Document:

epzm-ex1044_335.htm

 

Exhibit 10.44

Execution Version

 

GUARANTY AND SECURITY AGREEMENT

Dated as of November 18, 2019

by

 

EPIZYME, INC.

(as Borrower),

and

Each OTHER Grantor
From Time to Time Party Hereto

in favor of

 

BIOPHARMA CREDIT PLC

(as Collateral Agent on behalf of Lenders and the other Secured Parties)

 

 

 

 

TABLE OF CONTENTS

 

	
 
	
Page

	
ARTICLE I DEFINED TERMS
	
 

	
 
	
Section 1.1.
	
 
	
Definitions
	
1

	
 
	
Section 1.2.
	
 
	
Certain Other Terms
	
5

	
ARTICLE II GUARANTY
	
7

	
 
	
Section 2.1.
	
 
	
Guaranty
	
7

	
 
	
Section 2.2.
	
 
	
Limitation of Guaranty
	
7

	
 
	
Section 2.3.
	
 
	
Authorization; Other Agreements
	
7

	
 
	
Section 2.4.
	
 
	
Guaranty Absolute and Unconditional
	
8

	
 
	
Section 2.5.
	
 
	
Waivers
	
9

	
 
	
Section 2.6.
	
 
	
Reliance
	
9

	
 
	
Section 2.7.
	
 
	
Contribution
	
10

	
Article III GRANT OF SECURITY INTEREST
	
10

	
 
	
Section 3.1.
	
 
	
Collateral
	
10

	
 
	
Section 3.2.
	
 
	
Grant of Security Interest in Collateral
	
11

	
Article IV REPRESENTATIONS AND WARRANTIES
	
12

	
 
	
Section 4.1.
	
 
	
Title; No Other Liens
	
12

	
 
	
Section 4.2.
	
 
	
Perfection and Priority
	
12

	
 
	
Section 4.3.
	
 
	
Pledged Stock
	
13

	
Article V COVENANTS
	
14

	
 
	
Section 5.1.
	
 
	
Maintenance of Perfected Security Interest; Further Documentation and 

Consents
	
14

	
 
	
Section 5.2.
	
 
	
Pledged Collateral
	
15

	
 
	
Section 5.3.
	
 
	
Intellectual Property
	
15

	
Article VI REMEDIAL PROVISIONS
	
16

	
 
	
Section 6.1.
	
 
	
Code and Other Remedies
	
16

	
 
	
Section 6.2.
	
 
	
Accounts and Payments in Respect of General Intangibles
	
19

	
 
	
Section 6.3.
	
 
	
Pledged Collateral
	
20

	
 
	
Section 6.4.
	
 
	
Proceeds to be Turned over to and Held by Collateral Agent
	
21

	
 
	
Section 6.5.
	
 
	
Sale of Pledged Collateral
	
22

	
 
	
Section 6.6.
	
 
	
Deficiency
	
22

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TABLE OF CONTENTS
(continued)

Page

	
 
	
Section 6.7.
	
 
	
Collateral Accounts
	
22

	
 
	
Section 6.8.
	
 
	
Directions, Notices or Instructions
	
22

	
Article VII ADDITIONAL RIGHTS OF COLLATERAL AGENT
	
23

	
 
	
Section 7.1.
	
 
	
Collateral Agent’s Appointment as Attorney-in-Fact
	
23

	
 
	
Section 7.2.
	
 
	
Authorization to File Financing Statements
	
24

	
 
	
Section 7.3.
	
 
	
Authority of Collateral Agent
	
25

	
 
	
Section 7.4.
	
 
	
Duty; Obligations and Liabilities
	
25

	
Article VIII MISCELLANEOUS
	
25

	
 
	
Section 8.1.
	
 
	
Reinstatement
	
25

	
 
	
Section 8.2.
	
 
	
Release of Collateral and Guarantee Obligations
	
26

	
 
	
Section 8.3.
	
 
	
Independent Obligations
	
26

	
 
	
Section 8.4.
	
 
	
No Waiver by Course of Conduct
	
26

	
 
	
Section 8.5.
	
 
	
Amendments in Writing
	
27

	
 
	
Section 8.6.
	
 
	
Additional Grantors and Guarantors; Additional Pledged Collateral
	
27

	
 
	
Section 8.7.
	
 
	
Notices
	
27

	
 
	
Section 8.8.
	
 
	
Successors and Assigns
	
27

	
 
	
Section 8.9.
	
 
	
Counterparts
	
27

	
 
	
Section 8.10.
	
 
	
Severability
	
27

	
 
	
Section 8.11.
	
 
	
Governing Law
	
28

	
 
	
Section 8.12.
	
 
	
Waiver of Jury Trial
	
28

 

ANNEXES

 

	
Annex 1
	
 
	
Form of Pledge Amendment
	
 

	
Annex 2
	
 
	
Form of Joinder Agreement
	
 

	
Annex 3
	
 
	
Form of Intellectual Property Security Agreement
	
 

	
Annex 4
	
 
	
Form of Uncertificated Stock Control Agreement
	
 

 

 

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GUARANTY AND SECURITY AGREEMENT, dated as of November 18, 2019, by EPIZYME, INC., a Delaware corporation (“Borrower”) and each other Person that becomes a party hereto pursuant to Section 8.6 (together with Borrower and such Guarantors, “Grantors”), in favor of BIOPHARMA CREDIT PLC, a public limited company incorporated under the laws of England and Wales (as the “Collateral Agent”) on behalf of Lenders and each other Secured Party.

W I T N E S S E T H:

WHEREAS, pursuant to the Loan Agreement dated as of November 4, 2019 (as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Loan Agreement”) by and among Borrower, the Collateral Agent and the other parties thereto, Lenders agrees to make extensions of credit to Borrower upon the terms and subject to the conditions set forth therein;

WHEREAS, each Grantor other than Borrower agrees to guaranty, jointly and severally, the Obligations (as defined in the Loan Agreement) of Borrower;

WHEREAS, each Grantor will derive substantial direct and indirect benefits from the making of the extensions of credit under the Loan Agreement; and

WHEREAS, it is a condition precedent to the obligation of Lenders to extend credit to Borrower under the Loan Agreement that the Grantors shall have executed and delivered this Agreement to the Collateral Agent and each Lender for the benefit of Lenders and the other Secured Parties.

NOW, THEREFORE, in consideration of the mutual premises herein contained and for valuable consideration the receipt and sufficiency of which is hereby acknowledged and to induce the Collateral Agent, Lenders and the Credit Parties to enter into the Loan Agreement and to induce each Lender to make extensions of credit to Borrower thereunder, each Grantor hereby agrees with the Collateral Agent, each intending to be legally bound, as follows:

Article I

DEFINED TERMS

Section 1.1.Definitions. Capitalized terms used herein without definition are used as defined in the Loan Agreement.

(a)The following terms have the meanings given to them in the Code and terms used herein without definition that are defined in the Code have the meanings given to them in the Code (such meanings to be equally applicable to both the singular and plural forms of the terms defined):  “account”, “account debtor”, “as-extracted collateral”, “certificated security”, “chattel paper”, “check”, “commercial tort claim”, “commodity account”, “commodity contract”, “documents”, “deposit account”, “electronic chattel paper”, “encumbrance”, “entitlement holder”, “equipment”, “farm products”, “financial asset”, “fixture”, “general intangible”, “goods”, “health-care-insurance receivable”, “instruments”, “inventory”, “investment property”, “letter of credit”, “letter-of-credit right”, “money”, “proceeds”, “promissory note”, “record”, “securities account”, “security”, “security entitlement”, “supporting obligation”, “tangible chattel paper” and “uncertificated security”.

 

 

(b)The following terms shall have the following meanings:

“Agreement” means this Guaranty and Security Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time.

“Applicable IP Office” means the United States Patent and Trademark Office or the United States Copyright Office.

“Collateral” has the meaning specified in Section 3.1.

“Excluded Property” means, collectively:

(i)any “intent to use” United States Trademark applications for which a statement of use or an amendment to allege use has not been filed (but only until such statement is filed) solely to the extent, if any, that, and only during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of such intent to use Trademark applications under applicable federal law;

(ii)any permit, lease, license, contract, instrument or other agreement held by any Grantor with respect to which, the grant to the Collateral Agent, in favor of and for the benefit of Lenders and the other Secured Parties, of a security interest therein and Lien thereupon, and the pledge to the Collateral Agent thereof, in favor of and for the benefit of Lenders and the other Secured Parties, to secure the Obligations (and any guaranty thereof) are validly prohibited by the terms thereof, but only, in each case, to the extent, and for so long as, such prohibition is not terminated or rendered unenforceable or otherwise deemed ineffective by the Code (including Sections 9-406(d), 9-407(a), 9-408(a) and 9-409 of the Code) or by any applicable Requirements of Law;

(iii)any other permit, lease, license, contract, instrument or other agreement held by any Grantor with respect to which, the grant to the Collateral Agent, in favor of and for the benefit of Lenders and the other Secured Parties, of a security interest in and Lien thereupon, and the pledge to the Collateral Agent thereof, in favor of and for the benefit of Lenders and the other Secured Parties, to secure the Obligations (and any guaranty thereof) require the consent, approval or waiver of any Governmental Authority or other third party (other than Borrower or an Affiliate of Borrower) and such consent, approval or waiver has not been obtained by such Grantor or Borrower following their respective commercially reasonable efforts to obtain the same;

(iv)any other asset or property subject or purported to be subject to a Lien under any Collateral Document held by any Grantor with respect to which, the grant to the Collateral Agent, in favor of and for the benefit of Lenders and the other Secured Parties, of a security interest in and Lien thereupon, and the pledge to the Collateral Agent thereof, in favor of and for the benefit of Lenders and the other Secured Parties, to secure the Obligations (and any guaranty thereof) require the consent, approval or waiver of any Governmental Authority or other third party (other than Borrower or an Affiliate of Borrower) and such consent, approval or waiver has not been obtained by such Grantor or Borrower following their respective commercially reasonable efforts to obtain the same;

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(v)any property or asset subject or purported to be subject to a Lien under any Collateral Document held by any Grantor that is a non-Wholly-Owned Subsidiary with respect to which, the grant to the Collateral Agent, in favor of and for the benefit of Lenders and the other Secured Parties, of a security interest therein and Lien thereupon, and the pledge to the Collateral Agent thereof, in favor of and for the benefit of Lenders and the other Secured Parties, to secure the Obligations (and any guaranty thereof) are validly prohibited by, or would give any third party (other than Borrower or an Affiliate of Borrower) the right to terminate its obligations under, the Operating Documents of, the joint venture agreement or shareholder agreement with respect to, or any other contract with such third party relating to such non-Wholly-Owned Subsidiary (other than customary non-assignment provisions which are ineffective under Article 9 of the Code or other Requirements of Law), but only, in each case, to the extent, and for so long as such Operating Documents, joint venture agreement, shareholder agreement or other contract is in effect;

(vi)any asset or property subject or purported to be subject to a Lien under any Collateral Document held by any Grantor with respect to which, the cost, difficulty, burden or consequences (including adverse Tax consequences) of granting the Collateral Agent, in favor of and for the benefit of Lenders and the other Secured Parties, a security interest therein and Lien thereupon, and pledging to the Collateral Agent thereof, in favor of and for the benefit of Lenders and the other Secured Parties, to secure the Obligations (and any guaranty thereof) are excessive relative to the value to be afforded to Lenders thereby;

(vii)any rights under any Federal or state governmental license, permit, franchise or authorization to the extent that the granting of a security interest therein is specifically prohibited or restricted by any Requirements of Law;

(viii)any asset or property subject to a Permitted Lien to the extent the documents governing such Permitted Lien or the Permitted Indebtedness secured thereby validly prohibit other Liens on such assets or property, but only, in each case, to the extent, and for so long as, such prohibition is not terminated or rendered unenforceable or otherwise deemed ineffective by the Code (including Sections 9-406(d), 9-407(a), 9-408(a) and 9-409 of the Code) or by any applicable Requirements of Law;

(ix)leasehold interests in real property;

(x)fee interests in real property with a fair market value (reasonably determined in good faith by a Responsible Officer of Borrower) less than $5,000,000;

(xi)Vehicles;

(xii)any letter of credit with an amount less than $500,000 and all letter-of-credit rights with respect thereto;

(xiii)any other property or assets (other than Intellectual Property) as to which the creation or attachment of a lien is not governed by Article 9 of the Code;

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(xiv)Excluded Equity Interests; and

(xv)Excluded Accounts;

provided, however, that “Excluded Property” shall not include any proceeds, products, substitutions or replacements of Excluded Property (unless such proceeds, products, substitutions or replacements would otherwise constitute Excluded Property).

“Fraudulent Transfer Laws” has the meaning set forth in Section 2.2.

“Guaranteed Obligations” has the meaning set forth in Section 2.1.

“Guarantor” means each Grantor other than Borrower.

“Guaranty” means the guaranty of the Guaranteed Obligations made by Guarantors as set forth in this Agreement.

“IP License” means all express and implied grants or rights to make, have made, use, sell, reproduce, distribute, modify, or otherwise exploit any Intellectual Property, as well as all covenants not to sue and co-existence agreements (and all related IP Ancillary Rights), whether written or oral, relating to any Intellectual Property.

“Maximum Guaranteed Amount” has the meaning set forth in Section 2.2.

“NDA” means a new drug application filed with the FDA pursuant to Section 505(b) of the U.S. Federal Food, Drug, and Cosmetic Act, along with all supplements and amendments thereto.

“Pledged Certificated Stock” means all of the Equity Interests (other than Excluded Equity Interests) of any Subsidiary evidenced by a certificate, instrument or other similar document (as defined in the Code), in each case owned by any Grantor, including a Grantor’s right, title and interest resulting from its ownership of any such Equity Interests as a limited or general partner in any partnership that has issued Pledged Certificated Stock or as a member of any limited liability company that has issued Pledged Certificated Stock, and a Grantor’s right, title and interest resulting from its ownership of any such Equity Interests in, to and under any Operating Document or shareholder agreement of any corporation, partnership or limited liability company to which it is a party, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, including all certificated Equity Interests listed on Schedule 1 of the Security Disclosure Letter.  “Pledged Certificated Stock” includes, for the avoidance of doubt, any Pledged Uncertificated Stock that subsequently becomes certificated.

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“Pledged Collateral” means, collectively, the Pledged Stock and the Pledged Debt Instruments.

“Pledged Debt Instruments” means all right, title and interest of any Grantor in instruments evidencing any Indebtedness owed to such Grantor or other obligations owed to such Grantor, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, including all Indebtedness described on Schedule 3 of the Security Disclosure Letter, issued by the obligors named therein.  “Pledged Debt Instruments” excludes any Excluded Property.

“Pledged Investment Property” means any investment property of any Grantor, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, other than any Pledged Stock or Pledged Debt Instruments.  “Pledged Investment Property” excludes any Excluded Property.

“Pledged Stock” means all Pledged Certificated Stock and all Pledged Uncertificated Stock.

“Pledged Uncertificated Stock” means all of the Equity Interests (other than Excluded Equity Interests) of any Subsidiary that is not Pledged Certificated Stock, in each case owned by any Grantor, including Grantor’s right, title and interest resulting from its ownership of any such Equity Interests as a limited or general partner in any partnership not constituting Pledged Certificated Stock or as a member of any limited liability company not constituting Pledged Certificated Stock, a Grantor’s right, title and interest resulting from its ownership of any such Equity Interests in, to and under any Operating Document or shareholder agreement of any partnership or limited liability company to which it is a party, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, including in each case those interests set forth on Schedule 1 of the Security Disclosure Letter, to the extent such interests are not certificated.

“Secured Obligations” has the meaning set forth in Section 3.2.

“Security Disclosure Letter” means the security agreement disclosure letter, dated as of the date hereof, delivered by the Grantors to the Collateral Agent and each Lender.

“Vehicles” means rolling stock, motor vehicles, vessels, aircraft and other assets subject to certificates of title.

 

Section 1.2.Certain Other Terms

.

(a)For the purposes of and as used in this Agreement: (i) references to any Person include its successors and assigns and, in the case of any Governmental Authority, any Person succeeding to its functions and capacities; (ii) each authorization herein shall be deemed irrevocable and coupled with an interest; and (iii) where the context requires, provisions relating to any Collateral when used in relation to a Grantor shall refer to such Grantor’s Collateral or any relevant part thereof.

(b)Other Interpretive Provisions.

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(i)Defined Terms.  Unless otherwise specified herein or therein, all terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto.

(ii)This Agreement.  The words “hereof”, “herein”, “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

(iii)Certain Common Terms.  The words “include”, “included” and “including” are not limiting and mean “including without limitation.”  The word “or” has the inclusive meaning represented by the phrase “and/or”.  The word “shall” is mandatory.  The word “may” is permissive.  The singular includes the plural and the plural includes the singular.

(iv)Performance; Time.  Whenever any performance obligation hereunder (other than a payment obligation) shall be stated to be due or required to be satisfied on a day other than a Business Day, such performance shall be made or satisfied on the next succeeding Business Day.  In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”, and the word “through” means “to and including.”  If any provision of this Agreement refers to any action taken or to be taken by any Person, or which such Person is prohibited from taking, such provision shall be interpreted to encompass any and all means, direct or indirect, of taking, or not taking, such action.

(v)Contracts.  Except as the context otherwise requires (including to the extent otherwise expressly provided herein), references to any contract, agreement, instrument or other document, including this Agreement and the other Loan Documents, shall be deemed to include any and all amendments, supplements or modifications thereto or restatements or substitutions thereof, in each case which are in effect from time to time, but only to the extent such amendments, supplements, modifications, restatements or substitutions are not prohibited by the terms of any Loan Document.

(vi)Laws.  Except as the context otherwise requires (including to the extent otherwise expressly provided herein), references to any law, statute, treaty, order, policy, rule or regulation include any amendments, supplements and successors thereto, and references to any law, statute, treaty, order, policy, rule or regulation are to be construed as including all statutory and regulatory provisions related thereto or consolidating, amending, replacing, supplementing or interpreting such law, statute, treaty, order, policy, rule or regulation.

(vii)Excluded Property.  Notwithstanding anything to the contrary herein, the representations, warranties and covenants set forth herein in relation to the assets of the Grantors shall not apply to any Excluded Property.

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Article II

GUARANTY

Section 2.1.Guaranty.  To induce Lenders to make the Term Loans to Borrower in accordance with the terms and conditions of the Loan Agreement, each Guarantor, jointly and severally with each other Guarantor, absolutely, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, the full and punctual payment when due, whether at stated maturity or earlier, by reason of acceleration, mandatory prepayment or otherwise in accordance with any Loan Document, of all the Obligations of Borrower existing on the date hereof or hereinafter incurred or created (the “Guaranteed Obligations”).  This Guaranty by each Guarantor hereunder constitutes a guaranty of payment and not of collection.  Each Guarantor hereby acknowledges and agrees that the Guaranteed Obligations, at any time and from time to time, may exceed the Maximum Guaranteed Amount of such Guarantor and may exceed the aggregate of the Maximum Guaranteed Amounts of all Guarantors, in each case without discharging, limiting or otherwise affecting the obligations of any Guarantor hereunder or the rights, powers and remedies of any Secured Party hereunder or under any other Loan Document.

Section 2.2.Limitation of Guaranty.  Any term or provision of this Guaranty or any other Loan Document to the contrary notwithstanding, the maximum aggregate amount for which any Guarantor shall be liable hereunder (the “Maximum Guaranteed Amount”) shall not exceed the maximum amount for which such Guarantor can be liable without rendering this Guaranty or any other Loan Document, as it relates to such Guarantor, subject to avoidance under applicable Requirements of Law relating to fraudulent conveyance or fraudulent transfer (including the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act and Section 548 of title 11 of the United States Code or any applicable provisions of comparable Requirements of Law) (collectively, “Fraudulent Transfer Laws”).  Any analysis of the provisions of this Guaranty for purposes of Fraudulent Transfer Laws shall take into account the right of contribution established in Section 2.7 below and, for purposes of such analysis, give effect to any discharge of intercompany debt as a result of any payment made under the Guaranty.

Section 2.3.Authorization; Other Agreements.  The Collateral Agent, on behalf of Lenders and the other Secured Parties is hereby authorized, without notice, to or demand upon any Guarantor and without discharging or otherwise affecting the obligations of any Guarantor hereunder and without incurring any liability hereunder, from time to time, to do each of the following but subject in all cases to the terms and conditions of the other Loan Documents, including, for the avoidance of doubt in the case of clause (d) below, subject to being permitted to do so in accordance with such terms and conditions:

(a)subject to compliance with Section 11.5 of the Loan Agreement and Section 8.5 hereof (as applicable), (i) modify, amend, supplement or otherwise change, (ii) accelerate or otherwise change the time of payment or (iii) waive or otherwise consent to noncompliance with, any Guaranteed Obligation or any Loan Document;

(b)apply to the Guaranteed Obligations any sums by whomever paid or however realized to any Guaranteed Obligation in such order as provided in the Loan Documents;

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(c)refund at any time any payment received by any Secured Party in respect of any Guaranteed Obligation;

(d)(i) sell, exchange, enforce, waive, substitute, liquidate, terminate, release, abandon, fail to perfect, subordinate, accept, substitute, surrender, exchange, affect, impair or otherwise alter or release any Collateral for any Guaranteed Obligation or any other guaranty therefor in any manner, (ii) receive, take and hold additional Collateral to secure any Guaranteed Obligation, (iii) add, release or substitute any one or more other Guarantors, makers or endorsers of any Guaranteed Obligation or any part thereof and (iv) otherwise deal in any manner with Borrower or any other Guarantor, maker or endorser of any Guaranteed Obligation or any part thereof; and

(e)settle, release, compromise, collect or otherwise liquidate the Guaranteed Obligations.

Section 2.4.Guaranty Absolute and Unconditional.  Each Guarantor hereby waives and agrees not to assert any defense (other than the indefeasible payment in full of the Guaranteed Obligations (other than inchoate indemnity obligations)), whether arising in connection with or in respect of any of the following clauses (a) through (f) or otherwise, and hereby agrees that its obligations under this Guaranty are irrevocable, absolute and unconditional and shall not be discharged as a result of or otherwise affected by any of the following clauses (a) through (f) (which may not be pleaded and evidence of which may not be introduced in any proceeding with respect to this Guaranty, in each case except as otherwise agreed in writing by Lender):

(a)the invalidity or unenforceability of any obligation of Borrower or any other Guarantor under any Loan Document or any other agreement or instrument relating thereto (including any amendment, consent or waiver thereto), or any security for, or other guaranty of, any Guaranteed Obligation or any part thereof, or the lack of perfection or continuing perfection or failure of priority of any security for the Guaranteed Obligations or any part thereof;

(b)the absence of (i) any attempt to collect any Guaranteed Obligation or any part thereof from Borrower or any other Guarantor or other action to enforce the same or (ii) any action to enforce any Loan Document or any Lien thereunder;

(c)the failure by any Person to take any steps to perfect and maintain any Lien on, or to preserve any rights with respect to, any Collateral;

(d)any workout, insolvency, bankruptcy proceeding, reorganization, arrangement, liquidation or dissolution by or against Borrower, any other Guarantor or any of Borrower’s other Subsidiaries or any procedure, agreement, order, stipulation, election, action or omission thereunder, including any discharge or disallowance of, or bar or stay against collecting, any Guaranteed Obligation (or any interest thereon) in or as a result of any such proceeding;

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(e)any foreclosure, whether or not through judicial sale, and any other sale or other disposition of any Collateral or any election following the occurrence of an Event of Default and during the continuance thereof by the Collateral Agent, on behalf of Lenders and any other Secured Party, to proceed separately against any Collateral in accordance with the Collateral Agent’s rights and the rights of any Lender or other Secured Party under any applicable Requirements of Law; or

(f)any other defense, setoff, counterclaim or any other circumstance that might otherwise constitute a legal or equitable discharge of Borrower, any other Guarantor or any other Subsidiary of Borrower, in each case other than the indefeasible payment in full of the Guaranteed Obligations (other than inchoate indemnity obligations).

Section 2.5.Waivers.  To the fullest extent permitted by Requirements of Law, each Guarantor hereby unconditionally and irrevocably waives and agrees not to assert any claim, defense, setoff or counterclaim based on diligence, promptness, presentment, requirements for any demand or notice hereunder, including any of the following:  (a) any demand for payment or performance and protest and notice of protest; (b) any notice of acceptance; (c) any presentment, demand, protest or further notice or other requirements of any kind with respect to any Guaranteed Obligation (including any accrued but unpaid interest thereon) becoming immediately due and payable; and (d) any other notice in respect of any Guaranteed Obligation or any part thereof, and any defense arising by reason of any disability or other defense of Borrower or any other Guarantor.  Until the indefeasible payment in full of the Guaranteed Obligations (other than inchoate indemnity obligations), each Guarantor further unconditionally and irrevocably agrees not to (x) enforce or otherwise exercise any right of subrogation or any right of reimbursement or contribution or similar right against Borrower or any other Guarantor by reason of any Loan Document or any payment made thereunder or (y) assert any claim, defense, setoff or counterclaim it may have against any other Credit Party or set off any of its obligations to such other Credit Party against obligations of such Credit Party to such Guarantor.  No obligation of any Guarantor hereunder shall be discharged other than by complete performance.

Section 2.6.Reliance.  Each Guarantor hereby assumes responsibility for keeping itself informed of the financial condition of Borrower, each other Guarantor and any other guarantor, maker or endorser of any Guaranteed Obligation or any part thereof, and of all other circumstances bearing upon the risk of nonpayment of any Guaranteed Obligation or any part thereof that reasonable and diligent inquiry would reveal, and each Guarantor hereby agrees that neither the Collateral Agent nor any Lender or other Secured Party shall have any duty to advise any Guarantor of information known to it regarding such condition or any such circumstances.  In the event the Collateral Agent, in its sole discretion, undertakes at any time or from time to time to provide any such information to any Guarantor, such Person shall be under no obligation to (a) undertake any investigation not a part of its regular business routine, (b) disclose any information that any Lender or other Secured Party, pursuant to accepted or reasonable commercial finance or banking practices, wishes to maintain confidential or (c) make any future disclosures of such information or any other information to any Guarantor.

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Section 2.7.Contribution.  To the extent that any Guarantor shall be required hereunder to pay any portion of any Guaranteed Obligation exceeding the greater of (a) the amount of the value actually received by such Guarantor and its Subsidiaries from the Term Loans and other Obligations and (b) the amount such Guarantor would otherwise have paid if such Guarantor had paid the aggregate amount of the Guaranteed Obligations (excluding the amount thereof repaid by Borrower) in the same proportion as such Guarantor’s net worth on the date enforcement is sought hereunder bears to the aggregate net worth of all Guarantors on such date, then such Guarantor shall be reimbursed by such other Guarantors for the amount of such excess, pro rata, based on the respective net worth of such other Guarantors on such date.

Article III

GRANT OF SECURITY INTEREST

Section 3.1.Collateral.  For the purposes of this Agreement, the following tangible and intangible assets and property now owned or at any time hereafter acquired, developed or created by a Grantor or in which a Grantor now has or at any time in the future may acquire any right, title or interest, in each case, wherever located, is collectively referred to as the “Collateral”:

(a)all accounts;

(b)all as-extracted collateral;

(c)all chattel paper, including electronic chattel paper or tangible chattel paper;

(d)all checks;

(e)all deposit accounts;

(f)all documents;

(g)all encumbrances;

(h)all equipment;

(i)all fixtures;

(j)all general intangibles (including all agreements of any kind);

(k)all goods;

(l)all Intellectual Property and IP Licenses (including Current Company IP Agreements to which a Grantor is a party and the rights of such Grantor thereunder, and all of a Grantor’s right, title and interest in, to and under any NDA, Internet Domain Names and Software);

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(m)all instruments (including all promissory notes);

(n)all inventory;

(o)all investment property (including Pledged Collateral, Pledged Investment Property, Equity Interests, securities, securities accounts and security entitlements with respect thereto and financial assets carried therein, and all commodity accounts and commodity contracts);

(p)all money;

(q)all letters of credit, letter-of-credit rights and supporting obligations;

(r)the commercial tort claims with a predicted value of $500,000 or more (as reasonably determined by a Responsible Officer of Borrower in good faith and based upon reasonable assumptions) described on Schedule 4 of the Security Disclosure Letter;

(s)all books, records, ledger cards, files, correspondence, customer lists, blueprints, technical specifications, manuals, computer software, computer printouts, tapes, disks and other electronic storage media and related data processing software and similar items that at any time pertain to or evidence or contain information relating to any of the other property described in this Section 3.1;

(t)all property of such Grantor held by the Collateral Agent for the benefit of Lenders and any other Secured Party, including all property of every description, in the custody of or in transit to the Collateral Agent for the benefit of Lenders and any other Secured Party for any purpose, including safekeeping, collection or pledge, for the account of such Grantor or as to which such Grantor may have any right or power, including cash;

(u)all proceeds, products, accessions, rents and profits of or in respect of any of the foregoing; 

(v)to the extent not otherwise included, all personal property of such Grantor, whether tangible or intangible and wherever located, and all proceeds, products, accessions, rents, issues and profits of any and all of the foregoing and all collateral security, supporting obligations and guarantees given by any Person with respect to any of the foregoing; and

(w)to the extent not otherwise included, all other properties or assets of whatever kind and nature subject or purported to be subject from time to time to a Lien under any Collateral Document;

excluding, however, all Excluded Property.

Section 3.2.Grant of Security Interest in Collateral.  Without limiting any other security interest granted to the Collateral Agent, in favor of and for the benefit of Lenders and the other Secured Parties, each Grantor, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Obligations of such Grantor (the “Secured Obligations”), hereby pledges, hypothecates and 

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grants to the Collateral Agent, in favor and for the benefit of Lenders and the other Secured Parties, to secure the payment and performance in full of all of the Obligations for the benefit of Lenders and the other Secured Parties, a first priority Lien (subject only to Permitted Liens) on and continuing security interest in, all of its right, title and interest in, to and under the Collateral of such Grantor, wherever located, whether now owned or hereafter acquired or arising; provided, however, notwithstanding the foregoing, no Lien or security interest is hereby granted on, and “Collateral” shall not include, any Excluded Property; provided, further, that if and when any property or asset shall cease to be Excluded Property, a first priority Lien (subject only to Permitted Liens) on and security interest in such property or asset shall be deemed granted therein and, therefore, “Collateral” shall then include any such property or asset.

Article IV

REPRESENTATIONS AND WARRANTIES

To induce the Collateral Agent and Lenders to enter into the Loan Documents, each Grantor, jointly and severally with each other Grantor, represents and warrants each of the following to the Collateral Agent, each Lender and the other Secured Parties:

Section 4.1.Title; No Other Liens.  Except for the Lien granted to the Collateral Agent for the benefit of Lenders and the other Secured Parties pursuant to this Agreement and any other Permitted Liens under any Loan Document (including Section 4.2 hereof), such Grantor owns or otherwise has the rights it purports to have in each item of the Collateral, free and clear of any and all Liens or claims of others.  Such Grantor (a) is the record and beneficial owner of the Collateral pledged by it hereunder constituting instruments or certificates and (b) except for Permitted Subsidiary Distribution Restrictions, has rights in or the power to transfer each other item of Collateral in which a Lien is granted by it hereunder, free and clear of any other Lien other than any Permitted Liens.

Section 4.2.Perfection and Priority.  Other than in respect of money and other Collateral subject to Section 9-311(a)(1) of the Code, the security interest granted to the Collateral Agent pursuant to this Agreement constitutes a valid and continuing first priority perfected security interest (subject, in the case of priority only, to Permitted Liens that are expressly permitted (if at all) by the terms of the Loan Agreement or this Agreement to have superior priority to the Lien and security interest granted to the Collateral Agent for the benefit of Lenders and the other Secured Parties) in favor of and for the benefit of Lenders and the other Secured Parties in all Collateral, subject, for the following Collateral, to the occurrence of the following:  (a) in the case of all Collateral in which a security interest may be perfected by filing a financing statement under the Code, the completion of the filings and other actions specified on Schedule 2 of the Security Disclosure Letter (which, in the case of all filings and other documents referred to on such schedule, have been duly authorized by the applicable Guarantor); (b) with respect to any deposit account over which a Control Agreement is required pursuant to Section 5.5 of the Loan Agreement, the execution of Control Agreements; (c) in the case of all United States Trademarks, Patents and Copyrights for which Code filings are insufficient to effectuate perfection, all appropriate filings having been made with the Applicable IP Office, as applicable; (d) in the case of all Pledged Certificated Stock, the delivery thereof to the Collateral Agent, for the benefit of Lenders and the other Secured Parties, of such Pledged Certificated Stock consisting of instruments and certificates, in each case, properly endorsed for transfer to the Collateral Agent or in blank; (e) in the case of all Pledged Uncertificated Stock, the delivery 

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to the Collateral Agent, for the benefit of Lenders and the other Secured Parties, of an executed uncertificated stock control agreement among the issuer, the registered owner and the Collateral Agent in the form attached as Annex 4 hereto; and (f) in the case of all other instruments that are not Pledged Stock, if any, the delivery thereof to the Collateral Agent, for the benefit of Lenders and the other Secured Parties, of such instruments.  Such Lien on and security interest in Pledged Stock shall be prior to all other Liens on such Collateral, subject to Permitted Liens having priority over the Collateral Agent’s Lien by operation of law or as and to the extent expressly permitted (if at all) by any Loan Document.  Except to the extent expressly not required pursuant to the terms of the Loan Agreement or this Agreement, all actions by each Grantor necessary or desirable to protect and perfect the first priority Lien on and security interest in the Collateral granted hereunder have been duly taken.

Section 4.3.Pledged Stock. 

(a)The Pledged Stock issued by any Subsidiary of any Grantor pledged by such Grantor hereunder (i) consist of the number and types of Equity Interests listed on Schedule 1 of the Security Disclosure Letter and constitutes that percentage of the issued and outstanding equity of all classes of each issuer thereof as set forth on Schedule 1 of the Security Disclosure Letter, (ii) has been duly authorized, validly issued and is fully paid and nonassessable (other than Pledged Stock in limited liability companies and partnerships), and (ii) constitutes the legal, valid and binding obligation of the obligor with respect thereto, enforceable in accordance with its terms.  As of the date any Joinder Agreement or Pledge Amendment is delivered pursuant to Section 8.6, the Pledged Stock pledged by each applicable Grantor thereunder (x) is listed on the applicable schedule attached to such Joinder Agreement or Pledge Amendment, as applicable, and constitutes that percentage of the issued and outstanding equity of all classes of each issuer thereof as set forth on such schedule, (y) has been duly authorized, validly issued and is fully paid and non-assessable (other than Pledged Stock in limited liability companies and partnerships) and (z) constitutes the legal, valid and binding obligation of the obligor with respect thereto, enforceable in accordance with its terms.

(b)(i) All Pledged Certificated Stock has been delivered to the Collateral Agent, for the benefit of Lenders and the other Secured Parties, in accordance with Section 5.2(a), and (ii) with respect to Pledged Uncertificated Stock, uncertificated stock control agreements in the form attached as Annex 4 hereto have been delivered to the Collateral Agent, for the benefit of Lenders and the other Secured Parties, in accordance with Section 5.2(a).

(c)Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent for the benefit of Lenders and the other Secured Parties shall be entitled to exercise all of the rights of the Grantor granting the security interest in any Pledged Stock, and a transferee or assignee of such Pledged Stock shall become a holder of such Pledged Stock to the same extent as such Grantor and, upon the transfer of the entire interest of such Grantor, such Grantor shall, by operation of law, cease to be a holder of such Pledged Stock.

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Article V

COVENANTS

Each Grantor agrees with the Collateral Agent to the following, until the indefeasible payment in full of the Obligations (other than inchoate indemnity obligations) and unless the Collateral Agent, on behalf of Lenders and the other Secured Parties, otherwise consents in writing:

Section 5.1.Maintenance of Perfected Security Interest; Further Documentation and Consents.

(a)Subject to the occurrence of the actions described in Section 4.2, which each Grantor shall promptly undertake, and except to the extent perfection is either (i) mutually agreed between Borrower and the Collateral Agent not to be required under this Agreement or the other Loan Documents or (ii) mutually agreed between Borrower and the Collateral Agent to be effected by filings of financing statements or amendments thereto to be made by the Collateral Agent or any Lender or its Related Party pursuant to Section 7.2, such Grantor shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in Section 4.2 and shall warrant and defend the Collateral covered by such security interest and such priority against the claims and demands of all Persons (other than Secured Parties).

(b)Such Grantor shall furnish to the Collateral Agent at any time and from time to time statements and schedules further identifying and describing the Collateral and such other documents in connection with the Collateral as the Collateral Agent may reasonably request in writing, all in reasonable detail and in form and substance reasonably satisfactory to the Collateral Agent.

(c)At any time and from time to time, upon the written request of the Collateral Agent, such Grantor shall, for the purpose of obtaining or preserving the full benefits of this Agreement and the other Collateral Documents and of the rights and powers herein and therein granted, (i) promptly and duly execute and deliver, and have recorded, such further documents, including an authorization to file (or, as applicable, the filing) of any financing statement or amendment under the Code (or other filings under similar Requirements of Law) in effect in any jurisdiction with respect to the security interest created hereby and (ii) take such further action as the Collateral Agent may reasonably request in writing that is consistent with the requirements hereof and of the other Loan Documents, including executing and delivering any Control Agreements required by Section 5.5 of the Loan Agreement with respect to the Collateral Accounts.

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Section 5.2.Pledged Collateral.

(a)Delivery of Pledged Collateral.  Such Grantor shall, promptly after acquiring any Pledged Collateral not owned on the Tranche A Closing Date, (i) deliver to the Collateral Agent, in suitable form for transfer and in form and substance reasonably satisfactory to the Collateral Agent, (A) all such Pledged Stock that is Pledged Certificated Stock, (B) all Pledged Debt Instruments and (C) all certificates and instruments evidencing Pledged Investment Property, (ii) subject all Collateral Accounts required to be subject to a Control Agreement pursuant to the Loan Agreement to a Control Agreement, and (iii)  cause the issuer of any such Pledged Stock that is Pledged Uncertificated Stock to execute an uncertificated stock control agreement in the form attached hereto as Annex 4, pursuant to which, inter alia, such issuer agrees to comply with the Collateral Agent’s instructions with respect to such Pledged Uncertificated Stock without further consent by such Grantor, and, for the avoidance of doubt, if any such Pledged Uncertificated Stock becomes certificated, promptly (but in any event within thirty (30) days thereof) deliver to the Collateral Agent, in suitable form for transfer and in form and substance reasonably satisfactory to the Collateral Agent, all such certificates, instruments or other similar documents (as defined in the Code).

(b)Event of Default.  During the continuance of any Event of Default and in connection with the exercise of rights or remedies hereunder or under any other Loan Document, the Collateral Agent shall have the right, at any time in its discretion and without prior notice to Grantor, to (i) transfer to or to register in its name or in the name of its nominees any Pledged Stock and (ii) exchange any certificate or instrument representing or evidencing any Pledged Stock for certificates or instruments of smaller or larger denominations.

(c)Cash Distributions with respect to Pledged Collateral and Pledged Investment Property.  Except as provided in Article VI and subject to any limitations set forth in the Loan Agreement, such Grantor shall be entitled to receive all cash distributions paid in respect of the Pledged Collateral and the Pledged Investment Property.

(d)Voting Rights.  Except as provided in Article VI, such Grantor shall be entitled to exercise all voting, consent and corporate, partnership, limited liability company and similar rights with respect to the Pledged Collateral and Pledged Investment Property; provided, however, that no vote shall be cast, consent, waiver or ratification given or right exercised (or failed to be exercised) or other action taken (or failed to be taken) by such Grantor in any manner that would reasonably be expected to (i) violate or be inconsistent with any of the terms of this Agreement or any other Loan Document or (ii) have the effect of materially impairing such Collateral or the position or interests of the Secured Parties.

Section 5.3.Intellectual Property.  Such Grantor shall, promptly (and in no event later than fifteen (15) days) after delivery of financial statements pursuant to Section 5.2(a) of the Loan Agreement), execute and deliver to Lender in form and substance reasonably acceptable to Lender and suitable for filing in the Applicable IP Office the short-form intellectual property security agreements in the form attached hereto as Annex 3 for all Collateral consisting of any newly-acquired Copyrights, Trademarks or Patents (as applicable) of such Grantor registered in the Applicable IP Office during the applicable reporting period.

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Article VI

REMEDIAL PROVISIONS

Section 6.1.Code and Other Remedies.

(a)Code Remedies.  During the continuance of an Event of Default, the Collateral Agent, on behalf of Lenders and the other Secured Parties, may exercise, in addition to all other rights and remedies granted to it in this Agreement, any IP Agreement, any other Loan Document or in any other instrument or agreement securing, evidencing or relating to any Secured Obligation, all rights, powers and remedies of a secured party under the Code or any other Requirements of Law or in equity.

(b)Disposition of Collateral.  During the continuance of an Event of Default, without limiting the generality of the foregoing, the Collateral Agent may (personally or through its agents or attorneys), without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by Requirements of Law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived):  (i) enter upon the premises where any Collateral is located, without any obligation to pay rent, through self-help, without judicial process, without first obtaining a final judgment or giving Grantor or any other Person notice or opportunity for a hearing on the Collateral Agent’s or any Lender’s claim or action; (ii) collect, receive, appropriate and realize upon any Collateral; (iii) store, process, repair or recondition the Collateral or otherwise prepare any Collateral for disposition in any manner to the extent the Collateral Agent deems appropriate; and (iv) sell, assign, license out, convey, transfer, grant option or options to purchase or license and deliver any Collateral (or enter into contractual obligations to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of the Collateral Agent or any Lender or other Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk.  The Collateral Agent, on behalf of Lenders and the other Secured Parties, shall have the right, upon any such public sale or sales and, to the extent permitted by the Code and other Requirements of Law, upon any such private sale or sales, to purchase or license the whole or any part of the Collateral so sold or licensed, free of any right or equity of redemption of any Grantor, which right or equity is hereby waived and released.  The Collateral Agent, as representative of all Lenders and other Secured Parties, shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Collateral sold at any such sale made in accordance with the Code, to use and apply any of the Secured Obligations as a credit on account of the purchase price for any Collateral payable by the Collateral Agent on behalf of Lenders and the other Secured Parties, at such sale.  If the Collateral Agent on behalf of any Lender sells any of the Collateral upon credit, Grantor will be credited only with payments actually made by purchaser and received by such Lender and applied to indebtedness of the purchaser.  In the event the purchaser fails to pay for the Collateral, the Collateral Agent may resell the Collateral and Grantor shall be credited with proceeds of the sale.  Neither the Collateral Agent nor any Lender shall have an obligation to marshal any of the Collateral.

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(c)Management of the Collateral.  Each Grantor further agrees, that, during the continuance of any Event of Default, (i) at the Collateral Agent’s request, it shall assemble the Collateral and make it available to the Collateral Agent at places that the Collateral Agent shall reasonably select, whether at such Grantor’s premises or elsewhere, (ii) without limiting the foregoing, the Collateral Agent also has the right to require that such Grantor store and keep any Collateral pending further action by the Collateral Agent and, while any such Collateral is so stored or kept, provide such guards and maintenance services as shall be necessary to protect the same and to preserve and maintain such Collateral in good condition, normal wear and tear excepted, (iii) until the Collateral Agent is able to sell, assign, license out, convey or transfer any Collateral, the Collateral Agent shall have the right to hold or use such Collateral to the extent that it deems appropriate for the purpose of preserving the Collateral or its value or for any other purpose deemed appropriate by the Collateral Agent and (iv) the Collateral Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of any Collateral and to enforce any of the Collateral Agent’s or any Lender’s remedies, with respect to such appointment without prior notice or hearing as to such appointment.  The Collateral Agent shall not have any obligation to any Grantor to maintain or preserve the rights of any Grantor as against other Persons with respect to any Collateral while such Collateral is in the possession of the Collateral Agent.

(d)Application of Proceeds.  The Collateral Agent shall apply the cash proceeds received by it in respect of any sale of, any collection from, or other realization upon all or any part of the Collateral, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any Collateral or in any way relating to the Collateral or the rights of Lenders and the other Secured Parties, including reasonable and documented out-of-pocket attorneys’ fees and disbursements, to the payment in whole or in part of the Secured Obligations, as set forth in the Loan Agreement, and only after such application and after the payment by the Collateral Agent or Lenders of any other amount required by any Requirements of Law, need the Collateral Agent or any Lender account for the surplus, if any, to any Grantor.

(e)Direct Obligation.  Neither the Collateral Agent nor any Lender or other Secured Party shall be required to make any demand upon, or pursue or exhaust any right or remedy against, any Grantor or any other Person with respect to the payment of the Obligations or to pursue or exhaust any right or remedy with respect to any Collateral therefor or any direct or indirect guaranty thereof.  All of the rights and remedies of the Collateral Agent and Lenders and any other Secured Party shall be cumulative, may be exercised individually or concurrently and not exclusive of any other rights or remedies provided by any Requirements of Law.  To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Collateral Agent, Lenders or any other Secured Party, any valuation, stay, appraisement, extension, redemption or similar laws and any and all rights or defenses it may have as a surety, now or hereafter existing, arising out of the exercise by any of them of any rights or remedies hereunder.  If any notice of a proposed sale or other disposition of any Collateral shall be required by Requirements of Law, such notice shall be deemed reasonable and proper if given at least ten (10) days before such sale or other disposition.

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(f)Commercially Reasonable.  To the extent that applicable Requirements of Law impose duties on the Collateral Agent or any Lender or other Secured Party to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is not commercially unreasonable for the Collateral Agent or any Lender to do any of the following:

(i)fail to incur significant costs, expenses or other liabilities reasonably deemed as such by the Collateral Agent or such Lender to prepare any Collateral for disposition or otherwise to complete raw material or work in process into finished goods or other finished products for disposition;

(ii)fail to obtain permits, licenses or other consents for access to any Collateral to sell or license or for the collection or sale or licensing of any Collateral, or, if not required by other Requirements of Law, fail to obtain permits, licenses or other consents for the collection or disposition of any Collateral;

(iii)fail to exercise remedies against account debtors or other Persons obligated on any Collateral or to remove Liens on any Collateral or to remove any adverse claims against any Collateral;

(iv)advertise dispositions of any Collateral through publications or media of general circulation, whether or not such Collateral is of a specialized nature, or to contact other Persons, whether or not in the same business as any Grantor, for expressions of interest in acquiring any such Collateral;

(v)exercise collection remedies against account debtors and other Persons obligated on any Collateral, directly or through the use of collection agencies or other collection specialists, hire one or more professional auctioneers to assist in the disposition of any Collateral, whether or not such Collateral is of a specialized nature, or, to the extent deemed appropriate by the Collateral Agent or such Lender, obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Collateral Agent or such Lender in the collection or disposition of any Collateral, or utilize Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets to dispose of any Collateral;

(vi)dispose of assets in wholesale rather than retail markets;

(vii)disclaim warranties, such as title, merchantability, possession, non-infringement or quiet enjoyment; or

(viii)purchase insurance or credit enhancements to insure the Collateral Agent or any Lender or other Secured Party against risks of loss, collection or disposition of any Collateral or to provide to the Collateral Agent and Lenders a guaranteed return from the collection or disposition of any Collateral.

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Each Grantor acknowledges that the purpose of this Section 6.1 is to provide a non-exhaustive list of actions or omissions that are commercially reasonable when exercising remedies against any Collateral and that other actions or omissions by the Collateral Agent, Lenders or any other Secured Party shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 6.1.  Without limitation upon the foregoing, nothing contained in this Section 6.1 shall be construed to grant any rights to any Grantor or to impose any duties on the Collateral Agent or any Lender or other Secured Party that would not have been granted or imposed by this Agreement or by applicable Requirements of Law in the absence of this Section 6.1.

(g)IP Licenses.  To the extent permitted, and only for the purpose of enabling the Collateral Agent to exercise rights and remedies under this Section 6.1 during the continuance of an Event of Default (including in order to take possession of, collect, receive, assemble, process, appropriate, remove, realize upon, sell, assign, license out, convey, transfer or grant options to purchase any Collateral) at such time as the Collateral Agent on behalf of Lenders and the other Secured Parties shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby grants to the Collateral Agent (i) an irrevocable, nonexclusive, assignable, worldwide license (exercisable without payment of royalty or other compensation to such Grantor), including the right to sublicense, use and practice any and all Intellectual Property now owned or held or hereafter acquired or held by such Grantor and access to all media in which any of the licensed items may be recorded or stored and to all Software and programs used for the compilation or printout thereof and (ii) an irrevocable license (without payment of rent or other compensation to such Grantor) to use, operate and occupy all real property owned, operated, leased, subleased or otherwise occupied by such Grantor.

Section 6.2.Accounts and Payments in Respect of General Intangibles.

(a)In addition to, and not in substitution for, any similar requirement in the Loan Agreement, if required by the Collateral Agent at any time during the continuance of an Event of Default, any payment of accounts or payment in respect of general intangibles relating to the Collateral, when collected by any Grantor, shall be promptly (and, in any event, within two (2) Business Days of such collection) deposited by such Grantor in the exact form received, duly indorsed by such Grantor to the Collateral Agent for the benefit of Lenders and the other Secured Parties, in a Collateral Account, subject to withdrawal by the Collateral Agent as provided in Section 6.4.  Until so turned over, such payment shall be held by such Grantor in trust for the Collateral Agent for the benefit of Lenders and the other Secured Parties, segregated from other funds of such Grantor.  Each such deposit of proceeds of accounts and payments in respect of general intangibles relating to the Collateral shall, upon the Collateral Agent’s request, be accompanied by a report identifying in reasonable detail the nature and source of the payments included in the deposit.

(b)At any time during the continuance of an Event of Default:

(i)each Grantor shall, upon the Collateral Agent’s request, assemble and hold for the benefit of Lenders and the other Secured Parties all original and other documents evidencing, and relating to, the contractual obligations and transactions that gave rise to any account or any payment in respect of general intangibles, including all IP Licenses, original orders, invoices and shipping receipts and notify account debtors that the accounts or general intangibles have been collaterally assigned to the Collateral Agent for the benefit of Lenders and the other Secured Parties and that payments in respect thereof shall be made directly to the Collateral Agent for the benefit of Lenders and the other Secured Parties or to any Lender on behalf of itself and the other Secured Parties, as the Collateral Agent shall direct; and

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(ii)each Grantor shall take all actions, deliver all documents and provide all information necessary or reasonably requested by the Collateral Agent to ensure any Internet Domain Name is registered.

(c)Anything herein to the contrary notwithstanding, each Grantor shall remain liable under each account and each payment in respect of general intangibles included in the Collateral to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto.  Neither the Collateral Agent nor any Lender or other Secured Party shall have any obligation or liability under any agreement giving rise to an account or a payment in respect of a general intangible included in the Collateral by reason of or arising out of any Loan Document or the receipt by the Collateral Agent or any Lender or other Secured Party of any payment relating thereto, nor shall the Collateral Agent nor any Lender or other Secured Party be obligated in any manner to perform any obligation of any Grantor under or pursuant to any agreement giving rise to an account or a payment in respect of a general intangible included in the Collateral, to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts that may have been assigned to it or to which it may be entitled at any time or times.

Section 6.3.Pledged Collateral.

(a)Voting Rights.  During the continuance of an Event of Default, all rights of each Grantor to exercise or refrain from exercising the voting and other consensual rights which it would otherwise be entitled to exercise pursuant hereto shall cease and all such rights shall thereupon become vested in the Collateral Agent or a nominee on behalf of Lenders or the other Secured Parties, who shall thereupon have the sole right to exercise such voting and other consensual rights, including the right to exercise (i) any voting, consent, corporate and other right pertaining to the Pledged Collateral at any meeting of shareholders, partners or members, as the case may be, of the relevant issuer or issuers of Pledged Collateral or otherwise, and (ii) any right of conversion, exchange and subscription and any other right, privilege or option pertaining to the Pledged Collateral as if it were the absolute owner thereof (including the right to exchange at its discretion any Pledged Collateral upon the merger, amalgamation, consolidation, reorganization, recapitalization or other fundamental change in the corporate or equivalent structure of any issuer of Pledged Collateral, the right to deposit and deliver any Pledged Collateral with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Collateral Agent (or such nominee) on behalf of Lenders or the other Secured Parties may determine), all without liability except to account for property actually received by it; provided, however, that the Collateral Agent (or such nominee) shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.

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(b)Proxies.  During the continuance of an Event of Default, in order to permit the Collateral Agent on behalf of Lenders and the other Secured Parties to exercise the voting and other consensual rights that it may be entitled to exercise pursuant hereto and to receive all dividends and other distributions that it may be entitled to receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause to be executed and delivered) to the Collateral Agent all such proxies, dividend payment orders and other instruments as the Collateral Agent may from time to time reasonably request and (ii) without limiting the effect of clause (i) above, such Grantor hereby grants to the Collateral Agent for the benefit of Lenders and the other Secured Parties an irrevocable proxy to vote all or any part of the Pledged Collateral and to exercise all other rights, powers, privileges and remedies to which a holder of the Pledged Collateral would be entitled (including giving or withholding written consents of shareholders, partners or members, as the case may be, calling special meetings of shareholders, partners or members, as the case may be, and voting at such meetings), which proxy shall be effective, automatically and without the necessity of any action (including any transfer of any Pledged Collateral on the record books of the issuer thereof) by any other Person (including the issuer of such Pledged Collateral or any officer or agent thereof) during the continuance of an Event of Default and which proxy shall only terminate upon (A) the cure of any and all Events of Default or (B) the indefeasible payment in full of the Secured Obligations (other than contingent indemnification obligations to the extent no claim giving rise thereto has been asserted).

(c)Authorization of Issuers.  Each Grantor hereby expressly and irrevocably authorizes and instructs, without any further instructions from such Grantor, each issuer of any Pledged Collateral pledged hereunder by such Grantor to, and each Grantor that is an issuer of Pledged Collateral so pledged hereunder hereby agrees to (i) comply with any instruction received by it from the Collateral Agent in writing that states that an Event of Default is continuing in accordance with the terms of this Agreement and each Grantor agrees that such issuer shall be fully protected from liabilities to such Grantor in so complying, and (ii) during the continuance of such Event of Default, unless otherwise permitted hereby or by the Loan Agreement, pay any dividend or make any other payment with respect to the Pledged Collateral directly to the Collateral Agent for the benefit of Lenders and the other Secured Parties or to any Lender on behalf of itself and the other Secured Parties, as the Collateral Agent shall direct.

Section 6.4.Proceeds to be Turned over to and Held by Collateral Agent.  Unless otherwise expressly provided in the Loan Agreement or this Agreement, during the continuance of an Event of Default and, upon written notice by the Collateral Agent to the relevant Grantor or Grantors, all proceeds of any Collateral received by any Grantor hereunder in cash or Cash Equivalents shall be held by such Grantor in trust for Lenders and the other Secured Parties, segregated from other funds of such Grantor, and shall, promptly upon receipt by any Grantor, be turned over to the Collateral Agent for the benefit of Lenders and the other Secured Parties in the exact form received (with any necessary endorsement).  All such proceeds of Collateral and any other proceeds of any Collateral received by the Collateral Agent in cash or Cash Equivalents shall be held by the Collateral Agent for the benefit of itself and the other Secured Parties in a Collateral Account.  All proceeds being held by the Collateral Agent in a Collateral Account (or by such Grantor in trust for Lenders and the other Secured Parties) shall continue to be held as collateral security for the Secured Obligations and shall not constitute payment thereof until applied as provided in the Loan Agreement.

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Section 6.5.Sale of Pledged Collateral. 

(a)Each Grantor recognizes that the Collateral Agent may be unable to effect a public sale of any Pledged Collateral by reason of certain prohibitions contained in the Securities Act and applicable state or foreign securities laws or otherwise or may determine that a public sale is impracticable, not desirable or not commercially reasonable and, accordingly, may resort to one or more private sales thereof to a restricted group of purchasers that shall be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof.  Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner.  The Collateral Agent shall be under no obligation to delay a sale of any Pledged Collateral for the period of time necessary to permit the issuer thereof to register such securities for public sale under the Securities Act or under applicable state securities laws even if such issuer would agree to do so.

(b)Each Grantor agrees to use commercially reasonable efforts to do or cause to be done all such other acts as may be reasonably necessary to make such sale or sales of any portion of the Pledged Collateral pursuant to Section 6.1 and this Section 6.5 valid and binding and in compliance with all applicable Requirements of Law.  Each Grantor further agrees that a breach of any covenant contained herein will cause irreparable injury to the Collateral Agent, Lenders and the other Secured Parties, that the Collateral Agent, Lenders and the other Secured Parties have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained herein shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any defense against an action for specific performance of such covenants except for a defense that no Event of Default has occurred and is continuing under the Loan Agreement or a defense of indefeasible payment in full of the Guaranteed Obligations (other than inchoate indemnity obligations).  Each Grantor waives any and all rights of contribution or subrogation upon the sale or disposition of all or any portion of the Pledged Collateral by the Collateral Agent on behalf of Lenders and the other Secured Parties.

Section 6.6.Deficiency.  Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of any Collateral are insufficient to pay the Secured Obligations and the reasonable and documented fees and disbursements of any attorney employed by the Collateral Agent or any Lender to collect such deficiency.

Section 6.7.Collateral Accounts.  If any Event of Default shall have occurred and be continuing, the Collateral Agent may apply the balance from any Collateral Account of a Grantor or instruct the bank at which any Collateral Account is maintained to pay the balance of any Collateral Account to the Collateral Agent for the benefit of Lenders and the other Secured Parties or to any Lender on behalf of itself and the other Secured Parties, as the Collateral Agent shall direct, to be applied to the Secured Obligations in accordance with the terms hereof.

Section 6.8.Directions, Notices or Instructions.  Neither the Collateral Agent nor any Lender or any Related Party thereof or any other Secured Party shall take any action under or issue any directions, notice or instructions pursuant to any Control Agreement or similar agreement unless an Event of Default has occurred and is continuing.

-22-

 

Article VII

ADDITIONAL RIGHTS OF COLLATERAL AGENT

Section 7.1.Collateral Agent’s Appointment as Attorney-in-Fact.  

(a)Each Grantor hereby irrevocably constitutes and appoints the Collateral Agent and any Related Party thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of the Loan Documents, to take any appropriate action and to execute any document or instrument that may be necessary or desirable to accomplish the purposes of the Loan Documents, in each case during the continuance of an Event of Default, and, without limiting the generality of the foregoing, each Grantor hereby gives the Collateral Agent and its Related Party the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any of the following when an Event of Default shall be continuing:

(i)in the name of such Grantor, in its own name or otherwise, take possession of and indorse and collect any check, draft, note, acceptance or other instrument for the payment of moneys due under any account or general intangible or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Collateral Agent for the purpose of collecting any such moneys due under any account or general intangible or with respect to any other Collateral whenever payable;

(ii)in the case of any Intellectual Property (including any IP Ancillary Rights) or any IP Licenses included in the Collateral, execute, deliver and have recorded any document that the Collateral Agent may request to evidence, effect, publicize or record the Collateral Agent’s security interest, in favor of and for the benefit of Lenders and the other Secured Parties, in such Intellectual Property or IP Licenses and the goodwill and general intangibles of such Grantor relating thereto or represented thereby and the Collateral Agent’s (on behalf of Lenders and the other Secured Parties) rights and remedies with respect thereto;

(iii)pay or discharge taxes and Liens levied or placed on or threatened against any Collateral, effect any repair or obtain or pay any insurance called for by the terms of the Loan Agreement (including all or any part of the premiums therefor and the costs thereof);

(iv)execute, in connection with any sale provided for in Section 6.1 or 6.5, any document to effect or otherwise necessary or appropriate in relation to evidence the sale of any Collateral; or

(v)(A) direct any party liable for any payment under any Collateral to make payment of any moneys due or to become due thereunder directly to the Collateral Agent or as the Collateral Agent shall direct, (B) ask or demand for, and collect and receive payment of and receipt for, any moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral, (C) commence and prosecute any suit, action or proceeding at law or in equity in any court of competent jurisdiction to collect any Collateral and to enforce any other right in respect of any Collateral, (D) defend any actions, suits, proceedings, audits, claims, demands, orders or disputes brought against such Grantor with respect to any 

-23-

 

Collateral, (E) settle, compromise or adjust any such actions, suits, proceedings, audits, claims, demands, orders or disputes and, in connection therewith, give such discharges or releases as the Collateral Agent may deem appropriate, (F) assign or license any Intellectual Property included in the Collateral on such terms and conditions and in such manner as the Collateral Agent shall in its sole discretion determine, including the execution and filing of any document necessary to effectuate or record such assignment or license and (G) generally, sell, assign, license, convey, transfer or grant a Lien on, make any contractual obligation with respect to and otherwise deal with, any Collateral as fully and completely as though the Collateral Agent on behalf of Lenders and the other Secured Parties were the absolute owner thereof for all purposes and do, at the Collateral Agent’s option, at any time or from time to time, all acts and things that the Collateral Agent deems necessary to protect, preserve or realize upon any Collateral and the Collateral Agent’s, in favor of and for the benefit of Lenders and the other Secured Parties, security interests therein and to effect the intent of the Loan Documents, all as fully and effectively as such Grantor might do.

(vi)If any Grantor fails to perform or comply with any contractual obligation contained herein, the Collateral Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such contractual obligation.

(b)The reasonable and documented out-of-pocket expenses of the Collateral Agent and any Lender and other Secured Party incurred in connection with actions undertaken as provided in this Section 7.1, together with interest thereon at the Default Rate, from the date of payment by such Person to the date reimbursed by the relevant Grantor, shall be payable by such Grantor to such Person on demand.

(c)Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue of this Section 7.1.  All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until the indefeasible payment in full of the Secured Obligations (other than inchoate indemnity obligations), this Agreement is terminated and the security interests created hereby are released.

Section 7.2.Authorization to File Financing Statements

.  Each Grantor authorizes the Collateral Agent and its Related Party, at any time and from time to time, without notice to any Grantor, to file or record financing statements, amendments thereto, and other filing or recording documents or instruments with respect to any Collateral in such form, in such jurisdictions and in such offices as the Collateral Agent reasonably determines appropriate to perfect or protect the security interests of the Collateral Agent, in favor of and for the benefit of Lenders and the other Secured Parties, under this Agreement or any other Loan Document (and the Collateral Agent’s and each Lender’s and each other Secured Party’s rights in respect thereof), and such financing statements and amendments may describe the Collateral covered thereby as “all assets of the debtor” or words of similar effect and may include a notice that any disposition of the Collateral, by any Grantor or other Person, shall be deemed to violate the rights of the Collateral Agent and Lenders and other Secured Parties under the Code to the extent not permitted under this Agreement or any other Loan Document.  A photographic or other reproduction of this Agreement shall be sufficient as a financing statement or other filing or recording document or instrument for filing or recording in any jurisdiction.  Such Grantor also hereby ratifies its authorization for the Collateral Agent to have filed any initial financing statement or amendment thereto under the Code (or other similar laws) in effect in any jurisdiction if filed prior to the date hereof.

-24-

 

Section 7.3.Authority of Collateral Agent.  Each Grantor acknowledges that, as between the Collateral Agent and the Grantors, the Collateral Agent shall be conclusively presumed to be acting as agent for each Lender and all of the other Secured Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation or entitlement to make any inquiry respecting such authority.

Section 7.4.Duty; Obligations and Liabilities.

(a)Duty of Collateral Agent.  The Collateral Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession shall be to deal with it in the same manner as it deals with similar property for its own account.  The powers conferred on the Collateral Agent hereunder are solely to protect each Lender’s and the other Secured Parties’ interest in the Collateral and shall not impose any duty upon the Collateral Agent to exercise any such powers.  The Collateral Agent shall be accountable only for amounts that it receives as a result of the exercise of such powers, and neither it nor any of its Related Parties shall be responsible to any Grantor for any act or failure to act hereunder, except for its or their own gross negligence, bad faith or willful misconduct as finally determined by a court of competent jurisdiction.  In addition, the Collateral Agent shall not be liable or responsible for any loss or damage to any Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehousemen, carrier, forwarding agency, consignee or other bailee if such Person has been selected by the Collateral Agent in good faith.

(b)Obligations and Liabilities with respect to Collateral.  Neither the Collateral Agent nor Lenders or any other Secured Parties nor any of their respective Related Parties shall be liable for failure to demand, collect or realize upon any Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to any Collateral.

Article VIII

MISCELLANEOUS

Section 8.1.Reinstatement.  Each Grantor agrees that, if any payment made by any Credit Party or other Person and applied to the Secured Obligations is at any time annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required to be refunded or repaid, or the proceeds of any Collateral are required to be returned by any Secured Party to such Credit Party, its estate, trustee, receiver or any other party, including any Grantor, under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or repayment, any Lien or other Collateral securing such liability shall be and remain in full force and effect, as fully as if such payment had never been made.  If, prior to any of the foregoing, (a) any Lien or other Collateral securing such Grantor’s liability hereunder shall have been released or terminated by virtue of the foregoing or (b) any provision of the Guaranty hereunder shall have been terminated, cancelled or surrendered, such Lien, other Collateral or provision shall be reinstated in full force and effect and such prior release, termination, cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligations of such Grantor in respect of any Lien or other Collateral securing such obligation or the amount of such payment.

-25-

 

Section 8.2.Release of Collateral and Guarantee Obligations.

(a)When all Obligations (other than inchoate indemnity obligations)  have indefeasibly been paid in full, the Collateral shall be released from the Lien created hereby and this Agreement and all obligations (other than those expressly stated to survive such termination) of each Lender and any other Secured Party and each Guarantor and Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party (except as required hereunder), and all rights of the Collateral Agent, Lenders and any other Secured Parties to the Collateral shall revert to the Grantors.

(b)In connection with any termination or release pursuant to this Section 8.2, the Collateral Agent shall, and to the extent required, each Secured Party hereby authorizes the Collateral Agent to, promptly execute and deliver to any Grantor all instruments, documents and agreements which such Grantor shall reasonably request in writing to evidence and confirm such termination or release (including termination statements under the Code), and will duly assign, transfer and deliver to such Grantor (or its designee), such of the Collateral that may be in the possession of the Collateral Agent, all without further consent or joinder of the Collateral Agent or any Lender or other Secured Party.

(c)Any termination or release pursuant to this Section 8.2 is subject to reinstatement as provided in Section 8.1.

(d)Upon the release of the Liens on any Collateral or of a Grantor from all of its obligations as a Credit Party under the Loan Agreement and as a Grantor hereunder, any representation, warranty or covenant contained in any Loan Document relating to any such Collateral or such Grantor, as applicable, shall no longer be deemed to be made.

(e)Without limiting the generality of Section 2.4 of the Loan Agreement, Borrower agrees to pay all reasonable and documented out-of-pocket expenses incurred by the Collateral Agent and each Lender and other Secured Party in connection with the taking of any actions pursuant to or as otherwise contemplated by this Section 8.2.

Section 8.3.Independent Obligations.  The obligations of each Grantor hereunder are independent of and separate from the Secured Obligations and the Guaranteed Obligations.  Upon any Event of Default and during the continuance thereof, the Collateral Agent for the benefit of Lenders and the other Secured Parties may, at its sole election, proceed directly and at once, without notice, against any Grantor and any Collateral to collect and recover the full amount of any Secured Obligation or Guaranteed Obligation then due, without first proceeding against any other Grantor, any other Credit Party or any other Collateral and without first joining any other Grantor or any other Credit Party in any proceeding.

Section 8.4.No Waiver by Course of Conduct.  Neither the Collateral Agent nor any Secured Party shall by any act (except by a written instrument pursuant to Section 8.5), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default.  No failure to exercise, nor any delay in exercising, on the part of the Collateral Agent or any Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof.  No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  A waiver by the Collateral Agent or any Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that the Collateral Agent or any Secured Party would otherwise have on any future occasion.

-26-

 

Section 8.5.Amendments in Writing.  None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance with Section 11.5 of the Loan Agreement; provided, however, that annexes to this Agreement may be supplemented (but no existing provisions may be modified and no Collateral may be released) through Pledge Amendments and Joinder Agreements, in substantially the form of Annex 1 and Annex 2 attached hereto, respectively, in each case, duly executed by the Collateral Agent and each Grantor directly affected thereby.

Section 8.6.Additional Grantors and Guarantors; Additional Pledged Collateral.

(a)Joinder Agreements.  If, at the option of Borrower or as required pursuant to Section 5.12 or Section 5.13 of the Loan Agreement, Borrower shall cause any Subsidiary (other than an Excluded Subsidiary) that is not a Grantor or Guarantor to become a Grantor and Guarantor hereunder, such Subsidiary shall execute and deliver to the Collateral Agent a Joinder Agreement substantially in the form of Annex 2 attached hereto and shall thereafter for all purposes be a party hereto and have the same rights, benefits and obligations as a Grantor party hereto on the Closing Date.

(b)Pledge Amendments.  To the extent any Pledged Collateral has not been delivered as of the Tranche A Closing Date, such Grantor shall, promptly after such Pledged Collateral is acquired, deliver a pledge amendment duly executed by the Grantor in substantially the form of Annex 1 attached hereto (each, a “Pledge Amendment”).  Such Grantor authorizes the Collateral Agent to attach each Pledge Amendment to this Agreement.

Section 8.7.Notices

.  All notices, requests and demands to or upon the Collateral Agent or any Grantor hereunder shall be effected in the manner provided for in Section 9 of the Loan Agreement; provided, however, that any such notice, request or demand to or upon any Grantor shall be addressed to Borrower’s notice address set forth in Section 9 of the Loan Agreement.

Section 8.8.Successors and Assigns

.  This Agreement shall be binding upon the successors and assigns of each Grantor and shall inure to the benefit of the Collateral Agent and each Secured Party and their respective successors and assigns; provided, however, that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Collateral Agent.

Section 8.9.Counterparts

.  This Agreement may be executed in any number of counterparts and by different parties 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.  Signature pages may be detached from multiple separate counterparts and attached to a single counterpart.  Delivery of an executed signature page of this Agreement by facsimile transmission or by electronic transmission shall be as effective as delivery of a manually executed counterpart hereof.

Section 8.10.Severability

.  Any provision of this Agreement being held illegal, invalid or unenforceable in any jurisdiction shall not affect any part of such provision not held illegal, invalid or unenforceable, any other provision of this Agreement or any part of such provision in any other jurisdiction.

-27-

 

Section 8.11.Governing Law

.  This Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the law of the State of New York without regard to any principle of conflicts of law that could require the application of the law of any other jurisdiction.

Section 8.12.Waiver of Jury Trial

.  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO, OR DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN AND THEREIN OR RELATED HERETO OR THERETO (WHETHER FOUNDED IN CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO OTHER PARTY AND NO RELATED PARTY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.12 AND (C) HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

EACH GRANTOR AGREES TO BE BOUND BY THE PROVISIONS OF SECTION 10 OF THE LOAN AGREEMENT.

[Signature Pages Follow]

 

 

-28-

 

IN WITNESS WHEREOF, each of the undersigned has caused this Guaranty and Security Agreement to be duly executed and delivered as of the date first above written.

 

	
EPIZYME, INC.,

as Borrower and Grantor

	
 
	
 
	
 

	
By:
	
 
	
/s/ Robert B. Bazemore

	
Name:
	
 
	
Robert B. Bazemore

	
Title:
	
 
	
Chief Executive Officer

 

	
ACCEPTED AND AGREED 

as of the date first above written:

	
 
	
 
	
 

	
BIOPHARMA CREDIT PLC,

as Collateral Agent

	
 
	
 
	
 

	
By:
	
 
	
Pharmakon Advisors, LP,

	
its Investment Manager

	
 
	
 
	
 

	
By:
	
 
	
Pharmakon Management I, LLC,

	
its General Partner

	
 
	
 
	
 

	
By:
	
 
	
/s/ Pedro Gonzalez de Cosio

	
Name:
	
 
	
Pedro Gonzalez de Cosio

	
Title:
	
 
	
Managing Memberepzm-ex1045_334.htm

Exhibit 10.45

Execution Version

Certain identified information has been excluded from the exhibit because it is both (i) not material and (ii) would likely cause competitive harm to the Company, if publicly disclosed.  Double asterisks denote omissions.

 

 

 

 

 

 

 

Purchase Agreement

 

by and between

 

Epizyme, Inc.

 

and

 

RPI Finance Trust

 

 

Dated as of November 4, 2019

 

 

 

	
SECTION 1
	
Defined Terms and Rules of Construction
	
1

	
 
	
1.1
	
Definitions
	
1

	
 
	
1.2
	
Certain Interpretations
	
8

	
 
	
1.3
	
Headings
	
8

	
SECTION 2
	
Purchase and Sale of Shares, Warrants and Japan Royalty; Applicable Reduction Payment
	
9

	
 
	
2.1
	
Sale of Shares
	
9

	
 
	
2.2
	
Sale of Warrant
	
10

	
 
	
2.3
	
Sale of Japan Royalty
	
10

	
 
	
2.4
	
Purchase Price
	
10

	
 
	
2.5
	
No Assumed Obligations
	
10

	
 
	
2.6
	
True Sale of Japan Royalty
	
10

	
SECTION 3
	
Closing; Payment of Purchase Price
	
11

	
 
	
3.1
	
Closing
	
11

	
 
	
3.2
	
Royalty Reduction
	
11

	
 
	
3.3
	
Closing Certificates
	
12

	
 
	
3.4
	
Bill of Sale
	
12

	
 
	
3.5
	
Share Issuance
	
12

	
 
	
3.6
	
Warrant
	
12

	
SECTION 4
	
Representations and Warranties of the Company
	
12

			
	
 
	
-i-
	
 

 

 

Table of Contents

Page

 

	
 
	
4.1
	
Organization and Good Standing and Qualifications
	
12

	
 
	
4.2
	
Authorization
	
13

	
 
	
4.3
	
Reservation and Valid Issuance of Shares
	
13

	
 
	
4.4
	
No Conflicts
	
14

	
 
	
4.5
	
Compliance
	
15

	
 
	
4.6
	
Capitalization
	
15

	
 
	
4.7
	
Commission Documents, Financial Statements
	
16

	
 
	
4.8
	
Internal Controls and Procedures
	
16

	
 
	
4.9
	
Material Adverse Change
	
17

	
 
	
4.10
	
No Undisclosed Liabilities
	
17

	
 
	
4.11
	
No Undisclosed Events or Circumstances
	
17

	
 
	
4.12
	
Actions Pending
	
17

	
 
	
4.13
	
Compliance with Law
	
17

	
 
	
4.14
	
Exemption from Registration, Valid Issuance
	
18

	
 
	
4.15
	
Transfer Taxes
	
18

	
 
	
4.16
	
Investment Company
	
18

	
 
	
4.17
	
License Agreement
	
18

	
 
	
4.18
	
Title to Royalty
	
20

	
 
	
4.19
	
Intellectual Property
	
20

	
 
	
4.20
	
UCC Representation and Warranties
	
21

	
 
	
4.21
	
Brokers
	
22

	
SECTION 5
	
Representations and Warranties of the Investor
	
22

	
 
	
5.1
	
Experience
	
22

	
 
	
5.2
	
Investment
	
22

	
 
	
5.3
	
Rule 144
	
22

	
 
	
5.4
	
Access to Information
	
22

	
 
	
5.5
	
Enforceability
	
23

	
 
	
5.6
	
Authorization
	
23

	
 
	
5.7
	
No Conflicts
	
23

	
 
	
5.8
	
Investor Status
	
23

	
 
	
5.9
	
No Inducement
	
24

	
SECTION 6
	
Covenants
	
24

	
 
	
6.1
	
Efforts to Consummate Transactions
	
24

	
 
	
6.2
	
Authorization and Reservation of Warrant Shares
	
24

	
 
	
6.3
	
Exchange Listing
	
24

	
 
	
6.4
	
Antitrust Approval
	
24

	
 
	
6.5
	
Board Nomination
	
25

	
 
	
6.6
	
Section 16 Matters
	
25

	
 
	
6.7
	
D&O Indemnification; Insurance Priority Matters
	
26

	
 
	
6.8
	
Disclosures
	
26

	
 
	
6.9
	
Payments Received in Error; Interest
	
26

	
 
	
6.10
	
Royalty Reduction
	
27

	
 
	
6.11
	
Royalty Reports
	
27

	
 
	
6.12
	
Inspections and Audits
	
27

			
	
 
	
-ii-
	
 

 

Table of Contents

Page

 

	
 
	
6.13
	
Amendment or Assignment of License Agreement
	
28

	
 
	
6.14
	
Maintenance of Agreements
	
28

	
 
	
6.15
	
Enforcement of Agreements
	
28

	
 
	
6.16
	
Termination of Agreements
	
29

	
 
	
6.17
	
Preservation of Rights
	
30

	
 
	
6.18
	
Enforcement; Infringement Claims
	
30

	
SECTION 7
	
Confidentiality
	
32

	
 
	
7.1
	
Confidentiality
	
32

	
 
	
7.2
	
Authorized Disclosure
	
32

	
SECTION 8
	
Conditions to Investor’s Obligations at Closing
	
33

	
 
	
8.1
	
No Injunction, etc
	
33

	
 
	
8.2
	
Representations and Warranties
	
34

	
 
	
8.3
	
Performance
	
34

	
 
	
8.4
	
No Material Adverse Change
	
34

	
 
	
8.5
	
HSR Act
	
34

	
 
	
8.6
	
Company Closing Certificate
	
34

	
 
	
8.7
	
Licensee Consent
	
34

	
 
	
8.8
	
Form W-9
	
34

	
 
	
8.9
	
Securities Laws
	
34

	
 
	
8.10
	
Authorizations
	
35

	
 
	
8.11
	
Warrant
	
35

	
 
	
8.12
	
Legal Opinion
	
35

	
SECTION 9
	
Conditions to the Company’s Obligations at Closing
	
35

	
 
	
9.1
	
No Injunction, etc
	
35

	
 
	
9.2
	
Representations and Warranties
	
35

	
 
	
9.3
	
HSR Act
	
36

	
 
	
9.4
	
Licensee Consent
	
36

	
 
	
9.5
	
Performance
	
36

	
 
	
9.6
	
Securities Law Compliance
	
36

	
 
	
9.7
	
Investor Closing Certificate
	
36

	
 
	
9.8
	
Investor Incumbency Certificate
	
36

	
 
	
9.9
	
Form W-8BEN-E
	
36

	
 
	
9.10
	
Authorization
	
36

	
SECTION 10
	
Resales
	
36

	
 
	
10.1
	
Rule 144 Reporting
	
36

	
 
	
10.2
	
Restrictive Legend
	
37

	
SECTION 11
	
Indemnification
	
37

	
 
	
11.1
	
Indemnification
	
37

	
 
	
11.2
	
Limitations on Liability
	
38

	
 
	
11.3
	
Exclusive Remedy
	
39

	
SECTION 12
	
Termination
	
39

	
 
	
12.1
	
Grounds for Termination
	
39

	
 
	
12.2
	
Automatic Termination
	
39

	
 
	
12.3
	
Survival
	
39

			
	
 
	
-iii-
	
 

 

Table of Contents

Page

 

	
SECTION 13
	
Miscellaneous
	
40

	
 
	
13.1
	
Governing Law
	
40

	
 
	
13.2
	
Successors, Assigns
	
40

	
 
	
13.3
	
Notices
	
40

	
 
	
13.4
	
Expenses
	
41

	
 
	
13.5
	
Finder’s Fees
	
41

	
 
	
13.6
	
Counterparts
	
41

	
 
	
13.7
	
Severability
	
41

	
 
	
13.8
	
Entire Agreement
	
41

	
 
	
13.9
	
Waiver
	
42

	
 
	
13.10
	
Trustee Capacity of Wilmington Trust Company
	
42

 

 

			
	
 
	
-iv-
	
 

 

 

EPIZYME, INC.

PURCHASE AGREEMENT

THIS PURCHASE AGREEMENT (the “Agreement”) is made as of November 4, 2019, by and between Epizyme, Inc., a Delaware corporation (the “Company”), and RPI Finance Trust, a Delaware statutory trust (the “Investor”).

RECITALS

WHEREAS, pursuant to the License Agreement, the Company granted to Licensee an exclusive, royalty-bearing license under the Licensed Epizyme IP to, among other things, sell Licensed Products in the Eisai Territory, and Licensee, in consideration thereof, agreed to pay the Japan Royalty to the Company;

WHEREAS, pursuant to that certain Royalty Purchase Agreement, dated as of October 29, 2019, between the Investor and Licensee (the “Eisai Royalty Purchase Agreement”), Investor has agreed to purchase up to all of the royalty or like payments payable to Licensee by the Company under the License Agreement (collectively, the “WW Royalty”);

WHEREAS, pursuant to and in accordance with the Eisai Royalty Purchase Agreement and the Instruction Letters delivered pursuant thereto by Licensee to the Company from time to time, the Company shall pay to the Investor the portion of the WW Royalty set forth in the Instruction Letter then in effect; and

WHEREAS, pursuant to terms set forth in this Agreement, the Company desires to sell to the Investor, and the Investor desires to purchase from the Company, (a) certain shares of the Company’s common stock, $0.0001 per share (the “Common Stock”), (b) a warrant to purchase shares of the Common Stock and (c) the Japan Royalty.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1

Defined Terms and Rules of Construction

1.1Definitions.  As used in this Agreement, the following terms shall have the following meanings:

“Affiliate” means, with respect to any particular Person, any other Person directly or indirectly controlling, controlled by or under common control with such particular Person.

“Aggregate Purchase Price” means the Closing Purchase Price plus the aggregate Applicable Reduction Payments, if any, actually paid or credited.

“Agreement” is defined in the Preamble.

 

 

“Applicable Reduction Payment” means, during the term of the WW Royalty on a calendar year-by-calendar year basis, with respect to each calendar quarter, an amount equal to the sum of (a) [**]% of the amount of Net Sales in such calendar quarter in the Epizyme Territory that, together with prior Net Sales in such calendar year in the Epizyme Territory, are greater than $[**] but less than or equal to $[**] plus (b) [**]% of the amount of Net Sales in such calendar quarter in the Epizyme Territory that, together with prior Net Sales in such calendar year in the Epizyme Territory, are greater than $[**].

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

“Bill of Sale” is defined in Section 3.4.

“Board of Directors” means the board of directors of the Company.

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

“Closing” is defined in Section 3.1.

“Closing Date” is defined in Section 3.1.

“Closing Purchase Price” is defined in Section 3.1.

“Commercialize” means any and all activities directed to the manufacture, distribution, marketing, detailing, promotion, selling and securing of reimbursement of Licensed Products (including the making, using, importing, selling and offering for sale of the Licensed Products), and shall include post-marketing approval studies, post-launch marketing, promoting, detailing, marketing research, distributing, customer service, selling the Licensed Products, importing, exporting or transporting the Licensed Products for sale, and regulatory compliance with respect to the foregoing.

“Commission” means the U.S. Securities and Exchange Commission.

“Commission Documents” is defined in Section 4.7(a).

“Common Stock” is defined in the Preamble.

“Company” is defined in the Preamble.

“Company Closing Certificate” is defined in Section 3.3(a).

“Confidential Information” is defined in Section 7.1.

“Covered Persons” is defined in Section 6.5(f).

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“Credit Event” means any insolvency, bankruptcy, receivership, assignment for the benefit of creditors, or similar proceeding, following or as a result of which the Licensee fails to pay amounts owing to the Company in respect of the Japan Royalty as a result of Licensee’s financial distress, creditworthiness, or insolvency.

“DGCL” means the Delaware General Corporation Law.

“Disclosing Party” is defined in Section 7.1.

“Disclosure Schedule” means the Disclosure Schedule, attached hereto as Exhibit A and dated as of the date hereof and delivered by the Company to the Investor.

“Eisai Royalty Purchase Agreement” is defined in the Preamble.

“Eisai Royalty Reports” means the quarterly reports deliverable by Licensee to the Company pursuant to Section 6.7 of the License Agreement.

“Eisai Territory” shall have the meaning ascribed thereto in Section 1.34 of the License Agreement.

“Epizyme Royalty Reports” means the quarterly reports deliverable by the Company to Licensee pursuant to Section 6.7 of the License Agreement.

“Epizyme Territory” shall have the meaning ascribed thereto in Section 1.42 of the License Agreement.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“GAAP” is defined in Section 4.7(b).

“Governmental Entity” means any:  (i) nation, principality, republic, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (ii) federal, state, local, municipal, foreign or other government; (iii) 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); (iv) multi-national organization or body; or (v) 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. 

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

“Indemnified Party” is defined in Section 11.1.

“Indemnifying Party” is defined in Section 11.1.

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“Instruction Letters” means the payment instruction letters, duly executed by the Licensee and the Investor, delivered to the Company by the Licensee and the Investor from time to time in accordance with the Eisai Royalty Purchase Agreement, instructing the Company to pay the portion of the WW Royalty specified therein to the Investor.

“Investor” is defined in the Preamble.

“Investor Closing Certificate” is defined in Section 3.3(b).

“Investor Designee” means the individual elected to the Board of Directors in accordance with Section 6.5.

“Investor Incumbency Certificate” is defined in Section 3.3(c).

“Investor Indemnitors” is defined in Section 6.7.

“Investor WW Royalty Payment” means such portion of the WW Royalty payable by the Company to the Investor pursuant to the Instruction Letter then in effect.

“Japan Royalty” means all of the Company’s right, title and interest in and to (a) all payments payable to the Company by Licensee under Article 6 of the License Agreement with respect to all Net Sales of any Licensed Product in the Eisai Territory, (b) any payments to the Company under the License Agreement in lieu of the payments of clause (a), (c) any royalty payments to the Company based on amounts treated as Net Sales of Licensee in the Eisai Territory under the final sentence of Section 8.4 of the License Agreement, (d) any payments to the Company under Section 8.5.6 of the License Agreement to the extent related to the Licensed Product in the Eisai Territory, and (e) any payments payable to the Company by any licensee under any New Arrangement.

 

“Joint Patents” shall have the meaning ascribed thereto in Section 1.59 of the License Agreement.

“Knowledge of the Company” means the actual knowledge of Robert Bazemore, Paolo Tombesi, Matthew Ros, Shefali Agarwal and John Weidenbruch.

“License Agreement” means that certain Amended and Restated Collaboration and License Agreement, dated as of March 12, 2015, between the Company and the Licensee.

“Licensed Eisai IP” means the Eisai IP, the Eisai Collaboration IP and Licensee’s interest in the Joint IP, as each such capitalized term is defined in the License Agreement.

“Licensed Eisai Patents” means the Eisai Patents and the Eisai Collaboration Patents, as each such capitalized term is defined in the License Agreement.

“Licensed Epizyme IP” means the Epizyme IP, the Epizyme Collaboration IP and the Company’s interest in the Joint IP, as each such capitalized term is defined in the License Agreement.

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“Licensed Epizyme Patents” means the Epizyme Patents and the Epizyme Collaboration Patents, as each such capitalized term is defined in the License Agreement.

“Licensed IP” means, collectively, the Licensed Epizyme IP and the Licensed Eisai IP.

“Licensed Patents” is defined in Section 4.19(a).

“Licensed Product” shall have the meaning ascribed thereto in Section 1.63 of the License Agreement.

“Licensee” means Eisai Co., Ltd. and any successor thereof, as permitted pursuant to the terms of this Agreement and the License Agreement. 

“Licensee Consent” is defined in Section 8.7. 

“Lien” means any mortgage, lien, pledge, charge, adverse claim, security interest, encumbrance or restriction of any kind, including any restriction on use, transfer or exercise of any other attribute of ownership of any kind.

“Losses” is defined in Section 11.1.

“Material Adverse Change” means (i) a material adverse effect on the business, operations, properties or financial condition of the Company and its consolidated Subsidiaries, taken as a whole, provided, that none of the following shall constitute a “material adverse effect”: (1) the effects of conditions or events that are generally applicable to the capital, financial, banking or currency markets and the biotechnology industry, (2) changes in the market price of Common Stock, (3) matters related to the approval of tazemetostat in any subpopulation for which a New Drug Application has been filed with the U.S. Food & Drug Administration, (4) a delay in the approval of tazemetostat as a treatment for epithelioid sarcoma or follicular lymphoma as a result of clinical efficacy or (5) the termination of collaboration or licensing arrangement(s) between the Company and any Third Party unrelated to tazemetostat, (ii) a material adverse effect on the legality, validity or enforceability of the Transaction Documents, (iii) a material adverse effect on the ability of the Company to perform any of its obligations thereunder, including the issuance and sale of any of the Securities, (iv) a material adverse effect on the rights of the Company under the License Agreement with respect to the Japan Royalty, other than as a result of a Credit Event, (v) a material adverse effect on the validity or enforceability of any of the Licensed Epizyme Patents or Joint Patents in the Eisai Territory, or (vi) an adverse effect in any respect on the timing, amount or duration of the payments to be made to the Investor in respect of the Japan Royalty or the right of the Investor to receive such payments, other than as a result of a Credit Event.

“Nasdaq” means The Nasdaq Stock Market, LLC.

“Net Sales” shall have the meaning ascribed thereto in Section 1.70 of the License Agreement.

“New Arrangement” is defined in Section 6.17(b).

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“Permitted Liens” means any (i) mechanic’s, materialmen’s, and similar liens for amounts not yet due and payable, (ii) statutory liens for taxes not yet due and payable or for taxes that the taxpayer is contesting in good faith, (iii) liens under or permitted by that certain Loan Agreement, dated as of November 4, 2019 by and among the Company, Biopharma Credit PLC and Biopharma Credit Investments V (Master) LP, and (iv) other liens and encumbrances not incurred in connection with the borrowing of money that do not materially and adversely affect the use or value of the affected assets provided that, in each case, such liens are automatically released upon the sale or other transfer of the affected assets (it being understood that any obligations secured by such “Permitted Liens” shall remain the obligations of the Company).

“Permitted Reduction” means a Royalty Reduction pursuant to Sections 6.4.2(b), 6.4.3, 6.4.4 of the License Agreement or 8.4 of the License Agreement with respect to the Licensed Product in the Eisai Territory. 

“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.

“Preferred Stock” is defined in Section 4.6.

“Prime Rate” means the prime rate published by the Wall Street Journal, from time to time, as the prime rate.

“Proceeds” means any amounts actually recovered by the Company as a result of any settlement or resolution of any actions, suits, proceedings, claims or disputes related to the Japan Royalty.

“Product Rights” is defined in Section 6.17(b).

“Put Closing” is defined in Section 2.1(b)(iii).

“Put Closing Date” is defined in Section 2.1(b)(iii).

“Put Exercise Notice” is defined in Section 2.1(b)(ii).

“Put Option” is defined in Section 2.1(b)(i).

“Put Option Period” is defined in Section 2.1(b)(i).

“Put Option Purchase Price” is defined in Section 2.1(b)(i).

“Put Price” means the lesser of (i) the ten-day volume-weighted average trading price of the Common Stock for the ten full consecutive Trading Days immediately preceding the date and time that the Put Exercise Notice is delivered to the Investor and (ii) Twenty Dollars ($20.00).

“Put Price VWAP Threshold” means the three-day volume-weighted average trading price of the Common Stock for the three full consecutive Trading Days immediately following the last Trading Day included in the determination of the Put Price pursuant to clause (i) of the definition thereof.  For 

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example, if the Put Exercise Notice is dated and delivered to the Investor (i) prior to the commencement of the trading of shares of the Common Stock on a Monday, then the Put Price VWAP Threshold would be determined based upon the three-day volume-weighted average trading price of the Common Stock for Monday, Tuesday and Wednesday (assuming such Monday, Tuesday and Wednesday are each Trading Days) or (ii) after the close of trading (or during the trading) of shares of the Common Stock on a Monday, then the Put Price VWAP Threshold would be determined based upon the three-day volume-weighted average trading price of the Common Stock for the next Tuesday, Wednesday and Thursday (assuming such Tuesday, Wednesday and Thursday are each Trading Days).

“Put Shares” is defined in Section 2.1(b)(i).

“Receiving Party” is defined in Section 7.1.

“Reference Date” is defined in Section 4.6.

“Regulation D” means Regulation D promulgated under the Securities Act. 

“Representative” means, with respect to any Person, (i) any member or partner of such Person and (ii) 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 Reduction” is defined in Section 4.17(m).

“Securities” means, collectively, (i) the Shares, (ii) the Warrant, (iii) when and if issued upon conversion or exercise of the Warrant, the Warrant Shares and (iv) when and if issued in accordance with Section 2.1(b) hereof, the Put Shares.

“Securities Act” means the Securities Act of 1933, as amended.

“Shares” is defined in Section 2.1(a).

“Subsidiary” is defined in Section 4.1.

“Trading Day” means a day on which trading in the Common Stock occurs on the Nasdaq Global Select Market.

“Transaction Documents” means this Agreement and the Warrant.

“UCC” means the New York Uniform Commercial Code as in effect from time to time.

“UNC Agreement” means that certain License Agreement, dated as of January 7, 2008, by and between The University of North Carolina at Chapel Hill and the Company, as terminated pursuant to that certain Notice of Termination of License Agreement, effective as of March 7, 2016.

“UNC Patents” means any and all issued patents and pending patent applications that were licensed to the Company pursuant to the UNC Agreement.

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“Warrant” is defined in Section 2.2.

“Warrant Shares” is defined in Section 2.2.

“WW Royalty” is defined in the Preamble.

1.2Certain 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; and 

(h)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.

1.3Headings.  The table of contents and the descriptive headings of the several Articles and Sections of this Agreement and the 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.

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SECTION 2

Purchase and Sale of Shares, Warrants and Japan Royalty; Applicable Reduction Payment

2.1Sale of Shares.

(a)Subject to the terms and conditions hereof, at the Closing, the Company will issue and sell to the Investor, and the Investor will purchase from the Company, 6,666,667 shares of Common Stock (the “Shares”).  

(b)Put Option.

(i)For a period of eighteen (18) months from the date hereof (the “Put Option Period”), the Company shall have the option (the “Put Option”) to issue and sell to the Investor, and, subject to Section 2.3(b)(v), the Investor shall purchase from the Company, a number of shares equal to the quotient obtained by dividing (a) Fifty Million Dollars ($50,000,000.00) (the “Put Option Purchase Price”) by (b) the Put Price (the “Put Shares”). 

(ii)The Company may exercise the Put Option only once and solely during the Put Option Period by delivering to the Investor written notice of such exercise (the “Put Exercise Notice”), which shall include (a) the Put Price and its calculation and (b) a certification from the chief executive officer or chief financial officer of the Company that, as of the date and time of the delivery of the Put Exercise Notice to the Investor, no event or circumstance has occurred or exists with respect to the Company, its Subsidiaries, or their respective businesses, properties, operations or financial condition, which has not been publicly announced or disclosed (other than such delivery of the Put Exercise Notice) and which, individually or in the aggregate, would constitute a Material Adverse Change or would reasonably be expected to have a material adverse effect on the trading price of the Common Stock.  The delivery of the Put Exercise Notice shall be the Confidential Information of the Company.  Any purported exercise of the Put Option by the Company following the date that is eighteen (18) months from the date hereof shall be void.

(iii)The purchase and sale of the Put Shares shall take place remotely via the exchange of documents and signatures (the “Put Closing”) on the Business Day that is immediately following the third (3rd) Trading Day following which the Investor received the Put Exercise Notice, subject to the satisfaction of the conditions set forth in Sections 8.1 (other than clause (iii) thereof), 8.2 (provided that the Company shall be allowed to deliver an updated Disclosure Schedule dated as of the Put Closing Date in a form reasonably acceptable to the Investor with respect to the representations and warranties of the Company in Section 4), 8.3, 8.4, 8.5, 8.9, 8.10 (other than clause (ii) thereof), 8.12, 9.1 (other than clause (iii) thereof), 9.2, 9.3, 9.6 and 9.10 (other than clause (ii) thereof), in each case as if references therein to the “Closing”, the “Closing Date” and “Shares” were instead references to the “Put Closing”, the “Put Closing Date” and “Put Shares”, respectively, mutatis mutandis, have been satisfied or waived in writing by the Investor (except to the extent not permitted by law), or at such other time as agreed by both parties (the “Put Closing Date”). At the Put Closing, the Investor shall pay the Put Option Purchase Price by wire transfer of immediately available funds to one or more accounts specified by the Company on Exhibit C or such other account(s) as may be specified by the Company.  

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(iv)At the Put Closing, upon confirmation of receipt of the Put Option Purchase Price by the Company, the Company shall issue the Put Shares in book-entry form to the Investor.

(v)Notwithstanding any other provision in this Section 2.1(b) to the contrary, if (A) the Put Price is equal to less than Eight Dollars ($8.00) or (B) the Put Price VWAP Threshold is equal to less than ninety percent (90%) of the Put Price, the Investor shall have the right to decline to purchase the Put Shares at the Put Closing, whereupon the Put Option shall be void, which right must be exercised prior to 11:59 PM (Eastern Time) on the third (3rd) Trading Day following which the Investor received the Put Exercise Notice.

2.2Sale of Warrant.   Subject to the terms and conditions hereof, at the Closing, the Company will issue and sell to the Investor, and the Investor will purchase from the Company, a warrant (the “Warrant”), in substantially the form attached hereto as Exhibit B, to acquire up to two million five hundred thousand (2,500,000) shares of Common Stock at an exercise price of Twenty Dollars ($20.00) per share (such shares of Common Stock issuable upon exercise of or otherwise pursuant to the Warrant, the “Warrant Shares”).

2.3Sale of Japan Royalty.  Subject to the terms and conditions hereof, at the Closing, the Company shall sell, transfer, assign and convey to the Investor, and the Investor shall purchase, acquire and accept from the Company, free and clear of all Liens, all of the Company’s right, title and interest in and to all of the Japan Royalty. 

2.4Purchase Price.  The purchase price to be paid to the Company for (a) the issuance and sale of the Shares and the Warrant and (b) the sale, transfer, assignment and conveyance of the Company’s right, title and interest in and to the Japan Royalty to the Investor, is the Aggregate Purchase Price.

2.5No Assumed Obligations.  Notwithstanding any provision in this Agreement to the contrary, the Investor is purchasing, acquiring and accepting only the Shares, the Warrant and the Japan Royalty, and is not assuming any liability or obligation of the Company of whatever nature, whether presently in existence or arising or asserted hereafter, under the License Agreement or otherwise.  Except as specifically set forth herein in respect of the Japan Royalty purchased, acquired and accepted hereunder, the Investor does not, by such purchase, acquisition and acceptance, acquire any other contract rights of the Company under the License Agreement or any other assets of the Company.

2.6True Sale of Japan Royalty.  It is the intention of the parties hereto that the sale, transfer, assignment and conveyance contemplated by this Agreement constitute a sale of the Japan Royalty from the Company to the Investor and not a financing transaction, borrowing or loan. Following the Closing, the Investor will be the owner of the Japan Royalty, the Investor will have no right to return the Japan Royalty to the Company, and the Company will have no right to repurchase the Japan Royalty from the Company.  The sole recourse of the Investor against the Company in respect of the Japan Royalty will be (a) for Royalty Reductions other than Permitted Reductions, only to the extent permitted under Section 6.10 hereof, and (b) indemnification for Losses, only to the extent permitted under Section 11 hereof; provided, however, that nothing herein shall otherwise limit the Company’s obligations under its covenants in Section 6 and elsewhere in this Agreement or the 

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Company’s liability for failure to perform such obligations.  Accordingly, the Company shall treat the sale, transfer, assignment and conveyance of the Japan Royalty as a sale of an “account” or a “payment intangible” (as appropriate) in accordance with the UCC, and the Company hereby authorizes the Investor to file financing statements (and continuation statements with respect to such financing statements when applicable) naming the Company as the debtor and the Investor as the secured party in respect of the Japan Royalty.  Not in derogation of the foregoing statement of the intent of the parties hereto in this regard, and for the purposes of providing additional assurance to the Investor in the event that, despite the intent of the parties hereto, the sale, transfer, assignment and conveyance contemplated hereby is hereafter held not to be a sale, the Company does hereby grant to the Investor, as security for the obligations of the Company hereunder, a first priority security interest in and to all right, title and interest of the Company, in, to and under the Japan Royalty and any “proceeds” (as such term is defined in the UCC) thereof, and the Company does hereby authorize the Investor, from and after the Closing, to file such financing statements (and continuation statements with respect to such financing statements when applicable) as are necessary to perfect such security interest.

SECTION 3

Closing; Payment of Purchase Price

3.1Closing. The purchase and sale of the Shares, the Warrant and the Japan Royalty shall take place remotely via the exchange of documents and signatures (the “Closing”) on the second Business Day after the date on which the conditions set forth in Section 8 and Section 9 have been satisfied, or at such other time as agreed by both parties (the “Closing Date”).  At the Closing, the Investor shall pay One Hundred Million Dollars ($100,000,000.00) (the “Closing Purchase Price”) by wire transfer of immediately available funds to one or more accounts specified by the Company on Exhibit C.

3.2Royalty Reduction.  

(a)Following the Closing, within forty-five (45) calendar days of receipt by the Investor of the Epizyme Royalty Report for any calendar quarter, the Investor shall pay the Applicable Reduction Payment, if any, for such calendar quarter to the Company by wire transfer of immediately available funds to one or more accounts specified by the Company on Exhibit C or such other account as may be specified in writing by the Company from time to time. 

(b)In lieu of the Investor making such payment to the Company under Section 3.2(a), and subject to the terms and conditions hereof and of the Instruction Letter then in effect, for so long as and for any calendar quarter during which the Investor WW Royalty Payment is payable to the Investor by the Company, the Company may elect, by written notice delivered to the Investor, to instead receive the Applicable Reduction Payment, if any for such calendar quarter, by reducing the Investor WW Royalty Payment payable for such calendar quarter by an amount equal to the Applicable Reduction Payment for such calendar quarter.

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3.3Closing Certificates.

(a)Company’s Closing Certificate.  At the Closing, the Company shall deliver to the Investor a certificate of the Secretary of the Company, dated as of the Closing Date, certifying (i) as to the incumbency of the officer of the Company executing this Agreement, (ii) as to the attached copies of Company’s certificate of incorporation, bylaws and resolutions adopted by the Board of Directors authorizing the execution and delivery by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby and (iii) that the conditions set forth in Section 8.2, Section 8.3 and Section 8.4 have been satisfied (the “Company Closing Certificate”).

(b)Investor’s Closing Certificate.  At the Closing, RP Management LLC, as administrator of the Investor, shall deliver to the Company a certificate of an authorized person thereof, certifying that the conditions set forth in Section 9.2, 9.3 and 9.4 have been satisfied (the “Investor Closing Certificate”).

(c)Investor’s Incumbency Certificate. At the Closing, the Investor shall deliver to the Company a certificate of an authorized person of the owner trustee of the Investor certifying as to the incumbency of the officers executing this Agreement on behalf of Investor (the “Investor Incumbency Certificate”).

3.4Bill of Sale.  At the Closing, upon confirmation of the receipt of the Closing Purchase Price by the Company, the Company shall deliver to the Investor a duly executed bill of sale evidencing the sale, transfer, assignment and conveyance of the Japan Royalty, substantially in the form attached hereto as Exhibit D (the “Bill of Sale”).

3.5Share Issuance.  At the Closing, upon confirmation of the receipt of the Closing Purchase Price by the Company, the Company shall issue the Shares in book-entry form to the Investor. 

3.6Warrant.  At the Closing, upon confirmation of the receipt of the Closing Purchase Price by the Company, the Company shall deliver to the Investor the duly executed Warrant.

SECTION 4

Representations and Warranties of the Company

Except as set forth on the Disclosure Schedule, the Company hereby represents and warrants the following as of the date hereof:

4.1Organization and Good Standing and Qualifications. The Company and each of its Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), and has all requisite corporate power and authority to own or lease, as the case may be, and to operate its properties and conduct its business as now being conducted. Neither the Company nor any Subsidiary is in violation or default of any of the provisions of its respective certificate of incorporation, bylaws, or other organizational documents.  The Company owns all of the outstanding shares of capital stock 

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or equivalent equity security of each of the entities listed in Section 4.1 of the Disclosure Schedule (each such entity, a “Subsidiary”). The Company and each of its Subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted or property owned or leased by it makes such qualification necessary, other than those in which the failure so to qualify or be in good standing would not have a material adverse effect on the business, operations, properties, or financial condition of the Company and its consolidated Subsidiaries, taken as a whole. 

4.2Authorization. 

(a)The Company has the requisite corporate power and authority to enter into and perform its obligations under the Transaction Documents.

(b)The execution, delivery and performance of the Transaction Documents by the Company, the consummation by the Company of the transactions contemplated thereby and the issuance, sale and delivery of the Securities have been duly authorized by all necessary corporate action and no further consent or authorization of the Company, its Board of Directors and its stockholders is required. 

(c)The Agreement and, when executed and delivered in accordance with the terms hereof, the Warrant have been duly executed and delivered and constitute a valid and binding obligation of the Company enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by applicable Bankruptcy Laws, or indemnification or by other equitable principles of general application.

(d)Pursuant to resolutions previously provided to the Investor, the Board of Directors or a committee thereof composed solely of two or more “non-employee directors” as defined in Rule 16b-3 of the Exchange Act has approved, or will approve in advance of the Closing, for the express purpose of exempting the Investor’s and/or the Investor Designee’s interests (in each case, to the extent such person may be deemed to be a director or “director by deputization”) in each such transaction from Section 16(b) of the Exchange Act, pursuant to Rule 16b-3 thereunder to the extent applicable, the transactions contemplated by the Transaction Documents, including any disposition of the Warrant to the Company upon the conversion thereof and any acquisition of Warrant Shares from the Company upon the exercise or conversion of the Warrant, any deemed acquisition or disposition in connection therewith, and all transactions with the Company related thereto. 

4.3Reservation and Valid Issuance of Shares. 

(a)The Company has authorized and reserved, free of preemptive rights and other similar contractual rights of stockholders, a sufficient number of shares of Common Stock for issuance to the Investor in accordance with the Company’s obligations under this Agreement and the Warrant. 

(b)The issuance of the Securities has been duly authorized by all requisite corporate action. When the Shares, the Put Shares and the Warrant Shares are issued, sold and delivered in accordance with the terms of this Agreement and the Warrant for the consideration expressed herein and therein, the Shares, the Put Shares and the Warrant Shares will be duly and validly issued and outstanding, fully paid, and nonassessable, and will be free of all liens and restrictions on transfer other than restrictions on transfer under this Agreement and under applicable state and federal securities laws and the Investor shall be entitled to all rights accorded to a holder of 

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shares of Common Stock. When the Warrant is issued and sold for the consideration expressed herein, the Warrant will be the valid and legally binding obligation of the Company, enforceable in accordance with its terms, subject to:  (i) judicial principles respecting election of remedies or limiting the availability of specific performance, injunctive relief, and other equitable remedies; and (ii) Bankruptcy Laws.  

4.4No Conflicts.  

(a)The execution, delivery and performance of this Agreement, and any other document or instrument contemplated hereby, including the Warrant, by the Company and the consummation by the Company of the transactions contemplated hereby, do not and will not: 

(i)violate any provision of the certificate of incorporation or by-laws of the Company;

(ii)conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which the Company is a party where such default or conflict would constitute a Material Adverse Change;

(iii)create or impose a Lien, charge or encumbrance on any property or assets of the Company under any agreement or any commitment to which the Company is a party or by which the Company is bound, which would constitute a Material Adverse Change;

(iv)result in a violation of any federal, state, local or foreign statute, rule, regulation, order, writ, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company are bound or affected where such violation would constitute a Material Adverse Change; or 

(v)require any consent of any third-party that has not been obtained pursuant to any material contract to which the Company is subject or to which any of its assets, operations or management may be subject where the failure to obtain any such consent would constitute a Material Adverse Change. 

(b)Assuming the accuracy of the relevant representations and agreements of the Investor set forth herein, the Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental agency or other Person in connection with the execution, delivery or performance of any of its obligations under the Transaction Documents (including the issuance, sale and delivery of the Securities), other than:

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(i)any required filings or approvals under the HSR Act or any foreign antitrust or competition laws, requirements or regulations;

(ii)the filing of the applicable listing of additional shares notification with Nasdaq; and 

(iii)any required filings pursuant to the Exchange Act or the rules of the Commission.

4.5Compliance.  The Company is not, and the execution and delivery of each of the Transaction Documents and the consummation of the transactions contemplated thereby will not cause the Company (in each case, other than as would not, individually or in the aggregate, constitute a Material Adverse Change) to be:

(a)in violation or default of any provision of any instrument, mortgage, deed of trust, loan, contract, commitment filed with the Commission Documents (as defined below);

(b)in violation of any provision of any judgment, decree, order or obligation to which it is a party or by which it or any of its properties or assets are bound; or

(c)to its Knowledge, in violation of any federal, state or local statute, rule or governmental regulation.

4.6Capitalization.  The authorized share capital consists of 125,000,000 shares of Common Stock and 5,000,000 shares of preferred stock, par value $0.0001 per share (“Preferred Stock”). As of October 31, 2019 (the “Reference Date”), there were 91,074,671 shares of Common Stock issued and outstanding and 350,000 shares of Preferred Stock issued and outstanding. Since the Reference Date, the Company has not issued any capital stock since the Reference Date other than pursuant to (i) employee benefit plans disclosed in the Commission Documents and (ii) outstanding warrants, options issued under the Company’s stock incentive plans, or other securities disclosed in the Commission Documents.  Except as set forth in the Commission Documents or for options to acquire shares of Common Stock granted under the Company’s stock incentive plans disclosed in the Commission Documents, there are no outstanding rights (including, without limitation, preemptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any unissued shares of capital stock or other equity interest in the Company, or any contract, commitment, agreement, understanding or arrangement of any kind to which the Company is a party and relating to the issuance or sale of any capital stock of the Company, any such convertible or exchangeable securities or any such rights, warrants or options. Without limiting the foregoing, no preemptive right, co-sale right, right of first refusal, registration right, or other similar right exists with respect to the Shares, the Put Shares or the Warrant Shares or the issuance and sale thereof. There are no shareholder agreements, voting agreements or other similar agreements with respect to the voting of Common Stock to which the Company is a party or, to the Knowledge of the Company, between or among any of the Company’s shareholders.

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4.7Commission Documents, Financial Statements. 

(a)The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and, during the past twelve (12) months, the Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the Commission pursuant to the reporting requirements of the Exchange Act, including material filed pursuant to Section 13(a) or 15(d) of the Exchange Act (all of the foregoing, including filings incorporated by reference therein, being referred to herein as the “Commission Documents”).  

(b)As of its date, each Commission Document filed within the past twelve (12) months complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder applicable to such document, and, as of its date, after giving effect to the information disclosed and incorporated by reference therein, no such Commission Document contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the Commission Documents filed with the Commission during the past twelve (12) months complied as to form and substance in all material respects with applicable accounting requirements and the published rules and regulations of the Commission or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) applied on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements), and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). 

(c)The Common Stock is currently listed or quoted on the Nasdaq Global Select Market. The Company is not in violation of the listing requirements of Nasdaq and has no Knowledge of any facts that would reasonably lead to delisting or suspension of its Common Stock from the Nasdaq Global Select Market in the foreseeable future.

4.8Internal Controls and Procedures. The Company maintains disclosure controls and procedures as such terms are defined in, and required by, Rule 13a-15 and Rule 15d-15 under the Exchange Act. Such disclosure controls and procedures are effective as of the latest date of management’s evaluation of such disclosure controls and procedures as set forth in the Commission Documents to provide reasonable assurance that all material information required to be disclosed by the Company in the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Commission. The Company maintains a system of internal controls over financial reporting sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations and (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP. 

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4.9Material Adverse Change. Except as disclosed in the Commission Documents, since September 30, 2019, no event or series of events has or have occurred that would, individually or in the aggregate, constitute a Material Adverse Change.

4.10No Undisclosed Liabilities. To the Company’s Knowledge, neither the Company nor any of its Subsidiaries has any liabilities, obligations, claims or losses (whether liquidated or unliquidated, secured or unsecured, absolute, accrued, contingent or otherwise) that would be required to be disclosed on a balance sheet of the Company or any of its Subsidiaries (including the notes thereto) in conformity with GAAP and are not disclosed in the Commission Documents, other than those incurred in the ordinary course of the Company’s or its Subsidiaries’ respective businesses since September 30, 2019.

4.11No Undisclosed Events or Circumstances. Except for the transactions contemplated by the Transaction Documents, no event or circumstance has occurred or exists with respect to the Company, its Subsidiaries, or their respective businesses, properties, operations or financial condition, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed and which, individually or in the aggregate, would constitute a Material Adverse Change.

4.12Actions Pending. There is no action, suit, claim, investigation or proceeding pending or, to the Knowledge of the Company, threatened against the Company or any Subsidiary which questions the validity of this Agreement or the transactions contemplated hereby or any action taken or to be taken pursuant hereto. Except as set forth in the Commission Documents, there is no action, suit, claim, investigation or proceeding pending or, to the Knowledge of the Company, threatened, against or involving the Company, any Subsidiary, or any of their respective properties or assets that would be reasonably expected to result in a Material Adverse Change. Except as set forth in the Commission Documents, no judgment, order, writ, injunction or decree or award has been issued by or, to the Knowledge of the Company, requested of any court, arbitrator or governmental agency which would be reasonably expected to result in a Material Adverse Change.

4.13Compliance with Law. The businesses of the Company and its Subsidiaries have been and are presently being conducted in accordance with all applicable federal, state and local governmental laws, rules, regulations and ordinances, except as would not reasonably be expected to cause a Material Adverse Change. The Company and each of its Subsidiaries have all franchises, permits, licenses, consents and other governmental or regulatory authorizations and approvals necessary for the conduct of its business as now being conducted by it, except for such franchises, permits, licenses, consents and other governmental or regulatory authorizations and approvals, the failure to possess which, individually or in the aggregate, would not reasonably be expected to constitute a Material Adverse Change.

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4.14Exemption from Registration, Valid Issuance. Subject to, and in reliance on, the representations, warranties and covenants made herein by the Investor, the issuance and sale of the Securities in accordance with the terms and on the bases of the representations and warranties set forth in this Agreement, may and shall be properly issued pursuant to Section 4(a)(2) of the Securities Act, Regulation D and/or any other applicable federal and state securities laws. The sale and issuance of the Securities pursuant to, and the Company’s performance of its obligations under, this Agreement will not (i) result in the creation or imposition of any liens, charges, claims or other encumbrances upon any of the Securities or any of the assets of the Company, or (ii) entitle the holders of any outstanding shares of capital stock of the Company to preemptive or other rights to subscribe to or acquire any of the Securities or other securities of the Company.

4.15Transfer Taxes.  All stock transfer or other taxes (other than income taxes) which are required to be paid in connection with the sale and transfer of the Shares and the Warrant to be sold to Investor hereunder will be, or will have been, fully paid or provided for by the Company and all laws imposing such taxes will be or will have been fully complied with.

4.16Investment Company.  The Company is not and, after giving effect to the offering, sale and issuance of the Securities will not be an “investment company” as defined in the Investment Company Act of 1940, as amended.

4.17License Agreement.

(a)Agreements.  Attached hereto as Exhibit E is a true, correct and complete copy of the License Agreement.  The Company has made available to the Investor, in the data room, true, correct and complete copies of the following communications between the Company and Licensee under the License Agreement since March 12, 2015:  (x) all written minutes of, and written documents delivered to participants at meetings of the JSC (as defined in the License Agreement) and meetings of any Subcommittees (as defined in the License Agreement) thereof and senior management meetings conducted pursuant to Section 4.3 of the License Agreement, and (y) all other material written communications delivered to the Company related to the License Agreement or the Licensed Product.

(b)No Other Agreements.  Apart from the Licensee Consent when executed, and except as set forth on Schedule 4.17(b) of the Disclosure Schedule, the License Agreement is the only agreement, instrument, arrangement, waiver or understanding between the Company (or any predecessor or Affiliate thereof), on the one hand, and Licensee (or any predecessor or Affiliate thereof), on the other hand, relating to the Licensed Products and the Japan Royalty, and there are no other agreements, instruments, arrangements, waivers or understandings between the Company (or any predecessor or any Affiliate thereof), on the one hand, and Licensee (or any predecessor or Affiliate thereof), on the other hand, that relate to the License Agreement, the Licensed IP, the Licensed Products (including the development or commercialization thereof), or the Japan Royalty.  The Company has not proposed or received any proposal, to amend or waive any provision of the License Agreement since July 1, 2018.

(c)Licenses/Sublicenses.  Except as set forth on Schedule 4.17(c) of the Disclosure Schedule, to the Knowledge of the Company, there are no licenses or sublicenses entered into by Licensee or any other Person (or any predecessor or Affiliate thereof) in respect of Licensee’s rights and obligations under the License Agreement (including any Licensed IP) in the Eisai Territory.

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(d)Validity and Enforceability of License Agreement.  The License Agreement is a valid and binding obligation of the Company and the Licensee in accordance with its terms.  The License Agreement is enforceable against the Company and the Licensee 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) or by any Credit Event.  The Company has not received any notice in connection with the License Agreement challenging the validity, enforceability or interpretation of any provision of the License Agreement, including Licensee’s obligation to pay any portion of the Japan Royalty without set-off of any kind.

(e)Licensed Product.  Tazemetostat is a Licensed Product under the License Agreement.  Licensee is obligated to pay royalties under Article 6 thereof on all sales of any Licensed Product in the Eisai Territory.

(f)No Liens or Assignments by the Company.  The Company has not, except as contemplated hereby, conveyed, assigned or in any other way transferred or granted any liens upon or security interests with respect to all or any portion of its right, title and interest in and to the Japan Royalty, the Licensed Epizyme IP or the License Agreement.

(g)No Waivers or Releases.  The Company has not granted any material waiver under the License Agreement and has not released Licensee, in whole or in part, from any of its material obligations under the License Agreement.

(h)No Termination.  The Company has not (i) given Licensee any notice of termination of the License Agreement (whether in whole or in part) or any notice expressing any intention or desire to terminate the License Agreement or (ii) received any notice of termination of the License Agreement (whether in whole or in part) or any notice expressing any intention or desire to terminate the License Agreement.  To the Knowledge of the Company, no event has occurred that would give rise to the expiration or termination of the License Agreement.

(i)No Breaches or Defaults.  There is and has been no material breach or default under any provision of the License Agreement either by the Company (or any predecessor thereof) or, to the Knowledge of the Company, by Licensee (or any predecessor thereof), and there is no event that upon notice or the passage of time, or both, would reasonably be expected to give rise to any breach or default either by the Company or, to the Knowledge of the Company, by Licensee.  

(j)Payments Made.  The Company has received from Licensee the full amount of the payments due and payable under the License Agreement by Licensee to the Company.  The Company (or any predecessor thereof) has received no other payments from Licensee under or related to the License Agreement since March 12, 2015.

(k)No Assignments by Licensee.  The Company has not consented to any assignment or other transfer by Licensee or any of its predecessors of any of their rights or obligations under the License Agreement, and, to the Company’s Knowledge, Licensee has not assigned or otherwise transferred or granted any liens upon or security interest with respect to any of its rights or obligations under the License Agreement or any portion of its right, title and interest in and to the Licensed Eisai IP, in each case, to any Person.

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(l)No Indemnification Claims.  The Company has not notified Licensee or any other Person of any claims for indemnification under the License Agreement nor has the Company received any claims for indemnification under the License Agreement, whether pursuant to Article 11 thereof or otherwise.

(m)No Royalty Reductions.  As of the date hereof, there is no Japan Royalty due and payable under Section 6.4.1(a) of the License Agreement.  To the Knowledge of the Company, no event or condition exists that, upon notice or passage of time or both, would reasonably be expected to permit Licensee to make, or have the right to make, any claim against the Company pursuant to (i) any right of set-off, counterclaim, credit, reduction or deduction by contract or otherwise (a “Royalty Reduction”) or (ii) a Permitted Reduction set forth in Sections 6.4.3, 6.4.4 or 8.4 of the License Agreement in respect of the Japan Royalty.

(n)No Notice of Infringement.  The Company has not received any written notice from, or given any written notice to, Licensee pursuant to Section 8.4 or Section 8.5.1 of the License Agreement.

(o)Audits.  The Company has not initiated, pursuant to Section 6.8.2 of the License Agreement or otherwise, any inspection or audit of books of accounts or other records pertaining to Net Sales of Licensed Products in the Eisai Territory, or to the calculation of royalties or other amounts payable by Licensee to the Company under the License Agreement.

4.18Title to Royalty.  The Company has good and marketable title to the Japan Royalty free and clear of all Liens (other than Permitted Liens).  Upon payment of the Closing Purchase Price to the Company by the Investor at the Closing, the Investor will acquire, subject to the terms and conditions set forth in this Agreement and the License Agreement, good and marketable title to the Japan Royalty, free and clear of all Liens (other than Liens created by the Investor).

4.19Intellectual Property.

(a)Schedule 4.19(a) of the Disclosure Schedule lists all Licensed Eisai Patents, Licensed Epizyme Patents and Joint Patents (collectively, the “Licensed Patents”).  The Company is the sole owner of, and has the sole interest in, all of the Licensed Epizyme Patents.  To the Knowledge of Company, Licensee is the sole owner of, and has the sole interest in, all of the Licensed Eisai Patents.  The Company and Licensee collectively are the sole owners of, and collectively have the sole interest in, the Joint Patents, and the Company is the sole owner of, and has the sole interest in, its undivided half interest in each of the Joint Patents.  Schedule 4.19(a) of the Disclosure Schedule specifies as to each of the Licensed Patents, as applicable, 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 numbers and application numbers and issue and filing dates, and the record owner of each such patent or patent application.  

(b)Except as set forth in Schedule 4.19(b) of the Disclosure Schedule, there are no pending or, to the Knowledge of the Company, threatened litigations, interferences, reexamination, oppositions or like procedures involving any Licensed Epizyme Patent or Joint Patent. To the Knowledge of the Company, there are no pending or threatened litigations, interferences, reexamination, oppositions or the like procedures involving any Licensed Eisai Patents.

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(c)All of the issued Licensed Epizyme Patents and issued Joint Patents are in full force and effect and have not lapsed, expired or otherwise terminated, and, to the Knowledge of the Company, are valid and enforceable.  The Company has not received any written notice relating to the lapse, expiration or other termination of any of the issued Licensed Epizyme Patents or issued Joint Patents, or any written legal opinion that alleges that any of the issued Licensed Epizyme Patents or issued Joint Patents is invalid or unenforceable. To the Knowledge of the Company, all of the issued Licensed Eisai Patents are in full force and effect and have not lapsed, expired or otherwise terminated, and are valid and enforceable. 

(d)There is no Person who is or claims to be an inventor under any of the owned Licensed Epizyme Patents or the Joint Patents who is not a named inventor thereof.

(e)The Company has not, and, to the Knowledge of the Company, Licensee has not, received any written notice of any claim by any Person challenging inventorship or ownership of, the rights of the Company or Licensee, as applicable, in and to, or the patentability, validity or enforceability of, any Licensed Patent, or asserting that the development, manufacture, importation, sale, offer for sale or use of any Licensed Product infringes any patent or other intellectual property rights of such Person. 

(f)To the Knowledge of the Company, the discovery and development of any Licensed Product did not and has not infringed, violated or misused any patent or other intellectual property rights owned by any third party.  The Company has not, except as set forth in Schedule 4.19(f) of the Disclosure Schedule, and, to the Knowledge of the Company, Licensee has not, in-licensed any intellectual property right covering the manufacture, use, sale, offer for sale or import of any Licensed Product.

(g)To the Knowledge of the Company, the manufacture, use, marketing, sale, offer for sale, importation or distribution of any Licensed Product has not and will not, infringe, misappropriate or otherwise violate any patent rights or other intellectual property rights owned by any other Person, including the UNC Patents.

(h)To the Knowledge of the Company, there is no, nor has there been any, infringement or misappropriation or other violation of, any of the Licensed Patents or any other patent right claiming the composition of matter of, or the method of making or using, any Licensed Product by any third party.

(i)All required maintenance fees, annuities and like payments with respect to the Licensed Patents for which Company controls the prosecution and maintenance in accordance with Section 8.2 of the License Agreement, and to the Knowledge of the Company, with respect to all other Licensed Patents, have been timely paid.

4.20UCC Representation and Warranties.  The Company’s exact legal name is, and for the immediately preceding ten years has been, “Epizyme, Inc.”.  The Company is, and for the prior ten years has been, incorporated under the laws of the State of Delaware.

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4.21Brokers.  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 Company who might be entitled to any fee or commission in connection with the transactions contemplated by this Agreement.

SECTION 5

Representations and Warranties of the Investor

The Investor hereby represents and warrants the following as of the date hereof:

5.1Experience.  The Investor is experienced in evaluating companies such as the Company, has such knowledge and experience in financial and business matters that the Investor is capable of evaluating the merits and risks of the Investor’s prospective investment in the Company, and has the ability to bear the economic risks of the investment.

5.2Investment.  The Investor is acquiring the Japan Royalty, the Shares and the Warrant, and, upon exercise or conversion of the Warrant, the Warrant Shares, and, when and if issued and sold in accordance with Section 2.1(b), the Put Shares, for investment for the Investor’s own account and not with the view to, or for resale in connection with, any distribution thereof.  The Investor understands that the Securities have not been and will not be registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent as expressed herein.  The Investor further represents that it does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to any third person with respect to any of the Securities. 

5.3Rule 144. The Investor acknowledges that the Securities must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such registration is available.  The Investor is aware of the provisions of Rule 144 promulgated under the Securities Act which permit limited resale of shares purchased in a private placement subject to the satisfaction of certain conditions.  In connection therewith, the Investor acknowledges that the Company will make a notation on its stock books regarding the restrictions on transfers set forth in this Section 5, subject to Section 9.2, and will transfer the Shares, the Put Shares and the Warrant Shares on the books of the Company only to the extent not inconsistent herewith and therewith.

5.4Access to Information. The Investor has received and reviewed information about the Company and has had an opportunity to discuss the Company’s business, management and financial affairs with its management and to review the Company’s facilities.  The Investor has had a full opportunity to ask questions of and receive answers from the Company, or any person or persons acting on behalf of the Company, concerning the terms and conditions of the purchase of the Japan Royalty and an investment in the Securities.  The Investor is not relying upon, and has not relied upon, any statement, representation or warranty made by any person, except for the statements, representations and warranties contained in this Agreement.

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5.5Enforceability.  This Agreement when executed and delivered by the Investor will constitute a valid and legally binding obligation of the Investor, enforceable in accordance with its terms, subject to:  (i) judicial principles respecting election of remedies or limiting the availability of specific performance, injunctive relief, and other equitable remedies; and (ii) Bankruptcy Laws. 

5.6Authorization.  The Investor has the requisite trust power and authority to enter into and perform its obligations under the Transaction Documents

. The execution, delivery and performance of the Transaction Documents by the Investor and the consummation by the Investor of the transactions contemplated thereby have been duly authorized by all necessary corporate action on the part of its owner trustee and no further consent or authorization of the Investor and its owner trustee is required. 

5.7No Conflicts.

(a)The execution, delivery and performance of this Agreement, and any other document or instrument contemplated hereby, by the Investor and the consummation by the Investor of the transactions contemplated hereby, do not and will not:  

(i)violate any provision of the organizational documents of the Investor;

(ii)conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement, mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which the Investor is a party;

(iii)result in a violation of any federal, state, local or foreign statute, rule, regulation, order, writ, judgment or decree (including federal and state securities laws and regulations) applicable to the Investor or any of its Subsidiaries; or 

(iv)require any consent of any third-party that has not been obtained pursuant to any material contract to which the Investor is subject. 

(b)Assuming the accuracy of the relevant representations and agreements of the Company set forth herein, the Investor is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental agency or other Person in connection with the execution, delivery or performance of any of its obligations under the Transaction Documents, other than any required filings or approvals under the Exchange Act, the HSR Act or any foreign antitrust or competition laws, requirements or regulations.

5.8Investor Status.  The Investor acknowledges that it is either (i) an institutional “accredited investor” as defined in Rule 501(a) of Regulation D or (ii) a “qualified institutional Investor” as defined in Rule 144A of the Securities Act, as indicated on Schedule A hereto, and the Investor shall submit to the Company such further assurances of such status as may be reasonably requested by the Company.

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5.9No Inducement.  The Investor was not induced to participate in the offer and sale of the Securities by the filing of any registration statement in connection with any public offering of the Company’s securities, and the Investor’s decision to purchase the Shares hereunder was not influenced by the information contained in any such registration statement.

SECTION 6

Covenants

6.1Efforts to Consummate Transactions.  Subject to the terms and conditions of this Agreement, each of the Company and the Investor shall use its commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary under applicable law to consummate the transactions contemplated by the Transaction Documents. Each of the Company and the Investor agrees 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 consummate or implement expeditiously the transactions contemplated by the Transaction Documents.

6.2Authorization and Reservation of Warrant Shares and Put Shares.  The Company covenants to continue to keep authorized and reserved, free of preemptive rights and other similar contractual rights of stockholders, a sufficient number of shares of Common Stock for issuance to the Investor (i) in accordance with the Company’s obligations under the Warrant and (ii) in accordance with Section 2.1(b) hereof.

6.3Exchange Listing.  Promptly following the date hereof, the Company shall prepare and file the applicable listing of additional shares notification with Nasdaq and use its reasonable best efforts to cause the Shares, the Put Shares and the Warrant Shares to be approved for listing on Nasdaq Global Select Market as promptly as practicable and in any event before the Closing.

6.4Antitrust Approval.  The Company and the Investor acknowledge that (a) no filing under the HSR Act is necessary before or at the Closing, and (b) a filing under the HSR Act may be necessary in connection with the acquisition of Warrant Shares or Put Shares contemplated by the Transaction Documents.  The Investor will notify the Company if any such filing is required on the part of the Investor (x) in advance of exercise of the Warrant or (y) promptly following the Company’s exercise of the Put Option. The Company, the Investor and any other applicable Affiliate of the Investor or of the Company will use reasonable best efforts to cooperate in timely making or causing to be made all required applications and filings under the HSR Act (and other applicable antitrust laws) in connection with the acquisition of Warrant Shares or the Put Shares in a timely manner.  In furtherance (and without limitation) thereof, each of the Company and the Investor shall (and Investor shall cause its applicable Affiliates to) make any such applications or filings required in connection with the acquisition of Warrant Shares or Put Shares as promptly as practicable (and in any event within five (5) Business Days) after the date the Investor delivers a notice to the Company indicating that such filing is required.  For as long as the Warrant or the Put Option is outstanding and owned by the Investor, the Company shall as promptly as reasonably practicable after receipt of the Investor’s written request provide (no more than four (4) times per calendar year) such information regarding the Company and its Subsidiaries as the Investor may reasonably request in order to determine whether any antitrust requirements may exist with respect to any potential exercise of the Warrant or the Put Option and issuance of the Warrant Shares or Put Shares (it being understood that the Investor shall keep such information confidential in accordance with Section 7 and the Company shall have no obligation to disclose any information to the extent the disclosure thereof would result in the breach of any contract to which the Company is a party or the violation of any applicable law, rule, regulation 

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or stock exchange requirement).  Except to the extent prohibited by applicable law, each of the Investor and the Company will consult and cooperate with one another, and consider in good faith the views of one another, in connection with, and provide to the other parties in advance, any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of any party hereto in connection with proceedings under or relating to the HSR Act or any other applicable antitrust law.  The Investor and the Company shall each use reasonable best efforts to satisfy the conditions set forth in Section 8.5 and Section 9.3 on or prior to the date specified in Section 12.1(b).

6.5Board Nomination.  The Company agrees to appoint Pablo Legorreta to the Board of Directors, effective as of the Closing (or such later date as may be mutually agreed by the Company and the Investor), by taking all necessary action to increase the size of the Board of Directors prior to the Closing unless there otherwise is a vacancy in the Board of Directors and in either event filling the vacancy thereby created with such individual. The initial Investor Designee described in the immediately preceding sentence shall be appointed as a “Class III” director.

6.6Section 16 Matters.  If the Company becomes a party to a consolidation, merger or other similar transaction or if there is any event or circumstance that may result in the Investor or the Investor Designee being deemed to have made a disposition or acquisition of equity securities of the Company or derivatives thereof for purposes of Section 16 of the Exchange Act, and if the Investor Designee is serving or participating on the Board of Directors at such time or has served on the Board of Directors during the preceding six months, then upon request of the Investor or the Investor Designee, (i) the Board of Directors or a committee of the Board of Directors composed solely of two or more “non-employee directors” as defined in Rule 16b-3 of the Exchange Act will pre-approve such acquisition or disposition of equity securities of the Company or derivatives thereof for the express purpose of exempting the Investor’s and/or the Investor Designee’s interests (in each case, to the extent such person may be deemed to be a director or “director by deputization”) in such transaction from Section 16(b) of the Exchange Act pursuant to Rule 16b-3 thereunder to the extent applicable and (ii) if the transaction involves (A) a merger or consolidation to which the Company is a party and the Common Stock is, in whole or in part, converted into or exchanged for equity securities of a different issuer, (B) a potential acquisition or deemed acquisition, or disposition or deemed disposition, by the Investor or the Investor Designee of equity securities of such other issuer or derivatives thereof and (C) an Affiliate or other designee of the Investor or its Affiliates will serve on the board of directors (or its equivalent) of such other issuer, then the Company shall require that such other issuer pre-approve any such acquisitions of equity securities or derivatives thereof for the express purpose of exempting the interests of the Investor or the Investor Designee (in each case, to the extent such persons may be deemed to be a director or “directors by deputization” of such other issuer) in such transactions from Section 16(b) of the Exchange Act pursuant to Rule 16b-3 thereunder to the extent applicable.

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6.7D&O Indemnification; Insurance Priority Matters.  The Investor Designee shall be entitled to enter into the Company’s standard form of indemnification agreement, a copy of which has been publicly filed with the Commission. The Company acknowledges and agrees that the Investor Designee may have certain rights to indemnification, advancement of expenses and/or insurance provided by the Investor or its Affiliates (collectively, the “Investor Indemnitors”). The Company acknowledges and agrees that the Company shall be the indemnitor of first resort with respect to any indemnification, advancement of expenses and/or insurance provided in the Company’s certificate of incorporation, bylaws and/or indemnification agreement to the Investor Designee, in his or her capacity as a director of the Company (such that the Company’s obligations to such indemnitee in his or her capacities as director are primary and any obligation of the Investor Indemnitors to advance expenses or to provide indemnification or insurance for the same expenses or liabilities incurred by such indemnitees are secondary). Such indemnitee shall, in his or her capacities as director, be entitled to all the rights to indemnification, advancement of expenses and entitled to insurance to the extent provided under (i) the certificate of incorporation and/or bylaws of the Company as in effect from time to time and/or (ii) such other agreement, if any, between the Company and such indemnitee, without regard to any rights such indemnitee may have against the Investor Indemnitors. No advancement or payment by the Investor Indemnitors on behalf of such indemnitees with respect to any claim for which such indemnitees have sought indemnification, advancement of expenses or insurance from the Company in their capacities as directors shall affect the foregoing and the Investor Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such indemnitees against the Company.

6.8Disclosures.  Except for a press release previously approved in form and substance by the Company and the Investor or any other public announcement using substantially the same text as such press release, neither the Company nor the Investor shall, and each party hereto shall cause its respective Representatives, Affiliates and Affiliates’ Representatives not to, issue a press release or other public announcement or otherwise make any public disclosure with respect to the terms of the Transaction Documents or the subject matter hereof without the prior written consent of the other party hereto (which consent shall not be unreasonably withheld, conditioned or delayed), except as may be required by applicable law 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).

6.9Payments Received in Error; Interest.

(a)Commencing on the Closing Date and at all times thereafter, if any payment of any portion of the Japan Royalty is made to the Company, the Company shall pay such amount to the Investor, promptly (and in any event within five (5) Business Days) after the receipt thereof, by wire transfer of immediately available funds to an account designated in writing by the Investor, without any deduction, recoupment, or offset for any reason whatsoever. The Company shall notify the Investor of such wire transfer and provide reasonable details regarding the Japan Royalty payment so received by the Company.  The Company agrees that, in the event any portion of the Japan Royalty is paid to the Company, the Company (i) until paid to the Investor, shall hold such payment received in trust for the benefit of the Investor, and (ii) shall have no right, title or interest in such payment and shall not pledge or otherwise grant any security interest in such payment. 

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(b)Commencing on the Closing Date and at all times thereafter, if any payment due under the License Agreement that does not constitute the Japan Royalty, or to which the Investor is not entitled under the Eisai Royalty Purchase Agreement, is made to the Investor, the Investor shall pay such amount to the Company, promptly (and in any event within five (5) Business Days) after the receipt thereof, by wire transfer of immediately available funds to an account designated in writing by the Company, without any deduction, recoupment, or offset for any reason whatsoever. The Investor shall notify the Company of such wire transfer and provide reasonable details regarding the erroneous payment so received by the Investor.  The Investor agrees that, in the event any payment due under the License Agreement that does not constitute the Japan Royalty, or to which the Investor is not entitled under the Eisai Royalty Purchase Agreement, is paid to the Investor, the Investor (i) until paid to the Company, shall hold such payment received in trust for the benefit of the Company, and (ii) shall have no right, title or interest in such payment and shall not pledge or otherwise grant any security interest in such payment.

(c)A late fee of 4% over the Prime Rate shall accrue on all unpaid amounts with respect to any sum payable under Section 6.9(a) or 6.9(b) beginning five (5) Business Days after notice that such payment was received in error.

6.10Royalty Reduction. If Licensee exercises any Royalty Reduction against any payment of the Japan Royalty other than for a Permitted Reduction, and if such Royalty Reduction reduces any amount paid to the Investor on account of the Japan Royalty to below the amount that would have been received by the Investor on account of the Japan Royalty had such Royalty Reduction other than a Permitted Reduction not been exercised by Licensee, then the Company shall promptly (and in any event within five (5) Business Days following the payment of the Japan Royalty affected by such Royalty Reduction) make a true-up payment to the Investor such that the Investor receives the full amount of such Japan Royalty payment that would have been payable to the Investor had such Royalty Reduction, other than a Permitted Reduction, not occurred.  For the avoidance of doubt, any nonpayment by Licensee as a result of a Credit Event shall not constitute a Royalty Reduction for purposes of this Section 6.10 and shall not obligate the Company to make any payment under this Section 6.10.

6.11Royalty Reports.  Promptly (and in any event within five (5) Business Days) following the receipt by the Company of any Eisai Royalty Report, notice, correspondence or other confidential information provided to the Company under the License Agreement that, to the Company’s Knowledge, the Licensee has not provided to the Investor directly, the Company shall furnish a true, correct and complete copy of the same to the Investor.

6.12Notices and Other Information to the Licensee.  The Company and the Investor shall consult prior to the Company sending any material written notice or correspondence to Licensee relating to, or involving, the Japan Royalty, the Licensed IP or the License Agreement that would reasonably be expected to result in a Material Adverse Change.  Except for such notices and correspondence required to be given or made by the Company under the License Agreement that would not reasonably be expected to result in a Material Adverse Change, the Company shall not send any such notice or correspondence without the prior written consent of the Investor.  The Company shall send to the Investor a copy of each notice and correspondence send by the Company to the License that relates to, or involves, the Japan Royalty, the Licensed IP or the License Agreement.

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6.13Inspections and Audits.

(a)At the written request of the Investor, the Company shall, to the extent permitted under Section 6.8.2 of the License Agreement, cause an inspection or audit by an independent public accounting firm to be made for the purpose of determining the correctness of the Japan Royalty payments made under the License Agreement. With respect to any inspection requested by the Investor, the Company shall, for purposes of Section 6.8.2 of the License Agreement, select such independent public accounting firm as the Investor shall recommend for such purpose (as long as such independent certified public accountant is reasonably acceptable to Licensee as required by Section 6.8.2 of the License Agreement).  The Company shall not, without the Investor’s prior written consent, cause an inspection or audit to be made under Section 6.8.2 of the License Agreement. The Investor shall pay the Company the expenses of any inspection or audit (including the fees and expenses of such independent public accounting firm designated for such purpose) that would otherwise be borne by the Company pursuant to the License Agreement (if and as such expenses are actually incurred by the Company).

(b)If the Company elects, in accordance with Section 3.2(b) to offset any Applicable Reduction Payments against the Investor WW Royalty Payment, then, following such election made in accordance with Section 3.2(b), upon at least fourteen (14) Business Days’ written notice and during normal business hours, no more frequently than once per calendar year, the Investor may cause an inspection and/or audit by an independent public accounting firm reasonably acceptable to the Company to be made of the Company’s books of account for the three (3) calendar years prior to the audit for the purpose of determining the correctness of any Applicable Reduction Payment offset against the Investor WW Royalty Payment. All of the expenses of any inspection or audit caused by the Investor hereunder (including the fees and expenses of such independent public accounting firm designated for such purpose) shall be borne by (i) the Investor if the independent public accounting firm determines that an Applicable Reduction Payment was incorrect by an amount less than five percent (5%) of the Applicable Reduction Payment actually offset or (ii) the Company if the independent public accounting firm determines that an Applicable Reduction Payment was incorrect by an amount equal to or greater than five percent (5%) of the Applicable Reduction Payment actually offset.  All information obtained by the Investor as a result of any such inspection or audit shall be Confidential Information of the Company subject to Section 7 and the independent public accounting firm shall be considered a Representative of the Investor for purposes of Section 7.

6.14Amendment or Assignment of License Agreement.  The Company shall not, without the Investor’s prior written consent, assign, amend, modify, supplement or restate (or consent to any assignment, amendment, modification, supplement or restatement of) any provision of the License Agreement in any manner that would reasonably be expected to result in a Material Adverse Change.  Subject to the foregoing, promptly, and in any event within five (5) Business Days, following receipt by the Company of any final assignment, amendment, modification, supplement or restatement of the License Agreement, the Company shall furnish a copy of the same to the Investor. 

6.15Maintenance of Agreements.  The Company shall comply in all material respects with its obligations under the License Agreement and shall not take any action or forego any action that would reasonably be expected to constitute a material breach thereof or default thereunder by the Company that would reasonably be expected to result in a Material Adverse Change.  Promptly, and in any event within five (5) Business Days, after receipt of any (written or oral) notice from Licensee 

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of an alleged breach or default by the Company under the License Agreement, the Company shall give notice thereof to the Investor, including delivering to the Investor a copy of any such written notice.  The Company shall use its reasonable best efforts to cure any breaches or defaults by it and shall give written notice to the Investor upon curing any such breach or default. The Company shall consult with the Investor as to any action the Company proposes to take to dispute or cure any such breach or default under the License Agreement, and in connection with any dispute regarding such breach or default under the License Agreement, shall employ such counsel, reasonably acceptable to the Company, as the Investor may select.  The Company shall not, without the prior consent of the Investor, (a) forgive, release or compromise any amount owed to or becoming owed to the Company under the License Agreement in respect of the Japan Royalty or (b) waive any obligation of, or grant any consent to, Licensee under, in respect of or related to the Japan Royalty, provided that neither the occurrence of a Credit Event nor any automatic effect of a Credit Event under the License Agreement without an affirmative action of the Company shall itself be deemed any forgiving, release, compromise, waiver, or consent by the Company.  The Company shall not exercise or enforce its applicable rights under the License Agreement in any manner that would be reasonably likely to result in a Material Adverse Change.

6.16Enforcement of Agreements.

(a)Notice of Breaches by Licensee.  Promptly (and in any event within five (5) Business Days) after the Company becomes aware of, or comes to believe in good faith that there has been, a breach of the License Agreement by Licensee, the Company shall provide notice of such breach to the Investor.  In addition, the Company shall provide to the Investor a copy of any written notice of breach or alleged breach of the License Agreement delivered by the Company to Licensee as soon as practicable and in any event not less than five (5) Business Days following such delivery.

(b)Enforcement of License Agreement.  In the case of any breach by Licensee referred to in Section 6.16(a), the Company shall consult with the Investor regarding the timing, manner and conduct of any enforcement of Licensee’s obligations under the License Agreement.  The Company shall, (i) if (and only if) requested in writing by the Investor, within ten (10) Business Days after receipt of such request, exercise such rights and remedies relating to any such breach related to the Eisai Territory as shall be available to the Company, whether under the License Agreement or by operation of law, as instructed by the Investor, and (ii) if requested by the Investor, the Company shall employ such counsel reasonably acceptable to the Company as the Investor shall recommend for such purpose.

(c)Allocation of Proceeds and Costs of Enforcement.  The Investor shall pay all costs and expenses incurred by the Investor and the Company (including the fees and expenses of attorneys engaged jointly or separately by the Investor and the Company) of any enforcement pursuant to this Section 6.16 undertaken at the Investor’s request, as they are incurred and paid. All Proceeds resulting from any enforcement of Licensee’s obligations under the License Agreement that relate to the Japan Royalty and are undertaken at the Investor’s request pursuant to this Section 6.16 shall be paid to the Investor.  The Company hereby assigns and, if not presently assignable, agrees to assign to the Investor the amount of Proceeds due to the Investor in accordance with this Section 6.16(c).

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6.17Termination of Agreements

(a)The Company shall not exercise any right to terminate the License Agreement, agree with Licensee to terminate the License Agreement, or take, or permit any Affiliate or sublicensee to take, any action that would reasonably be expected to give Licensee the right to terminate the License Agreement, under Article 12 of the License Agreement, in each case, except with the prior written consent of the Investor, provided that in no event shall the Company be obligated to prevent any termination of the License Agreement as a result of a Credit Event and not a result of any affirmative action of the Company. 

(b)If the License Agreement or Licensee’s rights in the Eisai Territory are terminated by the Company pursuant to Section 12.3.1 or Section 12.4 of the License Agreement or by Licensee pursuant to Section 12.2.1(b) (including any deemed termination pursuant to Section 12.2.2) of the License Agreement such that the Company is granted the license and other rights by Licensee under Section 12.5.1(d) (and the remainder of such Section 12.5.1) of the License Agreement (collectively, the “Product Rights”), the Company shall, upon the written request of the Investor, take commercially reasonable efforts to negotiate the terms of a license with a third party under the Licensed IP, to make, have made, use, import, offer for sale and sell the Licensed Products in the Eisai Territory for any purpose that Licensee would have been permitted to make, have made, use, import, offer for sale and sell the Licensed Products in the Eisai Territory under the License Agreement and subject to rights retained, if any, by Licensee following such termination (any such license, a “New Arrangement”).  The Company and the Investor shall each provide assistance to, and cooperate with the each other, in connection with the negotiation of a New Arrangement.  The Investor shall reimburse the Company for any action taken by the Company at the Investor’s written request in connection therewith (including the Investor’s payment, upon written demand, of the Company’s reasonable attorneys’ fees, if any, in connection therewith).  Any New Arrangement shall (i) not become effective earlier than the effective date of the termination of the License Agreement in its entirety or as to the Eisai Territory, as the case may be, (ii) include terms, conditions and limitations that are, in the aggregate, not materially more burdensome to the Company than those contained in the License Agreement and (iii) require the advance written consent (not to be unreasonably withheld, conditioned or delayed) of the Investor.  The Company agrees to duly execute and deliver one or more agreements effecting such New Arrangement that satisfies the foregoing requirements promptly upon the written request of the Investor.

6.18Preservation of Rights.  The Company shall not hereafter sell, transfer, hypothecate, assign or in any manner convey or mortgage, pledge or grant a security interest or other encumbrance of any kind in any of its interest in any portion of the Licensed Epizyme Patents, Joint Patents, or the License Agreement without the prior written consent of the Investor, except for any transaction in which the Company transfers all or substantially all of its assets and business to which the Licensed Epizyme Patents, Joint Patents, and the License Agreement relate and as part of which the counterparty assumes the obligations of the Company in respect of the Japan Royalty hereunder and subordinates any rights obtained in such transaction to the rights of the Investor to the Japan Royalty as set forth herein.  The Company shall not hereafter subject to a Lien (other than a Permitted Lien), sell, transfer, assign, convey title (in whole or in part), grant any right to, or otherwise dispose of any portion of the Japan Royalty. 

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6.19Enforcement; Infringement Claims; Prosecution.

(a)The Company shall promptly inform the Investor of any suspected infringement by a third party of any of the Licensed Patents or any other patent right claiming the composition of matter of, or the method of making or using, any Licensed Product in the Eisai Territory.  The Company shall provide to the Investor a copy of any written notice of any suspected infringement in the Eisai Territory of any of the Licensed Patents delivered or received under Section 8.5.1 of the License Agreement or otherwise as soon as practicable and in any event not less than five (5) Business Days following such delivery.

(b)If the Company has the right to initiate an enforcement action in the Eisai Territory as set forth in Section 8.5.2 or 8.5.3 of the License Agreement or to defend a Licensed Patent in the Eisai Territory as set forth in Section 8.4 of the License Agreement, the Company shall, if and only if requested in writing by the Investor, promptly, and in any event within five (5) Business Days after receipt of such request, exercise such right as instructed by the Investor and, if requested by the Investor, the Company shall employ such counsel reasonably acceptable to the Company as the Investor shall recommend for such purpose, at the sole cost and expense of the Investor to the extent instructed by the Investor.

(c)The Company shall use commercially reasonable efforts to, or shall cause the same to be done, (i) take any and all actions, and prepare, execute, deliver and file any and all agreements, documents and instruments, that are reasonably necessary or desirable to diligently prosecute, preserve and maintain the Licensed Patents in the Eisai Territory for which it controls the prosecution and maintenance in accordance with Section 8.2 of the License Agreement that are necessary or reasonably useful to develop, make, have made, use, sell, have sold, import or export any Licensed Product, including payment of maintenance fees or annuities on any such Licensed Patents, which shall be reimbursed to the extent provided under Section 8.3 of the License Agreement (ii) prosecute any corrections, substitutions, reissues, reviews and reexaminations of the Licensed Patents in the Eisai Territory for which it controls the prosecution and maintenance in accordance with Section 8.2 of the License Agreement and any other forms of patent term restoration in any applicable jurisdiction in accordance with Section 8.5.8 of the License Agreement, and (iii) not disclaim or abandon, or fail to take any action necessary or desirable to prevent the disclaimer or abandonment, of the Licensed Patents in the Eisai Territory for which it controls the prosecution and maintenance in accordance with Section 8.2 of the License Agreement.  For purposes of compliance with this Section 6.19(c), the Company shall employ such counsel, reasonably acceptable to the Company, as the Investor shall recommend for such purpose. Notwithstanding the foregoing, to the extent the Company decides not to file any such Licensed Patent in the Eisai Territory or intends to allow such Licensed Patent to lapse or become abandoned without having first filed a substitute and Licensee does not exercise its step-in rights under Section 8.2.2 of the License Agreement in respect of such Licensed Patent, the Company shall notify and consult with the Investor on such decision or intention at least thirty (30) days prior to the date upon which the subject matter of such Licensed Patent shall become unpatentable or such Licensed Patent shall lapse or become abandoned, and, to the extent the Licensee has declined to step-in to assume, as applicable, the filing, prosecution or maintenance of such Licensed Patent in accordance with Section 8.2.2 of the License Agreement, the Investor shall thereupon have the right (but not the obligation) to assume the same at its own expense with counsel of its own choice.  In such case, the Company shall use commercially reasonable efforts to transfer such prosecution and maintenance to the Investor, at the sole cost of the Investor.

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6.20Third Party Stacking.  The Company agrees that, if at any time during the Royalty Term (as defined in the License Agreement) of the WW Royalty, the Company is entitled to credit, under Section 6.4.4 of the License Agreement, any amount against the royalties due by the Company to the Licensee on Net Sales of a Licensed Product as a result of any payments, royalties or other amounts of any kind paid to a third party with respect to the Company’s license rights, covenant not to sue or any other rights to or under one or more of patents or patent applications, which the Company and Investor have agreed in writing is subject to this Section 6.20, then the Company shall not exercise its right to credit such amount and shall pay the full amount of the WW Royalty due in accordance with the Instruction Letter then in effect as if the Company was not entitled to credit such amount under Section 6.4.4 of the License Agreement.

SECTION 7

Confidentiality

7.1Confidentiality.  Except as provided in this Section 7 or otherwise agreed in writing by the parties, the parties hereto agree that, during the term of this Agreement and for five (5) years thereafter, each party (the “Receiving Party”) shall keep confidential and shall not publish or otherwise disclose 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”) 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, other than under an obligation of confidentiality, at the time of disclosure by the Disclosing Party;

(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 and other than through any act or omission of the Receiving Party in breach of this Agreement; 

(d)is independently developed by the Receiving Party or any of its Affiliates, as evidenced by written records, without the use of or reference of the Confidential Information; or

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

7.2Authorized Disclosure.

(a)Either party may disclose Confidential Information to the extent such disclosure is reasonably necessary in the following situations:

(i)prosecuting or defending litigation;

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(ii)complying with applicable laws and regulations, including regulations promulgated by securities exchanges; 

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

(iv)for regulatory, tax or customs purposes;

(v)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;

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

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

(viii)disclosure to its actual or potential investors and co-investors, and other sources of funding, including debt financing, or potential partners, collaborators or acquirers, and their respective accountants, financial advisors and other professional representatives, provided, that such disclosure shall be made only to the extent (A) that the Disclosing Party determines in good faith that the information to be disclosed is material to an investment in the Disclosing Party and is customarily required to consummate such investment, financing transaction partnership, collaboration or acquisition and that each recipient of Confidential Information must be bound by customary obligations of confidentiality and non-use prior to any such disclosure, or (B) that the information is the sales of the Licensed Product and such information is to be included in the Investor’s financial reports to its investors.

(b)Notwithstanding the foregoing, in the event the Disclosing Party is required to make a disclosure of the Receiving Party’s Confidential Information pursuant to Sections 7.2(a)(i), (ii), (iii) or (iv), it will, except where impracticable, give reasonable advance notice to the Receiving Party of such disclosure and use reasonable efforts to secure confidential treatment of such information and to avoid and/or minimize the extent of such disclosure.  In any event, the Investor shall not file any patent application based upon or using the Confidential Information of Company provided hereunder.

SECTION 8

Conditions to Investor’s Obligations at Closing

The obligations of the Investor under this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions, any of which may be waived in writing by the Investor (except to the extent not permitted by law):

8.1No Injunction, etc.  No preliminary or permanent injunction or other binding order, decree or ruling issued by a court or governmental agency shall be in effect which shall have the effect of preventing the consummation of the transactions contemplated by the Transaction Documents.  No 

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action or claim shall be pending before any court or quasi-judicial or administrative agency of any federal, state, local or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling or charge would be reasonably likely to (i) prevent consummation of any of the transactions contemplated by the Transaction Documents, (ii) cause any of the transactions contemplated by the Transaction Documents to be rescinded following consummation, (iii) have the effect of making illegal the purchase, sale, transfer and assignment of the Japan Royalty to the Investor or (iv) have the effect of making illegal the purchase of, or payment for, any of the Securities by the Investor.

8.2Representations and Warranties.  The representations and warranties of the Company contained in Section 4 shall be true and correct in all material respects as of the Closing Date as though made at and as of the Closing Date, except to the extent any such representation or warranty expressly speaks as of a particular date, in which case it shall be true and correct in all material respects as of such date; provided, that to the extent that any such representation or warranty is qualified by the term “material,” “material adverse effect” or “Material Adverse Change,” such representation or warranty (as so written, including the term “material” or “Material Adverse Change”) shall be true and correct in all respects as of the Closing Date or such other date, as applicable.

8.3Performance.  The Company shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing.

8.4No Material Adverse Change.  After the date of this Agreement, there shall not have occurred any fact, circumstance, effect, change, event or development that, individually or in the aggregate, has resulted, or would reasonably be likely to result, in a Material Adverse Change. 

8.5HSR Act.  The waiting period(s) (and any extension thereof) applicable to the transactions contemplated by this Agreement under the HSR Act shall have expired or been terminated.

8.6Company Closing Certificate.  The Company shall have delivered the Company Closing Certificate.

8.7Licensee Consent.  The Company shall have delivered to the Investor a consent and instruction letter, in substantially the form attached hereto as Exhibit H (the “Licensee Consent”), duly executed by the Company and Licensee.

8.8Form W-9.  The Company shall have delivered to the Investor a valid, properly executed IRS Form W-9 certifying that the Company is exempt from U.S. federal withholding tax and “backup” withholding tax.

8.9Securities Laws.  The offer and sale of the Shares to the Investor pursuant to this Agreement shall be exempt from the registration requirements of the Securities Act and the registration and/or qualification requirements of all applicable state securities laws.

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8.10Authorizations.  All authorizations, approvals or permits, if any, of any governmental authority or regulatory body that are required in connection with (i) the lawful issuance and sale of the Securities and (ii) the sale, transfer and assignment of the Japan Royalty pursuant to this Agreement, including any authorizations required under the HSR Act, shall have been duly obtained and shall be effective on and as of the Closing.

8.11Warrant.  The Company shall have delivered to the Investor the duly executed Warrant.

8.12Legal Opinion.  The Investor shall have received a legal opinion from counsel to the Company and in a form previously agreed upon by the Company and the Investor.

8.13Dataroom. Goodwin Procter LLP, counsel to the Investor shall have received an electronic copy of all of the information and documents posted to the virtual dataroom established by the Company as of the date hereof and made available to the Investor via Merrill Corp, for archival purposes only and to be held in escrow in the event of a future dispute regarding its contents.  Goodwin Procter LLP shall not make such materials available to the Investor, other than with the prior written consent of the Company, which shall not be unreasonably withheld.

SECTION 9

Conditions to the Company’s Obligations at Closing

The obligations of the Company to the Investor under this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions by the Investor:

9.1No Injunction, etc.  No preliminary or permanent injunction or other binding order, decree or ruling issued by a court or governmental agency shall be in effect which shall have the effect of preventing the consummation of the transactions contemplated by the Transaction Documents.  No action or claim shall be pending before any court or quasi-judicial or administrative agency of any federal, state, local or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling or charge would be reasonably likely to (i) prevent consummation of any of the transactions contemplated by the Transaction Documents, (ii) cause any of the transactions contemplated by the Transaction Documents to be rescinded following consummation, (iii) have the effect of making illegal the purchase, sale, transfer and assignment of the Japan Royalty to the Investor or (iv) have the effect of making illegal the purchase of, or payment for, any of the Securities by the Investor.

9.2Representations and Warranties. The representations and warranties of the Investor contained in Section 5 shall be true and correct in all material respects as of the Closing Date as though made at and as of the Closing Date, except to the extent any such representation or warranty expressly speaks as of a particular date, in which case it shall be true and correct in all material respects as of such date; provided, that to the extent that any such representation or warranty is qualified by the term “material,” “material adverse effect” or “Material Adverse Change,” such representation or warranty (as so written, including the term “material,” “material adverse effect” or “Material Adverse Change”) shall be true and correct in all respects as of the Closing Date or such other date, as applicable. 

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9.3HSR Act.  The waiting period(s) (and any extension thereof) applicable to the transactions contemplated by this Agreement under the HSR Act shall have expired or been terminated.

9.4Licensee Consent.  The Company shall have received from Licensee the Licensee Consent, duly executed by the Company and Licensee.

9.5Performance.  The Investor shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing.

9.6Securities Law Compliance.  The offer and sale of the Securities to the Investor pursuant to this Agreement shall be exempt from the registration requirements of the Securities Act and the registration and/or qualification requirements of all applicable state securities laws.

9.7Investor Closing Certificate.  The Investor shall have delivered the Investor Closing Certificate.

9.8Investor Incumbency Certificate.  The Investor shall have delivered the Investor Incumbency Certificate.

9.9Form W-8BEN-E.  The Investor shall have delivered to the Company a valid, properly executed IRS Form W-8BEN-E certifying that the Investor is exempt from U.S. federal withholding tax with respect to any and all payments of and in respect of the Japan Royalty

9.10Authorization.  All authorizations, approvals or permits, if any, of any governmental authority or regulatory body that are required in connection with (i) the lawful issuance and sale of the Securities and (ii) the sale, transfer and assignment of the Japan Royalty pursuant to this Agreement, including any 

SECTION 10

Resales

10.1Rule 144 Reporting.  With a view to making available to the Investor the benefits of certain rules and regulations of the Commission which may permit the sale of the Shares, the Put Shares and the Warrant Shares to the public without registration, the Company agrees to use commercially reasonable efforts to:

(a)Make and keep public information available, as those terms are understood and defined in Rule 144 promulgated under the Securities Act;

(b)File with the Commission in a timely manner all reports and other documents required of the Company under the Exchange Act; and

36

 

Furnish the Investor forthwith upon request (i) a written statement by the Company as to its compliance with the public information requirements of said Rule 144, (ii) a copy of the most recent annual or quarterly report of the Company, and (iii) such other reports and documents as may be reasonably requested in availing the Investor of any rule or regulation of the Commission permitting the sale of any such securities without registration.

10.2Restrictive Legend.  The certificates representing the Shares, the Warrant Shares, when issued, and the Put Shares, when issued, will bear a restrictive legend in substantially the following form:

“THE SECURITIES EVIDENCED OR CONSTITUTED HEREBY HAVE BEEN ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) AND MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE ACT UNLESS EITHER (i) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH DISPOSITION OR (ii) THE SALE OF SUCH SECURITIES IS MADE PURSUANT TO SECURITIES AND EXCHANGE COMMISSION RULE 144.”

The legend set forth in this Section 10.2 and the related notation in the Company’s stock books shall be removed and the Company shall issue a certificate without such legend or any other legend to the holder of the Shares, the Warrant Shares and/or the Put Shares or issue to such holder by electronic delivery at the applicable balance account at the Depository Trust Company, if (i) the Shares, the Warrant Shares and/or the Put Shares are registered for resale under the Securities Act, (ii) the Shares, the Warrant Shares and/or the Put Shares are sold or transferred in compliance with Rule 144, or (iii) the Shares, the Warrant Shares and/or the Put Shares are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule 144.  Following Rule 144 becoming available for the resale of Shares, Warrant Shares and/or Put Shares, without the requirement for the Company to be in compliance with the current public information required under Rule 144, the Company shall (at the Company’s expense), upon the written request of Investor, cause its counsel to issue to the Company’s transfer agent a legal opinion authorizing the issuance of a certificate representing the Shares, Warrant Shares and/or Put Shares without any restrictive or other legends, if requested by such transfer agent.

 

SECTION 11

Indemnification

11.1Indemnification.  Each party (an “Indemnifying Party”) hereby indemnifies and holds harmless the other party, such other party’s respective officers, directors, employees, consultants, representatives and advisers, and any and all Affiliates of the foregoing (each of the foregoing, an “Indemnified Party”) from and against all losses, liabilities, costs, damages and expense (including reasonable legal fees and expenses) (collectively, “Losses”) suffered or incurred by any such Indemnified Party to the extent arising from, connected with or related to (i) breach of any representation or warranty of such Indemnifying Party in this Agreement; and (ii) breach of any covenant or undertaking of any Indemnifying Party in this Agreement, provided that in no event shall 

37

 

the Company be liable for any Losses as a result of any Credit Event or any Permitted Reduction.  If an event or omission (including, without limitation, any claim asserted or action or proceeding commenced by a third party) occurs which an Indemnified Party asserts to be an indemnifiable event pursuant to this Section 11, the Indemnified Party will provide written notice to the Indemnifying Party, setting forth the nature of the claim and the basis for indemnification under this Agreement.  The Indemnified Party will give such written notice to the Indemnifying Party promptly after it becomes aware of the existence of any such event or occurrence.  Such notice will be a condition precedent to any obligation of the Indemnifying Party to act under this Agreement but will not relieve it of its obligations under the indemnity except to the extent that the failure to provide prompt notice as provided in this Agreement prejudices the Indemnifying Party with respect to the transactions contemplated by this Agreement and to the defense of the liability.  In case any such action is brought by a third party against any Indemnified Party and it notifies the Indemnifying Party of the commencement thereof, the Indemnifying Party will be entitled to participate therein and, to the extent that it wishes, to assume the defense and settlement thereof with counsel reasonably selected by it and, after notice from the Indemnifying Party to the Indemnified Party of such election so to assume the defense and settlement thereof, the Indemnifying Party will not be liable to the Indemnified Party for any legal expenses of other counsel or any other expenses subsequently incurred by such Indemnified Party in connection with the defense thereof, provided, however, that an Indemnified Party shall have the right to employ separate counsel at the expense of the Indemnifying Party if (i) the employment thereof has been specifically authorized in writing by the Indemnifying Party; or (ii) representation of both parties by the same counsel would be inappropriate due to actual or potential conflicts of interests between such parties (which such judgment shall be made by counsel to the Indemnified Party in good faith).  The Indemnified Party agrees to cooperate fully with (and to provide all relevant documents and records and make all relevant personnel available to) the Indemnifying Party and its counsel, as reasonably requested, in the defense of any such asserted claim at no additional cost to the Indemnifying Party.  No Indemnifying Party will consent to the entry of any judgment or enter into any settlement with respect to any such asserted claim without the prior written consent of the Indemnified Party, not to be unreasonably withheld or delayed, (a) if such judgment or settlement does not include as an unconditional term thereof the giving by each claimant or plaintiff to each Indemnified Party of a release from all liability in respect to such claim or (b) if, as a result of such consent or settlement, injunctive or other equitable relief would be imposed against the Indemnified Party or such judgment or settlement would materially and adversely affect the business, operations or assets of the Indemnified Party.  No Indemnified Party will consent to the entry of any judgment or enter into any settlement with respect to any such asserted claim without the prior written consent of the Indemnifying Party, not to be unreasonably withheld or delayed.  If an Indemnifying Party makes a payment with respect to any claim under the representations or warranties set forth herein and the Indemnified Party subsequently receives from a third party or under the terms of any insurance policy a sum in respect of the same claim, the receiving party will repay to the other party such amount that is equal to the sum subsequently received.

11.2Limitations on Liability. No party hereto shall be liable for any punitive or special damages under this Section 11 (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 Section 7) in or pursuant to this Agreement.  For the avoidance of doubt, and notwithstanding anything to the contrary in this Agreement, the Investor shall have no recourse against the Company as a result of any Credit Event or any Permitted Reduction.

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11.3Exclusive Remedy.  The rights of the parties hereto pursuant to (and subject to the conditions of) this Section 11 shall be the sole and exclusive remedy of the parties hereto and their respective Affiliates with respect to any Losses (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 Closing, 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 Section 11.  

 

SECTION 12

Termination

12.1Grounds for Termination.  This Agreement may be terminated at any time prior to the Closing:

(a)by mutual written agreement of the Investor and the Company; 

(b)by the Investor upon notice in writing to the Company at any time after November 11, 2019, if by such date the Closing shall not have been consummated for any reason other than a material breach by the Investor of any of its representations, warranties, covenants, agreements or obligations under this Agreement; or

(c)by the Company upon notice in writing to the Investor at any time after November 11, 2019, if by such date the Closing shall not have been consummated for any reason other than a material breach by the Company of any of its representations, warranties, covenants, agreements or obligations under this Agreement.

12.2Automatic Termination.  Unless earlier terminated as provided in Section 12.1, this Agreement shall continue in full force and effect until the end of the Royalty Term (as defined in the License Agreement), at which point this Agreement shall automatically terminate, except with respect to any rights that shall have accrued prior to such termination.

12.3Survival.  Notwithstanding anything to the contrary in this Section 12, the following provisions shall survive termination pursuant to 12.2 of this Agreement:  Section 6.2 (Authorization and Reservation of Warrant Shares and Put Shares), Section 6.7 (D&O Indemnification; Insurance Priority Matters), Section 6.8 (Disclosures), Section 6.9 (Payments Received in Error; Interest), Section 6.13 (Inspections and Audits), Section 7 (Confidentiality), Section 10 (Resales), Section 11 (Indemnification), Section 12.3 (Survival) and Section 13 (Miscellaneous).  Termination of the Agreement shall not relieve any party of liability in respect of breaches under this Agreement by any party on or prior to termination.

 

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SECTION 13

Miscellaneous

13.1Governing Law.  This Agreement shall be governed in all respects by the laws of the State of New York as applied to agreements entered into and performed entirely in the State of New York by residents thereof.

13.2Successors, Assigns.  Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.  This Agreement may not be assigned by either party without the prior written consent of the other; except that either party may assign this Agreement to an Affiliate of such party or to any third party that acquires all or substantially all of such party’s business, whether by merger, sale of assets or otherwise.

13.3Notices.  All notices and other communications required or permitted hereunder shall be in writing and shall be sent by facsimile (receipt confirmed) or mailed by registered or certified mail, postage prepaid, return receipt requested, or otherwise delivered by hand or by messenger, addressed

if to the Investor, at the following address:

  

RPI Finance Trust

c/o RP Management, LLC

110 East 59th St, 33rd Floor

New York, NY 10022

Attention:  George Lloyd
Telephone:  (212) 883-2280
E-mail: glloyd@royaltypharma.com
Facsimile:  (212) 883-2260

 

with a copy to:

Goodwin Procter LLP
100 Northern Avenue
Boston, Massachusetts 02210
Attention:  Arthur McGivern and Karen A. Spindler

Telephone: (617 570-1971; (415) 733-6058

Facsimile:  (617) 523-1231

E-mail: AMcGivern@goodwinlaw.com; KSpindler@goodwinlaw.com

if to the Company, at the following address:

 

Epizyme, Inc.

Robert Bazemore

Attention:Chief Executive Officer

Telephone: (617) 229-5872

40

 

Facsimile:(617) 349-0707

E-mail:rbazemore@epizyme.com 

 

with a copy to:

 

WilmerHale

60 State Street

Boston, MA 02109

Attention:Stuart Falber

Telephone: (617) 526-6663

Facsimile:(617) 526-5000

E-mail:stuart.falber@wilmerhale.com  

 

or at such other address as one party shall have furnished to the other party in writing.  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.

13.4Expenses.  Each of the Company and the Investor shall bear its own expenses and legal fees incurred on its behalf with respect to this Agreement and the transactions contemplated hereby.

13.5Finder’s Fees.  Each of the Company and the Investor shall indemnify and hold the other harmless from any liability for any commission or compensation in the nature of a finder’s fee, placement fee or underwriter’s discount (including the costs, expenses and legal fees of defending against such liability) for which the Company or the Investor, or any of its respective partners, employees, or representatives, as the case may be, is responsible.

13.6Counterparts.  This Agreement may be executed in counterparts, each of which shall be enforceable against the party actually executing the counterpart, and all of which together shall constitute one instrument.

13.7Severability.  In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party.

13.8Entire Agreement. This Agreement, including the exhibits and schedules attached hereto and thereto, and the Licensee Consent constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof, and this Agreement shall supersede any existing confidentiality agreements between the parties, including that certain Confidentiality Agreement by and between the Company and the Investor, dated as of October 16, 2018, with all Confidential Information exchanged thereunder deemed Confidential Information hereunder and subject to the confidentiality and non-use restrictions set forth in Section 7.  No party shall be liable or bound to any other party in any manner with regard to the subjects hereof or thereof 

41

 

by any warranties, representations or covenants except as specifically set forth herein or therein.  In the event that the Investor or any Affiliate of the Investor enters into any other agreement with the Company, neither the Company, on the one hand, nor the Investor or any applicable Affiliate of the Investor, on the other hand, shall have any right to deduct or offset any amount owing to the other under this Agreement as a result of any obligation under any such other agreement.

13.9Waiver.  The failure of either party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition by the other party.  None of the terms, covenants and conditions of this Agreement can be waived except by the written consent of the party waiving compliance.

13.10Trustee Capacity of Wilmington Trust Company.  Notwithstanding anything contained herein to the contrary, it is expressly understood and agreed by the parties hereto that (i) this Agreement is executed and delivered by Wilmington Trust Company, not individually or personally but solely in its trustee capacity, in the exercise of the powers and authority conferred and vested in it under the trust deed of the Investor, (ii) each of the representations, undertakings and agreements herein made on the part of the Investor is made and intended not as a personal representation, undertaking and agreement by Wilmington Trust Company but is made and intended for the purpose of binding only the Investor and (iii) under no circumstances shall Wilmington Trust Company be personally liable for the payment of any indebtedness or expenses of the Investor or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Investor under this Agreement or any related documents.

 

[SIGNATURE PAGES FOLLOW]

 

42

 

IN WITNESS WHEREOF, the parties have executed this Purchase Agreement as of the date first set forth above.3

 

		
	
 
	
 

	
 
	
 

	
EPIZYME, INC.

	
 
	
 

	
 
	
 

	
By:
	
/s/ Robert B. Bazemore

	
 
	
Name:  Robert B. Bazemore

	
 
	
Title:  Chief Executive Officer 

	
 
	
 

	
 
	
 

	
 
	
 

	
RPI FINANCE TRUST

	
 
	
 

	
By:
	
Wilmington Trust Company, not in its individual capacity but solely in its capacity as owner trustee

	
 
	
 

	
 
	
 

	
By:
	
/s/ Cynthia L. Major

	
 
	
Name: Cynthia L. Major

	
 
	
Title: Officer

	
 
	
 

 

 

 

 

Schedule A

The Investor is an institutional “accredited investor” as defined in Rule 501(a) of Regulation D of the Securities Act.

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