the Seller and
its Affiliates and their directors, officers, agents and employees (the “Seller
Indemnified Parties”) from, against and in respect of all Loss suffered or
incurred by the Seller Indemnified Parties to the extent arising out of or
resulting from (i) any breach of any of the representations or warranties (in
each case, when made) of the Buyer provided in this Agreement or (ii) any breach
of any of the covenants or agreements of the Buyer in this Agreement.

Section 6.2Notice of Claims.  If either a Buyer Indemnified Party, on the one
hand, or a Seller Indemnified Party, on the other hand (such Buyer Indemnified
Party on the one hand and such Seller Indemnified Party on the other hand being
hereinafter referred to as an “Indemnified Party”), has suffered or incurred any
Loss for which indemnification may be sought under this Article 6, the
Indemnified Party shall so notify the other party from whom indemnification is
sought under this Article 6 (the “Indemnifying Party”) promptly (and in any case
within fourteen (14) calendar days after such party has knowledge that such Loss
has been suffered or incurred by the Indemnified Party) in writing describing
such Loss, the amount or estimated amount thereof, if known or reasonably
capable of estimation, and the method of computation of such Loss, all with
reasonable particularity and containing a reference to the provisions of

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this Agreement in respect of which such Loss shall have occurred.  If any claim,
action, suit or proceeding is asserted or instituted by a Third Party (a “Third
Party Claim”) with respect to which an Indemnified Party intends to claim any
Loss under this Article 6, such Indemnified Party shall promptly (and in any
case within five (5) calendar days) notify the Indemnifying Party of such claim,
action, suit or proceeding and tender to the Indemnifying Party the defense of
such claim, action, suit or proceeding.  A failure by an Indemnified Party to
give timely notice of such claim, action, suit or proceeding in a timely manner
pursuant to this Section 6.2 shall not limit the obligation of the Indemnifying
Party under this Article 6, except to the extent such Indemnifying Party is
actually prejudiced thereby.

Section 6.3Limitations on Liability.  The indemnification provided for in this
Article 6 shall be subject to the following limitations:

(a)The Seller’s maximum liability pursuant to Section 6.1(a) shall not exceed an
amount equal to [*].

(b)The Buyer’s maximum liability pursuant to Section 6.1(b) shall not exceed
[*].

(c)Notwithstanding anything to the contrary in this Agreement, neither party
hereto shall be liable under this Agreement for any Loss suffered or incurred by
the other party that result from any inaccuracy in or breach of any
representation or warranty in this Agreement if the party seeking
indemnification for such Loss (whether under this Article 6 hereof or otherwise)
had knowledge of such inaccuracy or breach at the time of Closing.

(d)For the avoidance of doubt, no party hereto shall be liable for any lost
profits or revenue, lost opportunity or consequential, punitive, special or
incidental damages (and no claim for indemnification hereunder shall be
asserted) as a result of any breach or violation of any covenant or agreement of
such party (including under this Article 6) in or pursuant to this Agreement.

Section 6.4Third Party Claims.  Upon providing notice to an Indemnifying Party
by an Indemnified Party pursuant to Section 6.2 of the commencement of any Third
Party Claim with respect to which such Indemnified Party intends to claim any
Loss under this Article 6, such Indemnifying Party shall have the right to
defend such claim, at such Indemnifying Party’s expense and with counsel of its
choice reasonably satisfactory to the Indemnified Party.  If the Indemnifying
Party assumes the defense of such claim, the Indemnified Party shall, at the
request of the Indemnifying Party, use commercially reasonable efforts to
cooperate in such defense; provided, that the Indemnifying Party shall bear the
Indemnified Party’s reasonable out-of-pocket costs and expenses incurred in
connection with such cooperation.  So long as the Indemnifying Party is
conducting the defense of such claim as provided in this Section 6.4, the
Indemnified Party may retain separate co-counsel at its expense and may
participate in the defense of such claim. Neither the Indemnified Party nor the
Indemnifying Party shall consent to the entry of any Judgment or enter into any
settlement with respect to such claim without the prior written consent of the
other; provided that the consent of the Indemnified Party shall not be required
if such Judgment or settlement (a) provides for the payment by the Indemnifying
Party of money as sole relief (if any) for the claimant (other than customary
and reasonable confidentiality obligations relating to such claim, Judgment or
settlement), (b) results in the full and general release of the Indemnified
Party from all liabilities arising out of, relating to or in connection with
such claim and (c) does not involve a finding or admission of any violation of
any law, rule, regulation or Judgment, or the rights of any Person, and has no
effect on any other claims that may be made against the Indemnified Party.  Any
party’s assumption of the defense of any Third Party Claim can be made with a
reservation of the right to contest the right of Indemnified Party to be
indemnified with respect to such claim under this Agreement, and a party’s
consent to any settlement of a Third Party Claim shall not be used as evidence
of the truth of the allegations in any Third Party Claim or the merits of such
Third Party Claim.  Furthermore, the existence of any Third Party Claim shall
not create a presumption

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of any breach by a party to this Agreement of any of its representations,
warranties or covenants set forth in this Agreement.

Section 6.5Exclusive Remedy.  Except as set forth in Section 9.13, from and
after Initial Closing Date, the rights of the parties hereto pursuant to (and
subject to the conditions of) this Article 6 shall be the sole and exclusive
remedy of the parties hereto and their respective Affiliates with respect to any
Loss (whether based in contract, tort or otherwise) resulting from or relating
to any breach of the representations, warranties covenants and agreements made
under this Agreement or any certificate, document or instrument delivered
hereunder, and each party hereto hereby waives, to the fullest extent permitted
under applicable law, and agrees not to assert after the Initial Closing Date,
any other claim or action in respect of any such breach.  Notwithstanding the
foregoing, claims for common law fraud shall not be waived or limited in any way
by this Article 6.

Article 7

Termination

Section 7.1Mutual Termination.  This Agreement may be terminated by mutual
written agreement of the Buyer and the Seller.

Section 7.2Automatic Termination.  Unless earlier terminated pursuant to Section
7.1, Section 7.3 or Section 7.4, this Agreement shall continue in full force and
effect until the earlier of:

(a)sixty (60) days after such time as the Seller is no longer obligated to pay
any Royalties under this Agreement, at which point this Agreement shall
automatically terminate, except with respect to any rights that shall have
accrued prior to such termination and survive pursuant to Section 7.5 herein; or

(b)the Sunset Date applicable to the nHCM Trial Condition, if the nHCM Trial
Condition has not occurred on or prior to such date.

Section 7.3[*]

Section 7.4Termination Upon Funding Failure or Product Failure.  

(a)The Seller may terminate this Agreement if the Buyer fails to pay the First
Tranche Purchase Price when required pursuant to Section 2.2 and such failure is
not cured within [*] calendar days; and

(b)Either the Seller or the Buyer may terminate this Agreement upon [*] Business
Days’ prior written notice upon the occurrence of a Product Failure prior to
First Commercial Sale of the Product.

Section 7.5Survival.  Notwithstanding anything to the contrary in this Article
7, the following provisions shall survive termination of this Agreement: Section
5.3 (Disclosures), Article 6 (Indemnification), Section 7.5 (Survival), Article
8 (Confidentiality) and Article 9 (Miscellaneous).  Termination of this
Agreement shall not relieve any party of liability in respect of breaches under
this Agreement by any party on or prior to termination.  Notwithstanding
anything in this Agreement, Section 9.14 (Relationship of the Parties), Section
9.16 (Withholding) and Section 9.17 (Tax Treatment) shall survive until thirty
(30) days after the expiration of the applicable statute of limitations.

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Article 8

CONFIDENTIALITY

Section 8.1Confidentiality.  Except to the extent expressly authorized by this
Agreement or otherwise agreed in writing by the parties, the parties hereto
agree that, for the term of this Agreement and for ten (10) years thereafter,
each party (the “Receiving Party”) shall keep confidential and shall not publish
or otherwise disclose or transfer and shall not use for any purpose other than
as provided for in this Agreement (which includes the exercise of any rights or
the performance of any obligations hereunder) any information furnished to it by
or on behalf of the other party (the “Disclosing Party”) directly relating to
the Product, the Acquired Intangibles, the Royalty or the transaction
contemplated hereunder and delivered pursuant to this Agreement (such
information, “Confidential Information” of the Disclosing Party), except for
that portion of such information that:

(a)was already known to the Receiving Party at the time of disclosure by the
Disclosing Party on a non-confidential basis;

(b)was generally available to the public or otherwise part of the public domain
at the time of its disclosure to the Receiving Party;

(c)became generally available to the public or otherwise part of the public
domain after its disclosure, other than through any act or omission of the
Receiving Party or its Representatives in breach of this Agreement;

(d)is independently developed by the Receiving Party or any of its Affiliates
without the use of the Confidential Information;

(e)was disclosed to the Receiving Party, other than under an obligation of
confidentiality by a Third Party who had no obligation to the Disclosing Party
not to disclose such information to others; or

(f)is subsequently disclosed to the Receiving Party on a non-confidential basis
by a Third Party without obligations of confidentiality with respect thereto.

Section 8.2Authorized Disclosure.  Either party may disclose Confidential
Information to the extent such disclosure is reasonably necessary in the
following situations:

(a)prosecuting or defending litigation;

(b)complying with applicable laws and regulations, including regulations
promulgated by a global stock market or securities exchanges;

(c)complying with a valid order of a court of competent jurisdiction or other
Governmental Entity;

(d)for regulatory, Tax or customs purposes;

(e)for audit purposes, provided that each recipient of Confidential Information
must be bound by customary obligations of confidentiality and non-use prior to
any such disclosure;

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(f)disclosure to its Affiliates and Representatives on a need-to-know basis,
provided that each of such recipients of Confidential Information must be bound
by customary obligations of confidentiality and non-use prior to any such
disclosure;

(g)upon the prior written consent of the Disclosing Party; or

(h)disclosure to actual and potential licensees, acquirors, investors and other
sources of funding, including underwriters, debt financing, royalty financing
partners, or co-investors, and their respective accountants, financial advisors
and other professional representatives (“Financial Advisors”), provided, that
such disclosure shall be made only to the extent customarily required to
consummate such investment or financing transaction and that each recipient of
Confidential Information must be bound by customary obligations of
confidentiality and non-use prior to any such disclosure;

provided that, in the event the Receiving Party is required to make a disclosure
of the Disclosing Party’s Confidential Information pursuant to Sections 8.2(a),
(b), (c) or (d), it will, except where impracticable, give reasonable advance
written notice to the Disclosing Party of such disclosure and use reasonable
efforts to secure confidential treatment of such information.  In any event, the
Buyer shall not file or assist any Third Party in filing any patent application
based upon or using the Confidential Information of the Seller provided
hereunder.

The Buyer hereby acknowledges that the Seller may from time to time provide the
Buyer with information that may constitute material non-public information with
respect to itself and Permitted Licensees.  Seller makes no representation or
warranty and assumes no duty to inform Buyer whether any information delivered
to Buyer pursuant to this Agreement constitutes material non-public
information.  The Buyer hereby agrees that it shall not, and shall cause its
Affiliates or Representatives to not, trade any securities of the Seller or any
Permitted Licensee while in possession of any information received by it from
the Seller pursuant to this Agreement in violation of securities laws.

Notwithstanding any other provision hereunder, the Receiving Party shall be
liable to the Disclosing Party for any breach by its Affiliate and
Representatives in the case of any disclosure made by a Receiving Party under
Section 8.2(f) and any of its Financial Advisors in the case of any disclosure
made by a Receiving Party under Section 8.2(h), if any such Person violates the
terms of its confidentiality obligation or any of the terms set forth in this
Agreement as if such Person was a party hereto.

Article 9

MISCELLANEOUS

Section 9.1Definitions.  As used in this Agreement, the following terms shall
have the following meanings:

“Additional Tranche Purchase Price” is defined in Section 2.3.

“Affiliate” means, with respect to any Person, any other Person, directly or
indirectly, controlling, controlled by or under common control with such
Person.  For purposes of this definition, the term “control” (including the
correlative terms “controlling,” “controlled by” and “under common control
with”) means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.  For clarity, the
Buyer shall not be considered an Affiliate of the Seller for the purpose of this
Agreement.  

“Agreement” is defined in the preamble.

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“Acquired Intangibles” means the right to receive the Royalties for the term of
this Agreement subject to the terms and conditions set forth herein.

“Applicable Indications” means nHCM and oHCM.

“Bankruptcy Laws” means, collectively, in any jurisdiction, bankruptcy,
insolvency, examinership, reorganization, moratorium, fraudulent conveyance,
fraudulent transfer or other similar laws affecting the enforcement of
creditors’ rights generally.

“Bundled Product” is defined in the definition of Net Sales.

“Business Day” means any day other than (a) a Saturday or Sunday or (b) a day on
which banking institutions located in New York are permitted or required by
applicable law or regulation to remain closed.

“Buyer” is defined in the preamble.

“Buyer Indemnified Parties” is defined in Section 6.1(a).

“Change of Control” means, with respect to the Seller: (a) a transaction or
series of related transactions that results in the sale or other disposition of
all or substantially all of the Seller’s assets (other than any such sale or
other disposition to a Subsidiary of the Seller); or (b) a merger or
consolidation as a result of which the shareholders of the Seller immediately
prior to the consummation of such merger or consolidation do not, immediately
after consummation of such merger or consolidation, possess, directly or
indirectly through one or more intermediaries, a majority of the voting power of
all of the surviving entity’s outstanding stock and other securities and the
power to elect a majority of the members of the Seller’s board of directors; or
(c) a transaction or series of related transactions (which may include a tender
offer for the Seller’s stock or the issuance, sale or exchange of stock of the
Seller) if the shareholders of the Seller immediately prior to the initial such
transaction do not, immediately after consummation of such transaction or any of
such related transactions, possess, directly or indirectly through one or more
intermediaries, a majority of the voting power of all of the Seller’s or its
successor’s outstanding stock and other securities and the power to elect a
majority of the members of the Seller’s or its successor’s board of directors.

“Clinical Trial” means a human clinical trial intended to support the Marketing
Approval of the Product within the Royalty Purchase Territory.

“Clinical Updates” means a summary of any material updates with respect to the
Clinical Trials conducted by or on behalf of the Seller or a counterparty to any
Out-License, including (a) the progress of each Clinical Trial for the Product
(including the number of patients currently enrolled in each such Clinical
Trial, the number of sites conducting each such Clinical Trial, and any material
modifications to each such Clinical Trial, and any serious adverse events
attributed to the Product), and (b) the Seller’s then-existing plans to start
new Clinical Trials.  

“Co-Packaged Product” is defined in the definition of Net Sales.

“Collaboration Agreement” means that certain License and Collaboration
Agreement, dated as of the date hereof, between Ji Xing and the Seller.

“Commercial Updates” means a summary of material updates with respect to the
Seller’s and its Affiliates’ and any Permitted Licensee’s sales and marketing
activities and commercial manufacturing matters with respect to the Product in
the Royalty Purchase Territory.  

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“Commercialization” means any and all reasonable activities directed to the
commercial manufacture, distribution, marketing, detailing, promotion, selling
and securing of reimbursement of the Product whether before or after Marketing
Approval has been obtained (including the making, using, importing, selling and
offering for sale of the Product), and shall include post-Marketing Approval
studies, post-launch marketing, promoting, detailing, marketing research,
distributing, customer service, selling the Product, importing, exporting or
transporting the Product for sale, and regulatory compliance with respect to the
foregoing.  When used as a verb, “Commercialize” means to engage in
Commercialization.

“Confidential Information” is defined in Section 8.1.

“Diligent Efforts” means [*].

“Disclosing Party” is defined in Section 8.1.

“Disclosure Schedule” means the Disclosure Schedule delivered in connection with
a side letter, dated as of the date hereof, delivered to the Buyer (or to its
counsel) by the Seller concurrently with the execution of this Agreement.

“EMA” means the European Medicines Agency, or any successor agency thereto.

“FDA” means the U.S. Food and Drug Administration, or any successor agency
thereto.

“Financial Advisors” is defined in Section 8.2.

“First Commercial Sale” means, the first sale for use or consumption by the
general public of the Product, as applicable, in any country in the Royalty
Purchase Territory after Marketing Approval of the Product has been granted, or
such marketing and sale is otherwise permitted, by the Regulatory Authority of
such country for an Applicable Indication or, if the Additional Tranche Purchase
Price is paid by the Buyer to the Seller pursuant to Section 2.3, for an Other
Indication. For clarity, First Commercial Sale shall not include any sale or
transfer of the Product prior to receipt of Marketing Approval, such as
so-called “treatment IND sales,” “named patient sales” and “compassionate use
sales.”

“First Tranche” means the commitment and obligation of the Buyer to pay the
First Tranche Purchase Price pursuant to Section 2.2(a).

“First Tranche Purchase Price” means FORTY-FIVE MILLION U.S. DOLLARS
($45,000,000).

“First Tranche Funding Date” means a Business Day no later than the 30th day
following the delivery of a Funding Request by the Seller in respect of the
First Tranche.

“Funding Date” means each of the First Tranche Funding Date and the Second
Tranche Funding Date.

“Funding Failure” means the failure by the Buyer to pay the Second Tranche
Purchase Price when required pursuant to Section 2.2(b), which failure is not
cured by the Buyer within thirty (30) calendar days.

“Funding Request” means a request from the Seller to the Buyer for payment of
the Purchase Price substantially in the form attached hereto as Exhibit A.

“GAAP” means generally accepted accounting principles in the United States in
effect from time to time.

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“Governmental Entity” means any: (a) nation, principality, republic, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign or
other government; (c) governmental or quasi-governmental authority of any nature
(including any governmental division, subdivision, department, agency, bureau,
branch, office, commission, council, board, instrumentality, officer, official,
representative, organization, unit, body or other entity and any court,
arbitrator or other tribunal); (d) multi-national organization or body; or (e)
individual, body or other entity exercising, or entitled to exercise, any
executive, legislative, judicial, administrative, regulatory, police, military
or taxing authority or power of any nature.

[*]

“Indebtedness” of any Person means any indebtedness for borrowed money,
obligation evidenced by a note, bond, debenture or similar instrument, or
guarantee of any of the foregoing.

“In-License” means any license, settlement agreement or other agreement between
the Seller or any of its Affiliates and any Third Party pursuant to which the
Seller or any of its Affiliates obtains a license, a covenant not to sue or
similar grant of rights to any Patents or other intellectual property rights of
such Third Party that is or was reasonably necessary for the manufacture, use or
Commercialization of the Product.

“Initial Closing Date” is defined in Section 4.1.

“Initial Funding Date” means the date that the Seller receives the First Tranche
Purchase Price from the Buyer.

“Initiation” of a clinical trial means the [*] such clinical trial (as
applicable).    

“Intellectual Property Rights” means any and all of the following as they exist
throughout the world at any time and as they are owned or controlled by the
Seller or any Subsidiary or under which the Seller or any Subsidiary may become
empowered to grant licenses: (a) the Patent Rights; (b) rights in registered and
unregistered trademarks, service marks, trade names, trade dress, logos,
packaging design, slogans and Internet domain names, and registrations and
applications for registration of any of the foregoing, in each case, used in the
marketing and promotion of the Product; (c) copyrights in both published and
unpublished works, including all compilations, databases and computer programs,
manuals and other documentation and all copyright registrations and
applications, and all derivatives, translations, adaptations and combinations of
the above, in each case, as specifically related to the Product; (d) rights in
research in progress, algorithms, data, databases, data collections, chemical
and biological materials (including any compounds, DNA, RNA, clones, vectors,
cells and any expression product, progeny, derivatives or improvements thereto),
and the results of experimentation and testing, including samples, in each case,
as specifically directly related to the Product; and (e) rights in all Know-How
directly related to the Product that is reasonably necessary for the
manufacture, use or Commercialization of the Product.

“Intellectual Property Updates” means any new Patents issued or filed relating
to the Product in the Royalty Purchase Territory, or any abandonments or other
termination of prosecution with respect to any of the Patent Rights, and any
other material information or developments with respect to the Intellectual
Property Rights.  For the avoidance of doubt, the Seller shall not be required
to include any trade secrets or attorney client privileged information in any
Intellectual Property Update.

“Ji Xing” means Ji Xing Pharmaceuticals Limited, a limited liability company
organized and existing under the laws of the Cayman Islands.

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“Judgment” means any judgment, order, writ, injunction, citation, award or
decree of any nature.

“Know-How” means any and all proprietary or confidential information, know-how
and trade secrets, including processes, formulae, models and techniques (but
excluding rights in research in progress, algorithms, data, databases, data
collections, chemical and biological materials and the results of
experimentation and testing).

“Knowledge of the Seller” means the [*].

“Lien” means any mortgage, lien, pledge, charge, adverse claim, security
interest, encumbrance or restriction of any kind, in each case to secure payment
of a debt or performance of an obligation.

“Loss” means any and all Judgments, damages, losses, claims, costs, liabilities
and expenses, including reasonable fees and out-of-pocket expenses of counsel;
provided, however, that “Loss” shall not include any lost profits or revenue,
lost opportunity or consequential, punitive, special or incidental damages.

“Market Capitalization” means, as of any time of determination, the total number
of outstanding shares of the Seller’s common stock multiplied by the closing
price per share of such common stock as of the most recent trading day ending
immediately prior to such time.

“Marketing Approval” means, with respect to the Product in any Royalty Purchase
Territory, approval from the applicable Regulatory Authority sufficient for the
promotion and sale of the Product in such jurisdiction in accordance with
applicable law, including, without limitation, a U.S. New Drug Application.

“Net Sales” means the [*] on sales of the Product by the Seller, its Affiliates
or licensees, including Permitted Licensees, for sale of the Product to a Third
Party in the Royalty Purchase Territory, less the following deductions, to the
extent allocable to sales of the Product:  

 

(a)

[*];

(b)

[*];

(c)

[*];

(d)

[*]; and

(e)

[*].  

 

Each of the amounts set forth above shall be determined from the books and
records of the Seller, its Affiliate or licensee, maintained in accordance with
GAAP consistently applied. For the avoidance of doubt, if a single item falls
into more than one of the categories set forth in clauses (a)-(e) above, such
item may not be deducted more than once. With respect to sales of the Product
invoiced in U.S. dollars, Net Sales shall be determined in U.S. dollars.  With
respect to sales of the Product invoiced in a currency other than U.S. dollars,
Net Sales shall be determined by converting the currencies at which the sales
are made into U.S. dollars, at rates of exchange determined in a manner
consistent with the Seller’s method for calculating rates of exchange in the
preparation of the Seller’s or such Permitted Licensee’s annual financial
statements in accordance with generally accepted accounting principles
consistently applied.  

With respect to any sale of the Product [*].  

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Sales between the Seller and its Affiliates and licensees shall be disregarded
for purposes of calculating Net Sales except if such purchaser is a distributor,
a pharmacy or an end user.  Net Sales also exclude any sale or transfer of the
Product for free or below cost in early access, compassionate use or named
patient programs.

Notwithstanding the foregoing, Net Sales shall not include amounts (whether
actually existing or deemed to exist for purposes of calculation) for Product
distributed for use in clinical trials or pre-clinical trials.

If the Product is (a) sold co-packaged with one or more other pharmaceutical
product(s) that is not the Product (“Co-Packaged Product”), or (b) is sold
together with other products of the selling party or Affiliates in which the
joint selling price provides a discount (e.g., as part of a “bundled” or joint
or combined discount arrangement) from the list price of the Product (“Bundled
Product”), then the Net Sales for the Product contained in such Co-Packaged
Product or Bundled Product shall be calculated [*].

Notwithstanding the foregoing, in the case of any sales by a Permitted Licensee,
Net Sales will be calculated based on the corresponding definition of net sales
in the applicable license agreement permitting such sales, provided that such
definition is commercially reasonable.

“nHCM” means non-obstructive hypertrophic cardiomyopathy.

“nHCM Trial Condition” means [*].

“oHCM” means obstructive hypertrophic cardiomyopathy.

“oHCM Trial Condition” means [*].

“Other Indications” means [*] or any human therapeutic indication [*] than oHCM
and nHCM.

“Out-License” means any license or other agreement between the Seller or any of
its Affiliates and any Third Party (including any Permitted License with a Third
Party) pursuant to which the Seller or any of its Affiliates grants to such
Third Party a license or sublicense of, covenant not to sue under, or other
similar rights under any Intellectual Property Right that is reasonably
necessary for the manufacture, use or Commercialization of the Product in any
Applicable Indication in the Royalty Purchase Territory in order for such Third
Party to manufacture, use or Commercialize the Product; provided, however, that
“Out-License” shall not include (a) any research licenses; (b) licenses to
distributors, without any other right to Commercialize the Product; (c)
agreements granting non-exclusive rights to Intellectual Property Rights that do
not grant any right to market, distribute, sell, or promote the Product,
including, but not limited to, manufacturing agreements, material transfer
agreements and consulting agreements.

“Patent Rights” means any and all existing or future Patents in the Royalty
Purchase Territory that are owned, exclusively in-licensed or otherwise
controlled by the Seller or any Subsidiary or under which the Seller or any
Subsidiary is or may become empowered to grant licenses, the subject matter of
which is necessary or used for the development, manufacture, use, marketing,
promotion, sale or distribution of the Product.

“Patents” means any and all patents and patent applications existing as of the
date of this Agreement and all patent applications filed hereafter, including
any continuation, continuation-in-part, division, provisional or any substitute
applications, or any patent application claiming priority thereto, including
patent applications filed under the Patent Cooperation Treaty or any patent
application claiming priority under the Paris Convention, any patent issued with
respect to any of the foregoing patent

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applications, any certificate, reissue, reexamination, renewal or patent term
extension or adjustment (including any supplementary protection certificate) of
any such patent or other governmental actions which extend any of the subject
matter of a patent, and any substitution patent, confirmation patent or
registration patent or patent of addition based on any such patent, and all
foreign counterparts of any of the foregoing.

“Permitted License” is defined in Section 5.8(a).

“Permitted Licensee” is defined in Section 5.8(a).

“Permitted Liens” means (a) Liens for Taxes not yet delinquent or Liens for
Taxes being contested in good faith and by appropriate proceedings for which
adequate reserves have been established; (b) banker’s liens for collection or
rights of set off or similar rights and remedies as to deposit accounts or other
funds maintained with depositary institutions; (c) any interest or title of a
Permitted Licensee under a Permitted License, (d) Liens in the nature of right
of setoff in favor of counterparties to contractual agreements with the Seller
in the ordinary course of business; (e) Liens securing Permitted Secured
Indebtedness to the extent, at any time following the payment of the First
Tranche Purchase Price, such Liens are subject to an Acceptable Intercreditor
Agreement (as defined in the Seller Security Agreement), and (f) any interest of
a licensor under any In-License.

“Permitted Secured Indebtedness” means Indebtedness that is secured by a Lien on
the Product Assets in an aggregate principal amount not to exceed $100,000,000
at any time outstanding (including, for the avoidance of doubt, any such
Indebtedness incurred under the Senior Loan Agreement).

“Person” means any individual, firm, corporation, company, partnership, limited
liability company, trust, joint venture, association, estate, trust,
Governmental Entity or other entity, enterprise, association or organization.

“Pivotal Clinical Trial” means any human Clinical Trial of the Product that is
intended (as of the time of Initiation of such clinical trial) to obtain the
results and data to support the filing of a New Drug Application (NDA)
(including label expansion but excluding the data that may be necessary to
support the pricing and/or reimbursement approval), including so called Phase
2/3 trials and any human Clinical Trial that would satisfy the requirements of
21 § CFR 312.21(c) or corresponding foreign regulations. [*].

“Press Release” means one or more press releases describing this Agreement and
the transactions contemplated by this Agreement issued individually by the Buyer
and/or the Seller in form reasonably satisfactory to the other party.

“Product” means any pharmaceutical that contains the Seller’s proprietary small
molecule cardiac myosin inhibitor product, referred to as CK-274, and any [*],
in any strength, form, formulation, administration or delivery route.

“Product Assets” means the Seller’s and its Subsidiaries’ rights, title and
interests in the Product Rights owned, licensed or otherwise held by the Seller
or any of its Subsidiaries and any proceeds thereof, including all accounts
receivable resulting from the sale, license or other disposition of Product by
the Seller or its Permitted Licensees; provided, however, that, upon a Change of
Control of the Seller or any Subsidiaries, no Product Rights owned, in-licensed
or otherwise held by the acquiring entity (or any of its Affiliates existing
prior to such Change of Control or acquired after such Change of Control) as of
immediately prior to the closing of such Change of Control (or in the case of an
acquired Subsidiary, as of immediately prior to the closing of such acquisition)
or any Patents claiming priority to any Patent Rights included therein or other
intellectual property rights will be deemed “owned, licensed or otherwise held”

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for the purposes of this definition.  Notwithstanding the foregoing, “Product
Assets” shall not include raw materials, inventory, work in progress, cash or
cash equivalents.

“Product Failure” means, with respect to the Product, the occurrence of: (i) (A)
the Seller’s drug safety committee; (B) the FDA or the EMA; or (C) at Buyer’s or
Seller’s option and request, an independent third-party reasonably agreed upon
between the Parties to review the Clinical Trials data and results, making a
reasonable and good faith determination that the Product presents in oHCM and
nHCM a risk of death, a life-threatening condition, or such serious safety or
health risks to patients such that, based on then-available data, the Seller
cannot ethically and in good faith continue to administer the Product to
patients; or (ii) any material adverse development, occurrence or event with
respect to the clinical development of the Product, as a result of which the
Seller, in consultation with Buyer, may reasonably make a good faith
determination to cease continued development of the Product, including, for
example, if the Product (A) fails as a result of the manufacturing thereof due
to failure to achieve a purified yield required to commercialize the Product, or
because a manufacturing process cannot be established according to GMP
manufacturing guidelines to produce sufficient material for Commercialization or
(B) is otherwise not reasonably suited for the continuation of Clinical Trials
(in the case of preclinical or clinical stage trials, toxicities that would
trigger the stoppage of further development, e.g., as may be reported as adverse
events, serious adverse events, or clinical laboratory abnormalities), or (C)
fails to meet its primary endpoint of any Clinical Trial.

“Product Rights” means any and all of the following, solely for or to the extent
related to the Applicable Indications as they exist in the Royalty Purchase
Territory: (a) Intellectual Property Rights, (b) regulatory filings, submissions
and approvals with or from any Regulatory Authorities specifically related to
the Product, (c) In-Licenses, and (d) Out-Licenses.

“Product Royalty Rate” means, with respect to the Product in a country in the
Royalty Purchase Territory: (a) prior to the applicable Royalty Termination Date
for such country, (i) from and after the Royalty Commencement Date, two percent
(2%) and (ii) from and after the payment of the Second Tranche Purchase Price
pursuant to Section 2.2(b), four percent (4%), and (b) on or after the Royalty
Termination Date for such country, zero percent (0%); [*]:

(i)[*];

(ii)[*];

(iii)[*]; and

(iv)[*].

“Prohibited Transfer” is defined in Section 9.6.

“Purchase Price” means the First Tranche Purchase Price, the Second Tranche
Purchase Price and any Additional Tranche Purchase Price.

“Receiving Party” is defined in Section 8.1.

“Regulatory Authority” means any national or supranational governmental
authority, including, without limitation, the FDA or EMA, or any successor
agency thereto, that has responsibility in granting a Marketing Approval.

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“Regulatory Updates” means a summary of material information and developments
that would reasonably be expected to materially impact the Product with respect
to any regulatory filings or submissions made to the FDA and EMA (or, to the
extent the EMA is not applicable, the Regulatory Authority for any country
within the Royalty Purchase Territory).

“Representative” means, with respect to any Person, (a) any direct or indirect
stockholder, member or partner of such Person and (b) any manager, director,
officer, employee, agent, advisor or other representative (including attorneys,
accountants, consultants, bankers, financial advisors and actual and potential
lenders and investors) of such Person.

“Royalty” means for each calendar quarter during the Term, an amount payable to
the Buyer equal to the sum of the product of Net Sales of the Product during
such calendar quarter in each country in the Royalty Purchase Territory
multiplied by the Product Royalty Rate.

“Royalty Commencement Date” means the date that is the later of (i) the First
Commercial Sale and (ii) the Initial Funding Date.

“Royalty Purchase Agreement” means that certain Royalty Purchase Agreement,
dated as of the date hereof, between the Buyer and the Seller.

“Royalty Purchase Territory” means each of the United States, each member within
the European Union, each member of the European Economic Area (to the extent
such member is not a member of the European Union), Switzerland and the United
Kingdom.

“Royalty Termination Date” means, with respect to the Product in a country in
the Royalty Purchase Territory, the date that is the later of (a) the last
patent expiration that includes a valid claim for such country [*] in such
country, and (b) the expiration of all regulatory exclusivities for the Product
in such country.

“Royalty Report” is defined in Section 5.2(b).

“SEC” means the Securities and Exchange Commission.

“Second Tranche” means the commitment and obligation of the Buyer to pay the
Second Tranche Purchase Price pursuant to Section 2.2(b).

“Second Tranche Funding Date” means a Business Day occurring no later than the
30th day following the delivery of a Funding Request by the Seller in respect of
the Second Tranche.

“Second Tranche Purchase Price” means FORTY-FIVE MILLION U.S. DOLLARS
($45,000,000).

“Seller” is defined in the preamble.

“Seller Indemnified Parties” is defined in Section 6.1(b).

“Seller SEC Documents” is defined in Section 3.1(m).

“Seller Security Agreement” means that certain Security Agreement to be dated as
of the First Tranche Funding Date executed in favor of the Buyer by the Seller
substantially in the form attached hereto as Exhibit B (or such other form as
reasonably acceptable to the Buyer and the Seller).

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“Selling Party” is defined in the definition of Net Sales.

“Senior Lender” is defined in the definition of Senior Loan Agreement.

“Senior Loan Agreement” means that certain Loan and Security Agreement, dated as
of May 17, 2019, by and among Oxford Finance, LLC, as collateral agent and as
lender thereunder, Silicon Valley Bank, as lender thereunder, the other lenders
party thereto from time to time (collectively and individually, “Senior Lender”)
and the Seller, as amended by the First Amendment to Loan and Security Agreement
dated as of November 6, 2019 and the Second Amendment to Loan and Security
Agreement dated as of November 7, 2019, and as may be further amended, restated,
supplemented or otherwise modified from time to time.

“Stock Purchase Agreement” means that certain Stock Purchase agreement, dated as
of the date hereof, between the Seller and the Buyer.

“Subsidiary” means with respect to the Seller any and all corporations,
partnerships, limited liability companies, joint ventures, associations and
other entities controlled (by contract or otherwise) by the Seller directly or
indirectly through one or more intermediaries.  

“Sunset Date” means, with respect to oHCM Trial Condition, the date that is two
years and six months following the Initial Closing Date, and with respect to the
nHCM Trial Condition, the date that is three years and six months following the
Initial Closing Date.

“Tax” or “Taxes” means any present or future U.S. federal, state, local or
non-U.S. income, gross receipts, license, payroll, employment, excise,
severance, occupation, premium, windfall profits, environmental, customs duties,
capital stock, franchise, profits, withholding, social security, unemployment,
disability, real property, personal property, abandoned property, value added,
alternative or add-on minimum, estimated or other tax of any kind whatsoever,
including any interest, penalty or addition thereto, whether disputed or not.

“Term” means the period commencing on the date hereof, and ending upon
termination of this Agreement pursuant to Article 7.

“Third Party” means any Person other than the parties hereto (or an Affiliate of
such parties).

“Third Party Claim” is defined in Section 6.2.

“Total Net Payments” means as of any date of determination:

(a) the aggregate amount of all payments remitted to, or otherwise received by,
Buyer pursuant to this Agreement as of such date (including any payments made
pursuant to Section 5.5), less

(b) all overpayments of Royalties under this Agreement required to be, and
actually, reimbursed by the Buyer to the Seller pursuant to Section 5.4 but only
to the extent that such overpayments have been included in the calculation of
the under the immediately preceding clause (a), and provided that no prepayment
made by the Seller pursuant to Section 5.2(c) shall be deemed an overpayment of
Royalties or other payments due to the Buyer hereunder provided such credit
occurs.

“Transaction Agreements” means the Collaboration Agreement, the Royalty Purchase
Agreement, the Stock Purchase Agreement and the Seller Security Agreement.

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“Value Added Tax” means any sales, use, value-added, excise and other similar
Taxes (excluding withholding and income Taxes).

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

“Update Report” is defined in Section 5.1(a).

Section 9.2Certain Interpretations.  Except where expressly stated otherwise in
this Agreement, the following rules of interpretation apply to this Agreement:

(a)“either” and “or” are not exclusive and “include,” “includes” and “including”
are not limiting and shall be deemed to be followed by the words “without
limitation;”

(b)“extent” in the phrase “to the extent” means the degree to which a subject or
other thing extends, and such phrase does not mean simply “if;”

(c)“hereof,” “hereto,” “herein” and “hereunder” and words of similar import when
used in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement;

(d)references to a Person are also to its permitted successors and assigns;

(e)definitions are applicable to the singular as well as the plural forms of
such terms;

(f)unless otherwise indicated, references to an “Article”, “Section” or
“Exhibit” refer to an Article or Section of, or an Exhibit to, this Agreement,
and references to a “Schedule” refer to the corresponding part of the Disclosure
Schedule;

(g)references to “$” or otherwise to dollar amounts refer to the lawful currency
of the United States;

(h)references to an agreement or other document include references to any
annexes, exhibits and schedules attached thereto; and

(i)references to a law include any amendment or modification to such law and any
rules and regulations issued thereunder, whether such amendment or modification
is made, or issuance of such rules and regulations occurs, before or after the
date of this Agreement.

Section 9.3Headings.  The table of contents and the descriptive headings of the
several Articles and Sections of this Agreement and any Exhibits and Schedules
are for convenience only, do not constitute a part of this Agreement and shall
not control or affect, in any way, the meaning or interpretation of this
Agreement.

Section 9.4Notices.  All notices and other communications under this Agreement
shall be in writing and shall be by email with PDF attachment, facsimile,
courier service or personal delivery to the

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following addresses, or to such other addresses as shall be designated from time
to time by a party hereto in accordance with this Section 9.4:

 

If to the Seller, to it at:

Cytokinetics, Incorporated

280 East Grand Avenue

South San Francisco, CA 94080

Attn: General Counsel

Telephone:

650-624-3000

Facsimile:

650-624-3010

Email:

mschlossberg@cytokinetics.com

with a copy to:

Cooley LLP

101 California Street,

San Francisco, CA 94111

Attention:

Gian-Michele a Marca

Telephone:

415-693-2000

Facsimile:

415-693-2222

Email:

gmamarca@cooley.com

If to the Buyer, to it at:

Dolya Holdco 19 Designated Activity Company (in the process of changing its name
to RTW Royalty Holdings Designated Activity Company)

[*]

Attention:

The Directors

Telephone:

[*]

Email:

[*]

Fax:

[*]

with a copy to:

RTW Investments, LP

40 10th Avenue, Floor 7

New York, NY 10014

Attention:

Roderick Wong and Alice Lee

Telephone:

[*]

Email:

[*]

with a copy to:

Goodwin Procter LLP

100 Northern Avenue

Boston, MA 02210

Attention:

Kingsley L. Taft and Shane Albright

Telephone:

[*]

Email:

[*]

 

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All notices and communications under this Agreement shall be deemed to have been
duly given (i) when delivered by hand, if personally delivered, (ii) when
received by a recipient, if sent by email, (iii) when sent, if sent by
facsimile, with an acknowledgement of sending being produced by the sending
facsimile machine or (iv) one Business Day following sending within the United
States by overnight delivery via commercial one-day overnight courier service.

Section 9.5Expenses.  Except as otherwise provided herein, all fees, costs and
expenses (including any legal, accounting and banking fees) incurred in
connection with the preparation, negotiation, execution and delivery of this
Agreement and to consummate the transactions contemplated hereby shall be paid
by [*].

Section 9.6Assignment.  The Seller shall not sell, convey, assign, dispose,
pledge, hypothecate or otherwise transfer this Agreement, any of its rights or
obligations hereunder, without the Buyer’s prior written consent, except in
connection with the sale, license or transfer of all or substantially all of the
Seller’s business or assets related to the Product (including this Agreement),
whether by merger, sale of assets, license, reorganization or otherwise;
provided that, in each case upon closing of any such transaction, the Seller
causes such Affiliate or Third Party, as applicable, to deliver a writing to the
Buyer in which it assumes all of the obligations of the Seller to the Buyer
under this Agreement; provided that nothing herein shall restrict the grant or
incurrence of Permitted Liens.  [*].  Subject to the foregoing, this Agreement
shall be binding upon, inure to the benefit of and be enforceable by, the
parties hereto and their respective permitted successors and assigns.  Any
purported sale, conveyance, assignment, disposition, pledge, hypothecation or
transfer in violation of this Section 9.6 shall be null and void.
Notwithstanding anything else contained in this Section 9.6, the Buyer may at
any time sell, convey, assign, dispose, pledge, hypothecate or otherwise
transfer any portion of this Agreement or any rights to the Acquired Intangibles
to (a) any Affiliate of the Buyer or (b) to the extent necessary in order to
bring the Buyer in compliance with any applicable concentration limits to which
it is subject or to an Affiliate of the Buyer (provided that the Buyer provides
prior written notice of such transfer to the Seller) [*].

Section 9.7Amendment and Waiver.

(a)This Agreement may be amended, modified or supplemented only in a writing
signed by each of the parties hereto.  Any provision of this Agreement may be
waived only in a writing signed by the party hereto granting such waiver.

(b)No failure or delay on the part of any party hereto in exercising any right,
power or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or remedy preclude any other
or further exercise thereof or the exercise of any other right, power or
remedy.  No course of dealing between the parties hereto shall be effective to
amend, modify, supplement or waive any provision of this Agreement.

Section 9.8Entire Agreement.  This Agreement, the Exhibits annexed hereto and
the Disclosure Schedule constitute the entire understanding between the parties
hereto with respect to the subject matter hereof and supersede all other
understandings and negotiations with respect thereto.  

Section 9.9No Third Party Beneficiaries.  This Agreement is for the sole benefit
of the Seller and the Buyer and their permitted successors and assigns and
nothing herein expressed or implied shall give or be construed to give to any
Person, other than the parties hereto and such successors and assigns, any legal
or equitable rights hereunder.

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Section 9.10Governing Law.  This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without giving effect to
any choice or conflict of law provision or rule that would cause the application
of the laws of any other jurisdiction.

Section 9.11JURISDICTION; VENUE.

(a)EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS,
FOR ITSELF AND ITS RESPECTIVE PROPERTY AND ASSETS, TO THE EXCLUSIVE JURISDICTION
OF ANY NEW YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA
SITTING IN NEW YORK COUNTY, NEW YORK, AND ANY APPELLATE COURT THEREOF, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, AND THE BUYER AND
THE SELLER HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREE THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN
SUCH FEDERAL COURT.  THE BUYER AND THE SELLER HEREBY AGREE THAT A FINAL JUDGMENT
IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
APPLICABLE LAW.  EACH OF THE BUYER AND THE SELLER HEREBY SUBMITS TO THE
EXCLUSIVE PERSONAL JURISDICTION AND VENUE OF SUCH NEW YORK STATE AND FEDERAL
COURTS.  THE BUYER AND THE SELLER AGREE, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THAT PROCESS MAY BE SERVED ON THE BUYER OR THE SELLER IN THE
SAME MANNER THAT NOTICES MAY BE GIVEN PURSUANT TO SECTION 9.4 HEREOF.

(b)EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY NEW YORK STATE OR FEDERAL
COURT.  EACH OF THE BUYER AND THE SELLER HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM
TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

Section 9.12Severability.  If any term or provision of this Agreement shall for
any reason be held to be invalid, illegal or unenforceable in any situation in
any jurisdiction, then, to the extent that the economic and legal substance of
the transactions contemplated hereby is not affected in a manner that is
materially adverse to either party hereto, all other terms and provisions of
this Agreement shall nevertheless remain in full force and effect and the
enforceability and validity of the offending term or provision shall not be
affected in any other situation or jurisdiction.

Section 9.13Specific Performance.  Each of the parties acknowledges and agrees
that the other party may be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached or violated.  Accordingly, each of the parties
agrees that, without posting bond or other undertaking, the other party will be
entitled to seek an injunction or injunctions to prevent breaches or violations
of the provisions of this Agreement and to seek to enforce specifically this
Agreement and the terms and provisions hereof in any action, suit or other
proceeding instituted in any court of the United States or any state thereof
having jurisdiction over the parties and the matter in addition to any other
remedy to which it may be entitled, at law or in equity.

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Section 9.14Relationship of Parties.  The relationship between the Buyer and the
Seller is solely that of purchaser and seller, and neither the Buyer nor the
Seller has any fiduciary or other special relationship with the other party or
any of its Affiliates.  This Agreement is not a partnership or similar
agreement, and nothing contained herein shall be deemed to constitute the Buyer
and the Seller as a partnership, an association, a joint venture or any other
kind of entity or legal form for any purposes, including any Tax purposes.  The
Buyer and the Seller agree that they shall not take any inconsistent position
with respect to such treatment in a filing with any Governmental Entity.

Section 9.15Counterparts.  This Agreement may be executed in any number of
counterparts and by the 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.  Copies of executed
counterparts transmitted by telecopy, facsimile or other similar means of
electronic transmission, including “PDF,” shall be considered original executed
counterparts, provided receipt of such counterparts is confirmed.

Section 9.16Withholding.

(a)The Seller shall be entitled to deduct and withhold from the payments
otherwise required pursuant to this Agreement any such Taxes as the Seller may
be required to deduct and withhold with respect to any such payments under
applicable law (it being understood that, solely with respect to U.S. federal
withholding Tax, the Seller shall not make any such deduction or withholding if
the Seller has received, as applicable, either (i) a valid, properly executed
Internal Revenue Service Form W-9 certifying that the Buyer or the relevant
assignee, as applicable, is exempt from U.S. “backup” withholding Tax or (ii) a
valid, properly executed Internal Revenue Service Form W-8BEN-E (or other
applicable W-8, with any necessary accompanying attachments) certifying that the
Buyer or the relevant assignee, as applicable, is exempt from U.S. federal
withholding Tax under a United States income Tax treaty with respect to
royalties and other income).  If the Seller is required by applicable law to
deduct and withhold any Taxes from any such payment, the Seller shall pay the
full amount deducted or withheld to the relevant Governmental Entity in
accordance with applicable law.  To the extent that amounts are so deducted or
withheld and paid to the relevant Governmental Entity, except as set forth in
the following sentence such deducted and withheld amounts will be treated for
all purposes of this Agreement as having been paid to the Buyer. Notwithstanding
this Section 9.16(a), if, as a result of a Withholding Action by the Seller
(including any assignee or successor), withholding is required by applicable law
and the amount of such withholding exceeds the amount of withholding that would
have been required if the Seller had not committed the Withholding Action, then
the Seller shall pay an additional amount to the Buyer such that, after
withholding from the payment contemplated by this Agreement and such additional
amount, the Buyer receives the same amount as it would have received from the
Seller absent such Withholding Action by the Seller.  For the avoidance of
doubt, if as a result of a Withholding Action by the Buyer (including any
assignee or successor) the amount of withholding under the law of the applicable
jurisdiction exceeds the amount of such withholding that would have been
required in the absence of such Withholding Action by the Buyer, the Seller
shall be required to pay an additional amount only to the extent that the Seller
would be required to pay any additional amount to the Buyer pursuant to the
preceding sentence if the Buyer had not committed such Withholding Action. For
purposes of this Section 9.16(a), “Withholding Action” by a party means (i) a
permitted assignment or sublicense of this Agreement (in whole or in part) by
such party to an Affiliate or a Third Party in a different jurisdiction; (ii)
the exercise by such party of its rights under this Agreement (in whole or in
part) through an Affiliate or Third Party in a different jurisdiction (or the
direct exercise of such rights by an Affiliate of such party outside of the
applicable jurisdiction); (iii) a redomiciliation of such party, an assignee or
a successor to a jurisdiction outside of the applicable jurisdiction; and (iv)
any action taken after the date of this Agreement by such party that causes this
Agreement or any payment contemplated by this Agreement to become subject to tax
(including by virtue of withholding or deduction) in any additional
jurisdictions after the date of this Agreement.

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(b)If any taxes are imposed, the Buyer and the Seller hereby agree to cooperate
in good faith to mitigate the amount of any of such Taxes which the Seller must
withhold or deduct pursuant to this Section 9.16, provided, however, that the
Buyer shall determine in its sole discretion whether, or the extent to which,
its investors shall be involved or be required to be involved in connection with
the foregoing.

(c)Notwithstanding anything herein to the contrary, (i) the parties hereunder
shall make all payments required to be made pursuant to this Agreement in U.S.
dollars by wire transfer of immediately available funds to the bank account
designated in writing from time to time by the other party, and (ii) any such
payments made by the Buyer shall be made so long as the Seller have provided to
the Buyer a valid, properly executed Internal Revenue Service Form W-9, W-8BEN-E
or other applicable form, without set-off, reduction or deduction, or
withholding for or on account of any U.S. federal withholding taxes.

Section 9.17Tax Treatment. The Buyer and the Seller agree to treat, for U.S.
federal income and other applicable tax purposes, (i) the transactions
contemplated by this Agreement as a contractual arrangement between the Buyer
and the Seller and not as indebtedness of the Seller or the sale of any assets
by the Seller, (ii) Buyer’s payment of the Purchase Price as received by the
Seller in a taxable transaction, (iii) the Seller’s payment of the Royalty as
received by the Buyer in a taxable transaction and (iv) this Agreement as not
giving rise to a partnership or similar arrangement, and nothing contained
herein shall be deemed to constitute the Buyer and the Seller as a partnership,
an association, a joint venture or any other kind of entity.  Each of the Buyer
and the Seller shall file all applicable Tax returns consistent with this
Section 9.17. If there is an inquiry by any Governmental Entity of the Buyer or
the Seller related to this Section 9.17, the Buyer and the Seller shall
cooperate with each other in responding to such inquiry in a commercially
reasonable manner consistent with this Section 9.17.  The Buyer and the Seller
agree that, if either determines in good faith that any provision hereunder is
inconsistent with such treatment, the Buyer and Seller shall substitute, by
mutual consent, provisions consistent with such intended tax treatment for such
inconsistent provision, and such provisions shall be effective as of the date
such substitution is made.

Section 9.18[*].  

(a)[*].

(b)[*].

(c)[*]

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their respective representatives thereunto duly authorized as
of the date first above written.

 

SELLER:

Cytokinetics, Incorporated

By:

 

/s/ Robert I. Blum

Name:

 

Robert I. Blum

Title:

 

President & Chief Executive Officer

BUYER:

Signed by a duly authorised attorney of
DOLYA HOLDCO 19 DESIGNATED
ACTIVITY COMPANY (in the process of
changing its name to RTW ROYALTY
HOLDINGS DESIGNATED ACTIVITY
COMPANY)

By:

 

/s/ Roderick Wong

Name:

 

Roderick Wong, M.D.

Title:

 

Authorised Attorney